January 23, 2004
Re: Fee for municipal delinquent tax attorney
Dear City Attorney,
You have asked me if a municipal attorney filing suits for collection of delinquent real property taxes is limited to a 10% fee for such services. In my opinion, the answer is “no.”
The only section of the Tennessee Code that addresses compensation of attorneys prosecuting delinquent tax suits discusses attorneys hired by the county trustee, and makes no mention of municipal attorneys. T.C.A. ' 67-5-2404(a)(2)(A) states that attorneys hired by the county trustee may not receive more than 10% of all delinquent land taxes received as compensation for prosecuting such suits. There is no language concerning attorneys hired by cities to perform this service, and you will note from your review of this chapter of the Tennessee Code that tax collection suits filed by municipalities are not addressed or even mentioned. For that reason, in my opinion, this section of the code cannot apply to limit compensation received by a municipal attorney for prosecuting tax collection suits to 10%.
The Court of Appeals has ruled that delinquent tax attorneys who bring suits to recover delinquent taxes for cities are entitled to receive “reasonable compensation” for their services.
State v. Delinquent Taxpayers, 167 S.W.2d 690 (Tenn. App. 1942). No specific percentage or limit was placed on such compensation by the Court.
It is important to note that the law that is now codified at T.C.A. ' 67-5-2404 was in existence at the time the Court of Appeals issued the State v. Delinquent Taxpayers opinion, and the Court did not rely on that statute when determining that compensation was owed to the municipal attorneys. The Court rather relied upon the common law rule that one is entitled to a reasonable fee for services rendered.
I hope this information is helpful. Thank you for consulting with MTAS.
Sincerely,
Melissa A. Ashburn
Legal Consultant