[Cite as Hager v. Swickheimer, 2023-Ohio-414.]
IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT LAKE COUNTY
GENE HAGER, CASE NO. 2022-L-069
Plaintiff-Appellee, Civil Appeal from the - vs - Court of Common Pleas
DARLENE K. SWICKHEIMER, Trial Court No. 2022 CV 000466 Defendant-Appellant.
OPINION
Decided: February 13, 2023 Judgment: Reversed and remanded
Daniel F. Lindner, The Lindner Law Firm, LLC, 2077 East 4th Street, Second Floor, Cleveland, OH 44115 (For Plaintiff-Appellee).
Matthew C. Rambo, Freeburg & Rambo, LLC, 8228 Mayfield Road, Suite 5B, Chesterland, OH 44026 (For Defendant-Appellant).
MATT LYNCH, J.
{¶1} Defendant-appellant, Darlene Swickheimer, appeals the Judgment of the
Lake County Court of Common Pleas, denying her Motion for Relief from Judgment. For
the following reasons, we reverse the decision of the lower court and remand for further
proceedings consistent with this Opinion.
{¶2} On April 15, 2022, plaintiff-appellee, Gene Hager, filed a Complaint on
Cognovit against Swickheimer.
{¶3} On April 28, 2022, the trial court entered the following Judgment in favor of
Hager: 1. Plaintiff is the named Payee on a Cognovit Note dated January 18, 2008 that secured a debt from October 6, 2006.
2. Defendant is a named Maker of said Cognovit Note.
3. The Cognovit Note secured a business loan in the principal amount of $45,000.00, accruing interest at 5% per annum compounded, payable on demand.
4. Plaintiff made demand for payment in full from Defendant, but Defendant never made any payment.
5. Defendant is in material default of her contractual obligations under the Cognovit Note.
6. As the direct and proximate result of Defendant’s breach of the Cognovit Note contract, Plaintiff has incurred ninety seven thousand six hundred sixty six 68/100 dollars $97,114.86 [handwritten] ($97,666.86 [sic]) in contract damages, together with future interest thereon a[t] a contract rate of five (5%) per annum.
{¶4} The findings in the Judgment were affirmed by an Affidavit of Gene Hager.
Attached to the Affidavit was a printout from “The Calculator Site” demonstrating that
compound interest at a rate of 5% on the principal of $45,000.00 for 185 months amounts
to $52,114.86.
{¶5} On May 27, 2022, Swickheimer filed a Motion for Relief from Judgment
pursuant to Civil Rule 60(B)(3) and (5) on the grounds that the April 28 Judgment “was
based upon a note that does not appear to have been issued for a commercial purpose,
for which payment was never demanded as due, and for an amount that was incorrectly
calculated and prayed for by Plaintiff.”
{¶6} On July 5, 2022, the trial court denied the Motion for Relief from Judgment.
The court’s Judgment provides as follows:
Defendant makes ambiguous statements that the Note “does not appear to have been issued for a commercial purpose”1 [Fn. 1: There is no statutory requirement that a cognovit note state on its face that 2
Case No. 2022-L-069 it is for commercial purposes in order to be enforceable. See R.C. 2323.13.] and “vehemently denies” that demand for payment was made, both without providing an Affidavit and while ignoring Plaintiff’s Affidavit averring that the Note was made for a commercial purpose and that demand for payment was made. Because Defendant has not provided the court with an Affidavit or other evidence to support her allegations, the court finds that it is undisputed that the Note was for commercial purposes, and that there is no evidentiary dispute requiring a hearing.
{¶7} On August 1, 2022, Swickheimer filed a Notice of Appeal. On appeal, she
raises the following assignments of error:
[1.] The trial court erred in denying Appellant’s unopposed Motion for Relief from Judgment.
[2.] The trial court erred in failing to conduct an evidentiary hearing on Appellant’s unopposed Motion for Relief from Judgment.
{¶8} The assignments of error will be addressed in a consolidated manner.
{¶9} “An appellate court reviews a decision on a Civ.R. 60(B) motion for abuse
of discretion.” State ex rel. Jackson v. Ohio Adult Parole Auth., 140 Ohio St.3d 23, 2014-
Ohio-2353, 14 N.E.3d 1003, ¶ 21. “If the movant files a motion for relief from judgment
and it contains allegations of operative facts which would warrant relief under Civil Rule
60(B), the trial court should grant a hearing to take evidence and verify these facts before
it rules on the motion.” (Citation omitted.) Coulson v. Coulson, 5 Ohio St.3d 12, 16, 448
N.E.2d 809 (1983). “Thus, the trial court abuses its discretion in denying a hearing where
grounds for relief from judgment are sufficiently alleged and are supported with evidence
which would warrant relief from judgment.” Kay v. Marc Glassman, Inc., 76 Ohio St.3d
18, 19, 665 N.E.2d 1102 (1996).
{¶10} The test for determining when a party is entitled to relief from judgment as
set forth in Civil Rule 60(B) and GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47
Case No. 2022-L-069 Ohio St.2d 146, 351 N.E.2d 113 (1976), “is modified when a party is seeking relief from
a cognovit judgment.” Natl. City Bank v. Rini, 162 Ohio App.3d 662, 2005-Ohio-4041,
834 N.E.2d 836, ¶ 18; Huntington Natl. Bank v. D & G Ents., Inc., 7th Dist. Mahoning No.
12 MA 15, 2013-Ohio-1117, ¶ 20 (“[t]he movant’s burden is somewhat lessened when the
judgment was taken by confession on warrant of attorney without prior notice”); Home S.
& L. of Youngstown v. Snowville Subdivision, 8th Dist. Cuyahoga No. 97985, 2012-Ohio-
4594, ¶ 17.
{¶11} “Because the judgment debtor is not afforded notice or the opportunity to
answer the complaint prior to the entry of a cognovit judgment, the judgment debtor is not
required to show entitlement to relief under one of the specific grounds listed under Civ.R.
60(B).” Rini at ¶ 18. “Therefore, a party seeking relief from a cognovit judgment is only
required to demonstrate the existence of a meritorious defense and that the motion is
made within a reasonable time.” (Citation omitted.) Id.; SHJ Co. v. Avani Hospitality and
Fin., L.L.C., 2022-Ohio-1173, 187 N.E.3d 1121, ¶ 16; Cook Family Invests. v. Billings, 9th
Dist. Lorain No. 07CA009281, 2009-Ohio-73, ¶ 8.
{¶12} There is no dispute regarding the timeliness of Swickheimer’s Motion.
Accordingly, the determinative issue is whether she demonstrated the existence of
meritorious defenses.
{¶13} Swickheimer raised three purported meritorious defenses. She denied,
despite the Affidavit to the contrary, that Hager ever made a demand for payment and
argued that, “[w]ithout such demand, payment on the Note was never due.” We disagree.
“If a note does not specify a maturity date, it will be due on demand.” Fogg v. Friesner,
55 Ohio App.3d 139, 140, 562 N.E.2d 937 (6th Dist.1988). “Furthermore, it has been held
Case No. 2022-L-069 that ‘* * * the filing of an action is in itself a sufficient demand against the maker of a note
to sustain the action and no demand for payment is required prior thereto.” Id., citing
Union Properties, Inc. v. McHenry, 142 Ohio St. 136, 144,
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[Cite as Hager v. Swickheimer, 2023-Ohio-414.]
IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT LAKE COUNTY
GENE HAGER, CASE NO. 2022-L-069
Plaintiff-Appellee, Civil Appeal from the - vs - Court of Common Pleas
DARLENE K. SWICKHEIMER, Trial Court No. 2022 CV 000466 Defendant-Appellant.
OPINION
Decided: February 13, 2023 Judgment: Reversed and remanded
Daniel F. Lindner, The Lindner Law Firm, LLC, 2077 East 4th Street, Second Floor, Cleveland, OH 44115 (For Plaintiff-Appellee).
Matthew C. Rambo, Freeburg & Rambo, LLC, 8228 Mayfield Road, Suite 5B, Chesterland, OH 44026 (For Defendant-Appellant).
MATT LYNCH, J.
{¶1} Defendant-appellant, Darlene Swickheimer, appeals the Judgment of the
Lake County Court of Common Pleas, denying her Motion for Relief from Judgment. For
the following reasons, we reverse the decision of the lower court and remand for further
proceedings consistent with this Opinion.
{¶2} On April 15, 2022, plaintiff-appellee, Gene Hager, filed a Complaint on
Cognovit against Swickheimer.
{¶3} On April 28, 2022, the trial court entered the following Judgment in favor of
Hager: 1. Plaintiff is the named Payee on a Cognovit Note dated January 18, 2008 that secured a debt from October 6, 2006.
2. Defendant is a named Maker of said Cognovit Note.
3. The Cognovit Note secured a business loan in the principal amount of $45,000.00, accruing interest at 5% per annum compounded, payable on demand.
4. Plaintiff made demand for payment in full from Defendant, but Defendant never made any payment.
5. Defendant is in material default of her contractual obligations under the Cognovit Note.
6. As the direct and proximate result of Defendant’s breach of the Cognovit Note contract, Plaintiff has incurred ninety seven thousand six hundred sixty six 68/100 dollars $97,114.86 [handwritten] ($97,666.86 [sic]) in contract damages, together with future interest thereon a[t] a contract rate of five (5%) per annum.
{¶4} The findings in the Judgment were affirmed by an Affidavit of Gene Hager.
Attached to the Affidavit was a printout from “The Calculator Site” demonstrating that
compound interest at a rate of 5% on the principal of $45,000.00 for 185 months amounts
to $52,114.86.
{¶5} On May 27, 2022, Swickheimer filed a Motion for Relief from Judgment
pursuant to Civil Rule 60(B)(3) and (5) on the grounds that the April 28 Judgment “was
based upon a note that does not appear to have been issued for a commercial purpose,
for which payment was never demanded as due, and for an amount that was incorrectly
calculated and prayed for by Plaintiff.”
{¶6} On July 5, 2022, the trial court denied the Motion for Relief from Judgment.
The court’s Judgment provides as follows:
Defendant makes ambiguous statements that the Note “does not appear to have been issued for a commercial purpose”1 [Fn. 1: There is no statutory requirement that a cognovit note state on its face that 2
Case No. 2022-L-069 it is for commercial purposes in order to be enforceable. See R.C. 2323.13.] and “vehemently denies” that demand for payment was made, both without providing an Affidavit and while ignoring Plaintiff’s Affidavit averring that the Note was made for a commercial purpose and that demand for payment was made. Because Defendant has not provided the court with an Affidavit or other evidence to support her allegations, the court finds that it is undisputed that the Note was for commercial purposes, and that there is no evidentiary dispute requiring a hearing.
{¶7} On August 1, 2022, Swickheimer filed a Notice of Appeal. On appeal, she
raises the following assignments of error:
[1.] The trial court erred in denying Appellant’s unopposed Motion for Relief from Judgment.
[2.] The trial court erred in failing to conduct an evidentiary hearing on Appellant’s unopposed Motion for Relief from Judgment.
{¶8} The assignments of error will be addressed in a consolidated manner.
{¶9} “An appellate court reviews a decision on a Civ.R. 60(B) motion for abuse
of discretion.” State ex rel. Jackson v. Ohio Adult Parole Auth., 140 Ohio St.3d 23, 2014-
Ohio-2353, 14 N.E.3d 1003, ¶ 21. “If the movant files a motion for relief from judgment
and it contains allegations of operative facts which would warrant relief under Civil Rule
60(B), the trial court should grant a hearing to take evidence and verify these facts before
it rules on the motion.” (Citation omitted.) Coulson v. Coulson, 5 Ohio St.3d 12, 16, 448
N.E.2d 809 (1983). “Thus, the trial court abuses its discretion in denying a hearing where
grounds for relief from judgment are sufficiently alleged and are supported with evidence
which would warrant relief from judgment.” Kay v. Marc Glassman, Inc., 76 Ohio St.3d
18, 19, 665 N.E.2d 1102 (1996).
{¶10} The test for determining when a party is entitled to relief from judgment as
set forth in Civil Rule 60(B) and GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47
Case No. 2022-L-069 Ohio St.2d 146, 351 N.E.2d 113 (1976), “is modified when a party is seeking relief from
a cognovit judgment.” Natl. City Bank v. Rini, 162 Ohio App.3d 662, 2005-Ohio-4041,
834 N.E.2d 836, ¶ 18; Huntington Natl. Bank v. D & G Ents., Inc., 7th Dist. Mahoning No.
12 MA 15, 2013-Ohio-1117, ¶ 20 (“[t]he movant’s burden is somewhat lessened when the
judgment was taken by confession on warrant of attorney without prior notice”); Home S.
& L. of Youngstown v. Snowville Subdivision, 8th Dist. Cuyahoga No. 97985, 2012-Ohio-
4594, ¶ 17.
{¶11} “Because the judgment debtor is not afforded notice or the opportunity to
answer the complaint prior to the entry of a cognovit judgment, the judgment debtor is not
required to show entitlement to relief under one of the specific grounds listed under Civ.R.
60(B).” Rini at ¶ 18. “Therefore, a party seeking relief from a cognovit judgment is only
required to demonstrate the existence of a meritorious defense and that the motion is
made within a reasonable time.” (Citation omitted.) Id.; SHJ Co. v. Avani Hospitality and
Fin., L.L.C., 2022-Ohio-1173, 187 N.E.3d 1121, ¶ 16; Cook Family Invests. v. Billings, 9th
Dist. Lorain No. 07CA009281, 2009-Ohio-73, ¶ 8.
{¶12} There is no dispute regarding the timeliness of Swickheimer’s Motion.
Accordingly, the determinative issue is whether she demonstrated the existence of
meritorious defenses.
{¶13} Swickheimer raised three purported meritorious defenses. She denied,
despite the Affidavit to the contrary, that Hager ever made a demand for payment and
argued that, “[w]ithout such demand, payment on the Note was never due.” We disagree.
“If a note does not specify a maturity date, it will be due on demand.” Fogg v. Friesner,
55 Ohio App.3d 139, 140, 562 N.E.2d 937 (6th Dist.1988). “Furthermore, it has been held
Case No. 2022-L-069 that ‘* * * the filing of an action is in itself a sufficient demand against the maker of a note
to sustain the action and no demand for payment is required prior thereto.” Id., citing
Union Properties, Inc. v. McHenry, 142 Ohio St. 136, 144, 50 N.E.2d 315 (1943).
{¶14} Swickheimer also argues that, despite the Affidavit to the contrary, “the Note
is not clearly for a commercial or business loan.” See R.C. 2323.13(E) (“[a] warrant of
attorney to confess judgment * * *, arising out of a consumer loan or consumer
transaction, is invalid”). This is not a meritorious defense. Swickheimer does not claim
that the Note arose out of a consumer loan or transaction, only that it “does not appear to
have been issued for a commercial purpose.” As noted by the trial court, a promissory
note is required to specify the underlying transaction. Hager’s Affidavit is evidence that
the Note secured a business loan and this evidence is not challenged merely because
the Note is silent with respect to its underlying purpose.
{¶15} Finally, Swickheimer challenges the calculation of interest on the Note.
With respect to interest, the Cognovit Note provides as follows:
* * * John G. Swickheimer and Darlene K. Swickheimer * * * promise to pay to the order of Gene Hager * * * the principal sum of Forty-Five Thousand and No/100 ($45,000.00), together with interest at the rate of Five (5%) per annum on the unpaid balance from the 6 day of October, 2006, until paid in full.
Said principal and interest shall be payable upon demand.
In the event said amount is not paid in full on the date due, interest shall accrue at the rate of one and one-half percent (1.5%) per month on the unpaid portion of principal, compounded monthly, until the entire amount is paid, or, at the option of Payee [Hager], may be withdrawn from the security deposit held by Payee or its assignee.
{¶16} Swickheimer points out that, according to the printout attached to Hager’s
Affidavit, the interest was calculated at a rate of “5% yearly” but compounded “monthly,” 5
Case No. 2022-L-069 contrary to the Note which provides for interest “at the rate of Five (5%) per annum.” She
further notes that “[n]o effect has been given to [the] provision of the Note” providing for
interest at the rate of 1.5% compounded monthly. The provision for interest at the rate of
1.5% compounded monthly was also referred to in Hager’s Affidavit in support of
judgment (“[t]he Cognovit Note provided for a default interest rate of 1.5% per month,
compounding monthly”).
{¶17} The trial court did not address this aspect of Swickheimer’s Motion for Relief
from Judgment. Rather, the court ruled that “Defendant has not provided the court with
an Affidavit or other evidence to support her allegations.” This court has held that, “[w]hile
it is generally advisable and preferable to do so, Civ.R. 60(B) does not require a movant
to submit evidence in the form of affidavits or alternative evidence produced under oath.”
Wells Fargo Fin. Leasing, Inc. v. Pero, 11th Dist. Portage No. 2005-P-0053, 2006-Ohio-
1459, ¶ 12; Ohio Carpenters’ Fringe Benefit Fund v. Krulak, 8th Dist. Cuyahoga No.
88872, 2008-Ohio-220, ¶ 32 (“Civ.R. 60(B) does not specifically impose a requirement on
the movant to file evidence in the form of affidavits, * * * [h]owever, it may be necessary
where the motion requires consideration of facts, which do not appear in the record”). In
the present case, Swickheimer’s alleged defense, the miscalculation of interest, does not
rely on evidence extrinsic to the record. The printout from The Calculator Site calculates
interest that is compounded monthly. Inasmuch as this calculation is contrary to the terms
of the Note that interest is to be calculated at 5% per annum and that interest at the rate
of 1.5% compounded monthly shall accrue from the date of demand, Swickheimer has
alleged facts presenting a meritorious defense.
Case No. 2022-L-069 {¶18} In the recalculation of interest, the date of demand will be significant for the
application of the default interest rate. We note that Hager’s Affidavit states that he “made
demand for payment in full from the Maker in November, 2017.” The trial court’s April 28,
2022 Judgment Entry acknowledges that “Plaintiff made demand for payment in full” but
did not incorporate the date of demand. In seeking relief from judgment, Swickheimer
could not be expected to challenge the demand date when that date was not part of the
judgment. For the reasons stated above, merely contesting whether demand was made
is not a meritorious defense inasmuch as the filing of the lawsuit constitutes demand for
payment. On remand, Swickheimer will be able to contest what the proper date of
demand should be for the purposes of calculating default interest.
{¶19} Swickheimer’s assignments of error are with merit.
{¶20} For the foregoing reasons, we reverse the Judgment of the lower court and
remand for further proceedings consistent with this Opinion. Costs to be taxed against
the appellee.
JOHN J. EKLUND, P.J.,
MARY JANE TRAPP, J.,
concur.
Case No. 2022-L-069