May the Lawsuit Filed Against You be an Interpleader Complaint

Today’s post is just a quick follow-up to one from a few years ago.

That post, titled Interpleaders: The Only Time People Like to Hear from Me, discussed what an interpleader action is, why a bank/creditor would file an interpleader, and, most importantly, why it’s good news to receive one.

With it being the start of the year, a lot of banks and law firms are dealing with escrow and trust account balances, and trying to resolve those balances (i.e. pay the funds out). If those funds relate to a foreclosure and the foreclosing bank or trustee isn’t sure who is the proper party to send them to, they’ll probably file a Complaint in Interpleader.

So, to those of you who have had property foreclosed on in 2018 and now the bank has filed a lawsuit, there’s a chance that the lawsuit is good news.

A small chance, but there’s always hope.

Interpleaders: The Only Time People Like to Hear from Me

When people ask me what kind of law that I do, I always end my answer with “Generally, it’s bad news if you’re hearing from me.” In fact, if you’re reading this right now on a computer, look at my bio over to the right.

If you’re on a phone, I’ll help. It says: “It’s probably bad news if you’re hearing from him.

Recently, though, I’ve been spreading good news, because I’m filing a bunch of interpleader lawsuits.

Interpleader actions are filed by plaintiffs who are asking for court direction as to who to send cash or other property to. The typical situation arises after a foreclosure, when the foreclosure attorney sells the property for more than the debt owed, and there are multiple parties who can make a claim for those excess proceeds.

Generally, the deed of trust is pretty clear as to who gets the money, but, sometimes, it’s not clear or the situation is contentious. To be safe, you file an Complaint for Interpleader under Rule 22, name all the parties who have, or may have, a claim to the proceeds, and ask the Court to decide. This way, the judge gets to make the hard decision, and the foreclosure attorney (often the substitute trustee) isn’t exposed to future lawsuits alleging he paid the money to the wrong party.

Under Tenn. R. Civ. P. 22.02, the attorney files the lawsuit, later deposits the money with the Court, and, then, the filing attorney can be dismissed while the remaining parties fight over the money.

So, back to my phone calls this week. I was calling my “Defendants” to tell them that I was getting ready to sue them, but, “don’t worry, it’s a good lawsuit.”