Exaggeration of Lien Rights Can Lead to a Counter-Claim for Attorney Fees in Tennessee

The ability to record a lien on a debtor’s property is one of the strongest tools in the creditor’s arsenal. I mean, I am always talking about judgment liens. Liens get creditors paid.

That’s part of the reason why materialman/mechanic’s liens are such a great tool for contractors supplying labor and materials to real property.

But, there’s one note of caution in Tennessee: Don’t be so eager to claim lien rights that you exaggerate or overstate your rights.

I’m talking about Tenn. Code Ann. § 66-11-139, which provides the following remedy to a property owner who is facing a defective and/or fraudulent lien claim. That statute says:

If, in any action to enforce the lien provided by this chapter, the court finds that any lienor has willfully and grossly exaggerated the amount for which that person claims a lien, as stated in that person’s notice of lien or pleading filed, in the discretion of the court, no recovery may be allowed thereon, and the lienor may be liable for any actual expenses incurred by the injured party, including attorneys’ fees, as a result of the lienor’s exaggeration.

Some courts will remove all lien rights–even the portions that are valid–where a contractor overstates its lien rights.  Although Tennessee Courts haven’t yet considered it, other jurisdictions with similar statutes have allowed recovery of fees where the lienor knowingly asserts lien claims on property that is not lienable. The statute certainly appears to provide recovery where a lien claimant asserts a lien that is invalid, such as an untimely claim.

Tennessee Courts follow the “American Rule,” meaning that a party can’t recover attorney fees unless they are provided for in a contract between the parties. If you are fighting with a lien claimant over an exaggerated or defective lien in Tennessee, consider turning the tables on them–ask for an award of attorneys fees.

Resources to Learn More About For Profit Student Loan Forgiveness

Student loans are a big problem for folks in the Middle Tennessee area. After I gave an interview on the “for profit” student loan forgiveness story last week, my phone started ringing off the hook.

One of the statements I made (which didn’t make the interview) was that a borrower who wants to make a forgiveness request may not need to hire a lawyer to help them with this process.

I mean, I love taking client money as much as the next lawyer, but there are resources online that you should review before talking to a lawyer.

I think the official Federal Student Aid website was a great resource. The site is written in good, clear text and contains a a link at the bottom, under the “How to Repay Your Loans” tab. The specific link is “Forgiveness, Cancellation, and Discharge.” This section contains a comprehensive “Frequently Asked Questions” section, as well links to the application to utilize the forgiveness process.

Lawyers are great and can be a benefit in any process like this. But, before you hire one, I’d suggest that you read the website and get an understanding of the issues first. Then, you know, bring in the big guns.