ROBERT A. HANKS, ET AL.
FIRST AMERICAN TITLE INSURANCE CO.
Session January 9, 2018
from the Chancery Court for Sumner County No. 2015-CV-42
Louis W. Oliver, III, Chancellor
A. Hanks and Lee E. Hanks ("Plaintiffs") sued First
American Title Insurance Co. ("First American") for
breach of contract with regard to an owner's title
insurance policy ("Title Policy"). First American
filed a motion for summary judgment. After a hearing, the
Chancery Court for Sumner County ("the Trial
Court") granted summary judgment to First American after
finding and holding, inter alia, that the Title
Policy excluded any claim pursuant to either federal
bankruptcy code or Tennessee law for an alleged fraudulent
conveyance, fraudulent transfer, or preferential transfer.
Plaintiffs appeal the grant of summary judgment to this
Court. We find and hold that First American made a properly
supported motion for summary judgment demonstrating that
Plaintiffs' evidence is insufficient to establish an
essential element of their claim and that Plaintiffs failed
to demonstrate that there are genuine disputed issues of
material fact with regard to the claims for fraudulent
conveyance or fraudulent transfer. We further find and hold
that the claim for post-petition transfer is not excluded
from coverage pursuant to exclusion 4 of the Title Policy,
and, therefore, summary judgment on the post-petition claim
was improper. We, therefore, affirm the grant of summary
judgment, in part, and reverse it, in part, and remand this
case to the Trial Court for further proceedings consistent
with this Opinion.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Affirmed, in part; Reversed, in part; Case
E.Covington Johnston, Jr., Franklin, Tennessee, for the
appellants, Robert A. Hanks and Lee E. Hanks.
Brown and Brad W. Craig, Nashville, Tennessee, for the
appellee, First American Title Insurance Co.
D.MICHAEL SWINEY, C.J., delivered the opinion of the court,
in which RICHARD H. DINKINS and W. NEAL MCBRAYER, JJ.,
MICHAEL SWINEY, CHIEF JUDGE
own real property located on Valley Brook Drive in Sumner
County, Tennessee ("the Property"), which they
purchased by Warranty Deed from Charles R. Dennie and Joanne
R. Dennie ("the Dennies") on October 11, 2013.
Charles Dennie is the son of Plaintiff Lee E. Hanks and the
step-son of Plaintiff Robert Hanks. The Dennies had filed a
Chapter 7 bankruptcy petition on October 10, 2013, the day
before the transfer of the Property. The bankruptcy petition
listed the Property as one of the Dennies' assets. At the
closing on the Property, the Dennies executed an affidavit as
to liens and encumbrances stating that no proceedings in
bankruptcy or receivership had been instituted against them.
connection with the closing on the Property, Plaintiffs
executed a note and deed of trust in the amount of $153, 000
payable to CMG Mortgage, Inc. Plaintiffs also purchased the
Title Policy from First American. In pertinent part, the
Title Policy provides:
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the
coverage of this policy, and the Company will not pay loss or
damage, costs, attorneys' fees, or expenses that arise by
3. Defects, liens, encumbrances, adverse claims, or other
(a) created, suffered, assumed, or agreed to by the Insured
(b) not Known to the Company, not recorded in the Public
Records at Date of Policy, but Known to the Insured Claimant
and not disclosed in writing to the Company by the Insured
Claimant prior to the date the Insured Claimant became an
insured under this policy.
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Date of Policy
(however, this does not modify or limit the coverage provided