The Journal of The DuPage County Bar Association

Back Issues > Vol. 25 (2012-13)

Confessions of a Conflicted Cognovit Counselor
By Edward N. Tiesenga and Nathaniel J. Reinsma

The Illinois Rules of Professional Conduct (RPC), when read, studied, and meditated upon as an integral part of an attorney’s life and practice, take on a very real function as both an internal and external compass guiding our conduct, effectively vouchsafing our professional character we are compelled to entrust to the care of these Rules. However, in the context of a Confession of Judgment, meditation on the Rules may have a chastising role that resembles other well-known confessions in life and history.  In a cognovit situation, the general rule is this:  confessions of judgment may be made by an attorney on behalf of a creditor client, without notice to or any other discussion with the corresponding debtor defendant, whom that same attorney is also representing in the same judicial proceeding.

For the attorney following the rules, those rules set up the inherent conflict.   RPC 1.7(a)[1] says “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest,” which RPC 1.7 (a)(1)[2] says exists if “representation of one client will be directly adverse to another client,” and especially not if such representation involves “the assertion of a claim by one client against another client represented by the lawyer in the same litigation.”[3] RPC 1.4[4] requires that a lawyer communicate with each client.  But RPC 1.7 and 1.4 don’t apply if an attorney is (i) representing opposing clients in the same proceeding; (ii) not communicating with one of them; (iii) being paid by one client but not the other; and (iv) benefiting the paying client’s interests at the expense of the non-paying client’s interests; or (v) if the attorney can toss a bound copy of the Illinois Rules of Professional Conduct five feet into the air of any Illinois courtoom and properly pronounce the Latin word cognovit six times before it hits the ground!  However, only one of the preceding conditions is fictional. 

So in one area of commercial practice, an attorney is permitted to confess a client communication without any penalty.  In fact, a commercial lawyer can do even more—he may manufacture a current confession of legally detrimental information on behalf of a client, irrespective of the client’s wishes, based on something a client may have signed long ago, which the client now disavows as the product of fraud, coercion, or distress.  This legal holiday from the ordinary application of legal ethics is permitted to any attorney whose paying commercial client pays him enough to represent the adverse party to the same judicial proceeding.  In that case, the commercial lawyer need not even tell the non-paying adverse party about the existence of the representation, or for that matter, the existence of the proceeding.  So here the attorney keeps his paying client’s litigation secret from his non-paying client, and uses that secrecy to harm his non-paying client, all for the benefit of his paying client, in a situation where the non-paying client might have really benefited from an independent lawyer’s help.  This is rare legal air, indeed.

In this role, the plaintiff’s attorney may communicate a legal confession of fault for a debt on behalf of his non-paying client, a confession that the non-paying client never physically communicated to the disclosing attorney.  This amounts to double points for avoiding not one but two of the ordinary Rules of Professional Conduct regarding client communication and representation.  Any ethical lawyer, at this point is now shaking his or her head and asking how this can be?

The answer lies in the term cognovit.  “The cognovit is the ancient legal device by which the debtor consents in advance to the holder's obtaining a judgment without notice or hearing, and possibly even with the appearance, on the debtor's behalf, of an attorney designated by the holder.”[5]  Former Minnesota lawyer, U.S. Supreme Court Justice, and amateur penumbrist, Harry Blackmun described the cognovit in terms of its ancient provenance[6] and its purpose, which is ‘"to permit the note holder to obtain judgment without a trial of possible defenses which the signers of the notes might assert";’[7] “and,” reaching back to “long ago,” as ‘"the loosest way of binding a man's property that ever was devised in any civilized country."’[8] The U.S. Supreme Court has evaluated the fitness of cognovit twice, and has refused to invalidate its use under either the Full Faith and Credit Clause or the 14th Amendment’s Due Process Clause.[9]   And although the subject of recent technical writing here in Illinois,[10] fresh analysis of cognovit may be called for under our Rules of Professional Conduct, since a state may confer more rights or impose different rules than the federally protected ”floor.” The state’s capacity to confer new rights or novel rules and definitions beyond the federal Constitutional minimum was recently seen in Illinois with the legislative abolition of capital punishment, and with the crafting of a new civil union definition[11] quite unknown “long ago” at the time when the “magic words”[12] of cognovit were first conjured in England.   

In A Survey of the Legality of Confessed Judgment Clauses in Commercial Transactions,[13] the most recent such compendium of cognovit statutes and case law from around the United States, a 50-state grid summarizes the availability of cognovit enforcement actions within each state, and also the enforceability of cognovit judgments obtained in other states, when a judgment creditor then seeks to enforce that judgment in a state that may have more restrictions on cognovit proceedings that were not observed in the state where the judgment is originally entered.  Interestingly, some states where it is difficult or even illegal to bring a cognovit action will nevertheless allow a foreign cognovit judgment from a more liberal state to be enforced without requiring the same due process for a domestic cognovit judgment.[14]  

This same compendium of cognovit law discusses constitutional concerns with due process (whether rights may be waived by debtors under the 5th or 14th Amendments), and summarizes several U.S. Supreme Court decisions,[15] but none of these cases address the RPC ethical issues that stand out like an untreated sore thumb.  Although 44 States regulate cognovit by statute,[16]  these statutes mainly afford additional notice and due process rights to cognovit defendants.  Some of these procedures are focused on procedures for defendants to knowingly waive due process rights. For example, California “requires that a certificate of the attorney independently representing the judgment debtor accompany the document containing the confession of judgment clause.”[17]  Other state law details interact with the Full Faith and Credit Clause of the U.S. Constitution[18], or the Uniform Enforcement of Foreign Judgments Act.[19]  Other than banning cognovit outright, adding rules to be followed when signing documents containing cognovit clauses, or requiring various layers of notice or filings to actually enforce them, however, none of these statutes, nor their interpretive case law, address the ethical issues plainly raised by the Illinois Rules of Professional Conduct.  This is a strange, glaring gap in the law.

Illinois cases dealing with cognovit follow the same track, and have typically addressed substantive limitations on post-judgment enforcement procedures for cognovit judgments.[20]  In one recent DuPage County case,[21] however, for perhaps the first time in Illinois, the ethical issues of dual representation were raised by a group of cognovit defendants.  The Defendants, separately represented by independent counsel, pursued a motion to disqualify their cognovit attorney—the same attorney of record appearing for the plaintiff in the proceeding.  The Defendants argued that disqualification should be ordered due to the cognovit attorney’s failure to comply with RPC 1.4 (not communicating with his cognovit clients about his intention to confess judgment on their behalf), and failure to comply with RPC 1.7 (by representing both sides in the same proceeding, creating a concurrent conflict).  Plaintiff’s counsel (also acting as Defendants’ cognovit counsel) argued that the “magic words”[22] in the promissory note authorizing the cognovit procedure had waived any conflict, and the fact that the Defendants signed the note to begin with provided sufficient notice to inform them that the cognovit procedure might be used against them if they failed to make timely payment according to the terms of the note.  The Defendants, in turn, argued that under Rule 1.7 of the Rules of Professional Conduct, the conflict was not waivable, and in addition, that the note was void as a result of language purporting to waive a conflict that the Illinois Supreme Court Rules deem not waivable. The court denied the motion to disqualify, unpersuaded by the Defendants’ independent attorney’s arguments that the dual role of the Plaintiff’s attorney presented a conflict, and that any attempted waiver of that conflict was void per se under the Illinois Rules of Professional Conduct.[23]

VI.       When Cognovit Calls

But what will the commercial attorney do when that cognovit client knocks at the office door?  “For the [attorney]-confessor this is a crucial threshold—what must he do?  Shut his eyes on it all, obedient to the instinct for the self-preservation natural to all of us?”[24]  The nagging concern is the struggle between dual representation and forced client confession in cognovit that appears to trample the language and principles of the ethical rules governing attorneys, as well as the spirit of the attorney-client relationship.[25] However, based on the most recent decision of the Circuit Court for the Eighteenth Judicial Circuit of Illinois, that attorney can also handle the cognovit action with a certain respite from worry of attorney discipline, and without fear of liability to the debtor client whom is directly affected by the permissible conflict in the rules. While this may be cold comfort, perhaps, at some point, the Illinois Supreme Court may choose to address the interaction of the Rules of Professional Conduct with the ancient practice of cognovit.  Until then, if one’s legal conscience needs any salve besides the money, it may help to pretend that a cognovit lawyer is not “really” a viable attorney, able to function under normal ethics.  With that line of reasoning, one would be in distinguished legal company.

[1] 134 Ill.2d R. 1.7(a)

[2] 134 Ill.2d R. 1.7()(1)

[3] RPC 1.7(b)(3), 134 Ill.2d R. 1.7(b)(3). Indeed, RPC 1.7 is so rock solid that the Comments to this Rule state that such conflicting representation is prohibited, “regardless of the client’s consent.”

[4] 134 Ill.2d R. 1.4

[5] Overmyer v. Frick, 405 U.S. 174, 175 (1972).  Merriam-Webster’s Online Dictionary defines cognovit as Latin for “he has acknowledged.”, accessed August 29, 2012.

[6] It was known at least as far back as Blackstone's time. 3 W. Blackstone, Commentaries *397,” Overmyer, Id. at fn. 12.

[7] Overmyer, 405 U.S. at 176, quoting Hadden v. Rumsey Products, Inc., 196 F.2d 92, 96 (CA2 1952).

[8] Id., quoting Alderman v. Diament, 7 N.J.L. 197, 198 (1824).

[9]See, National Exchange Bank v. Wiley, 195 U. S. 257 (1904); Grover & Baker Sewing Machine Co. v. Radcliffe, 137 U. S. 287 (1890). See American Surety Co. v. Baldwin, 287 U. S. 156 (1932) (The Full Faith and Credit cases); and Overmyer v. Frick, 405 U.S. 174 (1972) (the Due Process Clause case).  However, although it is permissible under the federal Constitution to perform a cognovit procedure on an undeveloped defense to payment under a promissory note, thus terminating the defense, the use of this device may be further restricted by state law.  For example, in Illinois, both the legislature and the courts have restricted creditor access to the cognovit procedure in cases of consumer debts.  See, e.g., 735 ILCS 5/2-1301(c).  Further limitations on the exercise of  cognovit could therefore be recognized, and legal ethics grounds may provide a sound basis to do so.  Indeed, this article suggests that a good-faith argument could be made that the Illinois Supreme Court’s Rules of Professional Conduct, in their current form, should be interpreted or extended to prohibit  cognovit in the case of a single attorney simultaneously representing both parties to an Illinois cognovit proceeding.  

[10] Michael G. Cortina, “Confessions of an Illinois Judgment,” Ill. Bar J. (Nov. 2010) at 578.  Cortina spells out exactly what incantation of words to draft into standard form promissory notes if a creditor client wants to try cognovit on a debtor someday: 

To further secure payment hereof, Borrower irrevocably authorizes any attorney of any court of record to appear for Borrower, at any time from time to time after payment is due, whether by acceleration or otherwise, and confess a judgment, without process, in favor of the Lender against the Borrower for such amount as may be unpaid, together with costs of such proceeding and reasonable attorneys’ fees, and waives and releases all errors which may intervene in any such proceeding and consents to immediate execution upon said judgment, hereby ratifying and confirming all that said attorney may do by virtue hereof.  Borrower hereby waives any errors and fully releases any attorney-in-fact obtained by Lender to confess judgment on Borrower’s behalf.      

[11] Senate Bill 1716 was signed into law January 31, 2011 by Governor Quinn, as the Illinois Religious Freedom Protection & Civil Union Act (Public Act 96-1513).

[12] Cortina, Id. At fn. 17, describing what “magic words” to include in a promissory note in order to enforce it using the cognovit procedure.

[13] H. Ward Classen, et al, “A Survey of the Legality of Confessed Judgment Clauses in Commercial Transactions,” The Business Lawyer (ABA) Vol. 47, Feb. 1992 (729-772).

[14] For example, Massachusetts bans cognovit  proceedings in its state (technically “Commonwealth”) courts, but will honor and enforce a cognovit judgment obtained in another state.  

[15] Overmyer, supra fn. 12, National Exchange Bank, supra fn. 16, and Grover, supra fn. 16.

[16] All but Connecticut, New Hampshire, Colorado, Kansas, Hawaii, and Maine.  See generally, Classen, et al., Survey, fn. 21 at 738 (at internal fn. 74).  

[17] Id. at 744, citing  Cal. Civ. Proc. Code Sec. 1132(b) (West 1982).

[18] Article IV, Sec. 1 of the United States Constitution.

[19] Id. at 751, which details versions of such acts adopted by the various states.

[20] See generally, Valley Pontiac-Cadillac-Jeep-Eagle, Inc. v. Thornton Pontiac Cadillac, Inc., 187 Ill.App.3d 699, 543 NE2d 950 (3d Dist. 1989), Gecht v. Suson, 3 Ill.App.3d 183, 278 NE2d 193 (1st Dist. 1971), and Citibank, NA v. Bearcat Tire, AG, 550 F. Supp 148, 150 (N.D. Ill. 1982).

[21] Amcore Bank, N.A. v. Heggs 10, LLC et al., 09 L 1146 (Cir. Ct. 18th J. Cir., Ill.).

[22] These are Cortina’s Ill. Bar J. article words, not the actual words of counsel in the DuPage proceeding.

[23] Amcore Bank, N.A. v. Heggs 10, LLC et al., 09 L 1146 (Cir. Ct. 18th J. Cir., Ill.).

[24] Sakharov at 114

[25] Id. Justice Blackmun’s rationalization that the attorney is not really acting as the debtor’s attorney “in any sense of the word, but […]as only an agent of the [Plaintiff].” Overmyer, 405 U.S. at 183.

Edward N. Tiesenga earned his B.A. from Hope College in 1981. He then attended American University, where he earned his J.D. in 1984. He practices commercial law as a principal with Tiesenga Gottlieb & Reinsma LLP in Oak Brook, Illinois. He also joined the DCBA on the trip to Cuba earlier in 2012.

Nathaniel J. Reinsma received his B.A. from Wheaton College in 2000. He obtained his J.D., with honors, from Harvard University in 2003. He also practices commercial litigation as a principal with Tiesenga Gottlieb & Reinsma LLP in Oak Brook, Illinois. He was also an active participant in the mock trial program during his high school years.

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