Month: September 2015

New Lawsuit Alleges the Nashville Golf Cart Taxi Service is Liable for Negligence, Damages after Accident

If you live in Nashville, you’ve seen the golf carts driving people around. Everywhere.

Some drivers complain that the golf carts have a tendency to take liberties with the rules of the road, zipping in and around traffic. (Disclosure: I’ve used the golf cart service, and my drivers were courteous, nice, and followed the rules of road).

A new lawsuit filed on Monday in Davidson Circuit Court against Joyride Nashville (and others) alleges that, in late 2014, a golf cart “taxi” made a quick turn-around turn in a US Bank parking lot on Broadway in Nashville, resulting in the golf cart flipping over on its side and landing on the plaintiff’s leg. The lawsuit alleges negligence and seeks a judgment for her injuries.

This is an interesting case, because of the ubiquitous nature of the golf carts and the public’s (and car drivers’) general polarized opinions regarding their presence in downtown Nashville and the surrounding areas. This lawsuit may be a rallying cry for their critics and result in more regulations on their activities.

They say bad facts make bad law, and, here, if the plaintiff’s claims are true, additional regulations may be in order.

Google Fiber Inc. Owns the House Next Door: Two Quiet Title Lawsuits Filed in Davidson County Chancery

Two lawsuits were filed in Davidson County Chancery Court yesterday by Google Fiber Inc., seeking to quiet title and declare Google’s ownership of two tracts of real property in Davidson County.

These both involve real property that was sold by Metro Nashville via tax sale. In fact, at those tax sales, the Metropolitan Government of Nashville and Davidson County were the purchasers, and Metro then sold the properties to Google Fiber Inc. in early September 2015.

A “quiet title” action is a lawsuit in which a purchaser or claimant to certain real property seeks a Court order to clarify or declare that the plaintiff has the superior claim to the property. It’s usually done because, at some point in the property’s recent history, there has been a dispute or cloud on the title. Here, Google Fiber is filing these to clarify that no issues or competing claims remain after the tax sale.

One property appears to be a former church, while another property was formerly owned by someone who is now in prison. In the end, these are fairly routine matters under Tennessee law.

The better question is: Why is Google Fiber buying these properties and what is its long range plan?

Google Fiber Inc. v. Glenn’s Tabernacle Baptist Church aka Glenn’s Tabernacle Church fka James Tabernacle Baptist Church; Barry B. Bishop, trustee; Does, filed on 9/22/2015; 15-1138-II Quiet title.

Google Fiber Inc. v. Jennifer E. Hannah aka Jennifer E. Buchanan; Federal Home Loan Mortgage Corp.; U.S. Bank Association ND now known as U.S. Bank NA, filed on 9/22/2015; 15-1137-IV Quiet title.

Tennessee Supreme Court Considers Noisy Corn Maze in the Context of “Nuisance” Laws

In the fall, you’ll see corn mazes sprout up all over Tennessee. In fact, Memphis loves Marc Gasol so much that they made a corn maze mural of Big Spain. I’ve been to this corn maze, however, and I encourage you to not attend on the nights offering the “haunted” version. (It’s horribly terrifying.)

Ok, back to the legal talk. All this reminds me of a recent Tennessee Supreme Court opinion involving a corn maze, which is a great primer on the law surrounding “nuisance.” It’s at Shore v. Maple Lane Farms, dated August 19, 2013.

In the case, two neighboring landowners squared off in a dispute over the 225 acre farm’s noisy new side business. After years of raising cattle, corn, and other produce, Maple Lane Farms expanded to include an annual spring festival and, later, a fall festival and corn maze. The Plaintiff moved next door in 2003, and, over the next few years, the Farm’s side activities got louder. Beyond the quaint occasional pumpkin festivals, the Farm moved on to regular music festivals, ATV rides, fireworks, and even aerial tours of the corn maze via helicopter.

As you can imagine, music festivals and helicopter fly-overs can get loud, and the farm’s neighbor filed suit in Blount County Chancery Court for them to be quiet, citing local zoning laws.  The opinion has a long discussion of the procedural aspects, but I’ll talk about noisy neighbors here.

Citing the law that “directs landowners not to use their property in a way that injures the lawful rights of others,” the Court said a “nuisance is anything that annoys or disturbs the free use of one’s property or that renders the property’s ordinary use or physical occupation uncomfortable. It extends to everything that endangers life or health, gives offense to the senses, violates the laws of decency, or obstructs the reasonable and comfortable use of the property.” “As long as an interference with the use or enjoyment of property is substantial and unreasonable enough to be offensive or inconvenient, virtually any disturbance of the use or enjoyment of the property may amount to a nuisance.”

The Court noted that the test is for a “reasonable person,” not for the “hypersensitive.” In judging a noise complaint, the Court noted “[a]mong the relevant circumstances are the locality, the character of the neighborhood, the nature of the use causing the noise, the extent and frequency of the injury, the time of day when the noise occurs, and the effects on the enjoyment of life, health, and property of those affected by the noise.” Remedies include damages and injunctive relief.

So, as you’re walking around a corn maze this fall, yelling for help or waiting for the fireworks to start, think of the angry neighbors next door.

The really interesting part of this opinion is actually later, in the Court’s interpretation of the Farm’s defense under the Tennessee Right to Farm Act. I’ll save that talk for another day.

If a Debt Isn’t Scheduled in a Chapter 7, Is it Discharged? (Probably)

Growing up, my dad liked the saying, “If a tree falls in the woods and nobody is there to hear it, does it make noise?” (Actually, he used the alternate version, involving a bear, bear excrement, and the resulting odors).

But, let’s get back to creditor rights talk: “If a Debt isn’t Scheduled in a Chapter 7, Is it Discharged?”

I get this question all the time, from a creditor who–for whatever reason–isn’t listed as a creditor in the Bankruptcy Schedules and who may not get notice of the Bankruptcy Case.

The general thought is, if you want to discharge the debt, you have to list and send notice that creditor. This comes from 11 U.S.C. § 523 (a)(3), which says that all debts are discharged under § 727, unless those debts that are:

“…neither listed nor scheduled under section 521(a)(1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit–

(A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or

(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request…”

Based on the text above, it’s pretty clear, right?

Well, the Sixth Circuit Court of Appeals has very convincingly ruled otherwise, in In re Madaj, 149 F.3d 467 (6th Cir. 1998). In that case, the debtor intentionally hid the bankruptcy from the creditors (who, coincidentally, were his foster parents). They weren’t listed, weren’t warned, and, in fact, the debtors actively kept the case a secret from mom and dad.

But, nevertheless, the Bankruptcy Court noted that the case was a no-asset case, meaning no Proof of Claim deadline was ever set, such that the § 523 (a)(3) timelines and deadlines were never implicated. The Court said that, because no claim deadline was ever set in this no asset case, then it didn’t matter when the creditors learned of the Bankruptcy Case: the instant they learned about the Bankruptcy, the debt was discharged.

“Their learning of the bankruptcy after the entry of the discharge order did not transmogrify the debt into one that is excepted from discharge under some provision of the Code other than § 523(a)(3)(A).”

Once upon a time, when a creditor wasn’t listed, the debtor would file a Motion to reopen the closed bankruptcy case and then amend their Schedule F to include the debt. The Court expressly rejected that practice. Instead of imposing administrative hassle on the Clerks and counsel, the Court found that such debts–listed or unlisted–are discharged. In a no asset case, “the fact that the debts were not listed becomes irrelevant.”

So, in these situations, that sound you hear is the debt getting discharged.

Remote Contractors Can’t Assert a Materialman’s Lien on Residential Property in Tennessee

In this booming economy, there’s money in real estate, and the contractors who went broke in the Great Recession are back on top. So, let’s talk for a moment about mechanic’s and materialman lien laws, i.e. the Tennessee laws that allow an unpaid contractor to assert a lien claim on the real property that is improved by his labor and materials.

If you’re a contractor and you provide labor and materials to a real property project, you can always assert a lien on the property, right? Well, like many things in the legal world, the real answer isn’t that easy.

Here’s a quick exception to keep in mind.

First off, are you a “remote contractor” or a “prime contractor”?

A contractor who contracts directly with the owner is a “prime contractor.” A “remote contractor” is anyone who provides material, services, equipment or machinery in furtherance of an improvement pursuant to a contract with a person other than an owner (i.e. a subcontractor who is brought on to the project by the general contractor).

Under Tennessee’s lien laws, remote contractors may not assert liens on what is defined as “residential real property.” Tenn. Code Ann. § 66-11-146(a)(1) defines “residential real property” as a dwelling unit in which the owner intends to reside. There’s an exception under Tenn. Code Ann. § 66-11-146(b)(2) for situations where the owner is operating as a de facto general contractor (in which case the remote contractor has contracted with the owner, so the remote contractor is really a prime contractor).

So, yes, lien laws are a great way to protect contractors and ensure that their debts are paid. Just not on residential projects.

Ineffective Service of Process Will Not Toll the Statute of Limitations in Tennessee: Act Fast in Obtaining (or Correcting) Service

Earlier this year, I wrote a blog post explaining that, under Tenn. R. Civ. P. 3, just because you filed a timely lawsuit, doesn’t mean that you don’t have statute of limitations issues–you have to also accomplish prompt and timely service of process.

Recently, the Tennessee Court Appeals re-visited that issue in Kimberly Urban v. Robin Nichols, and it came to the same conclusion. In the Urban case, the Plaintiff filed the lawsuit within the one year statute of limitations, but the Plaintiff delayed in obtaining valid service of process and, worse, delayed in correcting her defective efforts to obtain service. The Court found that the ineffective service, followed by the long delay in correcting the service, failed to prevent the statute of limitations from expiring. Accordingly, the Court dismissed the lawsuit.

But, basically, that’s the same law as the blog post from April, right? Yes, but what I found interesting about this new case is that, if the Plaintiff had been diligent about correcting the ineffective service of process, the Court would have cut her some slack.

In fact, the Court said she could have amended her Complaint under Rule 15 to correct the defective name of one of the defendants or she could have issued new summons. If she had made any of these corrective efforts in a timely fashion, the Court suggests, the case would not have been dismissed on the technicalities, since Tennessee law and policy favor litigants to amend their pleadings to have disputes resolved on the merits.

So, the moral of the story may be: If you make a technical error, act fast in getting it fixed or at least brought before the Court.

Forum Selection Clauses Will be Upheld by Tennessee Courts

You don’t need a law degree to know this: The tricky stuff in a contract is always in the fine print, at the end of the contract.

For instance, most good contracts will invariably include a forum selection clause. This is generally a line at the end of the “Miscellaneous” paragraph that says something like: the parties to the contract agree that any action or proceeding arising under or related to this agreement shall be filed only in the United States District Court or the state courts in Nashville, Tennessee.

Of course, forum selection clauses don’t always say “Nashville,” but they do generally list the forum in a location that is: (1) convenient to the party preparing the contract; and (2) inconvenient for the other party. It makes sense, the contract drafter says, because that company doesn’t want to open itself to lawsuits all over the country. Presented with these “take it or leave it” terms, the other party often doesn’t object, no matter how burdensome the forum would be, because a party doesn’t generally sign a contract anticipating a default.

Unless, you know, they have a lawyer review the contract and warn you about the doomsday scenario. In Tennessee, these provisions are generally enforceable, as noted in a recent Court of Appeals opinion, The Cohn Law Firm v. YP Southeast Advertising & Publishing, LLC. In that case, a Memphis-based law firm filed suit against the Yellow Pages in Memphis; in response, the Yellow Pages moved to dismiss, citing page 3, paragraph 18 (titled “Miscellaneous”) of the contract, stating that all lawsuits must be filed in Georgia. The lower court dismissed the lawsuit for lack of jurisdiction and improper venue, and the appellate court agreed.

That Court wrote that: “Generally, a forum selection clause is enforceable and binding on the parties entering the contract. Lamb v. MegaFlight, Inc., 26 S.W.3d 627, 631 (Tenn. Ct. App. 2000). A forum selection clause will be upheld if it is fair and reasonable in light of all the circumstances surrounding its origin and application. Id. (citing Dyersburg Mach. Works, Inc. v. Rentenbach Eng’g Co., 650 S.W.2d 78 (Tenn. 1983)). A party seeking to invalidate a forum selection clause must prove that the clause resulted from misrepresentation, duress, abuse of economic power, or other unconscionable means. Id.”

The Court further wrote: “Tennessee law is clear that the party challenging the enforcement of the forum selection clause “should bear a heavy burden of proof.” Chaffin v. Norwegian Cruise Line Ltd., 1999 WL 188295, *4 (Tenn. Ct. App. Apr. 7, 1999).

The Plaintiffs argued that the contract was an “adhesion” contract, i.e. a boilerplate provision that wasn’t discussed or contemplated, and the Court ultimately rejected this, since the forum selection clause wasn’t patently unfair and had a reasonable basis.

I estimate that most contracts have these provisions in them; if they don’t, they should. A good lawyer will always consider the “worst case” scenario, even at the front end of the deal. In doing that, no lawyer worth his billable hour rate will overlook the impact of a forum selection clause.