Friday, December 27, 2013

D.H. Overmyer Co. v. Frick Co. case brief

D.H. Overmyer Co. v. Frick Co. case brief summary
405 U.S. 174 (1972)

CASE SYNOPSIS
Asserting a claim of deprivation of due process in violation of U.S. Constitutional Amendment XIV, petitioner corporation sought review of a decision from the Court of Appeals of Ohio, Lucas County, which affirmed a judgment in favor of respondent contractor on a cognovit provision contained within a second installment note.

DISCUSSION

  • The Supreme Court affirmed a judgment in favor of respondent contractor on a cognovit provision contained within a second installment note written by petitioner corporation. 
  • The cognovit provision allowed respondent to secure entry of a judgment for default on payments on the note by authorizing an attorney to appear on petitioner's behalf in order to confess the judgment, without personal notice to petitioner or voluntary appearance by petitioner. 
  • The court held that petitioner, in its execution and delivery to respondent of the second installment note, voluntarily, intelligently, and knowingly waived the rights it otherwise possessed to prejudgment notice and hearing under U.S.Constitutional Amendment XIV, and that petitioner did so with full awareness of the legal consequences. 
  • The parties' contract was not a contract of adhesion or the product of disparity in the parties' bargaining power. 
  • In fact, petitioner provided the second installment note to respondent in exchange for substantial benefits and consideration. 
  • Therefore, under the circumstances of this particular case, the court concluded that cognovit provisions did not, per se, violate due process.
CONCLUSION
The Supreme Court affirmed a judgment in favor of respondent contractor on a cognovit provision because petitioner corporation made a valid waiver of its due process rights to prejudgment notice and hearing with full awareness of the legal consequences of its waiver.


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