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Moses v. Elrod

Court of Appeals of Tennessee, Knoxville

September 19, 2019


          Session: August 21, 2019

          Appeal from the Chancery Court for Meigs County No. 4624 Frank V. Williams, III, Chancellor

         The plaintiffs appeal the trial court's decision concerning the ownership of real property. We affirm.

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

          H. Franklin Chancey, Cleveland, Tennessee, for the appellants, James and Nancy Moses.

          H. Chris Trew, Athens, Tennessee, for the appellees, Rebecca Elrod, Christopher Hennessee, and Matthew Moses.

          John W. McClarty, J., delivered the opinion of the Court, in which Charles D. Susano, Jr., J. and D. Michael Swiney, C.J., joined.



         In May 1999, Rebecca and Jack Elrod (collectively "the Elrods") purchased the property at issue for $35,000 after obtaining a loan of approximately $47,500. The remainder of the loan was used to improve the property. The original loan was made for a term of five years with a balloon payment due at the end of the term. The loan was refinanced when the balloon payment became due and again in 2007.

         Since the purchase of the property, Kim Hennessee Moses (Mrs. Elrod's daughter, who is now deceased); her husband, James Moses; and son, Matthew Moses have lived in the residence and remitted payment throughout their residency. At times, the Elrods also made payments. There is no record of payments made, and neither Kim nor James had access to the mortgage account. Payments were made by cash, check, or automatic transfer but were sporadic until Kim's death in 2006. Since that time, James submitted monthly payments through social security death benefits paid to him as trustee for Matthew. In 2007, the Elrods obtained another $20,000 loan for further renovations completed by James.

         James married Nancy Moses in December 2012, and he and Nancy ("Plaintiffs") completed additional renovations. Mrs. Elrod transferred the property to Christopher Hennessey and Matthew Moses in December 2017. Plaintiffs filed suit against Mrs. Elrod, Christopher, and Matthew (collectively "Defendants"),[2] claiming that the payments made to the Elrods were in fulfillment of an oral loan obligation for the purchase of the property. They requested the imposition of a constructive trust. Defendants denied any existence of an oral loan and claimed that even if one had been negotiated, any such loan would be prohibited by the statute of frauds. They claimed that the home was purchased for James and Kim to rent but that the Elrods always intended to retain ownership of the property and later transfer the property to Matthew.

         The case proceeded to a bench trial, at which James claimed that the Elrods agreed to finance the residence because he could not obtain a loan due to his credit. He claimed that Mrs. Elrod advised him of their monthly payment obligation and that they either remitted payment through an automatic transfer or in cash. He admitted that his name was not included on the deed to the property at the time of purchase and that their agreement was not in writing. He testified that Mrs. Elrod visited the house often and was aware of the extensive renovations completed by him. Further, she referred to the residence as his house and asked permission to move a mobile home onto the property.

         However, James admitted that the Elrods purchased the materials for the initial renovations and for the renovations in 2007. He further conceded that he did not reside in the house for the entirety of the time prior to Kim's death because they had a disagreement that led to him moving out. He agreed that she also did not live in the residence at some point while they were no longer in a relationship. He admitted that he may have also missed a few payments but claimed that he remitted payment throughout the majority of his residency. He confirmed that he remitted payment from Matthew's social security benefits following Kim's death.

         James testified that he and Nancy also completed extensive renovations on the residence using their own funds. He and Nancy introduced evidence concerning their extensive renovations of the property beyond that paid for by the Elrods. Nancy stated that she would not have invested money in repairs had she been made aware that the property would not transfer to them. She claimed that James advised her that the property would become theirs as soon as the loan was fulfilled. She acknowledged that she had two conversations with Mrs. Elrod in which she asked whether she would be thrown out of the house if her husband passed away. She noted that Mrs. Elrod did ...

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