To comply with R.C. 2323.13(D), a cognvoit note must include the statutorily-required warning language "in such type size or distinctive marking" that it is "more clear[ ] and conspicuous[ ] than anything else on the document." However, in creating a warning that appears more clearly and conspicuously than anything else, courts have recognized that a drafter of a cognovit note may employ multiple methods--capitalization, italicization, underlining, bolding, framing the warning with a border, or a distinctive type style.
In the promissory notes at issue in Huntington National Bank v. Burda, the warning was the only paragraph formed entirely of bolded, capitalized words and was surrounded by a black box. Moreover, the warning appeared in a larger type size than the majority of the other text in the promissory notes. However, the words "Sky Bank" (the name of the originating lender) appeared on the top of the first page of each promissory note. Although the Court noted that the large type size and boldness of the font gave the words "Sky Bank" prominence, the Court still concluded that the warning was nonetheless more clear and conspicuous. In reaching this conclusion, the Court relied in large part on the fact that the warning language - unlike the words "Sky Bank" - was enclosed in a box with thick black margins. Therefore, the Court concluded that, in combination, the use of bolding, capitalization, type size, and a black box made the warning the most clear and conspicuous part of the promissory notes.
The Court also addressed the appellant's argument that the promissory notes violated R.C. 2323.13(D) because they included additional language that modifies the warning. Although the Court noted that at least two Ohio appellate courts have reversed judgments entered on cognovit notes because the notes did not include a verbatim recitation of the statutory warning (see, e.g., Bank One, Youngstown, N.A. v. Salem China Co. (May 16, 1990), 7th Dist. No. 89-C-27, 1990 Ohio App. LEXIS 1858; Central Trust Co. of Northeastern Ohio, N.A. v. Hutcheson (Oct. 13, 1987), 5th Dist. No. CA-7104, 1987 Ohio App. LEXIS 9249), the Court distinguished those cases on the facts.
Unlike the notes at issue in Bank One, Youngstown and Hutcheson, the promissory notes at issue in this case repeated the statutorily-required warning word-for-word. Although an additional sentence was included in the black box with the warning, the additional sentence was separated from the warning by a space and the use of smaller, regular (not bold) type. Therefore, because the additional sentence was not incorporated into the warning, the Court concluded the additional sentence did not modify the warning. For these reasons, the Court concluded that the promissory notes complied with the statutory requirements set forth in R.C. 2323.13(D).
Huntington Nat'l Bank v. Burda (Ohio 10th App. Dist., Apr. 14, 2009), 2009 Ohio 1752.