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Craig v. Peoples Community Bank

Court of Appeals of Tennessee, Knoxville

December 30, 2016


          Session September 14, 2016

         Appeal from the Chancery Court for Washington County No. 43240 John C. Rambo, Chancellor

         The plaintiffs, Greer Craig and Lana Kaye Craig, brought an action against Peoples Community Bank (the Bank). Their cause of action is essentially identical to Mr. Craig's two prior actions, each of which previously had been dismissed with prejudice and not appealed. In the present action, the trial court applied the doctrines of res judicata and collateral estoppel and granted the Bank summary judgment. We affirm. Furthermore, we find this appeal to be frivolous. Accordingly, we remand this case to the trial court so it can award the Bank its reasonable attorney's fees and expenses on appeal.

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

          Greer Craig and Lana Kaye Craig, Jonesborough, Tennessee, appellants, pro se.

          Steven C. Huret, Robert L. Arrington, and Andrew D. Street, Kingsport, Tennessee, for appellee, Peoples Community Bank.

          Charles D. Susano, Jr., J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.




         Mr. Craig, acting pro se, filed a complaint against Robert Williams, president of the Bank, on January 6, 2015. The complaint alleged that the Bank offered initially to finance his business, operating as Holiday Market in Elizabethton, in the amount of $385, 000, but that it then reduced the amount to $270, 000. The complaint states that the Bank "encouraged [him] to go get additional business" and that the Bank "had his back." On March 5, 2015, the trial court granted the Bank's motion to dismiss. The order expressly dismissed the action with prejudice. Mr. Craig did not appeal, so that judgment became final thirty days after its entry. See Creech v. Addington, 281 S.W.3d 363, 377 (Tenn. 2009), citing Tenn. R. App. P. 4(a)-(c).

         Mr. Craig filed a second complaint against Williams on April 7, 2015, again in the latter's capacity as president of the Bank. This time, he also sued Gary Mills, the president of First Community Bank. According to the record before us, the Bank is a "subdivision" of First Community Bank. The complaint alleged:

Having been approached by a senior officer of Peoples Community Bank, Mr. Dan Ledford, Vice President of Operations, Johnson City, Tennessee induced me to grow my business, the Bank has my back. This was echoed by Robert Williams at a joint meeting at the end of October, 2012. A presence of credible promise, substantiated by persons of significance [sic] status to effectively carry out the mission of "grow your business, We got your back". I've done my part. They need to step up!

         The second complaint's only reference to Mills or First Community Bank is the following:

I have lost trust with [the] Bank . . . . But maybe, just maybe, they see my position and have no way to help. Possibly the home office, First Community Bank, Bluefield, West Virginia is giving decisions that are final. Therefore, I plea to expand this appeal to include Mr. Gary Mills, President, First Community Bank[.]

         The trial court dismissed this second action with prejudice by order entered July 21, 2015. As to the defendant Williams, the court held that the suit was barred by res judicata. As to Mills, the court held that the complaint failed to state a cause of action upon which relief could be granted, "because the pro se plaintiff did not produce any writing from the defendants satisfying the provisions of Tenn. Code Ann. § 29-2-101(b)(1)[2012]." That statute provides as follows:

No action shall be brought against a lender or creditor upon any promise or commitment to lend money or to extend credit, or upon any promise or commitment to alter, amend, renew, extend or otherwise modify or supplement any written promise, agreement or commitment to lend money or extend credit, unless the promise or agreement, upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the lender or creditor, or some other person lawfully authorized by such lender or creditor.

         Mr. Craig again failed to appeal and the judgment on the second suit became final.

         On October 12, 2015, Mr. Craig filed a third and last complaint. He was joined this time by Mrs. Craig. This is the case now before us. The plaintiffs' complaint states, in pertinent part, as follows:

Defendant, Peoples Community Bank approached Plaintiffs with an unsolicited loan proposal in February, 2011, offering to provide a loan on Plaintiffs' real property upon which the Holiday Market is located. The initial loan offer from the Defendant to Plaintiff was for $385, 000.00 to be based upon a real estate appraisal value of at least $600, 000.00, for the real property referred to above.
Relying on the banking expertise of the Defendant, the assurances of the officers, representatives, and/or agents of the Defendant that the Defendant would make Plaintiffs the loan, and Defendant's expressed desire to provide adequate financing to meet the business needs of the Plaintiffs for operation of the Holiday Market, Plaintiffs agreed to the loan terms and allowed Defendant to hire its own real estate and business appraiser to do the necessary investigation and analysis of the value of Plaintiffs' real estate and attendant business, Holiday Market.
In further reliance upon the assurances of the Defendant and its officers, representatives, and/or agents, that the unsolicated [sic] loan would be arranged by Defendant and made to Plaintiffs, Plaintiffs began spending their own funds to improve the Holiday Market, in the amount of approximately $110, 000.00.
The value of the Plaintiffs' real property and its attendant business, Holiday Market, was over $600, 000, in 2012. The net income to the Plaintiffs from the operations of the Holiday Market was over $100, 000.00 per year. However the Defendant's hired appraiser provided a report that stated the value of the Plaintiffs' property was only $450, 000.00, not the true $600, 000.00 plus value of the real estate and attendant business.
Defendant provided no justification for the low appraisal and told the Plaintiffs they would only loan $270, 000 on the said property and business. . . . Due to the expenditures Plaintiffs had made from their personal funds for upgrades to the Holiday Market in good faith reliance upon the assurances of the Defendant and its officers, representatives, and/or agents, Plaintiffs were placed under undue influence and undue economic duress by the Defendant to agree to the reduced loan amount and additional costs and expenses or get no loan at all and lose all their personal funds and sweat equity they had invested in the improvements to the Holiday Market.
In further reliance upon the business and banking expertise of the Defendant and the assurances of its officers, representatives, and/or agents, Plaintiffs agreed to the reduced loan amount and the additional expenses . . . and after the loan was made, continued to spend approximately $50, 000.00 more of their own funds to grow the businesses of the Holiday and Uncle Dan's Gashouse, Jonesborough, Tennessee.
However, because of the valuation by the Defendant's appraiser and the inducements promised by the Defendant, its officers, representatives, and/or agents, the Plaintiffs could not pay down the indebtedness owed against the real property by an amount sufficient to make the business able to pay all its debts, and now Plaintiffs face the prospect of personal bankruptcy and loss of their real property and business to foreclosure by the Defendant.

(Paragraph numbering in original omitted.)

         The Bank moved to dismiss or, in the alternative, for summary judgment. Following a hearing, the trial court granted the motion for summary judgment in an order ...

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