D. H. OVERMYER CO. v. FRICK CO.

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Case Basics
Docket No. 
69-5
Petitioner 
D. H. Overmyer Co.
Respondent 
Frick Co.
Tags
Term:
Facts of the Case 

In 1966, D.H. Overmyer Co. entered into a contract with Frick Co. for the manufacture and installation of a $223,000 automatic refrigeration system for a warehouse under construction in Toledo, Ohio. The agreement established a promissory note with monthly payment obligations. Overmyer began to fall behind on the monthly payments. Frick filed three mechanic’s liens against the Toledo warehouse, and the two companies negotiated a new payment agreement in February 1967. Overmyer again fell behind on payments, and the two companies established a new note which contained a confession-of-judgment provision.

In June of 1968, Overmyer stopped making monthly payments under the new note and brought a claim against Frick in the United States District Court for the Southern District of New York for alleged breaches of the original contract. The District court concluded that the plaintiff failed to show any likelihood that it would prevail on the merits.

Frick came before the Common Pleas Court of Lucas County, Ohio and asked the court to enter a judgment against Overmyer for the remaining balance of the note plus interest. Overmyer did not receive notice prior to the entry of the judgment because the confession-of-judgment provision waived the issuance and service of process and confessed judgment.

After the entry of the adverse judgment, Overmyer filed several motions, including a motion to vacate the judgment due to a lack of notice. After a hearing was held, the court denied the motions. Overmyer appealed to the Court of Appeals for Lucas County, Ohio, asserting deprivation of due process in violation of the Ohio and Federal Constitutions. The appellate court affirmed the lower court’s decision. The Supreme Court of Ohio dismissed the subsequent appeal, and Overmyer appealed to the Supreme Court.

Question 

Can the constitutional right to notice be surrendered as part of consideration for a contract?

Conclusion 
Decision: 7 votes for Frick Co., 0 vote(s) against
Legal provision: Due Process

Yes. Justice Harry A. Blackmun wrote for a unanimous Supreme Court and held that contractual clause waiving a party's rights to prejudgment notice and hearing is not unconstitutional per se. Since Overmyer agreed to the provision for consideration and with full awareness of the legal consequences, enforcement of the waiver was not a violation of Overmyer's constitutional rights.

Justice William O. Douglas, with whom Justice Thurgood Marshall joined, wrote a concurring opinion. Douglas agreed that the heavy burden against the waiver of constitutional rights had been effectively overcome by the evidence presented. However, he emphasized the fact that a trial judge is duty-bound to vacate judgments obtained through clauses waiving due process rights whenever debtors present jury questions is a minimal obstacle, and complete answer to the contention that unbridled discretion governs the disposition of petitions to vacate.

Justice Lewis Powell and Justice William H. Rehnquist took no part in the consideration or decision of this case.

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D. H. OVERMYER CO. v. FRICK CO.. The Oyez Project at IIT Chicago-Kent College of Law. 14 December 2014. <http://www.oyez.org/cases/1970-1979/1971/1971_69_5>.
D. H. OVERMYER CO. v. FRICK CO., The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1970-1979/1971/1971_69_5 (last visited December 14, 2014).
"D. H. OVERMYER CO. v. FRICK CO.," The Oyez Project at IIT Chicago-Kent College of Law, accessed December 14, 2014, http://www.oyez.org/cases/1970-1979/1971/1971_69_5.