Legal Profession – Page 12 – Creditors Rights 101

The Cure for a B.S. Answer is the Power of a Motion for Summary Judgment

“All litigants have the right to defend themselves,” I tell my clients when I’ve received a B.S. Answer to a Complaint I’ve filed. As you know, I usually represent banks and other creditors, and, frankly, there are not many defenses to the lawsuits I generally file.

I generally have to prove: (1) the Defendant signed the Note; (2) the Plaintiff loaned money; (3) the Defendant didn’t pay the money back; and (4) how much wasn’t paid back.

Sometimes, the defendant calls and simply concedes judgment and, instead, focuses on the real issue at stake (setting a reasonable and “livable” repayment schedule). One of the results of a generally improving economy, however, is that a defendant may not have enough money to repay the debt, but they’ve got enough money to put up a little bit of fight.

In most cases, this involves “delay” tactics. In the Answer, the defendant will raise no real factual or legal defense, but they’ll deny everything, demanding that the plaintiff “prove” the facts.

That’s when I file a Motion for Summary Judgment under Tennessee Rule of Civil Procedure 56, which is a Motion that tells the Court that: (1) the material facts are not disputed (or cannot be disputed); and (2) on those undisputed facts, the plaintiff is entitled to judgment as a matter of law.

In response, a defendant’s broad denial of all facts will not win. Instead, Rule 56.03 says that a defendant must “demonstrate” that an important fact is disputed. If a fact is disputed, the defendant must support the denial with a specific citation to an affidavit or a deposition. A general denial isn’t enough.

This focus on the need to “demonstrate” that relevant facts are disputed was discussed recently in Discover Bank Issuer of Discover Card v. Layton Howell, III, No. M2013-00485-COA-R3-CV (Tenn. Crt. Apps. Nov. 8, 2013).

Keep this case in your tool-box for the next time that a defendant tries to delay the inevitable without concrete facts.

You Say I Can’t Cite Unpublished Opinions: I Say Free Legal Research in Tennessee!

One of the most useful things about my Tennessee Bar Association membership is the “TBA Today” daily email, which has links to Tennessee legal news and blurbs/links to the recent Tennessee Appellate Opinions.

Just like I did earlier this week about quantum meruit, I frequently blog about the opinions, regardless of whether the opinion is going to be published. Invariably, some dummy comments that I shouldn’t mention the case because, under Tennessee Supreme Court Rule 4, an opinion that is designated as “Not for Citation” shall not be cited as authority in court pleadings.

Well, first off, I’m giving them too much credit: the dummy commenters never actually cite Rule 4. Secondly, they miss the point. Even if unpublished cases aren’t binding authority, they are still great resources for the most up-to-date statement of the law on a topic.

Nearly every day, new cases are posted, and those cases provide incredible overviews of a Judge’s very up-to-date research on issues of law.

Want to learn what the Tennessee Dead Man’s Statute? Look at this case from last week.

How will a court rule on a Motion for Judgment on the Pleadings? Here’s a case from two weeks ago.

Want to be shocked and amazed at how horrible divorce cases can be? Well, basically, the Court issues an opinion every other day with facts and attorneys fees that will make your hair raise, so I’m not going to cite to those.

Well, I’ll cite to the one from last week about the guy who married a blackjack dealer and brought her back to Tennessee. And, also, check out this one about the millionaire who has basically lived the past 20 years of his life trying to not pay anything to his ex-wife. Marriage!

If you aren’t a TBA member, you can still look at the cases at the Tennessee Courts website. Even better, the website has a “search” button, so if you’re looking for a specific topic, you can search the case summaries. Up-to-date and free legal research can’t be beat, published or unpublished.

Service of Process: Just Like the Movies

There’s a reason that there’s never been an epic movie about Bankruptcy lawyers: To the rest of the world, it’s not very exciting work.

In fact, the only movie about it (that I know of) is Heart and Souls (1993), starring Robert Downey, Jr. as a creditor bankruptcy attorney who goes after struggling companies and shuts them down when they can’t pay their bills. The premise is that his four childhood guardian angels come back to visit him and are shocked at the work he does. (Yikes).

But, there is one aspect of my practice that is just like the movies: Service of Process.

Under the Tennessee Rules of Civil Procedure, a lawsuit and summons must be physically served on an individual (Per Rule 4.04).

This part of the process can be frustrating to clients, because, until you get the other party served, they have no responsibility to answer and the case doesn’t move forward. Obviously, the other party in the lawsuit has every incentive to dodge, evade, and generally run from you when you go to serve them.

I wrote about this on Paid in Full–some of my clients get so upset that they want to serve the process themselves (which they can’t).

My advice: Find a really good process server, one who is willing to be creative in order to get the job done.

Have you ever seen the movie Pineapple Express? In that movie, Seth Rogen plays a sneaky process server, who has a car full of costumes and disguises. That’s who you want working for you.

I have a guy right now, who is great. He’s gone to the door with a big bouquet of flowers. He’s used a pizza delivery guy disguise. Around the holidays, he doesn’t serve “process”–he delivers “gifts.” Who doesn’t like gifts?

Sometimes you get efficient and good results because you’re a great lawyer. Sometimes, it’s because the other side thinks they have a secret admirer.

Creditors Rights 101: Double the Content, Same Low Price!

In addition to this fine blog, I now will also be blogging at a second location, on my law firm’s website.

That blog is called Paid in Full.

Paid in Full will cover some of the same ground that this blog covers, but, as corporate blogs sometimes do, that discussion may tend to have the “top button buttoned,” if you know what I mean.

I know, I know. The internet is littered with the carcasses of abandoned blogs. So, you might ask, why on earth keep two blogs?

I enjoy this forum and appreciate the growth I’ve seen in the three years I’ve been posting here. A surprising number of you subscribe via email or follow me on WordPress, and the Google search results I get show that people want to see what I’m talking about here.

So, now, congratulations. You’ll either get double the content or, equally likely, you’ll get to see me slowly kill off two blogs.

Be sure to check out Paid in Full, subscribe to that blog via email as well, and keep Creditors Rights 101 bookmarked.

Remember how they did a spin-off of the TV show Baywatch, called Baywatch Nights? Well, this is sort of like that, except Paid in Full is the spin-off, and this blog is the fun one, with all the bikinis.

Think Before You Tweet: Your Online Rant Could Get You Sued in Tennessee

You do it. I do it. Everybody does it.

Your steak is burned.Your cable goes out. You have to wait 30 minutes too long in the waiting room.

Out of boredom, anger, or some mix of it all, you go on twitter or Facebook and complain. If you really want their attention, you link your target’s twitter account. That will get their attention, you might think. Maybe they respond and apologize.

Or, maybe, they file a lawsuit against you for defamation or invasion of privacy. Yes, in Tennessee, a twitter or Facebook rant can get you sued.

The Tennessee Court of Appeals recently considered this issue in the opinion of Jennifer Patterson v. Natalie Grant-Herms, decided on October 8, 2013. In that case, the Defendant (accomplished Christian music performer Natalie Grant) posted a number of complaints about the Plaintiff’s service (the Plaintiff is a boarding agent for Southwest Airlines), in which Defendant: mentioned Plaintiff by name; complained about a boarding decision involving Defendant’s child; and generally made a mountain out of a molehill regarding a trivial inconvenience.

(Edited to add: The underlying lawsuit had more of the tweets, including one from Natalie Grant where she bragged that her baby had a “MAJOR blowout” which was left as “a gift on the plane.”)

Ultimately, the Court found that the tweets did not rise to the level of actionable defamation (but, instead, were complaints showing “frustration”), but the Court found that the personally identifiable statements about the Plaintiff could constitute actionable false light/invasion of privacy.

The real take-away is this: Plaintiff brought a viable claim against Defendant as a result of tweets. Defendant had to hire a lawyer to defend herself, and the matter was litigated to the Court of Appeals (and, now, it’s remanded back for more proceedings).

Frankly, between you and me, I think the tweets, which were directed to Southwest, the Plaintiff’s employer, would constitute actionable defamation.

I tell my clients all the time to avoid any meaningless, unnecessary action that will result in exposure to a lawsuit. This is a classic example of a person letting anger lead them to action that invites a lawsuit.

It’s Not Me, It’s You: My Thoughts on Dealing with “The Clients From Hell”

I can remember the email like it was yesterday, even though it’s been a few years now.

I’m sitting on my couch, at 7pm on the Friday night before New Years Eve. I check my work e-mail to find this long, mean request (demand) from a client. The client wanted updates on about a dozen matters, and they wanted them right then. The e-mail had the red exclamation point and a condescending tone that was unmistakable.

This client had long before decided that I was over-paid, too slow to respond, and, despite the great success I’d had for them, not very good at my job.

In the spirit of New Years Eve Resolutions, I decided right then that the next year would bring one specific change: I was going to fire my largest paying client.

The next week, I did just that. There was no conciliatory or touchy-feely “let’s work this out” effort. Instead, I thanked them for the work and gave them a list of 3 lawyers who I sincerely thought would do a fine job for them.

You can imagine my interest, then, in the recent articles about “How to Handle the Client from Hell.” Here’s the original article, “How to Deal with a Toxic Client.”

I’m fortunate to be a very busy lawyer, and the risk I took by firing a big client was tempered by my ability to focus my efforts on my other clients (who actually appreciated my work and results).

Not every lawyer has that luxury, but I question the advice in the articles, like asking the ranting client “What was that all about?” Open hostility rarely makes for a good working relationship, especially one that involves hourly billings that the client is complaining about.

My ultimate take-away on my decision was this: I screen new clients thoroughly, to make sure that their expectations fit in with my abilities (including costs, results, and time). If they want constant updates on minor developments, they might not be for me (unless, of course, they are willing to pay me for those constant updates).

Angry, ungrateful, and cheap? No, thank you.

Useful CLE Alert: 2013 Tennessee Real Estate Law Conference in Nashville

It’s getting close to the end of the year, so now is the time to be looking to satisfy the year end CLE requirements.

Tennessee Attorney’s Memo is presenting the 2013 Tennessee Real Estate Law Conference on October 4, 2013. This all day seminar will cover a number of topics related to real estate, mortgages, and case law updates.

Most important, Sean Kirk of Bonelaw will speak about our practice group’s big victory in the Sterling Ventures case, which was the first opinion to construe Tenn. Code Ann. § 35-5-118–the new Tennessee post-foreclosure deficiency statute.

Tour of Tennessee Courts: Tips for Rutherford County General Sessions

I enjoy hitting the road and going to courts all over middle Tennessee. But, at the same time, it can be disconcerting to go to court in a new county, which generally has its own Local Rules and customs of practice. No matter how long you’ve been practicing, you never want to embarrass yourself in front of a foreign court.

So, I’m starting a “Tour of Tennessee” blog series, which discusses the different Courts that I go to, along with some tips and tricks for appearances.

First stop, Rutherford County General Sessions Court. Here is a link to the General Sessions Court’s website, which has updated, good information about the Court, including phone number, address, and Clerk information.

Note that the Rutherford County Courts, including General Sessions, post a variety of their dockets online. Be sure to print out a copy of the docket before you go to court.

Their Local Rules are also posted online, and read those before you go.

Here are some helpful tips to know from the Local Rules:

The Court presumes cases will be tried on the the date they are set, but, on the first setting in civil actions, the “court may liberally grant a continuance on the first setting of a case.”
The Court does not allow “indefinite” continuances. Under Local Rule 5.01, the Court only allows continuances of less than 60 days.
The Court will only allow 3 continuances, absent good cause.
The Court caps attorney fees at 25%, unless good cause is shown.

Here are a few other things to know:

The Judge, Larry Brandon, is sharp, both in his legal acumen, as well as his wit and the way he runs the Courtroom. Stay on his good side by being early, paying attention, and reading the Local Rules before you go.
Seriously, that’s important: stay on his good side across the board.
Many Clerks are liberal and let you use any old Civil Warrant forms, but, if you’re in doubt about your form, be sure to use the official Civil Warrant forms from the Rutherford County General Sessions Clerk. Using the standard form is an important part of staying on the Judge’s and the Clerk’s good side.
On street parking is plentiful all around the Courthouse, and there are a number free lots available.
General Sessions Court takes place on the third floor of the Courthouse. The General Sessions Clerk is on the first floor.
The security line can get long, particularly if you’re running late. Be prepared to remove watches, belts, and other metal items. Attorneys can purchase “pre-screened” pass cards for $5, which allow you to by-pass security. If you go there a lot, keep that in mind.
The elevator gets backed up, and, if you’re running late, head to the stairs in the back of the building.
Judge Brandon starts promptly, at 9AM.
It’s about a 45 minute drive from downtown Nashville, so give yourself an hour.
Cases are generally called in batches, organized by the Plaintiff’s attorney’s name, meaning all of an attorney’s cases are generally bundled together and called at the same time (and then that attorney is allowed time to go to the hall and review the matters or write them up).

Rutherford County General Sessions Court is an active court, often with a large number of cases (40-50) set on one docket. Be early, be prepared, and read the Local Rules, and your court appearance will go fine.

Tennessee Secretary of State to launch new online UCC filing system on July 1, 2013

The ability to file documents online is one of the many ways technology has made the practice of law easier. Faced with a looming deadline, attorneys no longer need to rush to the Courthouse before closing time. Nowadays, they pdf their pleading and can upload it at 11:59 from home.

Starting on July 1, 2013, the Tennessee Secretary of State will allow parties to make Tennessee Uniform Commercial Code (UCC) filings online. Information about this program can be found in this release.

To prepare Tennessee UCC filers for this process, the Secretary of State has posted a number of links to a number of training videos, which cover topics such as:

Filing a Tennessee UCC1 Financing Statement
Filing a Tennessee UCC3 Amendment – Termination
Filing a Tennessee UCC3 Amendment – Continuation
Filing a Tennessee UCC3 Amendment – Party Update
Filing a Tennessee UCC3 Amendment – Assignment
Filing a Tennessee UCC3 Amendment – Collateral and Max Indebtedness Change
Filing a Tennessee UCC5 Information Statement
Filing a Tennessee UCC11 Information Request
Searching the Tennessee UCC Database

The electronic filing system also coincides with the implementation of the 2010 Amendments to UCC Article 9, which also become effective on July 1, 2013. I’ll discuss those in a later post.

For now, I’ll say that I’m really excited about the prospect of filing and searching UCC records online. This is a great development for Tennessee lawyers.

Post-It Note: Creditor’s Rights During Bankruptcy

As many of you know, I’ll occasionally use this blog as a place to post reminders or cites to cases for my own benefit. As you’ve seen in the past, I call those entries “Post-It Notes.”

I saw this CLE seminar and thought the content would be helpful (plus, it’s a good outline for any future Creditor’s Rights CLEs I might teach). It’s presented by NBI Seminars and is called “Creditor’s Rights in Bankruptcy.” It’s set for July 31, 2013.

Here’s the Agenda:

Case Evaluation
- 10 Questions to Ask Before Getting Started
- Important Timeline Considerations
- Determining the Priority of Claims
Miscellaneous Creditors’ Rights
- The Involuntary Bankruptcy as a Collection Remedy
- Examination of Debtor’s Affairs
- Rule 2004 Exams
- Creditors’ Committees in Chapter 11 Cases
- Dismissal or Conversion of a Bankruptcy Case
- Appointment of and Communication With a Trustee or Examiner
- Recovery of Property for the Benefit of Creditors
- Municipal Collection Issues
Ethical Representation During Bankruptcy
- Collection Letters and Communication With the Debtor
- Misrepresentation
- Intermingling Activities of Collection Agency and Attorney
- Harassment
- Attorneys’ Fees
- Avoiding Violations of the Injunction
Overview of Creditors’ Rights Under Each Chapter
- Chapter 7
- Chapter 13
- Chapter 12
- Chapter 11
- When the Debtor Converts From a Chapter 13 to a Chapter 7 Case
- Significance of Valuation of Collateral
Claims and Distributions
- Filing and Allowance of Claims
- Objections to Discharge
- Objections to Confirmation
- Dealing With Objections to Claim
- Distribution to Creditors
- UCC Filing
- What to do When the Debtor Defaults on the Repayment Plan
- Recovery of Fraudulent Transfers
- Reaffirmation Agreements
Automatic Stay
- Broad Scope of the Automatic Stay
- Obtaining Relief From the Automatic Stay
- Motion for Lift of Stay: How, Why You Can Request It
- Changes in the Automatic Stay in Consumer Cases Involving Repeat Filers
- Changes in the Automatic Stay in Certain Other Limited Situations Involving Liens on Real Estate
- Changes in the Automatic Stay Involving Consumer Landlord/Tenant Law
- Exceptions to the Automatic Stay and Related Changes
- Monetary Sanctions for Automatic Stay Violation Where Notice is Lacking
Representing Creditors in Adversary Proceedings
Special Rights in Particular Property
- Reclamation Rights
- Setoffs
- Landlords and Equipment Lessors