United States District Court, E.D. Tennessee, Knoxville Division
MEMORANDUM OPINION AND ORDER
case concerns commercial property located at 5727 Clinton
Highway, Knoxville, Tennessee 37912 (“Property”).
Plaintiff Gary Epps (“Epps”) seeks to prevent a
pending foreclosure sale on the property by BSCMS 1999-CLF1
Clifton Highway REO, LLC (“Defendant”). The
Property, which is in receivership, is subject to the Deed of
Trust executed between Gibson and Epps, L.L.C. and
Defendant's predecessor entity in 1997. Gibson and Epps,
L.L.C. was administratively dissolved in 2001, then operated
as a general partnership, then as a sole proprietorship by
Epps. However, Epps does not claim any responsibility under
the Promissory Note associated with the Deed of Trust.
the Court are two motions: Epps' motion for a preliminary
injunction [D. 11] and Defendant's motion to dismiss for
failure to state a claim [D. 14]. The parties have responded
in kind; both motions are ripe. The Court will first address
Defendant's motion to dismiss, then Epps' motion for
a preliminary injunction.
Motion to Dismiss
October 1997, Gibson and Epps, L.L.C. executed the Deed of
Trust, along with a Promissory Note, to Bedford Capital
Funding Corp., the original lender. The Deed of Trust secured
the note, which had an original principal amount of $660,
800.00. Gibson and Epps, L.L.C. was administratively
dissolved on July 20, 2001, but continued to operate as a
general partnership with Jimmy Gibson (“Gibson”)
and Epps as the only partners. On June 24, 2013, Jimmy Gibson
assigned all of his interest in the general partnership to
Epps and his wife, Jackie Epps. Jackie Epps subsequently
assigned all of her interest to Epps, who now operates as a
Promissory Note went into default, and litigation arose in
which Epps, along with Gibson and Epps, L.L.C., sued several
parties including Defendant in Knox County Circuit Court
regarding the property. See Gary Epps et al. v. Gibson
& Assoc. et al., No. C-13-363913 (Knox Cty. Cir. Ct.
filed 2013). On August 26, 2016, an “Agreed Order
Appointing Receiver” was entered in the case, signed by
counsel for Epps, in which a receiver
(“Receiver”) was appointed to manage the
Property, collect rents pursuant to a lease with the United
States Postal Service. Gary Epps et al. v. Gibson &
Assoc. et al., No. C-13-363913 (Knox Cty. Cir. Ct. Aug.
26, 2016). Pursuant to the order, the Receiver's fees and
expenses were advanced by Defendant.
August 6, 2018, U.S. Bank National Association (“U.S.
Bank”) initiated the appointment of a substitute
trustee under the Deed of Trust, which was recorded. U.S.
Bank then issued a “Notice of Trustee's Foreclosure
Sale”, which was scheduled for September 10, 2018. On
the morning of September 10, 2018, Epps filed suit in Knox
County Chancery Court to enjoin the foreclosure sale,
alleging that U.S. Bank was not the holder of the Promissory
Note. A Temporary Restraining Order (“TRO”) was
entered by the Chancery Court, and U.S. Bank removed that
action to this Court. See Epps v. U.S. Bank National
Association, et al., No. 3:18-cv-405 (E.D. Tenn. removed
Sept. 24, 2018). The case lay stagnant until May 24, 2019,
when U.S. Bank moved to dismiss the action for lack of
prosecution. On June 27, 2019, Epps filed a Notice of
Voluntary Dismissal pursuant to Federal Rule of Civil
Procedure 41(a)(1)(A)(i) on the grounds that U.S. Bank
acknowledged that it was not the holder of the Promissory
Note. On August 2, 2019, Defendant prompted the issuance of a
“Notice of Trustee's Foreclosure Sale”
setting the foreclosure sale for August 28, 2019.
August 23, 2019, Epps again filed suit in Knox County
Chancery Court to enjoin the foreclosure sale. On August 26,
2019, Defendant removed the action to the Eastern District of
Tennessee, where the case was initially assigned to the
Honorable Harry S. Mattice, United States District Judge.
Judge Mattice held a telephonic hearing regarding the case
with the parties and Defendant cancelled the foreclosure sale
and re-noticed it for September 16, 2019. Given the relation
of this case to the previous action filed by Epps over the
Property, the case was then transferred to this Court. Epps
then filed his motion for a preliminary injunction on
September 8, 2019 and requested a hearing on the motion. This
Court sought to schedule a hearing on September 11, 2019, but
counsel for the Defendant, who is based out of Kansas City,
Missouri, could not appear in person. Consequently, Defendant
re-noticed the foreclosure sale for October 25, 2019. On
September 13, 2019, Defendant moved to dismiss the action and
responded in opposition to the motion for a preliminary
injunction on September 23, 2019. Epps responded in
opposition to the motion to dismiss on October 16, 2019.
Standard of Review
survive a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure, a complaint must articulate
a facially plausible claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). When ruling on a Rule
12(b)(6) motion, the court must view the complaint in the
light most favorable to the plaintiff and accept all factual
allegations in the complaint as true. Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555-56 (2007). Dismissal is
appropriate only if the Court finds that the plaintiff
“can prove no set of facts in support of his claims
that would entitle him to relief.” Meador v.
Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir.
1990). But even with this liberal standard, the Sixth Circuit
has made clear that “[c]onclusory allegations or legal
conclusions masquerading as factual allegations will not
suffice.” Bishop v. Lucent Techs., Inc., 520
F.3d 516, 519 (6th Cir. 2008). Instead, the “complaint
must contain either direct or inferential allegations
respecting all the material elements to sustain a recovery
under some viable legal theory.” Scheid v. Fanny
Farmer Candy Shops, Inc., 859 F.2d 434 (6th Cir. 1988)
outset, the Court notes that Epps has included various
documents in his verified complaint filed in the Chancery
Court for Knox County, which was removed to this Court. These
documents include a copy of the Deed of Trust (Exhibit C) as
well as an “Agreed Order Appointing Receiver”
from Gary Epps et al. v. Gibson & Assoc. et al.,
No. C-13-363913 (Knox Cty. Cir. Ct. Aug. 26, 2016) (Exhibit
D). Likewise, Defendant has included several documents as
exhibits to its response in opposition to the motion for a
preliminary injunction Rule 10(c) provides that a “copy
of any written instrument which is an exhibit to a pleading
is a part thereof for all purposes.” Fed.R.Civ.P.
10(c). Consequently, in weighing Defendant's motion to
dismiss, the Court treats the documents attached to Epps'
complaint as part of the pleadings. See, e.g.,
Peoples v. Bank of Am., No. 11-2863-STA, ...