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Ammons v. Longworth

Court of Appeals of Tennessee, Knoxville

November 14, 2019

JOHN THOMAS AMMONS
v.
WILLIAM C. LONGWORTH, ET AL.

          April 16, 2019 Session

          Appeal from the Chancery Court for Knox County No. 178387-3 Michael W. Moyers, Chancellor

         This appeal involves many attempts to secure repayment of a loan. After the most recent hearing, the trial court denied the plaintiff's request to revisit the prior rulings. We affirm as modified.

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

          Donald K. Vowell and Douglas L. Dunn, Knoxville, Tennessee, for the appellant, John Thomas Ammons.

          Ray H. Jenkins, Knoxville, Tennessee, for the appellees, William C. Longworth and Tamara Longworth.

          John W. McClarty, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Thomas R. Frierson, II, J., joined.

          OPINION

          JOHN W. MCCLARTY, JUDGE

         I. BACKGROUND

         William C. Longworth and his wife, Tamara Longworth ("the Longworths"), began construction of a new home in the late 2000s, just when the economic decline began, despite the warnings of Mrs. Longworth's father, John Thomas Ammons. In 2009, Mrs. Longworth informed her father that the individuals under contract to purchase the Longworths' old house, located on Wilnoty Drive in Knoxville, had backed out. She sobbed that she and her husband "were going to lose everything," as the new house was complete and the construction loan was due. Mr. Ammons's understanding was that if the couple was unable to pay the construction loan, they were going to lose the new house. He told his daughter that he "would loan them the money with the stipulation that when the [old] house did sell, that they would repay the loan at that time. . . ." Mrs. Longworth immediately accepted the offer and told her father that "when the house sold that they would repay [him] and how grateful they were, how thankful they were." Mr. Ammons testified that, at that time, he had no doubt he would be repaid. On January 6, 2009, Mr. Ammons obtained a check from Y-12 Federal Credit Union in the amount of $193, 000. The bank teller, who had known him for years, expressed her concern that he was "lending such a large sum of money without additional paperwork," but Mr. Ammons replied, "[N]o, she's my daughter and she promised she'll pay me back as soon as the old house sells."

         Three days later, Mrs. Longworth requested that her father sign a "gift letter" that certified to the Longworths' lender that he had "given or will give the sum of $193, 000 as a gift to William C. Longworth towards the purchase of the property located at 1619 Nicholas View Ln, Knoxville TN." According to Mr. Ammons, at the time he signed the "gift letter," Mrs. Longworth "reiterated quite strongly how they knew that they were borrowing money from me, that they would pay me back, pay the entire loan when the house sold, and made it very clear that this was to satisfy the lending institution." Mr. Ammons testified that he did not feel he was doing anything improper because there were no monthly payments on the loan; rather, the agreement was that the money would be repaid once the old house sold. The money borrowed from Mr. Ammons was used to pay off the Wilnoty Drive home, automobiles, and credit cards in order for the Longworths to "have a clear slate to qualify for the loan on their new home."

         The Wilnoty Drive home, however, did not sell. Mr. Ammons soon urged his daughter to "get the home cleaned up, cleaned out, and get it on the market to rent" in order to "[a]t least get some money coming in." After Mr. Ammons helped the Longworths prepare the house, it was rented to a couple from California. Despite Mr. Ammons requesting that the rent money come to him in an escrow account until the house sold, by July 2009, the Longworths had not made any payments to him, even though by that time they had been receiving rent payments in the amount of $1250 for several months. One day when his daughter was visiting at his home, Mr. Ammons brought up the subject of payment. Mrs. Longworth got very upset and left with her children.[1] After Mr. Ammons called Mr. Longworth and left a message, his son-in-law returned the call and offered to pay $600 out of the $1250 per month that the Longworths were receiving for rent. But nothing was ever paid. According to Mr. Ammons, he was never again able to reach either one of the Longworths by telephone. However, Mrs. Longworth wrote her father a letter: "As far as the money - we still intend to pay you back as we agreed to do in the beginning. WE have never wavered on the deal that was made. . . . We are aware that we owe you the money." (Emphasis in original.).

         It appears that the Wilnoty house continued to remain off the market as a rental property. Mrs. Longworth asserted that the couple had lined up a buyer for the house for $185, 000, but that her father rejected the sale. She also claimed that Mr. Ammons was offered the deed to the property but refused to accept it. Mr. Ammons rejected both of these contentions. When Mr. Ammons's attorney sought a quitclaim deed to the property, the Longworths' attorney challenged Mr. Ammons to produce a signed contract that he was owed any money.

         On August 4, 2010, Mr. Ammons filed a complaint against the Longworths in which he alleged that he had loaned them $193, 000 but feared that they would refuse to pay him. The complaint asserted that the Longworths had acknowledged the debt. In his request for relief, Mr. Ammons asked for judgment in the amount of $193, 000, a "judgment lien," and general relief. In their answer, the Longworths denied any agreement to repay or that they owed Mr. Ammons any money.

         The case proceeded to trial on September 2, 2011. In the memorandum opinion, the trial court held that Mr. Ammons had loaned his daughter $193, 000 and that both father and daughter "understood this to be a loan[.]" The court stated that "Mrs. Longworth, you have been unjustly enriched if that money is not returned to Mr. Ammons." The court further found that Mrs. Longworth "acknowledges that this was the debt, acknowledges that she had agreed to repay it and that it would be repaid." The court held that "a judgment against Mrs. Longworth should go down in the amount of $193, 000, secured by a judgment lien against the Wilnoty Drive house." As to Mr. Longworth, the court found that Mr. Ammons had "not proved [his] case, and the case against Mr. Longworth is dismissed." The trial court added: "I'm not today going to order a sale of that house. I'll let the parties try to work that out, how that it will be executed upon or sold[.]" The court asserted, "So, the $193, 000 is solely [owed] by a judgment lien against the Wilnoty Drive house, and I'll let you counsel decide how you're going to enforce that judgment lien. . . ."

         After the court announced the decision, counsel for the Longworths inquired as follows:

Mr. Jenkins: Your Honor, for clarification, how is this done? Does this affect Mr. Longworth -
The Court: Good question. I'll let you guys work that out.
Mr. Jenkins: - about the ownership
The Court: That gets into questions of tenancy by the entireties and a whole lot of other questions that I know I'm not ready, willing or able to answer today. When we get to the point of - if the Court has to intervene further, to figure out how to enforce this judgment money, we'll take that up at that time.
Right now, I'm saying there's $193, 000 judgment against Mrs. Longworth that's secured by her interest in the home. Whether that's an un[divided] interest or half interest, I don't know. I'll let you guys work that out, or we'll take that up another day, all right?

         A motion to alter or amend the judgment, filed by Mr. Ammons, that asked the court to grant judgment against Mr. Longworth because he also had been unjustly enriched was overruled on March 9, 2012.

         In August 2016, Mr. Ammons sought the sale of Mrs. Longworth's interest in the Wilnoty Drive property. The Longworths responded as follows:

Mr. Longworth owned the Wilnoty Drive property prior to and at the time of marriage. He continues to be the sole owner listed on the Deed on file in the Register's office. At no time has Mrs. Longworth been on the Deed for Wilnoty.

         They further asserted:

Assuming that Mrs. Longworth does have an ownership interest in Wilnoty property, that interest is as a Tennent by the Entirety [sic] and the Plaintiff's proper and equitable remedy is to hope the Longworths divorce or to wait for Mr. Longworth to "shuffle off this mortal coil," thereby separating ...

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