Justia Real Estate & Property Law Opinion SummariesArticles Posted in Tennessee Supreme Court
Trent v. Mountain Commerce Bank
The Supreme Court affirmed the judgments of the trial court and the court of appeals denying reformation of a quitclaim deed, holding that equitable reformation was not available when reformation would benefit parties with constructive notice of a title defect but harm the rights of creditors with recorded judgment liens.A husband and wife quitclaimed parcels of real property. The wife, who owned the property with her husband as tenants by the entirety, was omitted as grantor on one of the quitclaim deeds. Later, two banks obtained judgments against the husband and wife. When the property was sold, the purchasers discovered that the property was subject to the wife's retained ownership interest and the banks' recorded judgment liens. The wife signed a quitclaim deed of correction. The purchasers then filed a declaratory judgment action asking to the trial court to hold, based on mutual mistake, that the corrected quitclaim deed reformed the original quitclaim deed. The court denied reformation. The Supreme Court affirmed, holding that because reforming the quitclaim deed would deprive the banks of their recorded judgment liens and benefit the purchasers and their lender, who acquired the property with constructive notice of the banks' recorded judgment liens and the wife's remaining interest in the property, the purchasers were not entitled to reformation. View "Trent v. Mountain Commerce Bank" on Justia Law
Dialysis Clinic, Inc. v. Medley
The Supreme Court affirmed the ruling of the trial court that documents containing communications between a corporation’s legal counsel and a property management property were protected under the attorney-client privilege, holding that the attorney-client privilege applied to the documents in this case.After acquiring commercial properties, the corporation filed unlawful detainer actions against the properties’ tenants. The tenants sought documents from the property management company that managed the corporation’s properties, but the corporation and property management company objected to producing the documents. The trial court concluded that the property management was an agent of the corporation, and therefore, the attorney-client privilege applied. The Supreme Court affirmed on different grounds, holding (1) the attorney-client privilege extends to communications between an entity’s legal counsel and a third-party non employee of the entity if the non employee is the functional equivalent of the entity’s employee; (2) the property management company in this case was the functional equivalent of the corporation’s employee; and (3) the communications related to the subject matter of counsel’s representation of the corporation and were made with the intention that they would be kept confidential. View "Dialysis Clinic, Inc. v. Medley" on Justia Law
Embraer Aircraft Maintenance Services, Inc. v. Aerocentury Corp.
The Supreme Court answered a question certified to it by a federal court regarding whether a repairman’s lien arising under Tenn. Code Ann. 66-19-101 may be enforced by a method other than attachment of the lien-subject property itself. Here, the lien-subject property was sold to a purchaser and was no longer available for attachment during the pendency of the federal court action, so the lien holder sought to reach the proceeds from the sale of the lien-subject property. The Supreme Court answered by holding that Tenn. Code Ann. 66-21-101, which addresses enforcement of a statutory lien by original attachment where the lien statute does not specify a method to enforce the lien, is not a statutory vehicle for the lien holder to reach the proceeds from the sale of the lien-subject property and neither provides for nor excludes other remedies that may be available to the lien holder to reach the proceeds from the sale of the lien-subject property. View "Embraer Aircraft Maintenance Services, Inc. v. Aerocentury Corp." on Justia Law
Cracker Barrel Old Country Store, Inc., et al. v. Epperson, et al.
Cracker Barrel Old Country Store, Inc., and Cracker Barrel Associates, LLC, (collectively “Plaintiffs”) owned certain real property on Sidco Drive in Davidson County. Richard Epperson and Timothy Causey (collectively “Defendants”) owned adjoining property. Both parcels were subject to a Declaration of Reciprocal Rights and Easements and Restrictive Covenants (“Declaration”), created by the original developer of these two parcels and several others in the same development. In April 2005, Defendants submitted to the Nashville/Davidson County Metropolitan Council a proposal to expand the building on their property. Upon learning of the plan, Plaintiffs notified Defendants that they believed the new construction would violate covenants 1(a), 2, and 3 of the Declaration, granting mutual vehicular easements to the adjoining owners and prohibiting obstruction to traffic flow. Defendants disagreed and persisted in seeking approval for their plan. In August, Plaintiffs filed suit to try and stop Defendants' building plans. The trial court ultimately granted Plaintiffs’ motion for temporary injunctive relief. On October 21, 2005, Plaintiffs filed a Motion for Costs and Expenses, seeking almost $62,000 in attorney fees to that point. The ultimately resolved the substantive issues of the lawsuit and on January 30, 2006, the trial court entered an Agreed Judgment and Permanent Injunction, which permanently enjoined Defendants from expanding the building on their property. With regard to fees, the parties agreed that they would submit the fee matter to non-binding mediation. After the parties failed to reach an agreement, Plaintiffs renewed their motion for costs and expenses, requesting $3,913.75 in costs and expenses and a total of $117,334.50 in attorney fees. In their response to Plaintiffs’ motion, Defendants again asserted that Plaintiffs were not entitled to recover attorney fees because the Declaration did not expressly provide for their recovery. The trial court ultimately denied Plaintiffs’ request for attorney fees, explaining that no authority presented supported a finding that the contractual language of Paragraph 9 of the Declaration created a right to recover attorney fees. On appeal, the Court of Appeals affirmed the trial court’s denial of attorney fees. The Tennessee Supreme Court granted Plaintiffs’ application for review to clarify the application of the American rule regarding attorney fees to the language in the Declaration, and affirmed the Court of Appeals. View "Cracker Barrel Old Country Store, Inc., et al. v. Epperson, et al." on Justia Law
Mortgage Elec. Registration Sys., Inc. v. Ditto
Mortgage Electronic Registration Systems, Inc. (MERS) brought this action to set aside a tax sale of real property, arguing that the county’s failure to provide it with notice of the sale violated his right to due process. The purchaser of the real property (Defendant) moved for judgment on the pleadings, asserting that MERS did not tender payment of the sale price plus the accrued taxes before bringing suit, as is statutorily required in a suit challenging the validity of a tax sale, and that MERS did not have a protected interest in the subject property. The trial court granted Defendant’s motion, concluding that MERS did not have an interest in the property. The Court of Appeals on the grounds that MERS lacked standing to file suit. The Supreme Court affirmed on different grounds, holding (1) MERS was not required to tender payment before filing this lawsuit; and (2) MERS acquired no protected interest in the subject property, and therefore, its due process rights were not violated by the county’s failure to notify it of the tax foreclosure proceedings or the tax sale. View "Mortgage Elec. Registration Sys., Inc. v. Ditto" on Justia Law
Johnson v. Hopkins
Landlords brought an unlawful detainer action against Tenants to regain possession of the premises and recoup damages. The general sessions court later entered a default judgment granting Landlords possession of the property and a $42,500 judgment for past due rent and attorneys' fees. Tenants filed a notice of appeal and posted an appeal bond by depositing $250 cash with the clerk of court. Landlords filed a motion to dismiss, arguing that Tenants violated Tenn. Code Ann. 29-18-130(b)(2) by failing to post a bond equal to one year's rent. The circuit court denied the motion, concluding that a bond for one year's rent was unnecessary because Tenants had already surrendered possession of the property and vacated the premises. The Supreme Court affirmed the circuit court's denial of Landlords' motion to dismiss, holding that the circuit court did not err in determining that section 29-18-130(b)(2) does not require a tenant who has surrendered possession of the property to post a bond for one year's rent when appealing an adverse judgment of the general sessions court in an unlawful detainer action. View "Johnson v. Hopkins" on Justia Law
Hughes v. New Life Dev. Corp.
After the death of the president of the original corporate developer of a residential development, a successor developer purchased the property with the intent to continue to develop it. Homeowners filed suit, alleging the successor developer's new development plan violated restrictive covenants. The court of appeals remanded on the question of whether a general plan of development, or the plat for the subdivision, gave rise to certain implied restrictive covenants. Meanwhile, the homeowners' association amended its charter and the restrictive covenants, which the homeowners challenged. The trial court granted the successor developer summary judgment on all claims in both suits. The court of appeals remanded with directions to determine whether the amendments were reasonable and whether the plat supported the existence of implied restrictive covenants. The successor developer appealed, contending that Tennessee law did not support the court of appeals' reasonableness inquiry and that the plat provided no basis for the existence of implied restrictive covenants. The Supreme Court held that the amendments were properly adopted but found that there was no basis for implied restrictive covenants arising from a general plan of development or from the plat, thus vacating the portion of the court of appeals' judgment remanding the case. View "Hughes v. New Life Dev. Corp." on Justia Law
Ready Mix, USA, LLC v. Jefferson County
Jefferson County enacted a comprehensive zoning ordinance limiting the use of certain property, including Plaintiff's property, to agricultural purposes. Before the passage of the ordinance, Plaintiff undertook various activities designed to establish business operations for its property. When the County issued a stop work order, Plaintiff, without first receiving a decision from the County's board of zoning appeals, filed a declaratory judgment action arguing that the portion of the property not previously subject to zoning qualified as a pre-existing non-conforming use. The trial court (1) concluded Plaintiff was not required to exhaust its administrative remedies, and (2) ruled that the business activities on the property qualified for protection under Tenn. Code Ann. 31-7-208. The court of appeals set the judgment aside, holding that Plaintiff had failed to exhaust its administrative remedies. The Supreme Court reversed and reinstated the judgment of the trial court, holding (1) the trial court did not err by ruling that Plaintiff was not required to exhaust the administrative remedies; and (2) the evidence did not preponderate against the trial court's finding that Plaintiff had established operations sufficient to qualify for protection under section 13-7-208. View "Ready Mix, USA, LLC v. Jefferson County" on Justia Law
In re Estate of Trigg
After Decedent's will was admitted to probate in the probate court, the Bureau of TennCare filed a claim against her estate seeking reimbursement for services provided through the TennCare program. Decedent's personal representative filed an exception to this claim. The probate court upheld TennCare's claim, and the Estate appealed. The circuit court determined that Decedent's real property was not subject to TennCare's claim. TennCare appealed. The court of appeals vacated the circuit court's judgment and affirmed the probate court, holding that the circuit court lacked subject matter jurisdiction over the appeal from the probate court and that the appeal should have been filed with the court of appeals. The Supreme Court affirmed, holding (1) the circuit court lacked jurisdiction over the Estate's appeal from the probate court's judgment regarding TennCare's claim; and (2) the real property owned by Decedent at the time of her death was subject to TennCare's claims for reimbursement.
Waddle v. Elrod
Regent Investments sued Earline Waddle and Lorene Elrod alleging that Regent contracted to purchase real property from Waddle, but that afterwards Regent discovered Waddle had conveyed one-half of her interest in the property to Elrod. Waddle filed a cross-claim against Elrod, alleging that Elrod had acquired her interest in the property through undue influence. Regent later dismissed its claims. Waddle subsequently agreed to settle the case against Elrod by way of emails sent by the parties' attorneys. Elrod, however, refused to sign the settlement documents. The trial court entered an order enforcing the settlement agreement. Elrod appealed, arguing that the Statue of Frauds precluded enforcement of the settlement agreement. The court of appeals affirmed, reasoning that the Statute of Frauds applies only to contracts for the sale of lands. The Supreme Court affirmed on alternate grounds, holding (1) the Statute of Frauds applies to settlement agreements requiring the transfer of an interest in real property; but (2) the Statute of Frauds did not bar enforcement of the settlement agreement at issue in this appeal because the emails that the parties' counsel exchanged and the legal description of the property included in the cross claim satisfied the Statute of Frauds.