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^^zoj/ ^^1 IN THE OHIO SUPREME COURT ABL WHOLESALE DISTRIBUTORS, Supreme Court Case No. 2014-1151 Plaintiff-Appellant, vs. On Appeal from Eightli Dist. App. No. CA- 13-100256 CLARK GAS, et al., Defendants-Appellees. DEFENDANTS-APPELLEES CLARK GAS AND HAMID SARKIS' MEMORANDUM IN RESPONSE Nate N. Malek (0067380) Counsel of Record Law Offices of Nate N. Malek, LLC 29025 Bolingbrook Rd. Cleveland, Ohio 44124 216-443-0450 Telephone 216-292-2909 Facsimile nnmlawt'a^aol.com Mark C. Brncik (0089134) Counsel of Record Javitch, Block & Rathbone 1100 Superior Ave., 19"' Floor Cleveland, Ohio 44114-2581 216-525-4926 Telephone 216-525-4927 Facsimile MBrncik(,JBandR.com Counsel_for Defendants-Appellees Claj°k Gas and Hamid Sarkis Counsel for Plaintiff-Appellant ABL lf,'holesale Distributors ;-: {' U 1 , f^; „^^ ^ ,'^ ``'. 2 r , ^ 1 4 4 %': ,^^^^^ i./,1 :;!^•'SL. /'••S p R ..ux,..^............... . r ^.^..^....'.S % ..% r 5 ^ :f

^^zoj/ ^^zoj/ ^^1 IN THE OHIO SUPREME COURT ABL WHOLESALE DISTRIBUTORS, Supreme Court Case No. 2014-1151 Plaintiff-Appellant, vs. On Appeal from Eightli Dist. App. No. CA-13-100256

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Page 1: ^^zoj/ ^^zoj/ ^^1 IN THE OHIO SUPREME COURT ABL WHOLESALE DISTRIBUTORS, Supreme Court Case No. 2014-1151 Plaintiff-Appellant, vs. On Appeal from Eightli Dist. App. No. CA-13-100256

^^zoj/^^1

IN THE OHIO SUPREME COURT

ABL WHOLESALE DISTRIBUTORS, Supreme Court Case No. 2014-1151

Plaintiff-Appellant,

vs. On Appeal from Eightli Dist. App. No. CA-13-100256

CLARK GAS, et al.,

Defendants-Appellees.

DEFENDANTS-APPELLEES CLARK GAS AND HAMID SARKIS'MEMORANDUM IN RESPONSE

Nate N. Malek (0067380)Counsel of RecordLaw Offices of Nate N. Malek, LLC29025 Bolingbrook Rd.Cleveland, Ohio 44124216-443-0450 Telephone216-292-2909 Facsimilennmlawt'a^aol.com

Mark C. Brncik (0089134)Counsel of RecordJavitch, Block & Rathbone1100 Superior Ave., 19"' FloorCleveland, Ohio 44114-2581216-525-4926 Telephone216-525-4927 FacsimileMBrncik(,JBandR.com

Counsel_for Defendants-Appellees Claj°kGas and Hamid Sarkis

Counsel for Plaintiff-Appellant ABLlf,'holesale Distributors

;-:

{' U1, f^;„^^ ^

,'^ ``'.2 r ,^ 1 44%':

,^^^^^ i./,1:;!^•'SL. /'••Sp R

..ux,..^............... . r ^.^..^....'.S % ..% r 5 ^ :f

Page 2: ^^zoj/ ^^zoj/ ^^1 IN THE OHIO SUPREME COURT ABL WHOLESALE DISTRIBUTORS, Supreme Court Case No. 2014-1151 Plaintiff-Appellant, vs. On Appeal from Eightli Dist. App. No. CA-13-100256

TABLE OF CONTENTS

THIS CASE DOES NOT CONCERN ANY MATTER OF PUBLIC OR GREATGENERAL INTERE S T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . I

STATEMENT OF THE CASE AND FACTS ................................................................................3

OPPOSITION TO PROPOSITIONS OF LAW AND ARGUMENT .............................................5

A. RESPONSE TO PROPOSITION OF LAW NO. 1: A claim of lack of subject matterjurisdiction cannot be waived ................................................................................................5

B. RESPONSE TO PROPOSITION OF LAW NO. 2: A Civ.R. 60(B) motion must beinterpreted to satisfy the rule's purpose and do substantial. justice .......................................11

CONCLUSION ..............................................................................................................................14

CERTIFICATE OF SERVICE ......................................................................................................15

APPENDIX:

i

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I. THIS CASE DOES NOT CONCERl\r ANY MATTER OF PUBLIC OR GREATGENERAL INTEREST.

The judgment which Appellant ABL Wholesale Distributors ("Appellant") seeks to

enforce was a nullity as the trial court never had subject matter jurisdiction to enter a cognovit

judgment on an alleged note that did not contain the required warrant of attorney. Appellant is

seeking to have the Court rewrite the law concerning cognovit notes in order to enforce a cognovit

judgment on a defective cognovit note that failed to comply with R.C. 2323.13 and to further cut-

off any defenses that a non-english speaking defendant may have, including the fact that he could

not understand the note, he did not sign the note andior that the note failed to comply with R.C.

2323.13, thereby failing to confer any subject matter jurisdiction to the court to issue a cognovit

judgment.

A cognovit note is a legal device by which the debtor consents in advance to the holder's

obtaining a judgmerrt without notice or hearing. The purpose of a cognovit note is to allow the

holder of the note to quickly obtain judgment. In Ohio, a trial court's jurisdiction to render a

judgment on an alleged cognovit note is governed by R.C. 2323.12 and 2323.13. Unless these

statutory requirements are met, a valid cognovit judgment cannot be granted. Where said statutory

requirements are not met, the trial court does not have jurisdiction and any judgment granted

thereon is void ab initio. Pratts v. HuYley, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992 at

¶¶11-12; Patton v. Diemer, 35 Ohio St.3d 68, 70, 518 N.E.2d 941 (1988) at paragraph tliree of the

syllabus. This Honorable Court explained:

Because subject matter jurisdiction goes to the power of the court toadjudicate the merits of a case, it can never be waived and may bechallenged at any time. It is a°'condition precedent to the court's ability tohear the case. If a court acts without jurisdiction, then any proclamation bythat court is void."

1

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Pratts at ¶11, quoting United States v. Cotton, 535 U.S. 625, 630, 122 S.Ct. 1781, 152 L.Ed.2d

860 (2002) and citing to Patton at paragraph three of the syllabus. The authority to vacate a void

judgment is an inherent power possessed by Ohio Courts. Patton at paragraph four of the syllabus.

All of the statutory requirements "must be met in order for a valid judgment to be granted

upon a cognovit note or for a court to have subject-matter jurisdiction over the same." lverchants

Bank and Trust Co. v. Five Star Fin. Corp., 195 Ohio App.3d 42, 2011-Ohio-2476, 958 N.E.2d

964 (lst Dist.) at ¶7. Because the statutes empower courts to enter judgments that they would

otherwise be without authority to enter, warrants of attorney to confess judgment must be "strictly

construed, and court proceedings based on such warrants must conform in every essential detail

with the statutory law governing the subj ect. °" Merchants Bank and Trust Co. at ¶7, citing Lathr-em

v. Foreman, 168 Ohio St.186, 151 N.E.2d 905 (1958) at paragraph one of the syllabus. As the

note did not meet the requirements of R.C. 2323.13, the trial court never had subject matter

jurisdiction to enter a cognovit judgment and any judgment rendered thereon was void ab initio.

The Eighth District's ruling in this case does not call into question the finality of every

judgment in the State of Ohio, as suggested by the Appellant. This is simply a case in which the

trial court never had subject matterjurisdiction to enter a cognovitjudgment. The Court of Appeals

therefore reversed the denial of the Appellee's Motion for Relief and ordered the trial court to

conduct a hearing as to the facts alleged by the Appellees which supported their potential

meritorious defenses, including the defense that the trial court never had subject matter jurisdiction

to enter the cognovit judgment in this case.

This matter is of no general or public interest. In fact, the facts and law contained in this

case are of no interest to anyone other than the Appellant itself, whom is seeking to enforce a

defective cognovit note that was obtained by questionable means. Namely, the Appellees never

2

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signed the note, Appellees do not read, write or understand English (which is the language of the

alleged note), and the note did not meet the requirements of R.C. 2323.13, thereby the trial court

lacked subject matter jurisdiction to enter a cognovit judgment.

This Honorable Court has recently, and repeatedly, held that claims involving subject

matter jurisdiction are not barred by the doctrine of res judicata because subject matter jurisdiction

can never be waived and can even be raised by a court sua sponte. State v. Lomax, 96 Ohio St.3d

318, 2002-Ohio-4453, 774 N.E.2d 249 at ¶17; State v. Davis, 131 Ohio St.3d. 1, 2011-Ohio-5028,

959 N.E.2d 516 at ¶11; State v. Noling, 136 Ohio St.3d 163, 2013-Ohio-1764, 992 N.E.2w 1095

at ¶10. This Honorable Court has already clearly stated the law on this subject and thus, should

deny jurisdiction over this matter.

H. STATEMENT OF THE CASE AND FACTS

This case arises out of a purported cognovit judgment that was granted on or about January

25, 2011. Appellant filed a complaint on an alleged cognovit note on January 25, 2011 against

Appellee Clark Gas, as the payor, and Appellee Sarkis, as an alleged guarantor of said note. (Clark

Gas and Sarkis are collectively referred to herein as "Appellees"). The purported cognovit note

was allegedly signed by Sarkis on behalf of Clark Gas. Regardless, the note did not contain a

warrant of attorney as required by R.C. 2323.13(A). Despite the lack of warrant of attorney, the

trial court allowed an attorney chosen. by Appellant to appear on Appellees' behalf and confess

judgment. The trial court then entered a cognovit judgment on the sarne day the complaint was

filed, without any notice to Appellees, and without Appellee's having any ability to raise any

defense to said complaint.

On March 8, 2012, the Appellees filed a Motion for Relief from the Judgment noting that

the Court lacked jurisdiction to enter a cognovit judgment as the cognovit note did not contain the

3

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warrant of attorney as required by R.C. 2323.13(A); as well as facts supporting additional

meritorious defenses including the fact that neither Sarkis nor Clark Gas ever signed the note or

guarantee at issue, and as Sarkis cannot speak, understand, write or read in English, which would

thereby render any alleged cognovit warning invalid and defeat the purpose of said warning.

The Motion for Relief was denied on Apri14, 2012, without a hearing, and the Appellants

proceeded in the same case to attempt to collect on the judgment with the trial court's assistance.

During the collection portion of the case, the Eighth District Court of Appeals released its decision

in ABL Wholesale Distributors, Inc. v. Quick Shop, 8th Dist. No. 97897, 2012-Ohio-3576. This

case was also between Appellees and Sarkis concerning another business in which Appellees

alleged that Sarkis signed another purported cognovit note that contained the exact same terms and

language as the note in this case. The Eighth District Court of Appeals found the where this same

Appellant had used this exact same note, that the note did not meet the requirements of R.C.

2323.13. The Eighth District Court of Appeals further found that as Sarkis stated that he did not

sign the not, could not read or write in English, and that he could not understand the provisions of

the document at issue in regards to the cognovit language, Sarkis had alleged operative facts

involving improper conduct in obtaining the alleged note and that a meritorious defense had been

stated challenging the integrity and validity of the note, thereby entitling the debtors to a hearing

to determine the facts before a trial court could rule on the motion for relief.

As a result of the decision in Quick Shop, Appellee's renewed their Motion for Relief on

August 5, 2013, noting that the Quick Shop case involved the exact same note and the exact same

factual scenario as well as essentially the same parties as the instant matter and therefore, as a

matter of law, the Appellees had stated operative facts that would support a meritorious defense

and were entitled to have received a hearing before their motion was denied. The trial court once

4

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again denied said motion without a hearing and the Appellees timely filed their Appeal with the

Eighth District Court of Appeals as to whether or not Appellees were entitled to a hearing on their

prior Motion for Relief from Judgment. The Eighth District Court of Appeals agreed that the trial

court lacked subject matter jurisdiction to enter a cognovit judgment due to the failure of the note

to contain a warrant of attorney as required by R.C. 2323.13(A), and that the Appellees were

entitled to a hearing before the trial court could rule on the Motion for Relief, as the Appellees had

clearly stated facts that supported a meritorious defense. It is from this judgment that the Appellant

now appeals.

III. OPPOSITION TO PROPOSITIONS OF LAW AND ARGUMENT

A. Response to Proposition of Law No. 1: A CLAIM OF LACK OF SUBJECTMATTER JURISDICTION CANNOT BE WAIVED.

This Honorable Court has recently and repeatedly held that claims involving subject matter

jurisdiction can never be waived and can even be raised by a court sua sponte. Lomax at ¶17;

Davis at ¶11; Noling, at ¶10. A party cannot create subject matter jurisdiction by their actions or

by any inaction where subject matter jurisdiction does not exist. Solomon v. Vizurraga, 8th Dist.

No. 87160, 2006-Dhio-3841; Agarwal v. Matthews, 8tb Dist. No. 96959, 2012-Ohio-161.

Pursuant to Section 2323.13(A) of the Ohio Revised Code, "[a]n attorney who confesses

judgment in a case, at the time of making such confession, must produce the warrant of attorney

for making it to the court before which he makes the confession." Warrants of attorney to confess

judgment must be reviewed by the court and the requirements must be strictly construed. Latlu°ern

at paragraph one of the syllabus. All "court proceedings based on such warrants must conform

in every essential detail with the statutory law governing the subject." Id.

It is undisputed that the alleged note at issue did not have a warrant of attorney contained

therein. A trial court does not have subject jurisdiction to render a cognovit judgment on a note

5

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that does not contain a warrant of attorney as required by R.C. 2323.13. Klosterman v. Turnkey-

Ohio, LLC, 182 Ohio App.3d 515, 2009-Ohio-2508, 913 N.E.2d 993 at ¶l. Any cognovit

judgment taken on an alleged note that does not contain the required warrant of attorney is void ab

initio. Klvsternzan at ¶25, Patton at paragraph three of the syllabus, 70.

Appellant cites to Ins. Corp. of Ireland, ltd. v. Compagnie des Bauxites de Guinee, 456

U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982), for the alleged proposition that subject matter

jurisdiction can sornehow be waived. However, in Ins. Corp. of Ireland, Ltd. the U.S. Supreme

Court upheld a Court's determination that any claim of a lack of personal jurisdiction had been

waived. Personal jurisdiction has long been held to be waivable, unlike subject matter jurisdiction,

as it pertains to the rights of the individual to be free from being hailed into an inconvenient or

irrelevant forum. As personal jurisdiction protects a party themselves, the party may choose to

waive such protection. However, the trial court must have statutory authority to enter a judgment,

regardless of any action or inaction by a party, in order to have subject matter jurisdiction. If no

authority has been conferred upon the trial court by statute over the subject of the action, the Court

exceeds its powers in entering any judgment thereon.

In Sturgill v. Sturgill, 61 Ohio App.3d 94, 572 N.E.2d 178 (2"a Dist. 1989), the Second

District Court of Appeals determined that while "no action of the parties can confer subject matter

jurisdiction" upon the court, the parties may stipulate to facts which would show subject matter

jurisdiction existed. Sturgill at 99. In Sturgill, jurisdiction turned ori where the location of the

plaintiffs residence being in Ohio, which had been previously stipulated to by both parties.

Sturgill is not relevant to this action as this matter concerned a cognovit judgment taken without

notice to Appellees and in violation of the statutory jurisdictional requirements. Unlike the parties

in Sturgill, Appellees never had any opportunity to stipulate to any facts that would provide the

6

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trial court with jurisdiction. Furthermore, as the alleged note did not provide a warrant of attorney,

no one else could have legally stipulated to any facts on behalf of the Appellees. As such, the trial

court improperly entered a cognovit judgment against Appellees, without subject matter

jurisdiction to do so, as the purported note did not comply with all of the requirements contained

in R.C. 2323.12 and 2323.13.

Appellant further cites to Harris v. Anderson, 109 Ohio St.3d 101, 2006-Ohio-1934, 846

N.E.2d 43, where the Coui-t found that res judicata prevented filing multiple motions for relief

from judgment on grounds that were or could have been raised in a prior motion for relief.

However, the Harris case has no bearing on the issue of subject matter jurisdiction, and is not

applicable to the facts of this case. Namely, Appellees renewed their earlier motion for relief based

upon the fact that the trial court erred by ruling on the prior Motion for Relief without conducting

a hearing as to the operative facts of their meritorious defense. This case is a bit unusual as while

the case continued before the trial court, the Eighth District Court of Appeals reviewed another

note between the same Appellant and Sarkis, which similarly failed to contain a warrant of attorney

and in which case Sarkis also raised the exact same defenses as he did in the above-noted matter.

The Eighth District Court of Appeals found in the Quick Shop case that this same form of the note

used by the Appellant in this case failed to meet the cognovit requirements of R.C. 2323.13 and

that the exact saine lacts as alleged by Sarkis in Quick S'hop, which were the exact same defenses

alleged by Sarkis in this case, constituted facts supporting a meritorious defense for which it was

an abuse of discretion to fail to conduct a hearing before ruling on a motion for relief Therefore,

Appellees filed a Renewed Motion for Relief based upon Quick Shop, as they had cited facts that

would support meritorious defenses as a matter of law, and requested that the trial court set the

matter for a hearing. Appellees could not raise this argument in its prior motion as the Quick Shop

7

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decision had not yet been rendered. Once the Quick Shop decision was rendered, it established

contrary verdicts based upon the exact same facts and substantially the same parties. As such, the

Appellees' brought the trial court's error to its attention and requested that the trial court correct

the error and provide consistency under the law. Instead of providing the hearing as requested, the

trial court denied the renewed Motion for Relief as untimely. The Appellate Court found that the

Renewed Motion for Relief was timely made and that the trial court abused its discretion in finding

it to be untimely. The timeliness of the Motion is no longer in dispute as Appellant has not

appealed this aspect of the case to this Honorable Court.

Appellant next cites to In re: Lorok, 93 Ohio App. 251, 114 N.E.2d 65 (8th Dist. 1952) and

Diagnostic & Behavioral IHealth Clinic, Inc. v. JeffeNson County Mental Health, Alcohol andDrug

Addiction Board, 7th Dist. No. 01 JE 5, 2002-Ohio-1.567, wherein both cases the respective trial

court found that it did not have jurisdiction to proceed and required the plaintiff to refile the case

in the proper jurisdiction. For example, in In re: Lorok, the applicable statutory provisions of

jurisdiction for the juvenile court only permitted the court to have jurisdiction over a delinquent,

neglected, crippled, dependent, or an otherArise physically handicapped child. The action that was

filed was a custody dispute over a child that was not delinquent, neglected, crippled, dependent,

or otherwise physically handicapped. As such, the court found that it lacked jurisdiction and

dismissed the claim. These cases are not relevant to the proposition raised by the Appellants where

they are seeking to allow a judgment to stand where a court clearly had no subject matter

jurisdiction to render said judgment in the first place.

The case of Burgher v. Taoka, 6`h Dist. No. L-92-136 (November 17, 1992), is similarly

not applicable as, unlike in the present case in which the judgment was rendered without notice to

Appellees, in Burgher both parties were present and were provided an opportunity to full_y litigate

8

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the issue of jurisdiction. As the issue of jurisdiction was not litigated prior to judgment in this

action, it cannot be considered to have been "litigated and resolved."

Despite the fact that subject matter jurisdiction can never be waived and cannot be created

by either action or inaction by Appellees, even if it could somehow be waived, it has long been the

policy in Ohio that a collateral attack is permitted where the policy against permitting a court to

act beyond its jurisdiction outweighs the reasons underlying the doctrine of res judicata. In re.-

Lorak at 266; Solomon, supra; Agarwal, supra. The Restatement of the Law of Judgments, page

57, Section 10 explains what is to be considered before determining if res judicata applies in a case

in which jurisdiction is being contested:

Among the factors appropriate to be considered in determining thatcollateral attack should be peimitted are that:

(a) The lack of jurisdiction over the subject matter was clear;

(b) the determination as to jurisdiction depended upon a question of lawrather than of fact;

(c) the court was one of limited and not of general jurisdiction;

(d) the question of jurisdiction was not actually litigated;

(e) the policy against the court's acting beyond its jurisdiction is strong.

Here, the factors weigh in favor of voiding a judgment due to a lack of subject matter jurisdiction.

First, the lack of the court's jurisdiction can be clearly established merely by looking at the note at

issue in the case, which the trial court was statutorily required to do before issuing any judgment.

The note at issue did not contain a warrant of attorney, which could be determined merely upon

examination. Despite this defect, the trial court granted a cognovit judgment without any notice

to the Appellees. The lack of jurisdiction was quite clear, the trial court was simply not permitted

to enter such a judgment under Ohio law and said judgment is void ab initio.

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Secondly, the determination ofjurisdiction is based upon the requirements of R.C. 2323.1 ')

and not upon any disputed issue of material fact. In fact, it was Appellant who submitted the note

as part of its Complaint.

Thirdly, the issue of jurisdiction was not able to be litigated prior to the judgment as the

judgment was obtained without notice to the Appellees and Appellees had no ability to raise any

defense whatsoever before the judgment was issued.

Finally, the policy against the court acting beyond its jurisdiction, especially in the case of

a cognovit judgment where said action is taken without the knowledge of a defendant and without

any ability to raise any defense, is strong. Defendants have no opportunity to appear and raise a

defense of lack of subject matter jurisdiction in cognovit actions and the jurisdiction is expressly

laid out in the statutory framework. The trial court was required to review the note to determine

whether or not it contained a warrant of attorney before it would have subject matter jurisdiction

to enter a cognovit judgment. 'The trial court clearly did not look as required as there is no warrant

contained in the note whatsoever. As such, the trial court was required to dismiss the cognovit

action for lack of jurisdiction and any judgment rendered in violation of the jurisdictional

requirements is void ab initio.

Regardless of the clear invalidity of the judgment that was entered by the trial court, the

Court of Appeals also found that the Appellees had stated operative facts, in addition to the lack

of subject matter jurisdiction, which would establish meritorious defenses and that the trial court

abused its discretion in denying the Motion for Relief without first conducting a hearing to

establish those facts, as discussed below. However, as this cognovit judgment was taken on an

alleged note that does not contain the required warrant of attorney, the judgment is void ab initio

as a matter of law. KlQsterman at ¶25, Patton at paragraph three of the syllabus, 70.

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B. Response to Proposition of Law No. 2: A CIV.R. 60(B) MOTION MUST BEINTERPRETED TO SATISFY THE RULE'S PURPOSE AND TO DOSUBSTANTIAL JUSTICE.

Appellees had stated operative facts, one of which was the lack of subject matter

jurisdiction as described above, which could establish a meritorious defense and the trial court

abused its discretion in denying the Motion for Relief without first conducting a hearing to

establish the facts. The Court of Appeals expressly found that the fact that the Appellees averred

that they did not write or speak English and that they did not sign the note, were also facts

supporting meritorious defenses, which on their own justified the ruling of the Court of Appeals

ordering a hearing before the trial court can rule upon the 60(B) Motion for Relief in this matter.

Appellant claims that these defenses are barred as they had been raised in a prior Motion

for Relief which was denied. The underlying defenses were not siinply reargued as alleged by

Appellant, but instead the Appellees made a new argument in the renewed motion that the trial

court erred by denying the initial Motion for Relief without first conducting a hearing, as the

Appellees were entitled to said hearing as a matter of law as shown in the recently decided Quick

Shop case, involving the same facts and essentially the same parties.

Appellees brought forth new evidence that they had set forth facts showing a meritorious

defense and that they were entitled to a hearing before the trial court could rule on the Motion for

Relief. A rather an unusual situation occurred in which the Eighth District Court of Appeals heard

the exact same case concerning the exact same note and exact same defenses to said note between

substantially the same parties. Sarkis alleged in that case the exact same defenses under the exact

same set of facts to another purported cognovit note with Appellant herein that contained the exact

same language (and which failed to contain a warrant of attorney) noting that it did not sign the

note arid that it did not read or write in English and couldn't understand the warning on the alleged

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note. Additionally, Sarkis similarly alleged that the trial cotiut did not have subject matter

jurisdiction due to the note failing to contain a warrant of attorney. The Eighth District Court of

Appeals expressly held that these averments constituted facts supporting one or more meritorious

defenses, and that it was therefore an abuse of discretion by the trial court to fail to hold a hearing

prior to ruling on the Motion for Relief. As the trial court had previously denied the Appellees'

Motion for Relief in this matter on the same note and save averments without a hearing, the error

of failing to hold a hearing was raised in the Renewed Motion for Relief and brought to the trial

court's attention. Obviously, this error could not be raised before the Court denied the Motion for

Relief without a hearing and/or until the Quick Shop case was decided on the exact same facts

between substantially the same parties. When the trial court denied the Renewed Motion for Relief

in which a demand for a hearing was made on the prior Motion, the issue was then appealed to the

Eighth District Court of Appeals.

As the Eighth District Court of Appeals did not make its findings of fact and conclusions

of law in the Quick Shop case until after the trial court denied the Appellees' motion without a

hearing, the proof that the averments constituted facts supporting one or more meritorious defenses

entitling Appellees to a hearing as a matter of law, similarly could not have been raised in the prior

pleading. "Res judicata does not bar a subsequent motion for relief from judgment pursuant to

Civ.R. 60(B) when the subsequent motion is based on different facts and asserts different grounds

for relief, and it is not certain that the issue could have been raised in the prior motion." Coulson

v. Coulson, 5 Ohio St.3d 12, 448 N.E.2d 809 (1983); Dawson v. Udelsen, 524 N.E.2d 525 (8t' Dist,

1987) at syllabus. Here, the grounds for relief were based upon the fact that Appellees were

entitled to a hearing on their motion as a matter of law, before it could be ruled upon which is

12

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different than the grounds cited in the prior motion seeking relief from judgment based upon

meritorious defenses to the underlying judgment.

The Eighth District Court of Appeals complied with the longstanding policy in Ohio that

the procedural requirements for an application of a Civ.R. 60(B) motion must be interpreted to

satisfy the rule's purpose and to do substantial justice. StzargiZl at 103; Advance Mortgage

Corporation v. Novak, 53 Ohio App.2d 289, 293, 373 N.E.2d 400 (8t" Dist. 1977). This situation

is unique in that the Court of Appeals addressed the same note and same facts between substantially

the same parties on appeal in a parallel case and found that the trial court in that case, doing exactly

what this trial court did, not only did not have subject matter jurisdiction to enter a cognovit

judgment, but further abused its discretion in failing to hold a hearing on the Motion for Relief,

exactly as occurred in this case. Thus, two cases based upon the exact same law and exact same

facts, and essentially the same parties, were proceeding through the courts at the same time in

which different results would otherwise be reached if not for a Renewed Motion for Relief.

Substantial justice can only be achieved if the Appellees are permitted to have the trial court hold

a hearing to determine the facts pertaining to the meritorious defenses prior to ruling on their initial

Motion for Relief, as required by the Eighth District Court of Appeals.

IV. CONCLUSION

Plaintiff/Appellant is seeking to have this Honorable Court remove a defendant's ability to

seek relief from a cognovit judgment and/or appeal a cognovit judgment when a trial court

improperly enters a cognovit judgment in clear violation of its own jurisdiction and in violation of

Ohio law. Ohio Courts have always reviewed these cognovit judgments closely because of the

manner in which they are entered, as they are obtained without a defendant's knowledgc and

without the defendant's ability to argue on its own behalf as to any irregularity. For all the forgoing

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reasons, this Honorable Court should deny jurisdiction for this appeal and thereby affirm the

subject matter jurisdiction of a trial court as to cognovit notes, which has been clearly set forth by

the legislature and in doing so, uphold this Honorable Court's own long standing precedent that a

trial court cannot enter a judgnient when it clearly does not have subject matter jurisdiction over

the action.

zlmit d,

)4leI7380Counsel of RecordLaw Offices of Nate,N. Malek, LLC29025 Bolingbrook Rd.Cleveland, Ohio 44124216-443-0450 Telephone216-292-2909 Facsimilennmlaw(a,aol.comCounsel for .Defendants/Appellees Clark Gas andHamid Sarkis

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CERTIFICATE OF SERVI:CE

I certify that a copy of the foregoing "Defendants-Appellees Clark Gas and Hamid Sarkis'

Memorandum in Response" was forwarded via regular U.S. Mail to: Mark C. Brncik, Javitch,

Block & Rathbone, 1100 Superior Ave., 19th Floor, Cleveland, Ohio 44114-2581, on this

day of August, 2014.

Nate Malek (0067380)Covinsel for L?efendants/Appellees Clark Gas andHamid Sarkzs

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