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Bane v. Bane

Court of Appeals of Tennessee, Knoxville

June 28, 2019

ROY EDWARD BANE, EXECUTOR OF THE ESTATE OF MARTHA HARRISON BANE
v.
JOHN BANE ET AL.

         Session May 20, 2019

          Appeal from the Chancery Court for Cocke County No. 2014-CV-103 Telford E. Forgety, Jr., Chancellor

         The trial court granted a default judgment to the plaintiff in March 2009, which judgment invalidated a deed for real property transferred from the plaintiff to her son and daughter-in-law. The trial court subsequently set aside the default judgment without making sufficient findings of fact and conclusions of law concerning the basis for the ruling. Following a consequent bench trial, the trial court upheld the deed from the plaintiff to her son, although the plaintiff sought to have the deed set aside based on undue influence and fraud. The plaintiff has appealed. Based upon our determination that the trial court failed to make sufficient findings of fact and conclusions of law in its order that set aside the default judgment, we vacate both the trial court's final order and the order setting aside the default judgment. We remand this matter to the trial court for entry of sufficient findings of fact and conclusions of law regarding the legal basis of the trial court's decision to set aside the default judgment, or, in the alternative, reconsideration of that judgment.

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

          Thomas M. Leveille, Knoxville, Tennessee, for the appellant, Roy Edward Bane, Executor of the Estate of Martha Harrison Bane.

          J. Patrick Stapleton, Sevierville, Tennessee, for the appellees, John Bane; Anne Bane; and Elizabeth Caldwell Kingery, Executor of the Estate of J. Alan Kingery.

          Thomas R. Frierson, II, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Charles D. Susano, Jr., J., joined.

          OPINION

          THOMAS R. FRIERSON, II, JUDGE.

         I. Factual and Procedural Background

         On December 15, 2008, Martha Harrison Bane filed a "Complaint for Cancellation of Deed Induced by Fraud and Undue Influence" ("first action") against her son and daughter-in-law, John and Anne Bane ("Defendants") in the Cocke County Chancery Court ("trial court").[1] In her complaint, Ms. Bane alleged that Defendants had exerted undue influence over her and had fraudulently induced her to transfer a tract of real property to them. Although all of the parties were residents of Virginia, the property in question ("the Property") is located in Cocke County, Tennessee.

         Ms. Bane asserted, inter alia, that at the time of the Property's transfer in 2003, John Bane was acting as her attorney-in-fact. Ms. Bane alleged that John Bane falsely represented that she needed to sign the deed transferring title to the Property to Defendants as part of Ms. Bane's estate plan. Ms. Bane further alleged that Defendants informed her the deed would be placed in a lock box and would not be recorded until after her death. According to Ms. Bane, she had no intention of transferring title for the Property to Defendants at the time she signed the deed; rather, she intended for them to receive it only following her death.

         Ms. Bane further asserted that upon her discovery of the transfer of the Property, she revoked the power of attorney granted to John Bane and demanded that he and his wife convey title back to her. Upon John Bane's refusal to do so, Ms. Bane filed this action, seeking title to the Property, damages, and an award of attorney's fees. A copy of the deed transferring the Property to Defendants was attached to the complaint.

         On March 23, 2009, the trial court entered an order, finding that Defendants had received proper service of process and had failed to answer the complaint or otherwise appear. The court thus entered a default judgment, which set aside the deed from Ms. Bane to Defendants. A Clerk and Master's Deed was accordingly issued, transferring title to the Property back to Ms. Bane.

         Ms. Bane subsequently instituted a separate action by filing a "Complaint for Cancellation of Deed of Trust" ("second action") with the trial court on August 27, 2014. In this complaint, Ms. Bane named John and Anne Bane as defendants as well as J. Alan Kingery, Anne Bane's father. Ms. Bane alleged that on June 20, 2007, Defendants had executed a Deed of Trust in favor of Mr. Kingery in the amount of $250, 000, which required no payments and set forth no associated interest rate. According to Ms. Bane, Mr. Kingery did not pay any money to Defendants upon the execution of the deed of trust. Rather, Ms. Bane alleged that the trust deed was executed to create a cloud on the title to the Property. Ms. Bane sought to have the deed of trust set aside.

         Mr. Kingery subsequently filed a motion to intervene in the first action, asserting that he was an indispensable party thereto. In addition, Mr. Kingery and Defendants filed motions to have the default judgment from the first action set aside.[2] On March 30, 2015, the trial court entered an order granting the motions to set aside the default judgment and finding Mr. Kingery to be a necessary and indispensable party. Rather than granting Mr. Kingery's motion to intervene in the first action, the trial court consolidated the first action with the second action, which permitted Mr. Kingery to proceed as a named party and rendered the motion to intervene moot. The court entered a subsequent order on September 15, 2015, allowing the intervention of the Martha Bane Trust as a party to the consolidated cases.

         On October 13, 2016, Defendants and Mr. Kingery filed a joint motion seeking sanctions against Ms. Bane for failing to appear for her scheduled deposition. The trial court subsequently entered an order directing Ms. Bane to appear for a deposition within thirty days. On December 8, 2016, Defendants and Mr. Kingery filed a renewed motion for sanctions, claiming that Ms. Bane had appeared for a deposition on December 2, 2016, but that the deposition was not completed because Ms. Bane was not feeling well. On July 11, 2017, Elizabeth Caldwell Kingery was substituted as a party in place of Mr. Kingery, who had recently passed away.

         The trial court conducted a bench trial on February 6, 2018. The trial court then entered a final order on February 12, 2018, wherein the court dismissed Ms. Bane's claims with prejudice. The Clerk and Master's deed executed in 2009, which had conveyed title for the Property to Ms. Bane, was set aside, as well as subsequent deeds conveying the Property to the Martha Bane Trust. The court specifically upheld the deed from Ms. Bane to Defendants and the deed of trust in favor of Mr. Kingery.

         In its memorandum opinion incorporated into the final judgment, the trial court explained in pertinent part:

The Court has listened to the evidence, which by the way is really in many respects confusing and just terribly convoluted, the dealings between the parties, terribly convoluted, but at the end of the day the Court is constrained to dismiss the complaint. The Court will explain its reasoning.
First of all, [Ms. Bane] claims that Mr. John Bane held a power of attorney for Martha Harrison Bane, which he did for sure, held a power of attorney which was dated May 9, 2003. The deed made from Martha Harrison Bane to John Bane was dated . . . October 20, 2003. John Bane held a deed of trust, or rather a power of attorney for his mother Martha Bane certainly in October of 2003. From the record here, the Court cannot find that there had been any use of the power of attorney between the time it was granted in May of 2003 and the time the deed was made in October of 2003.
There may have been use of the power of attorney after that, but there's no evidence in the record here that there was use of the power of attorney between May and October. Accordingly, I don't think the presumption of undue influence by reason of a confidential relationship between John Bane and Martha Bane, I don't think that presumption arises with respect to this transaction.
I also note that there's no evidence in the record that the power of attorney was used in connection with the very deed at issue. Martha Bane signed the deed herself. John Bane did not sign the deed as power of attorney for Martha Bane as ...

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