Tennessee State Bank v. Douglas v. Mashek

05/21/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
January 23, 2020 Session

TENNESSEE STATE BANK v. DOUGLAS V. MASHEK ET AL.

Appeal from the Chancery Court for Knox County
No. 182407-3 Michael W. Moyers, Chancellor

No. E2019-00591-COA-R3-CV

This case involves a home equity line of credit (“HELOC”) extended to the co-defendant,
Douglas V. Mashek, by the plaintiff, Tennessee State Bank (“the Bank”), via a
promissory note secured by a deed of trust encumbering real property titled to Mr.
Mashek and acquired during Mr. Mashek’s marriage to the co-defendant, Deborah A.
Mashek. When the Bank subsequently attempted to foreclose on the property, Mr.
Mashek objected based on alterations to the deed of trust and a notice of right of
rescission that had allegedly occurred after the deed’s execution and prior to recordation.
The Bank filed a complaint against the Masheks in the trial court, seeking declaratory
judgment that the recorded deed of trust was valid and enforceable, or in the alternative,
reformation of the executed deed of trust to conform to the recorded deed. The Bank also
named the title company involved in the loan transaction as a third-party defendant,
alleging the title company’s liability in the event that the trial court found the deed of
trust, either as executed or as recorded, to be unenforceable.1 The Masheks, proceeding
pro se, filed various pleadings in response to the complaint, including a counterclaim
against the Bank, alleging, inter alia, common law fraud, breach of fiduciary duty,
negligence, equitable estoppel, slander of title, statutory estoppel, wrongful foreclosure,
and unclean hands. Upon the Bank’s motion for partial summary judgment and
following a hearing, the trial court granted the motion as to reformation of the executed
deed of trust, declaring the deed, as reformed, to be enforceable and finding that the Bank
was entitled to pursue foreclosure proceedings. The trial court found in part that the
Bank or its agent(s) had employed “procedurally questionable and perhaps fraudulent”
methods that were “at the very least negligent and potentially criminal in nature” to
correct mistakes in the executed deed of trust and to, without authorization, affix the
Masheks’ initials over a change in a date of signature on the notice of right of rescission.
However, having also found that the mistakes corrected were mutual and amounted to
scrivener’s errors that were not intended to and did not prejudice the Masheks, the trial
court granted the Bank’s request to reform the executed deed of trust. The trial court
1
The title company is not participating in this appeal.
awarded to the Bank a monetary judgment against Mr. Mashek, as the sole debtor named
in the loan documents, in the amount of $294,566.39 for unpaid principal and interest.
The trial court also awarded to the Bank reasonable attorney’s fees and expenses in the
amount of $8,795.84, limiting such fees to those that “would be expected in an ordinary
foreclosure action.” The trial court dismissed the Masheks’ various counterclaims and
subsequently denied the Bank’s motion to alter or amend language in the judgment. The
Masheks have appealed, and the Bank has raised issues regarding the trial court’s denial
of its request to alter the court’s findings and denial of its request for additional attorney’s
fees and expenses. Having determined that the Bank or its agent(s) made a unilateral
mistake in materially altering the deed of trust after the document’s execution and then
recording the altered deed of trust with the unilateral mistake incorporated, we reverse the
trial court’s judgment as to the reformation and enforceability of the executed deed of
trust. Having also determined that the action of the Bank or its agent(s) in affixing the
Masheks’ initials over the altered date on the rescission notice without authorization or
notice constituted gross negligence, we reverse the trial court’s finding that no gross
negligence occurred but affirm the trial court’s implied finding that the Bank could not
succeed in its request to reform the effective date of the rescission notice. However,
concluding that no alterations were made to the promissory note, we further determine
that the trial court properly found Mr. Mashek to be liable for the unpaid principal and
interest due under the terms of the note. We therefore affirm the trial court’s $294,566.39
monetary judgment against Mr. Mashek. We vacate the trial court’s award of attorney’s
fees and expenses to the Bank and remand for a hearing to determine the amount of
attorney’s fees and expenses incurred by the Bank solely to obtain a judgment based on
the promissory note. We affirm the trial court’s judgment in all other respects, including
its denial of the Bank’s request for additional attorney’s fees and expenses and its denial
of the Bank’s motion to alter or amend the language of the judgment. Finally, we clarify
that no evidence has been presented in this case to support a finding of the intent
necessary for forgery as a cause of action against the Bank or its agent(s).

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed in Part, Reversed in Part, Vacated in Part; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and RICHARD H. DINKINS, J., joined.

Douglas Vernon Mashek and Deborah A. Mashek, Powell, Tennessee, Pro Se.

W. Morris Kizer, Knoxville, Tennessee, for the appellee, Tennessee State Bank.

2
 OPINION

I. Factual and Procedural Background

The initial transaction giving rise to this action occurred in December 2003 when
Mr. Mashek obtained a HELOC from the Bank via a promissory note (“the Note”) that
was secured by a deed of trust encumbering real property located at 1116 Irwin Road in
Powell, Tennessee (“the Property”). The trial court, in its July 2017 Memorandum
Opinion and Order, summarized the essentially undisputed facts leading to the initiation
of this lawsuit as follows:

Pursuant to this [HELOC] transaction, Mr. Mashek executed several
documents, including a Promissory Note, a Deed of Trust (wherein his
property at 1116 Irwin Road was pledged as security for any indebtedness
arising pursuant to the Note,) a Notice of Right of Rescission, and a Sweep
Authorization Form. Mrs. Mashek executed the Deed of Trust, with the
proviso that she was not obligated on the debt and was only conveying any
interest she might have in the property. The documents were fully executed
by December 22, 2003, Mrs. Mashek having signed the necessary
documents at the couple[’s] then residence in Minnesota. Sometime after,
Mr. Mashek began making draws on the HELOC.

In 2005 or 2006, according to Mr. Mashek’s recollection, when the
balance owed on the HELOC was zero or close to zero, he contacted [the
Bank] to close the line of credit, and was informed that there would be a
charge for this service. This charge was called for in the Promissory Note
under the Paragraph entitled “Additional Charges.” Faced with paying this
fee, Mr. Mashek decided to leave the line of credit open. Following this
conversation, Mr. Mashek began making additional draws against the line
of credit.

In 2011, Mr. Mashek, who had apparently fallen behind on
repayments of the loan, was contacted by a representative of [the Bank].
During this conversation Mr. Mashek asked to see a copy of the original
loan documentation and was refused, the representative asserting that [Mr.
Mashek] had the original copies. Sometime after that conversation, Mr.
Mashek failed or refused to make any additional repayments of the loan. In
2012, [the Bank] attempted to foreclose on the property, and was at [that]
point notified by Mr. Mashek that the documents which he had signed in
2003 had been altered, and that he objected to the foreclosure sale based on
those alterations.
3
 Although [the Bank] in its original complaint asserted that a copy of
the Deed of Trust securing the debt of Douglas Mashek was a “true and
correct copy of the Deed of Trust that was signed by Mr. and Mrs. Mashek
at the closing,” it seems certain now and is not seriously disputed by [the
Bank] that at some time after the closing, the Deed of Trust and other
documents relative to the loan were in fact altered. The original Deed of
Trust, included at various places in the record, most recently as an exhibit
in response to the pending Motion, reflects that the Deed was executed to
secure the obligations of “Breaking Bread, Inc.[,”] an entity that the
Masheks had never heard of nor had any interest in. Additionally, the
Notary seal indicates that the documents were executed in Knox County,
Tennessee, when in fact they had been executed in Minnesota and notarized
by a Minnesota Notary. Further, it appears that the Notice of Right of
Rescission was also altered to change the date of notice from December 22,
20[03] to December 15, 200[3],[2] with an apparently fraudulent
acknowledgment in the form of forged initials made over the handwritten
correction. Finally, the box that indicates the Deed of Trust is an “Open
Ended Mortgage as defined by Chapter 137, 1987 Public Acts of
Tennessee” is checked on the documents executed by the Masheks, but
absent on the documents actually filed with the Knox County Register of
Deeds Office.

(Internal citations to record omitted.)

The Bank initiated this action by filing a complaint in the trial court on March 8,
2012, naming as defendants the Masheks and Stewart Title Company d/b/a Abstract Title
(“Stewart Title”). The Bank sought declaratory judgment that the deed of trust recorded
with the Knox County Register of Deeds on January 16, 2004 (“Recorded Deed of
Trust”), was valid and enforceable and that the Bank could “proceed with the exercise of
its remedies under the Deed of Trust.” In the alternative, the Bank requested that the trial
court “reform the Deed of Trust to correct the identity of the borrower listed therein as
Douglas V. Mashek, with such correction of the name of the borrower to relate back by a
nunc pro tunc order to the date of execution of the Deed of Trust, December 15, 2003,”
allowing the Bank to then proceed with its exercise of remedies.

The Bank also sought a monetary judgment for the principal purportedly owed on
the HELOC by Mr. Mashek of $234,079.32 plus interest, costs, and fees, as well as
2
At this point in its order, the trial court inadvertently stated these dates concerning the notice of right of
rescission as occurring in 2005 and 2015, respectively. The court correctly stated these dates later in the
order as occurring in 2003.
4
reasonable attorney’s fees and litigation expenses. In a subsequent amendment to the
complaint, the Bank requested that if the trial court were to find that “the Deed of Trust
was materially altered after it was signed by Mr. Mashek and Mrs. Mashek and should
not be reformed or corrected,” that the trial court would “impose an equitable lien on the
Property” and direct that “the Property be sold with the proceeds applied to the payment
of the Note.”

The Bank attached to its complaint the following exhibits: (A) a copy of the Note
in the principal amount of $224,000.00, dated December 15, 2003, and signed by Mr.
Mashek and a vice president of the Bank, Tim Tassell; (B) the Recorded Deed of Trust,
Instrument No. 200401160070275, dated as executed on December 15, 2003, securing
the obligations of Mr. Mashek and otherwise reflecting what the trial court ultimately
found to be alterations in the original document; and (C) a copy of the first page of the
deed of trust that Mr. Mashek had delivered to the successor trustee on February 2, 2012,
also dated as executed on December 15, 2003, but purporting to secure the obligations of
“Breaking Bread, Inc.” and including a checkmark to indicate an “Open-End Mortgage”
where no such checkmark exists on the Recorded Deed of Trust. At the time of the
complaint’s filing, the Bank asserted that its “Exhibit B,” the Recorded Deed of Trust,
was “a true and correct copy of the Deed of Trust that was signed by Mr. Mashek and
Ms. Mashek at the Closing.”

As to Stewart Title, the Bank asserted in its complaint that Stewart Title, a Texas
corporation qualified to do business in Tennessee, was the successor by merger with
Abstract Title and was liable for the actions of Abstract Title related to this transaction.
According to the Bank, it had retained Abstract Title to “prepare the Deed of Trust, close
the Loan, record the Deed of Trust, and provide copies of the closing documents,
including the Deed of Trust, to Mr. Mashek and Mrs. Mashek after the closing of the
Loan.” The Bank thereby requested that if the trial court were to find the deed of trust to
be unenforceable, it should also find Stewart Title liable to the Bank “for all damages it
has sustained due to the negligence and/or reckless conduct of Abstract Title in
connection with its preparation of the Deed of Trust.” Stewart Title subsequently filed a
motion to dismiss based on the applicable statute of limitations. The Bank then filed a
motion to amend its complaint to, inter alia, add an averment that it had not learned of
Mr. Mashek’s claim that the Recorded Deed of Trust was unenforceable until February 2,
2012, when Mr. Mashek had delivered what he asserted was a copy of the original deed
of trust to the successor trustee.

As to the Masheks’ response to the Bank’s complaint, they filed a motion for
enlargement of time to file an answer on March 23, 2012. Following an agreed order
entered by the trial court on April 25, 2012, granting the Masheks’ request for additional
time, the Masheks filed a “Verified Motion to Dismiss/Strike/Demand for More Definite
5
Statement” on May 9, 2012, along with a document entitled “Judicial Notice/Cognizance
with Claim of Rights in the Form of an Affidavit,” the next day; two letters with the trial
court near the end of May 2012; and an amended verified motion to
dismiss/strike/demand in June 2012. In the original and amended versions of their
motion, the Masheks asserted, inter alia, that the trial court lacked subject matter
jurisdiction over this action “due to statutory/felony violations committed by [the Bank]
and/or its agent.”

The Masheks attached to their original motion to dismiss/strike/demand an
affidavit and report completed by Larry S. Miller, Ph.D., a forensic document examiner
certified by the national Forensic Specialties Accreditation Board according to his
curriculum vitae, which was also attached. In his report, Dr. Miller opined, upon his
examination of the documents at issue, that “[t]he face page of [the deed of trust in Mr.
Mashek’s possession] [had] been replaced with the face page of [the Recorded Deed of
Trust].” Dr. Smith also opined that the initials, “DM,” appearing both above and below
the signature date of December 15, 2003, on the notice of right of rescission (“Rescission
Notice”) in the Bank’s possession “were not authored (penned) by Douglas V. Mashek
nor Deborah A. Mashek” and that both sets of “DM” initials on that document “were
probably made by one, yet identified, individual.” To their amended motion, the
Masheks attached an affidavit executed by Mr. Mashek, setting forth a copy of the
Bank’s November 4, 2011 response to Mr. Mashek’s qualified written request for
information related to his loan.

The Bank filed an objection to the consideration of the affidavits filed by the
Masheks, arguing that insofar as the Masheks’ motion was one to dismiss the action, it
appeared to be based on an alleged failure to state a claim upon which relief could be
granted, pursuant to Tennessee Rule of Civil Procedure 12.02(6), and that in order for
matters outside the pleadings to be considered, the trial court would have to convert the
Masheks’ motion to one for summary judgment. The Masheks filed an answer to this
objection, reasserting that their motion to dismiss was based on an alleged lack of subject
matter jurisdiction pursuant to Tennessee Rule of Civil Procedure 12.02(1).

Following a hearing, the trial court entered an order on August 27, 2012, denying
the Masheks’ amended motion to dismiss/strike/demand upon finding that the motion
was “not well taken.” In a subsequent order entered on September 12, 2012, the trial
court denied a motion filed by the Masheks that the trial court treated as a motion to
reconsider their amended motion to dismiss/strike/demand. The trial court then denied a
third motion to dismiss filed by the Masheks in an order entered on October 11, 2012.

Meanwhile, in its August 27, 2012 order, the trial court granted the Bank’s motion
to amend its complaint and dismissed Stewart Title’s motion to dismiss. On September
6
5, 2012, Stewart Title filed an answer in response to the amended complaint, denying any
allegation that its predecessor, Abstract Title, had altered the first page of the deed of
trust and asserting several affirmative defenses. Ms. Mashek ultimately filed an
“Answer, Preliminary Statement and Defenses” on December 3, 2012, stating that she
was “without knowledge” of all facts averred in the Bank’s complaint and that the Bank
had failed to state a claim upon which relief could be granted against her individually.

On January 14, 2013, the Bank filed a motion for default judgment against Mr.
Mashek, who responded by filing, inter alia, a “Belated Verified Answer” and a
“Verified Counterclaim,” with multiple exhibits attached, on January 22, 2013. In his
counterclaim, Mr. Mashek asserted that he was seeking a declaration to quiet title,
arguing that the Recorded Deed of Trust was void due to the Bank’s actions. He sought
an order “voiding” the Recorded Deed of Trust and “damages for the tort[ious] and
wrongful conduct” of the Bank. Mr. Mashek further alleged in his counterclaim that due
to an act of criminal forgery, the Bank “lacks standing to foreclose in that they have no
present legal right to enforce the security agreement that underlies the foreclosure
action.” Also in his counterclaim, Mr. Mashek asserted “causes of action” against the
Bank of common law fraud, breach of fiduciary duty, negligence, equitable estoppel,
slander of title, statutory estoppel, wrongful foreclosure, and unclean hands.

Among the exhibits attached to Mr. Mashek’s counterclaim was a copy of the deed
of trust he claimed to have executed and then been sent a copy of by Abstract Title, the
first page of which had been the “Exhibit C” to the Bank’s complaint (“Executed Deed of
Trust”). In his answer, Mr. Mashek did not deny having executed a deed of trust with the
Bank in December 2003 or having drawn money on the line of credit. Mr. Mashek did
deny, however, that he owed any monetary obligation to the Bank predicated on what he
claimed to be the unenforceability of the Recorded Deed of Trust.

In a reply to the counterclaim, filed March 1, 2013, the Bank acknowledged the
discrepancies between the Recorded Deed of Trust and the Executed Deed of Trust but
denied all substantive allegations as to how the discrepancies occurred and maintained
that the Recorded Deed of Trust was enforceable. The Bank asserted that “if the deed of
trust and the notice of rescission were altered, such alterations were done by Stewart Title
Company [d/b/a] Abstract Title . . . .” Following the filing of these pleadings, Mr.
Mashek filed notices of having served discovery requests on Stewart Title and the Bank
in May 2013, and Stewart Title filed a notice of having responded to Mr. Mashek’s
discovery requests.

The next pleading filed in this matter was a motion for continuance filed by Mr.
Mashek on May 20, 2016, in which he referenced having received notice that the trial
was set for June 1, 2016. Mr. Mashek then filed a motion to compel discovery from the
7
Bank on May 31, 2016. On January 10, 2017, the Bank filed a motion to set the case for
hearing. Mr. Mashek again filed multiple documents concerning discovery, including a
second motion to compel wherein he asserted that the Bank’s responses to his
interrogatories and requests had been incomplete and insufficient. Mr. Mashek then filed
a motion for continuance on April 11, 2017, asserting, inter alia, that his “[r]epeated
discovery requests” to the Bank “had gone effectively unanswered.” This motion for
continuance was ultimately denied by the trial court in an order entered on June 30, 2017.

On June 5, 2017, the Bank filed a motion for partial summary judgment,
requesting that the trial court dismiss Mr. Mashek’s counterclaims; enter a judgment
against Mr. Mashek in the amount of $291,523.10, as the amount owed as of June 2,
2017, plus interest at a rate of $26.46342 per diem; and reform the “deed of trust at
issue.” As to reformation, the Bank specifically requested:

(a) that the deed [of] trust at issue be reformed, to state that it secures the
debts of defendant [Mr. Mashek] to [the Bank], and not the obligations of
Breaking Bread, Inc. to [the Bank], so that it conform with the deed of trust,
as recorded in the Knox County Register’s Office, nunc pro tunc to
December 15, 2003, (b) that the acknowledgment of the deed of trust at
issue be reformed to state “State of Minnesota, County of Anoka,” rather
than “State of Tennessee, County of Knox,” nunc pro tunc to December 15,
2003[.]

Among other documents and copies of pleadings, the Bank attached to its motion
excerpts of “Unsworn Statement[s]” given by Mr. Mashek and Ms. Mashek, both of
whom had declined to be sworn in during their respective depositions, and affidavits
executed by Gordon Lee Ownby, Jr., an attorney giving his expert legal opinion as to
mistakes and scrivener’s errors in conveyances of real property, and Shelly Spurgeon, a
senior vice president for the Bank. Mr. Ownby opined that the purported differences
between the Executed Deed of Trust and the Recorded Deed of Trust amounted to
scrivener’s errors in part because the mistakes did not affect the intended obligations of
the parties. Mr. Ownby stated that when a mistake is noted in a deed or deed of trust
after the closing of a transaction, it may be corrected with a scrivener’s affidavit so long
as “the change is made to conform the document to the intent of the parties to the
transaction.”

Ms. Spurgeon explained in her affidavit that in her position with the Bank, she was
the Special Assets and Credit Analyst Manager and that she had maintained primary
responsibility for pursuing payment of Mr. Mashek’s debt on his line of credit. Ms.
Spurgeon stated that Mr. Mashek’s loan history, dated December 15, 2003 through May
22, 2017, reflected a principal balance owed in the amount of $244,379.70 and a total
8
payoff amount, including interest as of June 2, 2017, in the amount of $291,523.10. As
summarized by the Bank in its motion, Ms. Spurgeon also stated in her affidavit that Mr.
Mashek had “failed to pay the insurance on the house for at least since April 20, 2009;
that he [had] failed to pay the real estate taxes on his house for at least since 2011; and
that he [had] not made a payment on the line of credit since March 14, 2011.”

The Bank subsequently filed a motion to bifurcate its claim for attorney’s fees
from the balance of the action. The Masheks, now filing pleadings as both Mr. and Ms.
Mashek, filed a response in opposition to the Bank’s motion for partial summary
judgment and several other pleadings and exhibits, including, inter alia, motions to strike
the excerpts of unsworn statements and the affidavits noted above, as well as their own
affidavits purporting to clarify their unsworn statements given in deposition.

Following a hearing, the trial court entered its Memorandum Opinion and Order
granting partial summary judgment to the Bank on July 13, 2017. The trial court granted
the Bank’s motion to reform the Executed Deed of Trust and to declare the deed, as
reformed, to be enforceable, allowing the Bank to reinstate foreclosure proceedings
regarding the Property. In so determining, the trial court found that “the changes sought
to the documents by [the Bank] fall within the definition of ‘scrivener’s errors’” and that
the Masheks had received the benefit “from the agreement that they made with the bank.”
The trial court directed that the loan documents would be reformed, “nunc pro tunc to
December 22, 2003, when they were fully executed” and that the Executed Deed of Trust
would be reformed “to reflect that it secures the debt of [Mr. Mashek], and the Notary
Acknowledgment should reflect that the documents were notarized in Minnesota.” The
trial court additionally directed that “the box denoting the Deed of Trust as securing an
‘Open Ended Mortgage’ shall be checked.”

The trial court summarized its findings in this regard as follows in pertinent part:

While it is the opinion of the Court that the methods employed by [the
Bank] and/or Stewart Title to correct these mistakes were deplorable, it is
also the opinion of the Court that those methods, while at the very least
sloppy, were not undertaken in bad faith; again the Court would come to a
different conclusion had the changes been made to disadvantage the
[Masheks] or materially alter the agreement they had reached. Here
however the changes were made to comport the documents with the actual
agreement and intentions of the Parties. While the Court certainly
questions the means employed by [the Bank] and/or Stewart Title in
conforming the documents to reflect the intention[s] of the Parties, nothing
has been presented to this Court that would cause the Court to question
their motives.
9
Ultimately having found in favor of the Bank on the questions of reformation and
enforceability, the trial court did not directly address the Bank’s alternate claim against
Stewart Title in the court’s Memorandum Opinion and Order.

The Bank subsequently filed a motion to alter or amend the Memorandum Opinion
and Order, seeking to have the trial court address the Bank’s claim for a monetary
judgment against Mr. Mashek, exclusive of attorney’s fees, and seeking to have the court
enter an order specifically reforming the Executed Deed of Trust to conform to the
Recorded Deed of Trust. Noting certain language contained in the Memorandum
Opinion and Order, the Bank also requested that the trial court alter and amend the order
“to state that the alterations to the loan documents at issue were not fraudulent, forgeries
or potentially criminal” and, in a supplement to the motion, requested that the trial court
amend the order “to state that there was no malfeasance on the part of [the Bank].” In
addition to a response to the Bank’s motion to alter or amend, the Masheks filed a
“Motion for Permission to Appeal, Stay of Proceeding and Sale with Combined
Memorandum in Support,” requesting interlocutory appeal.

Following a hearing, the trial court entered an order on October 17, 2017, granting
in part and denying in part the Bank’s motion to alter or amend. The trial court granted
the motion as to the monetary judgment, awarding to the Bank $294,566.39,
“representing the principal balance and the accrued interest owed by Douglas V. Mashek
on his line of credit with the [Bank] through September 25, 2017.” Noting that the
Masheks had in their pleadings “neither admitted nor denied the statements in Shelly
Spurgeon’s affidavit, saying only that ‘Defendants only agree that the figure is on the
Affidavit of Shelly Spurgeon,’” the trial court found that the Masheks had “filed nothing
to create a genuine issue of material fact regarding the amount owed.”

The trial court granted the Bank’s motion as to the reformation of the Executed
Deed of Trust, directing that nunc pro tunc to December 22, 2003, it would be reformed
“to conform with the deed of trust recorded as Instrument No. 200401160070275 in the
Knox County Register’s Office.” The trial court also directed that the Recorded Deed of
Trust would be reformed, nunc pro tunc to December 22, 2003, “so that the box
preceding the first paragraph thereof is checked,” indicating an open-end mortgage. The
trial court denied the Bank’s motion to alter or amend in all other respects without further
comment in the order.

On November 17, 2017, the Bank filed an application for attorney’s fees and for
entry of a final judgment pursuant to Tennessee Rule of Civil Procedure 54.02.
Attaching detailed invoices, the Bank requested an award of $84,230.25 in attorney’s fees
and $7,135.34 in legal expenses, for a total amount requested of $91,365.59. The
10
Masheks filed, inter alia, a response in opposition to the Bank’s motion for attorney’s
fees.

Following a hearing conducted on January 30, 2018, the Bank filed a revised
application for attorney’s fees on February 28, 2018, noting that the revision had been
directed by the trial court during the hearing. In its revised application, the Bank
requested those “attorney’s fees and expenses up until the filing of this action and the
work preparatory thereto.” Again attaching detailed invoices, as well as an affidavit
executed by the Bank’s counsel, the Bank requested $6,226.00 in attorney’s fees and
$2,569.84 in legal expenses, for a total request in the amount of $8,795.84. The Bank
expressly stated in the revised application that it “does not waive, and reserves its rights,
relative to its attorney’s fees and expenses incurred in connection with this action.”

The Masheks subsequently filed a “Motion to Vacate Void Judgment,” “Motion
for Leave to Depose Shelly Spurgeon et al.,” and an opposition to the Bank’s revised
application for attorney’s fees. The Bank filed responses to these motions, and the
Masheks replied to the responses.

On November 5, 2018, the trial court entered a “Final Order” granting the Bank’s
revised application for attorney’s fees, denying the Masheks’ pending motions, and
certifying the order as final pursuant to Tennessee Rule of Civil Procedure 54.02.3 Upon
the Bank’s subsequent motion, the trial court entered an “Amended Final Order” on
December 5, 2018, which was substantively identical except for language added to fully
comply with Rule 54.02. In so ruling, the trial court stated the following in pertinent
part:

After extensive litigation, this Court rendered its opinion on July 13,
2017. This Court found that, while [the Bank] and/or [its] agents engaged
in some questionable behavior as regards the loan at issue, none of those
actions affected the rights or responsibilities of the Masheks under the loan
documents they signed. Pursuant to those loan documents, [the Bank] is
entitled to recover attorney’s fees necessitated by the institution of litigation
necessary to enforce the provisions of the loan documents. Because this
Court found that the majority of the litigation necessitated by this matter

3
Tennessee Rule of Civil Procedure 54.02(1) provides in pertinent part:

When more than one claim for relief is present in an action, whether as a claim,
counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the
court, whether at law or in equity, may direct the entry of a final judgment as to one or
more but fewer than all of the claims or parties only upon an express determination that
there is no just reason for delay and upon an express direction for the entry of judgment.
11
 was occasioned by the actions of [the Bank] and/or its agents, the Court
directed that it would only award such attorney’s fees as would be expected
in an ordinary foreclosure action. [The Bank] has now complied with this
Order and has submitted a request for fees in the amount of $8,795.84. The
Court has carefully reviewed the request and finds it fair and reasonable
and therefore awards a judgment in that amount to [the Bank].

The Court finds that the arguments put forth by the [Masheks] in
both their opposition to the award of attorney’s fees and their Motion to
Vacate this Court’s Judgment are in their entirety either attempts to re-
litigate the matters already decided by this Court or based on legal theories
which find no support in Tennessee law and Jurisprudence. Therefore all
other pending motions are DENIED and this Order shall be considered a
Final Order pursuant to Rule 54.02 of the Tennessee Rules of Civil
Procedure upon the Court’s express determination that there is no just
reason for delay and upon the Court’s express direction for the entry of
judgment.

Upon the Masheks’ April 2018 motion to depose Ms. Spurgeon, November 2018
motion to clarify the November 2018 order, motion to alter or amend the December 2018
order, and amended motion to alter or amend, the trial court entered a “Final Order” on
March 4, 2019, denying the motions and again certifying the order as final pursuant to
Rule 54.02. According to its March 2019 order, the trial court conducted a hearing on
February 11, 2019, and “[w]ithout hearing argument,” “announced that it had fully
considered the [Masheks’ pending] Motions, had found each of them to be without merit,
and had determined that each of them should be denied.” The Masheks timely appealed.

II. Issues Presented

The Masheks present six issues on appeal, which we have restated and slightly
reordered as follows:

1. Whether the trial court erred by granting partial summary judgment
in favor of the Bank.

2. Whether the trial court erred by granting the Bank’s request for
reformation of the loan documents.

3. Whether the trial court erred by granting a monetary judgment to the
Bank for the principal and interest pursuant to the HELOC in a total
amount of $294,566.39.
12
 4. Whether the trial court erred by granting a monetary judgment to the
Bank for attorney’s fees and expenses in the amount of $8,795.84.

5. Whether the trial court erred by failing to dismiss the Bank’s
complaint sua sponte.

6. Whether the trial court erred by dismissing the Masheks’
counterclaims.

The Bank has raised two additional issues, which we have restated as follows:

7. Whether the trial court erred by finding that there was an apparent
fraudulent acknowledgement on the Rescission Notice, that the Bank
acted fraudulently, that the alterations to the Rescission Notice were
potentially criminal, and that the Bank acted with apparent
malfeasance, and if so, whether the trial court erred by declining to
amend its Memorandum Opinion and Order to state that the changes
to the loan documents were not fraudulent, forgeries, or potentially
criminal.

8. Whether the trial court erred by declining to award the full amount
of attorney’s fees and expenses initially requested by the Bank.

III. Standard of Review

The grant or denial of a motion for summary judgment is a matter of law;
therefore, our standard of review is de novo with no presumption of correctness. See Rye
v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick
Broad. Co. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013) (citing
Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court must
“make a fresh determination of whether the requirements of Rule 56 of the Tennessee
Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250. As our Supreme
Court has explained concerning the requirements for a movant to prevail on a motion for
summary judgment pursuant to Tennessee Rule of Civil Procedure 56:

[W]hen the moving party does not bear the burden of proof at trial, the
moving party may satisfy its burden of production either (1) by
affirmatively negating an essential element of the nonmoving party’s claim
or (2) by demonstrating that the nonmoving party’s evidence at the
summary judgment stage is insufficient to establish the nonmoving party’s
13
 claim or defense. We reiterate that a moving party seeking summary
judgment by attacking the nonmoving party’s evidence must do more than
make a conclusory assertion that summary judgment is appropriate on this
basis. Rather, Tennessee Rule 56.03 requires the moving party to support
its motion with “a separate concise statement of material facts as to which
the moving party contends there is no genuine issue for trial.” Tenn. R.
Civ. P. 56.03. “Each fact is to be set forth in a separate, numbered
paragraph and supported by a specific citation to the record.” Id. When
such a motion is made, any party opposing summary judgment must file a
response to each fact set forth by the movant in the manner provided in
Tennessee Rule 56.03. “[W]hen a motion for summary judgment is made
[and] . . . supported as provided in [Tennessee Rule 56],” to survive
summary judgment, the nonmoving party “may not rest upon the mere
allegations or denials of [its] pleading,” but must respond, and by affidavits
or one of the other means provided in Tennessee Rule 56, “set forth specific
facts” at the summary judgment stage “showing that there is a genuine issue
for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party “must do more
than simply show that there is some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co., 475 U.S. [574,] 586, 106 S. Ct. 1348,
[89 L.Ed.2d 538 (1986)]. The nonmoving party must demonstrate the
existence of specific facts in the record which could lead a rational trier of
fact to find in favor of the nonmoving party. If a summary judgment
motion is filed before adequate time for discovery has been provided, the
nonmoving party may seek a continuance to engage in additional discovery
as provided in Tennessee Rule 56.07. However, after adequate time for
discovery has been provided, summary judgment should be granted if the
nonmoving party’s evidence at the summary judgment stage is insufficient
to establish the existence of a genuine issue of material fact for trial. Tenn.
R. Civ. P. 56.04, 56.06. The focus is on the evidence the nonmoving party
comes forward with at the summary judgment stage, not on hypothetical
evidence that theoretically could be adduced, despite the passage of
discovery deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65. “Whether the nonmoving party is a plaintiff or a
defendant—and whether or not the nonmoving party bears the burden of proof at trial on
the challenged claim or defense—at the summary judgment stage, ‘[t]he nonmoving party
must demonstrate the existence of specific facts in the record which could lead a rational
trier of fact to find in favor of the nonmoving party.’” TWB Architects, Inc. v. The
Braxton, LLC, 578 S.W.3d 879, 889 (Tenn. July 22, 2019) (quoting Rye, 477 S.W.3d at
265)). Pursuant to Tennessee Rule of Civil Procedure 56.04, the trial court must “state
the legal grounds upon which the court denies or grants the motion” for summary
14
judgment, and our Supreme Court has instructed that the trial court must state these
grounds “before it invites or requests the prevailing party to draft a proposed order.” See
Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316 (Tenn. 2014).

We review the trial court’s conclusions of law, including its interpretation of a
written agreement, de novo with no presumption of correctness. See Ray Bell Constr.
Co., Inc. v. State, Tenn. Dep’t of Transp., 356 S.W.3d 384, 386 (Tenn. 2011). However,
this Court reviews a trial court’s decision concerning attorney’s fees according to an
abuse of discretion standard. See Wright ex rel. Wright v. Wright, 337 S.W.3d 166, 176
(Tenn. 2011); In re Estate of Greenamyre, 219 S.W.3d 877, 886 (Tenn. Ct. App. 2005)
(“[A] trial court will be found to have ‘abused its discretion’ only when it applies an
incorrect legal standard, reaches a decision that is illogical, bases its decision on a clearly
erroneous assessment of the evidence, or employs reasoning that causes an injustice to
the complaining party.”) (internal citations omitted). Likewise, “[w]e review a trial
court’s denial of a Tenn. R. Civ. P. 59.04 motion to alter or amend a judgment for abuse
of discretion.” Robinson v. Currey, 153 S.W.3d 32, 38 (Tenn. Ct. App. 2004) (quoting
Chambliss v. Stohler, 124 S.W.3d 116, 120 (Tenn. Ct. App. 2003)).

In reviewing pleadings, we “must give effect to the substance, rather than the form
or terminology of a pleading.” Stewart v. Schofield, 368 S.W.3d 457, 463 (Tenn. 2012)
(citing Abshure v. Methodist Healthcare-Memphis Hosp., 325 S.W.3d 98, 104 (Tenn.
2010)). We respect the Masheks’ decision to proceed without benefit of counsel and note
that pleadings “prepared by pro se litigants untrained in the law should be measured by
less stringent standards than those applied to pleadings prepared by lawyers.” Stewart,
368 S.W.3d at 462 (citing Carter v. Bell, 279 S.W.3d 560 568 (Tenn. 2009); Hessmer v.
Hessmer, 138 S.W.3d 901, 903 (Tenn. Ct. App. 2003); Young v. Barrow, 130 S.W.3d 59,
63 (Tenn. Ct. App. 2003)). Although parties proceeding without benefit of counsel are
“entitled to fair and equal treatment by the courts,” we “must not excuse pro se litigants
from complying with the same substantive and procedural rules that represented parties
are expected to observe.” Hessmer v. Hessmer, 138 S.W.3d 901, 903 (Tenn. Ct. App.
2003).

IV. Appellate Record

At the outset, we address, sua sponte, whether a supplementation made to the
appellate record by order of the trial court may properly be considered by this Court on
appeal. See Tenn. R. App. P. 13(c) (providing in relevant part that appellate courts “may
consider those facts established by the evidence in the trial court and set forth in the
record . . . .”). During the pendency of this appeal, the Masheks did not initially file any
transcript, statement of the evidence, or notice stating that neither would be filed pursuant
to Tennessee Rule of Appellate Procedure 24. Following entry of this Court’s
15
administrative order directing the Masheks to comply with Rule 24 or show cause why
the appeal should not be dismissed, the Masheks filed with the trial court, inter alia, a
“Belated Declarations Pursuant to TRAP 24” and an “Affidavit of recordings for
depositions of Lynne Begluitti and Stacy Mynatt, Affidavit of transcript and three (3)
audio compact discs” related to the April 26, 2018 motions hearing.4

In response, the Bank filed a motion with this Court requesting dismissal of the
appeal, pursuant to Tennessee Rule of Appellate Procedure 26(b), for failure to timely
file a transcript or statement. In a Tennessee Rule of Appellate Procedure 24(e) motion
concomitantly filed with the trial court, the Bank objected to the inclusion in the record of
the affidavits and compact discs (“CDs”) of Ms. Begluitti’s and Ms. Mynatt’s
depositions, stating that “[n]either deposition was filed in connection with the [Bank’s]
motion for summary judgment or the [Masheks’] response thereto, and neither deposition
was placed in evidence or marked as an exhibit to any other motion hearing . . . .”
Concerning Mr. Mashek’s affidavit of the April 26, 2018 motions hearing, the Bank
stated in its Rule 24(e) motion that although the affidavit “contains errors,” the Bank
“does not think the errors are of such a nature that an objection needs to be made.” The
Masheks filed a response objecting to the Bank’s motion to dismiss.

On June 25, 2019, this Court entered an order denying the Bank’s motion to
dismiss the appeal upon determining that the Masheks’ filing should be construed as a
late-filed statement of the evidence. This Court stated that the Bank’s time to respond,
pursuant to Tennessee Rule of Appellate Procedure 24(b), would begin to run as of the
date of this Court’s order. Rule 24(b) provides in pertinent part:

If the appellee has objections to the transcript as filed, the appellee shall file
objections thereto with the clerk of the trial court within fifteen days after
service of notice of the filing of the transcript. Any differences regarding
the transcript shall be settled as set forth in subdivision (e) of this rule.

Tennessee Rule of Appellate Procedure 24(e) provides:

If any matter properly includable is omitted from the record, is improperly
included, or is misstated therein, the record may be corrected or modified to
conform to the truth. Any differences regarding whether the record
accurately discloses what occurred in the trial court shall be submitted to
and settled by the trial court regardless of whether the record has been
transmitted to the appellate court. Absent extraordinary circumstances, the
4
According to discovery documents in the record, Ms. Begliuitti is a former employee of the Bank, and
Ms. Mynatt is a former employee of Abstract Title.

16
 determination of the trial court is conclusive. If necessary, the appellate or
trial court may direct that a supplemental record be certified and
transmitted.

Following a hearing conducted pursuant to Rule 24(e), the trial court entered an
order on August 14, 2019, noting that the Bank had presented objections to the Masheks’
request to include the affidavits and CDs of Ms. Begluitti’s and Ms. Mynatt’s depositions
in the record. The trial court explained the following procedural background concerning
these items:

The Court previously granted [the Bank’s] motion for determination
that Lynne Begluitti was, for purposes of Rule 32.01(3) of the Tennessee
Rules of Civil Procedure, unavailable as defined in Rule 804(a)(4) of the
Tennessee Rules of Evidence, without the Begluitti Deposition transcript or
exhibits referenced therein being provided to the Court, over the Masheks’
objection.

The Masheks argued the above listed items should be included
because the deposition of Lynne Begluitti should have been included in [the
Bank’s] motion for determination that Lynne Begluitti was unavailable.
The Masheks further argued that the exhibits referenced in the depositions
of Lynne Begluitti and Stacy Mynatt ought in fairness to be considered
contemporaneously with it.

In its order, the trial court allowed supplementation of the appellate record with
the affidavits and CDs at issue, stating:

The Court determined that, because the Masheks are unrepresented
and are learning as they go and in fairness and to give the court of appeals
as complete a record as possible to allow the Masheks to have the CD
recordings, affidavits of transcript, and exhibits to the Begluitti and Mynatt
depositions added to the record for appeals, with a note to the Court of
Appeals that they were not presented to the Court and they were not
considered by the Court in its determination on the Motion for Summary
Judgment, but were requested by the Masheks.

We emphasize that with exceptions not applicable here, “those facts established by
the evidence in the trial court and set forth in the record” may be considered by this Court
on appeal. See Tenn. R. App P. 13(c). Therefore, we determine that this Court must not
consider “the CD recordings, affidavits of transcript, and exhibits to the Begluitti and
Mynatt depositions” because those items were not presented to or considered by the trial
17
court when it granted the Bank’s motion for partial summary judgment. See Cartwright
v. Jackson Capital, No. W2011-00570-COA-R3-CV, 2012 WL 1997803, at *11 n.9
(Tenn. Ct. App. June 5, 2012) (“In considering whether the trial court erred in granting
summary judgment, we will look to the evidence that the parties presented to the trial
court at each stage of the summary judgment proceedings in order to decide whether the
parties met their burden of production and whether a genuine issue of fact existed.”
(citing Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008)); see generally,
Hessmer, 138 S.W.3d at 903 (“[T]he courts must not excuse pro se litigants from
complying with the same substantive and procedural rules that represented parties are
expected to observe.”).

V. Trial Court’s Grant of Partial Summary Judgment

Primarily at issue in the trial court’s grant of partial summary judgment to the
Bank are (1) the reformation of the Executed Deed of Trust with the declaration that the
Executed Deed of Trust, as reformed, is enforceable as a security instrument to encumber
the Property; (2) the monetary judgment granted to the Bank for the principal and interest
owed by Mr. Mashek on the Note; and (3) the award of attorney’s fees and expenses to
the Bank. We will address each of these issues in turn.

At the outset of this analysis, it is helpful to set forth the operative relationship
between the Executed Deed of Trust, as a security instrument, and the Note, as a
negotiable instrument. As this Court has explained:

A deed of trust is an instrument which secures with real property the
payment of a debt, typically evidenced by a promissory note. 59 C.J.S.
Mortgages, §§ 15 and 204 (2013). Promissory notes secured by deeds of
trust are generally considered negotiable instruments governed by Article 3
of the Uniform Commercial Code.

It is a maxim of the law that the “security follows the debt.”
Douglas J. Whaley, Mortgage Foreclosures, Promissory Notes, and the
Uniform Commercial Code, 39 W. ST. U.L. REV. 313, 326-27. The
United States Supreme Court established this fundamental principle as
early as 1873, stating:

The note and mortgage are inseparable; the [note] as
essential, the [mortgage] as an incident. An assignment of the
note carries the mortgage with it, while an assignment of the
[mortgage] alone is a nullity . . . . The mortgage can have no
separate existence. When the note is paid the mortgage
18
 expires. It cannot survive for a moment the debt which the
note represents.

Id. at 326-27 (quoting Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271,
274, 21 L.Ed. 313 (1872)).

This principle has been reiterated by the Tennessee Supreme Court,
which held: “[t]he policy of the law is to treat the note as the principal
thing and the mortgage as the incident—the transfer of the note secured as a
transfer pro tanto of the incident, the lien of the mortgage.” W.C. Early Co.
v. Williams, 135 Tenn. 249, 186 S.W. 102, 103-04 (Tenn. 1916).

Dickerson v. Regions Bank, No. M2012-01415-COA-R3-CV, 2014 WL 1118076, at *8
(Tenn. Ct. App. Mar. 19, 2014); see also Mortg. Elec. Registration Sys., Inc. v. Ditto, 488
S.W.3d 265, 268 n.1 (Tenn. 2015) (noting that in Tennessee, as in many states, a deed of
trust is the security instrument used, “by which the legal title to real property is placed in
one or more trustees, to secure the repayment of a sum of money or the performance of
other conditions” (quoting Cadence Bank, N.A. v. Latting Rd. Partners, LLC, 699 F.
Supp. 2d 1033, 1035 n.1 (W.D. Tenn. 2010))).5 “Deeds of trust are not, in and of
themselves, negotiable instruments.” Levine v. March, 266 S.W.3d 426, 439 n.14 (Tenn.
Ct. App. 2007).

In the case at bar, the alterations at issue were to the Executed Deed of Trust (and
in turn the Recorded Deed of Trust), along with the related Rescission Notice. Although
the Masheks raise an issue concerning the monetary judgment granted to the Bank, the
Masheks have not alleged any alterations to the Note itself. Therefore, even without an
accompanying deed of trust, the Note would remain a negotiable instrument, albeit an
unsecured one, representing the agreement entered into by the parties for repayment of
the principal borrowed by Mr. Mashek through future advances and applicable interest.
See generally, Dickerson, 2014 WL 1118076, at *8.

5
The Bank asserts that the promissory note at issue does not meet the definition of a “negotiable
instrument” as provided in Tennessee Code Annotated § 47-3-104 (Supp. 2019) and is therefore not
governed by Article 3 of the Uniform Commercial Code—Negotiable Instruments, codified at Tennessee
Code Annotated § 47-3-101 (2001 & Supp. 2019) et seq. We disagree with this assertion. Promissory
notes in transactions such as the one in the instant action have been treated by Tennessee courts as
negotiable instruments governed by Article 3. See, e.g., Mortg. Elec. Registration Sys., 488 S.W.3d at
267; Dickerson, 2014 WL 1118076, at *8. Tennessee Code Annotated § 47-3-104(d) (2013) does provide
an exception for promissory notes that at the time of issuance or upon first coming into possession of the
holder, contain “a conspicuous statement, however expressed, to the effect that the promise or order is not
negotiable or is not an instrument governed by this chapter.” The promissory note in the instant action
contains no such statement.
19
 A. Reformation of Executed Deed of Trust

The Masheks contend that the trial court erred by granting partial summary
judgment to the Bank upon the trial court’s finding that the Bank was entitled to reform
the Executed Deed of Trust to conform to the Recorded Deed of Trust with the addition
of the check mark indicating an open-end mortgage. The Masheks thereby contend that
the trial court erred in finding that the reformed deed of trust would be enforceable as a
security instrument encumbering the Property. Upon our thorough review of the record
and applicable authorities, we determine that because the Bank recorded a deed of trust
that included a unilateral alteration made after the document’s execution, specifically the
omission of a notation that it was an open-end mortgage, reformation is not available to
the Bank as a matter of law.

Regarding the reformation of a written agreement, such as the Executed Deed of
Trust at issue here, this Court has articulated:

[I]t is well settled that the courts have the power to alter the terms of a
written contract where, at the time it was executed, both parties were
operating under a mutual mistake of fact or law regarding a basic
assumption underlying the bargain. The courts are also empowered to
modify the provisions of a written contract where only one of the parties
was operating under a mistake of fact or law if the mistake was influenced
by the other party’s fraud.

The judicial alteration of the provisions of a written agreement is an
equitable remedy known as “reformation.” The basic purpose of
reformation is to make the contract “conform to the real intention of the
parties.” It is “driven by a respect for the parties’ intent and gives effect to
the terms mutually agreed upon by the parties.” Because the law strongly
favors the validity of written instruments, a person seeking to reform a
written contract must do more than prove a mistake by a preponderance of
the evidence. Instead, the evidence of mistake must be clear and
convincing.

An important subcategory of mistake is mistake in the expression, or
integration, of the agreement. A mistake in expression occurs where one or
both parties to a written contract erroneously believe that the contract
embodies the agreement that both parties intended it to express. In such
cases, the courts may adjust the provisions of the written contract to make it
express the true agreement reached by the parties.

20
 In order to obtain reformation on the basis of mistake in expression,
a party must present clear and convincing evidence that: (1) the parties
reached a prior agreement regarding some aspect of the bargain; (2) they
intended the prior agreement to be included in the written contract; (3) the
written contract materially differs from the prior agreement; and (4) the
variation between the prior agreement and the written contract is not the
result of gross negligence on the part of the party seeking reformation.
Reformation is not automatically barred simply because one of the parties
denies that there was an antecedent agreement or claims that the mistake
was not mutual.

Sikora v. Vanderploeg, 212 S.W.3d 277, 286-88 (Tenn. Ct. App. 2006) (footnotes and
internal citations omitted).

In initially granting the Bank’s motion to reform the Executed Deed of Trust in its
Memorandum Opinion and Order, the trial court concluded that the following facts had
occurred to create the situation in this case:

The record makes apparent to this Court what has occurred here.
[The Bank] agreed to provide a revolving line of credit to the Masheks, to
be secured by a Deed of Trust on the [Property]. The usual documents
were drafted and executed in due course by [the Bank] and the [Masheks].
However, because of sloppy drafting and a failure on all parties’ part to
catch the errors, the Deed of Trust submitted by [the Bank] to the Masheks
contained several errors, to wit: (1) The Deed of Trust as submitted by [the
Bank] and executed by the [Masheks] purports to secure the obligation of
Breaking Bread Inc., an entity unknown to the Parties; (2) the Deed of
Trust contains a Notary Acknowledgment indicating it was executed in
Knox County, when in fact it was executed and notarized in Minnesota; (3)
the Notice of Right of Rescission was executed on December 22, 2003, but
for some reason [the Bank] or Stewart Title desired that it reflect the date
on which the Promissory Note was executed (December 15, 2003); and (4)
the “Open Ended Mortgage” check box, checked in the original Deed of
Trust, was left unchecked in the document actually filed with the
Registrar’s Office.

(Emphasis added.)

At the outset, we note that the parties do not dispute the trial court’s findings as to
the existence of the four discrepancies in the loan documents listed in the trial court’s
Memorandum Opinion and Order. The first two discrepancies constituted purported
21
“mistakes” in the Executed Deed of Trust, in other words, elements that at the time of the
loan documents’ execution in December 2003, did not match the undisputed bargain
entered into between the Bank and the Masheks.

As to the third discrepancy, the change in date on the Rescission Notice, the trial
court found that the reason for the change in date by the Masheks’ signatures
acknowledging that they had received the notice was not clear. It is undisputed that the
date was altered after the Masheks had subsequently executed the confirmation that they
did not wish to rescind the agreement on December 30, 2003, and it is undisputed that the
Masheks’ initials by the altered date were written by someone other than the Masheks.
However, the Masheks do not dispute that the actual signatures on the Rescission Notice
were theirs.

In contrast, the fourth discrepancy, underlined above, was correct in the Executed
Deed of Trust, meaning that the box was checked to indicate that “this is an OPEN-END
MORTGAGE” and that this indication matched the parties’ original agreement. The
unchecked box in the Recorded Deed of Trust did not match the parties’ original
agreement. The trial court’s findings reflect that the court clearly noted this distinction
concerning the fourth discrepancy; however, we determine that the listing of the fourth
discrepancy concerning the open-end mortgage as though it were another mistake in the
executed loan documents ultimately proved erroneous in the trial court’s analysis.

In its Memorandum Opinion and Order, the trial court continued its findings
regarding how the situation occurred as follows:

Clearly, after the documents were executed and returned to [the
Bank] by the Masheks, someone, either an employee or an agent of [the
Bank], noticed the mistakes. At this point there were several legitimate
options open to [the Bank]. It could have had the documents redrafted to
properly reflect the intentions of the parties and resubmitted those
documents to the Masheks. Mr. Mashek has stated in his deposition and in
open court that he probably would have signed the corrected documents. In
fact, Mr. Mashek has stated in open court and in deposition that had he
noticed the “Breaking Bread” error he would have pointed it out to [the
Bank], and the Court believes he would have done so. Had this been
offered and refused, [the Bank] could have filed an action to reform the
documents, which in fact they now belatedly seek to do. At any time after
April 2004, [the Bank] could have filed an Affidavit of Scrivener’s Error
with the Registrar’s Office to conform the documents to the intentions of
the Parties. None of those options were availed to by [the Bank] until
March 2012, when [the Bank] filed this action seeking to enforce the
22
 documents filed with the Registrar’s Office or in the alternative to reform
the documents. Instead [the Bank] or its agents indulged in self-help,
unilaterally altering the documents and in one case actually forging an
acknowledgment by the Masheks in the alteration, and then filing the
unilaterally altered documents with the Registrar’s Office. These actions
are at the very least negligent and potentially criminal in nature. At a
minimum they shock the conscience of the Court.

Although the Bank has raised an issue concerning the trial court’s denial of the Bank’s
motion to alter or amend a portion of the court’s language in the above section, which we
will address in a subsequent section of this opinion, we discern no genuine issue of
material fact regarding the court’s essential finding that, as concerns the parties involved
in this appeal, the alterations to the Executed Deed of Trust and the Rescission Notice
prior to recordation were made either by the Bank or its agent(s).

In its Memorandum Opinion and Order, the trial court next focused on the
question of whether the Masheks were “damaged by these actions in any material way,”
concluding that “[t]he testimony and actions of the [Masheks] indicate that they were
not.” The trial court continued:

Mr. Mashek has stated in deposition and in open court that it was his
intent to obtain a line of credit from [the Bank], and to secure that line of
credit by the execution of a Deed of Trust encumbering his home. He
acknowledges that he signed the Promissory Note, although he hedges
somewhat in disclaiming an understanding that the document he signed was
a Promissory Note. It is ancient law that a claimed lack of understanding of
the contents of a document will not excuse performance of the requirements
of the document he signed: “It will not do for a man to enter into a
contract, and, when called upon to respond to its obligations, to say that he
did not read it when he signed it, or did not know what it contained. If this
were permitted, contracts would not be worth the paper on which they are
written. But such is not the law. A contractor must stand by the words of
his contract; and, if he will not read what he signs, he alone is responsible
for his omission.” Upton v. Tribilcock, 91 U.S. 45[, 50] (1875).

The [Masheks] do not contest that they signed the Deed of Trust, nor
do they contest that their intent and purpose in signing that document was
to secure the Line of Credit from [the Bank]. The [Masheks] further do not
contest the fact that they signed the Notice of Right of Rescission document
on December 22, 2003, nor do they contest that they signed, on December
30, 2003, the acknowledgment on the same document that they had no
23
desire to rescind the agreement. And again, Mr. [Mashek] does not contest
the validity of his signature on the “Sweep Authorization Form,” executed
December 15, 2003, which explicitly acknowledges his understanding that
he could lose his home if he does not “meet the obligations in [his] Home
Equity Line of Credit with Tennessee State Bank.” Mr. Mashek drew
against the line of credit, paid down the draw and sought to close it in 2005
or 2006. When told he would have to pay a fee for early termination of the
line of credit, instead of letting it lay fallow until such time as he could
terminate it without cost, he began to again draw on the line, and stated in
open court that he did so with the understanding that the same terms and
conditions applied: that the money would have to be repaid and that the
debt was secured by the Deed of Trust against his home.

The [Masheks’] defense to this action is that [the Bank] or its agents
acted in bad faith, and that they should be relieved of their debt based upon
the misfeasance and malfeasance of the bank and/or its agents. Had the
alterations made by [the Bank] or its agents materially changed the
intended bargain between [the Bank] and the [Masheks]; had the alterations
placed the [Masheks] in a different position vis[-à-vis] the Bank than they
had bargained for, for example by changing the rate of interest or adding
additional provisions to the contracts that the [Masheks] actually executed,
the Court would be more inclined to strike those provisions or deem the
entire agreement unenforceable. But here it appears that the changes, albeit
procedurally questionable and even perhaps fraudulent, were made not to
disadvantage the [Masheks] or change the terms of the agreement, but
instead were made to conform the flawed documents to the actual
intentions of the Parties. The material provisions were in most respects
unchanged from what the parties intended: the altered Deed of Trust
actually secures the debt of Douglas [Mashek], as Mr. [Mashek] has
testified was always his understanding and intention. The alterations to the
Notice of Right of Rescission were immaterial, as Mr. and Mrs. [Mashek]
never attempted to rescind the agreement, and in fact signed an
acknowledgment of their intent not to rescind on December 30, 2003, a full
eight days after the date on which they actually executed the Notice. Mr.
[Mashek] has made some suggestions that the Notice was flawed in that the
notice states on its face that they must rescind no later than December 18,
2003, a date that passed before the Notice was executed, but had this been a
problem for Mr. [Mashek] he could have alerted the Bank to the error. In
any event there is no evidence that Mr. [Mashek] ever intended to rescind
the agreement. Likewise the alteration of the Notary Acknowledgment to
reflect that the document had actually been signed and notarized in
24
 Minnesota merely reflects an uncontested fact, and works no hardship on
the [Masheks].

(Footnote and internal citation to record omitted.)

We note that the trial court’s finding that the alterations made to the Executed
Deed of Trust prior to recordation “were made to conform the flawed documents to the
actual intentions of the Parties” cannot be said in relation to the omission on the
Recorded Deed of Trust of the checkmark indicating an open-end mortgage because this
checkmark was undisputedly part of the original agreement. Concerning this omission,
the trial court stated:

Slightly more troubling to the Court is the failure of [the Bank] or its agents
to check the box on the Deed of Trust that describes it as an open ended
mortgage, and informing (the Masheks) of certain rights they might have
under Tennessee Law. In fact, the box was checked on the form they
actually signed, and so they were on notice of those rights. Additionally,
Mr. [Mashek] testified that he did not read the Deed of Trust and did not
ask anyone what it was before he signed it. Similarly, Mrs. [Mashek]
disclaimed any knowledge or understanding of the Deed of Trust when she
signed it. It is quite unlikely that the [Masheks] were prejudiced by the
failure of the Bank or its agents to check this box on the document filed
with the Registrar’s office when: (a) that failure was unknown to the
[Masheks] when they drew on the line of credit, (b) they claim not to have
read or understood the Deed of Trust, and (c) even though their copy of the
Deed of Trust provided them notice of rights they may have had under
Chapter 137 of the Tennessee Public Acts of 1987, there is no evidence that
they ever explored those rights or tried to assert them.

In ultimately determining that the Bank should be allowed to reform the loan
documents, the trial court considered the reformation requirements set forth in Sikora,
212 S.W.3d at 287-88, concluding as follows in relevant part:

Sikora holds that in order to reform an instrument, the party seeking
reformation must show by clear and convincing evidence that (1) the
parties reached a prior agreement regarding some aspect of the bargain; (2)
they intended the prior agreement to be included in the written contract; (3)
the written contract materially differs from the prior agreement; and (4) the
variation between the prior agreement and the written contract is not the
result of gross negligence on the part of the party seeking reformation. In
this case it is readily apparent that the first three parts of the test have been
25
met by clear and convincing evidence. It is undisputed that Mr. Mashek
desired a line of credit, and intended and understood that the line would be
secured by a Deed of Trust on his home. It is undisputed that Mr. and Mrs.
Mashek signed a series of documents intended to carry out this agreement.
It is similarly undisputed that the Deed of Trust which purported to secure
the indebtedness of “Breaking Bread Inc.” did not reflect the understanding
or agreement of the parties. The only aspect of the Sikora test that is
disputed is the question of whether the fault in the documents, specifically
the Deed of Trust, was the result of gross negligence on the part of [the
Bank]. On that point, the Sikora Court teaches that a mistake based on
inattention or inadvertence does not rise to the level of gross negligence.
The Court finds that the mistakes made in the Deed of Trust meet this
definition. It is undisputed that “Breaking Bread Inc.” was a party
unknown to either [the Bank] or the [Masheks]. It is undisputed that
neither [the Bank] nor the [Masheks] ever intended that “Breaking Bread
Inc.” be a party to their agreement. The [Masheks] disclaim any knowledge
of “Breaking Bread Inc.” and assert that it was never their intention to
pledge their home as security for the debts of “Breaking Bread Inc.” It
appears to this Court that the inclusion of “Breaking Bread Inc.” as the
party whose debts were to be secured by the Deed of Trust was a matter of
inattention or inadvertence on the part of the party drafting the Deed of
Trust, in this case apparently Defendant Stewart Title Company. There has
been no evidence produced before this Court that would suggest that the
inclusion of “Breaking Bread Inc.” in the Deed of Trust was the result of
bad faith or any sinister motive by [the Bank] or Stewart Title Company.
While it is the opinion of the Court that the methods employed by [the
Bank] and/or Stewart Title to correct these mistakes were deplorable, it is
also the opinion of the Court that those methods, while at the very least
sloppy, were not undertaken in bad faith; again the Court would come to a
different conclusion had the changes been made to disadvantage the
[Masheks] or materially alter the agreement they had reached. Here
however the changes were made to comport the documents with the actual
agreement and intentions of the Parties. While the Court certainly
questions the means employed by [the Bank] and/or Stewart Title in
conforming the documents to reflect the intention of the Parties, nothing
has been presented to this Court that would cause the Court to question
their motives.

At the end of the day, the [Masheks], or at least Mr. [Mashek],
sought a source of credit from [the Bank]. They obtained that credit, took
advantage of it and benefited from it. Although the Court does not doubt
26
 that the [Masheks] feel themselves aggrieved by the post-execution
alteration of the documents central to this business relationship, they cannot
in good faith argue that they did not benefit from the agreement that they
made with the bank, and they cannot deny (and have not denied) that it was
always their intention to repay the funds they were advanced, or that they
voluntarily and intentionally pledged their home as security for any funds
advanced to them.

In short, the Court finds that the changes sought to the documents by
[the Bank] fall within the definition of “scrivener’s errors” and that the
documents shall be reformed nunc pro tunc to December 22, 2003, when
they were fully executed. The Deed of Trust shall be reformed to reflect
that it secures the debt of Douglas V. [Mashek], and the Notary
Acknowledgment should reflect that the documents were notarized in
Minnesota. Additionally, the box denoting the Deed of Trust as securing an
“Open Ended Mortgage” shall be checked. Further, the Court finds that the
findings announced herein fully address the claims made in the [Masheks’]
Counter-Complaint, and that therefore the Counter-Complaint shall be
dismissed. [The Bank] shall be allowed to pursue foreclosure proceedings
if it wishes. However, the Court would strongly encourage [the Bank] to
attempt to reach some reasonable agreement with the [Masheks] to allow
them to attempt to bring themselves into compliance with the terms of the
line of credit, the Court finding that their self-help response[s] to the
discovery of the altered loan documents, while lacking legal support, were
not borne out of bad faith on the part of the [Masheks], at least based upon
the record which has been brought before this Court. The [Masheks]
appear to this Court to be honorable people, legitimately, in their view,
aggrieved by apparent malfeasance of [the Bank] and/or its agents and
acting upon their consciences, and this Court would express a sincere desire
that they not lose their home because of this most unfortunate series of
events.

The trial court thereby determined that reformation of the loan documents was
appropriate because the discrepancies the Bank sought to correct constituted scrivener’s
errors; because the mistakes were the result of “inattention or inadvertence,” rather than
gross negligence, on the part of the Bank or its agent(s); and because the Masheks
obtained the benefit of their bargain with the Bank.

27
 1. Mutual Mistake

If the Bank’s action to reform the Executed Deed of Trust were based solely on
two of the alterations made to the Executed Deed of Trust prior to recordation, we would
agree with the trial court. These two alterations were corrections to mistakes in
expression, namely the change from Breaking Bread, Inc., to Mr. Mashek for the entity
whose debt was secured and the change in the location of notarization from Knox
County, Tennessee, to Anoka County, Minnesota. “A mistake in expression occurs
where one or both parties to a written contract erroneously believe that the contract
embodies the agreement that both parties intended it to express.” Sikora, 212 S.W.3d at
287.

Despite the Masheks’ protestations that they did not read the Executed Deed of
Trust before signing it, they are charged with knowledge of the contents of the documents
they signed. See Dixon v. Grissom, No. E2014-00947-COA-R9-CV, 2015 WL 3643426,
at *9 (Tenn. Ct. App. June 12, 2015) (“[P]arties have a duty to read the written contracts
they enter into and are ordinarily chargeable with knowledge of their contents regardless
of whether they have actually read them.” (citing Sikora, 212 S.w.3d at 290)). Because
the Masheks were presumably aware of what was in the Executed Deed of Trust, these
two mistakes in expression were mutual mistakes. See Sikora, 212 S.W.3d at 288 (“As
long as the party seeking reformation establishes the elements of a mistake in expression,
any discrepancy between the parties’ prior agreement and their written contract is
presumed to be the result of a mutual mistake (unless, of course, there is evidence of
fraud)).6

Applying the requirements for reformation set forth in Sikora to these two
discrepancies between the Executed Deed of Trust and the Recorded Deed of Trust, we
determine that the trial court properly found clear and convincing evidence that
reformation would have been appropriate to correct these two errors because (1) the
parties had reached a prior agreement that Mr. Mashek’s obligation under the Note would
be secured by the Property; (2) the parties intended this agreement to be included in the
Executed Deed of Trust; (3) the error of naming an unrelated party as the one whose
debts were secured differed from the parties’ agreement, and a simple factual
inconsistency existed in the wrong county and state of notarization; and (4) the two
6
Although the Masheks have asserted a claim for fraud on the part of the Bank through the unilateral
alterations to the loan documents after the documents’ execution, we note that the fraud referred to in
Sikora would be a defendant’s intentional insertion of a material difference in the parties’ agreement at
the time of the written documents’ execution to the detriment of the party seeking reformation (in this
case, the Bank). See Sikora, 212 S.W.3d at 288 (“To reform a contract based on mistake, a plaintiff must
establish that the contract was executed under mutual mistake or a unilateral mistake induced by the
defendant’s fraudulent misrepresentation.” (quoting 27 WILLISTON ON CONTRACTS § 70:93, at 495)).

28
mistakes amounted to scrivener’s errors rather than the result of gross negligence. See
Sikora, 212 S.W.3d at 288.

Concerning the trial court’s finding, specifically as to these two errors only, that
they were not the result of gross negligence on the part of the Bank or its agent(s), we
note that a party’s “inattention” in drafting an instrument is not a bar to reformation. See
id. at 290. As this Court has explained:

Although courts have stated that the mistake must not be due to the
complainant’s own negligence, see, e.g., Klosterman [Dev. Corp. v. Outlaw
Aircraft Sales, Inc.], 102 S.W.3d [621,] 632 [(Tenn. Ct. App. 2002)],
“reformation is denied only in ‘extreme cases’ where a party’s fault
‘amounts to a failure to act in good faith and in accordance with reasonable
standards of fair dealing.’” Sikora 212 S.W.3d at 290 (citing Restatement
(Second) of Contracts § 157 & cmt. a, at 416). Mere inattention, as the
word is used in common parlance, is not an absolute bar to reformation
under Tennessee law. Id. at 289. Often times, a party could have avoided
the mistake by exercising reasonable care, and if mere negligence barred
recovery, the availability of relief for mutual mistake would be severely
circumscribed. See id., n.15 (citing Restatement (Second) of Contracts §
157 cmt. a, at 416).

Hunt v. Twisdale, No. M2006-01870-COA-R3-CV, 2007 WL 2827051, at *7 (Tenn. Ct.
App. Sept. 28, 2007).

We acknowledge that throughout this litigation, the Masheks have essentially
argued that when the Bank or its agent(s) altered the Executed Deed of Trust and
recorded the altered deed without any notification to the Masheks of the alterations, the
Bank should have been precluded from reforming or enforcing the Recorded Deed of
Trust as a matter of law. However, the Masheks have presented no applicable authority,
and our research has revealed none, for the proposition that the Bank’s or its agent’s
action in, prior to recordation, correcting the two scrivener’s errors in the Executed Deed
of Trust to align with the parties’ mutual understanding of their bargain at the time of
execution would have been an automatic bar to enforcement of the Executed Deed of
Trust. We agree with the trial court that the Bank’s “self-help” actions in this regard
were “procedurally questionable and even perhaps fraudulent,” but because the correction
of these two scrivener’s errors did not materially alter the parties’ bargain, the Bank
would not have been automatically barred from enforcing the Recorded Deed of Trust
solely because it made these corrections through improper procedure.

29
 In support of their argument, the Masheks rely in part on Tennessee Code
Annotated § 66-5-107 (2015) to assert that “statutory estoppel” should be a bar to
enforcement of the Executed Deed of Trust. This statutory section provides a procedure
whereby

[w]henever an error or mistake is made in any deed of conveyance, or in the
registration thereof, either in courses, distances, or names, the person liable
to injury by such error or mistake may prefer a petition to the circuit court
of the county in which the land is situated, setting forth the nature of the
mistake or error, and all and singular the matters relative thereto.

Tenn. Code Ann. § 66-5-107(a). The statutory section also provides for public notice and
the appearance of any party opposing the correction. Id. at (b)-(d).

However, ultimately, the statute provides:

The court shall examine such testimony as the petitioner may produce; and
whenever it shall appear evident, from such testimony, that there was an
error or mistake committed in drawing the deed of conveyance, the court
shall order the same to be rectified, so as to comport with the intention of
the parties; and shall further order the register of the county, in which the
land is situated, to register the conveyance agreeably to the correction.

Id. at (e). Therefore, the purpose of the procedure provided through this correction
statute is to have the recorded deed “comport with the intention of the parties,” see id., as
the correction of the two scrivener’s errors would in this case.

Contrary to the Masheks’ assertion, Tennessee Code Annotated § 66-5-107 does
not expressly provide for a bar to the validity of the deed if the procedure is not followed.
As the trial court noted, other procedures that were available to the Bank to properly
correct the scrivener’s errors were to (1) file a motion to reform the Executed Deed of
Trust, as the Bank has finally done here, or (2) record an affidavit of scrivener’s error
pursuant to Tennessee Code Annotated § 66-24-101(27) (Supp. 2019), once that newly
enacted subsection took effect in April 2004, see 2004 Tenn. Pub. Acts, Ch. 497 §1 (S.B.
2712). See generally, Washington Mut. Bank v. N.K.T. Land Acquisitions Inc., No.
M2007-02040-COA-R3-CV, 2008 WL 2925299, at *5 (Tenn. Ct. App. July 23, 2008).

The Masheks argue that what the trial court found to be the Bank’s or its agent’s
“indulge[nce] in self-help” and “unilateral[] alter[ation]” of the Executed Deed of Trust
prior to recordation constitute a failure to act in good faith or in accordance with fair
dealing amounting to gross negligence and should therefore bar reformation. However,
30
specifically as to these two errors, because the unilateral alterations to the Executed Deed
of Trust occurred after the execution of the loan documents, we determine that the trial
court did not err in finding that the original creation of these two mistakes was most
likely the result of “mere negligence” or “mere inattention” and did not constitute gross
negligence on the part of the Bank. See Hunt, 2007 WL 2827051, at *7.

2. Rescission Notice

As to the third discrepancy in the loan documents, the trial court found that the
Bank or its agent(s) had unilaterally altered the Rescission Notice to change the date of
the Masheks’ signatures acknowledging the notice from December 22, 2003, the date
they actually signed the Rescission Notice, to December 15, 2003, the date that Mr.
Mashek had executed the Note. As the trial found, the Masheks do not “contest the fact
that they signed the Notice of Right of Rescission document on December 22, 2003, nor
do they contest that they signed, on December 30, 2003, the acknowledgment on the
same document that they had no desire to rescind the agreement.” This acknowledgment,
labeled a “CONFIRMATION” and signed by the Masheks as “Consumers” on December
30, 2003, states as follows:

More than 3 business days have elapsed since the undersigned received this
Notice, and Truth-in-Lending disclosures, with regard to this account. The
undersigned certify that the account has not been rescinded.

(Font standardized.)

The trial court found that in altering the Rescission Notice “for some reason [the
Bank] or Stewart Title desired that it reflect the date on which the Promissory Note was
executed (December 15, 2003).” In its complaint, amended complaint, and motion for
partial summary judgment, the Bank did not specifically request reformation as to the
date of the Rescission Notice confirmation. However, the Bank did request reformation
of the Executed Deed of Trust nunc pro tunc to December 15, 2003, as the date that the
entire agreement had been executed. Instead, the trial court, finding that the loan
documents had not been fully executed until the Rescission Notice confirmation had
actually been signed by the Masheks, granted reformation of the Executed Deed of Trust
nunc pro tunc to December 22, 2003.

The Masheks assert that because they received the Rescission Notice seven days
after signing the Executed Deed of Trust and four days after the three-day period
following execution had ended, they had no way of knowing that the three-day rescission
period had not ended. However, the Rescission Notice received by the Masheks stated
the following in pertinent part:
31
 Your Right to Cancel
We have agreed to establish an open-end credit account for you, and you
have agreed to give us a mortgage/lien/security interest on/in your home as
security for the account. You have a legal right under federal law to cancel
this account, without cost, within three business days from whichever of the
following events occurs last:

(1) the opening date of the account which is DECEMBER 15, 2003; or
(2) the date you received your Truth-in-Lending disclosures; or
(3) the date you received this notice of your right to cancel the account.

(Underlining represents a filled blank on the form.)

The event that occurred last was clearly the Masheks’ receipt of the Rescission
Notice, meaning that under the plain language of the “Right to Cancel” on the notice, the
Masheks were informed that they still had three days within which they could cancel the
agreement.7 See Beacon4, LLC v. I & L Investments, LLC, 514 S.W.3d 153, 181 (Tenn.
Ct. App. 2016) (“In interpreting the language of a contract, we are required to use ‘the
usual, natural, and ordinary meaning’ of terms.” (quoting Staubach Retail Servs.-Se., LLC
v. H.G. Hill Realty Co., 160 S.W.3d 521, 526 (Tenn. 2005))). We recognize that the
Rescission Notice subsequently listed the date of December 18, 2003, as the date by
which the Masheks would have had to mail a notice of cancellation. Although this date
was based on the opening date of the account and was potentially confusing, a careful
reading of the events triggering the three-day rescission period for the “Right to Cancel”
would have revealed that the triggering date in this case was the date of receiving the
notice.

Moreover, the Masheks have not at any time claimed that they actually desired to
rescind the agreement when they signed the confirmation statement on December 30,
2003. Upon careful review, we agree with the trial court that the change in date of the
Masheks’ signatures on the Rescission Notice did not change the parties’ agreement in
any way and does not, in and of itself, affect the validity of the Executed Deed of Trust.

7
The language setting forth the consumer’s right to cancel mirrors the requirements of the Code of
Federal Regulations § 1026.23 of the federal Truth in Lending Act, which the Masheks have cited in
support of their argument concerning the Rescission Notice. Although the Bank asserts that the Masheks
improperly relied on this provision for the first time on appeal, we find this assertion unavailing in that
the Bank knew that an alteration to the Rescission Notice was at issue in the Masheks’ defense to this
claim and knew that in sending the notice, the Bank had been required to comply with this federal
regulation.
32
 We recognize, however, that the Masheks’ central issue with regard to the
Rescission Notice is not the alteration of the date by their signatures but the manner in
which the change was made, with what the trial court found to be “an apparently
fraudulent acknowledgment in the form of forged initials made over the handwritten
correction.” On appeal, the Bank does not deny that the Rescission Notice was altered
after the Masheks confirmed that they did not wish to rescind the agreement. The Bank
acknowledges in its brief:

The alterations had obviously not been made at [the] time the Masheks
signed the document on December 30, 2003, because if they had been made
before that date, the Masheks would have seen them at the time, and the
changes would have been on the copy of the rescission notice that was
mailed to Mr. Mashek in January, 2004.

The Masheks essentially argue that the unauthorized writing of their initials over
the handwritten correction to the date on the Rescission Notice confirmation constitutes a
forgery and that even apart from the other three discrepancies in the loan documents, the
Bank should be estopped from enforcing the entire agreement based on this purported
forgery. Although we cannot agree that the unauthorized use of the Masheks’ initials
rises to the legal definition of forgery as a cause of action or invalidates the entire
agreement, we agree with the Masheks insofar as any reformation of the effective date of
the Rescission Notice is concerned.

It is true that a forged signature on a deed invalidates the deed. See Beazley v.
Turgeon, 772 S.W.2d 53, 59 (Tenn. Ct. App. 1988) (determining that because “the trust
deed given to defendants was a forgery,” it “became null and void upon its execution”).
Regarding a party’s initials, Tennessee courts have long recognized that “[i]t is not
necessary that a party should write his name on a note or under it to bind himself as
endorser or maker; he may execute it as effectually by his initials, by figures, or a mark.”
Brown v. McClanahan, 68 Tenn. 347, 348 (Tenn. 1878) (quoting EDWARDS ON BILLS
AND NOTES 150). However, as the Bank points out, “[t]he fact that a signature or
endorsement is unauthorized does not necessarily establish it as a forgery unless there is
also evidence of an intent to defraud.” Regions Bank v. Bric Constructors, LLC, 380
S.W.3d 740, 768 (Tenn. Ct. App. 2011) (quoting Bd. of Prof’l Responsibility v. Curry,
266 S.W.3d 379, 393 (Tenn. 2008). As our Supreme Court has explained:

The Uniform Commercial Code does not define “forgery,” and instead the
courts look to the definition of the offense in the criminal code. See
McConnico v. Third Nat’l Bank, 499 S.W.2d 874, 884-85 (Tenn. 1973).

33
 Under current law, a person commits forgery when he or she “forges
a writing with intent to defraud or harm another.” Tenn. Code Ann. § 39-
14-114(a). Thus, a necessary element of the act of forgery is an intent to
defraud. State v. Rounsaville, 701 S.W.2d 817, 819-20 (Tenn. 1985).

Bd. of Prof’l Responsibility v. Curry, 266 S.W.3d 379, 393 (Tenn. 2008) (footnote
omitted). Tennessee Code Annotated § 39-14-114(b)(1)(A)(i) (2018) defines “forge” in
relevant part as to “[a]lter, make, complete, execute or authenticate any writing so that it
purports to [b]e the act of another who did not authorize the act[.]”

In this case, the Masheks have presented a dearth of evidence that when the Bank
or its agent(s) altered the date of the Masheks’ signature on the Rescission Notice and
affixed the Masheks’ initials to the alteration without authorization, the act was
performed with an intent to defraud the Masheks. In fact, as determined above, the
reason for the change is unclear because the language of the Rescission Notice allowed
for a three-day rescission period after the notice had been received by the Masheks.
Therefore, we also cannot find that the Bank or its agent(s) performed this act in order to
perfect the agreement, and as the Bank acknowledges, the act was performed without any
notice to the Masheks, let alone authorization from them.

Although the intent behind this use of the Masheks’ initials “purport[ing] to [b]e
the act of another who did not authorize the act,” see id., does not rise to the level of
criminal forgery, we are in accord with the trial court’s statement that the act “shock[s]
the conscience of the Court.” We determine that the manner in which this change was
made exhibited gross negligence on the part of the Bank or its agent(s) in that the act of
affixing the Masheks’ initials over the altered date without authorization or notice
constituted a failure to act in good faith and in accordance with reasonable standards of
fair dealing. See Sikora 212 S.W.3d at 290 (“[R]eformation is denied only in ‘extreme
cases’ where a party’s fault ‘amounts to a failure to act in good faith and in accordance
with reasonable standards of fair dealing.’” (quoting RESTATEMENT (SECOND) OF
CONTRACTS § 157 & cmt. a, at 416)).

“Tennessee courts have consistently applied the principle that Tennessee law
recognizes an implied covenant of good faith and fair dealing in every contract.” Dick
Broad., 395 S.W.3d at 661 (citations omitted). As our Supreme Court has explained,
[w]hile the implied covenant of good faith and fair dealing ‘does not create new
contractual rights or obligations, it protects the parties’ reasonable expectations as well as
their right to receive the benefits of their agreement.” Id. at 666 (quoting Long v.
McAllister-Long, 221 S.W.3d 1, 9 (Tenn. Ct. App. 2006)). The Masheks had a
reasonable expectation that neither the Bank nor its agent(s) would place their initials on
a document in supposed authorization of a change that they did not authorize. Having
34
determined that the Bank or its agent(s) exhibited gross negligence in altering the date
that the Rescission Notice had been received, we conclude that the Bank could not
succeed as a matter of law in its request to reform the effective date of the Rescission
Notice confirmation to December 15, 2003.

3. Open-End Mortgage

Finally, we come to the fourth discrepancy in the loan documents, the box
indicating an open-end mortgage, which was checked on the Executed Deed of Trust and
not checked on the Recorded Deed of Trust. In its October 2017 order on the Bank’s
motion to alter or amend, the trial court directed that, nunc pro tunc to December 30,
2003, the Executed Deed of Trust would be reformed “to conform with the deed of trust
recorded as Instrument No. 200401160070275 in the Knox County Register’s Office,”
while also directing that the Recorded Deed of Trust would be reformed “so that the box
preceding the first paragraph thereof would be checked,” indicating an open-end
mortgage.

During the April 2018 post-judgment motion hearing, Mr. Mashek argued that it
was contradictory for the trial court to order that the Executed Deed of Trust be reformed
to conform to the Recorded Deed of Trust and then also order that the box indicating an
open-end mortgage be checked in the reformed document because that box had
previously only been checked in the Executed Deed of Trust. The trial court explained
orally that the effect of the October 2017 order would be that an entirely new document
would be recorded as Instrument No. 200401160070275, which would conform with the
parties’ agreement as both parties understood it at the time of execution. Although we
agree with the trial court that this substitution of a new deed of trust would be the effect
of its reformation order, we perceive a fatal flaw in this ruling for reformation. The
discrepancy concerning whether this was an open-end mortgage was not known to the
Masheks until Mr. Mashek requested presentment of the Note in 2011 and discovered the
accompanying discrepancies between the Executed and Recorded Deeds of Trust and the
two versions of the Rescission Notice.

We determine that, beyond any issue of material fact, the unilateral alteration of
the Executed Deed of Trust by the Bank or its agent(s) omitting the indication of an open-
end mortgage was an alteration to the executed agreement that was made after execution
but prior to recordation with no actual or constructive notice to the Masheks. Although
the Recorded Deed of Trust, with the indication of an open-end mortgage omitted, was a
public record open to inspection, the Bank has offered no reason why the Masheks should
have suspected that the Recorded Deed of Trust would be any different from the copy of
the Executed Deed of Trust they had received soon after executing the December 2003

35
agreement. We cannot find that the Masheks were chargeable with knowledge of the
alteration.

This purported error in the Recorded Deed of Trust was therefore not the result of
a mutual mistake in expression in the Executed Deed of Trust, as were the discrepancies
in the name of the party whose debts were secured and the location of notarization. The
omission of the open-end mortgage indication was a unilateral mistake on the part of the
Bank or its agent(s). See Russell v. Security Ins., Inc., No. 01A01-9803-CV-00135, 1999
WL 74787, at *2 (Tenn. Ct. App. Feb. 18, 1999) (“A mistake by one party coupled with
ignorance thereof by the other party does not constitute a mutual mistake.” (quoting 76
C.J.S. Reformation of Instruments § 29 at 382 (1996))).

Given that the Bank has acknowledged during this litigation that the parties’ prior
agreement was for the mortgage to be open-ended, the Bank certainly has not alleged any
fraud on the part of the Masheks that would have led the Bank to omit the checkmark on
the Recorded Deed of Trust. Additionally, when the Bank began foreclosure
proceedings, it represented the altered Recorded Deed of Trust as if it were the same
document the parties had executed. Even at the time of filing the complaint in this action,
the Bank asserted that the Recorded Deed of Trust was “a true and correct copy of the
Deed of Trust that was signed by Mr. Mashek and Ms. Mashek at the Closing” while also
acknowledging that Mr. Mashek had produced the front page of the Executed Deed of
Trust with the discrepancies visible.

Moreover, we determine that this unilateral mistake was material in nature. The
open box, checked in the Executed Deed of Trust and unchecked in the Recorded Deed of
Trust, is located next to the following provision:

If this box is checked, this is an OPEN-END MORTGAGE as defined in
Chapter 137, 1987 Public Acts of Tennessee, as amended, made pursuant to
a revolving credit agreement of even date herewith to which reference is
here made and which prescribes the terms and conditions under which
advances are to be made. This Deed of Trust fixes the maximum limit of
the principal indebtedness to be secured at anytime, i.e. the credit limit, and
further fixes the term of the revolving credit agreement. Grantor hereby
acknowledges notice that said Public Chapter 137, as amended, gives
Grantor the right, by complying with its provisions, to reduce the limit on
the maximum amount of the indebtedness secured by this Deed of Trust.

Tennessee Code Annotated § 47-28-101(8) (2013) defines an “Open-end
mortgage” as “a mortgage securing an open-end credit agreement.” The statutory
definition in turn provides:
36
 “Open-end credit agreement” means a revolving credit agreement that is
secured by a mortgage and that is not entered into for commercial purposes.
Any such agreement shall be included, incorporated by reference or
referred to in the mortgage, and shall prescribe the terms under which
advances thereunder are to be made.

Tenn. Code Ann § 47-28-101(7) (2013). Although certain provisions of the statutory
scheme codified at Tennessee Code Annotated § 47-28-101 (2013), et seq., apply to
mortgages securing future advances that are not open-end mortgages, see Home Fed.
Bank, FSB v. First Nat’l Bank, 110 S.W.3d 433, 438 (Tenn. Ct. App. 2002), the right
referred to in the notice on the Executed Deed of Trust is unique to open-end mortgages,
see Tenn. Code Ann. § 47-28-105 (2013).

Tennessee Code Annotated § 47-28-105(a) provides:

The credit limit under an open-end mortgage may be reduced by the
borrower, whether the advances to be made thereunder are obligatory or
optional, to an amount not less than the amount of principal indebtedness
shown on the most recent statement of the borrower’s account received by
the borrower from the creditor, plus the amount of any advances initiated
by the borrower subsequent to that statement.

The statutory subsection continues by setting forth the procedure a borrower must follow
to effectuate a reduction in credit limit, including serving a notice of limitation on the
creditor and recording same in the register’s office. Tenn. Code Ann. § 47-28-105(b)-(c).

The statute further provides:

From and after the service of such a notice of limitation, the borrower shall
not request or demand any further advances under the open-end credit
agreement that exceed the credit limit stated in the notice, and the creditor
will be relieved and released from any obligation or commitment to make
advances thereunder that exceed that reduced credit limit.

Tenn. Code Ann. § 47-28-105(d). A conspicuous notice concerning an open-end
mortgage and the borrower’s right, as displayed on the Executed Deed of Trust, is
required to be on an open-end mortgage document pursuant to Tennessee Code
Annotated § 47-28-104(a) (2013) (providing requirements for an open-end mortgage “to
have the priority provided in § 47-28-103”).

37
 We conclude that the Bank made a material, unilateral mistake when it omitted the
open-end mortgage indication from the Recorded Deed of Trust and did so without any
notice to the Masheks that the deed had been altered. We therefore determine that as to
the open-end mortgage, the Bank could not prove the essential reformation element of
mutual mistake or fraud at the time of the agreement’s execution. See Sikora, 212
S.W.3d at 288 (“To reform a contract based on mistake, a plaintiff must establish that the
contract was executed under mutual mistake or a unilateral mistake induced by the
defendant’s fraudulent misrepresentation.” (quoting 27 WILLISTON ON CONTRACTS §
70:93, at 495)); see, e.g., Hitchcock Metal Sources, Inc. v. Mulford, No. E2003-00738-
COA-R3-CV, 2004 WL 178390, at *6 (Tenn. Ct. App. Jan. 29, 2004) (affirming the trial
court’s denial of the plaintiff’s request to reform the parties’ contract upon concluding
that “the essential element” of mutual mistake had not been met). Furthermore, inasmuch
as the Bank has essentially requested a two-part reformation, first of the mutual mistakes
and then of its unilateral mistake compounded on the mutual mistakes, we determine that
under the totality of the facts in this case, a piecemeal reformation is not warranted. We
reverse the trial court’s grant of partial summary judgment to the Bank on this issue and
declare both the Executed Deed of Trust and the Recorded Deed of Trust to be
unenforceable.

B. The Note

The Masheks contend that the trial court erred in granting partial summary
judgment to the Bank by awarding a monetary judgment against Mr. Mashek in the
amount of $294,566.39 for the unpaid principal and interest owed on his line of credit
pursuant to the Note. Having determined that the Executed Deed of Trust may not be
reformed and is unenforceable, and that in turn the Recorded Deed of Trust may not be
reformed and is unenforceable, we emphasize that the Note remains an enforceable, albeit
unsecured, negotiable instrument. See Mortg. Elec. Registration Sys., 488 S.W.3d at 267;
W.C. Early Co. v. Williams, 186 S.W. 102, 103-04 (Tenn. 1916) (“The policy of the law
is to treat the note as the principal thing and the mortgage as the incident . . . .”). Upon
review, we conclude that the trial court did not err in granting partial summary judgment
to the Bank by awarding the monetary judgment on Mr. Mashek’s line of credit pursuant
to the Note.

In its October 2017 order on the Bank’s motion to alter or amend, the trial court
stated the following regarding this monetary judgment:

The Court’s Memorandum Opinion and Order, entered on July 13,
2017 (“the Order”) does not address the portion of [the Bank’s] motion for
partial summary judgment regarding its claimed entitlement to a judgment
against [Mr.] Mashek, exclusive of attorney’s fees. In this respect, [the
38
 Bank’s] motion for partial summary judgment was supported in part by the
affidavit of Shelly Spurgeon, a Senior Vice President of [the Bank], which
states that the principal balance owed by [Mr.] Mashek on his line of credit
is $244,379.70; that the unpaid interest as of June 2, 2017, was in the
amount of $47,143.40; and that interest would accrue from and after June 2,
2017, in the per diem amount of $26.46342. In their papers filed in
opposition to [the Bank’s] motion for partial summary judgment, [the
Masheks] neither admitted nor denied the statements in Shelly Spurgeon’s
affidavit, saying only that “Defendants only agree that the figure is on the
Affidavit of Shelly Spurgeon.” Since [the Masheks] filed nothing to create
a genuine issue of material fact regarding the amount owed by [Mr.]
Mashek to [the Bank] on his line of credit, pursuant to Rule 56 of the
Tennessee Rules of Civil Procedure, judgment shall issue in favor of [the
Bank] against [Mr.] Mashek for the amount he owes [the Bank] on his line
of credit, which is exclusive of attorney’s fees. Accordingly the Order is
amended to provide as follows:

IT IS HEREBY ORDERED that [the Bank] is hereby granted, and
shall have and recover a judgment against [Mr.] Mashek in the amount of
Two Hundred Ninety Four Thousand, Five Hundred Sixty-Six and 39/100
Dollars ($294,566.39), representing the principal balance and the accrued
interest owed by [Mr.] Mashek on his line of credit with [the Bank] through
September 25, 2017.

The Masheks assert that the trial court should not have accepted the figures presented by
the Bank because those figures were “based on [a] faulty affidavit of hearsay without the
right to cross-examine.” We disagree.

We note that “admissibility or exclusion of evidence rests within the sound
discretion of the trial court which should be reversed only for abuse of that discretion.”
Austin v. City of Memphis, 684 S.W.2d 624, 634 (Tenn. Ct. App. 1984). Regarding
affidavits presented in support of a motion for summary judgment, Tennessee Rule of
Civil Procedure 56.06 requires in pertinent part:

Supporting and opposing affidavits shall be made on personal knowledge,
shall set forth such facts as would be admissible in evidence, and shall
show affirmatively that the affiant is competent to testify to the matters
stated therein.

Tennessee Rule of Evidence 801(c) defines hearsay as “a statement, other than one made
by the declarant while testifying at the trial or hearing, offered in evidence to prove the
39
truth of the matter asserted.” Pursuant to Tennessee Rule of Evidence 802, “[h]earsay is
not admissible except as provided by these rules or otherwise by law.” See Godbee v.
Dimick, 213 S.W.3d 865, 894 (Tenn. Ct. App. 2006).

Tennessee Rule of Evidence 803(6) provides as an exception to the hearsay rule:

Records of Regularly Conducted Activity. A memorandum, report,
record, or data compilation, in any form, of acts, events, conditions,
opinions, or diagnoses made at or near the time by or from information
transmitted by a person with knowledge and a business duty to record or
transmit if kept in the course of a regularly conducted business activity and
if it was the regular practice of that business activity to make the
memorandum, report, record or data compilation, all as shown by the
testimony of the custodian or other qualified witness or by certification that
complies with Rule 902(11) or a statute permitting certification, unless the
source of information or the method or circumstances of preparation
indicate lack of trustworthiness. The term “business” as used in this
paragraph includes business, institution, profession, occupation, and calling
of every kind, whether or not conducted for profit.

Upon examination, we find Ms. Spurgeon’s affidavit to have met the Rule 803(6)
requirements for a record of the Bank’s regularly conducted activity. The Masheks argue
that Ms. Spurgeon could not have possessed personal knowledge of their line of credit
because Mr. Mashek had not personally dealt with her through the course of the parties’
transaction. However, Ms. Spurgeon established in her affidavit that through her role as
“a Senior Vice President and the Special Assets and Credit Analyst Manager” for the
Bank, she had been “the primary [Bank] officer involved in efforts to collect the debt
which [Mr. Mashek] owes to [the Bank].” Ms. Spurgeon also attached to her affidavit a
detailed loan history with each transaction cataloged, whether advance, payment, or
finance charge, during the time frame spanning December 15, 2003, through May 22,
2017.

For their part, the Masheks have not presented any evidence refuting the loan
history, and Mr. Mashek has not denied receiving the principal advances from the Bank.
The Masheks insist that they were prejudiced because they were unable to depose Ms.
Spurgeon due to timing conflicts during the discovery process and the trial court’s
subsequent denial of the Masheks’ post-judgment motion to depose Ms. Spurgeon, which
they filed pursuant to Tennessee Rule of Civil Procedure 27.02. We find no abuse of
discretion in the trial court’s denial of the Masheks’ Rule 27.02 motion, which allows for
a trial court in its discretion and if it “finds that the perpetuation of the testimony is
proper to avoid a failure or delay of justice,” to grant a motion for deposition testimony to
40
be taken pending an appeal “for use in the event of future proceedings in the trial court.”
(Emphasis added.) The instant situation was not appropriate for Rule 27.02 relief.

Moreover, the Masheks have presented no evidence to contradict the specific
principal and interest owed, as detailed in the loan history presented by the Bank, and
they have not indicated how their cross-examination of Ms. Spurgeon would yield any
such evidence. See Rye, 477 S.W.3d at 265 (“The nonmoving party must demonstrate the
existence of specific facts in the record which could lead a rational trier of fact to find in
favor of the nonmoving party.”). The trial court did not err in granting partial summary
judgment in favor of the Bank by awarding a judgment against Mr. Mashek in the amount
of $294,566.39 for the unpaid principal and interest owed on his line of credit pursuant to
the Note. We clarify that the Note will retain its original execution date of December 15,
2003.

C. Attorney’s Fees and Expenses

Upon the Bank’s motion for attorney’s fees and legal expenses, requested pursuant
to a provision in the Note, the trial court granted the motion only as to attorney’s fees and
expenses incurred during what “would be expected in an ordinary foreclosure action,”
awarding to the Bank $6,226.00 in attorney’s fees and $2,569.84 in expenses, for a total
award of $8,795.84. On appeal, the Masheks contend that the trial court erred by
awarding any attorney’s fees or expenses to the Bank. They argue that the Bank’s
alterations to the Executed Deed of Trust and Rescission Notice should bar the Bank
from recovery.

The Bank raises its own issue, contending that the trial court erred by denying its
request for the balance of the 84,230.25 in attorney’s fees and $7,135.34 in legal
expenses the Bank had originally requested. The Bank requested these fees and expenses
as those incurred during the entire litigation, comprising a total request of $91,365.59, or
$82,569.75 above what the trial court awarded. We conclude that the trial court did not
abuse its discretion in declining to award attorney’s fees and expenses to the Bank for
litigation that the court found to be caused by the Bank’s or its agent’s mistakes in
drafting and subsequent unilateral alterations to the loan documents. Moreover, having
determined that the Bank is precluded from enforcing the Executed Deed of Trust and the
Recorded Deed of Trust, we further determine that the Bank is entitled solely to those
attorney’s fees and expenses related to seeking a judgment based on the Note.

In considering claims for attorney’s fees, Tennessee courts adhere to the
“American Rule.” See Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d
303, 308 (Tenn. 2009) (explaining that “[u]nder the American rule, a party in a civil
action may recover attorney fees only if: (1) a contractual or statutory provision creates a
41
right to recover attorney fees; or (2) some other recognized exception to the American
rule applies, allowing for recovery of such fees in a particular case.”). In this action, the
trial court had the authority to grant attorney’s fees to the Bank based on the following
provision in the Note:

You [the borrower] agree to pay at our costs, including reasonable
attorney’s fees, what we incur in legal proceedings to collect or enforce the
debt should you be in default.

In granting attorney’s fees relevant to the collection of the debt on the Note and
foreclosure action, the trial court specifically found that the fees and expenses requested
by the Bank were reasonable. The Masheks have not specifically contested the
reasonableness of the attorney’s fees, and the record indicates that the Bank provided a
detailed accounting of the attorney’s fees and expenses.

Inasmuch as we have concluded that the Note remains enforceable, we
accordingly conclude that the trial court did not abuse its discretion by finding that the
Bank was entitled to reasonable attorney’s fees and expenses related to collection of Mr.
Mashek’s debt owed on the Note apart from the reformation action. However, having
also determined that the Executed Deed of Trust and the Recorded Deed of Trust are
unenforceable due to the actions of the Bank or its agent(s), we vacate the portion of the
attorney’s fees and expenses that the Bank incurred in attempting to enforce the Executed
Deed of Trust and the Recorded Deed of Trust. We remand to the trial court for an
evidentiary hearing as necessary and determination of the amount of reasonable
attorney’s fees and expenses incurred by the Bank solely related to the enforcement of the
Note apart from this reformation action.

VI. The Masheks’ Remaining Issues

The Masheks also assert that the trial court erred by failing to dismiss the Bank’s
complaint sua sponte and by dismissing the Masheks’ counterclaims. In support of their
assertion that the trial court should have dismissed the complaint sua sponte, the Masheks
rely on criminal forgery statutes and the doctrine of unclean hands, both of which the
Masheks had raised as “counterclaims” before the trial court, to argue that the Bank
“committed . . . a fraud upon this court.” The criminal statutes are inapplicable to this
civil action. Additionally, the doctrine of unclean hands is an affirmative defense that
must be proven by the defendant, not a reason for sua sponte dismissal. See In re Estate
of Boote, 265 S.W.3d 402, 418 (Tenn. Ct. App. 2007).

The Masheks have also asserted as one of their “counterclaims” the affirmative
defense of equitable estoppel. We recognize that “[w]hen a party has mistakenly
42
designated a defense as a counterclaim . . . the court, if justice so requires, shall treat the
pleading as if there had been a proper designation.” Tenn. R. Civ. P. 8.03. However,
having previously determined that the Bank cannot meet an essential element required for
reformation, we accordingly determine that any further consideration of the affirmative
defenses of equitable estoppel and unclean hands is pretermitted as moot. We note that
we have addressed the Masheks’ asserted defense of statutory estoppel in a previous
section of this opinion.

The Masheks’ remaining counterclaims include breach of fiduciary duty,
negligence, slander of title, and wrongful foreclosure. In the argument section devoted to
their counterclaims in their principal brief, the Masheks reassert factual allegations but
provide no legal authority for the theories upon which these claims may be based.
Tennessee Rule of Appellate Procedure 27(a)(7) provides that an appellant’s brief must
contain an argument setting forth “the contentions of the appellant with respect to the
issues presented, and the reasons therefor, including the reasons why the contentions
require appellate relief, with citations to the authorities and appropriate references to the
record (which may be quoted verbatim) relied on[.]” As our Supreme Court has
explained, “[a]n issue may be deemed waived, even when it has been specifically raised
as an issue, when the brief fails to include an argument satisfying the requirements of
Tenn. R. App. P. 27(a)(7).” Hodge v. Craig, 382 S.W.3d 325, 335 (Tenn. 2012). This
Court has likewise elucidated that an issue may be considered waived when a party has
failed to “cite authority for its arguments or to argue the issues in the body of its brief.”
See Forbess v. Forbess, 370 S.W.3d 347, 355 (Tenn. Ct. App. 2011); see also McGarity
v. Jerrolds, 429 S.W.3d 562, 566 n.1 (Tenn. Ct. App. 2013) (“The failure to cite authority
to support an argument on appeal constitutes a waiver of the issue.”).

According to our High Court, “[i]t is not the role of the courts, trial or appellate, to
research or construct a litigant’s case or arguments for him or her, and where a party fails
to develop an argument in support of his or her contention or merely constructs a skeletal
argument, the issue is waived.” Sneed v. Bd. of Prof’l Responsibility, 301 S.W.3d 603,
615 (Tenn. 2010). “[P]arties must thoroughly brief the issues they expect the appellate
courts to consider.” Waters v. Farr, 291 S.W.3d 873, 919 (Tenn. 2009). We therefore
conclude that the Masheks have waived their issue concerning the trial court’s dismissal
of their remaining counterclaims. See generally, Young v. Barrow, 130 S.W.3d 59, 63
(Tenn. Ct. App. 2003) (“[T]he courts must not excuse pro se litigants from complying
with the same substantive and procedural rules that represented parties are expected to
observe.”).

43
 VII. The Bank’s Motion to Alter or Amend Language in the
Memorandum Opinion and Order

The Bank also argues that the trial court erred by denying the Bank’s motion to
amend certain language contained in the trial court’s Memorandum Opinion and Order.
In its motion to alter or amend, the Bank requested that the trial court amend the order by
stating that “the alterations to the loan documents at issue were not fraudulent, forgeries
or potentially criminal.” In its supplemental motion, the Bank further requested that the
trial court amend the order “to state that there was no malfeasance on the part of [the
Bank].” In its October 2017 order, the trial court denied the Bank’s motion in this regard
without further comment.

In support of its position on this issue, the Bank cites to authorities that it
otherwise asserts are inapplicable to this case to argue that the Bank’s actions in
circumventing proper procedural avenues for reformation do not rise to the level of
fraudulent alterations of documents, see First Tenn. Bank Nat’l Assoc. v. Wilson, 713
S.W.2d 907 (Tenn. Ct. App. 1985), and that what the trial court termed the “forge[ry]” of
the Masheks’ initials on the Rescission Notice was not done with the intent required by
the criminal statute defining forgery, see Tenn. Code Ann. § 39-14-114(a). Having
previously determined that the Masheks failed to present any evidence to create a genuine
issue of material fact concerning whether the Bank or its agent(s) intended to defraud the
Masheks through the unauthorized use of the Masheks’ initials, we agree that the
requirements of criminal forgery cannot be found under the facts of this case. However,
we also determine that the trial court described the initials as “forged” in the sense that
the act of forgery, aside from the intent required, is defined in the criminal statute. See
Tenn. Code Ann. § 39-14-114(b)(1)(A)(i) (defining “forge” in relevant part as to “[a]lter,
make, complete, execute or authenticate any writing so that it purports to [b]e the act of
another who did not authorize the act[.]”).

We discern no abuse of discretion in the phrasing of the trial court’s Memorandum
Opinion and Order or in its denial of the Bank’s motion to alter or amend the language
therein. See Robinson, 153 S.W.3d at 38 (“We review a trial court’s denial of a Tenn. R.
Civ. P. 59.04 motion to alter or amend a judgment for abuse of discretion.” (quoting
Chambliss v. Stohler, 124 S.W.3d 116, 120 (Tenn. Ct. App. 2003))). We do take the
opportunity here to clarify that no evidence has been presented in this case to support a
finding of the intent necessary for forgery as a cause of action against the Bank or its
agent(s).

44
 VIII. Conclusion

For the reasons stated above, we reverse the portion of the trial court’s grant of
partial summary judgment reforming the Executed Deed of Trust, as well as the trial
court’s declaration that the Executed Deed of Trust was enforceable as reformed. We
declare that neither the Executed Deed of Trust nor the Recorded Deed of Trust is
enforceable as a matter of law, meaning that neither version may operate to secure Mr.
Mashek’s debt on the Note. We vacate the trial court’s award to the Bank of attorney’s
fees and expenses in the total amount of $8,795.84. We affirm the trial court’s judgment
in all other respects, including the grant of partial summary judgment to the Bank
awarding a monetary judgment against Mr. Mashek in the amount of $294,566.39 as the
total amount of unpaid principal and interest due on the Note; the implied finding that the
alteration to the date of the rescission notice confirmation was invalid; the dismissal of
the Masheks’ counterclaims; and the denial of the Bank’s motion to alter or amend the
language of the trial court’s Memorandum Opinion and Order. We clarify that no
evidence has been presented in this case to support forgery as a cause of action against
the Bank or its agent(s). This case is remanded to the trial court for a hearing to
determine the proper amount of reasonable attorney’s fees and expenses incurred by the
Bank solely to obtain a judgment in enforcing the Note, as well as for collection of costs
assessed below. Costs on appeal are taxed one-half to the appellant, Tennessee State
Bank, and one-half to the appellees, Douglas V. Mashek and Deborah A. Mashek.

_________________________________
THOMAS R. FRIERSON, II, JUDGE

45