Tennessee Properties, Inc. v. Gillentine


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Docket Number: 2010-CA-00376-COA
Court of Appeals: Opinion Link
Opinion Date: 06-07-2011
Opinion Author: Irving, P.J.
Holding: DA-Affirmed; CA-Affirmed.
Additional Case Information: Topic: Real property - Statute of limitations - Section 15-1-49 - Doctrine of concealed fraud - Sanctions - M.R.C.P. 11(b)
Judge(s) Concurring: Lee, C.J., Griffis, P.J., Myers, Ishee, Roberts, Carlton and Maxwell, JJ.
Non Participating Judge(s): Barnes and Russell, JJ.
Procedural History: Dismissal
Nature of the Case: CIVIL - REAL PROPERTY
Trial Court: Date of Trial Judgment: 02-04-2010
Appealed from: Lee County Chancery Court
Judge: John A. Hatcher
Disposition: Complaint Dismissed With Prejudice
Case Number: 08-0942-41-H
  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Tennessee Properties, Inc.




 WILLIAM R. BRUCE



  
  • Appellant #1 Brief
  • Appellant #1 Reply Brief
    		•
    Appellee: Larry Gillentine DENNIS W. VOGE  
    Synopsis provided by:

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    Topic: Real property - Statute of limitations - Section 15-1-49 - Doctrine of concealed fraud - Sanctions - M.R.C.P. 11(b)
    Summary of the Facts: On June 12, 2008, Tennessee Properties, Inc. filed a complaint to adjudicate title to property located in Verona. Southern Pilot Insurance Co. had foreclosed on the property on June 12, 1998. On August 31, 1998, Larry Gillentine purchased the property from Southern Pilot. Gillentine financed the purchase through Renasant Bank, which took a secured interest in the property. In its complaint, TPI argued that Southern Pilot’s foreclosure sale was unauthorized because TPI had paid the underlying debt secured by the property. Alternatively, TPI argued that the sale was void because it did not comply with the terms of the deed of trust, which required a sale by public outcry. TPI asserted that because Southern Pilot’s foreclosure sale was void, Gillentine’s warranty deed was also void. Gillentine filed a motion to dismiss, arguing that TPI had failed to serve process on Southern Pilot, to join Renasant as a necessary party under M.R.C.P. 19, and to file its claim within the general three-year limitations period set forth in section 15-1-49. Additionally, Gillentine sought sanctions in the form of attorney’s fees and court costs under M.R.C.P. 11(b). The court dismissed the complaint as time-barred, but it denied Gillentine’s motion for Rule 11 sanctions. TPI appeals, and Gillentine cross-appeals.
    Summary of Opinion Analysis: Issue 1: Statute of limitations TPI argues that the chancellor erred in applying the general, three-year statute of limitations set forth in section 15-1-49. TPI asserts that the ten-year statute of limitations applicable to actions to recover land applies to its claim. TPI contends that it had paid the debt secured by the property, and, therefore, Southern Pilot wrongfully foreclosed on its property. The general, three-year statute of limitations applies to actions for wrongful or fraudulent foreclosures. TPI filed its complaint exactly ten years after Southern Pilot had foreclosed on the property. As such, the chancery court did not err in finding that TPI’s claim of wrongful foreclosure was time barred. Alternatively, TPI argues that the ten-year statute of limitations applicable to defective instruments applies to its claim. While TPI alleges that Southern Pilot failed to conduct its sale of the property by public outcry and, consequently, failed to comply with the terms of the deed of trust, the record does not contain the substituted trustee’s deed The appellant has the duty of insuring that the record contains sufficient evidence to support his assignments of error on appeal. Furthermore, an appellate court must decide each case by the facts shown in the record, not assertions in the brief. TPI argues that even if the general, three-year statute of limitations applies to its claim, the doctrine of concealed fraud tolled the limitations period. While the doctrine of concealed fraud may toll the statute of limitations, it does not apply to matters of public record. TPI contends that the public-record exception to the concealed-fraud doctrine does not apply to its claim because the alleged defects in the foreclosure sale could not have been discovered by reviewing the land records. However, the substituted trustee’s deed is not in the appellate record. Issue 2: Sanctions Gillentine argues that the chancellor erred in refusing to award sanctions under Rule 11(b) in the form of attorney’s fees and court costs. Gillentine argues that sanctions are appropriate because TPI failed to perform a diligent search of the land records, to properly join Renasant under Rule 19, and to serve process on Southern Pilot. Under Rule 11(b), a trial court may order a party to pay expenses or attorney’s fees if any party files a motion or pleading which, in the opinion of the court, is frivolous or is filed for the purpose of harassment or delay. A motion or pleading is frivolous only when, objectively speaking, the pleader or movant has no hope of success. While TPI’s case against Gillentine, a subsequent purchaser for value, might have been weak, that alone is not sufficient to label it frivolous. Furthermore, there is no evidence in the record that TPI’s claim was intended to harass Gillentine.


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