Brown v. Tennessee Title Loans, Inc.

IN THE SUPREME COURT OF TENNESSEE
AT KNOXVILLE
September 2, 2010 Session

DAWN BROWN ET AL. v. TENNESSEE TITLE LOANS, INC.

Appeal by Permission from the Court of Appeals, Eastern Section
Circuit Court for Hamilton County
No. 04C1682 Jacqueline E. Bolton, Judge

No. E2008-01758-SC-R11-CV - Filed November 29, 2010

We granted this interlocutory appeal to answer a single question of first impression: whether
the Tennessee Title Pledge Act, Tenn. Code Ann. §§ 45-15-101 to -120 (2000), permits a
private right of action on behalf of pledgors against title pledge lenders who allegedly
charged excessive interest and prohibited fees. The trial court granted the defendant’s
motion to dismiss plaintiffs’ Title Pledge Act allegations for failure to state a claim, and the
Court of Appeals reversed. We hold that the Title Pledge Act does not expressly create an
individual private right of action, and plaintiffs have not carried their burden of establishing
that the legislature intended to imply such a right. Accordingly, we reverse the judgment of
the Court of Appeals and reinstate the judgment of the trial court.

Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals
Reversed and Case Remanded to the Circuit Court for Hamilton County

C ORNELIA A. C LARK, C.J., delivered the opinion of the Court, in which J ANICE M. H OLDER,
G ARY R. W ADE, W ILLIAM C. K OCH, J R., and S HARON G. L EE, JJ., joined.

J. Bartlett Quinn, Stephen D. Barham, and Justin L. Furrow, Chattanooga, Tennessee, for the
appellant, Tennessee Title Loans, Inc.

James R. Kennamer, Chattanooga, Tennessee, for the appellees, Dawn Brown, Anne Devries,
Carly Hahn, and Greg Walton.
 OPINION

Background

Dawn Brown, Anne Devries, Carly Hahn, and Greg Walton (“Plaintiffs”) filed the
initial complaint in this action on October 27, 2004, and then filed an amended complaint on
January 31, 2005. Because the case comes to us in the posture of Tennessee Title Loans,
Inc.’s (“Defendant”) motion to dismiss the amended complaint for failure to state a claim,
we accept the allegations of the amended complaint as true. See Leach v. Taylor, 124
S.W.3d 87, 90 (Tenn. 2004). Plaintiffs brought this case as a putative class action on behalf
of all those who had a title pledge loan with Defendant and paid interest or fees on that loan
“within the year preceding the filing of this Complaint and thereafter.” In the title pledge
transaction, Defendant loaned money to each Plaintiff in exchange for a security interest in
Plaintiff’s motor vehicle. Each Plaintiff delivered the certificate of title for his/her vehicle
to Defendant while retaining possession of the vehicle for the duration of the loan agreement.
Upon paying the total amount due within a specified period of time, each Plaintiff had the
right to redeem his/her vehicle title. If any Plaintiff defaulted on the loan, Defendant had the
right to take possession of that Plaintiff’s vehicle and to sell the vehicle after the expiration
of a grace period.

The amended complaint alleged that Plaintiffs and putative class members were
charged interest in excess of the statutory maximum set forth in the Tennessee Title Pledge
Act (“TTPA”) and/or charged fees not allowed by the TTPA. See Tenn. Code Ann. § 45-15-
111(a) (2000). Specifically, Defendant allegedly charged a prohibited “redemption premium
fee” for redeeming the loan, calculated based on the date the loan was paid. The amended
complaint alleged a violation of the TTPA because the redemption premium fee was not
allowed. See id. It also alleged a violation of the Tennessee Consumer Protection Act
(“TCPA”), Tenn. Code Ann. §§ 47-18-101 to -125 (2001), because Defendant
misrepresented to Plaintiffs that the redemption premium fee was lawful under the TTPA.
Plaintiffs sought class certification pursuant to Tennessee Rule of Civil Procedure 23.
Among their requested remedies, Plaintiffs requested rescission of the title pledge loan
agreements and an award of punitive damages for Defendant’s fraud.

Defendant originally moved to compel arbitration, citing identical clauses in the title
pledge agreements signed by each of the Plaintiffs. The trial court granted the motion to
compel arbitration. Subsequently, the trial court granted Plaintiffs’ application for
permission to file an interlocutory appeal, see Tenn. R. App. 9. The Court of Appeals
granted Plaintiffs’ request for an interlocutory appeal and ultimately reversed, holding that
the arbitration clause was unconscionable and unenforceable because it reserved access to
a judicial forum for Defendant but restricted Plaintiffs to arbitration. See Brown v. Tenn.

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Title Loans, Inc., 216 S.W.3d 780, 787 (Tenn. Ct. App. 2006) (citing Taylor v. Butler, 142
S.W.3d 277 (Tenn. 2004)), perm. app. denied (Feb. 26, 2007).

Defendant filed its motion to dismiss for failure to state a claim on April 26, 2007.
Defendant argued that the facts alleged by Plaintiffs, including the contents of the loan
agreements that Plaintiffs attached as exhibits to their pleadings, established that Defendant
did not violate the TTPA by charging prohibited fees or excessive interest.

Although the parties had not originally raised the issue, the trial court subsequently
requested that the parties file supplemental briefs on the question of whether a private right
of action existed under the TTPA.1 On May 19, 2008, the trial court issued an order
dismissing the individual and classwide TTPA claims because the TTPA provided no private
right of action. The trial court also dismissed the class allegations under the TCPA in light
of this Court’s holding that TCPA claims are inappropriate for class certification.2 See
Walker v. Sunrise Pontiac-GMC Truck, Inc., 249 S.W.3d 301, 313 (Tenn. 2008). The trial
court did not dismiss the individual TCPA claims.

The trial court then granted Plaintiffs’ application for permission to file an
interlocutory appeal pursuant to Tennessee Rule of Appellate Procedure 9 on the issue of
whether the TTPA provides a private right of action. The Court of Appeals granted
Plaintiffs’ application for permission to appeal and stayed proceedings in the trial court. The
intermediate court then reversed the judgment of the trial court, holding that the TTPA “does
create a private right of action in favor of pledgors for violations of the [TTPA] by predatory
lenders.” See Brown v. Tenn. Title Loans, Inc., No. E2008-01758-COA-R9-CV, 2009 WL
2213487, at *6 (Tenn. Ct. App. July 24, 2009).

Standard of Review

A motion to dismiss a complaint for failure to state a claim filed pursuant to
Tennessee Rule of Civil Procedure 12.02(6) “‘admits the truth of all of the relevant and
material allegations contained in the complaint, but it asserts that the allegations fail to

1
According to Defendant’s supplemental briefing in the trial court, the issue regarding the private
right of action first arose during a February 26, 2008 hearing on Plaintiffs’ motion to compel discovery.
Plaintiffs’ counsel informed the trial court that he intended to dismiss the TCPA claim because it could not
be certified on a classwide basis. Defendant’s counsel then asked the trial court to dismiss the entire
litigation, arguing that the TTPA did not provide for a private right of action. The trial court deferred its
ruling until the parties filed their supplemental briefs. The transcript of the February 26, 2008 hearing is not
part of the record.
2
This issue has not been appealed.

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establish a cause of action.’” Freeman Indus., LLC v. Eastman Chem. Co., 172 S.W.3d 512,
516 (Tenn. 2005) (quoting Leach, 124 S.W.3d at 90). We accept as true all factual
allegations in the complaint. Id. We review de novo the trial court’s legal conclusions,
including the determination that the TTPA does not contain a private right of action. Tenn.
R. App. P. 13(d); Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997).

Analysis

Determining whether a statute creates a private right of action is a matter of statutory
construction. Premium Fin. Corp. of Am. v. Crump Ins. Servs. of Memphis, Inc., 978
S.W.2d 91, 93 (Tenn. 1998). Our essential duty in statutory construction is to determine and
implement the legislature’s intent without limiting or expanding the statute’s coverage
beyond what the legislature intended. Id.; Hawks v. City of Westmoreland, 960 S.W.2d 10,
16 (Tenn. 1997). When the existence of a private right of action depends on the contents of
the statute, “our courts are not privileged to create such a right under the guise of liberal
interpretation of the statute.” Premium Fin. Corp., 978 S.W.2d at 93; see Hogan v.
McDaniel, 319 S.W.2d 221, 223 (Tenn. 1958) (“Judicial legislation has long been regarded
by the legal profession as unwise, if not dangerous business.”). The authority to create a
private right of action pursuant to statute is the province of the legislature. Premium Fin.
Corp., 978 S.W.2d at 93; Reed v. Alamo Rent-a-Car, Inc., 4 S.W.3d 677, 689 (Tenn. Ct.
App. 1999).

To determine whether the legislature intended to create a private right of action for
excessive interest and prohibited fees, we begin with the express statutory language. See
Ergon, Inc. v. Amoco Oil Co., 966 F. Supp. 577, 584 (W.D. Tenn. 1997); Premium Fin.
Corp., 978 S.W.2d at 93. Here, there is no dispute that the express language of the TTPA
does not create such a right of action on behalf of a title pledgor against a title pledge
lender—whether in the specific section prescribing the interest and fees that title pledge
lenders may charge, Tenn. Code Ann. § 45-15-111(a), or elsewhere.3

If a statute does not expressly create a private right of action, our next inquiry is
whether the legislature otherwise indicated an intention to imply such a right in the statute.
Premium Fin. Corp., 978 S.W.2d at 93; Reed, 4 S.W.3d at 689. In this analysis, we look to
the statutory structure and legislative history. Id. Appropriate factors to consider include (1)

3
By contrast, the legislature expressly granted a private right of action in the TCPA. Under that
statute, “[a]ny person who suffers an ascertainable loss . . . as a result of the use or employment by another
person of an unfair or deceptive act or practice declared to be unlawful by this part, may bring an action
individually to recover actual damages.” Tenn. Code Ann. § 47-18-109(a)(1) (2001); see Myint v. Allstate
Ins. Co., 970 S.W.2d 920, 925 (Tenn. 1998).

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whether the party bringing the cause of action is an intended beneficiary within the protection
of the statute, (2) whether there is any indication of legislative intent, express or implied, to
create or deny the private right of action, and (3) whether implying such a remedy is
consistent with the underlying purposes of the legislation.4 Ergon, 966 F. Supp. at 583-84;
Buckner v. Carlton, 623 S.W.2d 102, 105 (Tenn. Ct. App. 1981), superseded by statute on
other grounds, Act of May 24, 1984, ch. 972, 1984 Tenn. Pub. Acts 1026, as recognized in
Lucas v. State, 141 S.W.3d 121, 129, 137 (Tenn. Ct. App. 2004); see Premium Fin. Corp.,
978 S.W.2d at 93. The burden ultimately falls on the plaintiff to establish that a private right
of action exists under the statute. Premium Fin. Corp., 978 S.W.2d at 93 (citing Ergon, 966
F. Supp. at 585); Gillespie v. City of Memphis, No. W2007-01786-COA-R3-CV, 2008 WL
2331027, at *9 (Tenn. Ct. App. June 5, 2008).

Overview of Statutory Scheme 5

The General Assembly originally enacted the TTPA in 1995, following a United
States Bankruptcy Court decision holding that a title pledge loan did not satisfy the
requirements of a “pawn transaction” under the Tennessee Pawnbrokers Act, Tenn. Code
Ann. §§ 45-6-201 to -220 (1993). See Act of April 20, 1995, ch. 186, § 13, 1995 Tenn. Pub.
Acts 266, 270-76 (codified as amended at Tenn. Code Ann. §§ 45-15-101 to -120 (2000));
Lynn v. Fin. Solutions Corp. (In re Lynn), 173 B.R. 894, 900 (Bankr. M.D. Tenn. 1994).
According to the TTPA’s original statement of purpose:

The making of title pledge loans vitally affects the general economy of this
state and the public interest and welfare of its citizens. It is the policy of this
state and the purpose of this chapter to:

(1) Ensure a sound system of making title pledge loans through
licensing of title pledge lenders;

4
These factors originally appeared in the United States Supreme Court’s opinion in Cort v. Ash,
which set forth the standard for determining whether a private right of action is implicit in a federal statute.
See 422 U.S. 66, 78 (1975). Cort also articulated a fourth factor—whether the cause of action is traditionally
relegated to state law—which is inapplicable to the interpretation of state statutes and, therefore, omitted
from the analysis. See Ergon, 966 F. Supp. at 584 n.9. Buckner was the first Tennessee decision to analyze
the three applicable Cort factors to determine whether a Tennessee statute implied a private right of action.
5
Plaintiff filed the original complaint on October 27, 2004 and then filed the amended complaint on
January 31, 2005. The TTPA was amended later in 2005. See Act of May 27, 2005, ch. 440, 2005 Tenn.
Pub. Acts 1045. The parties do not dispute that, in determining whether a private right of action existed
when Plaintiffs filed this action, we consider the version of the TTPA that existed before the enactment of
the 2005 amendments. Accordingly, we discuss that prior version of the statute in our overview of the
statutory scheme.

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 (2) Provide for licensing requirements;
(3) Ensure financial responsibility to the public; and
(4) Assist local governments in the exercise of their police
power.

Tenn. Code Ann. § 45-15-102 (2000). These purposes are regulatory and penal in nature.
See Premium Fin. Corp., 978 S.W.2d at 94.

The TTPA legalizes loans by licensed title pledge lenders on pledges of personal
property certificates of title and pledges of titled personal property. Id. § 45-15-104(a)
(2000). Among other provisions, the TTPA sets forth the eligibility requirements necessary
to obtain a license, id. § 45-15-106 (2000), and prescribes the contents of the petition for the
license that the would-be lender must submit to the county clerk in the county where the
lender will operate, id. § 45-15-107 (2000). Lenders must record all loan agreements that
they execute, making those records available for inspection by municipal and county law
enforcement, id. § 45-15-109(a), (c) (2000), and must also record all liens on the certificate
of title in a title pledge transaction, id. § 45-15-110 (2000). The TTPA further caps the
length of pledge agreements at thirty (30) days, permitting renewals for thirty-day periods in
most circumstances;6 allows the lender to take possession of titled property if the pledgor
defaults; and prescribes a twenty-day holding period before the lender may sell the
unredeemed property. Id. §§ 45-15-113(a), -114(b) (2000).

Section 45-15-111(a), the provision that Defendant allegedly violated in this case,
caps the interest that title pledge lenders may charge at two percent (2%) per month. It also
allows lenders to charge “a customary fee to defray the ordinary costs of operating a title
pledge office.” Id. That fee must not exceed one-fifth of the original principal amount of
the loan, or of the total unpaid balance due at the beginning of any renewal. Id. The TTPA
separately enumerates other “[p]rohibited actions” by title pledge lenders in section 45-15-
115 (2000).7 The legislative councils of incorporated municipalities, cities, and tax districts

6
Pledge agreements may not be renewed if the pledgor has redeemed the property or title certificate,
surrendered all interest in the property to the lender, or defaulted on the agreement, or if the lender has
previously notified the pledgor in writing that the agreement will not be renewed. Tenn. Code Ann. § 45-15-
113(a)(1)-(4).
7
Title pledge lenders are prohibited from: (1) accepting pledges from underaged or intoxicated
persons, or those known to have been convicted of certain felonies; (2) agreeing to any recourse other than
taking possession of the titled property and selling the property if the pledgor defaults; (3) loaning more than
$2,500 in pledge for any single certificate of title; (4) accepting a pledgor’s waiver of any statutory right or
protection; (5) failing to exercise reasonable care in protecting property in the lender’s possession; (6)
(continued...)

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may adopt additional rules and regulations, although they may not regulate in certain
enumerated areas already covered by the statute.8 Id. § 45-15-118 (2000).

At the time Plaintiffs filed this action, the TTPA provided for enforcement of its
provisions entirely through criminal and administrative penalties. Id. § 45-15-117 (2000).
A knowing violation of the TTPA is a class A misdemeanor. Id. § 45-15-117(a).
Additionally, through the 1996 amendments, the county clerk, at the direction of the
department of financial institutions, shall suspend the license of a title pledge lender who
knowingly violates department rules that require the lender to issue a standardized
notification and disclosure form prior to executing a loan agreement. Act of Mar. 21, 1996,
§ 3, 1996 Tenn. Pub. Acts at 227 (codified at Tenn. Code Ann. § 45-15-117(b)(1)). A
repeated, persistent pattern of knowing violations of those rules will result in a longer
suspension and potentially a revocation of the license altogether.9 Id. We have previously
stated, “[w]here an act as a whole provides for governmental enforcement of its provisions,
we will not casually engraft means of enforcement of one of those provisions unless such
legislative intent is manifestly clear.” Premium Fin. Corp., 978 S.W.2d at 94; see Thomas
& Assocs., Inc. v. Metro. Gov’t, No. M2001-00757-COA-R3-CV, 2003 WL 21302974, at
*10 (Tenn. Ct. App. June 6, 2003); Reed, 4 S.W.3d at 690.

Having concluded our overview of the statutory structure, we now turn to the three
factors relevant to deciding whether the legislature intended to imply a private right of action
in the TTPA.

7
(...continued)
purchasing titled personal property in business operations; (7) maintaining more than one place of operation
per lender per license; (8) remaining open outside of specified hours of operation; (9) knowingly violating
the requirement to issue a disclosure and notification form prior to executing the loan agreement, in
compliance with regulations promulgated by the department of financial institutions; and (10) entering a
pledge agreement with a pledgor who does not present clear title to the pledged property. Tenn. Code Ann.
§ 45-15-115.
8
Local governments cannot regulate in the areas of interest or fees, operating hours, nature of the
title pledge lender’s business or the types of agreements, pledgor eligibility, or license requirements. Tenn.
Code Ann. § 45-15-118.
9
Accordingly, prior to the promulgation of the department’s regulations pursuant to the 1996
amendments, the TTPA “contain[ed] no [civil] sanctions for a violation” of the statute, Henley v. Cameron
Auto Pawn (In re Henley), 228 B.R. 425, 427 (Bankr. E.D. Ark. 1998), but was enforced entirely through
criminal prosecution for knowing violations of its provisions.

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 Plaintiffs as Intended Beneficiaries

The first factor is whether the party bringing the cause of action is an intended
beneficiary within the protection of the statute. Pledgors such as Plaintiffs are within the
protection of the TTPA and stand to benefit from its provisions. The TTPA prohibits the title
pledge lender from “[a]ccept[ing] any waiver . . . of any right or protection accorded a
pledgor” under the statute. Tenn. Code Ann. § 45-15-115(4). The legislative history
confirms that pledgors are the intended beneficiaries of the TTPA. In particular, Senator
Cooper, the sponsor of the 1995 Act, explained that section 45-15-111(a)’s cap on the
interest and fees that lenders could charge incidental to the loan was intended to protect the
pledgor-consumer.

The mere fact that the legislature enacted the TTPA to protect and benefit pledgors
is not alone sufficient, however, to imply a private right of action. See Ellison v. Cocke
Cnty., Tenn., 63 F.3d 467, 470 (6th Cir. 1995); Reed, 4 S.W.3d at 689-90. We must also
consider the remaining two factors in the inquiry.

Legislative Intent

The second factor is whether there is any indication of legislative intent, express or
implied, to create or deny a private right of action. Plaintiffs bear the burden of establishing
the evidence of legislative intent to create such a right.

We have reviewed the TTPA’s entire legislative history and found nothing that would
support Plaintiffs’ contention that the legislature intended to imply a private right of action
in the TTPA. As noted previously, the stated purposes were regulatory and penal in nature.
According to Senator Cooper, the cap on fees came about after district attorneys general had
threatened prosecution of title pledge lenders for price-gouging if the lenders did not “clean
up their act.” Nothing in Senator Cooper’s comments suggests that, in addition to the
criminal penalties for knowing violations of the TTPA, the legislature intended to allow
private enforcement of the fee cap. Therefore, Plaintiffs can point to nothing in the
legislative history that would make it “manifestly clear” that the legislature intended to
engraft a private right of action onto the governmental means of enforcement provided for
in the TTPA. See Premium Fin. Corp., 978 S.W.2d at 94.

While we recognize that “legislative inaction is generally irrelevant to the
interpretation of existing statutes,” Freeman Indus., LLC, 172 S.W.3d at 519, we also note
that “nonaction by a legislative body . . . may become significant where proposals for
legislative change have been repeatedly rejected.” Jo Ann Forman, Inc. v. Nat’l Council on
Comp. Ins., Inc., 13 S.W.3d 365, 373 (Tenn. Ct. App. 1999). To that end, Defendant directs

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our attention to at least eight bills introduced since the enactment of the 2005 amendments
that would expressly grant a private right of action to title pledge borrowers against title
pledge lenders but that have not become law. See 2009 Tenn. S.B. 1766; 2009 Tenn. S.B.
1765; 2009 Tenn H.B. 1498; 2009 Tenn H.B. 1497; 2007 Tenn. S.B. 1584; 2007 Tenn. S.B.
1558; 2007 Tenn. H.B. 2132; 2007 Tenn. H.B. 1984. As a representative example, House
Bill 1984, originally introduced in the 105th General Assembly on February 15, 2007, would
replace the existing section 45-15-119 with a new provision that begins as follows:

In addition to the administrative remedies provided in the preceding section,
any title pledge borrower aggrieved by a violation of any of the provisions of
this title by a title pledge lender shall be entitled to bring a civil lawsuit against
such title pledge lender in a court of competent jurisdiction within two (2)
years of the reasonable date discovery [sic] of such violation.

Speaking before the Utilities, Banking, and Small Business Subcommittee of the House
Commerce Committee and before a summer study committee, Webb Brewer, who drafted
the model legislation that became House Bill 1984 at the request of Deputy Speaker Turner,
stated his understanding that the TTPA lacked an express right of action as presently
written.10 He further opined that the TTPA was ambiguous as to whether such right of action
existed because the TTPA “doesn’t speak to that at all.” In the 106th General Assembly,
House Bill 1498, containing identical language on the express private right of action, failed
in the Utilities and Banking Subcommittee of the House Commerce Committee. Therefore,
following the enactment of the 2005 amendments, despite the legislature’s knowledge of the
ambiguous silence in the existing statute, it has repeatedly considered and ultimately refused
to adopt a provision that would expressly create a private right of action under the TTPA and
establish a two-year statute of limitations for a title pledgor to bring a civil action against a
title pledge lender for a TTPA violation.11

Ulitmately, we conclude that the TTPA’s history does not indicate a legislative intent,
whether express or implied, to create a private right of action for excessive interest and
prohibited fees. We now turn to the third and final factor of the inquiry.

10
At the time that Mr. Brewer appeared before these committees, he was Litigation Director for
Memphis Area Legal Services.
11
This proposed language is similar to what the legislature included in the TCPA (and other statutes).
That language has been available to the legislature even before it originally enacted the TTPA in 1995.
Despite being presumptively aware of the language that it has used to create express private rights of action
in other statutory schemes, the legislature has not yet included that language in the TTPA.

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 Underlying Purposes

The third and final factor is whether an implied right of action would be consistent
with the purposes of the statute. The TTPA was enacted to establish a “sound system of
making title pledge loans through licensing of title pledge lenders,” which included the
creation of “licensing requirements.” Tenn. Code Ann. § 45-15-102(1)-(2). While the TTPA
sought to “[e]nsure financial responsibility to the public,” it achieved that financial
responsibility by “[a]ssist[ing] local governments in the exercise of their police power.” Id.
§ 45-15-102(3)-(4). The TTPA empowers local governments to exercise their police power
by criminal sanctions. A knowing violation of “any of the provisions” of the TTPA is a class
A misdemeanor, id. § 45-15-117, punishable by imprisonment and/or fine, id. § 40-35-
111(e)(1) (2010). In addition to these criminal penalties, a knowing violation of rules
concerning the issuance of standardized forms prior to executing a pledge agreement will
result in the suspension and potentially the revocation of the lender’s license. Id. § 45-15-
117(b). In short, the TTPA was designed to regulate the title pledge lending industry,
especially through the licensure of lenders, and was governmentally enforced through
criminal and administrative sanctions.

The courts of this state have refused to imply a private right of action in regulatory
statutes enforced through governmental remedies. Our jurisprudence reflects the United
States Supreme Court’s maxim that “it is an elemental canon of statutory construction that
where a statute expressly provides a particular remedy or remedies, a court must be chary of
reading others into it.” Transam. Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979); see
Ellison, 63 F.3d at 470 (describing courts as “especially reluctant” to imply additional
remedies in a statute that expressly provides a remedy). Accordingly, in Premium Finance
Corp., we determined that the Premium Finance Company Act was “structured so as to
evince a clear design to regulate the premium finance industry” and accomplished that
regulatory function through many of the same mechanisms used in the TTPA: requiring
companies to be licensed, prescribing the contents of financial agreements, and setting
interest rates. 978 S.W.2d at 94. The act’s enforcement provisions were limited to criminal
sanctions and administrative penalties. Id. Because the “act as a whole provide[d] for
governmental enforcement of its provisions,” we declined to “casually engraft means of
enforcement of one of those provisions unless such legislative intent is manifestly clear.”
Id. We found no such manifestly clear intention and dismissed a premium finance
company’s claim under the act against the defendant insurers for failure to return unearned
premiums. Id.

Similarly, in Petty v. Daimler/Chrysler Corp., the Court of Appeals reviewed
Tennessee’s motor glass vehicle safety statute. 91 S.W.3d 765, 768 (Tenn. Ct. App. 2002),
perm. app. denied (Sept. 9, 2002). That statute was codified “[a]s part of the equipment and

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lighting regulations for motor vehicles,” required the use of safety glass in motor vehicles,
and authorized the commissioner of the department of safety to approve particular types of
glass as safety glass. Id. The statute’s sole remedy lay with the commissioner, who had the
authority to suspend the registration of a motor vehicle that did not comply. Id. Because
“[t]he only remedy provided by the statute [was] to be had by the State,” the Court of
Appeals held that the plaintiff car purchaser had no private right of action against the
defendant car manufacturer. Id.

Finally, in Reed v. Alamo Rent-A-Car, Inc., the Court of Appeals reviewed a
provision of the Tennessee Workers’ Compensation Law concerning the commissioner of
labor’s establishment of a case management system to coordinate medical care. 4 S.W.3d
677, 689 (Tenn. Ct. App. 1999), perm. app. denied (Oct. 4, 1999). The intermediate court
explained that, “[v]iewed in its entirety, the Workers’ Compensation Law provides for
governmental enforcement of its provisions,” including the department of labor’s
establishment and collection of penalties for certain violations. Id. at 690. Therefore, even
though the Court of Appeals acknowledged that the plaintiff employee was an intended
beneficiary of the statute, it “decline[d] to . . . engraft additional requirements onto the
enforcement scheme designed by the legislature.” Id. Accordingly, the court held there was
no implied private right of action against plaintiff’s employer for negligent performance of
case management duties. Id.12

Like the statutory schemes analyzed in these cases, the TTPA is a regulatory statute
enforced through governmental remedies. Accordingly, the implication of a private right of
action would be inconsistent with the TTPA’s purposes as set forth by the legislature.

Existence of Statute of Limitations

Notwithstanding the analysis above, Plaintiffs attempt to satisfy their burden of
establishing that the legislature intended to imply a private right of action by invoking the
TTPA’s statute of limitations: “[n]o action shall be brought by a pledgor against a title pledge
lender in connection with a title pledge agreement or property pledge agreement more than
one (1) year after the date of the alleged occurrence of any violation of this chapter.” Tenn.
Code Ann. § 45-15-104(b). In other words, Plaintiffs argue that the mere inclusion of a

12
But see Owens v. Univ. Club of Memphis, No. 02A01-9705-CV-00103, 1998 WL 719516, at *11
(Tenn. Ct. App. Oct. 15, 1998) (inferring private right of action in tip statute, Tenn. Code Ann. § 50-2-107
(1991), on behalf of plaintiff service employees because statute was intended to protect them and private
right would “complement[] the [criminal] remedy in the statute by providing a mechanism to make
employees whole”) (no Tenn. R. App. P. 11 application filed).

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statute of limitations is tantamount to implied legislative intent to create a private right of
action.

Plaintiffs provide no case law to support the proposition that a statute of limitations
provision should be alone sufficient to imply a private right of action. Indeed, Plaintiffs rely
on a case involving a statutory scheme that, by their own admission, did not have a statute
of limitations. In Pratt v. Smart Corp., the Court of Appeals held that the Medical Records
Act of 1974 authorized a private cause of action by a patient against the independent copying
service that processed the plaintiff’s request for her hospital records and allegedly charged
unreasonable fees. 968 S.W.2d 868, 872-73 (Tenn. Ct. App. 1997). The Court of Appeals
held that the Medical Records Act “clearly contemplates private actions to remedy violations
of its terms” because the statute contained a “provision for the recovery of ‘actual damages
in a civil action for willful or reckless or wanton’ violations” of the statute. Id. at 872-73
(quoting Tenn. Code Ann. § 68-11-311(b) (1992)). Because the Medical Records Act has
no statute of limitations and because the version of the TTPA in effect here had no provision
for the recovery of actual damages for violations of any of its terms, Pratt is unhelpful in
resolving the question before us.

Additionally, Plaintiffs have not cited, and we have not independently discovered, any
Tennessee decision inferring a private right of action in a statutory scheme with its own
statute of limitations. Therefore, we have reviewed decisions from other jurisdictions
concerning implied rights of action in statutory schemes that contain a limitations provision
(or some other language prescribing the time in which suit may be brought). The results,
admittedly, are mixed. Compare Davenport v. Wash. Educ. Ass’n, 197 P.3d 686, 691, 695
(Wash. Ct. App. 2008) (holding that statutory provision did not confer express or implied
right of action, where another provision in the statutory scheme imposed a five-year statute
of limitations), cert. granted, 166 Wash. 2d 1005 (Wash. 2009), and Miller v. Weaver, 66
P.3d 592, 598 (Utah 2003) (refusing to find implied private right of action for statutory
violations on the basis of “mere allusion” to bringing a civil action in a staying provision),
with Bailey v. Defenbaugh & Co. of Cleveland, Inc., 513 F. Supp. 232, 240-41 (N.D. Miss.
1981) (finding an implied right of action because the statutory scheme contained a limitations
provision and, therefore, exclusive enforcement by the state would defeat legislative intent).

As we stated in Premium Finance Corp., “[a]lthough the decisions of our sister states
are persuasive, they do not substitute for our own stated principles for determining whether
a statute creates a cause of action.” 978 S.W.2d at 93. “We must give effect to every word,
phrase, clause, and sentence in constructing a statute.” Cohen v. Cohen, 937 S.W.2d 823,
828 (Tenn. 1996). The legislative history is entirely silent concerning the statute of
limitations provision in section 45-15-104(b). Here, instead of creating a private right of
action, the TTPA’s statute of limitations has the effect of modifying the general statutes of

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limitations that would otherwise apply to causes of action that title pledgors can bring under
the common law “in connection with” a title pledge agreement. See Tenn. Code Ann. § 45-
15-104(b). Pursuant to Tennessee Code Annotated section 28-3-101 (2000), “[a]ll civil
actions . . . shall be commenced after the cause of action has accrued, within the periods
prescribed in this chapter, unless otherwise expressly provided.” (Emphasis added).

Accordingly, if the TTPA did not have its own limitations provision, the statutes of
limitations set forth in Title 28, Chapter 3 would control. For example, without the TTPA’s
statute of limitations, title pledgors would have six years after the accrual of a cause of action
for breach of contract to bring suit against the title pledge lender. See Tenn. Code Ann. § 28-
3-109(a)(3) (2000). Similarly, title pledgors would ordinarily have three years from accrual
to bring an action for common-law fraud, see id. § 28-3-105(1) (2000), and/or conversion,
see id. § 28-3-105(2). However, the TTPA “otherwise expressly provide[s]” the time in
which title pledgors may bring their actions. Therefore, when the title pledgor brings a
common law action against a title pledge lender “in connection with a title pledge
agreement,” id. § 45-15-104(b), the specific one-year statute of limitations in the TTPA
prevails over the general statutes of limitations in Title 28, Chapter 3.13 See Dobbins v.
Terrazzo Mach. & Supply Co., 479 S.W.2d 806, 809 (Tenn. 1972); see also Brewer v.
Lincoln Brass Works, Inc., 991 S.W.2d 226, 229-30 (Tenn. 1999). This construction gives
effect to the TTPA’s statute of limitations while respecting the legislature’s decision to
enforce the statute through criminal penalties and its silence concerning its intentions
whether to create a private right of action.

The subsequent history of the TTPA supports the conclusion that the legislature did
not intend to imply a private right of action in the version of the statute that was in effect
when Plaintiffs filed this action. The 2005 amendments included express private rights of
action in two specific circumstances. First, where the title pledge lender makes a loan
without a license, that loan is void, and the statute allows the pledgor to bring an action
against the lender to recover the sums paid and the property pledged, as well as attorney’s
fees and costs. Act of May 27, 2005, ch. 440, § 4, 2005 Tenn. Pub. Acts 1045, 1047-48
(codified at Tenn. Code Ann. § 45-15-105(b) (2007)). Second, the 2005 amendments require
an applicant for a title pledge license to obtain a surety bond or irrevocable letter of credit
in specified amounts. Id. § 5, 2005 Tenn. Pub. Acts at 1049 (codified at Tenn. Code Ann.
§ 45-15-106(d)(3) (2007)). The subparagraph then goes on to state that, in the event of the
title pledge lender’s non-payment, the unpaid person may sue the lender on the surety bond

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The general statute of limitations for misdemeanors requires that a criminal prosecution commence
within twelve months after the commission of the offense. Tenn. Code Ann. § 40-2-102(a) (2006).
Therefore, the TTPA’s statute of limitations does not alter the time frame for bringing a criminal action for
a knowing violation of the TTPA, which is a class A misdemeanor.

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or irrevocable letter of credit. Id., 2005 Tenn. Pub. Acts at 1049-50. Upon enacting the 2005
amendments to the TTPA, the legislature was presumptively aware of the statute of
limitations that it had already enacted. See Lee Medical, Inc. v. Beecher, 312 S.W.3d 515,
527 (Tenn. 2010); Colonial Pipeline Co. v. Morgan, 263 S.W.3d 827, 836 (Tenn. 2008).
Nonetheless, the legislature explicitly authorized pledgors to sue unlicensed lenders and
unpaid persons to sue lenders on the surety bond or irrevocable letter of credit. The
subsequent inclusion of certain express private rights of action in the 2005 amendments cuts
against Plaintiffs’ argument that, by previously including a statute of limitations, the
legislature expressed its manifestly clear intent to imply a private right of action on behalf
of title pledgors to enforce the TTPA’s provisions.

Conclusion

Since the Tennessee Title Pledge Act provides no express private right of action on
behalf of pledgors against title pledge lenders for charging excessive interest and prohibited
fees, Plaintiffs bear the burden of establishing that the legislature was “manifestly clear” in
its intent to imply a private right of action. Plaintiffs have not carried that burden, and we
“are not privileged to create such a right under the guise of liberal interpretation of the
statute.” Premium Fin. Corp., 978 S.W.2d at 93.

Therefore, we hold that, at the time Plaintiffs filed this action, the Tennessee Title
Pledge Act contained no private right of action on behalf of pledgors against title pledge
lenders for charging excessive interest and prohibited fees. Accordingly, we reverse the
judgment of the Court of Appeals and reinstate the trial court’s judgment granting
Defendant’s motion to dismiss Plaintiffs’ cause of action under the Tennessee Title Pledge
Act for failure to state a claim. We remand this case to the Hamilton County Circuit Court
for the litigation of Plaintiffs’ remaining claims, including their individual claims pursuant
to the Tennessee Consumer Protection Act. We tax the costs of this appeal to Plaintiffs
Dawn Brown, Anne Devries, Carly Hahn, and Greg Walton, and their surety, for which
execution may issue if necessary.

_________________________________
CORNELIA A. CLARK, CHIEF JUSTICE

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