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Sanders v. First Tennessee Bank, N.A

Court of Appeals of Tennessee, Knoxville

March 26, 2015

HERSHEL SANDERS, et al.
v.
FIRST TENNESSEE BANK, N.A., et al.

Session January 13, 2015.

Appeal from the Circuit Court for Cumberland County No. CV005540 Amy Hollars, Judge

This appeal concerns a dispute over which statute of limitations applies. Hershel and Alma Sanders ("Plaintiffs") filed suit against First Tennessee Bank, National Association ("the Bank") in the Circuit Court for Cumberland County ("the Trial Court").[1] Plaintiffs alleged that the Bank breached its contractual obligations to them by failing to provide long-term financing toward the building of their home as promised. The Bank denied it made any such promise. The Bank filed a motion for summary judgment. After a hearing, the Trial Court granted the Bank's motion for summary judgment on the basis that the three-year statute of limitations for injury to property or interest in property barred Plaintiffs' claims. Plaintiffs appeal. We hold that the financial damages alleged by Plaintiffs are in the nature of breach of contract and, therefore, a six-year statute of limitations governs. We reverse the judgment of the Trial Court.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed; Case Remanded

Mark N. Foster, Rockwood, Tennessee, for the appellants, Hershel Sanders and Alma Sanders.

Kristine L. Roberts and Kenny L. Saffles, Knoxville, Tennessee, for the appellee, First Tennessee Bank, National Association.

D. Michael Swiney, J., delivered the opinion of the court, in which John W. McClarty and Thomas R. Frierson, II, JJ., joined.

OPINION

D. MICHAEL SWINEY, JUDGE.

Background

In March 2007, Plaintiffs contracted with James Brannon ("Brannon") to build their "dream home" in Crossville, Tennessee. Plaintiffs entered into a loan agreement with the Bank with the initial maximum principal amount of $120, 000. The purpose of the loan was to provide funds for Plaintiffs' construction work on their home.

Problems emerged with the construction. According to Plaintiffs, Brannon failed to complete the work in a timely manner. The Bank advised Plaintiffs that they should fire Brannon. By Plaintiffs' account, they were assured by the Bank that they would receive from the Bank a permanent loan notwithstanding the termination of Brannon. Plaintiffs then fired Brannon. Brannon subsequently filed a mechanics' lien which apparently prevented Plaintiffs from obtaining financing from anyone other than the Bank. The Bank, which denies having made any promise to provide permanent financing to Plaintiffs, never did provide Plaintiffs with permanent financing. Plaintiffs' loan went into default and the Bank initiated foreclosure proceedings. Eventually, Plaintiffs' property was sold at a foreclosure sale in August 2009. During this time, Plaintiffs had filed for Chapter 7 bankruptcy. The Bank moved for relief from the bankruptcy stay which was granted on April 3, 2009.

In April 2012, Plaintiffs, pro se, filed a very threadbare complaint against the Bank in the Trial Court. Plaintiffs subsequently asked for leave to amend their complaint, which was granted by the Trial Court. In July 2012, Plaintiffs, now represented by counsel, filed a more substantive amended complaint in the Trial Court. Plaintiffs alleged a number of causes of action against the Bank. One count in Plaintiffs' complaint against the Bank was breach of contract. Plaintiffs alleged:

[The Bank] entered into an agreement with Plaintiffs that if Plaintiffs would terminate Brannon, [the Bank] would provide Plaintiffs with permanent financing . . . However, [the Bank] breached this agreement after Plaintiffs fulfilled their part of the bargain by terminating Brannon . . . As a result of the Defendant's actions, Plaintiffs suffered injury and damages, including the loss of their home and life savings.

In September 2013, the Bank filed a motion for summary judgment. The Bank argued that Plaintiffs' sole remaining claim, by this point that for breach of contract, was barred by the statute of frauds as well as by the three-year statute of limitations for injuries to property. The Bank's motion was heard by the Trial Court in February 2014. In March 2014, the Trial Court ...


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