Mantis Funding LLC v. Buy Wholesale Inc.
| Decision Date | 29 December 2022 |
| Docket Number | M2022-00204-COA-R3-CV |
| Parties | MANTIS FUNDING LLC v. BUY WHOLESALE INC. ET AL. |
| Court | Tennessee Court of Appeals |
Session December 7, 2022
Appeal from the Circuit Court for Davidson County No. 21C280 Thomas W. Brothers, Judge
Plaintiff filed a petition to have a New York confession of judgment enrolled as a judgment in Tennessee. Defendant claimed the Tennessee circuit court had no jurisdiction because the confession of judgment was not permitted by Tennessee law violated Tennessee public policy, and was fraudulent and usurious. The trial court enrolled the judgment. Defendant appealed. We affirm.
Tenn R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
John Martin Drake, Sterrett, Alabama, for the appellants, Buy Wholesale, Inc., and John K. Adams.
Ronald Charles Miller, Maryland Heights, Missouri, for the appellee Mantis Funding LLC.
OPINION
This case began on February 21, 2021, when Mantis Funding LLC ("Mantis") filed in Davidson County to enroll a New York judgment against Buy Wholesale, Inc. and John K. Adams pursuant to the Uniform Enforcement of Foreign Judgment Act. Attached to the filing was a "Judgment by Confession" signed by Mantis's attorney and entered in New York on July 11, 2018. The amount confessed was $27,996.23, including filing fees, costs, attorney's fees and interest and deducting payments made. Also attached to Mantis's filing was an "Affidavit of Facts, Constituting the Claim and the Amount Due," and an "Attorney's Affirmation" concerning attorney's fees.
The "Affidavit of Facts," from Kathleen Fink, a manager employed by Mantis, explains the background of this action. The Confession of Judgment was signed May 30, 2018. Mr. Adams signed a contract with Mantis through which Mantis supplied $20,000 to Buy Wholesale, Inc. in exchange for $29,000 in future receipts. Mr. Adams signed a personal guarantee of the obligation. Mantis received a total of $3,990 before the defendants defaulted by failing to pay pursuant to the agreement. Mantis went to court in the Supreme Court of the State of New York, County of Nassau[1] and used the confession of judgment to receive a judgment of $27,813.84.
On April 21, 2021, after Mantis filed in Davidson County Circuit Court to enforce the foreign judgment,[2] Mr. Adams filed a "Motion Objecting to Foreign Judgment" arguing that he had filed a motion to vacate the judgment in New York and that the New York court had not ruled on his motion. Mantis replied that the New York judgment was valid until "otherwise determined" and should be enrolled as a Tennessee judgment. On January 12, 2022, the trial court entered an order reserving ruling on the motion until the parties could file an order from the New York court "showing the Court's disposition on Defendant's Motion to Vacate." On February 3, 2022, Mantis filed an order from the New York court denying Mr. Adam's motion to vacate the judgment and enforcing the confession of judgment in the amount of $27,966.23. On February 7, the trial court issued an order denying Mr. Adam's motion objecting to the foreign judgment and determining that "the New York judgment is entitled to full faith and credit in Tennessee pursuant to the Constitution of the United States of America."[3] The trial court decided the case on the pleadings. No party complains about this or objects to the manner in which the trial court proceeded. Mr. Adams appealed.
No facts in the record appear to be in dispute. Consequently the trial court's decision to give the New York judgment full faith and credit is solely a question of law which we review de novo upon the record with no presumption of the trial court's correctness. Cap. Partners Network OT, Inc., v. TNG Contractors, LLC, 622 S.W.3d 227, 231 (Tenn. Ct. App. 2020).
"Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." U.S. Const. art. IV, § 1. Two of the defendant's arguments opposing full faith and credit rest on Tenn. Code Ann. § 25-2-101, which states, in pertinent part:
(a) Any power of attorney or authority to confess judgment which is given before an action is instituted and before the service of process in such action, is declared void; and any judgment based on such power of attorney or authority is likewise declared void.
Mr Adams maintains that the confession of judgment violated Tenn. Code Ann. § 25-2101 and Tennessee public policy as expressed in that statute. Both of these arguments were rejected in Capital Partners Network OT, Inc. v. TNG Contractors, LLC, 622 S.W.3d 227 (Tenn. Ct. App. 2020), a case which dealt with granting full faith and credit to a New York confession of judgment. Full faith and credit does not depend on Tennessee law being consistent with the law of the state where the judgment originated. Adams cites no legal authority for the proposition that it does. The Uniform Enforcement of Foreign Judgments Act, Tenn. Code Ann. §§ 26-6-101 et seq., does not so require, and neither does Tennessee case law. For example, although Tennessee law has opposed gambling, Tennessee courts allow enforcement of foreign state gambling debts. Cap. Partners, 622 S.W.3d at 234 (citing Boardwalk Regency Corp. v....
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