Month: February 2017

How “Foreign” Can a Foreign Judgment be and still be Entitled to Domestication?

In an earlier post, I noted that judgments aren’t enforceable across state lines. To enforce such a judgment, the creditor has to “domesticate” that judgment, which requires that a second action be filed in the new state to recognize the out-of-state judgment. This judgment is often referred to as a “foreign judgment.”

But, what about the really foreign judgments, i.e. the ones from other countries? Can those be enforced in state courts?

The short answer is: “probably.” Pursuant to the Uniform Foreign Money-Judgments Recognition Act, judgments obtained abroad may be enforced in the U.S. See 13 U.L.A. 261.

Under this Act, the process follows the Enforcement of Foreign Judgments Act in many ways. Keep in mind, however, that the Act specifically states that it’s a different process, so read the Act and update your forms accordingly.

Some quick tips are: (1) The party seeking to enforce the judgment has the burden of proof regarding the validity and application of the Act; (2) The party opposing the domestication has the burden of proof of any basis to assert non-recognition; and (3) The statute of limitations applicable to the original judgment applies and, if there is no statute of limitations, then the judgment becomes unenforceable after 15 years from the original effective date.

 

All Those Great Recession Judgments May be Expiring Soon

Depending on who you ask, the “Great Recession” resulting from the subprime mortgage crisis began in December 2007 and lasted about two years. So, about ten years ago, I was spending most of my work days working on loan documents for third, fourth, and sometimes fifth mortgages for a local bank who was really, really late to the mortgage boom.

Of course, the impact of this past recession was felt for years afterwards, meaning my spring 2007 HELOCS didn’t go bad until 2010 or 2012. As a result, just a few years later, I was suing and taking judgments against those same borrowers. From 2008 to 2014, I estimate that I obtained at least 500 judgments, ranging in amounts from $2,500 to $5,000,000.

As I like to say, if you were hearing from me, it was bad news.

So, with a drawer full of judgments, this is what keeps me up at night: Those judgments are only valid for ten years, and, if I haven’t collected on them, they expire.

I’m taking about Tenn. Code Ann. § 28-3-110(a)(2), which provides that actions on judgments are only valid for ten years.

So, a good rule of thumb is that, if you received a judgment against someone you haven’t been able to collect in the last ten years, go back and confirm when you were awarded that judgment. If you’re getting close to the ten year mark, you might be running out of time.

(But, not to be too dramatic, I’m going to talk about how to extend that time period soon.)

 

 

New Tennessee Case Provides Good Statement of Law on Contract Interpretation, Promissory Fraud, and Piercing the Corporate Veil

The Tennessee Court of Appeals released an opinion, Dog House Investments, LLC v. Teal Properties, Inc., et. al.,  that has some fairly useful issues of law discussed. (This case is currently “unpublished,” but it still has value for its useful content/summary of the law.)

In the case, a building was severely damaged in the Nashville 2010 floods, and the tenant and landlord got into a dispute over the repairs, including: who was required to perform them under the lease; did the landlord commit promissory fraud in statements that he’d reimburse the tenant for repairs; and should the corporate veil be pierced where landlord kept the insurance proceeds and paid his personal bills with the money.

The value here isn’t necessarily in the facts of the case, but the Court’s useful statements of “the law” as it relates to contract interpretation, promissory fraud, and piercing the corporate veil/fraud.

This is a good case to print and save for your next brief.

Tennessee Courts will give Pro Se Litigants “Some Leeway,” But Not Much

Some of the hardest trials to handle aren’t when there’s a good attorney on the other side. Instead, the toughest cases can be when there’s a non-attorney on the other side, meaning the other party is representing himself.  In the legal world, this is called “pro se” representation.

With a lawyer on the other side, there’s an expectation that they know the rules of civil procedure, the local rules, and the relevant law. As a result, you can expect that you will be able to cut to the chase and narrow the issues.

With a pro se litigant, everything could be at issue and, worse, a pro se party probably doesn’t know the rules of the court, meaning objection deadlines will be missed and all other types of procedural missteps can occur. This places the lawyer and the Judge in a strange situation–do you hold the pro se litigant to same standards as a party who goes to the trouble of hiring a lawyer? Shouldn’t they  be held to that standard?

A fairly recent Tennessee Court of Appeals case (click here to review) considered that issue in a dispute where a property owner was fighting a foreclosing creditor. The Court noted that “there are a multitude of problems with Defendant’s brief,” including a complete failure to comply with the Tennessee Rules of Appellate Procedure.  The Court called the pro se filing “a rambling and, at times, incoherent brief.”

The Court went on to say it “must not excuse pro se litigants from complying with the same substantive and procedural rules that represented parties are expected to observe.” Young v. Barrow, 130 S.W.3d 59, 63 (Tenn. Ct. App. 2003). “It is well-settled that, ‘[w]hile a party who chooses to represent himself or herself is entitled to the fair and equal treatment of the courts, [p]ro se litigants are not . . . entitled to shift the burden of litigating their case[s] to the courts.’” Chiozza v. Chiozza, 315 S.W.3d 482, 487 (Tenn. Ct. App. 2009). However, “[t]he courts give pro se litigants who are untrained in the law a certain amount of leeway in drafting their pleadings and briefs.” Young, 130 S.W.3d at 63.

This is good text to remember the next time a person appears on their own behalf in a matter. This frequently happens in debt collection cases for the obvious reason: if a person can’t pay their bills, then how can they afford to hire a lawyer.

General Sessions Court Refresher

One of the great things about blogging about esoteric issues that come up in my law practice is that, sometimes, I get to consult myself when a legal issue arises.

Like, right now, when I’m preparing for a Davidson County General Sessions trial that starts in an hour, and I’m trying to remember what Tennessee statute allows you to exceed the $25,000 jurisdictional limit in small claims court.

It’s Tenn. Code Ann. § 16-15-501, which allows you to exceed $25,000 in calculating a judgment, where the excess amount is comprised of attorneys fees (and/or court costs and/or discretionary costs).

So, thanks a lot, Creditor Rights 101.