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Davis v. Wells Fargo Home Mortgage

Court of Appeals of Tennessee, Jackson

March 29, 2018


          Session January 31, 2018

          Appeal from the Chancery Court for Shelby County No. CH-15-0991-2 Jim Kyle, Chancellor.

         Homeowner brought a lawsuit asserting multiple challenges to the bank's administration of her mortgage and initiation of foreclosure proceedings. The bank filed a motion to dismiss, which was ultimately granted by the trial court, despite several post-judgment motions filed by the homeowner. On appeal, the bank argues that the homeowner's notice of appeal was not timely. Although we find that the homeowner's notice of appeal was timely, we conclude that the trial court did not err in granting the bank's motion to dismiss the homeowner's complaint because it fails to state a claim upon which relief may be granted.

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

          Samuel Jacob Gowin and Jacqueline Strong Moss, Chattanooga, Tennessee, for the appellant, Maureen Davis.

          Kavita Goswamy Shelat and Bradley E. Trammell, Memphis, Tennessee, for the appellees, Wells Fargo Home Mortgage and Secretary of Veteran's Affairs.

          Andy D. Bennett, J., delivered the opinion of the Court, in which J. Steven Stafford, P.J., W.S., and Arnold B. Goldin, J., joined.



         Factual and Procedural Background

         Maureen Davis executed a promissory note and deed of trust in 1993 to secure financing for $98, 718 for her home on Monterey Drive in Memphis. Wells Fargo Home Mortgage, a division of Wells Fargo Bank, N.A., serviced Ms. Davis's loan until the deed of trust was foreclosed upon in August 2013. Following the foreclosure sale, the property was assigned to the Secretary of Veteran's Affairs.

         In July 2015, Ms. Davis filed this lawsuit against Wells Fargo and the Secretary of Veteran's Affairs (collectively, "Wells Fargo").[1] The complaint includes numerous allegations. For example, Ms. Davis alleged that the defendants mismanaged her account, that the loan was predatory, that the foreclosure process violated her due process rights, that the defendants' conduct was "tantamount to fraud, " that the defendants were guilty of false and deceptive practices, and that she did not receive notice of the foreclosure. The defendants filed a motion to dismiss the complaint on the ground that "none of Ms. Davis's allegations and statements support a cognizable claim." Along with their motion, the defendants submitted a memorandum and numerous exhibits showing Ms. Davis's extensive bankruptcy filings.

         Ms. Davis did not file a response to the defendants' motion to dismiss. On February 10, 2016, the trial court entered a "Consent Order of Dismissal with Prejudice." On March 10, 2016, Ms. Davis, appearing pro se, filed a motion pursuant to Tenn. R. Civ. P. 60.02 to set aside the order entered by the trial court on February 10, 2016. Ms. Davis asserted that she had not consented to the entry of the previous order by her attorney, that she was in the process of securing new counsel, and that she was presently hospitalized. The defendants agreed to have the order set aside.

         When the defendants re-set their motion to dismiss, Ms. Davis again did not appear in court. On June 7, 2016, the trial court determined that "Plaintiff's entire lawsuit fails to state a cognizable claim" and entered a "Final Order Dismissing Lawsuit with Prejudice and Judgment." Then, on July 6, 2016, Ms. Davis (who had retained another attorney) filed a motion to set aside this final order of dismissal, again citing Tenn. R. Civ. P. 60.02. She asserted that her previous attorney was still her attorney of record at the time of the June 7, 2016 hearing, that he had negligently failed to appear at the hearing, and that she, herself, was in the hospital at the time of the hearing.

         On September 26, 2016, the trial court entered an order withdrawing Ms. Davis's motion to set aside (in accordance with her filing of a notice of withdrawal of her motion). The court stated that its order of June 7, 2016, was a final order of dismissal and judgment pursuant to Rule 54.01. The court further provided: "To ensure clarity among the parties, however, the time for any appeal by Ms. Davis will run from entry of this Order Withdrawing Plaintiff's Rule 60 Motion."

         Ms. Davis filed a notice of appeal on October 26, 2016.

         Issues on Appeal

         In her appeal, Ms. Davis raises the following issues: (1) whether her complaint stated a sufficient cause of action to challenge the foreclosure, including improper notice; and (2) whether she pled a cause of action for fraud pursuant to Tenn. R. Civ. P. 8.01 and 9.02.[2] Wells Fargo raises the additional issue of whether Ms. Davis filed a timely notice of appeal.[3]


         I. Notice of Appeal.

         The issue presented, which has not been addressed in Tennessee, is whether Ms. Davis's notice of appeal was timely filed in light of her withdrawal of her July 6 post-judgment motion. Rule 4(b) of the Tennessee Rules of Appellate Procedure provides as follows:

In a civil action, if a timely motion under the Tennessee Rules of Civil Procedure is filed in the trial court by any party: (1) under Rule 50.02 for judgment in accordance with a motion for a directed verdict; (2) under Rule 52.02 to amend or make additional findings of fact, whether or not an alteration of the judgment would be required if the motion is granted; (3) under Rule 59.07 for a new trial; (4) under Rule 59.04 to alter or amend the judgment; the time for appeal for all parties shall run from the entry of the order denying a new trial or granting or denying any other such motion.

         The first argument Wells Fargo makes concerning the notice of appeal is that Ms. Davis's second post-judgment motion did not extend the time period for appeal. Ms. Davis filed two post-judgment motions, one on March 10, 2016, and another on July 6, 2016, both denominated Rule 60 motions. Under Tennessee law, however, courts consider the substance of a motion rather than its title. Tenn. Farmers Mut. Ins. Co. v. Farmer, 970 S.W.2d 453, 455 (Tenn. 1998). Thus, we will treat Ms. Davis's motions seeking to set aside the judgments dismissing her complaint as filed pursuant to Tenn. R. Civ. P. 59.04. Because Ms. Davis's motions were filed within thirty days of the order being challenged, they appear to fit within the parameters of Rule 59.04.[4]

         Rule 59.01 of the Tennessee Rules of Civil Procedure provides that, "Motions to reconsider [motions filed under Rule 50.02, Rule 52.02, Rule 59.07, or Rule 59.04] are not authorized and will not operate to extend the time for appellate proceedings." Thus, under Tennessee law, a party cannot file serial post-judgment motions to alter or amend seeking the same relief; such motions do not operate to extend the time for filing a notice of appeal. See Legens v. Lecornu, No. W2013-01800-COA-R3-CV, 2014 WL 2922358, at *8-9 (Tenn. Ct. App. June 26, 2014); Gassaway v. Patty, 604 S.W.2d 60, 61 (Tenn. Ct. App. 1980). Citing Gassaway, the advisory commission comment to Tenn. R. Civ. P. 59.01 states: "Filing and serving motions in serial fashion will not extend the time for filing a notice of appeal with the trial court clerk. In particular, motions to reconsider rulings on any of the listed motions will not extend the time for filing a notice of appeal."

         Yet, this rule concerning post-judgment motions is not absolute. In Legens v. Lecornu, 2014 WL 2922358, at *13, the Court of Appeals explained that "[t]he purpose of a Rule 59 motion to alter or amend a judgment is to prevent unnecessary appeals by providing the trial court with an opportunity to correct errors before the judgment becomes final." The plaintiff's two motions in Legens differed substantively. Legens, 2014 WL 2922358, at *10. The first motion sought reversal of the trial court's finding that there was no fraud in the sale of a vehicle to plaintiff. Id. Upon receiving a favorable ruling, the plaintiff filed a second motion seeking clarification as to the amount of the purchase price to be returned as well as an award of attorney fees. Id. The appellate court concluded that the plaintiff's "second motion to alter or amend . . . was not an impermissible motion to reconsider a Rule 59 motion." Id. at *14. The second motion, therefore, tolled the time period for filing the notice of appeal. Id.

         In the present case, Ms. Davis's first post-judgment motion was filed on March 10, 2016. This was a pro se motion in which Ms. Davis sought to set aside the consent order of dismissal entered on February 10, 2016, without her consent. The second post-judgment motion, filed on July 6, 2016, sought to set aside the final order dismissing the lawsuit entered on June 7, 2016. Thus, these two post-judgment motions were not filed in response to the same order and did not seek the same relief. We do not, therefore, see an issue with the effectiveness of the July 6, 2016 motion by virtue of it being a second post-judgment motion.

         We must now proceed to the more difficult question of whether Ms. Davis's withdrawal of her July 2016 post-judgment motion deprived the motion of its tolling effect for purposes of the running of the time for the filing of her notice of appeal. Tennessee Rule of Appellate Procedure 4(b) does not answer this question because withdrawal of a motion does not technically constitute the granting or denial of the motion. From a purely logical standpoint, one might conclude that, once a motion is withdrawn, it is as if the motion was never filed. Thus, it could even be argued that the motion did not toll the running of the time for filing the notice of appeal until "the entry of the order denying a new trial or granting or denying any other such motion." Tenn. R. App. P. 4(b).

         Although Tennessee courts have not addressed this issue, caselaw from other jurisdictions provides guidance. The analogous federal appellate rule, Fed. R. App. P. 4(a)(4), [5] also does not expressly address the circumstance where a party withdraws one of the motions that tolls the time provided under the rule for filing a notice of appeal. There are a few federal circuits that have ruled on the issue, and most have concluded that "withdrawal of a motion did not deprive it of tolling effect." 16A Fed. Prac. & Proc. Juris. § 3950.4 (4th ed. Supp. 2018). In United States v. Rodriguez, 892 F.2d 233 (2d Cir. 1989), Rodriguez was convicted of cocaine possession with intent to distribute and sentenced in a judgment entered on January 13, 1989. Rodriguez, 892 F.2d at 234. On February 9, 1989, the government moved the court to reconsider the sentence in light of a recent Supreme Court decision. Id. Then, on March 6, 1989, the government sent a letter to the district court withdrawing its motion to reconsider. Id. The government asked the court to extend its time for appeal under Fed. R. App. P. 4(b), [6] and the district court extended the time for appeal to March 15, 1989. Id. at 235. The court also stated that the government's motion for reconsideration was "denied as withdrawn." Id. The government filed its notice of appeal on March 15, 1989. Id.

         On appeal, Rodriguez argued that the government's notice of appeal filed on March 15, 1989, was not timely. Id. The Court of Appeals reasoned as follows:

It is conceded that the government had at least 30 days to appeal from the January 13, 1989 judgment of conviction. Within that period-on February 9, 1989-the government moved for reconsideration. Under the cases just cited, this stopped the running of the time period clock. On March 15, the district court endorsed the motion for reconsideration of the January 13 sentence with the words "[m]otion denied as withdrawn." It seems reasonable to construe this as a denial of the government's motion. Under [United States v.] Dieter, the finality of the judgment was thus suspended until March 15. See Dieter, [429 U.S. 6');">429 U.S. 6, 8, 97 S.Ct. 18, 19 (1976) (per curiam)]. The full 30-day clock started running again on March 15, and the government's notice of appeal filed the same day was obviously timely.

Id. Although the government conceded that it withdrew its motion for reconsideration in its letter on March 6, the trial court determined that it did not need to decide whether the time for filing the notice of appeal was tolled until March 6 (when the motion was withdrawn) or until March 15 (when the district court acknowledged the withdrawal and denied the motion on that basis) because, in either case, the notice of appeal was timely. Id. at 235-236; see also Worcester v. Springfield Terminal Ry. Co., 827 F.3d 179, 181 (1st Cir. 2016) (holding that trial court's verbal granting of motion to withdraw motion for new trial, noted on the docket, began clock running on time for filing notice of appeal); Brae Transp., Inc. v. Coopers & Lybrand, 790 F.2d 1439, 1442 (9th Cir. 1986) (holding that appeal period was tolled by motion to vacate or stay judgment although motion was withdrawn; time for appeal began to run from date of order "disposing of" motion to vacate or stay the judgment).[7]

         The Tenth Circuit case of Vanderwerf v. SmithKline Beecham Corp., 603 F.3d 842 (10th Cir. 2010), presents the arguments for reaching the opposite result as well as fleshing out the reasons supporting the approach taken in the previous cases. The Vanderwerf family sued the SmithKline drug company after the father committed suicide while being treated for depression and anxiety with the drug Paxil. Vanderwerf, 603 F.3d at 843. The district court granted summary judgment in favor of SmithKline on January 9, 2008. Id. The Vanderwerfs filed a motion to reconsider under Fed.R.Civ.P. 59(e) on January 17, 2008. Id. at 845. Then, on August 8, 2008, they filed a notice of withdrawal of the Rule 59 motion and a notice of appeal. Id. The Court of Appeals concluded that it lacked jurisdiction because the notice of appeal was not timely filed. Id.

         In reaching its conclusion, the Tenth Circuit elucidated its reasoning and made ...

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