This is generally an in-person event at the TBA headquarters in downtown Nashville, but, this year, it’ll be entirely online (for obvious reasons).
I’m the Chair of the TBA’s Creditors Section for 2020, and it was my job to recruit all the speakers and create the sessions. The online format really made for some fun choices, including finding speakers who otherwise wouldn’t be available to speak at a live event in Nashville.
We’ve got a Judge from Shelby County. A digital media specialist from Atlanta. A bankruptcy debtor’s lawyer from Jackson. A former creditor lawyer turned tech guru from Memphis. And, to everybody’s surprise–a creditor lawyer from California! (Note: Nobody even knew that California had creditor lawyers; we all assumed that they only had different levels of debtor focused lawyers.)
In all seriousness, it’ll be a great program. Topics include:
“A Creditor’s Rights: Top Issues and Common Mistakes From the Judge’s Perspective” by Hon. Phyllis Gardner, Hon. Lynda Jones and moderated by Kara Reese.
“The Future of Collections and Bankruptcy in the New Recession” by Monique Jewett-Brewster, Tracy L. Schweitzer and Jerome Teel, Jr.
“Legal Technology Update: Zoom, Slack, and Other Things You Never Realized You Need” by Zack Glaser, Lori Gonzalez and Kim Bennett.
And, remember, your Tennessee Bar Association membership includes 3 free CLE credits, so, basically, this will be free for you all. Thank me later!
Earlier this week, a lawsuit was filed in Davidson County Chancery Court by a landlord to collect $130,697.44 in unpaid rent from a Romano’s Macaroni Grill located in Rutherford County. There was no allegation that any of the facts of the case occurred in Davidson County or that the parties contractually agreed that the venue for any disputes would be in Nashville.
Should this lawsuit be dismissed for improper venue, where the business, all operations, and the leased premises were all in Rutherford County?
Not necessarily. Here’s why: All of the Defendants use corporate registered agents whose offices are based in Davidson County, and that subjects them to venue in Davidson County.
When analyzing venue for causes of action under Tenn. Code Ann. § 20-4-101(a), a defendant can be “found” in “any county wherein it has an office for the furtherance of its business activities.”
Tennessee courts have said that a registered agent’s address is an office for the furtherance of the defendant’s business activities, and it doesn’t matter that the defendant doesn’t actually operate a business out of that address or doesn’t otherwise have any other connection to that county. See Fed. Exp. v. The Am. Bicycle Grp., LLC, No. E200701483COAR9CV, 2008 WL 565687, at *3 (Tenn. Ct. App. Mar. 4, 2008).
Maybe this isn’t a big deal–most of these corporate agents are located in Davidson County, and Nashville uniformly has very strong courts and judges.
But, Tennessee is a very, very long state. It’s definitely something to keep in mind when you’re a company in Greenville or Memphis, and you’re selecting a registered agent.
But, despite being in payment default, The Palm went on the offensive and premptively filed the first lawsuit, arguing that the landlord’s (i.e. the Nashville Hilton) own shut-down in response to COVID was a breach that excused The Palm’s payment of its rent.
At the time, I marveled at the audacity of the tenant in making the first move. Today, however, I’ve discovered that this dispute has gone absolutely bonkers, and it’s has been (or is being) litigated in nearly every trial court in Davidson County.
First, there was the Chancery Court lawsuit filed by The Palm on July 9, 2020.
Then, after the Hilton declared The Palm to be in breach on July 13, 2020, the Hilton filed a Davidson County General Sessions evictions lawsuit on July 14, 2020.
In response, The Palm filed a Notice of Removal of the detainer action to the District Court for the Middle District of Tennessee on August 7, 2020. This prompted the Hilton to file a notice of voluntary dismissal on August 10, 2020.
Then, the Hilton filed a second detainer action in General Sessions Court on August 13, 2020. On August 26, 2020, The Palm filed an Application for Removal of the matter to Davidson County Circuit Court, which was granted.
So, what courts did they miss? Criminal Court? Bankruptcy? Environmental Court?
This dispute involves two mega-law firms, so it’s fun to see big-time lawyers fighting over eviction issues in small claims court.
Still, though, I have to wonder if the Hilton could have opposed The Palm’s request to remove the matter to Circuit Court, which was–possibly–an attempt to get the matter moved to the slower-paced Circuit Court, but without having to post the detainer possessory bond pursuant to Tenn. Code Ann. § 29-18-130(b)(2), which requires a tenant that loses in sessions court to post one year’s worth of rent in order to remain in possession of the property.
Sessions Judges don’t like to waste valuable docket time on complex commercial matters, so they are generally happy to allow complicated, discovery-heavy trials to be removed to Circuit Court pursuant to Tenn. Code Ann. § 16-15-732.
But, at the same time, it’s a move that Sessions judges see all the time, and the Judges will sometimes ask tenant’s counsel “Is the rent paid current?” and, depending on the answer, grant a judgment for possession, and tell the tenant’s counsel to appeal and sort it out in Circuit Court.
I don’t want to ruin the developing story, so I will remain quiet about the Landlord’s options in Circuit Court to force payment of rent. But they have a few.
Whatever direction this goes, in the age of COVID, this qualifies as entertainment (for law nerds).
But, early in the COVID crisis, the email started running stories about law firm pay cuts in Tennessee, with mentions of specific law firms. Yeah, it’s legal news, but it also felt like it was none of my business.
Plus, it led to two things: (1) Local lawyers started gossiping about other law firms’ financial stability (which was a terrible look, considering people lost jobs); and (2) Other law firms who really, really needed to take a hard look at their financial decisions and consider smart cuts may have elected to do nothing, in order to stay out of the news. Lose / Lose, right?
This is probably the Bankruptcy Lawyer in me talking, but a few financial adjustments made on the precipice of the biggest economic crisis of our era shouldn’t be considered a bad thing. Trust me, the law firms I’d be most worried about right now are the ones who haven’t changed their financial model at all.
Yes, I dreamed of being a judge. Yes, I’m from Memphis and love Memphis. Yes, I’m an award winning Best of Bar, Super Lawyer, Best Lawyers in America Bankruptcy Lawyer.
That would be an awesome job, in a community that has an incredibly large volume of financially distressed consumer debtors who really, really need a smart, progressive, creative judge. Talk about a place where a civic- and policy-minded judge can really make a difference and change lives…
But, it’s not going to be me.
Some of you may know this, but I was invited to interview in December 2019 with the Merit Selection Panel in Memphis for Judge Paulette Delk’s recent bankruptcy judgeship vacancy. The interview–to put it lightly–discouraged me from submitting my name for another vacancy so soon. (And, side note, I’ve already switched jobs recently.)
Judicial Diversity Matters. There were probably dozens and dozens of reasons I didn’t make the final round (and the ultimate pick was an absolute home run). But, based on the content and vigor of the questions to me, I discerned that, maybe, a white male (and, also, from Nashville) wasn’t their first choice (or choices 2 through 5, either, for that matter).
And, if true, they were absolutely correct (though I still question the “vigor” with which the questions were presented to me–yikes). Long before my interview, I’d been talking about the lack of judicial diversity.
We live in a time of monumental awareness of these issues, but our judiciary doesn’t always reflect the diversity of the communities that it serves. If we’re going to seize this moment and truly work for equality and true representation, isn’t this something that we should always factor into decisions?
When people have the power to hire, grant partnership, or appoint to a position, isn’t that a better consideration than “His dad is friends with _______” or “He goes to the same church that I do” or “He is an ‘opportunistic’ hire”? That’s called “affinity” hiring. Don’t do that.
I’ll go one step further: I think law firm clients need to think about this as well. When a client hires a law firm, are clients asking about diversity? Are clients challenging law firms to take a hard look at their internal policies? Do clients care about diversity and, if so, how are they expressing that to law firms?
I don’t perceive this to be a trend in our local legal community. Don’t get me wrong; everybody talks about diversity, but, in the end, lawyers and law firms focus mostly on the bottom line, traditional ways of doing things/hiring, and a social/cultural network that tends to promote the status quo. How can we change this?
Real change in the legal profession will not happen until clients start pushing these issues as well. Clients can vote with their dollars. If these issues are important to clients–and they should be–clients can force this discussion and impact the profession. If you’re a potential client and you care about this, ask prospective law firms what they do to promote diversity, whether in hiring or in the community.
This is a way to get more people of color into judicial spots. Clients, demand diversity in staffing your work. Make it a priority. Law firms will listen. With more opportunities for meaningful legal work and assignments, lawyers from under-represented backgrounds will gain experience that will change the trajectory of their career. Law firms are full of talk when it comes to diversity; real change requires that clients make it a priority.
Statute of Limitations; when a breach of contract cause of action accrues; and the standard of review for a 12.02(6) motion. This case from yesterday, In re Estate of Donald Cowan, No. M2019-01597-COA-R3-CV (Tenn. Ct. App. Aug. 25, 2020) has a great statement of the law on statutes of limitation, when the clock starts ticking on a claim, and a good recap of the standards in granting a motion to dismiss for failure to state a claim upon which relief can be granted under Tennessee Rule of Civil Procedure 12.02(6).
It’s a well written opinion, and a litigant with those issues can literally cut and paste those sections into a brief.
Motions to Intervene under Tenn. Riv. Civ. P. 24.Regions Bank v. The Blumberg Trust, et. al., No. E202000051COAR3CV, 2020 WL 4919783 (Tenn. Ct. App. Aug. 21, 2020). This opinion, issued on Friday, has a great summary of the statutes and case law on Intervention as of Right and Permissive Intervention in Tennessee under Rule 24.
In that case, the party seeking to intervene was an assignee of the debt and was really only trying to substitute itself as a party, so it’s strange that intervention was even an issue.
In an even stranger twist, the prevailing party (appellee) most definitely submitted the Order Denying the Motion, and the submitted (and entered) trial court order was entirely devoid of factual or legal analysis. As a result, the Court of Appeals refused to rule on the issues on appeal and remanded the case for further proceedings.
My question is this: It was clearly a deficient bare-bones trial court order, but doesn’t the appellant share the responsibility of curating the record? Shouldn’t the appellant have submitted a competing order that had enough substantive details to properly present the issue on appeal?
Just a strange case.
Prejudgment Interest under Tenn. Code Ann. § 47-14-123. The Court of Appeals revisited the case of 101 Constr. Co. v. Hammet, No. M201801321COAR3CV, 2019 WL 5606610, at *7 (Tenn. Ct. App. Oct. 30, 2019), appeal denied (Mar. 26, 2020), and I can’t tell exactly why, but I appreciated the reminder about this case’s very detailed lesson about the importance of detailed communication in legal fee arrangements.
Also, it has a nearly “cut and paste” perfect discussion of the standards in Tennessee for awarding prejudgment interest under Tenn. Code Ann. § 47-14-123.
Spoiler: Tennessee Courts should always be awarding pre-judgment interest.
Elements to Determine Value of Damages under Quantum Meruit Claims (and who can testify). This is an issue that doesn’t show up in appellate cases often: what type of proof is required to establish the amount of damages in a quantum meruit claim.
The Court of Appeals provided a really good road map last Tuesday, in Blount Mem’l Hosp. v. Glasgow, No. E201900776COAR3CV, 2020 WL 4809951, at *2 (Tenn. Ct. App. Aug. 18, 2020).
The Plaintiff had an awful contract, so it had to rely on unjust enrichment/quantum meruit to recover the value of the hospital services provided to the Defendant. The Plaintiff presented proof from the “hospital’s financial representative” (not a doctor or service provider) that “she was familiar with the customary charges in the medical industry and that the hospital’s charges for the services were reasonable and customary.”
This knowledge wasn’t gleaned from a survey of the industry or by first hand knowledge of what other hospitals were charging; instead, it was based solely on what Medicare allowed hospitals to pay. (As an added note, though, the Court mentioned that the mere fact that “this is what the hospital usually charges” isn’t good enough proof.)
But, because the proof presented, i.e. that the “medical services were comparable to all hospitals in the area that accepted Medicare patients…,” was presented by a “hospital representative who is familiar with what is reasonable and customary,” the Court found that it was “sufficient to make [a] prima facie case for the reasonable value of the services rendered.” Id. at *3.
Keep this case for those situations where your witness is the controller / bookkeeper, but has no idea how to perform the underlying services. This comes up alot.
Last One: Setting Aside a Judgment Under Rule 60.03.Reese v. Amari, No. M201900329COAR3CV, 2020 WL 4342734 (Tenn. Ct. App. July 28, 2020).
This one is really interesting. A judgment debtor attacked a decades old judgment, arguing that it was a default judgment.
In denying the attack, the Court noted that, even though it was called a “default” judgment, the trial court actually entered the judgment at a trial, which the defendant didn’t attend. So, it wasn’t technically a default judgment, as that is defined under Tenn. R. Civ. P. 55, and wasn’t entitled to the more generous standards to set aside default judgments.
Separately, though, Judge Dinkins’ opinion has a very precise presentation of when a court will set aside a final judgment under Rule 60.02(3).
And, new associates, this comes up far more than you’d imagine.
The point of that opinion was that a judgment creditor seeking to domesticate a foreign judgment under the Uniform Enforcement of Foreign Judgments Act (Tenn. Code Ann. §§ 26-6-101 to-108) would be limited to the actual amount of the foreign judgment. In Wolf, the issue was that the creditor was asking for the judgment amount plus more post-judgment attorney fees to be allowed. The Wolf Court said that the claim for additional attorney’s fees was a separate claim.
I appreciated this case, since it provided resolution of an obscure, but common, issue under the Tennessee Foreign Judgment Act.
The new issue? If the foreign judgment provides for a specific post-judgment rate of interest, but the Order enrolling the foreign judgment doesn’t mention interest, what happens?
The Court makes two useful observations:
Regardless of whether the new Order says anything about post-judgment interest, all judgments are automatically entitled to post-judgment interest.
But, in the absence of a specific statement or order about the amount of post-judgment interest in the enrollment Order, the rate of interest is just the Tennessee statutory rate, found at Tenn. Code Ann. § 47-14-121.
My take-aways from this opinion:
Details matter. If you think you will need it in the future, include it in the text of the Order. An order from a court will always be the most important pleading you’ll draft, and a smart lawyer will think about all the things she will need from this order and work backwards.
Are Orders always required? Under the Foreign Judgment statute, an order is not expressly required. Instead, under Tenn. R. Civ. P. 3A.04, the Clerk simply “enrolls” the original judgment after 30 days after service.
Sure, the Wolf creditor could have avoided all of this with a more detailed Order; could they have avoided all this by not filing any order? Maybe.
Also, following the first Wolf opinion, the creditor needed to go back to the other state to get an award of attorneys fees. Couldn’t the creditor also get a judgment for post-petition interest at the higher rate and then come back to Tennessee?
Either way, it’s an interesting case on a rarely litigated statutory scheme.
But, trust me, after nearly 13 years at Bone, where I was a partner, where I was on the firm’s Board of Directors, where everybody knew me for my work, where I had the really-big-awesome-lawyer office (decorated with a custom painting of a shirtless Rev. Al Green), where I knew where the secret stash of M&Ms were hidden…
Well, it feels really dramatic to me.
Over the past few weeks, I’ve developed a new morning routine. I tend to wake up, involuntarily, at 4:45 a.m. or so, to worry about all the work to be done to build something new. Opening bank accounts. Picking office space. Hiring staff. Hiring lawyers. And, of course, doing the legal work for all the clients.
And, usually, around 5:30 a.m. or so, I get up, and I get to work on it.
Early on, I confided in one of my best friends (also, a lawyer) about my new routine, and he laughed and said, “Well, you only have one option now: Success.”
So, here we are. Welcome to Day 13 of my efforts to build the perfect law firm.
What does this look like to me? My plan isn’t to re-invent the wheel, but to incorporate all the best parts of the firms that I admire already.
I want to build a team of awesome lawyers and also awesome people. The greatest compliment that I give to other lawyers is that “I’d trust them with my life.” That means they’re smart, competent lawyers, but, also, that they care. It’s not just about billable hours or paperwork. A lawsuit might be the biggest crisis of a client’s life. I want to surround myself with attorneys who understand that and treat their responsibility to the clients accordingly. Who say to clients: “You can worry less now. Your problem is now my problem.”
I want a diverse team. Many law firms are run by old white guys, for other old white guys. This isn’t that. I want to be intentional about growth, and I, like my clients, want a team of professionals that looks like the community we serve. For years, I’ve fought against “manels” when I’ve been asked to speak at CLEs. Now that I get to build a law office, I’m guided by those same principles.
I want a team that supports each other and holds each other accountable. This is going to be a team. If you have a trial you’re terrified about, I’ll go with you. If you have a pro bono cause that you’re passionate about, I’ll volunteer with you. I need you to do the same for me. Need help moving? Sigh. That too.
So, I probably got you with the dramatic headline, right? My departure at Bone has been as non-dramatic as you could imagine. Before I left, I wrote notes for all my fellow coworkers. Here’s the one I left to the newest associate:
It’s part career-advice, and also part recruiting pitch.
In late July, I noticed the television ads by the Nashville Catholic Schools during the morning news, confidently advertising that their schools would be open for in-person classes the 2020-21 school year.
The first few times, I wondered if it was a coincidence that the ads were being rolled out while public schools were struggling with the decision of whether to re-open for in-person classes during the COVID pandemic.
Then, the weekend after public schools started their online-only reopening, the private schools’ messaging got a lot less subtle:
Gone were the images of sweet kids in their school uniforms.
These new ads featured a frustrated mom, dealing with a pesky kid with a tablet in her little hands, bothering the mom for help with school work while the mom tried to work from home. But, as the ad showed, once the mom signed her kid up and sent her off to in-person school at the private school, however, all was good.
At the end of the day, a private school is a business, right? This is a marketing technique called “FUD,” which means “fear, uncertainty and doubt” and is evoked intentionally in order to put a competitor at a disadvantage. In short, the private schools knew that public school parents were terrified about the start of the new school year, had no idea what to do, and the ads were deployed the weekend after Metro re-opened to provide some answers.
The campaign has worked in my neighborhood. My local school’s Parent-Teacher Organization has been decimated by defections. Seriously, I might be the new PTO president by default and not even realize it. We’ve had so many kids and their parents opt out of our (awesome) school.
As a collections lawyer, I have to wonder if parents, who were enticed by the promise of in-person learning, will be unhappy with their decision (and the exorbitant monthly tuition costs) if in-person classes are suspended. Will this unhappiness result in defaults in tuition payments?
I was reminded of this [difficulty] when I read this [then recent] Tennessean article about lawsuits filed by Nashville private schools to collect on unpaid tuition. I was doubly reminded about the “hassle” part when I scanned the comments, with the schools’ dirty laundry getting aired for the world to see.
The school is perfectly within its rights to seek payment of past due amounts, but collections can bring out the worst in people, especially in this economy.
In 2009 and 2010, I issued a number of demand letters to parents for unpaid tuition, and, wowza, the responses I got were not pretty. The parents complained about everything imaginable. I sent probably 50 letters, but I talked the school out of filing any lawsuits. Life was too short to have to have to deal with those sorts of fights in small claims court.
So, if the promises of in-person schooling end up not coming true during the global pandemic, will parents pull their kids out? Maybe. Does the standard annual contract have a provision that keeps the parents obligated to repay the full tuition? Probably.
Should the school sue? See my 2011 post about that.
This will be a developing issue in 2021. This is the first time that many of those parents are incurring the $2,000 to $4,000 a month fees, and they may not have anticipated the huge budget impact it will have. If the pandemic takes a harder turn–whether it results in online only classes or even a parent’s job loss–will those parents be willing (or able) to stay enrolled and current on tuition?
That’s because he lost his rights and ownership to the film to a business partner, in an unpaid debt lawsuit. Poe says that he couldn’t afford a lawyer and, in the end, “skipped the court date.” At trial, the Judge found the debt to be about $6,500 (but with $43,000 in legal fees).
During the collections process, the judgment creditor was able to sell the copyright (to itself) via an execution sale, including ownership of Poe’s four films (which sold for $10 each).
Per the New York Times, Debbie Harry commented “What a farce that anyone else should claim his inspirational film.”
Here, there are a number of take-aways.
First, what the judgment creditor did here was valid and allowed under collection law. A judgment creditor can seize all sorts of assets of the judgment debtor, including these intellectual property rights (which are treated as personal property under many states’ laws, including Tennessee).
Plus, the ultimate sales price was only a small fraction of the value of the property being sold, most likely because no bidders appeared at any asset sale–and the creditor got ownership for its very low opening bid.
Second, there were so many things Poe could have done to protect his assets. File a list of exemptions. Sell the IP rights himself. Go to court on his court date (which I called one of the worst mistakes a debtor can make).
It’s a sad story, but it happens every day for debtors all across the country.