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Posted by: Tanja Trezise on May 1, 2015

Court: TN Court of Appeals

Attorneys 1:

Justin Cole Sensing, Clarksville, Tennessee, for the appellants, Robert W. Halliman and Mal Son Halliman.

Attorneys 2:

Joy Anne Boyd and Jonathan Cole, Nashville, Tennessee, for the appellees, Heritage Bank and Michael F. Stalls.

Judge(s): CLEMENT

After foreclosing on three lots securing three loans, the mortgagee, Heritage Bank, sought to satisfy the outstanding deficiency by foreclosing on the debtors? family-owned property that additionally secured these obligations. To prevent the impending foreclosure, the debtors commenced this action contending they are not liable for the deficiency because the properties sold at foreclosure for an amount materially less than their fair market value. In its answer, the bank asserted a counterclaim seeking a deficiency judgment and attorneys? fees. At the close of the debtors? case-in-chief, the bank moved for involuntary dismissal pursuant to Tenn. R. Civ. P. 41.02(2). The trial court granted the motion, finding that the debtors failed to prove the fair market value of the three properties at the time of each foreclosure was materially less than the foreclosure sale prices; therefore, the debtors failed to overcome the presumption afforded by Tenn. Code Ann. § 35-5-118(b) that the foreclosure sale prices equaled the fair market value. The court then conducted a trial on the bank?s counterclaim for the deficiency and awarded the bank a judgment of $111,115.66. The trial court also awarded attorney?s fees in the amount of $55,000, which was substantially less than the bank requested. Both parties appeal. The debtors contend the trial court erred in dismissing their claim because they presented sufficient proof that the sale prices were materially less than fair market value; they also contend the bank was not entitled to recover its attorneys? fees. The bank contends the trial court erred by reducing its fee application. We have determined the debtors failed to prove that the sales price for each of the foreclosed properties was materially less than their fair market value at the time of each sale, and we find no error with the award of attorneys? fees. Accordingly, we affirm.