My name got listed as sales agent on Zillow and my phone hasn’t stopped ringing

Last November, I started a bank foreclosure sale on a piece of property in Williamson County, at 2113 N Berrys Chapel Road, Franklin, Tennessee 37069. The foreclosure never happened, because the borrower filed a Chapter 11 Bankruptcy in the Eastern District of California.

When I received the Notice of Bankruptcy Filing, I printed a copy for my file, confirmed on PACER that the Notice was legit, and closed my file. This foreclosure sale is canceled.

In the 3 weeks that the foreclosure was pending, I’d received one or two calls about it.

But, somehow, the property website Zillow picked up my Foreclosure Sale Notice and, not only that, but Zillow has me listed as the sales agent on the property’s Zillow page. My name, address, and phone number (the ONE time I used my cell phone number), all right there online.

Since December, I’ve received probably 4-5 phone calls a week, every week, asking about this property. I’ve received calls from families, from real estate agents, and from property investors. The calls are from local numbers, as well as from far away places as Mississippi, California, Minnesota, and London. They call in the mornings, at night, and on the weekends.

I got a call last night at 8pm. I got one today at 2pm.

At this point, if I get a call from a number that I don’t recognize, I assume it’s somebody calling about “that house in Franklin that you’ve got listed for sale.”

It’s either a testament to the reach of Zillow, or the continued atomic-hot Nashville real estate market.

The people are always really nice. They also have a lot of questions about bankruptcy, when I’ll be foreclosing on this house again, and whether I have other houses I can sell to them.

Sometimes they’ll complain to me about the real estate market, about how expensive everything is and how hard it is to find a deal. Occasionally, they ask about bankruptcy and foreclosures, and, honestly, it’s easier to explain what the automatic stay is and how Chapter 11 works than to try to cut the calls short.

I’ve asked Zillow to remove my name and phone number, to no avail.

So, at this point, I propose this: If any of you are real estate agents and need “new customer leads,” please let me know.

And, finally, if you are reading this after googling “2113 N Berrys Chapel Road, Franklin, Tennessee 37069” and you are interested in buying it, here’s what I have to say:

The sale has been cancelled as a result of the borrower filing bankruptcy. A new sale date has not been set and will not be set in the foreseeable future. Yeah, you know those California judges. No, I don’t know if the kitchen appliances in the pictures are still there. No, I don’t have the keys; I just represent the bank foreclosing on the property.

And, yes, I agree. The real estate market in Nashville is insane.

Tennessee is set to increase homestead exemption in 2021

The Tennessee Legislature is, again, considering debtor-friendly changes to the homestead exemption statute.

The one most likely to pass is House Bill 1185, which seeks to increase Tennessee’s homestead exemption from the existing $5,000 to $35,000 for single homeowners and from $7,500 to $52,500 for jointly owned property.

Before you complain too much about that proposal, consider Senate Bill 566, which provides an unlimited exemption for a judgment debtor’s residential real property (and, after the debtor’s death, it passes to the heirs).

Similar proposals were made in 2019, in 2020, and also in 2012 (and a number of times in between). So far, all such efforts have failed, but I believe this is the year that the Tennessee homestead exemption is increased.

Back in 2019, I talked about the importance of exemptions for debtors, since exemptions can preserve and protect a basic necessity level of assets for debtors (picture the clothes on their back, a few thousand dollars in the bank, a car, tools).

As I wrote in 2019, though, “if this new law passes, the downfallen debtor can keep 100% of the equity in his $750,000 house entirely out of the reach of creditors.” I then said:

Wait a second. Is this law designed to protect downtrodden debtors seeking a fresh start in life (who very probably do not have high value real property at all) or, maybe, is it designed to protect high income individuals whose businesses fail?

Because that’s all this proposed law does. It grants fairly absolute protection to the high value real property owned by judgment debtors in Tennessee, and all the garnishments, levies, liens, and bankruptcies will never touch a penny of that equity.

I feel the same way about these new proposals. If we’re talking about protecting the working poor and preserving the necessities of life from garnishment, let’s start somewhere other than $750k of equity in a mansion. Let’s talk about debt relief measures, eviction support, access to justice, etc.

But, these new laws aren’t about basic necessities of life for poor people. Most poor people don’t live in lien-free mansions. Instead, these new measures are being lobbied for by the construction industry.

These are bad proposals. Unless you’re a debtors with big, lien-free McMansion. Then, sure, it’s a great new law.

Bankers: Are your Judgments expiring?

Tennessee judgments expire after ten years.

All those judgments you took during the Great Recession are coming up for renewal. If you don’t affirmatively ask the court for an extension, they just go away.

And, all those builders, contractors, investors, and so many others who were broke in 2010/2011 but who turned things around when Nashville real estate, business, and construction boomed in 2015 (and beyond)?

They’ve been waiting. Hoping that you’d forget about them. Hoping that you’d do nothing to renew your judgment.

Part of what makes this Creditors Rights blog so popular is that I keep it an objective discussion of the law. You don’t see me use it to solicit business. (Well, overtly.)

But, for today, I’ll say this: If you have a box of judgments that you haven’t touched for years…Call or e-mail me immediately. There may still be time.

I’m seeing it happen every day. Big judgments are expiring, and debtors are ridding themselves of millions dollars’ worth of judgment liens.

Once upon a time, the creditor probably got frustrated by the dead-ends (or maybe the expensive lawyers spinning their wheels while billing by the hour). Those old files got put in a file cabinet. Maybe the banker switched banks. Maybe the bank got sold.

But, if you don’t dust off those old files, you are probably leaving money on the table. If you haven’t looked at those old files lately, it may be too late.

Looking to help this season? Consider donating to the Window of Love.

You may have seen the Tennessean article last week that the State of Tennessee has amassed a historically high amount of surplus money in the Temporary Assistance for Needy Families fund, which is now at $741 million.

This is awesome, right? What perfect timing for this money in an economic crisis?

But, later, the article mentions that the state is just sitting on the money, with no clear plan in sight to use it to help people. In fact, the fund serves a smaller number of households in 2020 than it did in 2019. Some good news is that, maybe next year, the state will decide what to do with all this money.

Until then, though, I want to tell you about somebody who is doing something to help. She’s Samaria Leach, and she created the Window of Love.

It all started with a Facebook post on March 16, when she realized that the Metro school shut-down meant that there’d be no school lunches for the kids in her North Nashville neighborhood. That school lunch might be the only consistent source of food for some kids. So, from her own pantry, she put together food boxes, which she’d distribute out of her window a few days a week.

At first, she fed 25-35 hungry kids from her neighborhood with food from her own pantry.

Now, 8 months later, she’s still feeding hungry kids, but the number has tripled.

As you’re considering donations of time, money, or even food this holiday season, please consider donating to Windows Of Love. Her Facebook page frequently includes requests for grocery items that she needs for that week, including this post for Thanksgiving baskets for the families she serves.

If the state we live in isn’t going to help our kids, maybe we have to be like Samaria and recognize that we have to look out for each other sometimes.

New Court of Appeals opinion affirms landlord’s duty to mitigate damages on Tennessee leases

In a post from last month, I mentioned that, when a commercial tenant defaults and leaves a leased property, the landlord is faced with a hard decision: File the lawsuit for unpaid rent now, or do you wait 6-9 months until a replacement tenant can be found?

One thing we know for sure: A landlord can’t just file a lawsuit for all the rent due for the remainder of the term. Instead, the landlord has a duty to mitigate its losses, which means–in this situation–to try to find a replacement tenant.

Last week, the Tennessee Court of Appeals reaffirmed this duty in Loans YES v. Kroger Limited Partnership I, et. al. No. M201901506-COAR3CV, 2020 WL 6386884 (Tenn. Ct. App. Oct. 30, 2020).

As a quick summary, the Court makes the following points:

Continue reading “New Court of Appeals opinion affirms landlord’s duty to mitigate damages on Tennessee leases”

It may be time to start filing Davidson County evictions in Circuit Court.

The new 25 case limit on the civil dockets in Davidson County General Sessions has been the problem we thought it would be.

As of last Thursday, the next available civil hearing date for new and pending cases was December 9, 2020.

Since last Thursday, 357 new cases have been filed in Sessions Court.

Given the usual holiday court schedule, I’d bet that–as of this blog post— there are no more open civil dockets in 2020.

The Nashville Bar Association hosted a General Sessions Court Town Hall today to talk about these issues, but, given the unprecedented nature of this problem, nobody knows what’s next and how to solve it. Will there be afternoon dockets? Staggered morning dockets? Video appearances?

I’ve received a handful of calls from local lawyers, for advice on how to navigate all this. In some cases, the best move is to file the matter and just get a date locked down before things get worse (even if it’s in mid-January).

Another option, though, if you aren’t going to get into Court until January or February, is to file your commercial eviction lawsuits in Circuit Court (which has jurisdiction, per Tenn. Code Ann. § 29-18-108).

If you file an eviction action in Circuit, today, and get it served this week, you may be able to get a judgment by early December (or early January).

And, yes, I know I’ve criticized lawyers for filing Sessions-sized and eviction matters in Circuit Court (a move that generally presents no tangible strategic advantage, other than the lawyers get more billable hours).

But these unprecedented times call for novel ideas.

How your registered agent’s address could get you sued in their county.

Earlier this week, a lawsuit was filed in Davidson County Chancery Court by a landlord to collect $130,697.44 in unpaid rent from a Romano’s Macaroni Grill located in Rutherford County. There was no allegation that any of the facts of the case occurred in Davidson County or that the parties contractually agreed that the venue for any disputes would be in Nashville.

Should this lawsuit be dismissed for improper venue, where the business, all operations, and the leased premises were all in Rutherford County?

Not necessarily. Here’s why: All of the Defendants use corporate registered agents whose offices are based in Davidson County, and that subjects them to venue in Davidson County.

When analyzing venue for causes of action under Tenn. Code Ann. § 20-4-101(a), a defendant can be “found” in “any county wherein it has an office for the furtherance of its business activities.”

Tennessee courts have said that a registered agent’s address is an office for the furtherance of the defendant’s business activities, and it doesn’t matter that the defendant doesn’t actually operate a business out of that address or doesn’t otherwise have any other connection to that county. See Fed. Exp. v. The Am. Bicycle Grp., LLC, No. E200701483COAR9CV, 2008 WL 565687, at *3 (Tenn. Ct. App. Mar. 4, 2008).

Maybe this isn’t a big deal–most of these corporate agents are located in Davidson County, and Nashville uniformly has very strong courts and judges.

But, Tennessee is a very, very long state. It’s definitely something to keep in mind when you’re a company in Greenville or Memphis, and you’re selecting a registered agent.

The Palm and the Nashville Hilton’s litigation over unpaid COVID rent has touched almost every trial court in Davidson County.

As you all know, The Palm restaurant in Nashville sued the Nashville Hilton in July. At the time, The Palm was four months in arrears in its payment of rent.

But, despite being in payment default, The Palm went on the offensive and premptively filed the first lawsuit, arguing that the landlord’s (i.e. the Nashville Hilton) own shut-down in response to COVID was a breach that excused The Palm’s payment of its rent.

At the time, I marveled at the audacity of the tenant in making the first move. Today, however, I’ve discovered that this dispute has gone absolutely bonkers, and it’s has been (or is being) litigated in nearly every trial court in Davidson County.

First, there was the Chancery Court lawsuit filed by The Palm on July 9, 2020.

Then, after the Hilton declared The Palm to be in breach on July 13, 2020, the Hilton filed a Davidson County General Sessions evictions lawsuit on July 14, 2020.

In response, The Palm filed a Notice of Removal of the detainer action to the District Court for the Middle District of Tennessee on August 7, 2020. This prompted the Hilton to file a notice of voluntary dismissal on August 10, 2020.

Then, the Hilton filed a second detainer action in General Sessions Court on August 13, 2020. On August 26, 2020, The Palm filed an Application for Removal of the matter to Davidson County Circuit Court, which was granted.

So, what courts did they miss? Criminal Court? Bankruptcy? Environmental Court?

This dispute involves two mega-law firms, so it’s fun to see big-time lawyers fighting over eviction issues in small claims court.

Still, though, I have to wonder if the Hilton could have opposed The Palm’s request to remove the matter to Circuit Court, which was–possibly–an attempt to get the matter moved to the slower-paced Circuit Court, but without having to post the detainer possessory bond pursuant to Tenn. Code Ann. § 29-18-130(b)(2), which requires a tenant that loses in sessions court to post one year’s worth of rent in order to remain in possession of the property.

Sessions Judges don’t like to waste valuable docket time on complex commercial matters, so they are generally happy to allow complicated, discovery-heavy trials to be removed to Circuit Court pursuant to Tenn. Code Ann. § 16-15-732.

But, at the same time, it’s a move that Sessions judges see all the time, and the Judges will sometimes ask tenant’s counsel “Is the rent paid current?” and, depending on the answer, grant a judgment for possession, and tell the tenant’s counsel to appeal and sort it out in Circuit Court.

I don’t want to ruin the developing story, so I will remain quiet about the Landlord’s options in Circuit Court to force payment of rent. But they have a few.

Whatever direction this goes, in the age of COVID, this qualifies as entertainment (for law nerds).

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.