IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 22, 2012 Session
DAVID A. PACZKO ET AL. v. SUNTRUST MORTGAGES, INC. ET AL.
Appeal from the Chancery Court for Williamson County
No. 39912 D. J. Allissandratos, Chancellor
No. M2011-02528-COA-R3-CV - Filed September 25, 2012
Plaintiffs filed this action seeking to enjoin the foreclosure of their residence and to quiet
title. They also alleged slander of title and violations of the Tennessee Consumer Protection
Act. The trial court dismissed the action upon the defendants’ motions to dismiss for failure
to state a claim. We have determined that TCPA claims do not apply to allegedly deceptive
conduct in foreclosure proceedings, thus the dismissal of the TCPA claim is affirmed. We
have also determined that the plaintiffs never denied that they were in default of the Note and
Deed of Trust and they admitted that, during the pendency of this action, the property was
foreclosed upon and sold, thus they no longer have an interest in the property, which
circumstances render the remaining claims moot. We, therefore, affirm the dismissal of this
action.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
F RANK G. C LEMENT, J R., J., delivered the opinion of the Court, in which P ATRICIA J.
C OTTRELL, P.J., M.S., and R ICHARD H. D INKINS, J., joined.
James Marshall, Spring Hill, Tennessee, and Carol A. Molloy, Lynnville, Tennessee, for the
appellants, David A. Paczko and Barbara M. Paczko a/k/a Barbara McCafferty Paczko.
Kenneth M. Bryant and Kevin C. Baltz, Nashville, Tennessee, for the appellees, Suntrust
Mortgage, Inc., Mortgage Electronic Registration Systems, Inc., and Federal National
Mortgage Association.
Lori L. McGowan, Atlanta, Georgia, for the appellees, Nationwide Trustee Services, Inc.,
Prommis Solutions, LLC, and Johnson and Freedman, LLC.
OPINION
Plaintiffs, David and Barbara Paczko, purchased property at 2750 Rock Wall Road
in Williamson County on April 11, 2008, at which time they executed a promissory note in
the amount of $417,000 (the “Note”) payable to SunTrust Mortgage, Inc. The Note was
secured by a Deed of Trust, which named SunTrust Mortgage, Inc. as the lender and
Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee for the benefit of
SunTrust.
Three years later, Plaintiffs defaulted on the Note and Deed of Trust. Following
Plaintiffs’ default, in June of 2011, MERS executed an Assignment of the Deed of Trust to
SunTrust, which in turn executed an Appointment of Substitute Trustee naming Nationwide
Trustee Services as the Substitute Trustee. Both of these actions were recorded with the
Williamson County Register of Deeds. Thereafter, Nationwide instituted foreclosure
proceedings upon Plaintiffs’ property.
On July 6, 2011, Plaintiffs commenced this action with the filing of a “Complaint To
Restrict And Prohibit Foreclosure, For Damages And For Legal And Equitable Relief” in the
Williamson County Chancery Court seeking injunctive relief to stop the foreclosure and
setting forth claims for slander of title and violations of the Tennessee Consumer Protection
Act, and seeking to quiet title. The named defendants were SunTrust Mortgage Inc., MERS,
Federal National Mortgage Association (“Fannie Mae”), Nationwide, Prommis Solutions,
and Johnson & Freedman, LLC.1 The trial court issued a temporary restraining order on July
14, 2011, staying the foreclosure of the property, which was extended by agreed order
entered on August 26, 2011.
Defendants SunTrust, MERS, and Fannie Mae filed a Tennessee Rule of Civil
Procedure 12.02(6) motion to dismiss. The motion was supported by the affidavits of Mary
C. Jones, an Assistant Vice-President and Pre-Foreclosure Manager for SunTrust, and
Kenneth Bryant, an attorney for the Defendants. Defendants also attached copies of the Deed
of Trust and Note to Bryant’s affidavit and filed certified copies of the Deed of Trust,
Assignment of Deed of Trust, and Appointment of Nationwide as Substitute Trustee. In their
motion, Defendants contended that SunTrust and Nationwide had full authority to initiate
foreclosure proceedings as “holder” of the Note. On August 18, 2011, Defendants
Nationwide, Prommis, and Johnson & Freedman joined in the motion to dismiss. Following
a hearing, the trial court entered an order on September 7, 2011, granting all of the
1
On July 26, 2011, Plaintiffs amended their complaint to add Bank of America as a defendant;
Plaintiffs later took a non-suit as to Bank of America.
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Defendants’ motions to dismiss on the ground that the parties had authority to initiate
foreclosure proceedings as the holder of the Note. Plaintiffs filed a motion to alter or amend,
which the trial court denied. Plaintiffs filed a timely appeal.
A NALYSIS
Plaintiffs raise several issues on appeal. They contend that the trial court committed
error by treating Defendants’ motion as a motion to dismiss rather than a motion for summary
judgment when Defendants submitted evidence outside of the pleadings for the court’s
consideration. Plaintiffs further argue that the trial court erred in granting the motion to
dismiss, that the extrinsic evidence submitted by Defendants in support of their motion was
deficient, and that SunTrust erroneously claimed it was entitled to enforce the Note.
Generally, Plaintiffs argue that their Amended Complaint was sufficient to state a claim to
quiet title, for slander of title, and for violations of the Tennessee Consumer Protection Act.2
However, and significantly, at no time in these proceedings did Plaintiffs deny being in
default of the Note or Deed of Trust.
I. Tennessee Consumer Protection Act
Plaintiffs asserted a claim under the Tennessee Consumer Protection Act in their
complaint, making the following allegations:
31. Defendants [SunTrust], Nationwide, Prommis and [Johnson & Freedman]
are intentionally instituting a foreclosure against the Plaintiffs with full
knowledge that [SunTrust] has no right, title and/or interest in the property
upon which to foreclose.
32. The scheme, intentionally employed by Defendants with full knowledge
that they had no legal right to foreclose upon the property, had the capacity and
tendency to deceive Plaintiffs into believing that [SunTrust] had the right to
foreclose upon their property.
...
35. The acts of Defendants whereby they have purposely provided the
Plaintiffs with conflicting information regarding the servicing and ownership
2
Plaintiffs also sought injunctive relief to prevent foreclosure and the sale of the property before the
trial court. However, as Plaintiffs’ counsel acknowledged during oral argument, the real property was
foreclosed upon and sold while this action was pending in the trial court and Plaintiffs do not raise any issues
related to this issue on appeal.
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of their loan constitutes “unfair and deceptive” business practices as defined
by [Tennessee Code Annotated §] 47-18-104.
The trial court dismissed Plaintiffs’ TCPA claim for failure to state a claim upon
which relief could be granted. We find no error with this decision because the TCPA does
not apply to allegedly deceptive conduct in foreclosure proceedings. Gibson v. Mortgage
Elec. Registration Sys., Inc., No. 11-2173-STA, 2011 WL 3608538, at *5 (W.D. Tenn. Aug.
16, 2011) (quoting Simms v. CIT Group Consumer Fin., No. 08-2655-STA, 2009 WL
973011, at *9 (W.D. Tenn. 2009)) (stating “this Court and others applying Tennessee law
have held that ‘the TCPA does not provide a cause of action for the conduct of
foreclosure”’); see also Hunter v. Washington Mut. Bank, No. 2:08-CV-069, 2008 WL
4206604 (E.D. Tenn. 2008).
In Simms, the district courts relied upon the Tennessee Supreme Court’s decision in
Pursell v. First American National Bank, 937 S.W.2d 838 (Tenn. 1996), in which the court
held that the TCPA did not create a cause of action for deceptive repossession procedures
because the actions of a bank and its agent in carrying out a repossession “did not affect the
‘advertising, offering for sale, lease or rental, or distribution of any goods, services, or
property, tangible or intangible, real, personal, or mixed, and other articles, commodities, or
things of value wherever situated.”’ Simms, 2009 WL 973011, at *9 (quoting Pursell, 937
S.W.2d at 841). As noted in Pursell, the TCPA “does not extend to every action of every
business in the state of Tennessee.” Pursell, 937 S.W2d at 941. Accordingly, we affirm the
dismissal of Plaintiffs’ TCPA claim.
II. Slander of Title & Action to Quiet Title
Plaintiffs also alleged a claim for slander of title and a corresponding claim to quiet
title. A successful claim for slander of title requires: “(1) that the [plaintiff] has an interest
in the property, (2) that the defendant published false statements about the title to the
property, (3) that the defendant was acting maliciously, and (4) that the false statements
proximately caused the plaintiff a pecuniary loss.” Brooks v. Lambert, 15 S.W.3d 482, 484
(Tenn. Ct. App. 1999). One may bring an action to quiet title in realty but to do so he or she
must have an interest in the property at issue. See Indus. Dev. Bd. of City of Tullahoma v.
Hancock, 901 S.W.2d 382, 385 (Tenn. Ct. App. 1995); see also Hall v. Fowler, No.
W2006-00385-COA-R3-CV, 2007 WL 4554651, at *5 (Tenn. Ct. App. Dec. 28, 2007).
Plaintiffs have acknowledged that the property was foreclosed upon and sold while
this action was pending and they are not seeking to recover the property. Therefore Plaintiffs
no longer have any interest in “the property.” “Cases must be justiciable not only when they
are first filed but must also remain justiciable throughout the entire course of the litigation,
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including the appeal.” McIntyre v. Traughber, 884 S.W.2d 134, 137 (Tenn. Ct. App. 1994)
(citing Lewis v. Continental Bank Corp., 494 U.S. 472, 477 (1990); Kremens v. Bartley, 431
U.S. 119, 128–29 (1977); 13A Charles A. Wright et al., Federal Practice and Procedure §§
3533, 3533.10 (2d ed. 1984)) (emphasis added). Plaintiffs’ claims for slander of title and to
quiet title were justiciable when this action was commenced; however, these claims are no
longer justiciable because Plaintiffs no longer have an interest in “the property.” Accordingly
these claims are moot. See McIntyre, 884 S.W.2d at 137 (citing Davis v. McClaran, App. No.
01–A–01–9304– CH–00164, 1993 WL 523667, at *2 (Tenn. Ct. App. Dec. 10, 1993)
(“[m]ootness is a doctrine of justiciability”); Federal Practice and Procedure § 3533, at
211).
III. Claim for Monetary Damages
As noted previously, Plaintiffs acknowledged they were in default on the Note and,
although they challenged the right of SunTrust to initiate and pursue foreclosure proceedings,
the property was foreclosed upon and sold while this action was pending. Further, Plaintiffs
do not seek to recover the property. Nevertheless, Plaintiffs seek to recover monetary
damages as they pertain to the foreclosure on their now former property. Plaintiffs have
presented several creative theories upon which they claim to be entitled to pursue monetary
damages; we find no merit to these theories.
In Conclusion
Although some of our rulings in this appeal are based on different grounds than those
relied upon by the trial court in dismissing Plaintiffs’ claims, we affirm the decision to
dismiss all of Plaintiffs’ claims in this action.3 Accordingly, the judgment of the trial court
is affirmed and this matter is remanded with costs of appeal assessed against the Appellants.
______________________________
FRANK G. CLEMENT, JR., JUDGE
3
“The Court of Appeals may affirm a judgment on different grounds than those relied on by the trial
court when the trial court reached the correct result.” City of Brentwood v. Metropolitan Bd. of Zoning
Appeals, 149 S.W.3d 49, 60 n.18 (Tenn. Ct. App. 2004).
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