Wednesday, May 26, 2010

Court reviews award of attorney's fees as well as principal and interest amounts of a promissory note.

FIRST PEOPLES BANK OF TENNESSEE v. JAMES L. HILL (Tenn. Ct. App. May 26, 2010)

James L. Hill ("the defendant"), in order to accommodate his son, Shannon Hill, co-signed a note to First Peoples Bank of Tennessee ("the Bank") in the amount of $50,500 ("the small note"). Shannon later approached the Bank about a larger loan for his pizza business. As a consequence, the small note was combined with two other notes. The Bank made a loan in the amount of $294,764.65 under a new note ("the big note") but required a personal guaranty from the defendant as security. Unbeknownst to the Bank, the guaranty Shannon produced was a forgery. Shannon was later killed and, still later, his pizza business defaulted on the big note.

The Bank initially filed this action against the defendant on the sole basis of the guaranty. The Bank later amended its complaint to allege that the big note was a renewal of the small note and that the defendant remained liable on the small note. The primary issue for trial was whether the small note was renewed or whether it was satisfied with the proceeds from the big note.

On the morning of trial, when the Bank's witnesses appeared, the chancellor announced that he was acquainted with several of the Bank's witnesses. The defendant made an oral motion seeking recusal of the chancellor. The court denied the motion and the case proceeded to a bench trial. After trial, the court entered a judgment in favor of the Bank which included the attorney's fees of the Bank. The defendant appeals. The Bank asks for its attorney's fees incurred on appeal.

We affirm that part of the judgment which awards principal and interest, but vacate the award of attorney's fees claimed in the amount of $25,125 and remand for a determination of a reasonable fee. Additionally, we hold that the Bank is entitled, under the note, to recover reasonable attorney's fees incurred on appeal and remand for a determination of a reasonable appellate fee.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/firstpeoples_052610.pdf

Monday, May 24, 2010

Court review summary judgment ruling in a tortious intereference cause between two companies

BAILEY TOOL & MANUFACTURING CO. v. FORREST BUTLER ET AL. (Tenn. Ct. App. May 24, 2010)

This is a dispute between two companies that supply parts in the automotive industry. Company A claims that Company B tortiously interfered with its contract and with its business relationships. The trial court granted summary judgment on the grounds that there was no genuine issue of material fact as to causation and that Company B conclusively established the affirmative defense of justification. We affirm the decision of the trial court because Company B negated the element of causation.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/baileytool_052410.pdf

Court reviews whether creditor's involvement in the sale of collateral was commercially reasonable

REGIONS BANK v. TRAILER SOURCE, ET AL. (Tenn. Ct. App. May 24, 2010)

A junior creditor sued the senior creditor claiming that the senior creditor's involvement in the sale of collateral, used trailers for tractor-trailer trucks, was commercially unreasonable. We agree with the trial court that the senior creditor, a bank, was subject to the commercially reasonable disposition of collateral rule. However, we hold that the bank's approval of the sale, arranged by the debtor, was not commercially unreasonable. Consequently, we reverse the judgment of the trial court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/regionsbank_052410.pdf

Monday, May 17, 2010

Court reviews whether trial court propery ruled that appellee entities were not partnerships

SHERRY TANNER v. WHITECO, L.P. and ORANGECO, L.P. (Tenn. Ct. App. May 17, 2010)

This case involves the question of whether Appellee entities are partnerships under Tennessee law. Appellant appeals the trial court's order, which found that Appellee entities were not partnerships. Finding no error, we affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/tanners_051710.pdf