Court Opinion

ID: 9351587
Source: CourtListenerOpinion
Date Created: 2023-01-02 00:07:26.450623+00
Date Added: 2024-06-11T17:01:10.856355
License: Public Domain

12/29/2022
               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                        December 7, 2022 Session

         MANTIS FUNDING LLC V. BUY WHOLESALE INC. ET AL.

                 Appeal from the Circuit Court for Davidson County
                    No. 21C280      Thomas W. Brothers, Judge

                            No. M2022-00204-COA-R3-CV

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

ANDY D. BENNETT, J., delivered the opinion of the Court, in which W. NEAL MCBRAYER
and JEFFREY USMAN, JJ., joined.

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

                       FACTUAL AND PROCEDURAL BACKGROUND

       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 Nassau1 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.

                                                ANALYSIS

       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

1
    The Supreme Court is the trial court in the State of New York.
2
    A “foreign judgment” is “any judgment, decree, or order of a court of the United States or of any other
court which is entitled to full faith and credit in this state.” Tenn. Code Ann. § 26-6-103.
3
     The trial court’s order states that no oral argument took place. For some reason, the record contains a
CD of the court’s February 4, 2022 motion docket. This CD contains no recording of anything about this
case. Because neither party cited to this CD for any legal or factual point, there is no reason to delay this
appeal by asking the parties to supplement the record or explain what happened.
                                                   -2-
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. § 25-2-
101 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. Patterson, No. M199-02805-COA-R3-CV, 2001 WL
1613892 *3 (Tenn. Ct. App. Dec. 18, 2001)). We find the following statement from Capital
Partners appropriate:

       The record before us shows that the foreign judgment in the case at bar is a
       money judgment made by a New York court in accordance with the laws of
       that state; that the judgment was entered in accordance with the UEFJA
       procedures; that Defendants were afforded the opportunity to be heard by the
       trial court on the merits of the defenses to enrollment and enforcement of the
       foreign judgment, as required by the UEFJA; and that Defendants have not
       raised a due process issue. Accordingly, we conclude that the New York
       judgment must be accorded full faith and credit.

Cap. Partners, at 236-37.

        Mr. Adams spends approximately one-half of one page on his claim that the foreign
judgment should not be enrolled because of fraud. He claims that the interest rate is actually
much higher than stated by the contract with Mantis and is usurious. He also claims that
the contract had a reconciliation provision that would allow him to negotiate for more
favorable terms but Mantis would not comply. However, the contract between the parties
is not in the record. Without the document upon which these claims are based, we cannot
evaluate them. Furthermore, according to the New York court’s order in the record, these
issues were raised by Adams in the New York proceedings. The court found that “Adams
does not submit any evidence or authority in support of his contentions.” There is no
evidence of an appeal of the New York decision, so the decision is res judicata. Once

                                            -3-
decided, these issues cannot be raised in another, later case seeking to enroll the foreign
judgment. First State Bank of Holly Springs, Miss. v. Wyssbrod, 124 S.W.3d 566, 573
(Tenn. Ct. App. 2003).

                                       CONCLUSION

       The judgment of the trial court is affirmed. Costs of this appeal are assessed against
the appellant, John K. Adams, for which execution may issue if necessary.

                                                   _/s/ Andy D. Bennett_______________
                                                   ANDY D. BENNETT, JUDGE

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