Arnold B. Goldin, J., delivered the opinion of the Court, in which Brandon O. Gibson, and Kenny Armstrong, JJ., joined.
This appeal arises from the trial court's grant of summary judgment in favor of Plaintiff in an unlawful detainer action. The property at issue was sold in a foreclosure sale, and the purchaser assigned its
On August 15, 2005, Danny and Gloria Daniels executed a promissory note evidencing a home loan in the amount of $120,150. The promissory note was secured by a deed of trust on the Daniels's home at 2455 Forked Deer Road, Ripley Tennessee. Both Mr. Daniels and Ms. Daniels signed the deed of trust and, in doing so, agreed to be held jointly and severally liable for all obligations and liability arising under it. The beneficiary under the deed of trust was First South Bank, the original lender. In 2010, the promissory note and deed of trust were assigned to Nationstar Mortgage, LLC ("Nationstar").
In addition to the regularly scheduled payments due under the promissory note, the deed of trust required the Daniels to pay premiums for private mortgage insurance to protect the lender and subsequent purchasers of the promissory note from losses incurred if the Daniels failed to repay the loan as agreed. The promissory note provided that the Daniels's failure to pay the full amount of each monthly payment on the date it was due would result in default. In the event of default, the deed of trust provided the lender with the option to sell the property at public auction. In part, the deed of trust provided that:
Ms. Daniels passed away in August 2007. In 2009, Mr. Daniels began to fall behind on his monthly payments. On May 19, 2011, Nationstar sent a letter to inform Mr. Daniels that he was in default under the terms of the promissory note and that failure to cure the default within 35 days might result in acceleration of all sums due and a foreclosure sale of the property. Mr. Daniels applied for a loan modification but was notified that the loan would not be modified. Nationstar subsequently accelerated the balance due under the note and initiated foreclosure proceedings.
On October 4, 2011, FNMA filed an unlawful detainer action against Mr. Daniels for possession of the property in the Haywood County General Sessions Court. Following Mr. Daniels's unsuccessful attempt to remove the matter to federal court, the General Sessions Court entered a judgment in favor of FNMA on November 7, 2012. Shortly thereafter, Mr. Daniels filed a timely notice of appeal to the Haywood County Circuit Court.
FNMA filed a motion for summary judgment in the Circuit Court on October 17, 2013. Mr. Daniels did not file a response to the motion, and the Circuit Court granted summary judgment in favor of FNMA on December 16, 2013. Shortly thereafter, however, Mr. Daniels filed a motion to alter or amend the judgment in which he asserted that he never received notice of FNMA's motion for summary judgment. Following a hearing, the Circuit Court entered an order in which it set aside its previous order granting summary judgment in favor of FNMA.
On April 2, 2014, Mr. Daniels filed a request for admissions. In part, Mr. Daniels requested that FNMA admit that Nationstar mortgage forgave the debt owed by Ms. Daniels's estate on the promissory note on August 17, 2011 — the date of the foreclosure sale. Mr. Daniels also requested that FNMA admit the authenticity of the Form 1099-As that Nationstar issued Mr. Daniels and Ms. Daniels on that date and admit that Ms. Daniels was covered by a private mortgage insurance policy at the time of her death in August 2007. Along with the request for admissions, Mr. Daniels filed a request seeking production of, among other things, (1) documents from predecessors in interest having an interest in the mortgage and promissory note and establishing proof of ownership and the right to foreclose on the property, (2) assignments filed in Haywood County with respect to the mortgage and note, (3) all private mortgage insurance policies related to the property, (4) documents showing that the mortgage and/or note were bundled and sold as a security, and (5) documents showing that any private mortgage insurance provider refused to pay off debt related to the property.
In response to Mr. Daniels's discovery requests, FNMA filed a motion seeking an order of protection to protect FNMA from being required to respond to Mr. Daniels's discovery requests on the grounds that the evidence sought was neither admissible nor reasonably calculated to lead to the discovery of admissible evidence. FNMA argued that the documents Mr. Daniels requested related to the ownership history of the promissory note and Nationstar's right to foreclose on the property which were not relevant because Mr. Daniels did
After conducting a hearing on the matter, the Circuit Court granted FNMA's motion for protective order in its entirety on October 15, 2014.
On October 10, 2014, FNMA filed a second motion for summary judgment, along with a memorandum of law and statement of undisputed facts. According to FNMA's filings, the undisputed evidence in the record showed that: Mr. Daniels and Ms. Daniels executed the promissory note secured by a deed of trust on the property in August 2005; the promissory note was assigned to Nationstar in November 2010; Mr. Daniels fell behind on payments due under the promissory note and was in default in May 2011 when Nationstar notified him that it intended to initiate foreclosure proceedings; Nationstar conducted a foreclosure sale in compliance with the deed of trust and Tennessee law; and Nationstar purchased the property at the foreclosure sale and subsequently assigned its interest in the property to FNMA. FNMA asserted that because the deed of trust established a landlord/tenant relationship between a foreclosure sale purchaser and the borrower, Mr. Daniels was a tenant at will of FNMA and subject to eviction at its election.
In response to FNMA's motion for summary judgment, Mr. Daniels requested that the Circuit Court deny FNMA's motion for summary judgment and set aside its protective order to allow further discovery related to the private mortgage insurance on the property. In both his written memorandum and his response to FNMA's statement of undisputed facts, Mr. Daniels asserted that further discovery was necessary to determine whether all outstanding debt owed under the promissory note was forgiven prior to the foreclosure sale. Mr. Daniels submitted an affidavit in which he asserted that the Form 1099-As Nationstar transmitted to him indicated that the debt on the property had been forgiven, and that Ms. Daniels was covered by a private mortgage insurance policy intended to satisfy the mortgage indebtedness upon her death in August 2007. The affidavit did not contain any further explanation of the evidentiary materials that Mr. Daniels needed to oppose summary judgment.
On January 9, 2015, the Circuit Court entered an order on FNMA's motion for summary judgment. In part, the Circuit Court's order stated:
(internal citations omitted). The Circuit Court determined that because the deed of trust established a landlord/tenant relationship between the foreclosure sale purchaser and the borrower, Mr. Daniels was considered a tenant at will of FNMA. The Circuit Court therefore concluded that FNMA was entitled to possession of the property and granted its motion for summary judgment.
Mr. Daniels subsequently filed a motion to alter or amend judgment arguing that he was not able to adequately respond to FNMA's motion for summary judgment because he was prevented from conducting discovery related to the effect of the Form 1099-A and private mortgage insurance policy. Following a hearing, the Circuit Court entered an order denying Mr. Daniels's motion to alter or amend on May 10, 2015. Mr. Daniels filed a timely notice of appeal to this Court on May 27, 2015.
The sole issue Mr. Daniels presents on appeal, as stated in his appellate brief, is:
On appeal, we review a trial court's ruling on a motion for summary judgment de novo, with no presumption of correctness. Abshure v. Methodist Healthcare-Memphis Hosp., 325 S.W.3d 98, 103 (Tenn. 2010). In doing so, we must make a fresh determination of whether the requirements of Rule 56 of the Tennessee Rules of Civil Procedure have been satisfied. Estate of Brown, 402 S.W.3d 193, 198 (Tenn. 2013). A trial court's grant of summary judgment is appropriate when "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Tenn. R. Civ. P. 56.04.
The party moving for summary judgment bears the ultimate burden of establishing that judgment in its favor is appropriate as a matter of law because there are no disputed material facts that create a genuine issue for trial. Thompson v. Memphis City Schs. Bd. of Educ., 395 S.W.3d 616, 622 (Tenn. 2012). "If the moving party makes a properly supported motion for summary judgment, the burden of production shifts to the nonmoving party to demonstrate the existence of a genuine issue of material fact requiring trial." Town of Crossville Hous. Auth. v. Murphy, 465 S.W.3d 574, 578 (Tenn. Ct. App. 2014) (citing Byrd v. Hall, 847 S.W.2d 208, 215 (Tenn. 1993)). A disputed fact is "material" if it must be decided in order to resolve the substantive claim or defense at which the summary judgment motion is directed. Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008) (citing Byrd, 847
Tennessee's unlawful detainer statute creates a right to bring a cause of action for a writ of possession when a lessee remains on leased property after the lease has been terminated. Cain P'ship Ltd. v. Pioneer Inv. Servs. Co., 914 S.W.2d 452, 456 (Tenn. 1996). The statute provides:
Tenn.Code Ann. § 29-18-104 (2012). When a deed of trust establishes that, in the event of a foreclosure, a landlord/tenant relationship is created between the foreclosure sale purchaser and the mortgagor in possession of the property, constructive possession is conferred on the foreclosure sale purchaser upon the passing of title; that constructive possession provides the basis for maintaining the unlawful detainer. See CitiFinancial Mortg. Co., Inc. v. Beasley, No. W2006-00386-COA-R3-CV, 2007 WL 77289, at *7 (Tenn. Ct. App. Jan. 11, 2007) (citing Metro. Life Ins. Co. v. Moore, 167 Tenn. 620, 72 S.W.2d 1050, 1051 (1934)). Thus, to succeed on its motion for summary judgment, FNMA was required to establish (1) its constructive possession of the property and (2) its loss of possession by Mr. Daniels's act of unlawful detainer. See id. (citing Foster v. Hill, 510 S.W.2d 520, 522 (Tenn. Ct. App. 1973)).
As an initial matter, we conclude that FNMA's motion for summary judgment was properly supported. In support of its motion for summary judgment, FNMA produced evidence that established its constructive possession of the property at issue. Specifically, FNMA submitted copies of the promissory note and deed of trust that Mr. Daniels signed in August 2005. Those documents reflect that Mr. Daniels agreed to make monthly payments due under the promissory note and that his failure to do so would result in a default conferring a power of sale on the holder of the promissory note. The documents also provide that, in the event of a foreclosure sale, Mr. Daniels was required to surrender the property immediately or became a tenant at will of the foreclosure sale purchaser and pay the reasonable rental value of the property. FNMA provided a letter indicating that the promissory note was transferred to Nationstar in November 2010 and a summary of Mr. Daniels's payment history reflecting that he defaulted on his payment obligations under the promissory note in May 2011. FNMA submitted documents reflecting that, as a result of Mr. Daniels's default, Nationstar initiated foreclosure proceedings in accordance with the promissory note and deed of trust. FNMA submitted a copy of a trustee's deed reflecting that Nationstar
As we previously discussed, when a party submits a properly supported motion for summary judgment, the burden shifts to the nonmoving party to establish the existence of a genuine issue of material fact requiring trial. Town of Crossville Hous. Auth., 465 S.W.3d at 578. The nonmoving party may satisfy its burden of production and avoid summary judgment by:
Regions, 310 S.W.3d at 401 (quoting Rains v. Bend of the River, 124 S.W.3d 580, 587-88 (Tenn. Ct. App. 2003)). Here, it appears that Mr. Daniels attempted to satisfy his burden of production and avoid summary judgment by requesting additional time for discovery pursuant to Tennessee Rule of Civil Procedure 56.07. Although Mr. Daniels's response does not specifically cite Rule 56.07, Mr. Daniels asserted the need for further discovery in both his written memorandum and his response to FNMA's statement of undisputed facts. Mr. Daniels also submitted his own affidavit that, in pertinent part, stated:
Having carefully reviewed the filings Mr. Daniels submitted in response to FNMA's motion for summary judgment, we conclude that Mr. Daniels failed to comply with the requirements of Rule 56.07. Rule 56.07 was enacted to serve as a safeguard against an improvident or premature grant of summary judgment by insuring that a diligent party is given a reasonable opportunity to prepare its case. See Kenyon v. Handal, 122 S.W.3d 743, 753 n.7 (Tenn. Ct. App. 2003) (citations omitted). The rule provides that:
Tenn. R. Civ. P. 56.07. Thus, an affidavit submitted by a party seeking further discovery pursuant to Rule 56.07 need not contain evidentiary facts related to the substantive merits of the case; rather, it must explain why the nonmoving party has not been able to obtain and present the evidentiary material needed to oppose the summary judgment motion. Kenyon, 122 S.W.3d at 753 n.7; see also 4 Nancy Fraas MacLean, Tennessee Practice Series-Rules of Civil Procedure Annotated § 56:9 (4th ed. 2006) ("The request for a continuance must be based upon affidavit stating the reasons why the party is unable to present by affidavit facts essential to justify opposition to the motion for summary judgment."). When the nonmoving party seeks to continue a motion for summary judgment pursuant to Tennessee Rule of Civil Procedure 56.07, we review the trial court's decision to deny the continuance for an abuse of discretion. Regions, 310 S.W.3d at 401. The statements in Mr. Daniels's affidavit relate solely to the substantive merits of his position; it does not state the reasons why he is unable to present by affidavit the facts needed to oppose FNMA's motion for summary judgment. Thus, because Mr. Daniels failed to comply with Rule 56.07, we conclude that the Circuit Court did not abuse its discretion in denying his request for further discovery.
Moreover, even assuming that Mr. Daniels submitted his request for further discovery in compliance with Rule 56.07, summary judgment would have nevertheless been appropriate because the discovery he sought was irrelevant to determining whether or not FNMA was entitled to summary judgment. A trial court's decision to deny a request for discovery "must be viewed in the context of the issues being tried and the posture of the case at the time the request for discovery is made." Cardiac Anesthesia Servs., PLLC v. Jones, 385 S.W.3d 530, 538 (Tenn. Ct. App. 2012) (quoting Regions, 310 S.W.3d at 401). Thus, even if Mr. Daniels
The fact that a private mortgage insurance policy was in effect at the time of Ms. Daniels's death in August 2007 would not have had any effect on Mr. Daniels's obligation, having also signed the promissory note as a borrower, to continue making payments to avoid default. The payment history that FNMA submitted along with its motion for summary judgment reflects that he failed to do so. Thus, even viewing the record in the light most favorable to Mr. Daniels and allowing all reasonable inferences in his favor, there is no evidence in the record from which a reasonable person could find that Nationstar wrongfully foreclosed on the property.
In sum, Mr. Daniels's theory that Nationstar wrongfully foreclosed on the property is based on an inaccurate assertion that the Form 1099-A could lead a reasonable person to conclude that Mr. Daniels's debt under the promissory note was discharged prior to foreclosure and an incorrect understanding of private mortgage insurance. The undisputed evidence demonstrates that Mr. Daniels's debt was not discharged, and further discovery related to private mortgage insurance would not have assisted Mr. Daniels in demonstrating any genuine issue of material fact. We therefore conclude for these additional reasons that the Circuit Court did not abuse its discretion in denying Mr. Daniels's discovery requests. The judgment of the Circuit Court is affirmed.
Based on the foregoing, the judgment of the Circuit Court is affirmed. The costs of this appeal are taxed to the Appellant, Danny O. Daniels, and his surety, for which execution may issue if necessary.