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!
Friday, November 22, 2013
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
Great Reference for Lease Drafting
Here's a great resource for use when drafting leases. It was prepared by Nashville attorney, C. Dewees Berry, IV:
http://tnrelaw.blogspot.com/p/avoiding-lease-drafting-pitfalls.html
http://tnrelaw.blogspot.com/p/avoiding-lease-drafting-pitfalls.html
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.
Generally,
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:
PAYMENT WITH DEBIT OR CREDIT CARD:
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 client’s
account if not timely paid in full.
__________________ Date:______________________
Signed
Name:
Address:
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.
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