Per the Zillow information, the house was built in 2005, is in a phenomenal school district, and, based on my site visit, is vacant.
My bank client is the second priority lien holder. This is a “judicial foreclosure” because the third-priority lien holder is the United States government. As a result, any sale will be subject to the approval and confirmation of the Williamson County Chancery Court. Per my Sale Order, I’ll handle getting the sale approved.
The sale will occur on Thursday, November 4, 2021 at 11:00 o’clock a.m., at the property address.
Please let me know if you would like additional information on this property. I am the attorney for the creditor, and, as a result, I will be limited in what information and guidance that I can provide, but I am available to answer questions about the judicial foreclosure sale and the court approval process. Nothing in this post, of course, is designed to give you legal or factual advice about these sales.
As with all distressed real estate sales, buyer beware, and hire a lawyer.
When COVID first hit, lawyers talked about how future contracts would evolve to anticipate the special challenges presented by a global pandemic.
Now, 19 months in, a new Davidson County Chancery lawsuit filed on behalf of the Foo Fighters shows that–even with all the planning in the world–COVID is still disrupting the best laid plans.
The plaintiff (the touring company that books gigs for the band) alleges that defendant hired the Foo Fighters to perform at an August 13, 2021 corporate event for payroll processing company ADP. The parties entered entered into a April 5, 2021 written agreement. Per the contract, the band would receive $3,000,000 for the performance, with half paid when the contract was signed, and the other half paid at (or before) the event.
But this contract was updated to take into account all the lessons learned during a global pandemic.
Per Paragraph 10 of the Complaint, if the defendant defaults or cancels the performance for any reason, the band would receive the full performance payment (regardless of whether the band actually plays the show).
Based on the allegations of the Complaint, it’s clear that concerns about COVID played a large role in the negotiations. In fact, the parties included a section called “COVID CANCELLATION,” which–as you’d guess–allocated the risk of a forced cancellation due to the pandemic.
And, boy-oh-boy, was that risk apportioned squarely onto the plaintiff:
In short, if the contracted for event were to be deemed unsafe and impossible due to the resurgence of COVID, this provision says that it does not matter. The band, in their “sole reasonable discretion,” can terminate the obligation and refuse to perform…and still get paid.
Was COVID a “force majuere” event? The band says that they expressly removed the reference to COVID in that paragraph, and further allege this:
There’s a bit more to the story, but, in short, COVID didn’t go away, and this August 2021 event at Mile High Stadium in Denver became less and less of a good idea for the ADP corporate event.
They discussed limited capacity, the band offered to do an exclusive live-stream concert, but, on August 4, 2021 (9 days before the event), the defendant decided to cancel the event. The lawsuit points out that “there was no local, state, or other governmental restriction that required the cancellation of the Event” and, helpfully, points out a number of other large concerts and events that happened that weekend in or near Denver.
The Foo Fighters have sued for the $1,500,000 owed under the Agreement. (And I tend to agree with their analysis of the contract.)
It’s an interesting case. On the most superficial level, it shows that, no matter how hard you try, it’s hard to contract around the unexpected.
In April 2021, my own family was so exuberant about the vaccines and a COVID-free summer (and fall) that we surprised our kids with shockingly expensive Jonas Brothers tickets to celebrate the end of the pandemic. In April, my wife and I believed we had weathered the storm and that a sold out concert in September 2021 was a totally safe and reasonable reward for our kids. We went, but we were terrified taking our vaccinated kids to the show.
I have to wonder if the defendants, here, suffered from a similar bit of vaccine optimism.
Nevertheless, the Foo Fighters’ lawyers did not share that optimism; or, if they did, they included sufficient terms in the contract to assign the burden of any risk squarely on the other party.
From what I’ve seen of it, it’s a good contract. Who knew we’d be learning some lessons about contract law from the Foo Fighters?
As a young lawyer, one of the worst tasks I was ever given was to cover a hearing on a motion to deem admissions admitted, where the other lawyer appeared to have simply overlooked the deadline to respond.
Requests for admission are, basically, what they sound like. One party in a lawsuit sends another party a written demand that they admit or deny a specific thing–generally a fact or that a document is authentic. Under Rule 36.01 of the Tennessee Rules of Procedure, if the other party doesn’t respond in 30 days, the fact is conclusively admitted for purposes of the lawsuit.
And, yes, a lawyer receiving these requests and ruin a client’s case if she is not good at calendaring or paperwork.
And many lawyers are not.
So, 20 years ago, as a brand new associate, I was sent down to Williamson County Chancery Court to argue a motion like this where the other lawyer–apparently–simply forgot to respond and, as a result, his client’s fate was at the mercy of a paperwork oversight.
And he was not happy to be arguing his side of the case.
For my side, it wasn’t a particularly hard argument. You tell the Judge the date of the Requests, add 30 days, tell the Judge that there was no response by that date, and cite Rule 36.01.
What made it hard is that the lawyer on the other side was a well-known, respected lawyer, and, generally, as a matter of courtesy, lawyers don’t play “gotcha” with each other on paperwork issues like this. And, even to me–a brand-new lawyer–it was a tough request.
Ultimately, Judge Easter stared at Rule 36.01 for a long time and decided to not hold the other lawyer to 30 days. He gave him more time. I was–frankly–happy to lose that day.
I was reminded of all that when I read the Court of Appeals opinion from yesterday, in Masterfit Medical Supply v. Samuel Bada, No. W2020-01709-COA-R3-CV (Tenn. Ct. Apps., Sept. 23, 2021). In that case, a party lost at the trial court level based on his failure to respond to admissions on unpaid invoices.
A critical component of the Court’s opinion, however, was that the complaining party never filed a motion under Rule 36.02 to have the admission withdrawn or amended.
Under Tenn. R. Civ. P. 36.02, “[a]ny matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission. Subject to the provisions of Rule 16 governing amendment of a pre-trial order, the court may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits.”
Courts favor deciding cases on the merits and that’s why Rule 36.02 makes sense. As a matter of equity, all kinds of other sworn statements can be clarified, amended, and modified, so why should un-answered admissions be unassailable, where no particular prejudice results?
That day in Williamson County, the other lawyer didn’t argue this rule, but, based on Judge Easter’s clear desire to consider the merits (and not a technicality), it’s clear that the Judge would have welcomed such a request.
Yesterday, the Tennessee Court of Appeals issued an opinion on whether a party can ask that their own “agreed” judgment be set aside under Rule 60 of the Tennessee Rules of Civil Procedure. It’s an interesting factual scenario, and the opinion provides a good recap of the law regarding Rule 60.02 relief.
The case is City of Memphis, Tenn. v. Beale Street Development Corporation, No. W2020-00523-COA-R3-CV (Tenn. Ct. Apps., Sept. 21, 2021). In short, the defendant’s lawyer executed an agreed judgment that fully resolved the dispute, but, then, 364 days later, the defendant filed a Motion for Relief under Rule 60.02, arguing that its board never, in fact, properly approved the settlement agreement. As such, the lawyer should never have signed the judgment and the trial court should not have entered it.
In considering a party’s motion to set aside an agreed judgment that the attorney expressly agreed to, the Court spent some time with Rule 60.02, including on the following points.
A Rule 60.02 motion is reviewed under an “abuse of discretion standard.” Discover Bank v. Morgan, 363 S.W.3d 479, 487 (Tenn. 2012). This means that the appellate court will consider whether “the trial court applied incorrect legal standards, reached an illogical conclusion, based its decision on a clearly erroneous assessment of the evidence, or employed reasoning that cause[d] an injustice to the complaining party.” Id. The “trial court’s ruling ‘will be upheld as long as reasonable minds can disagree as to [the] propriety of the decision made.” Id.
That’s a pretty high standard, so much so that Rule 60.02 relief is called “an exceptional remedy.”
One of the bases to set aside a judgment under Tenn. R. Civ. P. 60.02 is for “fraud . . . , misrepresentation, or other misconduct of an adverse party.” This generally means that the other party or its counsel committed some fraud–like lying about the court date or forging a signature. But, the Court of Appeals says, this conduct must be committed by an adverse party (just like Rule 60 says). Action by a party’s own attorney will not support relief under Rule 60.02.
Finally, the Court noted that the motion was not timely. Of course, the rule expressly one year as an outer limit, but, here, the facts dictate that the defendants should have brought this motion sooner (maybe in response to the article on the front page of the Memphis newspaper the day after the settlement was announced).
“Rule 60.02 does not ‘permit a litigant to slumber on [its] claims and then belatedly attempt to relitigate issues long since laid to rest.’” Furlough v. Spherion Atl. Workforce, LLC, 397 S.W.3d 114, 127 (Tenn. 2013).
Motions brought under this rule are a hassle for the judgment creditor for obvious reasons: Who wants their hard work to be challenged years later? But, Tennessee Courts don’t look favorably on these motions and rarely grant them and, when they do, Rule 60.02 is strictly enforced on its terms.
Keep this case handy the next time you receive one of these motions.
In many cases, a plaintiff has to employ creative tactics to get the process into the hands of the defendant.
You’ve probably seen this in a movie, where the process server hides in the bushes, hands somebody a piece of paper, and yells “You’ve been served!” as he runs away.
So, yes, I thought about the opening sequence from Pineapple Express, when I read a recent opinion by Davidson County Chancellor Ellen Lyle about an evading defendant and an irritated process server, in Joyce B. Martin v. Devon Lawrence, et. al., Davidson County Chancery Court Case No. 20-1091-III.
In that case, the process server was knocking on the defendant’s door, had confirmed that the defendant was inside the house, and, when the defendant refused to come to the door, attempted service pursuant to Rule 4.04(1) by “plac[ing] the summons and complaint into a clear plastic sleeve and tap[ing] it to the glass front door before leaving the [Defendant’s house].”
(The opinion was silent on whether the process server yelled “You’ve been served!” as he walked away, but I would bet money that he did.)
On these facts, however, Chancellor Lyle found the service ineffective. Rule 4.04(1) provides that if a defendant “evades or attempts to evade service,” then the process server may perfect service of process “by leaving copies thereof at the individual’s dwelling house or usual place of abode with some person of suitable age and discretion then residing therein, whose name shall appear on the proof of service, or by delivering the copies to an agent authorized by appointment or by law to receive service on behalf of the individual served.”
Citing this Rule’s plain language—which expressly imposes a requirement that the summons be left “with some person of suitable age and discretion then residing therein”—the Judge found that merely taping the summons to the outside of a home does not meet the statutory requirements, even under these circumstances.
In a surprise twist, then, Seth Rogen’s stoner private process server turns out to be a highly effective process server whose work would be approved even by Chancellor Lyle (though she may question other aspects about his…demeanor and tactics).
In each instance in the movie clip he, in fact, personally serves each person. We lawyers can be awful to watch movies with, since we love to nit-pick the accuracy of the Hollywood depictions of the job, but this sequence complies with the law (except the part when he’s driving and using illegal substances).
But, other than that–congratulations to Seth Rogen–this clip could be shown in a first-year Civil Procedure class. Who knew?
You can always tell when I get really, really busy with work: I stop law blogging.
Which is a perfectly reasonable outcome, of course. But, having said that, August was a busy month, so here are some quick notes.
The Tennessee Bar Association interviewed me about starting my own firm during the pandemic. I know we’ve reached peak podcast capacity, but I really enjoy the TBA’s podcasts featuring interesting legal and lawyer stories from across the State. In a time where we’re not seeing each other in court or at events, it’s nice to virtually catch up with what is going on.
It was a fun podcast, and, to my surprise, I didn’t collapse into a ball of cringe when I listened to it. Yeah, I used the word “pivot” way more than I (believe) I do in real life, but, otherwise, I was pleased with the message.
As many of you know, I have a tendency toward saying more than is sometimes necessary, and I credit my wife’s advance coaching in that regard. Lena is a writer and a master content creator, and she made sure that I kept it reasonably on topic.
Except, of course, for the opening stories: She expressly told me not to talk about the RV trip or the boat. Oh well, I hope you all enjoyed it. (And, if I have kept one person from buying a boat this summer, my personal embarrassment will have been worth it.)
The course focuses on strategies and best practices in communicating with clients, witnesses, and other parties in the legal system, at all stages of the legal process.
A central tenent of my new firm is to focus on providing client-centered service, asking every step of the way: How are we serving our clients and what can we do better? This is the future, and my goal is to share this mind-set with the next generation of lawyers.
Hint: Invariably, a person’s LinkedIn page ends up being the highest result (or way up there). My new advice (and part of last week’s assignment): Create a good LinkedIn page for yourself. The best way to decrease the impact of negative information online is to lower that information in the google search results.
If LinkedIn has a fast track to the top of the list, create a LinkedIn page that is so robust with information (name, biography, practice areas, contact information) that a potential client or employer never clicks on your Myspace page from 2007 (an actual top result for one of the students).
I’m two classes in, and, so far, it’s been extremely rewarding and extremely hard work. Hug a teacher, guys, they’re the real heroes.
Side-note: I’ll be back with the law blogging soon–there have been lots of fun new opinions issued.
A number of you reached out for information on any other sales that I may have pending. Here is information on two Williamson County commercial properties that will be sold at the end of August.
This will be via a Sheriff’s Sale set for August 31, 2021, at 12pm, at the Williamson County Judicial Center, 135 South 4th Avenue, Franklin.
(1) Approximately 2.43 acres, South Carothers Road, Franklin, Tennessee, Map/Parcel No. 079-082.00. This is a wooded lot, immediately next to the Soar Adventure Tower ropes course.
Per the Sale Order, bidding for this tract will start at $51,500.00. The 2020 tax appraisal for this property is $103,000.
(2) Approximately 4.29 acres, Royal Oaks Boulevard, Franklin, Tennessee Map/Parcel 079-023.00. This is also a wooded lot, right off Highway 96, on Royal Oaks Boulevard.
The neighboring property to lot was in the news recently, in the Nashville Post article titled “Franklin apartment property sells for $100M.” In case you’re not a subscriber, my interpretation of the article is that a Los Angeles-based real estate group bought the property immediately next this 4.29 acre lot for One Hundred Million Dollars.
I am not suggesting that this property is worth $100,000,000 (or anywhere close to that number), but, per the Court Order, the opening bid will be $100,000.
Please let me know if you would like additional information on either of these two properties. I am the attorney for the creditor, and, as a result, I will be limited in what information and guidance that I can provide, but I am available to answer questions about the Sheriff’s Sale and the Sheriff’s Sale process. Nothing in this post, of course, is designed to give you legal or factual advice about these sales.
As with all distressed real estate sales, buyer beware, and hire a lawyer.
When the plaintiffs voluntarily reduce their claim to satisfy the Sessions jurisdiction limit, they’ll often use that as part of their bargaining leverage, i.e. “if you appeal my judgment, I’ll ask for the higher amount of all my claims in Circuit Court.”
Back in 2014, I talked about that strategy, which is allowed under Tenn. Code Ann. § 16-15-729. That statute says the Circuit Court “shall allow all amendments in the form of action, the parties thereto, or the statement of the cause of action, necessary to reach the merits, upon such terms as may be deemed just and proper. The trial shall be de novo, including damages.”
As noted back then, an actual Amended Complaint under Tenn. R. Civ. P. 15 must be filed in order to assert the new claims. No big deal, right?
Well, this brand new case from the Tennessee Court of Appeals makes this maneuver drastically more risky. The opinion was published yesterday, at Chimneyhill Condominium Association v. King Chow, No. W2020-00873-COA-R3-CV (Tenn. Ct. Apps., July 20, 2021).
In that case, when the defendant appealed the Sessions judgment against it, the plaintiff asserted new and increased claims in Circuit Court against the defendant. Here, the plaintiff did everything procedurally correct: it obtained a Circuit Court Order allowing the filing of an amended complaint; and then filed the claims in an Amended Complaint. Regardless, the trial court allowed the defendant to dismiss its appeal of the Sessions judgment and found, as a result of the dismissal of the appeal, that Plaintiff’s claims in the Amended Complaint must be dismissed.
The Court of Appeals agreed, stating that “new claims asserted by a plaintiff who did not appeal a general sessions court judgment will be dismissed upon dismissal of the appeal of the opposing party…” The plaintiff is “the master of his or her complaint” and will be expected to bring all of its claims in the original proceeding.
If certain claims are omitted or the sessions court fails to grant all the relief, then the remedy is for the plaintiff to file its own appeal. In dismissing the new claims, the Court wrote that “it was therefore [plaintiff’s] own decisions that resulted in [plaintiff’s] additional claims being dismissed when [defendant] chose to dismiss his appeal.”
This case is important for several reasons. It’s contrary to long-standing practice and procedure. It appears to divert from the precepts of Tenn. Code Ann. § 16-15-729 and also the concept of a “de novo” review (i.e. if everything starts anew on appeal, without regard to what happened in the lower court, why shouldn’t the plaintiff get to restate her claim).
In the end, however, this is a procedural strategy that will greatly benefit judgment defendants and catch many judgment creditors by surprise. What’s the fix? I guess a plaintiff with significant additional claims may consider voluntarily dismissing its own claims during the appeal, and then re-filing those claims as a new Complaint.
I know this blog has a creditor-friendly bent, but, regardless, I don’t like the reasoning behind this opinion. I understand what the Court is doing, but it also seems too procedurally clever and doesn’t consider the practical implications that are facing parties on a de novo review in Circuit Court.
Remember, back in the spring of 2020, when we embraced all the radical changes to the way we practiced law?
All across the country, law firms were closing their offices, sending the staff to work from home, and figuring out how to practice using a laptop, a phone, and really strong wi-fi. No more 4-hour dockets, just to announce an agreed order. Instead, we were doing hearings (and trials!) by Zoom, sitting at hot desks (or in our front bedroom), and figuring out ways to use technology to speed up the legal process for clients.
But lawyers, as a group, aren’t always looking for ways to innovate and “speed up” the legal process. This is an industry where “they way things have always been done” sets a direct course for the ways things will be done.
And so, sure, those early pandemic puff pieces about all the law firm Zoom happy hours made for great fodder in the local business journal in July 2020, but this is July 2021, and it’s time for attorneys and staff to get back to the office. Lawyers are logging off of Zoom and dusting off those old suits. The two hour drive to Court to make a five minute announcement is back.
I love this quote because it’s so true: We are discarding so many of our advances from the past year–things that made perfect sense and saved so much time and legal fees for clients–only to go back “to the way law was practiced when people rode horses to court.”
Why? National legal writer David Lat writes about this in his column about the “Five-Day Office Week.” Lat cites several factors, not the least of which is the sunk cost of long term leases and other hard costs built into the typical law firm. If the firm is paying for all that space, why not make people use it? And, yes, the traditional way of doing things is one of those factors.
Because I live and practice law in Nashville, my frustration about reverting back to the old-timey ways is influenced by, frankly, how much of a mess downtown Nashville can be to conduct business in. E-filing in Davidson County Chancery, Circuit, and General Sessions Courts cuts down on 90% of my trips downtown, but, for that 10%, it literally doesn’t matter what time of day you go: Downtown Nashville is a 24-hour madhouse of construction, beer delivery trucks, parties, and congestion.
In the end, common sense and efficiency may not be the deciding factors. If the Judges, the Court Clerks, and the Administrative Office of the Courts want lawyers to practice law in person, lawyers will have no choice. If law firm managing partners want staff, associates, and partners to physically come downtown, that’s what they’ll do (unless it results in a talent exodus, as predicted by David Lat).
If you want an early clue on where this is heading, though, look at the law firm screenshots showing their recent Zoom meetings and happy hours. In those, the younger associates tend to be working remotely. But, notice the older lawyers’ pictures. They’re generally wearing ties and doing the Zoom calls from their law firm offices.
My take-away? The five day work week is already back. They just haven’t sent you the memo yet.
As indicated in the Sheriff’s Sale Notice, the property is scheduled for auction at 11:00AM, on August 3, 2021. The Sale Notice contains the terms of sale, including opening bid and the bidding process.
I post here in order provide a quick link to the Notice of Sale, which I’m planning to forward to potential bidders. This should present a great opportunity to a bidder.
In this strong real estate market, there are limited opportunities to find good deals on Middle Tennessee real property. The investors have long figured out foreclosure sales, then they figured out tax sales, and, now, Sheriff’s Sales are the next frontier. Sheriff’s Sales used to be rare–given that the process is fairly complex and confusing (even to lawyers)–but these are becoming more common, given the rise in property values and the unyielding demand for residential real estate.
As Zillow continues to grow into a trusted resource, though, I worry that a typical homebuyer may be lulled into seeing only the upsides of the potential deals listed on Zillow, without fully exploring the risks that distressed asset sales present.
I’m not suggesting that a buyer shouldn’t consider participating in a sheriff’s sale (seriously, please come on August 3), but I am encouraging every caller to educate themselves on the process and to consult with a real estate lawyer in advance.