Start 2019 Right: Apply to be a Lawyer Mentor

With the new year, I’ve committed to serving the community more in 2019 than ever before.

To that end, I’ve signed up to mentor 7 high school students via the tnAchieves program, I’m coaching (maybe) a Mock Trial team at one of Nashville’s inner city high schools this spring, and, of course, I’m still going to visit Legal Aid regularly and continuing my service at The Village Chapel.

If you’re looking for an opportunity to get more engaged, I really recommend the Tennessee Bar Association’s Mentoring Program. It’s not too big of a time commitment and, trust me, you’ll make a lifelong friend in the process.

And, because we’re lawyers, the way we interact, foster relationships, and model civility in the bar with each other matters.

If you’ve got a few years under your belt (and, don’t worry, any experience matters and they’ll place you with an appropriate mentee), you’re needed.

Apply here.

Tennessee Post-Judgment Interest Rate at All-Time Modern High

Once upon a time, computing post judgment interest was really, really easy. But, as you’ll recall from my post in February 2013, Tennessee switched from a flat-rate of 10% to a variable rate under the (then) new version of Tenn. Code Ann. § 47-14-121.

Under that statute, the post judgment interest rate is subject to increase every six months. And, lately, it’s been steadily going up, every six months.

On January 1, 2019, it went up again, to 7.45%.

This is the highest that it’s been, since the statute changed.

Tennessee Supreme Court Changes Rule 4 on Service of Process

The Tennessee Supreme Court has issued four orders adopting amendments to various rules of procedure that will go into effect on July 1, subject to approval from the Tennessee General Assembly.

These include changes to the rules of criminal procedure and evidence, but, today, I’m going to talk about how Tennessee Rule of Civil Procedure 4 has changed. Here is a link to the proposed changes. This includes changes to service of process, which is a critical step in any litigation.

On this issue, it’s Tenn. R. Civ. P. 4.04 that is amended, where a plaintiff tries to serve a defendant via certified mail. Specifically, the amendments add a provision that allows for valid service where a defendant “refuse[s] to accept delivery” of the certified mail, as long as the record contains:

a return receipt stating that the addressee or the addressee’s agent refused to accept delivery, which is deemed to be personal acceptance by the defendant pursuant to Rule 4.04(11)

The Advisory Commission Comments provide a helpful warning for these situations. They state that “the Postal Service’s notation that a registered or certified letter is ‘unclaimed’ is no longer sufficient, by itself, to prove that service was ‘refused.’ ”

This comment clearly reminds plaintiffs to make sure that the return receipt states “refused” and not “unclaimed.” This distinction is important, since so many defendants simply never go to the post office to pick up their certified mail, because they assume it’s just a lawsuit, demand letter, or some other collection correspondence. This Comment makes clear that a lazy defendant does not submit itself to personal jurisdiction.

Remember, Rule 60 Motions Must be Filed Within One Year

This new opinion from the Tennessee Court of Appeals sets up a nightmare scenario for a prevailing party.

In that case (Reliant Bank v. Kelly D. Bush, No. M2018-00510-COA-R3-CV,  Tenn. Ct. App. Dec. 28, 2018), the Bank won a post-foreclosure deficiency judgment in 2014, after  competing experts testified about the fair market value of the property under Tenn. Code Ann. § 35-5-118. The former homeowners appealed the ruling, which was affirmed in 2016, and remanded. But, on remand, a new Chancery Court Judge was on the bench, and the new Chancellor had a different analysis and partially aside the judgment under Rule 60.02.

On the second appeal, the Judgment was upheld, but talk about snatching victory from the jaws of defeat (or vice versa).

Aside from being a great lesson about the uncertainty and risks of litigation, the 2018 opinion provides some good reminders about Rule 60.02. The Court noted, in part, the following:

Relief under Rule 60.02 is “an exceptional remedy.” Nails v. Aetna Ins. Co., 834
S.W.2d 289, 294 (Tenn. 1992). The rule is intended “to alleviate the effect of an
oppressive or onerous final judgment.” Spence v. Helton, No. M2005-02527-COA-R3-CV, 2007 WL 1202407, at *3 (Tenn. Ct. App. Apr. 23, 2007). It “acts as an escape valve from possible inequity that might otherwise arise from the unrelenting imposition of the principal of finality embedded in our procedural rules.” Thompson v. Firemen’s Fund Ins. Co., 798 S.W.2d 235, 238 (Tenn. 1990). The movant has the burden of proving the grounds for relief. Spence, 2007 WL 1202407 at *3.

Under Rule 60.02(1), the court may set aside a final judgment for reasons of “mistake, inadvertence, surprise or excusable neglect.” Tenn. R. Civ. P. 60.02. Under Rule 60.02(2), additional reasons for a court to set aside a final judgment are “fraud … misrepresentation, or other misconduct of an adverse party.” Id. But motions based on Rule 60.02(1) or (2) must be filed within a reasonable time, not more than one year after the order was entered. Id.

Ultimately, the Court of Appeals found the new Motion to be untimely.

Because the motion was untimely, the chancery court should not have entertained it. See Furlough v. Spherion Atl. Workforce, LLC, 397 S.W.3d 114, 131 (Tenn. 2013) (concluding that “relief [wa]s not available under Rule 60.02(1)” because the petition seeking relief “was not timely filed”); cf. Rogers v. Estate of Russell, 50 S.W.3d 441, 445 (Tenn. Ct. App. 2001) (“[M]otions under Rule 60.02(1) and (2) must be filed both within a reasonable time and within one year after the judgment or order was entered.”).

See you in 2019…

Some months are busier than others, and, when it’s a busy month, Creditors Rights 101 is the first place to suffer. So, here I am, on December 31, posting something for December.

As you may have heard, Tennessee’s Trial Court Vacancy Commission submitted my name (along with two others) to Tennessee Governor Bill Haslam to be considered for an appointment to replace Chancellor Claudia Bonnyman in Davidson County Chancery Court, Part I.

Many of you know me from a variety of different contexts and courts, and so you may be surprised that I’d be content to serve in just one court. In fact, if you follow my twitter account, you’ll recall that I’ve had some days when I’ve appeared in several courts on the same day…occasionally at the same time.

I consider Davidson County Chancery Court my “home” court. Per the Chancery Court’s online database, I’ve appeared as counsel in 176 cases in Davidson County Chancery Court since January 1, 2008. To put that number in context, my two opponents have appeared in front of those courts 22 and 16 times, respectively, during that same time period. Long story short, this is a court that I know really well.

So, yes, my December has been more hectic than usual.

I look forward to continuing talking about commercial law issues with you all in 2019, whether it’s from the bench or  from my office (a/k/a via this blog).

 

Service of Process via Registered Agents can be Hard, where There is no Registered Agent

As strange as it seems, but some businesses go to great lengths to set up a proper corporate entity (i.e. a corporation, LLC, etc.) for their business, but they don’t appoint a registered agent for process.

As you all know, a corporate entity must designate a person or entity to serve as a registered agent (i.e. to provide a public “face”) for service of process.

Before filing any lawsuits, I’ll research a corporation on the Tennessee Secretary of State business information search to get the name of its registered agent (i.e. the person/entity that I have to serve with service of process), and they simply don’t have one listed (or they just have the corporate name listed).

This may be dumb, or it may be dumb like a fox. I mean, if they don’t list an agent to accept service of legal documents, then is there a chance that plaintiffs simply can’t serve legal documents on them?

The short answer is “Of course not.” The longer answer is at
Tenn. Code Ann. § 48-15-104 (b), which provides:

(b) Whenever a domestic or foreign corporation authorized to do business in this state fails to appoint or maintain a registered agent in this state, whenever its registered agent cannot be found with reasonable diligence, whenever a foreign corporation shall transact business or conduct affairs in this state without first procuring a certificate of authority to do so from the secretary of state, or whenever the certificate of authority of a foreign corporation shall have been withdrawn or revoked, then the secretary of state shall be an agent of such corporation upon whom any such process, notice or demand may be served.

So, in that situation, you serve the Secretary of State. In the past, what I’ve frequently done is serve the managing corporate actor, such as the president, owner, or other suitable person in a management capacity. Per
Tenn. Code Ann. § 48-15-104 (d), that appears to also be allowed (that statute provides that “[t]his section does not prescribe the only means, or necessarily the required means, of serving a corporation.”

Take Care in Drafting Proposed Orders: Otherwise, You’ll Have to Go Back to Court

Nothing beats a legal victory that summarily wipes out and dismisses all of the other side’s claims and causes of action as a matter of law, under Rule 56, right? But, don’t be too quick to draft your proposed order and leave out the critical details.

My advice to the victor is to make sure that you get your judge to clearly articulate his or her ruling on the record or in open court (which you’ll transcribe with your notes or even record with your i-phone). Then, if you’re preparing the Order, be sure to include those specific findings of fact and detailed conclusions of law in your Order.

Otherwise, you’ll be faced with a situation similar to what the Tennessee Court of Appeals was faced with in this opinion issued yesterday, in Bertuccelli v. Haehner, E2017-02068-COA-R3-CV, (Tenn. App. Nov. 28, 2018).

In that case, the trial court’s summary judgment and final order simply stated that defendant’s “supplemental motion for summary judgment and motion for summary judgment are hereby granted and thus all claims and causes of action set forth in the complaint are hereby dismissed with prejudice.” There were no findings of fact or conclusions of law. Just that.

As a result, the Court of Appeals wrote:

there is nothing in the trial court’s “final order” that explains its decision to
grant Appellees’ motion for summary judgment as to all claims and causes, and the order does not state the legal grounds for the grant of such summary judgment. … The trial court does not recite any evidence or argument it considered in making the decision to grant the final order on summary judgment, and, therefore, fails to comply with Rule 56.04. Accordingly, “[w]e cannot proceed with a review, speculating on the legal theories upon which the trial court may have ruled and the legal conclusions the trial court may have made.” Potter’s Shopping Ctr., Inc. v. Szekely, 461 S.W.3d 68, 72 (Tenn. Ct. App. 2014) (quoting Winn 2010 WL 2265451, at *6).

So, again, if you want your big victory to stand up to appellate review, put some effort into your proposed Orders. When drafting your proposed Orders, be sure to clearly state the grounds for the judgment.