On the somewhat unusual occasions when your judgment debtor has assets, the question turns to how do I maximize my judgment and collect every penny legitimately owed to my client? Here are some thoughts:
1. If the debt on judgment entry day includes interest, i.e. a promissory note is the basis of the cause of action and any accrued interest is unpaid when the judgment is taken, that interest the due may be included in the judgment amount and you can collect post-judgment interest on the entire judgment, including the portion of the judgment that consists of interest. In a sense, this is compound interest. Ickes v. CNA Insurance, 2002 Ohio 2531; 2002 Ohio App. LEXIS 2574 (Stark Cty. App. may 6, 2002).
2. O.R.C. Section 1343.02 provides that an interest rate specified in a loan document controls post-judgment interest. So, you may be entitled to post-judgment interest at a rate above the statutory rate.
3. In a certain sense, taking a judgment on a promissory note destroys the promissory note. For example, the note no longer evidences the debt for purposes of endorsement, negotiation and transfer; rather, the judgment must be assigned in order to transfer the debt. It is not true, however, that the note no longer has any importance. Mayer v. Medancic, 124 Ohio St. 3d 101 (2009) is a case that holds a judgment creditor gets only simple post-judgment interest “absent agreement by the parties.” The Supreme Court looked at the promissory notes that were the basis of the judgment to determine that the parties had not in fact agreed to the payment of compound post-judgment interest. The lesson of this case is that the terms of the loan documents can permit you to collect compound post-judgment interest; so, read the loan documents closely and look for the opportunity to collect compound post-judgment interest.
4. Many loan documents provide that the lender may collect its attorney fees if forced to take legal action to collect the debts. Those provisions are generally enforceable in Ohio if the amount is reasonable and debt does not fall into certain protected categories. See Wilborn v. Bank One, 121 Ohio St. 3d 546 (2009). If the time and amount are significant, you can be awarded post-judgment interest on the attorney fees you have been awarded. Non-Employees of Chateau Estates Resident Ass'n v. Chateau Estates, Ltd., 2008 Ohio 1683; 2008 Ohio App. LEXIS 1450 (Clark Cty. App. April 4, 2008).
5. If you are not entitled to collect interest on post-judgment interest, it matters how partial payments are applied. You generally want to apply partial payments to post-judgment interest owed rather than pay the actual judgment (including the attorney fees award) on which you may collect post-judgment interest until further partial payments are received. Ohio law permits you to apply partial payments as provided by the applicable contracts between the parties, Mayer v. Medancic supra, or you might seek to apply Federated Management v. Coopers & Lybrand, 2004 Ohio 4785 (Franklin Cty. App) which states in part “ . . . the general rule in Ohio that, where partial payments on a judgment or amount owed are made, they will be applied first to accumulated interest, and only when exceeding interest will the balance be applied to principal.” In this case, this means the “principal” of the judgment. See also Viock v. Stowe-Woodward Co. (1989), 59 Ohio App.3d 3, 8, 569 N.E.2d 1070 and First Bank of Marietta v. Roslovic & Partners, Inc., Franklin App. No. 03AP-332, 2004 Ohio 2717…