Tax Sale Buyers Beware: Your property could be Redeemed

Sure, one of the best deals in distressed real estate is to buy property at a county tax sale, where you can purchase a property–basically–at an opening bid that is generally the past due taxes.

But, that strategy has a number of down-sides. The biggest is the taxpayer / property owner’s ability to “redeem” the real property by coming back and paying the debt.

This redemption period is defined at Tenn. Code Ann. § 67-5-2701 and, generally, lasts a year.  And, trust me, if you’ve paid money for a distressed property that’s gone to a tax sale, you probably don’t want to wait an entire year to do anything with the property, especially where the property is abandoned or in disrepair.

Well, the Tennessee Legislature has some good news for you. In legislation sponsored by John Stevens in 2019, there are some changes to the redemption law that allows a shorter redemption period based on the number of years a property has been delinquent.

This is quickly summarized as follows: Continue reading “Tax Sale Buyers Beware: Your property could be Redeemed”

Tennessee Supreme Court provides deep analysis on elements of “novation”

The Tennessee Supreme Court issued a new opinion today, which is notable for a few different reasons.

First, it discusses a legal dispute over The Braxton, which was a luxury high-rise condo building in Ashland City, Tennessee, and which is considered by some to be one of the first big development “fails” of Great Recession Nashville.

Second, the case provides a comprehensive analysis of the law on novation.

The case is TWB Architects, Inc. v.  The Braxton, LLC  No. M2017-00423-SC-R11-CV (Tenn., July 22, 2019).

At its most basic, “novation” is when a party substitutes a new obligation for an existing obligation, such that, after the novation, the second obligation is the only legally binding remaining obligation. Continue reading “Tennessee Supreme Court provides deep analysis on elements of “novation””

Tennessee Court of Appeals shows analysis on “reasonable” attorney fees.

The Tennessee Court of Appeals issued an opinion yesterday in a collection case, which has some really useful analysis on the reasonableness of attorney’s fees. This is an issue near and dear to my heart.

A full copy of the opinion, Tennessee Farmers Cooperative v. Ted Rains,  M201801097COAR3CV, 2019 WL 3229686 (Tenn. App. July 18, 2019), can be found here.

Continue reading “Tennessee Court of Appeals shows analysis on “reasonable” attorney fees.”

Want to be a better lawyer? Attend a Court of Appeals argument.

I recently had two oral arguments set on the same day in the Tennessee Court of Appeals, which was a fairly stressful experience. But, by the time the second docket came around, I had a really good idea of where to go, where to sit, how the dockets would start, who would say what, and all the little details.

Honestly, I was a little irritated at myself for not attending an oral argument docket a few months before, just for the experience and insight.

So, here’s my advice to you: If you’ve got a appeal pending and haven’t Continue reading “Want to be a better lawyer? Attend a Court of Appeals argument.”

Nashville Business Journal Names Me “Best of Bar” for Bankruptcy!

If you’re a subscriber to the Nashville Business Journal or, otherwise, just an enthusiast of  lawyer recognition awards, you may have already heard the news:

Last week, I was named one of Middle Tennessee’s Best of the Bar for 2019 (in Bankruptcy) by the Nashville Business Journal!

This honor pales in comparison to the cover story from the Nashville Scene in July 2010, for my winning entry their You are So Nashville If… contest, but I’m proud to receive this award. Unlike many lawyer awards, the Best of the Bar lists are based on nominations from the public, with the ultimate winners voted on by the nominees and their peers.

Continue reading “Nashville Business Journal Names Me “Best of Bar” for Bankruptcy!”

Judgment Creditors are Limited to the terms of their Foreign Judgments

Last week, the Tennessee Court of Appeals issued a decision on an action to enforce a default judgment under the Uniform Enforcement of Foreign Judgments Act, found at Tenn. Code Ann. §§ 26-6-101 to -108.

The case has a few interesting twists and turns, and the full text can be found at The Wolf Organization, Inc. v. TNG Contractors, LLC, M201800073COAR3CV, 2019 WL 2883813 (Tenn. App. July 3, 2019).

Today, I’m looking at only one issue: Whether the Judgment Creditor in a Foreign Judgment Enforcement action can get additional attorney’s fees for its efforts to domesticate the judgment.

Continue reading “Judgment Creditors are Limited to the terms of their Foreign Judgments”

Tennessee Courts Will Enforce Anti-Assignment Provisions in Leases

Commercial and residential leases frequently have an anti-assignment provision, which is a provision that prohibits the tenant from assigning or transferring the tenancy to a third party. A property owner should have final say, the reasoning goes, as to who can possess the owner’s property, and the tenant shouldn’t be able to transfer those rights to a stranger without the landlord’s consent. (Except in Bankruptcy Court.)

A new opinion posted by the Tennessee Court of Appeals emphasizes how strongly courts in Tennessee will enforce these provisions.

In Simmons Bank v. Vastland Development Partnership, No. M2018-00347-COA-R3-CV (June 27, 2019), the tenant assign the lease to a stranger or a literal third party; instead, the original tenant (First State Bank) merged into and was acquired by Simmons Bank. “Simmons Bank was the surviving entity, and First State Bank no longer existed separately. See Tenn. Code Ann. § 48-21-108(a)(1).”

A few months after the merger, Simmons Bank attempted to exercise its option to renew the Lease, and the landlord objected, saying that lease expressly states that any renewal requires that “Tenant is the Tenant originally named herein.” Here, Simmons Bank was not the tenant “originally named herein.” First State Bank was named in the Lease.

The Chancery Court agreed with Simmons Bank, but the Court of Appeals reversed, citing  the maxim that contracts are interpreted strictly according to their terms.  As a result, reading the text in its clear and strict meaning, the appellate court wrote: “the parties agreed to restrict the right to renew the Lease to one entity, First State Bank, ‘the Tenant originally named’ in the Lease. As a consequence, Simmons Bank does not have the right to exercise the renewal option.”

This is an interesting case because, as Simmons Bank argued, a merger of two entities really doesn’t introduce a new “stranger” into the tenancy, but, instead, pursuant to pursuant to Tenn. Code Ann. § 48-21-108(a)(2), a merger transfers all rights of the merged entity into the new one.

My guess is that the business, the employees, the phone numbers–most everything except the sign out front–remained the same. My concern is that the focus on the “name” of the entity creates an opportunity for a landlord to create a “technical” default.

To throw out an absurd example, what if a woman gets married and takes her husband’s name? Would she no longer be the “Tenant originally named herein”?

Under this new opinion, she wouldn’t.

Nevertheless, they don’t ask me to write the judicial opinions. But, they do pay me to help clients draft and negotiate lease provisions. An easy fix to a situation like this would be a provision that allowed for a new named tenant in the event of a merger or sale of all tenant’s assets.