Friday, August 21, 2009
Cognovit Note Can Backfire
The Eighth District Court of Appeals has recently held that cognovit notes can, if improperly drafted, can backfire on the drafter. (Cognovit notes are special promissory notes - controlled by statute- which give the holder of the note the ability to get an immediate and automatic judgment if the debtor defaults - without the normal delay associated with normal litigation). If the language in the cognovit note is defective (that is, not drafted according to the statutory mandate), any judgment rendered on the note is void - and unless the complaint is properly served upon the defendant, any other normal judgment rendered against the defendant in a normal litigation process is void as well. In Adams v. Bennett, the Court made it clear that anyone (be it a pro se litigant or a lawyer) who incorrectly drafts a cognovit note may essentially have a worthless document. Thought: Forget the store bought or non-lawyer drafted cognovit notes if the loan in question is important to you.