Friday, November 22, 2013

Organized Pseudolegal Commercial Argument Litigants

Read a very interesting article in the Economist dealing with Canadians concocting very novel, very strange legal arguments in support of their otherwise, illegal acts. It begins with a tenant in default of his lease who said he was a "Freeman-on-the-Land," inter alia, and the landlord had no rights to the land in the first place based on some natural order. Evidently, these lines of reasoning have become so commonplace that an associate chief justice of Alberta's highest court, John Rooke, has written an extensive article detailing and rebutting these arguments. The opinion is here and a good summary is here.

I ran across something similar here in the US, the other day. Some have posited that a person's name is in all caps on her birth certificate as an alter ego to make one serve as collateral for all the government's debt. Happily, you can avoid this dehumanization by preparing a UCC financing statement with your name in all caps as the debtor, and your name with first letter capitalized as secured party. Please remember to renew your UCC every 5 years!

Thursday, November 21, 2013

Domesticating an Out of State Judgment in Tennessee

An out of state judgment is not enforceable in Tennessee, unless the out-of-state judgment is properly domesticated in a Tennessee court. Judgments obtained in other states are entitled to “full, faith and credit” in Tennessee pursuant to the U.S. Constitution.

Art. IV § 1 of the Constitution of the United States

Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.

How a creditor can enforce her judgment

1.  Traditional Means: File a new lawsuit and obtain a judgment in the current jurisdiction (need only prove validity of judgment, not underlying substance); or
2. Register the foreign judgment pursuant to the Uniform Enforcement of Foreign Judgments Act (“UEFJA” or the “Act”).

Forty-eight states that have adopted some form of the uniform Act (California and Vermont have not). Tennessee’s version of the Act provides that a final judgment entered by a court in one state may be enforced in Tennessee by obtaining an authenticated copy of the judgment and filing it with the appropriate Tennessee court. Tenn. Code Ann. § 26-6-104

(a) A copy of any foreign judgment authenticated in accordance with the acts of congress or the statutes of this state may be filed in the office of the clerk of any circuit or chancery court of this state.
(b) The clerk shall treat the foreign judgment in the same manner as a judgment of a court of record of this state.
(c) A judgment so filed has the same effect and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a judgment of a court of record of this state and may be enforced or satisfied in like manner.
            Tenn. Code § 26-6-104.

An exemplified judgment is a copy of the judgment to which a certificate has been attached and signed in three places, once by the judge and twice by the clerk, attesting to the authenticity and validity of the judgment. It is frequently called a judgment that has been authenticated pursuant to an Act of Congress.

The Act also stipulates the technical procedures for filing the judgment and providing notice and service of process on the judgment debtor. Specifically, Tenn. Code § 26-6-105 requires that

(a)  At the time of the filing of the foreign judgment, the judgment creditor or the judgment creditor's lawyer shall make and file with the clerk of the court an affidavit setting forth the name and last known post office address of the judgment debtor, and the judgment creditor.

The Act directs courts in Tennessee to treat the foreign judgment in the same manner as a judgment of a court of record in Tennessee.  Once a foreign judgment has been enrolled, it has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of a court of record in Tennessee and may be enforced or satisfied in the same manner. No execution or any other collection process, however, may be initiated until 30 days after the summons is served on the defendant. Tenn. Code Ann. § 26-6-105(c).

Once the 30 days is up, the Tennessee Rules of Civil Procedure require filing a Request for Execution with the court. Most Tennessee courts will also require a hearing (although not called for in the statute or rules). If a judgment debtor does dispute the Notice of Filing Foreign Judgment, Tennessee’s Uniform Enforcement of Foreign Judgments Act entitles the debtor to a trial on the merits concerning the underlying validity of the judgment, and the Tennessee Rules of Civil Procedure govern the trial on the merits on that answer and response.

            When a Tennessee court can deny domesticating a foreign judgment:
              Void due to a lack of personal or subject-matter jurisdiction
              Based upon fraud
              Where enforcement of the judgment would violate the public policy of the forum state

Illustrative cases:
In BancorpSouth Bank v. Johnson, W2012-00452-COA-R3CV, 2013 WL 3770856 (Tenn. App. 2013)., an Arkansas debtor alleged improper in a foreclosure valuation. He asserted the public policy defense saying Tennessee had a strong public policy of requiring a proper showing of valuation of a foreclosure sale before allowing a deficiency. The Appeals Court agreed but nonetheless held that the public policy of enforcing sister state judgments trumped.
Hart v. Tourte, 10 S.W.3d 263 (Tenn. App. 1999) concerned a judgment first entered in California. Originally, the judgment was denied domestication in Tennessee because it did not have exemplified judgment attached. The creditor renewed the California judgment ten years later and then sought to domesticate in Tennessee. On appeal, the court said the ten year period of limitations had not passed since the renewed judgment was effectively the same as the original judgment. Also, the creditor’s failure to get the original judgment domesticated the first time (which failed due to the exemplification issue) was not res judicata as to renewed judgment. On the other hand, the debtor’s affidavit that he was not properly served in original California matter precluded summary judgment to creditor.

In Cadlerock, LLC v. Weber, E2010-02137-COA-R3-CV (Tenn. App. 2011), the court held that an assignee of a New Jersey judgment (Cadlerock bought judgment from original plaintiff) had just as much right to domesticate as the person first obtaining the judgment.

Federal District Court Judgments

Registration of a federal district court judgment is also very straightforward. A certified copy of the final judgment must be filed with the local court. Service upon the debtor is not mandatory.

Once registered in the local district, the judgment has "the same effect as a judgment of the district court of the district where registered and may be enforced in like manner." (28 USC 1963).

Judgments Entered in Foreign Countries

Tennessee does not apply the UEFJA to judgments of other nations. See Maberry v. Maberry, No. M1999-01322-COA-R3-CV, 1999 WL 1072568 (Tenn. App. Nov. 30, 1999). That opinion further laid out the requirements for enforcement in Tennessee:

Through comity, a valid judgment rendered in a foreign nation after a fair trial in a contested proceeding will be recognized in the United States so far as the immediate parties and the underlying claim are concerned. See Restatement (Second) of Conflict of Laws 98 (1989); Robert A. Leflar et al., American Conflicts of Law 84, at 169-171 (3d ed. 1977). While the subject matter and in personam jurisdiction of a foreign decree is generally presumed to exist, said decree is only entitled to such presumption upon an affirmative showing, by the party seeking enforcement, that said decree was so issued by a court of general jurisdiction. See generally 50 C.J.S. Judgment 1035 (1997) (citing Baio v. Mangano, 9 N.Y.S.2d 276, 277, 256 A.D. 831 (1939); Traders Trust Co. v. Davidson, 178 N.W. 735, 146 Minn. 224 (1920)). As our sister states have phrased the requirement best: "In order to be entitled to comity, the record must show the foreign judgment partook of the elements which would support it if it had been obtained in this state." Popper v. Popper, 595 So.2d 100, at 103 (Fla. App. 5th Dist., 1992). In short, common sense requires that for any court to recognize a foreign decree, the substance of that decree must be proven, or at least be open to such a plain and obvious interpretation as to be susceptible to judicial notice pursuant to the Rules of Evidence. See Tenn. R. Evid. 202.

Foreign Arbitration Awards

Because of the messiness of domesticating judgments of other nations, international players mostly prefer the international arbitration process as opposed to dealing with courts of individual nations. The United States is a signatory to the Convention on Recognition and Enforcement of Foreign Arbitral Award, which mandates enforcement of arbitration agreements between citizens and entities of different countries, as well as arbitration awards.

To enforce a foreign arbitration award, a petition to confirm the award must be filed in the appropriate federal district within three years from the date of the issuance of the arbitration award. If the award is not in English, a certified translation must be provided with the petition. Once confirmed, the award is entered as a federal district court judgment and is enforceable just like any other judgment.

Wednesday, October 30, 2013

Monday, October 28, 2013

Default Judgments and Service by Mail

Tennessee allows service of process by certified mail. This method may seem attractive, at first blush, due to its convenience and low cost. As a practical matter, however, a prescient defendant may well refuse to accept the mail in an attempt to thwart service, delaying the litigation. Also, a plaintiff who truly wishes to engage a defendant in a dispute may send a certified mail service only to get it returned as “undeliverable.” In such cases, will the plaintiff have anything to show for her attempts at service? As all good attorneys are trained to respond, it depends.

The Tennessee Rules of Civil Procedure (“TRCP”) contain special provisions for Tennessee residents and out-of-state residents. TRCP 4.04(10) covers Tennessee residents. It grants that service by “registered return receipt or certified return receipt mail” is valid service so long as plaintiff can provide a “return receipt showing personal acceptance by the defendant” or another person allowed by the rules. Such service will support a default judgment if the defendant does not then respond. However, without the return receipt, a default is not proper.

The rule for an out of state defendant is very different. Service by mail is, again, allowable. However, there is no requirement that the defendant actually sign the receipt. Under TRCP 4.05(5), the letter can be returned “unclaimed” or refused delivery and the service is still valid. The return must be filed in the clerk’s file and if so, it can be proper service for purposes of default.

In Hines v Tilimon, (Tenn. Ct. App. 2001), an out-of-state father was on the losing end of a default judgment granting custody of his children to the mother. Service of process upon the father was based on TRCP 4.05(5). On appeal, the father challenged the constitutionality of the service which argument was rejected on procedural grounds. (The father would have had to notify the attorney general while in the trial court so that the attorney general could defend the constitutionality of the Rule). Nonetheless, the Appeals Court found that the Rule not “so obviously unconstitutional on its face" as to warrant consideration of the constitutional issue. Thus, the father lost custody of his children based on not responding to his mail. It could have been different had he only been a Tennessee resident.

Tuesday, August 13, 2013

Service on a party while in court - Georgia law

Sometimes, it's tempting to serve someone when she is known to be coming to court for another matter. This is usually not permitted, but there are exceptions.


a suitor or a witness in attendance upon the trial of any case in court, is privileged from arrest under any civil process, and is exempted from the service of any writ or summons upon him or them while in attendance upon such court, or in going to or returning therefrom.

Steelman v. Fowler, 234 Ga. 706, 217 S.E.2d 285 (1975).

            There are two exceptions.  First, “it does not apply to criminal defendants or nonresidents, who are in this state temporarily ‘for some purpose other than to appear in court as a party or witness.’”  Loiten v. Loiten, 288 Ga. App. 638, 655 S.E.2d 265 (2007) citing Ausbon v. Ausbon, 131 Ga. App. 530, 531, 206 S.E.2d 546 (1974). 

            Second, it only protects “a party in attendance upon the trial of a case from service of process in a new action.” Blalock v. Blalock, 247 Ga. 548, 550, 277 S.E.2d 655 (1981).  For instance, a party suing for contempt could be served in court with a modification of custody matter which was actually a part of the same matter.  Id.

            In Loiten, the defendant appeared at trial to contest a restraining order entered against him ex parte for which he was not properly served (he received the order but not the petition).  At the hearing, the trial court asked him to waive service which he refused.  The court then instructed the sheriff to serve the defendant in the parking lot.  On appeal, the service was found to be ineffective.  Id. at 638.  The court held that although an ex parte hearing had been previously had, the matter was new to the defendant and therefore he was protected by the Steelman rule.

Credit Card Authorization Template

It's good practice to have authorization to charge a client or customer's credit card written into your contract. Here is a sample template:


I the undersigned hereby agree to pay the indebtedness incurred by _________________ for the services rendered by Business. I hereby authorize Business to charge my credit card on file for any balance remaining on the above clients account if not timely paid in full.

__________________            Date:______________________

Phone Number:
Credit Card Type:
Credit Card Number:
Expiration Date:

Name as it appears on card:

Wednesday, June 12, 2013

What happens when the signor of a guaranty adds a title e.g. "president" by her signature?

I once dealt with a situation where the guarantor for a corporate debtor signed the guaranty agreement with "president" by his name. He claimed he was signing not as an individual but as a corporate representative. This usually won't do since the guaranty clearly named the individual and it made little sense for the corporate guarantor to be the corporation (the principal).

Georgia case law:

A title such as “sec.” or “CEO” signed on a guaranty is a mere word of description and the signor remains personally liable.  See O.C.G.A. § 10-6-86; Upshaw v. Southern Wholesale Flooring Co., 197 Ga. App. 511, 398 S.E.2d 749 (1990); Keane v. Annice Heygood Trevitt Support Trust, 285 Ga. App. 155, 645 S.E.2d 641 (2007).  In Upshaw, the appellant placed the abbreviation “Sec.” immediately after her signature.  The court found this to be merely descriptive as the contract was unambiguous that she was signing in her personal capacity.  Likewise, in Keane, the appellant claims he signed “CEO” after his name although it was unreadable.  The court dismissed this argument as “there is nothing in the language of the guaranty to suggest that Keane was entering the obligation as a corporate officer.”  Id.

Secondly, in both Upshaw and Keane, the court found that removing the personal liability would render the obligation meaningless “as the corporation was already obligated on the debt” and summary judgment was thus proper.  Keane at 158; Upshaw at 513. 

Friday, March 8, 2013

"We are alive but not living"

A recent Economist article identifies several trends among the world's refugee populations:

  • Refugee populations are more mobile
  • Needs are less food and shelter, more psychological care (e.g. trauma) and education
  • Less likely to be in camps - registered refugees intermingle in urban centers
  • If in camps, the stay is longer
  • Stingier admissions among rich countries

The article mentions that handling refugees has become less humanitarian and more a development issue. The line between persecution and economic refugees is more and more blurry. One government manager suggests naturalizing refugees who are in country to allow them to find work, develop community, etc. In exchange, rich countries should foot the bill and provide expertise.