Tennessee Business Litigation Lawyers Blog
Liens lis pendens are, often, a critical tool in real estate and commercial litigation in Tennessee. There are two important questions about liens lis pendens that are completely unanswered by the Tennessee lien lis pendens statute. (In fact, a plain reading of that statute would give a lawyer the wrong answer to one of those questions.) Here are the questions:
- Can a lien lis pendens be placed on property that is not located in the same county where the plaintiff’s lawsuit is filed?
- If the plaintiff loses his or her case at the trial court level, can the plaintiff maintain the lien lis pendens until the appeal is decided, if the plaintiff appeals?
The answer to both questions is “yes.”
The lien lis pendens statute, if construed literally, would prohibit the filing of the lien lis pendens other than against real property “situated in the county of suit.” In my experience, in many cases, the real estate which is the subject of the lien lis pendens is located in the same county where the suit is filed. In some cases, given Tennessee venue statutes which dictate in which county a defendant may be sued, the plaintiff has no option other than to file suit in the county in which the real property is located. However, that is not always the case. For example, when a plaintiff wants to bring suit for specific performance to require a defendant to convey the subject real estate to the plaintiff, if the defendant resides in a county other than the one in which the subject property is located, the plaintiff can bring suit in the county of the defendant’s residence, and, for strategic reasons, may want to do so.
If a plaintiff decides to bring suit in a county other than the one in which the real property against which the plaintiff wants the lien lis pendens is located, that plaintiff can rest assured that the lien lis pendens issued by the court in the county in which the plaintiff filed suit can be recorded in the county in which the real estate is located and that it will be effective. In Figlio v. Shelley Ford, Inc. (Tenn. Ct. App. 1988), the Court of Appeals of Tennessee examined the lien lis pendens statute and held, unequivocally, that a lien lis pendens issued by a county court, other than the court of the county in which the real property is located, can be filed against real estate in the county of its location.
With respect to the second question, whether a lien lis pendens can remain during the pendency of an appeal, there is not a Tennessee case which squarely addresses that question. The answer, however, is that a lien lis pendens remains effective during an appeal. In the Figlio case cited above, the court stated that a lien lis pendens is not terminated until the “dismissal of an action pursuant to a judgment that makes no provision for further litigation.” That case is not directly on point because the issue before the court was not whether the lien lis pendens remained effective during an appeal, but was whether the lien lis pendens at issue in that case remained effective after the dismissal of the plaintiff’s first lawsuit by the trial court (the plaintiff filed a second after the dismissal of the first). As well, the court did not state whether a “judgment that makes no provision for further litigation” includes a final trial court judgment. Given that a party has a right to appeal any final trial court judgment in Tennessee, I believe that the language in Figlio should be interpreted to mean that a trial court’s final judgment is not one “that makes no provision for further litigation.”
The United States District for the Middle District of Tennessee, in a 2005 case, did directly address the question of whether a lien lis pendens remains in effect during an appeal and, relying on Figlio and a 1920 case from Oklahoma, held that it did. While that federal case is not binding on a Tennessee state court, its reasoning is valid. When the issue addressed in that federal case is addressed by a Tennessee state court, I do not perceive any compelling grounds for a different outcome by a Tennessee state court.
Having the answers to the above two questions will, hopefully, allow Tennessee real estate litigators and parties involved in real estate litigation in Tennessee to proceed with more confidence in cases involving liens lis pendens.