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Posted by: Stacey Shrader Joslin on Dec 28, 2016

Court: TN Court of Appeals

Attorneys 1:

John Frank Higgins, Nashville, Tennessee, for the appellant, Rainbow Ridge Resort LLC, Wayne R. Hill, and Cornelia D. Hill.

Attorneys 2:

W. Morris Kizer and John M. Kizer, Knoxville, Tennessee, for the appellee, Branch Banking and Trust Company.

Judge(s): SUSANO

The facts in this case implicate the doctrine of res judicata. In 2012, a real estate development limited liability company and its members filed suit in the Sevier County Circuit Court against their mortgage lender, Branch Banking and Trust Company (the bank). In that action, the developers alleged, inter alia, that the bank was guilty of fraud, breach of contract, and unjust enrichment. That suit involved four separate parcels of real property. While the case in circuit court was pending, the bank sued three individuals in the Sevier County Chancery Court, seeking a declaratory judgment regarding the priority of a security interest in one of the parcels of property at issue in the circuit court case. In the chancery court action, the bank joined the developers as parties. In response, the developers filed a counterclaim in which they repeated allegations included in the circuit court case and asserted other claims derived from the same set of facts. The two cases were later consolidated. In each case, the bank filed a Tenn. R. Civ. P. 12.02(6) motion to dismiss for failure to state a claim. The court heard both motions at a single hearing. On June 8, 2015, the trial court filed two orders – one in the circuit court suit and one by interchange in the chancery court action – granting the bank's motions. The developers appealed only the circuit court order. Unchallenged, the chancery court order became final. The bank later moved to dismiss this appeal, arguing that the doctrine of res judicata barred further litigation. We deferred a ruling on the bank's motion. We now hold that the motion has merit. Accordingly, we affirm the trial court's judgment dismissing this case. We do so based upon the doctrine of res judicata.