Judicial win for Ohio’s community banks

December 7, 2020

In August of 2019, Rick Gillett, Tony Gorrell, and Tom Showman of Sutton Bank – Attica, Ohio, reached out to CBAO, the case was regarding a cognovit clause decision by the 11th District Court of Appeals. If allowed to stand, this case would have significantly weakened the enforcement ability of the cognovit going forward for our industry.

They informed CBAO they would be appealing the case to the State of Ohio Supreme Court. CBAO evaluated the potential repercussions to the industry and offered support for this case. Supreme Court. Case no. 2019-1314

Reason for CBAO involvement:

The purpose of the cognovit clause is essential for the holder of the note to quickly obtain a judgment against a borrower in the state of Ohio. This clause has been in effect since January 1st, 1974, yet has come under increased scrutiny over the last several years. Section 2323.13 Warrant of attorney to confess can be found here.

Case update:

On November 3rd, 2020, the Supreme Court of Ohio unanimously ruled reversing the decision of the 11th District Court of Appeals in Portage County reinstating the trial court’s decision and judgment in favor of Sutton Bank. The final decision can be found here. The opinion can be found here. The Ohio Supreme Court case details can be found here.

Recognition:

On behalf of the community banking industry, CBAO expresses appreciation to Sutton Bank and their leadership team for bringing this matter to our attention so we may engage and advocate on behalf of the community banking industry. Sutton Bank has expressed deep appreciation to Michael D. Stultz of Stultz & Stephan, LTD., and their legal team for their passionate and relentless defense of the cognovit.

Additionally, CBAO would like to thank all of those for providing their support to this case. Their support strengthens our industry for the independence of all Ohio Community Banks.