Creditors Rights Tennessee – Creditors Rights 101

There will never be another Tom Lawless

Tom Lawless didn’t care whether you liked him or not.

And there were definitely people who didn’t like him. But those people never took the time to get to know him. They stopped at his politics, were leery of his sharp sense of humor, or were jealous of his self-confident independence. Tom was defined by his politics, but he didn’t play politics by the rules.

One reason Tom didn’t care if you didn’t like him was that, frankly, he knew you were wrong. Tom brought his authentic self to every interaction, to every case. He couldn’t help it.

If somebody was being dumb in court, he’d say it. If his client was being greedy, he’d tell them. If opposing counsel pushed too hard, watch out (and, to be clear, it didn’t need to be Tom who was being pushed–he was genuinely offended by jerks).

Local reporters loved Tom. Always willing to go on the record, and he was a “good quote.” (Though I bet the off-the-record stuff was phenomenal.)

A smart legal mind is a dime a dozen, but the ability cut somebody in half with a sarcastic comment and a willingness to say it? Tom was fearless and absolutely owned that.

He was also a fierce friend.

Tom and I swam in the same waters. We both represented creditors, and so we never had cases against each other. Instead, we were competing for the same clients–a position that maybe was more adversarial than being opposing counsel.

Tom was always good to me. Don’t get me wrong: For the first 10 years of my career, I avoided him. If Tom Lawless was in the business of calling out dumb lawyers for doing dumb things, I didn’t need him paying attention to my little career.

Then, I got to know him. He chaired the Nashville Bar Association Ethics and Professionalism Section, and, for years, he’d host a monthly sit-down session with titans of the Nashville Bar and chit chat with them, about the law, their career, about anything that came to mind, under the guise of a committee meeting. Really wide-ranging, candid conversations that only Tom could have with these people, but open to whoever showed up.

At first, I thought that it was a discrete way for Tom to flatter the important people; after attending a number of those meetings, I figured out that it was a way for those people to curry favor with Tom.

Because you always wanted to be on Tom’s good side. Pre-COVID, I joined the Rotary Club, and I’d generally sit at Tom’s table–at the back of the house–and he just could not keep quiet. He knew everybody and knew everything. A story would come to his mind, a catty comment, and he’d say it. Out loud. Years ago, a friend told me “Tom is like the internet. If you tell him, you need to assume that everybody knows.”

You couldn’t have a call with Tom that lasted less than an hour. He loved to talk and, despite his political reputation, had a genuine interest in people of all sorts. If you needed something, he’d help. A call with him always included a sincere “And how are you doing? Everything good?”

I can’t count the number of times I left the office late or ate a cold dinner, because I took the 5pm call from Tom.

People talk all the time about politics being too partisan nowadays, but, despite being the most conservative of conservatives–in a blue town like Nashville– Tom was always willing to cross the aisle when a helping “a lib” was the right thing to do.

For years, the Nashville Bar Association posted a list of volunteers for its Dial-A-Lawyer pro bono program, and Tom’s name was on it every month. What a thankless service, just answering debt collection questions on the phone for hours, but he was there.

When he passed, I hadn’t talked to Tom for months.

About a year ago, a friend of mine was up for a judgeship, and I reached out to Tom to put a good word in for her. (She got the job.)(Side-note: She didn’t need any help.) Tom took the credit, and I was happy to give it to him. Tom was a guy who did favors and got things done.

I felt guilty, asking for anything, when I hadn’t seen him for a bit. In fact, I volunteered at Dial-A-Lawyer last month (for the first time ever), hoping that maybe Tom would be there, holding court with the other volunteers during the lull in calls. He wasn’t there, and the volunteer coordinator said she hadn’t seen him in a long time.

I got a little concerned. For a few months, I had been meaning to reach out to him. To check in on him, trade some gossip, all of that. I never texted, because I knew, as soon as I hit “send,” he’d call, and I always held off, waiting until I had about an hour to chat.

It’s a busy time, and I’m sure I’ll see him soon.

Sunday night was a shock. Other people knew him far better than I did, but Tom’s passing is a big loss to our community. For all his politics, he was never politically correct. Despite his proximity to power, he’d call out hypocrites and stupidity, no matter the party. His strongest affiliation was to his friends. And, if you needed his help, he’d probably say yes.

Tom will be missed. In Bankruptcy Court and Chancery Court. At the Nashville Bar Association. Over at the legislative offices. On my caller id.

I can’t imagine there will ever be another Tom Lawless.

Memphis Grizzlies and Service of Process: A match made on Beale Street

I’m am a huge Memphis Grizzlies fan, but I haven’t had any reason to talk about them on this blog. Until now.

Here’s a photo from my seats when the Grizzlies played the 76ers on Marc Gasol retirement night on April 6, 2024. Side note: Melton did not file a motion to set aside while in town for this game.

Last week, the Tennessee Court Appeals issued an opinion, Werner, et al. v. De’Anthony Melton , No. W2025-00779-COA-R3-CV, 2026 WL 2654566 (Tenn. Ct. App. Sept. 9, 2026), involving a Grizzlies player and some interesting service of process issues.

On June 3, 2022, a neighbor sued De’Anthony Melton over an alleged dog bite that occurred on January 23, 2022. On June 24, 2022, Melton was traded to the 76ers (in a pretty dumb trade by the Grizzlies).

Not only did the trade frustrate me (Melton was a good player, on a great contract, and they got nothing for him), it made service of process especially difficult for the plaintiff.

First, they tried to serve him personally at his (former) Tennessee residence. Then, after the trade, an Alias Summons was issued, and they tried to serve him at the 76ers’ practice facility, but failed to serve him personally a number of times. On the third attempt in October 2022, the process server left the Summons with the team’s “Director of Executive Protection” “who purported to accept service on Mr. Melton’s behalf.” ….

Foreclosure Attorney Nightmares: How late is “too late” for recorded liens to receive notice of the sale?

Want to keep a foreclosure attorney up at night? Call one late on a Friday and leave a voicemail that says “Hi. I’m with a title company doing a sale of a property you foreclosed on, and we found some liens and have some questions about your notice.”

Foreclosures in Tennessee are non-judicial, meaning it’s all technical compliance with the foreclosure statutes (and the terms of the deed of trust), but no judges are involved.

“It’s all paperwork,” I often say, “but you’d better get it exactly right.”

I got one of those calls last week. I conducted a sale on a Friday in April, and the deed was recorded at 2pm on the following Monday. But, the title company discovered, a new lien was recorded on 10am on that same Monday.

“We want to know whether you gave notice to this lienholder of your sale.”

“Well, no,” I confidently wrote, “I did not give written notice to the party who at no point prior to the foreclosure had recorded a lien.” But the terrified voice in my head was nevertheless freaking out a bit.

This is why Tenn. Code Ann. § 35-5-104(d) exists.

That statute defines the “parties interested” (and, thus entitled to be listed in the sale notice and receive notice) as parties holding liens, but those liens must have been “recorded more than ten (10) days prior to the first advertisement or notice in the register’s office of the county in which the real property is located.”

This makes sense, right? There has to be cutoff, at some point, of the foreclosing party’s obligation to check for new liens. If a party records a lien the day before the sale, this should not blow up the sale.

Having said that, the “best practice” is to downdate the status of title beyond the requirements of Tenn. Code Ann. § 35-5-104(d), especially if the goal is to conduct a clean, problem-free sale. I tend to check for these liens in the days before, and often the day of, my sale.

Here the lien that was recorded a few days after my sale falls outside of the “parties interested” definition.

Ok. Back to sleep where I worry about all the other cases that are rightfully keeping me up at night.

Yes, a Final General Sessions Judgment Can Be Enforced in Other States as a Foreign Judgment (Part 2)

If you’ve been here long enough, you know that I’m an advocate for filing lawsuits in Tennessee’s General Sessions Courts.

Matters move fast, are cost-efficient, and judges are some of the most no-nonsense jurists you’ll ever meet.

Some lawyers like a little bit of “making things more complicated than necessary” and prefer cases with lots of billable hours, and those lawyers tend to object to “small claims court” because they aren’t a “court of record” and, thus, the judgments may not be enforceable in other states.

I’ve always said they’re wrong and that a judgment entered by a Tennessee General Sessions Court is likely entitled to full faith and credit and enforceable in other states under the Uniform Enforcement of Foreign Judgments Act, even though such courts are not courts of record.

If you are facing an argument about enforceability in Tennessee, here’s some text from a 2001 case that will be useful:

[Defendant’s] first argument is that the [Plaintiff’s] judgments are not entitled to full faith and credit because they were not rendered by a court of record. This argument is wrong … Tenn. Code Ann. § 26-6-104(b) does not, even by implication, limit the judgments entitled to full faith and credit to those rendered by a court of record.

Tenn.Code Ann. § 26-6-104(b) provides that our state courts will treat a foreign judgment “in the same manner as a judgment of a court of record in this state.” Based on this language, [Defendant] asserts that in order for a foreign judgment to be accorded the same treatment as a judgment of a Tennessee court of record, the judgment must have been rendered by a court of record. This reasoning overlooks that neither U.S. Const. art. IV, § 1 nor Tenn.Code Ann. § 26-6-103 limits the judgments entitled to full faith and credit to judgments of “courts of record.” According to Tenn. Code Ann. § 26-6-103, a “foreign judgment” entitled to full faith and credit in Tennessee is “any judgment, decree, or order of a court of the United States or of any other court which is entitled to full faith and credit in this state.”

See Boardwalk Regency Corp. v. Patterson, No. M199902805COAR3CV, 2001 WL 1613892, at *3 (Tenn. Ct. App. Dec. 18, 2001.

Under this same reasoning, the question of whether an “outgoing” Tennessee General Sessions Court judgment is entitled to full faith and credit in other states ultimately depends on the law of the enforcing state. But, under the UEFJA, those courts will generally look to whether the judgment is final and valid in Tennessee, and most states don’t introduce anything about “courts of record” into their version of the Act.

Lawyers are risk adverse, and, faced with a risky decision that will save the client money but introduce a drop of risk, many Tennessee lawyers will opt for to file a matter in chancery or circuit court.

This issue comes up more than you’d think, and that case citation could get you where you need quickly and in a cost-efficient manner.

More Square Feet, More Billable Hours–Inside Nashville’s Office Space Boom

In the last 7 days, I’ve seen not one, but TWO news stories about law firms renting larger and fancier office spaces.

Maybe it was just a slow news week, but I didn’t realize that was something that justified a news story. (Is it not Super Lawyers or Best Lawyers (TM) season yet?)

Regardless, we’ve come a long way since the days of COVID, when law firms offered “flex” work arrangements, allowing lawyers and staff to work from, well, wherever they wanted to (as long as the work got done). It made financial sense (allowing some firms to downsize, reduce costs, and eliminate those wasteful “corner” offices, in favor of uniform office sizes and more collaborative space) and also met a younger generation of professionals (i.e. the non-old-white guys) where they were at.

Law firms are creatures of tradition, and, as Colliers‘ recently released 2026 Law Firm Trends Report shows, it hasn’t taken long for the old timers to summon the associates back to to their desks. By the end of 2026, Colliers predicts that law firms will expect staff to spend up to 70% of the work week in the actual office.

As for Nashville, Colliers notes the rapid (and rabid) influx of global law firms into the market, which has increased competition for the best office space. Per Colliers, Nashville’s average Class A “asking” rent is $40.40 per square foot.

Having seen the insanely high hourly rates that these new law firms are injecting into the local market, I have no doubt they can afford it.

It seems that we’ve returned to flashy addresses as a signifier of the quality of legal services. The argument for this old fashioned approach is, of course, that “opulent physical spaces suggest success and prestige, which will result in more work from clients.” Said another way, “our marble encrusted tables and leather bound volumes will strike fear in the hearts of enemies and admiration from clients.”

And, yes, the above link takes you to a post by me from 2021, bragging about my WeWork office and how the then-new trends in lawyer office space and lower overhead were so wonderful. (Yes, I’m biased.)

Oh well. The Nashville legal market continues to evolve. But expensive offices, long term leases, and more time at your desk to pay for all that? No thanks.

A few weeks ago, a Nashville lawyer posted a picture on his LinkedIn page. He was visiting his big firm’s Miami office, taking all-day depositions. He posted a picture from the conference room, showing the view out the window.

In the picture, past the visible reflection of the rows of fluorescent lights, you could see people in the distance, having fun on the beach.

That “maximum indebtedness” line on your deed of trust only matters to the taxman, not the borrower.

By the time a loan gets referred to me for foreclosure–after we add interest (sometimes at a default rate), collection costs (attorney fees), and foreclosure expenses (somehow, newspaper publications have gotten more expensive)–the unpaid debt sometimes exceeds the original amount of the deed of trust.

This can create confusion, because my bank’s deed of trust will always include a line that says: “Maximum principal indebtedness for Tennessee recording tax purposes is $______.”

Are we capped at that “maximum” amount? Can we really enforce those other amounts? What if we have cross-collateralized debts that adds other accounts?

All good questions, since the text literally says “maximum indebtedness.” Deeds of trust are contracts, and words in contracts usually mean what they say.

Here, not so much.

This is specific language that is required on all Tennessee deeds of trust per Tenn. Code Ann. § 67-4-409(b)(6), and it exists only for computing taxes. As the statute explains, the statement “may be relied upon only by the department of revenue and by the receiving official charged with the duty of recordation and collection of tax, and such statement shall not constitute notice of any kind to any other party of the amount of indebtedness secured by the instrument.”

Tenn. Code Ann. § 67-4-409(b)(11)(A) doubles down on this interpretation, by expressly providing that “nonpayment or underpayment” of the tax “shall not affect or impair the effectiveness, validity, priority, of enforceability of the security interest or lien…”

This same reasoning applies, even when a bank is enforcing other debts pursuant to a cross-collateralization provision (meaning the deed of trust can also secure past, present, and other future debts). See Tenn. Code Ann. § 47-28-102. Your deed of trust with a $100,000 maximum for tax purposes can, conceivably, secure debts that are ten times that amount.

But, as a warning, be sure to look for text imposing a maximum debt limit text in the body of the deed of trust.

For example, if the deed of trust contains a specific cap that is embodied in the substantive text, it’s considered part of the agreement and will be enforced (something like a provision securing a note “or for any renewals, extensions, or additional advances not to exceed a total indebtedness of $65,000.00”). Those words mean what they say.

Just like my first grade teacher said, there are no dumb questions. Here, this one confuses lawyers and bankers all day long.

Two Traps to Avoid When Foreclosing: Redemption and Exemption Rights

When a lender refers me a deed of trust for foreclosure, there are a lot of things I immediately look for. Is the deed of trust recorded? Is this recording in the correct county? Is it signed? Is the collateral description correct? Does the deed of trust even allow foreclosures? (You’d be surprised how often these easy parts get messed up.)

Finally, are the borrower’s redemption and exemption rights waived?

These last ones are easy to overlook, but really important. In fact, I’ve never foreclosed real property on deed of trust without those waivers.

Remember, deeds of trust are contracts between a borrower and a lender. In Tennessee, when borrowers sign a deed of trust, they’re not just pledging their property as collateral—they’re often agreeing to give up certain statutory protections that would otherwise apply if things go sideways.

Two of the most important rights are the right of redemption and the homestead exemption.

The right of redemption, found in Tenn. Code Ann. § 66-8-101, would otherwise allow a borrower two years to reclaim the property after a foreclosure sale by paying the debt. This right to “buy back” the property would hardly ever be exercised, but the mere fact that it existed would cloud the post-foreclosure title and limit the re-sale value of foreclosed properties. This waiver allows the lender (or foreclosure purchaser) to obtain immediate, final title upon completion of the foreclosure sale, eliminating post-sale uncertainty.

The homestead exemption, at Tenn. Code Ann. § 26-2-301, is designed to protect a portion of a homeowner’s equity from creditors. When things go absolutely wrong for a homeowner and they lose their house, the law allows a borrower to protect up to $35,000 before it goes to certain creditors.

As indicated in each of these statutes, both of these rights can be waived in a deed of trust, allowing a mortgage lender the ability to foreclose with clear title.

The absence of these waivers do not prevent a sale, but they drastically change the outlook for the foreclosure process.

Nashville Honky-Tonks, Tennessee Two Steps, and a Triple Net Lease

Local Nashville news has been abuzz about the huge tax bill faced by Lower Broadway’s Acme Feed & Seed for the 2025 tax year. Located at 101 Broadway, at the start of the historic Broadway honky-tonks and overlooking the Cumberland River, it’s a prime property on a stretch that has continuously set (and re-set) new records for property values.

For the past 5-7 years, asking prices for Broadway honky-tonks have reached unimaginable heights. You can buy Jelly Roll’s bar for $100Million. Jon Bon Jovi’s is being offered for $130Million.

That’s great for the property owners’ balance sheets, but it’s bad news when the Metro Nashville Assessor starts paying attention. (Increases in tax appraisals generally mean higher taxes.)

2025 Metro Real Property taxes come due later this week, and, if this past week’s news is any indication, nobody is more worried about their 2025 tax bill than Tom Morales, the owner of Acme Feed and Seed.

As a result of the recent re-appraisals, for 2025, the property is appraised at $50,049,200, a huge jump from 2021’s value of $9,577,900.

The tax bill? $589,259.28 (and has not yet been paid).

The public response has been mixed. Lots of people won’t ever feel sorry for somebody whose property value goes up $40+ million dollars (and would fetch far more in a private sale), but those people are missing a key point: Tom Morales doesn’t own the property, per the Quitclaim Deed.

Why, then, would a renter care about the property taxes?

My guess is that he probably signed a triple net lease (often written as “NNN”).

In simple terms, a triple net lease is a lease where the tenant pays not just “base” monthly rent to the landlord, but also all of the property’s operating expenses: real estate taxes, insurance, and common area or maintenance costs. In short, the landlord owns the building, but, per the lease, the tenant agrees to pay all of the expenses of the building, usually in 1/12th increments throughout the year as “additional” rent.

If you don’t work in the commercial leasing realm, it probably blows your mind to think that, as a tenant, you’d be responsible for all of the expenses of a property. Why not just buy the building yourself?

It’s a common leasing structure. From the tenant’s perspective, they can operate out of property, without the cash, credit, or long-term obligations of purchasing an expensive building. Acme Feed and Seed may not have had the credit (or desire) to own a $50 Million property, but it can get it via lease. And what a property it is: On New Year’s Eve, nearly 250,000 people rang in the new year at Acme’s front door, with TV and media coverage you can’t buy.

From the owner’s perspective, a deal like this ties up lots of cash or credit on an fixed asset, but, at least, they don’t come deeper out of pocket for the operating expenses. It sounds like a great deal, sure, but being a landlord still carries risk. Ever hear of a bar going out of business and being vacant? Who pays the mortgage, taxes, and expenses in that situation?

At the end of the day, a commercial lease is a contract, and the two parties are free to agree to whatever they want in a lease. They can allocate taxes, insurance, and maintenance responsibilities in any way, and a Tennessee court will hold them to that bargain, no matter how unfair the unforeseen results can be. A contract will be enforced according to its plain language.

With that in mind, for any tenant considering a triple net lease on a property with potential for this sort of wild change, I’d recommend that the tenant consider a provision to mitigate the risk this could happen.

No landlord would be willing to voluntarily bear this tax increase, especially if the tenant retains all of the use and benefit of such a valuable property. (From the landlord’s perspective, the tenant is, now, paying under-market rent, as if the building was still worth a paltry $10Million, right?)

Instead, this lease could have included a provision that allows the tenant to opt out and terminate the lease, if the tenant could prove this increase in the tax cost was a material change. In that situation, the tenant would have an option to get out of the lease and, on the other side, the landlord would be freed from “the burden” of being bound by an under-market lease and could, then, attempt to enter into a new lease based on the $50MM valuation or capture the value via sale. (In short, the landlord would probably happily terminate the lease and see what the free market says about all of this.)

Without that, a tenant can only hope the landlord will pitch in and help with this cost. If I had to guess, all of this hit the local news after the landlord declined to pay the tax bill.

Broadway has changed a lot since Acme first opened their doors 15 years ago. Even the best commercial real estate attorneys could not have foreseen this when drafting this lease, but it’s something to think about on the next honky-tonk lease.

Will an “early” Motion for Default be granted? One Trial Court said no.

One of the frustrating parts of being a lawyer (there are many) is that, sometimes, you can’t get your case set for hearing as fast as you (or your client) would like it to be. The legal system moves at its own pace, and it’s generally not built for speed.

This is especially true in mid-March (spring break) and mid-October (fall break/judicial conference), when court dockets might be unavailable or closed.

Time is money for my clients, and they tend to want to get in front of the judge as soon as possible. One or two weeks of closed dockets can add 30-60 days of delay.

Under Tennessee law, if a defendant in a lawsuit fails to respond or otherwise defend “as provided by these rules,” the plaintiff can get a judgment by default. See Tenn. R. Civ. P. 55.01. This generally means that, after service of a lawsuit, a defendant must file an answer within 30 days. If they don’t, you file a motion saying that and, generally, you win.

For years, I had this theoretical question: If a plaintiff filed a motion for default prospectively–before the answer deadline had expired–and, if the defendant failed to answer by the 30 day deadline, would a judgment by default be entered?

This spring, I got my answer.

I had a case where defendant’s answer date was approaching, but the court’s motion calendar showed dockets in late March…and then mid-May. Yikes!

The deadline for my defendants to answer was March 15. March 14 was the deadline to get my Motion for Default heard on that last, March 28 docket. Should I file a day early (and see if they file an answer) or should I wait?

I got my clarity: My Motion was denied, with the text of the order noting that my motion was filed “twenty-nine days after Defendants were served.” As a result, the Motion “was untimely since less than thirty days elapsed between the date of service and the date Plaintiff filed its motion.”

In the end, then, it didn’t matter that the defendants never filed an answer, including between the filing date (March 14) and the scheduled hearing date (March 28). The original motion was premised on a condition that had not yet occurred.

As a result, upon receipt of the order, I filed a new Motion on March 28, set it for May 15, and got my default judgment then.

A Final General Sessions Judgment Can Be Enforced in Other States as a Foreign Judgment

When it’s an option, I always encourage clients to file lawsuits in Tennessee’s General Sessions Courts. Justice moves fast, efficiently, and cheap. The lawsuit you file today could be set for hearing next week; executions on the judgment could go out by the end of the month. Zip zap.

Nevertheless, lawyers often express uncertainty about whether a judgment from General Sessions Court–not a “court of record”–is enforceable in another state under under that state’s version of the Uniform Enforcement of Foreign Judgments Act (UEFJA).

I think they are. Here’s why.

If your General Sessions judgment is final and enforceable in Tennessee, why can’t you take to another state? “Foreign judgment” means “any judgment, decree, or order of a court of the United States or of any other court which is entitled to full faith and credit.” See Tenn. Code Ann. § 26-6-103.

In layman terms, it’s a judgment from another U.S. state court. Based on that, a Tennessee General Sessions judgment qualifies so long as the rendering court had jurisdiction and the judgment is valid and final, right?

“Final” in General Sessions Court is determined under Tenn. Code Ann. § 27-5-108, which says generally that any judgment that isn’t appealed within ten days. If you can garnish a bank account and wages on the judgment, why can’t you take it to another state?

So, yes, maybe small claims court has a more “vibrant” cast of characters than your typical courtroom, but that doesn’t mean the judgements granted there have any less legal impact.