J. P. MORGAN CHASE BANK, N.A.
GARY ELDON FINLEY, ET AL.
23, 2017 Session
from the Chancery Court for Marshall County No. 15370 J. B.
filed a complaint to reform a Deed of Trust to correct a
scrivener's error in the legal description of a parcel of
property in order to foreclose on the property. While the
litigation was pending, the mortgagors conveyed title to the
property to a third party, who claimed to be a bona fide
purchaser for value without notice. The trial court concluded
that the third party did not qualify as a bona fide purchaser
because he was aware of the bank's litigation when he
obtained title to the property. We affirm the trial
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Allen Dalton, Jr., Lewisburg, Tennessee, for the appellant,
Gary Eldon Finley.
Strevel Hayes, Knoxville, Tennessee, and Mary Elizabeth
Haltom White, Nashville, Tennessee, for the appellee, J.P.
Morgan Chase Bank, N.A.
D. Bennett, J., delivered the opinion of the Court, in which
Frank G. Clement, Jr., P.J., M.S., and W. Neal McBrayer, J.,
D. BENNETT, JUDGE
Factual and Procedural Background
case concerns real property in Lewisburg, Tennessee. In April
2005, Robin and Kerry Weaver purchased a house located at
2070 Wild Cherry Drive, also known as Lot 26 of the
Duncanwood Estates Subdivision, from Dean Baxter. The Weavers
also obtained Lots 24 and 25, which were neighboring
unimproved lots, from Mr. Baxter. The Weavers conveyed Lots
24 and 25 back to Mr. Baxter at the end of 2005. They
obtained a mortgage from National Mortgage Network
("National Mortgage") in January 2006 and
transferred a Deed of Trust to National Mortgage as security
for the loan. A scrivener's error was made in the legal
description of the property attached to the Deed of Trust.
The legal description referenced Lots 24 and 25 rather than
Lot 26, which was the parcel all the parties intended to be
the security for the loan. The Derivation Clause of the Deed
of Trust, however, correctly identified the encumbered
property as 2070 Wild Cherry Drive, Lewisburg, Tennessee.
Mortgage sold the Weavers' loan in the normal course, and
J. P. Morgan Chase Bank, N.A. ("Chase") became the
successor mortgagee some time later. Chase did not discover
the scrivener's error in the Deed of Trust until the
Weavers defaulted on their loan and Chase sought to initiate
foreclosure proceedings. When Chase discovered the error in
the legal description, it filed a complaint to reform the
Deed of Trust.
Chase's case against the Weavers was pending, the Weavers
conveyed Lot 26 to Gary Eldon Finley by quitclaim deed. Chase
amended its complaint to add Mr. Finley as a party defendant
once it became aware of the transfer. In addition to seeking
reformation of the Deed of Trust in its amended complaint,
Chase asserted that the purported conveyance to Mr. Finley
should be set aside because it was a fraudulent conveyance.
moved for summary judgment in May 2014. The trial court
denied the motion, stating that the issue of whether Mr.
Finley knew about Chase's lawsuit when he purchased Lot
26 was a genuine issue of material fact that precluded
summary judgment. Chase filed a renewed motion for summary
judgment in April 2015 in which it asked the trial court to
hold as a matter of law that the consideration Mr. Finley
gave in exchange for the quitclaim deed was too low to
qualify as "value" for the property as a matter of
law. The court denied Chase's renewed motion, but it
found the following facts were undisputed for purposes of the
1. On January 12, 2006, the Weavers executed a Deed of Trust
to Mark Rosser, Trustee, for the benefit of Chase, a
successor in interest to National Mortgage Network.
2. The Weavers intended to encumber their home located at
2070 Wild Cherry Drive by executing the above mentioned Deed
3.The Deed of Trust described another lot not owned by the
Weavers and it did not correctly describe the real estate at
2070 Wild Cherry Drive.
4. Chase brought this action to correct the error in the
description of the property in the Deed of Trust.
5.In their depositions the Weavers admitted that they
intended to encumber 2070 Wild Cherry Drive with the Deed of
6. On June 22, 2012, while this litigation was active and
ongoing, the Weavers quitclaimed their interest in 2070 Wild
Cherry Drive (also known as parcel 1) to Mr. Finley.
7.The land, 2070 Wild Cherry Drive (parcel 1) originally sold
in 2006 for $110, 250.00.
8.Parcel 1 was appraised in 2012 for $96, 100.00.
9.The consideration transferred with the quitclaim deed by
Mr. Finley was two (2) trucks between 12 and 22 years old.
10. The Weavers also lived in parcel 1 for some time after
the quitclaim without the obligation to pay any rent to Mr.
11.The Weavers now pay rent to Mr. Finley.
the trial court's order on its renewed motion, Chase
filed a motion seeking clarification of the court's
order. Specifically, Chase asked the court to state that (1)
with respect to the Weavers, the Deed of Trust "shall be
reformed to properly describe the Property" as Lot 26,
2070 Wild Cherry Drive and (2) the facts the court found
undisputed for purposes of the motion for summary judgment
"are, in fact, undisputed, and the Court need not and
shall not entertain any additional proof, testimony, or
evidence on them." The court declined to clarify its
earlier order as Chase requested, but it did clarify its
ruling as follows:
The issue of whether the Deed of Trust should be reformed
with respect to Robin and Kerry Weaver (the
"Weavers") is premature, as such reformation may
unfairly prejudice Defendant Gary Eldon Finley ("Mr.
Finley"). However, based on (1) the admissions in the
Weavers' Deposition, (2) the Weavers' failure to
defend either of the motions for summary judgment filed by
Chase or otherwise participate meaningfully in this
litigation, and (3) the undisputed findings of fact by this
Court, the Weavers are hereby estopped from asserting any
position contrary to the facts found to be undisputed by this
Court in its May 22, 2015 Order on the Motion.
The parties tried the case on March 10, 2016, and the trial
court issued a written opinion the following month in which
it concluded that Mr. Finley was not a bona fide purchaser
for value without notice of the property at issue.
Specifically, the court found the following based on the
proof introduced at trial:
It is undisputed that reformation of the Deed of Trust should
occur as between Chase and the Weavers. Their testimony
during the trial bolsters the Court's prior finding that
the Weavers intended to encumber 2070 Wild Cherry Drive when
they gave a note and Deed of Trust to National Mortgage. The
Weavers bought their home on their land and intended to be
bound to Chase's predecessor. They fully intended that
their home would be subject ...