No Conflict Exists for Attorneys to Confess Judgment in Cognovit Note
Ohio attorneys who acknowledge a client’s debt do not run afoul of conflict-of-interest rules, according to an Ohio Supreme Court Board of Commissioners on Grievances & Discipline advisory opinion.
Opinion 2014-3 addresses Prof.Cond.R. 1.7(c), which governs conflicts of interest. Opinion 2014-3 also supersedes and withdraws a previous opinion on this topic (Opinion 93-3) because the opinion provided advice under the former Ohio Code of Professional Responsibility.
The board was presented with the following question: “Is Advisory Opinion 93-3 valid following the change from the Ohio Code of Professional Responsibility to the Ohio Rules of Professional Conduct, or does a conflict of interest arise under Prof. Cond.R. 1.7(c) when a lawyer executes a confession of judgment for a cognovit note?”
The board reaffirmed the advice in the earlier opinion and inserted updates based on the current rules and recent case law.
Ohio Revised Code Section 2323.13 authorizes an attorney to confess judgment against a debtor, if the attorney has a valid warrant. By signing the cognovit note that contains a warrant, a debtor consents in advance to a creditor obtaining a judgment against the debtor without notice or hearing.
“The Board acknowledges the uniqueness of the act of confessing judgment pursuant to a warrant of attorney in a cognovit note, but does not find such an act to be a violation of the Rules of Professional Conduct,” according to the opinion.
The opinion also notes that “an attorney is specifically authorized by law under R.C. 2323.13 to confess judgment pursuant to a warrant of attorney in a cognovit note, provided the warrant of attorney contains a provision that the creditor’s attorney may confess judgment or contains an express waiver of conflict of interest, and otherwise complies with the law.”
Advisory Opinions of the Board of Commissioners on Grievances & Discipline are informal, nonbinding opinions in response to prospective or hypothetical questions regarding the application of the Supreme Court Rules for the Government of the Bar of Ohio, the Supreme Court Rules for the Government of the Judiciary, the Ohio Rules of Professional Conduct, the Ohio Code of Judicial Conduct, and the Attorney’s Oath of Office.