No Tort Claim Where Plaintiff Was Found To Have Caused Her Own Loss

In Haynes v. Bass, No. W2015-01192-COA-R3-CV (Tenn. Ct. App. June 9, 2016), plaintiff brought suit against her ex-husband, a mortgage company, a title company and an attorney claiming she suffered damage when a home that was supposed to be titled to her alone was sold at auction. Plaintiff and defendant ex-husband had previously been married, and in December 2007 they executed a postnuptial agreement stating that, once another property sold which was already under contract, a residence in Collierville that was being purchased by plaintiff would be plaintiff’s “sole and separate property.” After the sale, however, the money was split between the husband and wife and the deeds were allegedly not recorded as planned in the agreement. Plaintiff alleged that her name was forged on the deeds of trust for the property.

In 2014, the couple got divorced in Arkansas. During the divorce proceeding, plaintiff was supposed to be paying the mortgage on the residence, as she was living in it alone, but it was discovered that she had failed to pay and owed $51,000. The Arkansas court entered an order holding plaintiff in contempt for failing to pay the mortgage and stating that plaintiff could pay defendant husband $55,000 or the property would be sold by a receiver at auction. After plaintiff failed to pay, the residence was sold, and plaintiff filed suit seeking damages for the loss of the property.

In this Tennessee action, plaintiff brought several claims, including fraud, negligent misrepresentation, negligence and civil conspiracy. The trial court dismissed plaintiff’s complaint in total for failure to state a claim, and the Court of Appeals affirmed.

Against her ex-husband, plaintiff advanced claims of fraud and negligent misrepresentation, among other contract-based claims. Both of these causes of actions, though, require the plaintiff to suffer damages due to the misrepresentations. Here, the Court found that the evidence “reveal[ed] that [plaintiff] lost the residence, and the value of all of the improvements she made to the property, because of her failure to pay the mortgage, which resulted in the Arkansas court ordering the property to be sold.” Even if plaintiff’s allegations were taken as true, the Court held that “the allegations are not sufficient to make out a claim against [defendant] because the damages sustained by [plaintiff] are not related to [defendant’s] alleged breach of the postnuptial agreement.”

As to the fraud claim, the Court also found that it was barred by the statute of limitations. The other property referenced in the postnuptial agreement was sold in 2008, and plaintiff would have known then that the money was split between the parties and the postnuptial agreement had not been followed. Because fraud is subject to a three-year statute of limitations, plaintiff’s filing in 2014 was well outside the limitations period.

Further, on at least one claim plaintiff made against defendant ex-husband, the Court found that plaintiff’s pleadings lacked the requisite particularity. The complaint alleged that ex-husband “falsely supplied incorrect information to Plaintiff regarding the Collierville residence or failed to exercise reasonable care in obtaining or communicating this information.” Tenn. R. Civ. P. 9.02 requires that “the circumstances constituting fraud or mistake shall be stated with particularity,” and the Court found that these allegations failed to meet that threshold, as the Court could not identify what information plaintiff was referencing or how it was misleading.

Against the mortgage company, title company and attorney, plaintiff claimed negligence, but she again ran into problems proving damages. The defendants argued that “even if [the bank] failed to exercise due diligence in connection with the loan approval or the alleged forgery of the deeds of trust, or even if [the attorney] falsely notarized [plaintiff’s] signature, these actions did not proximately cause [plaintiff] to suffer any damages.” Moreover, the defendants pointed out that the allegedly fraudulent deeds of trust had been released before the sale of the property. The Court agreed that the defendants did not cause plaintiff’s damages, and thus affirmed dismissal of the negligence claims.

Finally, plaintiff alleged civil conspiracy against all the defendants, which the Court noted “must be pled with some degree of specificity.” (internal citation omitted). In her complaint, the Court found that instead of specific allegations regarding conspiracy,

[t]he paragraph [was] essentially a recitation of the elements of a claim for conspiracy stated in terms of the parties and property involved in the present case. The complaint fails to detail how the defendants engaged in a common scheme and had knowledge of one another’s intent to deprive the plaintiff of her rights in the Collierville residence. The complaint provides no specific facts to apply the elements of the claim to the present case.

Accordingly, the Court affirmed dismissal of all causes of action listed in the complaint.

One other note on this case—plaintiff asserted on appeal that the trial court should have converted the motion to dismiss to one for summary judgment, as matters outside the pleadings were considered. Defendants filed records from the Arkansas divorce action, and it appeared from the trial court’s oral ruling that those records were considered. The Court of Appeals found, however, that Tennessee law allows for “judicial notice of public records” and that, under Indiana State District Counsel of Laborers v. Brukardt, 2009 WL 426237 (Tenn. Ct. App. Feb. 19, 2009), a trial court can consider such items of judicial notice without converting a motion to dismiss into one for summary judgment.