Session April 11, 2017
from the Circuit Court for Davidson County No. 16C86 Joseph
P. Binkley Jr., Judge
issues in this appeal arise from two very unorthodox
agreements and the defendants' actions to avoid the
consequences of the agreements. The agreements are unorthodox
because, inter alia, each purports to be a
"Bill of Sale" of an automobile when in fact each
is a loan agreement for which the certificate of title is
held by the lender as security. To complicate matters, the
defendant who signed both agreements only owned one of the
vehicles; his wife owned the other, and it is disputed
whether the husband was authorized to act on her behalf. When
the husband failed to pay either debt, the lender attempted
unsuccessfully to possess the vehicles. Immediately
thereafter, the husband and wife applied for and obtained new
certificates of title and then used one of the duplicate
titles to sell one of the automobiles to a third party.
Thereafter, the lender commenced this action against the
husband and wife for breach of contract, slander of title,
and conspiracy to commit slander of title. The lender sought
both compensatory and punitive damages. Following a bench
trial, the court found the husband liable for breach of
contract, and found the husband and wife jointly liable for
slander of title and conspiracy to commit slander of title.
The court then awarded compensatory damages in the amount of
$32, 456.89 and punitive damages in the amount of $30, 000.
The defendants appealed contending the trial court erred in
failing to consider their affirmative defenses and in failing
to hold that the Tennessee Title Pledge Act, Tenn. Code Ann.
§§ 45-15-101 to -120 barred any recovery. They also
contend that the evidence does not support a finding that the
husband breached the contract or that they were jointly
liable for slander of title and for conspiracy to commit
slander of title. They further argue the trial court erred in
awarding punitive damages. We affirm.
R. App. P. 3 Appeal as of Right; Judgment of the Circuit
Court is Affirmed
Shannon L. Crutcher, Nashville, Tennessee, for the
appellants, Brian Sullivan and Tamara J. Sullivan.
Adam Long, Franklin, Tennessee, for the appellee, Damon
G. Clement Jr., P.J., M.S., delivered the opinion of the
Court, in which Andy D. Bennett and John W. Mcclarty, J.,
G. CLEMENT JR., P.J., M.S.
August 28, 2013, Damon Holland and Brian Sullivan executed a
written agreement titled "Bill of Sale" that
conveyed a 2013 BMW to Mr. Holland for $30, 000. Concurrent
with the execution of the Bill of Sale, Mr. Holland gave Mr.
Sullivan $30, 000, and Mr. Sullivan delivered to Mr. Holland
the certificate of title to the BMW. But for Mr. Holland
taking possession of the BMW, it would appear that a routine
sales transaction had been concluded as of August 28, 2013.
Well, it was neither routine nor concluded.
following reveals, the transaction was unorthodox, at best,
for several reasons. One unorthodox aspect is that the Bill
of Sale included a provision titled "Agreement to Resale
Back to Brian Sullivan." Pursuant to this provision, Mr.
Sullivan could repurchase the BMW within 10 days of the
purchase date (August 28, 2013) for $33, 000; within 33 days
for $35, 000; or, if beyond September 30, 2013, for $35, 000
plus $5, 000 for each additional month beyond September 30,
2013. Another unorthodox aspect of the transaction is that
the parties had an oral agreement that Mr. Sullivan could
retain possession of the BMW for an indeterminate time while
Mr. Holland retained the certificate of tile. Another
complicating factor is that, although Mr. Sullivan signed the
Bill of Sale for the BMW, he did not own the BMW, and he did
not have a power of attorney to sign a bill of sale. The
registered owner of the vehicle was Mr. Sullivan's wife,
Tamara Sullivan and while the certificate of title bore the
signature "Tamara Sullivan, " she denied having
signed the title.
months later, Mr. Holland and Mr. Sullivan entered into an
agreement pursuant to which Mr. Sullivan purportedly sold a
2013 Land Rover, which Mr. Sullivan owned, to Mr. Holland for
$22, 000. It was entitled "Bill of Sale of Motor
Vehicle" but, unlike the previous bill of sale, this one
did not contain a buy-back provision. Nevertheless, both Mr.
Holland and Mr. Sullivan acknowledged that they had a
"handshake agreement" to that effect and on terms
similar to the prior agreement.
parties executed the Bill of Sale of Motor Vehicle on
November 6, 2013. Concurrent with the execution of the bill
of sale, Mr. Sullivan delivered the signed certificate of
title to the Land Rover, and Mr. Holland tendered $22, 000 in
cash to Mr. Sullivan but, by agreement of the parties, Mr.
Sullivan retained $17, 000 while Mr. Holland retained $5,
As Mr. Holland explained, because Mr. Sullivan was still in
possession of the BMW and intended to repurchase the BMW, it
was agreed that Mr. Holland would apply the $5, 000 to the
repurchase price for the BMW. As had been done in the
previous transaction, Mr. Sullivan retained possession of the
Land Rover while Mr. Holland retained the title to the
vehicle as security for the loan.
20, 2014, Mr. Sullivan delivered two checks to Mr. Holland.
One of them, check No. 1435, was payable to Music City Pawn,
Mr. Holland's company, in the amount of $71, 210. The
other, check No. 1436, was payable to Mr. Holland in the
amount of $48, 000. However, Mr. Sullivan stopped payment on
both checks before they were negotiated. At trial Mr.
Sullivan testified that he stopped payment based on a
subsequent agreement with Mr. Holland. He claimed that Mr.
Holland agreed to return the titles to both vehicles in
exchange for $5, 000. Mr. Holland disputes having made any
days later, and at the request of Mr. Holland, Mr. Sullivan
wrote a check payable to the order of Tervice Burnett, Mr.
Holland's sister and business partner, for $5, 000. Mr.
Sullivan added a note in the memo line of the check that
stated: "Payment in full for Damon Holland and M.C.P.
[Music City Pawn] for all outstanding loans. Replaces Check
Numbers 1435 and 1436 for the cash received." Ms.
Burnett cashed the check. At trial, Mr. Holland acknowledged
that he requested the payment to Ms. Burnett but insisted
that he would not have authorized her to cash the check if he
had known what was written in the memo line.
August 2014, Mr. Holland hired Harpeth Towing to take
possession of both vehicles and to deliver them to him. When
Harpeth Towing arrived at the Sullivans' home,
Harpeth's employees immediately began loading the Land
Rover onto the tow-truck. As they were loading it, the
Sullivans came out and attempted to stop them, but Harpeth
Towing was able to remove the Land Rover. However, the
Sullivans prevented Harpeth Towing from removing the
they had already dug themselves into a deep hole, a point at
which most people stop digging, the Sullivans kept digging by
driving to the Davidson County Clerk's Office, whereupon
they applied for and obtained duplicate vehicle titles to
both vehicles. After obtaining duplicate titles, the
Sullivans used the duplicate title to sell the BMW to a third
Holland commenced this action against the Sullivans alleging
claims for breach of contract, conversion, slander of title,
and civil conspiracy. The Sullivans filed an answer and
counterclaim, asserting claims against Mr. Holland for breach
of contract and conversion of the Land Rover. In their
counterclaim, the Sullivans appear to assert the following
affirmative defenses as causes of action: accord and
satisfaction; usury; fraud; and unlawful repossession; and
that "if these transactions are deemed a title loan,
that it is illegal and unenforceable for the amount is over
the limits allowed by Tennessee Law."
case was tried without a jury over two days. At the
conclusion of the trial, the trial court stated its detailed
findings of fact and conclusions of law from the bench, and
we summarize the findings most pertinent to the issues on
appeal as follows:
1. Although both contracts are entitled "Bill of Sale,
" the contracts reflect loans rather a sale due to,
inter alia, the ambiguity created by the buy-back
provisions; the interest charges; the fact that the vehicles
remained in the possession of the Sullivans; the fact that
Mr. Holland did not sign the titles, record the titles, or
pay sales tax on the transfer; and evidence of a similar
transaction between the parties that occurred in 2010 with
Mr. Sullivan successfully exercising the buy-back provision.
2. Concerning the signatures on the vehicle titles, as to the
BMW, the trial court stated, "I don't think Mrs.
Sullivan signed [the BMW title]. . . . But . . . I'm not
sure it's really that important to anything." As to
the title for the Land Rover, the trial court found the
signature on the title to be that of Mr. Sullivan.
Nevertheless, the court further stated, "It's not
that important really whether he sign[ed] it or didn't
sign it. The parties intended to give [Mr. Holland] the
titles to hold as security for the loans."
3. The trial court found that Mrs. Sullivan's claim that
she did not know about the sale of the BMW until the trial
was not credible.
4. As to whether the subject loan agreements are illegal and
in violation of the Tennessee Title Pledge Act, Tenn. Code
Ann. § 45-15-101 through 120, the trial court found that
the loan agreements are not subject to the Tennessee Title
Pledge Act because the transactions were
"person-to-person" rather than
"business-to-person." The trial court further found
that should the opinion of the court regarding the
application of Tenn. Code Ann. § 45-15-101 through 120
be in error, that such cause of action and defense has been
waived by the Sullivans for failure to plead such cause of
action or defense and having been raised for the first time
during final arguments.
5. The Sullivans did not plead the defense of accord and
satisfaction prior to trial and it was therefore waived.
6. Mr. Sullivan breached the contract as to the BMW by
failing to pay what was owed on the BMW and by failing to
turn the vehicle over to Mr. Holland.
7. The Sullivans are liable of conspiracy because of the
following: (1) there was a common design between the
Sullivans each having intent and knowledge of the others
intent to deprive Mr. Holland of his security interest; (2)
conspiracy was accomplished by the Sullivans' concerted
actions for an unlawful purpose when, after realizing that
Mr. Holland was attempting to collect the security for the
loan agreements, the Sullivans went to the County Clerk's
office to obtain duplicate titles; and (3) overt actions
occurred when the Sullivans applied for duplicate titles to
both vehicles and sold the BMW.
8. The Sullivans are liable for slander of title for the
following reasons: (1) Mr. Holland had an interest in
property because he held the titles as securities for the
loan; (2) the Sullivans published false statements about the
property because they obtained duplicate titles and made
false statements about the title to the property; (3) the
Sullivans acted intentionally and maliciously because they
knew Mr. Holland was attempting to gain possession of both
vehicles, the Sullivans failed to inform the tow-service
driver that the BMW was in their garage knowing that Mr.
Holland sent the service to collect the security, and the
Sullivans subsequently obtained duplicate titles; and (4) the
foregoing false statements caused Mr. Holland pecuniary loss
because Mr. Holland's security interest (the BMW) was
9. The Sullivans are not guilty of conversion or trespass to
chattels because they are the true owners of the vehicles.
10. Mr. Holland is entitled to punitive damages because Mr.
Holland proved by clear and convincing evidence that the
Sullivans acted intentionally.
on these and other findings, the trial court awarded Mr.
Holland the 2013 Land Rover as his property, compensatory
damages in the amount of $40, 756.89 less the $8, 300 already
paid by the Sullivans, and punitive damages in the amount of
$30, 000 for a final net judgment of $62, 456.89. Relying on
Tenn. Code Ann. § 29-11-107, the trial court held the
Sullivans jointly and severally liable for this judgment due
to the Sullivans' liability for conspiracy and slander of
title. As for Mr. Holland's claims for
conversion and trespass to chattels, the court dismissed them
on the finding that the Sullivans were the true owners of the
vehicles. On February 23, 2016, the trial court entered an
order consistent with its oral ruling. From that order, the
Sullivans now appeal.
issues to be considered are as follows:
1. Whether the trial court erred in failing to consider the
affirmative defenses raised by the Sullivans and in finding
Tenn. Code Ann. § 45-15-101 to -120 did not apply to the
loans made by Mr. Holland.
2. Whether the evidence supports finding Mr. Sullivan liable
for breach of contract.
3. Whether the evidence supports finding the Sullivans
jointly and severely liable for slander of title.
4. Whether the evidence supports finding that the Sullivans
conspired to commit slander of title resulting in each being
jointly and severely ...