Service of Process: Just Like in Hollywood (Part 2)

It’s a strange day when legal procedural issues get top billing on the Today Show

As you may have seen, Jason Sudeikis served his ex-Olivia Wilde with legal papers while she was, literally, on a public stage talking about her upcoming movie. The photos from the event show her, in real time, opening the packet and reading the custody papers. On stage.

It’s news-worthy because it seems like such a jerk thing to do, especially given the public persona of Sudeikis, who is famous for playing the nicest character on modern TV and, generally, regarded as a nice person in real life.

Seriously, Ted Lasso isn’t just nice, but inspirationally nice. I can’t count the number of showy LinkedIn posts talking about life lessons people have learned from Ted. One review called the show a “warm hug of nice.”

But, this? This seems like a big-time jerk move.

I’ve written about this frequently: Service of process can be the hardest part of litigation, and a party may be forced to go to great lengths to get somebody personally served with legal papers. It may be a little too “on the nose” to cite examples from Hollywood, but this sequence from Pineapple Express is hilarious and procedurally accurate. It’s also a huge deal: Ineffective service of process can ruin your entire lawsuit.

Personally, in trying serve an evasive defendant, I’ve researched social media, court dockets, or anything else that will help me locate where and when the defendant may be. My process server has shown up holding a bouquet of flowers, an empty cardboard box, and waited at the end of a bike race, looking for Racer # 3433 at the finish line.

So, did Sudeikis do something wrong? It depends. Was Olivia Wilde evading service, requiring them to go to this extra mile to “catch” her? We don’t know that.

But, we do know this: This move is inflammatory and is going to make this litigation more difficult. As lawyers, we are faced with all sorts of “allowed” procedural tactics that sound great on paper, but that can also skew litigation into scorched earth territories in real life. Part of a good lawyer’s job is to talk clients out of those tactics and focus on the bigger picture.

Here, Sudeikis has already disavowed the action, saying that neither he nor his lawyer approved this rogue decision by the process server.

But, looking at the big picture, the damage may already be done. This custody battle just got a lot more contentious. And, honestly, it’s going to be weird watching Ted Lasso manage his own divorce and custody issues knowing what I know about this messy real-life drama.

Davidson County Election Picks from a Nashville Lawyer

Last night, I hosted a neighborhood “meet and greet” for a judicial candidate, and one of my neighbors told me something I didn’t know: We all watch your front yard, to see which candidate signs you have.

At the party, I saw this in real time, as neighbors showed up with pens, the Davidson County sample ballot mailing, and lots of questions.

If you put me in a roomful of people asking me questions, I’ll talk. Having said that, it was terrifying, seeing people circle names (or “X” out others) based just on what I was saying.

But, our city needs good judges and, as I shared my thoughts, I realized that my first-hand knowledge was useful to these people, who had never set foot in the courthouse. I go to courts in Davidson County for a living and nothing impacts my work as much as the quality of the local judiciary. So, I offered my honest and measured comments on each race.

I’ll share (some of) my comments with you all too:

First Circuit Court Judge (Division 1): I pick David Briley over Wendy Longmire. David has a compassionate heart for regular people and a calling to public service, coupled with a strong legal mind. I worked at a law firm with David Briley for more than 13 years, so I’m biased–but in a good way. He regularly represented individuals in personal injury cases, as well as pitched in on the biggest cases the firm handled. Personally, he and I teamed up on a construction lawsuit against one of America’s largest fast food chains, and I got to see him operate in my world. I was impressed (and so was my client). He’s also a nice, conscientious person. He’s someone who I trust to make the right decision.

Seventh Circuit Court Judge (Division 7): This is the Probate Court, and I don’t do probate law. But I know somebody who does it all the time: Andra Hedrick. And she’s running for Probate Judge. By my own review, she’s the most qualified candidate in terms of actual, practical experience. She’d be a great probate judge.

Eight Circuit Court Judge (Division 8): I support Kelvin Jones, the incumbent. He’s smart (look at his resume), and, when I can support candidates whose background and race reflect the larger community they serve, I have promised to do it. If you talk to him, you’ll see that he cares. This is a tough one (people I trust really disagree on these candidates), and I approached this race with a very open mind. I have gone to events for both candidates, and I see a clear argument for both. In short, do your research, and I won’t argue with you on this one.

Criminal Court Judge (Division 5): Whenever a big criminal case is shown on the news, it tends to have Monte Watkins as the judge. And he always does a good job. He’s a good judge and a good person.

District Attorney: My first legal job was a summer clerkship at the Shelby County District Attorney General’s Office, and I learned, quickly, that it’s a hard job. Glenn Funk is doing a good job. I don’t do criminal defense, so my measure is how often do I–as a regular citizen–hear complaints about the DA’s office (like what happens in other cities). I just don’t hear about problems with Funk’s office. I trust him and his values.

Chancery Court Part III: There may be no court that I care more about than Chancery Court, Part III. “Chancellor Lyle is the best judge I’ve ever appeared in front of,” and this is her court. When she announced her retirement, I was curious about who would be brave and bold enough to fill those shoes. I am pleased that my friend and former colleague, I’Ashea Myles, is that person. Myles isn’t just running for office, she’s looking to make history as the state’s first ever African-American female chancellor. We need judges who have guts. She’s got my vote.

General Sessions Judge, Division III: Melissa Blackburn may be the hardest working Judge in Davison County. Civil Dockets. Criminal Dockets. The Mental Health Court. The Veterans Court. And, to be announced later today, a new project helping to move individuals ruled incompetent through the system in a way that gets them help–and maybe out of the system.

General Sessions Judge, Division VI: No matter what type of case, I’d trust Jim Todd to get it right.

General Sessions Judge, Division VII: The first 2022 election sign that I put in my yard was for Marcus Floyd. He’s a great, smart guy (and a Hillsboro High graduate), and he’ll be an asset to this city for decades to come.

General Sessions Judge, Division VIII: This is also a close one, with spirited and smart people on each side. In a close race, I tend to favor the incumbent, Rachel Bell. Some folks may complain about the start time of her dockets, but I’d point out what she’s done to help people in Davidson County avoid eviction during the pandemic with the L.E.G.A.C.Y. Housing Resource Diversionary Court and Program, which has helped thousands of tenants (and, yes, landlords–as of September 20, 2021: $18,799,705.71 had been paid to landlords), and also her long-standing expungement clinics.

General Sessions Judge, Division IX: I appreciate that, no matter the case, Judge Lynda Jones never treats any case (or litigant) as a “small” claims matter. She is focused on getting it right, including past efforts to create a business docket in General Sessions. She’s ambitious and works hard.

Circuit Court Clerk: The current clerk, Ricky Rooker, is one of the best in the state, partly because he’s been doing it for so long. Everything they do seems to take lawyers’ needs into account, and they had a smooth transition to a very effective e-filing system in 2020. Part of that success was due to Rooker having a very good deputy, Joseph Day, who is now running for Clerk. If it isn’t broke, don’t change it. I’m voting for Day.

If you were at the house party, you probably got a bit more color and background on some of these races.

You’ll notice that there are a handful of races I’m not commenting on. I haven’t voted yet, and I plan to keep on researching those. This list may evolve. I’m researching all of these until the day I cast my own; they are imporant races.

Finally, this list is biased by my own interactions, experiences, and past; please do your own research.

New Tennessee Court of Appeals Resolves Ten-Year Old Question about Post-Judgment Interest Rate

For nearly a decade, I’ve been writing about the Tennessee post-judgment interest statute, Tenn. Code Ann. § 47-14-121, which was amended in 2012 to change from the long-standing fixed rate of 10% to a variable rate that changes every 6 months.

I say “writing,” but others may say “complaining.” They’d probably cite this post: What I Don’t Like About the New Post-Judgment Interest Rate Statute In Tennessee (Everything).

My initial concern was one that many Tennessee lawyers shared: Because the interest rate is subject to change every six months, will the applicable rate on an existing judgment also change every six months?

Nobody knew. Not attorneys. Not court clerks. Not even the trial court judges.

In a very helpful comment to this 2020 post about the issue, Tennessee attorney Michelle Reynolds provided the best answer I’d seen (and one that I’ve since argued):

From the TNCourts.gov website: “Beginning July 1, 2012, any judgment entered will have the interest set at two percent below the formula rate published by the Tennessee Department of Financial Institutions as set in Public Chapter 1043. The rate does not fluctuate and remains in effect when judgment is entered.”

Of course, that’s not a case or a statute. It’s an “introductory paragraph on the Administrative Office of the Courts website.”

In an opinion issued last night, however, we have our answer!

In the case (Laura Coffey v. David L. Coffey, No. E2021-00433-COA-R3-CV (Tenn. Ct. App. Apr. 11, 2022), the Tennessee Court of Appeals notes this long-standing confusion and then immediately dispels it.

In its analysis, the Court notes that the rate to be applied under Tenn. Code Ann. § 47-14-121(a) is clear and unambiguous (it’s math), and it’s the entirely separate provision at Tenn. Code Ann. § 47-14-121(b) that introduces fluctuations in the general rate. Noting the clarity in (a), the Court finds that (b) does not create ambiguity as to existing judgments.

Under Tenn. Code Ann. § 47-14-121(a), the Court writes, the “applicable post-judgment interest rate does not fluctuate when applied to a particular judgment; instead, it remains the same for the entire period of time following entry of the judgment…until the judgment is paid.”

It’s always a great day when an unresolved issue gets clarity. Sometimes I make a joke that only “law nerds” will appreciate a legal development like this; for this one, though, I think all Tennessee lawyers will benefit from this opinion.

Tennessee Judgments Always Incur Post-Judgment Interest

A good rule of thumb for prevailing parties in litigation is this: If you want something, be sure to include that in the court order.

Well, duh. The Judge can’t give it to you if it’s not expressly written in the order.

A recent opinion from the Tennessee Court of Appeals (Hartigan v. Brush, No. E202001442COAR3CV, 2021 WL 4983075 (Tenn. Ct. App. Oct. 27, 2021)), however, makes clear that post-judgment interest applies on all monetary judgments in Tennessee, no matter if the order expressly says so.

There, the Court noted that, under Tenn. Code Ann. § 47-14-122, “Interest shall be computed on every judgment…,” and, as a result, post-judgment interest is “mandatory.”

It’s an issue that’s unlikely to come up often, partially because every prevailing party generally includes an express grant in their judgment. But, when the order doesn’t expressly say it, have this recent case ready to go.

Ukraine Fundraising: I raised $1,950 for World Central Kitchen

I’ll skip to the Tl;dr part: On March 10, I donated all of my 6.5 billable hours to support Ukraine and, at $300.00 an hour, I raised $1,950.00 for World Central Kitchen’s refugee relief efforts.

In the grand scheme of things, it’s not much, but, to my little firm, a day’s worth of revenues is a lot.

This has been a law firm fund-raising concept that I’ve pondered for a while.

With the demands and time constraints that so many lawyers face, it’s hard to make time to volunteer at Legal Aid. But, if lawyers are already sitting at our desks, why not cut out the transit time and simply donate an hour (or more) of billable time per month to a good cause?

Of course, this grand idea works best at a big firm, where one hour a month is just a blip on an individual lawyer’s hourly billables report but, at the same time, results a substantial amount of money each month when you’ve got 40-50 lawyers participating.

Get a few law firms doing this instead of the standard “sponsor a table at a dinner” contribution, and you’re talking real money going to local charities.

So, to put my money where my mouth is, I’ll continue to do this each month, supporting different charitable causes by direct cash payments representing a billable hour.

Next month, I will donate time on April 13 to support the International Rescue Committee’s work helping Syrian refugees. I’m open to suggestions for the month after that.

And, in the interim, I promise to get back to law blogging. Thanks for your support.

We are Supporting World Central Kitchen on March 10, and We hope you will too

As some of you saw in my post from last week, my little law firm will be donating all revenue generated on March 10, 2022 to support Ukraine and Ukrainian refugees.

The initial decision was based on the terrible early images from the War and, in the past week, things have only gotten worse, as the Russian attack has ravaged residential areas and evacuation routes. If families are able to make it to the border, it’s only after losing everything they owned, after hard travel in the cold, and after days with no food.

Seeing this, my family has decided to support the World Central Kitchen, which quickly mobilized along the border to provide hot meals and basic necessities to Ukrainian refugees crossing into Poland and, now, are set up at eight other border crossings and also in the large cities inside Ukraine.

You can get live updates (and inspiration about kindness and humanity) via their twitter account: @WCKitchen

I encourage you to join us by donating at World Central Kitchen’s donation page.

If you do donate, please feel to let me know in the replies or comments to this post.

Note: You don’t have to be a new or an existing client to participate. Everybody is welcome to give.

On Ukraine: Tweets are Cheap, but Billable Hours Aren’t

Before law school, I majored in English, not Political Science.

So, as I see the news about the war in Ukraine, I don’t understand the politics behind the invasion (probably because there’s no just reason for this), but I absolutely see the tragedy. The fathers saying goodbye to their families. The injured and scared kids. The destroyed houses.

Photo from: https://twitter.com/verkhovna_rada/status/1498613193794625544?s=20&t=kZwUp1cKqaDLgujkNGLTWQ

I also see the bravery of the Ukrainian leaders and in the Ukrainian people. I bet there’s a hot-shot Ukrainian lawyer out there whose “to-do” list today didn’t consist of legal research, but instead defending their city from armed forces.

What would I do if that happened to my family? To my country?

Other than a few sympathetic tweets offering the typical “thoughts and prayers,” what can I do to help? I’m just a lawyer in Nashville.

Oh right. My time is valuable. Let’s donate that.

Next Thursday, March 10, I’ll donate all of my billable hours from legal work to humanitarian efforts supporting Ukraine and Ukrainian refugees.

I’m a lawyer (see above), so I’m sure you all will expect some fine print.

Here goes:

  • I will donate all billable hours, but don’t forget that I’m a small shop (so don’t expect a 24 hour day–I also do the IT and bookkeeping)
  • I’ll show my math, though, and I will post both the final tally at the end of the day, as well as the receipt for the donation (to be made on March 11)
  • I haven’t yet decided on the organization, but I’m open to suggestions for worthy organizations (my children and I are going to vote) (Edited: We are supporting World Central Kitchen)
  • If you’re a new or existing client who would like me to work on your file specifically on March 10, let me know
  • If you’re a lawyer or law firm who wants to out-donate me, you are welcome (and encouraged) to steal this idea

That last point is important.

I have the privilege and the luxury to donate my entire day to this cause. Some big law firms may not want donate 100% of the day. But can you imagine if some of Nashville’s largest law firms donated just one hour of each lawyer’s billable hours on March 10 to this?

As an aside, I also hear the skepticism about the Western world’s support for Ukraine, when there’s been an absence of similar responses for black and brown people facing similar crises. I also don’t know the answer for that, but I agree.

So, assuming this isn’t a massive failure and doesn’t send me into bankruptcy, let’s plan to do this again next month, on April 13, to help Syrian refugees.

The Red River Bankruptcy, COVID, and Nashville’s Garbage

What a time for Nashville’s curbside recycling to get disrupted. I’m not sure I bought any Christmas gifts in-person this season. Instead, I relied on Santa’s elves, dressed in FedEx and UPS uniforms, to deliver the gifts in cardboard boxes.

It’s something I’ve been doing since March 2020, when COVID first disrupted everything.

And, based on the Statement of Background Information in the Red River Waste Solutions, LP Bankruptcy Case, all of us staying at home and generating more residential garbage is, basically, why it filed bankruptcy.

The case was filed on October 14, 2021. The full bankruptcy docket can be found here.

The circumstances behind the filing of the bankruptcy are laid out in the Declaration of James Calandra, the proposed Chief Restructuring Officer of Red River, and the Statement of Background Information.

Red River alleges that the COVID pandemic resulted in more residential waste (and less commercial waste), putting additional burden on Red River (which serviced the residential waste, but generally not the commercial). This resulted in more employee costs and additional wear-and-tear on Red River’s equipment and vehicles. The goals of the bankruptcy are to restructure debt and, possibly, sell the business in parts.

In today’s Axios Nashville newsletter, they report that Nashville “is waiting for the bankruptcy court to determine what happens to its contract, and it’s possible Metro will be allowed to search for a new trash collector.” Well, sort of.

Based on my review of the docket, Nashville has hired a local Texas lawyer, but the real shots are probably being called by the Nashville law firm Bass Berry Sims, which was allowed to appear on behalf of the city “pro hac vice” (which means that an out of town lawyer who is otherwise not licensed in a jurisdiction can appear in a case).

After the entry of that Order on November 29, 2021, Nashville hasn’t filed anything to formally press Red River as to whether it will assume or reject the waste services contract. Instead, my guess is that the city’s very competent counsel are in negotiations behind-the-scenes for Red River to decide whether it can continue to provide the services or whether it’s going to walk away from its obligations.

So far, only one party is really pressing this issue. In its contract, Fort Wayne, Indiana required Red River to enter into a $4,900,000 performance bond and took affirmative steps to make sure that bond was renewed. Fort Wayne issued a default under the bond on December 8, 2021, asking for $1,718,569 in damages for missed collections. On December 14, attorneys for the bonding company filed an Emergency Motion to force “the Debtor to immediately assume or reject the Solid Waste Contract.”

Despite initially being set for December 23, this Emergency Motion has been taken off the docket indefinitely. In the Motion, the insurance agency references testimony showing that many of the municipalities that held bonds allowed them to expire (not Fort Wayne, though).

The next round of hearings in the case are set on January 7, 2022, when Red River will ask the Bankruptcy Court to grant a number of procedural and administrative orders. This includes: the ability to use “cash collateral” (i.e. spend money that a secured lender otherwise has the ability seize and retain); to grant its secured lender (probably the same one holding the cash collateral) a “superpriority” lien on post-bankruptcy assets; to hire all the bankruptcy-related attorneys and professionals; and to set the system by which all of those attorneys and professionals get paid.

And, of course, the orders approving the debtor’s attorneys’ employment and fees will be a big part of getting this case moving. And, wow, bankruptcy lawyers aren’t cheap: Red River’s primary counsel are to be paid hourly rates of $800 (Partner) and $575 and $450 (Associates).

My guess is that, until Red River gets (forces?) its lenders to agree to release its cash for use in business operations (and to fund the bankruptcy), Red River can’t meaningfully determine whether it can assume or reject the contracts. The hearings this Friday will be step one in that process.

As an aside, it bodes poorly that it has taken this long for the debtor to get these administrative motions approved. These are generally referred to as “first day” motions and, yes, they are generally considered and approved early in a case.

Aside from that, Red River will also have to show some ability to actually service the contracts in order to retain those contracts. A big part of chapter 11 bankruptcy is the ability to retain (and assume) the good contracts and reject (and walk away from) the bad contracts. Then, the “reorganized” debtor can either continue to perform the profitable contracts or, if it so choses, “sell” those contracts to somebody else.

Here, if Red River isn’t able to perform or provide a reasonable basis to believe it can perform under the Nashville contract, there will be cause for the city to ask the Bankruptcy Court to force it to decide. The fact that Red River isn’t currently servicing these contracts doesn’t make me feel optimistic about their chances.

The longer my cardboard boxes sit behind my house may be the best indication of where it’s all headed. I’ll update this post when I can see the pile over my fence.

2021 in Review: New Lawsuits in Davidson Circuit and General Session Courts were also Down

Last week, I wrote about how Bankruptcy Court debtor filings were at an all-time low in the Middle District of Tennessee.

A few of you asked if there was a corresponding drop in Chancery, Circuit, and General Sessions filings. Maybe that’s why people weren’t running to file bankruptcy.

Given the numbers in Bankruptcy Court, it’d make sense that state court litigation might have also slowed down, but I was a bit surprised by the answer.

Davidson County Chancery Court lawsuits have been surprisingly consistent. The final Chancery lawsuit of 2021 was filed at 11:59AM on December 30. It was case number 21-1324-I, which means that it was the 1,324th case filed last year. It’s an unpaid commercial debt lawsuit.

For comparison, here are the last few years’ numbers on new case filings: 1,299 cases filed in 2020; 1,569 in 2019; 1,413 in 2018; and 1,386 in 2017.

In short, there was no real drop in chancery court litigation, which surprised me. 2021 felt like a slow litigation year for Nashville.

Of the ten stories featured in the Nashville Post’s 2021 “Top Reads: Legal” article, six of them were just about law firm personnel moves not, you know, actual news-worthy litigation.

In general, you’d expect to see the business-minded Chancery Court have cases on this list, but, frankly, it’s a bit boring (no offense, toilet fire lawsuit).

What about General Sessions Cases? This is where it gets more interesting.

As of the end of November, there were 6,551 detainer / eviction warrants filed in 2021, along with 15,404 small claims lawsuits filed. For that same period (end of November) in 2019, there were 10,694 eviction lawsuits and 24,508 small claims lawsuits filed. Long story short, that’s about a 40% drop in filings.

Circuit Court? By the end of November, there had been 1,736 new civil lawsuits filed in 2021. At the end of November 2019, there had been 2,590 civil lawsuits filed, representing a 33% drop.

I’m not entirely sure what to make of this data. A 40% drop in evictions and credit card/debt collection cases would certainly be expected to result in a slower pace of new bankruptcy filings, but, nevertheless, this also shows that the common perception that “courts are closed” and “evictions aren’t happening” is incorrect.

Some credit has to be given to the LEGACY Housing Resource Diversionary Court run by Davidson County Judge Rachel Bell. This program can’t stop the new eviction filings, but it has helped many pending cases get resolved. As of September 20, 2021, $18,799,705.71 had been paid to landlords via this program and, most likely, kept those tenants out of the bankruptcy lawyers’ offices.

In the end, my take is that Middle Tennessee bankruptcy filing numbers are far more impacted by lawsuits filed in Davidson County General Sessions Courts than by the business-litigation dockets in Chancery Court. These numbers offer some part of an explanation.

Year In Review: Is Anybody Filing Bankruptcy in Nashville?

A few days ago, a lawyer from Oklahoma City called to refer me a new case, and, at the end of the call, he asked “Is anybody filing bankruptcy in Nashville? There’s just nothing going on here. Are you hearing anything about when it’s coming back?”

It’s a conversation I’ve had about 100 times over the last year, especially with local bankruptcy lawyers.

As of this moment (December 29), there have been 3,923 debtor bankruptcy cases filed in the Middle District of Tennessee in 2021. Compare that with 2011, when 12,546 debtor bankruptcy cases were filed. How on earth, in this economy and in month 21 of a global pandemic, has there been less than a third of the new cases we saw a decade ago?

For reference, here are the numbers for the past decade (plus):

  • 2021: 3,923
  • 2020: 5,616
  • 2019: 8,263
  • 2018: 8,577
  • 2017: 8,710
  • 2016: 9,198
  • 2015: 9,290
  • 2014: 10,089
  • 2013: 10,092
  • 2012: 11,827
  • 2011: 12,546
  • 2010: 14,063
  • 2009: 14,940

It’s clear that 2021 brought a historically low number of new bankruptcy case filings. It also shows that the Middle Tennesseans aren’t necessarily disinclined to file bankruptcy (or unable to, since so many of the past filers are not time-barred or ineligible under 11 USC § 109 or otherwise). So, why aren’t more people and businesses filing bankruptcy?

Some people refer to the influx of federal relief money and high wages, but I’m not seeing many debtors doing financially better now than they were in years past. 2021 appears to be as big a financial struggle as any of those years before it.

My guess is that the federal and local moratoriums on foreclosures and evictions are a big factor, since so many potential debtors aren’t being forced into a filing to save a imminent threat to their home. For many residential and commercial lenders, even though the moratorium may not apply to their loan, the creditor is nevertheless taking no action, for a number of reasons.

From all over the creditor realm, I have heard for months to mark my calendar for “January 1, 2022,” which was when many of the “big” lenders were planning to turn the foreclosure machine back on. Of course, that was before this latest COVID variant completely reshaped the status quo.

I’d guess that the January 1 date is being moved farther out, especially since we’re back in the throes of an ever-evolving pandemic. While it’s impossible to predict what COVID has in store for us, it’s easy to see that all of the same factors and circumstances are present to keep mortgage lenders at bay.

As awful as it sounds, then, we won’t see more bankruptcy filings until–strangely–the economy gets back to normal and people return to regular life (which, if you ignore my prediction that filings would spike in June 2020, is basically what I said in this old post).