Wilmington Savings Fund Society, FSB v. Thomas S. Jackson ( 2021 )

09/30/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 19, 2021 Session
WILMINGTON SAVINGS FUND SOCIETY, FSB ET AL. v. THOMAS S.
JACKSON
Appeal from the Chancery Court for Sevier County
No. 20-10-188 Telford E. Forgety, Jr., Chancellor
___________________________________
No. E2021-00300-COA-R3-CV
___________________________________
This appeal arises from an action for default on a promissory note. Wilmington Savings
Fund Society, FSB, as certificate trustee on behalf of Bosco Credit II Trust Series 2010-1
(“Plaintiff”), filed suit against Thomas S. Jackson (“Defendant”) in the Chancery Court for
Sevier County (the “trial court”), alleging causes of action for breach of contract and unjust
enrichment arising from a note executed in 2006. Defendant moved the trial court for
summary judgment, alleging that he defaulted on the note in 2007 and that the property
was foreclosed in 2008. Defendant averred that Plaintiff’s cause of action accrued when
Defendant’s remaining debt was accelerated in 2008 and that Plaintiff’s cause of action
was therefore time-barred by Tennessee’s six-year statute of limitations on breach of
contract actions. Plaintiff responded to Defendant’s motion but failed to cite to any facts
in the record that created a dispute as to Defendant’s statements and failed to produce any
countervailing evidence. Accordingly, the trial court granted Defendant’s motion and
Plaintiff filed a timely appeal to this Court. Discerning no error, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
KRISTI M. DAVIS, J., delivered the opinion of the Court, in which JOHN W. MCCLARTY and
THOMAS R. FRIERSON, II, JJ., joined.
Robert T. Lieber, Jr., Brentwood, Tennessee, for the appellant, Wilmington Savings Fund
Society, FSB, in its capacity as Certificate Trustee of Bosco Credit II Trust Series 2010-1.
Scott Hall, Sevierville, Tennessee, for the appellee, Thomas S. Jackson.
OPINION
BACKGROUND
Defendant executed a promissory note (the “Note”) for $45,900.00 on or about
August 23, 2006 in favor of Homecomings Financial Network, Inc. (“Homecomings”).
Attached to the Note is an allonge with a blank endorsement, and Plaintiff purports to be
the current holder of the Note. The Note provides that Defendant’s “obligations are
separately secured by a Mortgage/Deed of Trust dated the same date as this note.” The
Note further provides that “unpaid principal, earned interest and all other agreed charges”
may be made immediately due should Defendant default on the loan. It is undisputed that
Defendant did not make timely payments on the Note and defaulted some time in 2007.
Plaintiff filed an action against Defendant in the trial court on October 14, 2020,
alleging causes of action for breach of contract and unjust enrichment. Plaintiff averred
that notices of default had been mailed to Defendant on June 5, 2019 and October 7, 2019.
While a copy of the Note was attached to the complaint, the record does not contain copies
of the notices of default allegedly mailed to Defendant in 2019.
Defendant responded by filing a motion for summary judgment on November 30,
2020, arguing that Plaintiff’s claims were time-barred. Defendant averred that he had
received a notice of default and acceleration in 2008 and that the subject property was
foreclosed soon thereafter. Defendant’s statement of undisputed material facts provided,
inter alia, as follows:
2. Default on the Note occurred in 2007.
3. [Defendant] received numerous notices from purported holders of
the Note which advised [Defendant] that he was in default on the
Note.
4. The original Notice of Default on the Note was sent to [Defendant]
in or about year 2008.
5. The original lender sent [Defendant] a notice of default and notice
of acceleration in or about year 2008.
* * *
9. [The property] was foreclosed upon in year 2008.
10. [The property] was conveyed via foreclosure in 2008 to a third
party.
In support of his statement of undisputed material facts and motion, Defendant attached his
-2-
own affidavit explaining that he defaulted on the Note in 2007, received a notice of
acceleration in 2008, and that the Property was foreclosed later that year. Defendant also
attached to his statement of undisputed facts a substitute trustee’s deed reflecting that in
February 2008, Homecomings foreclosed the Property and it was sold to Deutsche Bank
Trust Company Americas as Trustee after public auction. The substitute trustee’s deed
reflects that the foreclosure was associated with a deed of trust executed by Defendant on
August 23, 2006.
Plaintiff responded to Defendant’s motion and statement of undisputed material
facts on December 17, 2020. In response to Defendant’s averment that he received notice
of acceleration in 2008, Plaintiff stated only: “Disputed. The Note was not accelerated until
the filing of this instant action.” However, Plaintiff did not cite to the record nor did it
provide any additional evidence. Rather, in response to all of Defendant’s undisputed
material facts, Plaintiff simply stated “disputed” or “admitted” without citation to the
record. Plaintiff also filed a written response to the motion for summary judgment, urging
that the Note is an installment note and that Plaintiff’s action was therefore timely. Plaintiff
argued that while claims as to some of the missed payments on the Note may be barred by
the six-year statute of limitations, the statute had not yet run with regard to all missed
payments. Additionally, Plaintiff stated that the Note was not accelerated “prior to the
initiation of the instant action” and explained that Plaintiff sent notices of default to
Defendant in June and October 2019. Again, however, Plaintiff cited nothing in the record
to support these contentions, nor did Plaintiff attach any affidavits or exhibits to its
response. Plaintiff also alleged for the first time that the 2008 foreclosure “was for the first
mortgage, not the second[,]” explaining that “[t]he Substitute Trustee’s Deed attached to
the Motion [for summary judgment] references a deed of trust recorded at Book 2604, Page
132. The Deed of Trust that secured the Note was recorded at Book 2604, Page 154. [See
Attached Exhibit 1].” Nonetheless, there were no attached exhibits to Plaintiff’s response,
and the only deed in the record is the substitute trustee’s deed produced by Defendant.
Finally, Plaintiff also noted that Defendant failed to state specifically which statutes of
limitation he was relying on.
The trial court granted Defendant’s motion on January 8, 2021.1 As pertinent, the
trial court found:
The original lender, Homecomings Financial Network, Inc., provided
the Defendant, Thomas [S.] Jackson, with notice of default and notice of
acceleration in or about year 2008, as evidenced by the verified Affidavit of
Thomas Jackson of Record. Plaintiff did not or could not refute the year 2008
acceleration of the debt.
1
There is no transcript of the hearing in the record.
-3-
The Record reflects that the Statute of Limitations has run on any of
the Plaintiff’s claims.
Plaintiff fails to demonstrate that acceleration did not occur in the year
2008, as sworn to by Defendant Thomas S. Jackson.
Essentially, the trial court concluded that Defendant was entitled to summary
judgment because Plaintiff failed to dispute the evidence offered with Defendant’s motion.
Accordingly, Plaintiff’s case was dismissed in its entirety. Plaintiff filed a motion to alter
or amend the trial court’s order on January 29, 2021, arguing the same installment theory
raised in its response to Defendant’s motion for summary judgment. Plaintiff also urged
that Defendant’s affidavit was an insufficient basis upon which to grant summary
judgment, and that Defendant had not established the elements of his statute of limitations
defense because Defendant failed to specify which statutes of limitation upon which he
relied. Defendant responded to Plaintiff’s motion and urged that the trial court properly
granted summary judgment inasmuch as Plaintiff failed to dispute any of Defendant’s
material facts, and clarified that Defendant was relying upon Tennessee Code Annotated
section 28-3-109(a) and (c) for his statute of limitations defense.2
The trial court denied Plaintiff’s motion to alter or amend on March 25, 2021. In
its order, the trial court clarified that “the Statute of Limitations has run on any of the
Plaintiff’s claims, both the six (6) and ten (10) year limitation periods.” The trial court also
reiterated that “Plaintiff has failed to demonstrate that acceleration did not occur in the year
2008, as sworn by Defendant Thomas S. Jackson.” Plaintiff then filed a timely notice of
appeal to this Court.
ISSUES
We rephrase Plaintiff’s issues on appeal as follows:
2
Tennessee Code Annotated section 28-3-109 provides:
(a) The following actions shall be commenced within six (6) years after the cause of action
accrued:
(1) Actions for the use and occupation of land and for rent;
(2) Actions against the sureties of guardians, executors and administrators, sheriffs,
clerks, and other public officers, for nonfeasance, misfeasance, and malfeasance
in office; and
(3) Actions on contracts not otherwise expressly provided for.
(b) The cause of action on title insurance policies, guaranteeing title to real estate, shall
accrue on the date the loss or damage insured or guaranteed against is sustained.
(c) The cause of action on demand notes shall be commenced within ten (10) years after
the cause of action accrued.
-4-
1. Whether the trial court erred in concluding that Defendant offered sufficient
evidence to show that acceleration of Defendant’s debt occurred in 2008.
2. Whether the trial court properly concluded that Plaintiff’s claims were time-
barred.
STANDARD OF REVIEW
A trial court may grant summary judgment only if the “pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits . . . show
that there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Tenn. R. Civ. P. 56.04. The propriety of a trial court’s
summary judgment decision presents a question of law, which we review de novo with no
presumption of correctness. Kershaw v. Levy, 583 S.W.3d 544, 547 (Tenn. 2019).
“The moving party has the ultimate burden of persuading the court that there are no
genuine issues of material fact and that the moving party is entitled to judgment as a matter
of law.” Martin v. Norfolk S. Ry., 271 S.W.3d 76, 83 (Tenn. 2008). As our Supreme Court
has instructed,
when the moving party does not bear the burden of proof at trial, the moving
party may satisfy its burden of production either (1) by affirmatively negating
an essential element of the nonmoving party’s claim or (2) by demonstrating
that the nonmoving party’s evidence at the summary judgment stage is
insufficient to establish the nonmoving party’s claim or defense.
Rye v. Women’s Care Ctr. of Memphis, 477 S.W.3d 235, 264 (Tenn. 2015) (emphasis in
original). “[I]f the moving party bears the burden of proof on the challenged claim at trial,
that party must produce at the summary judgment stage evidence that, if uncontroverted at
trial, would entitle it to a directed verdict.” TWB Architects, Inc. v. Braxton, LLC, 578
S.W.3d 879, 888 (Tenn. 2019) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986)).
When a party files and properly supports a motion for summary judgment as
provided in Rule 56, “to survive summary judgment, the nonmoving party may not rest
upon the mere allegations or denials of its pleading, but must respond, and by affidavits or
one of the other means provided in Tennessee Rule 56, set forth specific facts . . . showing
that there is a genuine issue for trial.” Rye, 477 S.W.3d at 265 (internal quotation marks
and brackets in original omitted). “Whether the nonmoving party is a plaintiff or a
defendant—and whether or not the nonmoving party bears the burden of proof at trial on
the challenged claim or defense—at the summary judgment stage, ‘[t]he nonmoving party
must demonstrate the existence of specific facts in the record which could lead a rational
trier of fact to find in favor of the nonmoving party.’” TWB Architects, 578 S.W.3d at 889
-5-
(quoting Rye, 477 S.W.3d at 265).
In reviewing the trial court’s summary judgment decision, we accept the evidence
presented by the nonmoving party as true; allow all reasonable inferences in its favor; and
“resolve any doubts about the existence of a genuine issue of material fact in favor of”
Plaintiff, the party opposing summary judgment. Id. at 887.
DISCUSSION
The dispositive issue here is whether the trial court properly concluded that the
undisputed facts show the Note was accelerated in 2008. As Plaintiff states in its brief,
“[i]f the Note was not accelerated in 2008 then [Plaintiff] is permitted to pursue claims for
each missed payment within the applicable statute of limitations.” Conversely, if the trial
court correctly concluded that the Note was accelerated in 2008, then Plaintiff’s cause of
action accrued at that time and is time-barred. See Tenn. Code Ann. § 28-3-109(a);
Deutsche Bank v. Nat’l Trust Co. v. Lee, No. M2018-01479-COA-R3-CV, 2019 WL
2482423, at *4–5 (Tenn. Ct. App. June 13, 2019) (explaining that default on a note
“amounts to a breach” and that a cause of action for future installments accrues when the
“creditor chooses to take advantage of” an acceleration clause); see also SunTrust Bank v.
Ritter, No. E2017-01045-COA-R3-CV, 2018 WL 674000, at *5 (Tenn. Ct. App. Feb. 1,
2018) (looking to date of acceleration to determine whether breach of contract action on
note was brought within limitations period).
Although the trial court concluded that Defendant properly supported his motion for
summary judgment with his affidavit and the substitute trustee’s deed, thereby requiring
Plaintiff to “demonstrate the existence of specific facts in the record which could lead a
rational trier of fact to find in favor of [Plaintiff,]” Plaintiff disputes this on appeal. TWB
Architects, 578 S.W.3d at 889. Plaintiff maintains that Defendant’s affidavit was
insufficient because it contains only legal conclusions “masked” as factual assertions, and
that Plaintiff’s burden to respond was therefore not triggered. See Progressive Specialty
Ins. Co. v. Kim, No. M2019-01998-COA-R3-CV, 2021 WL 1086884, at *2 (Tenn. Ct. App.
Mar. 22, 2021) (“If the moving party fails to show he or she is entitled to summary
judgment, ‘the non-movant’s burden to produce either supporting affidavits or discovery
materials is not triggered and the motion for summary judgment fails.’” (quoting Martin,
271 S.W.3d at 83)).
In particular, Plaintiff takes issue with Defendant’s statement that default and
acceleration occurred in 2008, inasmuch as Plaintiff contends that whether acceleration
occurred is a fact-sensitive inquiry best undertaken by the court. Plaintiff urges that
Defendant’s failure to produce a copy of a notice of acceleration from 2008 is fatal to
Defendant’s position, and avers that “the actual language of the document must be
evaluated in order to determine the effect, if any, on the note.” Plaintiff also contends that
-6-
the substitute trustee’s deed filed in conjunction with Defendant’s motion pertains to a
superior mortgage unrelated to the Note.
In support, Plaintiff relies almost entirely on non-binding authority from other
jurisdictions. For example, Plaintiff posits that Kryder v. Rogers, No. 1:13-cv-00048, 2015
WL 1345544 (M.D. Tenn. Mar. 23, 2015), is dispositive here. In that case, the plaintiff
brought several claims against the defendants arising from the execution of a promissory
note, one of which was improper acceleration. Id. at *1. The plaintiff sought partial
summary judgment on some of her claims, alleging in part that defendants improperly
“accelerated the principal balance on the term note” thereby breaching its terms. Id. at *2.
The letter from defendants’ counsel upon which plaintiff based this assertion read:
The purpose of this letter is to advise you of our representation and
notify you that the May 19, 2012, agreement with my client to “pause”
payments is no longer in effect. We therefore request that either the principal
sums be paid immediately, or, if you lack sufficient funding for that option,
that the notes be made current and you come within compliance of their terms
on or before October 1, 2012.
Id. at *7. Accordingly, the district court held that the letter was merely a “request”
and did not amount to acceleration of the note.
Plaintiff posits that Kryder and other cases cited in its brief stand for the proposition
that courts have definitively held “a review of the contents of the notice of acceleration [is]
imperative in determining the effect of the letter[,]” and that Defendant’s affidavit should
be disregarded. Defendant, on the other hand, argues on appeal that the trial court properly
granted summary judgment in Defendant’s favor because “Plaintiff did not offer a sworn
denial of the fact that the Note was accelerated [in 2008,]” nor did Plaintiff produce
countervailing evidence for the trial court’s consideration. Defendant points out that
pursuant to Tenn. R. Civ. P. 56.03, “[e]ach disputed fact must be supported by citation to
the record.” Because Plaintiff failed to dispute Defendant’s assertion that acceleration
occurred in 2008, Defendant argues that the trial court properly treated this fact as
undisputed and, in turn, properly concluded that Plaintiff’s cause of action accrued in 2008
and is untimely.
We agree with Defendant. When moving for summary judgment, “[s]upporting and
opposing affidavits shall be made on personal knowledge, shall set forth such facts as
would be admissible in evidence, and shall show affirmatively that the affiant is competent
to testify to the matters stated therein.” Tenn. R. Civ. P. 56.06; see also Synovus Bank v.
Paczko, No. M2014-00897-COA-R3-CV, 2015 WL 3455965, at *4 (Tenn. Ct. App. May
29, 2015) (“Evidence, including the substance of affidavits, filed in ‘support or to oppose
a motion for summary judgment must be admissible.’” (quoting Shipley v. Williams, 350
-7-
S.W.3d 527, 535 (Tenn. 2011)). “An abuse of discretion standard applies to decisions
regarding the admissibility of evidence filed in support of or in opposition to motions for
summary judgment.” Id. In the present case, Defendant’s affidavit provided that he was
competent to testify and had personal knowledge of the matters discussed therein.
Defendant further stated that he received, in the mail, a notice of default and acceleration
from the lender in 2008. While Plaintiff attempts to couch Defendant’s affidavit as
containing a legal opinion as to whether acceleration was properly, legally effectuated, this
is a mischaracterization. The affidavit merely provides that Defendant received a particular
notice in the mail. Moreover, although Plaintiff correctly points out that affidavits
containing conclusory statements are generally insufficient for purposes of summary
judgment, Plaintiff ignores the fact that Defendant also produced a substitute trustee’s deed
to corroborate his statements that the debt was accelerated and the property foreclosed in
2008. Consequently, while Defendant’s testimony is self-serving, it is also supported by
other documentation contained in the record. See Huggins v. McKee, 500 S.W.3d 360, 371
(Tenn. Ct. App. 2016).
Accordingly, we take no issue with the trial court’s conclusion that Defendant
submitted a properly supported motion for summary judgment. Moreover, we are not
persuaded that the cases cited by Plaintiff, such as Kryder, go so far as to hold that an
affiant may not swear in an affidavit that he or she received a notice of default and
acceleration in the mail.3 The trial court took no issue with the substance of Defendant’s
affidavit, and Plaintiff does not explain in its brief why this amounts to an abuse of
discretion. We are therefore not inclined to disturb the trial court’s decision that
Defendant’s affidavit was sufficient under the circumstances. See Garner v. Coffee Cnty.
Bank, No. M2014-01956-COA-R3-CV, 2015 WL 6445601, at *14 (Tenn. Ct. App. Oct.
23, 2015) (“[A]n appellate court is not permitted to interfere with the trial court’s
discretionary decision absent a showing that the trial court abused its discretion.”).
Likewise, we reject Plaintiff’s contention that it was excused from compliance with
Tenn. R. Civ. P. 56.03. “When a party makes a properly supported motion for summary
judgment, ‘the burden shifts to the nonmoving party to establish the existence of disputed
material facts or that the moving party is not entitled to judgment as a matter of law.’”
Ritter, 2018 WL 674000, at *5 (quoting Holland v. City of Memphis, 125 S.W.3d 425, 427
(Tenn. Ct. App. 2003)). Rule 56.03 itself mandates that once “a motion for summary
judgment is made and supported as provided in this rule, an adverse party may not rest
upon the mere allegations or denials of the adverse party’s pleading[.]” Id. Rather, the
adverse party “must set forth specific facts showing that there is a genuine issue for trial.”
3
Plaintiff cites a footnote in a federal case from Texas which provides that “[a] party’s assertion
that acceleration occurred is a legal conclusion that should not be considered competent summary judgment
evidence.” Tafacory v. Deutsche Bank Nat’l Trust Co., No. 4:19-CV-00886-SDJ-CAN, 2020 WL 7658070,
at *5 n.5 (E.D. Tex. Nov. 6, 2020). Nonetheless, under the particular circumstances of this case, we cannot
conclude that a footnote from non-binding legal authority is the dispositive factor in our analysis.
-8-
Id. (emphasis added). This may be accomplished “by pointing to evidence in the record
which indicates disputed material facts.” Ritter, 2018 WL 674000, at *5.
Nonetheless, Plaintiff’s response to Defendant’s statement of undisputed material
facts and motion for summary judgment contained only assertions of Plaintiff’s counsel,
with no citation to evidence in the record or additional, countervailing evidence. Indeed,
Plaintiff’s response to Defendant’s statement that he received a notice of default and
acceleration in 2008 was simply: “Disputed. The Note was not accelerated until the filing
of this instant action.” However, nothing in the record buttresses Plaintiff’s response. In
the same vein, Plaintiff’s response to the substitute trustee’s deed offered by Defendant is
an unsupported assertion that the deed addresses a different debt.4 Plaintiff wholly failed
to comply with Tenn. R. Civ. P. 56.03, and although “[a] trial court, acting within its
discretion, may waive the requirements of [Rule] 56.03 under certain circumstances[,]”
such a waiver did not occur in the present case. Deutsche Bank, 2019 WL 2482423, at *3
(quoting Cox v. Tenn. Farmers Mut. Ins. Co., 297 S.W.3d 237, 244 (Tenn. Ct. App. 2009)).
Rather, the trial court held Plaintiff to its obligations under the rule and, again, Plaintiff has
not explained in its brief how this amounts to an abuse of discretion. Consequently, we
deem it prudent to leave the trial court’s decision in this case undisturbed. See Garner,
2015 WL 6445601, at *14.
While Rule 56.03 provides that an adverse party “may not rest upon mere
allegations or denials” in response to a motion for summary judgment, that is precisely how
Plaintiff proceeded here. Accordingly, Plaintiff failed to “set forth specific facts showing
that there is a genuine issue for trial.” Tenn. R. Civ. P. 56.06. Insofar as Plaintiff failed to
dispute that acceleration of Defendant’s debt occurred in 2008, we agree with the trial
court’s conclusion that Plaintiff’s cause of action accrued in 2008. Consequently, we also
agree with the trial court’s conclusion that Plaintiff’s claims for breach of contract and
unjust enrichment5 are untimely pursuant to Tennessee Code Annotated section 28-3-109.
4
Plaintiff’s response to the motion for summary judgment provides:
The foreclosure of the property was for the first mortgage, not the second. The
Substitute Trustee’s Deed attached to the Motion references a deed of trust recorded at
Book 2604, Page 132. [See Exhibit C to Motion]. The Deed of Trust that secured the Note
was recorded at Book 2604, Page 154. [See Attached Exhibit 1].
There were no exhibits attached to Plaintiff’s response. As such, Plaintiff’s contention that the
2008 foreclosure was unrelated to the Note is an unsupported allegation by Plaintiff’s counsel. Moreover,
the substitute trustee’s deed references a deed of trust executed by Defendant the same day as the Note.
5
In determining the applicable statute of limitations, we look to the “‘gravamen of the
complaint.’” Benz-Elliott v. Barrett Enters., LP, 456 S.W.3d 140, 147 (Tenn. 2015) (quoting Whaley v.
Perkins, 197 S.W.3d 665, 670 (Tenn. 2006)); see also Metro. Gov’t of Nashville and Davidson Cnty. v.
Cigna Healthcare of Tennessee, Inc., 195 S.W.3d 28, 32 (Tenn. Ct. App. 2005) (“Unjust enrichment is a
-9-
The trial court therefore did not err in granting summary judgment to Defendant.
CONCLUSION
The judgment of the Chancery Court for Sevier County is hereby affirmed. Costs
of this appeal are assessed to the appellant, Wilmington Savings Fund Society, FSB, for
which execution may issue if necessary.
_________________________________
KRISTI M. DAVIS, JUDGE
quasi-contractual theory or an equitable substitute for a contract claim[.]”).
- 10 -