Collecting Out of State Judgments in Tennessee: The Narrow Defenses to Enrollment

enforcing out of state judgments
Enforcing Out of State Judgments

I recently concluded two matters involving the enrollment of an out of state judgment in Tennessee and thought I would re-visit the process and rules for enrolling an out of state judgments in Tennessee. I have previously written about the general process for enrolling judgments across state lines and the process for enrolling international judgments.

While the procedure in Tennessee for enrolling an out of state judgment is relatively simple, this process is sometimes complicated when a judgment debtor challenges the enrollment or otherwise attempts to prevent a Tennessee court from recognizing the judgment. Unfortunately, there are not that many Tennessee appellate cases involving the enrollment of foreign judgments or interpreting the Uniform Enforcement of Foreign Judgments Act, Tenn. Code Ann. § 26-6-101, et seq. (“UEFJA”). In fact, during 2014, the Tennessee Court of Appeals issued only one opinion involving the enrollment of a foreign judgment. The case, Guseinov v. Synergy Ventures, Inc., No. M2014-00213-COA-R3-CV (Tenn. Ct. App., Oct. 21, 2014), is important because it underscores the notion that a party who attempts to prevent the enrollment of a foreign judgment carries what Tennessee courts have described as a “stern and heavy” burden.

Courts in Tennessee hold that “the burden is placed on the party seeking to attack the validity of a foreign judgment to prove that it should not be given full faith and credit in this State as required by . . . the United States Constitution.” Four Seasons Gardening & Landscaping, Inc. v. Crouch, 688 S.W.2d 439, 442 (Tenn. Ct. App. 1984). Moreover, the factual issues underlying the foreign judgment may not be the basis for challenging the enrollment of a foreign judgment. Tennessee recognizes only three primary exceptions to the enrollment of a foreign judgment:

  1. when the judgment is void due to lack of personal or subject matter jurisdiction;
  2. where the judgment is based upon fraud; or
  3. when the enrollment would violate public policy.

Jurisdictional challenges to the enrollment of a foreign judgment look to whether personal and subject matter jurisdiction was established in the forum state. Courts will look to the rules of the forum state to determine whether jurisdiction was proper. For the fraud exception to apply, it must be extrinsic fraud in the underlying foreign action. Courts have explained this type of fraud as “keeping the unsuccessful party away from the court by a false promise of a compromise, or purposely keeping him in ignorance of the suit; or where an attorney fraudulently pretends to represent a party, and connives at his defeat; or, being regularly employed, corruptly sells out his client’s interests.” Schorr v. Schorr, 1996 WL 148613, at *3 (Tenn. Ct. App. Mar. 29, 1996) (quoting Noll v. Chattanooga Co., 38 S.W. 287, 291 (Tenn. Ct. App. 1896)). Under the public policy exception, some courts have found that Tennessee courts are not obligated to give full faith and credit to any judgment of a state that would violate of Tennessee’s public policy; however, this is a rare exception and Tennessee appellate courts have been very cautious with applying this defense. In sum, courts in Tennessee will decline to enroll and out of state judgment only when one of these three defenses is established.

Enrollment of a foreign judgment is not a determination that the judgment is enforceable. It is important to remember that collecting out of state judgment is a two-step process: enrollment of the judgment in Tennessee and then actual enforcement the judgment. Once a judgment is enrolled in Tennessee, it is subject to the same defenses and challenges as a judgment that originated in a Tennessee court. Of course, tactics and procedures for judgment enforcement and the potential defenses to judgment enforcement are topics for another day.

We are regularly retained to assist in the enrollment and enforcement of foreign judgments in Tennessee. We have been engaged to enroll and collect judgments from states as far away as Texas and Utah. Should you have questions regarding a foreign judgment or are seeking local counsel, please contact the Thompson Burton PLLC business litigation and dispute resolution team.