Tag: Statute of Limitations

New Associates: These recent Tennessee Appellate Opinions can save you some research time.

Over the past few weeks, the Tennessee appellate courts have issued some really useful opinions on creditor-specific issues of law.

As you’ll remember from this post (from 2013!), these opinions have great recaps of the law and can save valuable research time. I’ve literally been sitting at counsel table, furiously researching this site for a citation (this one, about slow pay motions. And also this one about Rule 69.02.)

Some quick hits from the past week:

Statute of Limitations; when a breach of contract cause of action accrues; and the standard of review for a 12.02(6) motion. This case from yesterday, In re Estate of Donald Cowan, No. M2019-01597-COA-R3-CV (Tenn. Ct. App. Aug. 25, 2020) has a great statement of the law on statutes of limitation, when the clock starts ticking on a claim, and a good recap of the standards in granting a motion to dismiss for failure to state a claim upon which relief can be granted under Tennessee Rule of Civil Procedure 12.02(6).

It’s a well written opinion, and a litigant with those issues can literally cut and paste those sections into a brief.

Motions to Intervene under Tenn. Riv. Civ. P. 24. Regions Bank v. The Blumberg Trust, et. al., No. E202000051COAR3CV, 2020 WL 4919783 (Tenn. Ct. App. Aug. 21, 2020). This opinion, issued on Friday, has a great summary of the statutes and case law on Intervention as of Right and Permissive Intervention in Tennessee under Rule 24.

In that case, the party seeking to intervene was an assignee of the debt and was really only trying to substitute itself as a party, so it’s strange that intervention was even an issue.

In an even stranger twist, the prevailing party (appellee) most definitely submitted the Order Denying the Motion, and the submitted (and entered) trial court order was entirely devoid of factual or legal analysis. As a result, the Court of Appeals refused to rule on the issues on appeal and remanded the case for further proceedings.

My question is this: It was clearly a deficient bare-bones trial court order, but doesn’t the appellant share the responsibility of curating the record? Shouldn’t the appellant have submitted a competing order that had enough substantive details to properly present the issue on appeal?

Just a strange case.

Prejudgment Interest under Tenn. Code Ann. § 47-14-123. The Court of Appeals revisited the case of 101 Constr. Co. v. Hammet, No. M201801321COAR3CV, 2019 WL 5606610, at *7 (Tenn. Ct. App. Oct. 30, 2019), appeal denied (Mar. 26, 2020), and I can’t tell exactly why, but I appreciated the reminder about this case’s very detailed lesson about the importance of detailed communication in legal fee arrangements.

Also, it has a nearly “cut and paste” perfect discussion of the standards in Tennessee for awarding prejudgment interest under Tenn. Code Ann. § 47-14-123.

Spoiler: Tennessee Courts should always be awarding pre-judgment interest.

Elements to Determine Value of Damages under Quantum Meruit Claims (and who can testify). This is an issue that doesn’t show up in appellate cases often: what type of proof is required to establish the amount of damages in a quantum meruit claim.

The Court of Appeals provided a really good road map last Tuesday, in Blount Mem’l Hosp. v. Glasgow, No. E201900776COAR3CV, 2020 WL 4809951, at *2 (Tenn. Ct. App. Aug. 18, 2020).

The Plaintiff had an awful contract, so it had to rely on unjust enrichment/quantum meruit to recover the value of the hospital services provided to the Defendant. The Plaintiff presented proof from the “hospital’s financial representative” (not a doctor or service provider) that “she was familiar with the customary charges in the medical industry and that the hospital’s charges for the services were reasonable and customary.”

This knowledge wasn’t gleaned from a survey of the industry or by first hand knowledge of what other hospitals were charging; instead, it was based solely on what Medicare allowed hospitals to pay. (As an added note, though, the Court mentioned that the mere fact that “this is what the hospital usually charges” isn’t good enough proof.)

But, because the proof presented, i.e. that the “medical services were comparable to all hospitals in the area that accepted Medicare patients…,” was presented by a “hospital representative who is familiar with what is reasonable and customary,” the Court found that it was “sufficient to make [a] prima facie case for the reasonable value of the services rendered.” Id. at *3.

Keep this case for those situations where your witness is the controller / bookkeeper, but has no idea how to perform the underlying services. This comes up alot.

Last One: Setting Aside a Judgment Under Rule 60.03. Reese v. Amari, No. M201900329COAR3CV, 2020 WL 4342734 (Tenn. Ct. App. July 28, 2020).

This one is really interesting. A judgment debtor attacked a decades old judgment, arguing that it was a default judgment.

In denying the attack, the Court noted that, even though it was called a “default” judgment, the trial court actually entered the judgment at a trial, which the defendant didn’t attend. So, it wasn’t technically a default judgment, as that is defined under Tenn. R. Civ. P. 55, and wasn’t entitled to the more generous standards to set aside default judgments.

Separately, though, Judge Dinkins’ opinion has a very precise presentation of when a court will set aside a final judgment under Rule 60.02(3).

And, new associates, this comes up far more than you’d imagine.

All Those Great Recession Judgments May be Expiring Soon

Depending on who you ask, the “Great Recession” resulting from the subprime mortgage crisis began in December 2007 and lasted about two years. So, about ten years ago, I was spending most of my work days working on loan documents for third, fourth, and sometimes fifth mortgages for a local bank who was really, really late to the mortgage boom.

Of course, the impact of this past recession was felt for years afterwards, meaning my spring 2007 HELOCS didn’t go bad until 2010 or 2012. As a result, just a few years later, I was suing and taking judgments against those same borrowers. From 2008 to 2014, I estimate that I obtained at least 500 judgments, ranging in amounts from $2,500 to $5,000,000.

As I like to say, if you were hearing from me, it was bad news.

So, with a drawer full of judgments, this is what keeps me up at night: Those judgments are only valid for ten years, and, if I haven’t collected on them, they expire.

I’m taking about Tenn. Code Ann. § 28-3-110(a)(2), which provides that actions on judgments are only valid for ten years.

So, a good rule of thumb is that, if you received a judgment against someone you haven’t been able to collect in the last ten years, go back and confirm when you were awarded that judgment. If you’re getting close to the ten year mark, you might be running out of time.

(But, not to be too dramatic, I’m going to talk about how to extend that time period soon.)

 

 

A Filed, but Not Served Complaint, May Not Prevent the Statute of Limitations from Expiring under Rule 3

The Court of Appeals issued an interesting case yesterday to remind us all about the importance of prompt service of process. This case is Amresco Independence Funding, LLC v Renegate Mountain Golf Club, LLC (Tenn. Crt. Apps., Mar. 31, 2015, No. E2014-01160-COA-R3-CV), and the full text can be found here.

The basic facts are that the Plaintiff filed a collection lawsuit against Defendant, but did not obtain valid and timely service of process of the Complaint. Then, after the statute of limitations expired and after one year from the date that the original Summons was issued, the Defendant filed a Motion to Dismiss. In the Motion, the Defendant argued that any new Summons would not relate back to the Complaint filing date and, as a result, the lawsuit was too late.

This is a good argument. Under Tenn. Rule. Civ. P. 3:

If process remains unissued for 90 days or is not served within 90 days from issuance, regardless of the reason, the plaintiff cannot rely upon the original commencement to toll the running of a statute of limitations unless the plaintiff continues the action by obtaining issuance of new process within one year from issuance of the previous process or, if no process is issued, within one year of the filing of the complaint.

The Court of Appeals agreed with this analysis and upheld the dismissal.

So, as a rule of thumb, don’t think that because you filed your lawsuit that all your statute of limitations issues go away. Indeed, if you simply file the lawsuit and then don’t obtain service of process, your time-sensitive claims could potentially expire.

And this isn’t just a rule that penalizes lazy lawyers. I’ve filed lawsuits to satisfy deadlines, but then considered not serving the Summons because the parties were engaged in settlement talks or waiting for a sale or some other event to occur.

Under Rule 3, the mere filing of the lawsuit may not be enough to save your claims.

Computation of Time: How Do You Count “10 Days” for a General Sessions Court Appeal in Tennessee?

Everybody knows that, in Tennessee General Sessions Courts, you have a right to file a de novo appeal in ten days. But, lawyers sometimes scratch their heads on how to count ten days. Is it business days? Is it calendar days?
Tenn. Code Ann. § 27-5-101 provides the Answer:

Any person dissatisfied with the judgment of a recorder or other officer of a municipality charged with the conduct of trials, in a civil action, may, within ten (10) entire days thereafter, Sundays exclusive, appeal to the next term of circuit court.

So, under the statute, you use calendar days but you exclude any intervening Sundays.
Also, see Tenn. Code Ann. § 1-3-102:

The time within which any act provided by law is to be done shall be computed by excluding the first day and including the last, unless the last day is a Saturday, a Sunday, or a legal holiday, and then it shall also be excluded.

So, if the tenth day falls on a Saturday, Sunday, or a legal holiday, the deadline rolls forward.

Ok, last question, what’s a “legal holiday” in Tennessee? See Tenn. Code Ann. § 15-1-101:

January 1; the third Monday in January, “Martin Luther King, Jr. Day”; the third Monday in February, known as “Washington Day”; the last Monday in May, known as “Memorial” or “Decoration Day”; July 4; the first Monday in September, known as “Labor Day”; the second Monday in October, known as “Columbus Day”; November 11, known as “Veterans’ Day”; the fourth Thursday in November, known as “Thanksgiving Day”; December 25; and Good Friday; and when any one (1) of these days falls on Sunday, then the following Monday shall be substituted; and when any of these days falls on Saturday, then the preceding Friday shall be substituted; also, all days appointed by the governor or by the president of the United States as days of fasting or thanksgiving, and all days set apart by law for holding county, state, or national elections, throughout this state, are made legal holidays, and the period from twelve o’clock (12:00) noon to twelve o’clock (12:00) midnight of each Saturday which is not a holiday is made a half-holiday, on which holidays and half-holidays all public offices of this state may be closed and business of every character, at the option of the parties in interest of the same, may be suspended.

Patience can be Rewarded: Tennessee Judgments are Good for Ten Years

A few years ago, when borrowers still had cash or available credit, collections was an easier process–sometimes involving only a strongly worded letter or the filing of a lawsuit. Even post-judgment, collections could just be a matter of finding the bank account with all the cash or placing a lien on the rapidly appreciating real property.

In this recession, creditors need to realize that judgment collections is a process, and no longer an event.

Fortunately, Tennessee creditor lawyers have the benefit of Tenn. Code Ann. § 28-3-110, which provides that a judgment is valid for ten years and, even then, can be renewed for another ten years.

So, while you may be dealing with a debtor without any money now, keep in mind that this economy can shift for the good, as quick as it went bad. In collections, patience can lead to money.