Gifford v. Casper Neon Sign Co., Inc.

Decision Date17 October 1980
Docket NumberNo. 5325,5325
Citation618 P.2d 547
PartiesMaxine GIFFORD, d/b/a the Closet, Appellant (Defendant), v. CASPER NEON SIGN CO., INC., a Wyoming Corporation, Appellee (Plaintiff).
CourtWyoming Supreme Court

Bruce P. Badley and Michael K. Shoumaker of Badley, Rasmussen & Shoumaker, Sheridan, for appellant.

John Burk, of John Burk, P. C., Casper, for appellee.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE and ROONEY, JJ.

ROSE, Justice.

This case comes to us upon direct appeal from a cognovit judgment, which, the appellant alleges, violates provisions of the Constitution of Wyoming and the United States Constitution. Appellee, in whose favor judgment was entered, counters with a two-stage argument: (1) Cognovit judgments are not, per se, unconstitutional; and (2) since no facts were developed in the trial court, the Wyoming Supreme Court may not decide whether, under the particular facts of this case, the cognovit judgment offends either the Wyoming Constitution or the Constitution of the United States. We accept appellee's argument and will affirm the trial court with respect to the facial validity of the cognovit judgment. The appeal also presents issues of unconscionability, the interpretation of our cognovit statutes and attorneys' fees, all of which we will discuss.

FACIAL VALIDITY OF COGNOVIT JUDGMENTS

In this case, the appellant, Maxine Gifford, sole proprietor of a clothing store, signed an "Advertising Display Lease Agreement" with the Casper Neon Sign Company. The contract obligated her to lease a sign for five years, with monthly payments of $137.12, and called for the appellee company to furnish a sign during that period. The lease provided for acceleration of payments upon default by the lessee and contained the following cognovit provision:

"... In the event of any breach of this Lease Agreement by him, Lessee and each of them, hereby authorize and empower any attorney at law to appear for them or any of them, before any court of This procedure was followed by the appellee, resulting in its obtaining a cognovit 1 judgment of $4,678.06 (which included $750.00 in attorneys' fees). Appellant Gifford did not learn of the judgment until after it was entered.

competent jurisdiction, whether or not said court is a court of record, within the State of Wyoming, or elsewhere and the Lessee, and each of them, thereby expressly waive the issuance and service of process and authorize any attorney at law duly admitted to practice before said court to confess judgment against them, or all or any of them, in favor of the Lessor, for the amount then unpaid, including attorneys fees and all other expenses therein provided for, and to release all error and waive all right and benefit of an appeal on behalf of the Lessee and to consent to the immediate issuance of execution ...."

On appeal, Ms. Gifford argues that the obtaining of the judgment in this manner violated her rights under the Fourteenth Amendment of the United States Constitution and Sections 6 and 8 of Article 1 of the Wyoming Constitution.

Our decision in Westring v. Cheyenne National Bank, Wyo., 393 P.2d 119 (1964), is relevant to the question here raised, even though the issues in Westring were not cast in the constitutional mold. In Westring, at page 121, we said:

"In this state, unlike many jurisdictions, a confession of judgment under a warrant of attorney contained in a promissory note is not contrary to public policy ...."

Appellant has not attempted to distinguish Westring, but it is to be noted that, in Westring, the warrant of attorney was contained in a promissory note, where, in this case, the warrant of attorney is contained in a lease agreement. We see no distinguishing significance in this fact-at least for any purpose with which we are concerned in this appeal.

In Westring, we made reference to § 1-312, W.S.1957 (now § 1-16-202, W.S.1977), which authorizes and prescribes a mode of procedure for the sort of cognovit judgment obtained in Westring and here. The statute provides:

"An attorney who confesses judgment in any case, at the time of making the confession shall produce the warrant of attorney for making the same to the court. The original or a copy of the warrant shall be filed with the clerk of the court."

In Westring, we noted that the above statute was derived from Ohio law. In 1972, the United States Supreme Court decided D. H. Overmyer Co. v. Frick Co., 405 U.S. 174, 92 S.Ct. 775, 31 L.Ed.2d 124 (1972). The first sentence of the opinion phrased the issue as follows:

"This case presents the issue of the constitutionality, under the Due Process Clause of the Fourteenth Amendment, of the cognovit note authorized by Ohio Rev.Code § 2323.13."

The first sentence of the cited Ohio statute is virtually identical to our § 1-16-202 reproduced "Our holding necessarily means that a cognovit clause is not, per se, violative of Fourteenth Amendment due process ...." 405 U.S. at 187, 92 S.Ct. at 783.

above. The Supreme Court concluded:

That holding, of course, rebuts any argument that the cognovit judgment in our case is, per se, violative of the Fourteenth Amendment.

Appellant also alleges that enforcement of cognovit judgments offends Sections 6 and 8 of Article 1 of the Wyoming Constitution. Article 1, Section 8, of the Wyoming Constitution provides:

"All courts shall be open and every person for an injury done to person, reputation or property shall have justice administered without sale, denial or delay. Suits may be brought against the state in such manner and in such courts as the legislature may by law direct."

In declining to hold cognovit judgments facially invalid, we are not leaving the cognovit-judgment defendant without a remedy. In Westring, supra, we specifically approved the use of a Rule 60(b), W.R.C.P., motion to reopen a cognovit judgment and held that the district court abused its discretion in denying such a motion where a meritorious defense had been tendered. Similarly, in Overmyer, supra, the cognovit defendant was given a post-judgment hearing and the Supreme Court noticed this hearing in justifying its refusal to invalidate the cognovit judgment against Overmyer, 405 U.S. at 188, 92 S.Ct. at 783. In declining to hold the judgment in this appeal facially invalid, we are, therefore, not denying appellant access to the courts.

Article 1, Section 6, of the Wyoming Constitution provides:

"No person shall be deprived of life, liberty or property without due process of law."

This provision, of course, tracks the due-process clause of the Fourteenth Amendment to the United States Constitution. We regard the United States Supreme Court's conclusion to the effect that the Ohio statutory scheme for cognovit judgments-from which ours is derived-does not, per se, offend the due-process clause of the Fourteenth Amendment, to be a persuasive argument that our statutory scheme does not, per se, offend Article 1, Section 6, of the Wyoming Constitution. Overmyer, supra.

THE FACTS-OR LACK THEREOF-IN THIS PARTICULAR CASE

Appellant argues that in Westring -despite our statement that cognovit judgments are not against public policy-we, nevertheless, observed that public policy favors an adjudication on the merits and we reversed the district court's denial of a Rule 60(b), W.R.C.P., motion to reopen the case. Appellant also correctly points out that the Supreme Court's decision in Overmyer was premised on a number of circumstances peculiar to the Overmyer case. These include: (1) Overmyer was a giant corporation with operations in 30 states; (2) Overmyer was represented by counsel when it signed the contract with a cognovit provision; and (3) Overmyer's original contract did not contain a cognovit provision. There is no indication that Overmyer agreed to the cognovit provision under a "take it or leave it" threat; indeed, the cognovit provision arose only after a renegotiation of the original contract, in which Overmyer gained substantial benefits. The Supreme Court emphasized that Overmyer, in agreeing to include the cognovit provision in the contract, "voluntarily, intelligently, and knowingly waived the rights it otherwise possessed to prejudgment notice and hearing, and that it did so with full awareness of the legal consequences." 405 U.S. at 187, 92 S.Ct. at 783. The Supreme Court, in Overmyer, was careful to limit its holding to the facts of that case, and it would be fair to say that Overmyer, and its companion case of Swarb v. Lennox, 405 U.S. 191, 92 S.Ct. 767, 31 L.Ed.2d 138 (1972), are pregnant with the possibility that cognovit judgments under certain different circumstances offend the Fourteenth Amendment. In contrast to Overmyer, appellant Gifford offers us an affidavit, which was not made a part of the We do not consider that appellant's affidavit is properly before us. Although we may, in certain extraordinary circumstances, exercise original jurisdiction, we are, in this case, exercising appellate jurisdiction, thus making Rule 1.04, W.R.A.P., applicable. It provides:

record in the district court, in which she deposes and says that she has only a high school education and signed the Lease Agreement without any understanding of the cognovit provision.

"A judgment rendered or final order made by a district court may be reversed in whole or in part, vacated or modified by the Supreme Court for errors appearing on the record." (Emphasis supplied.)

Rule 4.01, W.R.A.P., sets out the composition of the record on appeal as follows:

"The original papers and exhibits filed in the district court, the transcript of proceedings, if any, or any designated portion thereof, and a certified copy of the docket entries prepared by the clerk of the district court shall constitute the record on appeal in all cases ...." (Emphasis supplied.)

We thus agree with the appellee that the Wyoming Supreme Court, sitting in this case in its customary role as an appellate court, is not the proper forum in...

To continue reading

Request your trial
16 cases
  • UNC Teton Exploration Drilling, Inc. v. Peyton, 88-97
    • United States
    • United States State Supreme Court of Wyoming
    • May 12, 1989
    ...(Wyo.1987); Durdahl v. Bank of Casper, 718 P.2d 23 (Wyo.1986); Shanor v. A-Pac, Ltd., 711 P.2d 420 (Wyo.1986); Gifford v. Casper Neon Sign Co., Inc., 618 P.2d 547 (Wyo.1980); and Greenough, 531 P.2d 499. Finally, in the last three cases, this court found inadequate proof of amount of attorn......
  • Stauffer Chemical Co. v. Curry, s. 88-84
    • United States
    • United States State Supreme Court of Wyoming
    • July 28, 1989
    ...trial court. We cannot expand the record by accepting information presented for the first time on appeal. See Gifford v. Casper Neon Sign Company, Inc. 618 P.2d 547 (Wyo.1980), appeal after remand 639 P.2d 1385 (Wyo.1982). If the opposing party does not satisfy his burden, the summary judgm......
  • Bird v. Rozier, 95-232
    • United States
    • United States State Supreme Court of Wyoming
    • December 3, 1997
    ...This court, when exercising its appellate jurisdiction, is not the proper forum in which to develop facts. Gifford v. Casper Neon Sign Co., Inc., 618 P.2d 547, 551 (Wyo.1980); W.R.A.P. 1.04(a). Bird did not present any evidence to the trial court, nor did he request a hearing to present evi......
  • Lystarczyk v. Smits, 3-781A186
    • United States
    • Court of Appeals of Indiana
    • May 26, 1982
    ...1230, 1233; Williamsburg Nursing Home, Inc. v. Paramedics, Inc., (1970), Tex.Civ.App., 460 S.W.2d 168, 170; Gifford v. Casper Neon Sign Co., Inc. (1980), Wyo., 618 P.2d 547, 553. An example of the various factors which may be considered when objectively determining a reasonable award of att......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT