Month: August 2020

341: Judicial Retirements, Vacancies, and What we need to do to support diversity in the judiciary

Memphis Bankruptcy Judge David Kennedy is retiring after nearly 40 years on the bench. Yes, 40 years.

Way back in 2010, I wrote about Judge Kennedy as he approached his 30th anniversary on the bench, telling the story about how he graciously hosted me in his Court when I was a 1L law student and, in a way, set me on a course that has led to my 20 years (and counting) in bankruptcy law.

It’s a great reminder: Sometimes the smallest kindness and gift of your time and encouragement can make a meaningful impact on somebody.

In related news, there’s a Judicial Vacancy for a Bankruptcy Judge in Memphis! Yes, I know this, and I’ve had at least 5 people email me this United States Bankruptcy Judgeship Notice of Vacancy.

Yes, I dreamed of being a judge. Yes, I’m from Memphis and love Memphis. Yes, I’m an award winning Best of Bar, Super Lawyer, Best Lawyers in America Bankruptcy Lawyer.

That would be an awesome job, in a community that has an incredibly large volume of financially distressed consumer debtors who really, really need a smart, progressive, creative judge. Talk about a place where a civic- and policy-minded judge can really make a difference and change lives…

But, it’s not going to be me.

Some of you may know this, but I was invited to interview in December 2019 with the Merit Selection Panel in Memphis for Judge Paulette Delk’s recent bankruptcy judgeship vacancy. The interview–to put it lightly–discouraged me from submitting my name for another vacancy so soon. (And, side note, I’ve already switched jobs recently.)

Judicial Diversity Matters. There were probably dozens and dozens of reasons I didn’t make the final round (and the ultimate pick was an absolute home run). But, based on the content and vigor of the questions to me, I discerned that, maybe, a white male (and, also, from Nashville) wasn’t their first choice (or choices 2 through 5, either, for that matter).

And, if true, they were absolutely correct (though I still question the “vigor” with which the questions were presented to me–yikes). Long before my interview, I’d been talking about the lack of judicial diversity.

We live in a time of monumental awareness of these issues, but our judiciary doesn’t always reflect the diversity of the communities that it serves. If we’re going to seize this moment and truly work for equality and true representation, isn’t this something that we should always factor into decisions?

When people have the power to hire, grant partnership, or appoint to a position, isn’t that a better consideration than “His dad is friends with _______” or “He goes to the same church that I do” or “He is an ‘opportunistic’ hire”? That’s called “affinity” hiring. Don’t do that.

Clients, we need your help. I put the call out, last year, to clients as well. I said:

I’ll go one step further: I think law firm clients need to think about this as well. When a client hires a law firm, are clients asking about diversity? Are clients challenging law firms to take a hard look at their internal policies?  Do clients care about diversity and, if so, how are they expressing that to law firms?

I don’t perceive this to be a trend in our local legal community. Don’t get me wrong; everybody talks about diversity, but, in the end, lawyers and law firms focus mostly on the bottom line, traditional ways of doing things/hiring, and a social/cultural network that tends to promote the status quo. How can we change this?

Real change in the legal profession will not happen until clients start pushing these issues as well.  Clients can vote with their dollars. If these issues are important to clients–and they should be–clients can force this discussion and impact the profession. If you’re a potential client and you care about this, ask prospective law firms what they do to promote diversity, whether in hiring or in the community.

This is a way to get more people of color into judicial spots. Clients, demand diversity in staffing your work. Make it a priority. Law firms will listen. With more opportunities for meaningful legal work and assignments, lawyers from under-represented backgrounds will gain experience that will change the trajectory of their career. Law firms are full of talk when it comes to diversity; real change requires that clients make it a priority.

To quote a tweet from Tiffany Graves:

New Associates: These recent Tennessee Appellate Opinions can save you some research time.

Over the past few weeks, the Tennessee appellate courts have issued some really useful opinions on creditor-specific issues of law.

As you’ll remember from this post (from 2013!), these opinions have great recaps of the law and can save valuable research time. I’ve literally been sitting at counsel table, furiously researching this site for a citation (this one, about slow pay motions. And also this one about Rule 69.02.)

Some quick hits from the past week:

Statute of Limitations; when a breach of contract cause of action accrues; and the standard of review for a 12.02(6) motion. This case from yesterday, In re Estate of Donald Cowan, No. M2019-01597-COA-R3-CV (Tenn. Ct. App. Aug. 25, 2020) has a great statement of the law on statutes of limitation, when the clock starts ticking on a claim, and a good recap of the standards in granting a motion to dismiss for failure to state a claim upon which relief can be granted under Tennessee Rule of Civil Procedure 12.02(6).

It’s a well written opinion, and a litigant with those issues can literally cut and paste those sections into a brief.

Motions to Intervene under Tenn. Riv. Civ. P. 24. Regions Bank v. The Blumberg Trust, et. al., No. E202000051COAR3CV, 2020 WL 4919783 (Tenn. Ct. App. Aug. 21, 2020). This opinion, issued on Friday, has a great summary of the statutes and case law on Intervention as of Right and Permissive Intervention in Tennessee under Rule 24.

In that case, the party seeking to intervene was an assignee of the debt and was really only trying to substitute itself as a party, so it’s strange that intervention was even an issue.

In an even stranger twist, the prevailing party (appellee) most definitely submitted the Order Denying the Motion, and the submitted (and entered) trial court order was entirely devoid of factual or legal analysis. As a result, the Court of Appeals refused to rule on the issues on appeal and remanded the case for further proceedings.

My question is this: It was clearly a deficient bare-bones trial court order, but doesn’t the appellant share the responsibility of curating the record? Shouldn’t the appellant have submitted a competing order that had enough substantive details to properly present the issue on appeal?

Just a strange case.

Prejudgment Interest under Tenn. Code Ann. § 47-14-123. The Court of Appeals revisited the case of 101 Constr. Co. v. Hammet, No. M201801321COAR3CV, 2019 WL 5606610, at *7 (Tenn. Ct. App. Oct. 30, 2019), appeal denied (Mar. 26, 2020), and I can’t tell exactly why, but I appreciated the reminder about this case’s very detailed lesson about the importance of detailed communication in legal fee arrangements.

Also, it has a nearly “cut and paste” perfect discussion of the standards in Tennessee for awarding prejudgment interest under Tenn. Code Ann. § 47-14-123.

Spoiler: Tennessee Courts should always be awarding pre-judgment interest.

Elements to Determine Value of Damages under Quantum Meruit Claims (and who can testify). This is an issue that doesn’t show up in appellate cases often: what type of proof is required to establish the amount of damages in a quantum meruit claim.

The Court of Appeals provided a really good road map last Tuesday, in Blount Mem’l Hosp. v. Glasgow, No. E201900776COAR3CV, 2020 WL 4809951, at *2 (Tenn. Ct. App. Aug. 18, 2020).

The Plaintiff had an awful contract, so it had to rely on unjust enrichment/quantum meruit to recover the value of the hospital services provided to the Defendant. The Plaintiff presented proof from the “hospital’s financial representative” (not a doctor or service provider) that “she was familiar with the customary charges in the medical industry and that the hospital’s charges for the services were reasonable and customary.”

This knowledge wasn’t gleaned from a survey of the industry or by first hand knowledge of what other hospitals were charging; instead, it was based solely on what Medicare allowed hospitals to pay. (As an added note, though, the Court mentioned that the mere fact that “this is what the hospital usually charges” isn’t good enough proof.)

But, because the proof presented, i.e. that the “medical services were comparable to all hospitals in the area that accepted Medicare patients…,” was presented by a “hospital representative who is familiar with what is reasonable and customary,” the Court found that it was “sufficient to make [a] prima facie case for the reasonable value of the services rendered.” Id. at *3.

Keep this case for those situations where your witness is the controller / bookkeeper, but has no idea how to perform the underlying services. This comes up alot.

Last One: Setting Aside a Judgment Under Rule 60.03. Reese v. Amari, No. M201900329COAR3CV, 2020 WL 4342734 (Tenn. Ct. App. July 28, 2020).

This one is really interesting. A judgment debtor attacked a decades old judgment, arguing that it was a default judgment.

In denying the attack, the Court noted that, even though it was called a “default” judgment, the trial court actually entered the judgment at a trial, which the defendant didn’t attend. So, it wasn’t technically a default judgment, as that is defined under Tenn. R. Civ. P. 55, and wasn’t entitled to the more generous standards to set aside default judgments.

Separately, though, Judge Dinkins’ opinion has a very precise presentation of when a court will set aside a final judgment under Rule 60.02(3).

And, new associates, this comes up far more than you’d imagine.

Tennessee Court of Appeals issues opinion that resolves another obscure issue under Foreign Judgment Act.

Last year, I wrote a post called Judgment Creditors are Limited to the terms of their Foreign Judgments, which cited a Tennessee Court of Appeals case styled The Wolf Organization, Inc. v. TNG Contractors, LLC.

The point of that opinion was that a judgment creditor seeking to domesticate a foreign judgment under the Uniform Enforcement of Foreign Judgments Act (Tenn. Code Ann. §§ 26-6-101 to-108) would be limited to the actual amount of the foreign judgment. In Wolf, the issue was that the creditor was asking for the judgment amount plus more post-judgment attorney fees to be allowed. The Wolf Court said that the claim for additional attorney’s fees was a separate claim.

I appreciated this case, since it provided resolution of an obscure, but common, issue under the Tennessee Foreign Judgment Act.

Well, a little more than a year later, the Wolf litigants are back at it, with another interesting issue. The latest is Friday’s opinion, The Wolf Organization, Inc. v. TNG Contractors, LLC, M202000093COAR3CV (Tenn. App. Aug. 21, 2020).

The new issue? If the foreign judgment provides for a specific post-judgment rate of interest, but the Order enrolling the foreign judgment doesn’t mention interest, what happens?

The Court makes two useful observations:

  1. Regardless of whether the new Order says anything about post-judgment interest, all judgments are automatically entitled to post-judgment interest.
  2. But, in the absence of a specific statement or order about the amount of post-judgment interest in the enrollment Order, the rate of interest is just the Tennessee statutory rate, found at Tenn. Code Ann. § 47-14-121.

My take-aways from this opinion:

  1. Details matter. If you think you will need it in the future, include it in the text of the Order. An order from a court will always be the most important pleading you’ll draft, and a smart lawyer will think about all the things she will need from this order and work backwards.
  2. Are Orders always required? Under the Foreign Judgment statute, an order is not expressly required. Instead, under Tenn. R. Civ. P. 3A.04, the Clerk simply “enrolls” the original judgment after 30 days after service.

Sure, the Wolf creditor could have avoided all of this with a more detailed Order; could they have avoided all this by not filing any order? Maybe.

Also, following the first Wolf opinion, the creditor needed to go back to the other state to get an award of attorneys fees. Couldn’t the creditor also get a judgment for post-petition interest at the higher rate and then come back to Tennessee?

Either way, it’s an interesting case on a rarely litigated statutory scheme.

I quit my law firm. Click to Learn More…

Over the last couple of weeks, I’ve enjoyed telling people “I quit my job.” Because it sounds really dramatic.

It sounds less exciting when they realize that I just switched to a different law firm.

As seen in the Nashville Post on Monday, I left Bone McAllester to build the new Nashville office for Harris Shelton, a 60-lawyer firm based in Memphis.

But, trust me, after nearly 13 years at Bone, where I was a partner, where I was on the firm’s Board of Directors, where everybody knew me for my work, where I had the really-big-awesome-lawyer office (decorated with a custom painting of a shirtless Rev. Al Green), where I knew where the secret stash of M&Ms were hidden…

Well, it feels really dramatic to me.

Over the past few weeks, I’ve developed a new morning routine. I tend to wake up, involuntarily, at 4:45 a.m. or so, to worry about whether it was the right choice and about all the work to be done to build something. Opening bank accounts. Picking office space. Hiring staff. Hiring lawyers. And, of course, doing the legal work for all the clients. And by “wake up, involuntarily,” I really mean “freak out” about what’s next.

And, usually, around 5:30 a.m. or so, I get up, and I get to work on it.

Early on, I confided in one of my best friends (also, a lawyer) about my new early morning routine, and he laughed and said, “Well, you only have one option now: Success.”

So, here we are. Welcome to Day 13 of my efforts to build the better law firm.

What does this look like to me? My plan isn’t to re-invent the wheel, but to incorporate all the best parts of the firms that I admire already, and also incorporate the lessons that we’ve learned during COVID about technology and the practice of law.

I want to build a team of awesome lawyers and also awesome people. The greatest compliment that I give to other lawyers is that “I’d trust them with my life.” That means they’re smart, competent lawyers, but, also, that they care. It’s not just about billable hours or paperwork. A lawsuit might be the biggest crisis of a client’s life. I want to surround myself with attorneys who understand that and treat their responsibility to the clients accordingly. Who say to clients: “You can worry less now. Your problem is now my problem.”

I want a diverse team. Many law firms are run by old white guys, for other old white guys. This isn’t that. I want to be intentional about growth, and I, like my clients, want a team of professionals that looks like the community we serve. For years, I’ve fought against “manels” when I’ve been asked to speak at CLEs. Now that I get to build a law office, I’m guided by those same principles.

I want a community-minded team. I got a little hot last October, with my post asking lawyers “October is Pro Bono Month in Tennessee, and what have you done?” As lawyers, we have so much power to help under-privileged communities, but, too often, we get appointed to fancy-pants non-profit boards and think we’re doing pro bono. If you want a spot on my team, get ready to roll up your sleeves and work at legal clinics and expungement clinics. Make the world better.

I want a team that supports each other and holds each other accountable. This is going to be a team. If you have a trial you’re terrified about, I’ll go with you. If you have a pro bono cause that you’re passionate about, I’ll volunteer with you. I need you to do the same for me. Need help moving? Sigh. That too.

So, I probably got you with the dramatic headline, right? My departure at Bone has been as non-dramatic as you could imagine. Before I left, I wrote notes for all my fellow coworkers. Here’s the one I left to the newest associate:

It’s part career-advice, and also part recruiting pitch.

Will collection on unpaid private school tuition bills be a big news story in 2021? Probably.

In late July, I noticed the television ads by the Nashville Catholic Schools during the morning news, confidently advertising that their schools would be open for in-person classes the 2020-21 school year.

The first few times, I wondered if it was a coincidence that the ads were being rolled out while public schools were struggling with the decision of whether to re-open for in-person classes during the COVID pandemic.

Then, the weekend after public schools started their online-only reopening, the private schools’ messaging got a lot less subtle:

Gone were the images of sweet kids in their school uniforms.

These new ads featured a frustrated mom, dealing with a pesky kid with a tablet in her little hands, bothering the mom for help with school work while the mom tried to work from home. But, as the ad showed, once the mom signed her kid up and sent her off to in-person school at the private school, however, all was good.

At the end of the day, a private school is a business, right? This is a marketing technique called “FUD,” which means “fear, uncertainty and doubt” and is evoked intentionally in order to put a competitor at a disadvantage. In short, the private schools knew that public school parents were terrified about the start of the new school year, had no idea what to do, and the ads were deployed the weekend after Metro re-opened to provide some answers.

The campaign has worked in my neighborhood. My local school’s Parent-Teacher Organization has been decimated by defections. Seriously, I might be the new PTO president by default and not even realize it. We’ve had so many kids and their parents opt out of our (awesome) school.

But, as colleges across the country all over America are realizing this week, promises of in-person learning can be hard to keep.

As a collections lawyer, I have to wonder if parents, who were enticed by the promise of in-person learning, will be unhappy with their decision (and the exorbitant monthly tuition costs) if in-person classes are suspended. Will this unhappiness result in defaults in tuition payments?

During the last recession, I represented a handful of Nashville’s private schools in collection matters. It was not an easy task, as I wrote about in this 2011 blog post, More Than Just Legal Expense: The Unexpected Hassles of Pursuing Collection of Unpaid Debt. In that post, I said:

I was reminded of this [difficulty] when I read this [then recent] Tennessean article about lawsuits filed by Nashville private schools to collect on unpaid tuition. I was doubly reminded about the “hassle” part when I scanned the comments, with the schools’ dirty laundry getting aired for the world to see.

The school is perfectly within its rights to seek payment of past due amounts, but collections can bring out the worst in people, especially in this economy.

In 2009 and 2010, I issued a number of demand letters to parents for unpaid tuition, and, wowza, the responses I got were not pretty. The parents complained about everything imaginable. I sent probably 50 letters, but I talked the school out of filing any lawsuits. Life was too short to have to have to deal with those sorts of fights in small claims court.

So, if the promises of in-person schooling end up not coming true during the global pandemic, will parents pull their kids out? Maybe. Does the standard annual contract have a provision that keeps the parents obligated to repay the full tuition? Probably.

Should the school sue? See my 2011 post about that.

This will be a developing issue in 2021. This is the first time that many of those parents are incurring the $2,000 to $4,000 a month fees, and they may not have anticipated the huge budget impact it will have. If the pandemic takes a harder turn–whether it results in online only classes or even a parent’s job loss–will those parents be willing (or able) to stay enrolled and current on tuition?

How a Dispute over a CBGB documentary shows the dangers of not going to Court.

A few weeks ago, the New York Times told the story of filmmaker Amos Poe, who filmed historic shows at CBGB in New York City, getting footage of early shows by Blondie, Talking Heads, and the Ramones.

The article is titled “His Film Is a Punk Classic, but the Credits Now Roll Without Him,” and it’s not a happy story. In short, today, Poe gets hardly any credit for his visionary role in recognizing the significance of the time and the people he was shooting and creating what some call a classic punk rock story.

That’s because he lost his rights and ownership to the film to a business partner, in an unpaid debt lawsuit. Poe says that he couldn’t afford a lawyer and, in the end, “skipped the court date.” At trial, the Judge found the debt to be about $6,500 (but with $43,000 in legal fees).

During the collections process, the judgment creditor was able to sell the copyright (to itself) via an execution sale, including ownership of Poe’s four films (which sold for $10 each).

Per the New York Times, Debbie Harry commented “What a farce that anyone else should claim his inspirational film.”

Here, there are a number of take-aways.

First, what the judgment creditor did here was valid and allowed under collection law. A judgment creditor can seize all sorts of assets of the judgment debtor, including these intellectual property rights (which are treated as personal property under many states’ laws, including Tennessee).

Plus, the ultimate sales price was only a small fraction of the value of the property being sold, most likely because no bidders appeared at any asset sale–and the creditor got ownership for its very low opening bid.

Second, there were so many things Poe could have done to protect his assets. File a list of exemptions. Sell the IP rights himself. Go to court on his court date (which I called one of the worst mistakes a debtor can make).

It’s a sad story, but it happens every day for debtors all across the country.