341 Recaps: Recording Judgments, Getting the Checks Right, and the very small advantage of Small Law

The Race is On. On Friday, I wrote about the Chancery Court opinion that “blesses” the common practice of recording your judgments as a lien, even though the Tenn. R. Civ. P. 62.01 “30 day stay” was still in effect.

I’ve heard from a number of lawyers that it’s what they’ve always done, but, nevertheless, it’s nice to have a bit of judicial reassurance.

Back in September 2023, immediately after a trial in Sumner County, I was racing to get the new judgment recorded on land that the judgment debtor had under contract for sale.

As soon as the Judge signed my order, I asked to make a certified copy. Cautiously, because I’ve had judges and court clerks admonish me in the past for even asking for a certified copy of a brand new judgment.

In my case, I had no time to spare.

My Register of Deeds visit was where the real fun started. Within minutes of being handed my certified copy, I was at the Register of Deeds’ front counter.

While I was sitting in the Register’s waiting area, I overheard them discussing a problem they had to deal with.

A Big Law Firm had mailed in a document for recording for the third time, and, once again, the “payee” name on the check was wrong. I don’t know what was written on the check, but it did not say “Sumner County Register of Deeds” (or, I assume, anything close to that).

Twice already, the Register of Deeds had rejected the filing and mailed it back.

As I was sitting there, they were discussing what to do about this third time.

How on Earth does this happen three times? As it turns out, the year before, this AmLaw 200 Big Law Firm had purchased (or, as the marketing people say, “combined with”) a local law firm and checks were no longer written in Nashville or anywhere in Tennessee.

Instead, the checks were written 600 miles away by someone who has probably never heard of “Sumner County” or a “Register of Deeds Office,” and who probably has never met the lawyer (or client) who desperately wanted whatever was being rejected to be recorded.

I have no idea if the third recording got accepted that day, or if the Clerks ever just called the Big Firm to sort it out. I got my recorded judgment lien on the property and left; the rest was not my problem.

So what’s the point of the story? To be clear, I was very amused by it all.

Sometimes, when I am writing my own checks or driving to record my own documents, I miss the old law firm days when I had a person who did all that for me. But, I’m also a control freak who takes his job very seriously, and I would have lost my mind if I had lost weeks trying to record something that kept getting rejected.

Most articles about law firm acquisitions /combinations have the narrative that “bigger is better,” and usually mention “broader reach,” “expanded networks” and “new markets.”

Sitting there that day, with sweaty palms, watching the clock, hoping to get my document recorded before the land could be sold…I was glad to be the guy writing my own checks.

The race is on: Davidson County Chancery answers a long-standing question regarding judgment liens

We’re one step closer to answering one of Tennessee collection law’s greatest mysteries: Can a judgment creditor record a copy of its judgment as soon as it is signed by the Judge, or must the creditor wait 30 days?

The question arises under Tenn. R. Civ. P. 62.01, which says that “…no execution shall issue upon a judgment, nor shall proceedings be taken for its enforcement until the expiration of 30 days after its entry…”

The exact issue is this: Is recording a certified copy of a judgment an “execution”? I’ve been asked that for years, but never quite knew the answer.

For starters, what’s the statutory authority for recording a judgment lien? I look at Tennessee Rule of Civil Procedure 69, which is titled “Execution on Judgments,” and includes all the different ways you can “execute” on judgments (garnishments, levies, sheriff’s sales, liens). This list includes Tenn. R. Civ. P. 69.07(2), “Execution on Realty,” which provides the exact process to record a judgment lien against the judgment debtor’s realty.

And let’s be honest; why would you record a judgment in the first place? Under Tennessee law, the recording of a judgment with the register’s office creates a lien on real property, meaning that the debtor can’t sell, refinance, or transfer the property without dealing with the judgment. It’s a pretty powerful tool to get paid. That’s why you’d record it, and as fast as possible.

If the point is to get paid–and as soon as possible–that looks a lot like enforcement, right? But is that “execution”? Should we also throw around terms like “collection” or “attachment” too?

It’s been a mess because the statutes and rules all seem to use these different terms interchangeably, except when they aren’t interchangeable.

Faced with this exact issue, the Davidson County Chancery Court had to make sense of these competing terms and concepts. In an Order from February 2, 2024, the Court found the mere act of recording a judgment during the Rule 62.01 stay period “was not premature ….because the filing of judgment lien is not an act of enforcement.”

In doing so, the Court referenced the pleadings filed in the matter, which drew reasoning from Tenn. Code Ann. § 25-5-101(b)(1) and the competing concepts of “final” judgments found in Tenn. R. Civ. P. 54 and 62.01. Further, given the Court’s brief, but specific, factual finding, the Court seems to agree with the opposing brief’s distinction between the acts of recording a lien versus enforcing a lien, arguing that only the latter would violate Rule 62.01. The full Order is attached below.

It’s an important issue that has long vexed creditor rights lawyers, debtor’s counsel, and even court clerks. I’ve had court clerks only begrudgingly provide me with a certified copy of a judgment on the day of entry (and reminding me that I “can’t do anything with it for 30 days”).

This Order and the related reasoning may provide a roadmap for future arguments on this issue, which comes up far more frequently than you’d think.

I watched these trial court proceedings pretty closely, and I’m glad to see a creditor-friendly result. The underlying initial pleadings are also attached below.