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!

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.