Quick Note on Negligent Misrepresentation in Tennessee

One of the ways this blog helps me is as a research note. When I find a statement of an issue of law, I’ll post it here so I’ll know where to find it later.  Good for me, sort of boring for you. 

In the case of First Tennessee Bank, N.A. v. Shelby Village Mobile Home Park, LLC, et. al., the Tennessee Court of Appeals outlined the elements of the Tennessee tort negligent misrepresentation. Here’s what the Court said:

“A party pursuing a claim of negligent misrepresentation “must prove by a preponderance of the evidence that the defendant supplied the information to the plaintiff; the information was false; the defendant did not exercise reasonable care in obtaining or communicating the information; and the plaintiff justifiably relied on the information.” Hill v. John Banks Buick, Inc., 875 S.W.2d 667, 670 (Tenn. Ct. App. 1993) (citations omitted). The tort of negligent misrepresentation is most often recognized “in connection with business or professional persons who carelessly or negligently supply false information for the guidance of others in their business transactions.” Houghland v. Sec. Alarms & Servs., Inc., 755 S.W.2d 769, 774 (Tenn. 1988). Our Supreme Court has recognized, however, that, “[t]his theory of law . . . does not convert every breached promise or contractual undertaking into a basis for the rescission of otherwise valid contracts and the abrogation of their terms.” Id.”


Interesting Collections Questions Raised at 2014 General Practice Summit

I presented at the Tennessee Bar Association’s 2014 General Practice Summit today. My topic was “Collection in General Sessions Court.”

I’m always curious to see what topics attract questions, as well as what parts cause the listeners to take the most notes. Today’s questions were:

  • Whether General Sessions Courts allow post-judgment asset depositions and discovery? Yes, they do, although written discovery isn’t very helpful because a judgment debtor is likely to ignore it or not understand/make a full disclosure. I prefer to obtain this information in person, in an in-office deposition.
  • Is the failure to include an Affidavit fatal to a Motion for Slow Pay in Sessions Court? Maybe, but it depends on if the Judgment Debtor has the necessary asset/liability information with them in Court. If the debtor shows up on the hearing date with the information in hand, then the Judge will likely consider it. 
  • Can a litigant remove a matter from General Sessions? Yes, pursuant to Tenn. Code Ann. 16-15-732, a party can file a Motion and Affidavit that they have a defense or claim that is so complex or expensive to present that, in the interests of justice, it should be moved to Circuit Court, where a more deliberate process controls (with discovery, pre-trial pleadings, etc.).
  • Are legal briefs allowed in Sessions Court? Yes, but the Judges may not–and probably won’t–read the briefs in advance, due to their caseload. 

This was a well-run and well-attended Session, and I’ll definitely be back to teach in the future. It will be available online for viewing, so tune in and, in the meantime, feel free to call or email me if you have special collections issues. 

What to do about a Late Filed Garnishment Response: An Employer Remains Liable for Monies Paid

I file wage garnishments all the time on my Tennessee judgments.

If you know where a defendant works, Tennessee law allows a judgment creditor to garnish the debtor’s wages for payment toward the judgment. (See Tenn. Code Ann. § 29-7-101). Without boring you with the details (see this earlier post instead), an employer then is required to pay about 25% of the employee’s wages to the Court Clerk, who then holds the wages and disburses them to the creditor.

In the event the employer fails to respond to the garnishment, the creditor can seek a judgment against the employer itself for the full amount of the judgment (not just 25% of it), which, clearly, is an awesome way to actually get your money.

I’ve explained this process before: you get a “Conditional Judgment” against the employer and then you issue a Scire Facias, which requires the employer to come to Court and “show cause” why it shouldn’t be a “final” judgment.

This sounds great, but nine times out of ten, the employer shows up in response and files (finally) an answer. Under Tennessee case law, a late filed response is good enough to stop the process and avoid a “final” judgment being entered. Last week, the Tennessee Court of Appeals issued a great opinion in Emrick v Moseley (July 30, 2014), reviewing this entire process.

So, if a conditional judgment is considered a “wake up call” to prompt a response from an employer, then what do you do about the money that the employer should have paid to the Clerk? Two weeks ago, I had this exact case and argued that, under the existing case law, the cow was out of the barn and the employer’s only obligation is to comply with future obligations (i.e. withhold future wages).

I was wrong. That’s where the Emrick case is so good. Via dicta, the Emrick Court says that the employer has exposure under Tenn. Code Ann. § 29-7-112 for any money that it should have paid in, if it had timely responded.

So, no, you can’t get a judgment for the full amount of the debtor’s judgment, but you can get a judgment for the garnishment amounts that should have been withheld.

This is good news for creditor attorneys, and, even though I was wrong on this issue in the past, I’m glad to have been wrong.