Session Date September 17, 2014.
Appeal from the Circuit Court for Davidson County No. 06C1912 Hon. Hamilton V. Gayden, Jr., Judge.
Janet L. Layman and James Daniel Richardson Roberts, Jr, Nashville, Tennessee, for the appellant, David Jones.
Todd E. Panther, Nashville, Tennessee, for the appellees, Advantage Title and Escrow and Victor Hazelwood.
John W. McClarty, J., delivered the opinion of the Court, in which J. Steven Stafford, P.J., W.S., and Brandon O. Gibson, J., joined.
JOHN W. McCLARTY, JUDGE.
David Jones ("Plaintiff") inherited the properties at issue, 4201 West Hamilton Avenue ("West Hamilton") and 1609 11th Avenue North ("11th Avenue"), from his mother. When Plaintiff realized that he was unable to remit regular mortgage payments, he met with Mortgage Menders, LLC ("MM"), which was operated by Jeffrey Hardney, Curtis Sharpe, and Thomas Lanier. MM agreed to purchase the properties, fulfill the mortgage indebtedness, refurbish the properties for resale, and remit half of the profits when the properties sold. Plaintiff met with MM at Advantage Title and Escrow ("Advantage Title"), which was owned by Victor Hazelwood ("Defendant"), to sign an agreement in accordance with their arrangement relating to West Hamilton. The agreement, dated May 6, 2003, provided,
This is an agreement by and between [Plaintiff] and [MM] and/or assigns. Made on this May 6, 2003 for the purchase of [West Hamilton].
Whereas, for consideration of $500.00 cash paid in hand, and other consideration stated herein below, to [Plaintiff] from [MM], [Plaintiff] will deed [West Hamilton] to [MM].
Whereas [MM] agrees to reinstate mortgage on [West Hamilton] upon receipt of reinstatement figures. Also, [MM] will perform all repairs on this property needed to present this property for sale.
Whereas [MM] will keep the current mortgage with Citifinancial current by making monthly payments when they are due.
Whereas, upon the sale of [West Hamilton], [MM] will pay off the mortgage with Citifinancial, reimburse the LLC for repair expense, interest expense, commission and sale expense, and give [Plaintiff] 50% of the profit made on this property. Receipts will be supplied for all expenses. Property will be priced at market value.
Despite the terms of the agreement providing that MM agreed to purchase the property from Plaintiff, Defendant remitted the $500 payment to Plaintiff and listed himself as the buyer of the property. In fact, Defendant reinstated the mortgage and provided a $150, 000 installment loan to MM in which he provided advances on the loan as MM worked on the property.
Thereafter, MM and Plaintiff amended the original agreement to include 11th Avenue. Defendant claims on appeal that when he learned of the amended agreement, he demanded payment on his loan. MM agreed. In order to repay Defendant, MM refinanced West Hamilton with Equity Mortgage, Inc. ("Equity"), allowing it to fulfill the mortgage indebtedness on 11th Avenue and to recoup a $14, 500 "repair reserve." Defendant served as the escrow agent for the repair reserve, and MM remitted payment on Defendant's loan, less $5622.01. Several months later, MM sold West Hamilton for $175, 000 and fulfilled the mortgage indebtedness on West Hamilton. While serving as the closing agent, Defendant recouped the remainder of his investment and disbursed $6297.53 to MM. Plaintiff never received any portion of the proceeds. Shortly thereafter, MM procured a new mortgage on 11th Avenue but later defaulted on the mortgage.
On July 21, 2006, Plaintiff filed suit against Advantage Title, Defendant, MM, Mr. Hardney, Mr. Lanier, and Mr. Sharpe, claiming that he was entitled to half of the proceeds from the sale of West Hamilton and that the use of the equity from West Hamilton to pay the mortgage indebtedness on 11th Avenue was in violation of the contract. Relative to Advantage Title and Defendant, Plaintiff alleged breach of contract, fraud, and civil conspiracy. Plaintiff claimed that Defendant was intricately involved in each wrongful transaction. Defendant denied wrongdoing and filed a motion for summary judgment in which he alleged that there were no genuine issues of material fact and that he and Advantage Title were entitled to judgment as a matter of law. He asserted that he never entered into a contract with Plaintiff, that he never made any false statements to support Plaintiff's claim for fraud, and that he "never planned, agreed, or colluded with the other Defendants in a manner that would constitute a civil conspiracy." He claimed that his business relationship with MM was solely as a buyer and seller and that he never discussed forming a partnership or starting a business with the members of MM.
Plaintiff responded by asserting that Defendant had made a false material statement, namely he erroneously identified himself as an attorney and did not correct those who referred to him as an attorney. Plaintiff asserted that he entered into the agreement because he believed Defendant's status as an attorney would ensure that Mr. Hardney and Mr. Lanier acted lawfully. Plaintiff claimed that Defendant also stated that Mr. Hardney and Mr. Lanier needed his approval as a business partner. He noted that he received payment pursuant to the agreement from Defendant, not MM, Mr. Hardney, or Mr. Lanier and that Defendant continued a business relationship with them following the May agreement. He claimed that Defendant's involvement went far beyond the typical arms-length transaction expected from a legitimate title company. Defendant denied ever identifying himself as an attorney and asserted that even if he had erroneously identified himself as an attorney, the misstatement was immaterial because he was not a party to the agreement or amended agreement. He noted that Plaintiff never relied on him for legal advice because Plaintiff was already represented by an attorney. He also denied ever entering into a partnership with MM.
On March 15, 2010, the trial court partially granted the motion for summary judgment, finding that no genuine issues of material fact remained as to the claims for breach of contract and civil conspiracy. The court found that Defendant and Advantage Title "were clearly not parties to the written contract" and that Plaintiff had not "met the requirements" to establish a civil conspiracy claim against Defendant and Advantage Title. However, the court held that a genuine issue of material fact remained as to whether Defendant, as the closing agent, "should have remitted half of the proceeds to [Plaintiff] since he was aware of the agreement that [Defendant] was to receive half of the profit from the sale of the property." The case languished in the court system on that one issue until ...