{"id":2480,"date":"2025-01-24T13:10:43","date_gmt":"2025-01-24T19:10:43","guid":{"rendered":"https:\/\/thewilsonlawfirm.com\/?p=2480"},"modified":"2025-01-24T14:30:50","modified_gmt":"2025-01-24T20:30:50","slug":"no-common-law-cause-of-action-for-wrongful-foreclosure-in-tennessee","status":"publish","type":"post","link":"https:\/\/thewilsonlawfirm.com\/es\/no-common-law-cause-of-action-for-wrongful-foreclosure-in-tennessee\/","title":{"rendered":"No Common Law Cause of Action for Wrongful Foreclosure in Tennessee"},"content":{"rendered":"<p>In November 2024, the Tennessee Supreme Court in <em>Case v. Wilmington Trust, N.A. et al., <\/em>No. E2021-00378-SC-R11-CV, 2024 Tenn. Lexis 432, (Tenn. Nov. 14, 2024) held that there is no common law cause of action for \u201cwrongful foreclosure\u201d in Tennessee.\u00a0 Over the last two decades, there have been a handful of opinions in Tennessee using \u201cwrongful foreclosure\u201d terminology in decisions leading some to argue that a wrongful foreclosure is an independent cause of action. Here, the Court specifically addressed the issue finding that \u201cwrongful foreclosure\u201d is not a stand-alone claim. <em>Id<\/em>. at 32-41.<\/p>\n<p>The appeal arose from a lawsuit filed by Terry Case (\u201cMr. Case\u201d) in the Chancery Court of Hamilton County, Tennessee which asserted a claim for \u201cwrongful foreclosure,\u201d among others.\u00a0 He claimed the defendants Wilmington Trust, N.A. (\u201cWilmington\u201d) and Wilson &amp; Associates, PLLC (\u201cWilson\u201d) wrongfully foreclosed his property by failing to give him written notice of the postponed sale pursuant to the terms of the notice of sale. The relevant facts that gave rise to his complaint are as follows.\u00a0 Mr. Case was delinquent on his mortgage payments.\u00a0 Wilmington appointed Wilson as substitute trustee and initiated foreclosure.\u00a0 Wilson prepared the notice of sale which was mailed to Mr. Case and published in the newspaper.\u00a0 Prior to the scheduled foreclosure sale, Mr. Case filed suit and obtained a temporary restraining order preventing the sale.\u00a0 As a result of the temporary restraining order, Wilson orally announced the sale\u2019s postponement at the date, time and place of the original sale pursuant to \u00a735-5-101 of the Tennessee Code.\u00a0 On the postponed sale date, the property was sold at foreclosure sale.\u00a0 Mr. Case then amended his complaint and asserted claims for \u201cwrongful foreclosure,\u201d breach of contract, slander of title and to quiet title.\u00a0 He claimed Wilmington and Wilson wrongfully foreclosed the property by failing to give him written notice of the postponed sale pursuant to the terms of the Notice of Sale.<\/p>\n<p>The trial court dismissed the claims for slander of title and to quiet title, and ultimately granted defendants\u2019 motions for summary judgment on the remaining breach of contract and wrongful foreclosure claims. <em>Case v. Wilmington Trust, N.A. et al<\/em>, No. 20-0144 (Tenn. Ch. 2021).\u00a0 \u00a0\u00a0Mr. Case appealed, only challenging the dismissal of the wrongful foreclosure claim. He argued that the defendants failed to provide written notice of the foreclosure sale\u2019s postponement and failed to properly identify the location of the foreclosure sale in its notice of sale. <em>Case v. Wilmington Trust N.A. et al.<\/em>, 2022 Tenn. App. LEXIS 251 (Tenn. App. June 28, 2022). The appellate court held that the lack of written notice of the foreclosure sale postponement was a breach of the deed of trust.\u00a0 Thus, they reversed the trial court\u2019s order granting defendants\u2019 motion for summary judgment as to Mr. Case\u2019s wrongful foreclosure claim and ordered the foreclosure sale be set aside. <em>Id. <\/em>at 40-44.\u00a0 Wilmington then appealed to the Tennessee Supreme Court.<\/p>\n<p>At issue before the Tennessee Supreme Court was whether Mr. Case had standing to bring his claim, whether Tennessee recognizes an independent common law cause of action for wrongful foreclosure and whether the Fannie Mae\/Freddie Mac Uniform Tennessee Deed of Trust requires written notice of postponement in addition to an oral announcement according to section 35-5-101(f) of the Tennessee Code. <em>Case v. Wilmington Trust, N.A. et al., <\/em>No. E2021-00378-SC-R11-CV, 2024 Tenn. Lexis 432, (Tenn. Nov. 14, 2024) \u00a0\u00a0The Court determined that Mr. Case held a private interest in the real property at issue, which is a private right, and that he alleged injuries to his contract rights and property rights.\u00a0 Thus, the Court found Mr. Case to have constitutional standing to bring his claim. Id. at 31.<\/p>\n<p>The Court then tackled whether \u201cwrongful foreclosure\u201d is actionable in Tennessee.\u00a0 \u00a0The court reviewed the history of appellate case law in the state that has used the \u201cwrongful foreclosure\u201d terminology.\u00a0 The Court specifically analyzed the case of <em>Garner v. Coffee Cnty. Bank<\/em>, No. M2014-10956-COA-R3-CV, 2014 Tenn. App. LEXIS 873 (Tenn. App. Oct. 23, 2015) and its reliance on <em>Overholt v. Merchants &amp; Planters Bank<\/em>, 1982 Tenn. App. LEXIS 377 (Tenn. App. March 10, 1982) for the idea that \u201cwrongful foreclosure\u201d can be asserted \u201cas a primary cause of action when a mortgagor asserts that a foreclosure action is improper under a deed of trust.\u201d <em>Wilmington<\/em> at 33-38. \u00a0The Tennessee Supreme Court ultimately disagreed with the Court of Appeals in <em>Garner<\/em>, and all subsequent citations thereto as to its analysis relating to wrongful foreclosure.\u00a0 The Court explained that <em>Overholt <\/em>did not hold that wrongful foreclosure is an independent cause of action under Tennessee law, but merely discussed a bank\u2019s failure to satisfy its obligations under a deed of trust. <em>Id.<\/em> \u00a0In <em>Overholt<\/em>, the court\u2019s decision was based upon whether the bank had complied with the acceleration clause contained within the deed of trust in light of Tennessee law regarding the tender of payment after default.\u00a0 And therefore, the Court here found the <em>Garner<\/em> court\u2019s analysis of <em>Overholt <\/em>does not support the proposition that wrongful foreclosure is an independent common law claim in Tennessee. <em>Id.<\/em><\/p>\n<p>The Court discussed \u201cthere can be breaches of contact, torts and statutory causes of action based on allegations of \u201cwrongful foreclosure,\u201d but the use of the terminology to describe the claim does not transform it into its own separate cause of action.\u201d <em>Id.<\/em> at 38-39. \u00a0The Court analyzed that just as \u201cnegligence\u201d is a cause of action, \u201cbad driving\u201d is not a cause of action.\u00a0 And while \u201cbreach of contract\u201d is a cause of action, \u201cwrongful foreclosure\u201d is merely a description of the breach. <em>Id<\/em>. at 39. \u00a0Analysis was also given to the fact that if Tennessee recognized a common law cause of action for wrongful foreclosure, there would be case law detailing its elements and affirmative defenses, but none exist.\u00a0 The Court\u2019s review of the case law in the state revealed simply that \u201cwrongful foreclosure\u201d is only \u201ca description of the underlying factual basis for the substantive cause of action actually being asserted.\u201d <em>Id.<\/em><\/p>\n<p>Ultimately, the Court was clear to point out that while borrowers who believe their property was wrongfully foreclosed cannot bring a cause of action for wrongful foreclosure, they can still present claims for breach of contract, tort and statutory violations. <em>Id.<\/em> at 40.<\/p>\n<p>Because there is no common law cause of action for wrongful foreclosure in Tennessee, the Court found Mr. Case had no remaining claims in the case. As a result, the Court did not reach the final issue of whether the Fannie Mae\/Freddie Mac Uniform Tennessee Deed of Trust requires written notice of postponement, in addition to an oral announcement, according to section 35-5-101(f) of the Tennessee. Code.\u00a0 The court reversed the Court of Appeals\u2019 decision and remanded the case to the trial court. <em>Id.<\/em> at 41.<\/p>\n<hr \/>\n<p><em>Article by <a href=\"https:\/\/thewilsonlawfirm.com\/es\/attorneys\/courtney-mcgahhey\/\">Courtney McGahhey<\/a> written for the Winter 2025 USFN Report<\/em><\/p>","protected":false},"excerpt":{"rendered":"<p>In November 2024, the Tennessee Supreme Court in Case v. Wilmington Trust, N.A. et al., No. E2021-00378-SC-R11-CV, 2024 Tenn. Lexis 432, (Tenn. Nov. 14, 2024) held that there is no common law cause of action for \u201cwrongful foreclosure\u201d in Tennessee.\u00a0 Over the last two decades, there have been a handful of opinions in Tennessee using <\/p>","protected":false},"author":8,"featured_media":939,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2480","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>No Common Law Cause of Action for Wrongful Foreclosure in Tennessee - The Wilson Law Group<\/title>\n<meta name=\"description\" content=\"Over the last two decades, there have been a handful of opinions in Tennessee using \u201cwrongful foreclosure\u201d terminology in decisions leading some to argue that a wrongful foreclosure is an independent cause of action.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thewilsonlawfirm.com\/es\/no-common-law-cause-of-action-for-wrongful-foreclosure-in-tennessee\/\" \/>\n<meta property=\"og:locale\" content=\"es_MX\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"No Common Law Cause of Action for Wrongful Foreclosure in Tennessee - 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