IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

February 16, 2016 Session

COMMERCE UNION BANK, BRENTWOOD, TENNESSEE D/B/A RELIANT

BANK V. KELLY D. BUSH ET AL.

Appeal from the Chancery Court for Williamson County

No. 41461 James G. Martin, III, Chancellor

No. M2015-00396-COA-R3-CV – Filed June 29, 2016

This is a post-foreclosure action in which the lender seeks to recover a deficiency 

judgment, interest, and the costs of collection. In their answer, the borrowers asserted that 

the loan was a nonrecourse debt; thus, they were not liable for the deficiency. 

Alternatively, they asserted that the property sold at foreclosure for an amount materially 

less than its fair market value. Following a bench trial, the trial court concluded that the 

loan was a full recourse debt as to both borrowers. This determination was based on the 

finding, inter alia, that all parties intended the borrowers to be personally liable. The trial 

court also concluded that the lender was entitled to a deficiency judgment, finding that 

the borrowers failed to overcome the rebuttable presumption that the foreclosure sale 

price was equal to the fair market value of the property at the time of the foreclosure sale.

See Tenn. Code Ann. § 35-5-118. The trial court awarded the lender a judgment of 

$640,783.41, plus interest and attorney‟s fees, against the borrowers jointly and severally.

As the foregoing indicates, our review is benefited by the trial court‟s Tenn. R. Civ. P. 

52.01 findings of facts and conclusions of law, which disclose the reasoned steps by 

which the trial court reached its ultimate conclusion and enhance the authority of the trial 

court‟s decision. Having reviewed the trial court‟s findings of fact in accordance with 

Tenn. R. App. P. 13(d), we have concluded that the evidence does not preponderate 

against the trial court‟s findings and that the trial court identified and properly applied the 

applicable legal principles. For these reasons, we affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which ANDY D.

BENNETT and RICHARD H. DINKINS, JJ., joined.

Byron V. Bush, Brentwood, Tennessee, Pro se.

M. Todd Sandahl, Franklin, Tennessee, for the appellant Kelly D. Bush. 
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Marc T. McNamee and Stephen M. Montgomery, Nashville, Tennessee, for the appellee,

Commerce Union Bank, Brentwood, TN d/b/a Reliant Bank. 

OPINION

In 2006, Byron V. Bush, D.D.S., purchased approximately five acres of 

unimproved commercial property in Davidson County, Tennessee, located at the 

southeastern corner of the intersection of Old Hickory Boulevard and Interstate 24, 

referred to as “StarPointe property” or “StarPointe.”

On November 30, 2007, Dr. Bush and his wife, Kelly Bush (collectively “the 

Bushes”), entered into a Multipurpose Note and Security Agreement (the “Original 

Note”) with Commerce Union Bank, Brentwood, Tennessee, d/b/a Reliant Bank 

(“Reliant”) for the original principal amount of $1,500,000. To secure the Original Note, 

the Bushes concomitantly executed a deed of trust. Thereafter, the Original Note was 

renewed on three occasions to defer the due date: January 14, 2010; January 14, 2011; 

and May 14, 2011.

When the note matured on December 30, 2011, the entire principal balance 

remained unpaid and outstanding. Thereafter, the Bushes entered into a Forbearance 

Agreement in which they acknowledged that they were in default in the amount of 

$1,547,906.26 and waived all claims against Reliant. The agreement temporarily 

modified their payments due under the note until June 30, 2012, and provided the Bushes

an opportunity to either (1) complete a sale of StarPointe prior to the expiration of the 

forbearance period and pay to Reliant $1,400,000 at closing, or (2) pay Reliant 

$1,400,000 prior to the expiration of the forbearance period. The Bushes failed to satisfy 

the requirements under the agreement, and by letter dated July 23, 2012, Reliant declared 

the note in default, accelerated the entire principal and interest balance, and made a 

demand for payment in full. When the Bushes did not cure the default, Reliant initiated 

foreclosure proceedings on StarPointe.

The foreclosure sale was scheduled to occur on September 28, 2012, but was 

postponed following Dr. Bush‟s petition for relief under Chapter 13 of the United States 

Bankruptcy Code, which he filed moments before the foreclosure sale was to begin. The

bankruptcy petition was dismissed shortly after it was filed, and the foreclosure sale was 

rescheduled for December 4, 2012. The Bushes did not attend the foreclosure sale either 

in person or by representation. Reliant was the only bidder, bidding $1,050,000 based 

upon the appraisal Reliant ordered from B.G. Jones & Company, LLC prior to the 

original scheduled foreclosure date that valued the property at $1,050,000, with an 

effective date of September 19, 2012. Due to the foreclosure being delayed, B.G. Jones & 

Company, LLC, provided a second appraisal, with an effective date of January 2, 2013,

that also valued the property at $1,050,000.
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Because the foreclosure sale price did not fully satisfy the amount due under the 

note, Reliant filed a complaint seeking a deficiency judgment against the Bushes in the 

amount of $569,706.65, plus interest and costs of collection including attorneys‟ fees. In 

their answer, the Bushes alleged that they were not personally liable for the deficiency 

because the note was a nonrecourse note. They also alleged that StarPointe was sold at 

foreclosure for an amount “materially less” than its fair market value, which the Bushes 

claimed was “at least $1.8 million dollars.”

During the four-day bench trial, the court heard testimony from the parties 

including Dr. Bush, Mrs. Bush, DeVan Ard, the president of Reliant, and Rick Belote, the 

senior vice president of Reliant. Ben Jones, who prepared two appraisals, testified for 

Reliant, and Eric Boozer, who prepared one appraisal, testified for the Bushes. A third 

appraiser, Marvin Maes, testified for the Bushes, but he did not appraise the property. 

The parties agreed and the trial court found that there were two issues to be 

decided: (1) whether the note made by the Bushes to the order of Reliant was intended by 

the parties to be a nonrecourse note; and (2) whether Reliant bid materially less than fair 

market value for StarPointe at the foreclosure sale.

At the conclusion of the trial, the court entered separate orders addressing each 

issue, which include extensive findings of fact and conclusions of law. As to the first 

issue, by Order entered October 14, 2014, the trial found that the loan from Reliant to the 

Bushes is a full recourse transaction and that they are liable to Reliant for the entire 

amount of the deficiency. Concerning the foreclosure sale price of StarPointe, by order 

Memorandum and Order entered October 22, 2014, the trial court found that the Bushes‟

evidence concerning value did not overcome the presumption afforded Reliant, pursuant 

to Tenn. Code Ann. § 35-5-118, that the foreclosure sale price equaled the fair market 

value on the date of the foreclosure sale. 

Throughout the trial court proceedings, the Bushes were represented by attorney

Todd Sandahl. Immediately following the trial, Dr. Bush dismissed Mr. Sandahl as his 

attorney, and Mr. Sandahl was granted leave to withdraw from representing Dr. Bush. 

However, Mr. Sandahl continued to represent Mrs. Bush during the post-trial proceedings

and in this appeal. Dr. Bush has represented himself since dismissing Mr. Sandahl. 

On October 28, 2015, Reliant filed a Motion for Discretionary Costs, pursuant to 

Tennessee Rule of Civil Procedure 54.04, and an Application for Award of Attorneys‟

Fees and Expenses, which was supported by the affidavit of Marc T. McNamee, counsel 

for Reliant. Reliant requested an award of $106,749.01 for attorneys‟ fees and expenses, 

and $6,969.40 for discretionary costs. Dr. Bush filed a response in opposition to the 

Motion for Discretionary Costs and Attorneys‟ Fee Application. Mrs. Bush filed a 
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response in opposition to the Motion for Discretionary Costs but no response in 

opposition to the Attorneys‟ Fee Application. 

Following a hearing on the motions, the trial court awarded Reliant attorneys‟ fees 

and expenses in the amount of $106,749.01 and discretionary costs in the amount of 

$3,801.90. Dr. and Mrs. Bush each filed a Motion to Alter or Amend. The trial court 

denied both motions finding that neither party asserted grounds authorizing the court to 

grant relief.

On January 12, 2015, Dr. Bush filed a pro se Motion for Recusal and Motion for 

New Jury Trial. The trial court denied the motion for recusal finding it to be untimely 

filed and not properly supported as required by the Tennessee Supreme Court Rule 10B. 

The trial court also denied the motion for new jury trial finding that Dr. Bush waived his 

right to a jury trial by failing to demand a jury in accordance with the requirements of 

Rule 38 of the Tennessee Rules of Civil Procedure.

Dr. and Mrs. Bush filed separate notices of appeal, separate briefs, and present 

separate issues for our review, some of which are similar and others are not. 

ISSUES

For his part, Dr. Bush presents four issues on appeal, which comprise three full 

pages of his brief and are inundated with argument. For clarity, we restate the issues 

raised by Dr. Bush as follows: 1) whether the trial court erred by finding that the note 

made by the Bushes to the order of Reliant was intended by the parties to be a full 

recourse note as to both Dr. and Mrs. Bush; 2) whether the trial court erred by finding 

that the foreclosure sale price was not materially less than the fair market value of the 

property at the time of the foreclosure sale; 3) whether Reliant committed fraud, breach 

of contract, and lender liability; and 4) whether the trial court erred by denying his 

recusal motion.

For his third issue, Dr. Bush asks us to consider whether Reliant committed fraud, 

breach of contract, and lender liability; however, the latter two components are being 

raised for the first time on appeal. “[I]ssues raised for the first time on appeal are 

waived.” Black v. Blount, 938 S.W.2d 394, 403 (Tenn. 1996); see also Norton v. 

McCaskill, 12 S.W.3d 789, 795 (Tenn. 2000). Therefore, the issues of breach of contract 

and lender liability have been waived. As for the issue of fraud, Dr. Bush has preserved 

the issue of fraud to the extent it pertains to Reliant‟s engagement of Ben Jones to 

appraise the property, and its reliance on his appraisal in making its bid to purchase the 

property at the foreclosure sale. 

For his fourth issue, Dr. Bush contends that the trial judge erred by failing to 

recuse himself; however, he failed to provide citations to authorities and appropriate 
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references to the record to support his claim of bias as required by Tenn. R. App. P. 

27(a)(7). Our courts have consistently held that “the failure to make appropriate 

references to the record and to cite relevant authority in the argument section of the brief 

as required by Rule 27(a)(7) constitutes a waiver of the issue.” Bean v. Bean, 40 S.W.3d 

52, 55-56 (Tenn. Ct. App. 2000) (citations omitted). It is not the duty of this court to 

verify unsupported allegations or search the record for facts in support of an appellant‟s 

poorly-argued issues. See id. (citing Duchow v. Whalen, 872 S.W.2d 692, 693 (Tenn. Ct. 

App. 1993)). For these reasons, we find this issue waived.1

For her part, Mrs. Bush raises nine issues on appeal, which we consolidate and 

restate as follows: 1) whether the trial court erred by finding that the note made by the 

Bushes to the order of Reliant was intended by the parties to be a full recourse note as to 

both Dr. and Mrs. Bush; 2) whether the trial court erred by finding that the foreclosure 

sale price was not materially less than the fair market value of the property at the time of 

the foreclosure sale; 3) whether the trial court erred in relying on the appraisal of Ben 

Jones; 4) whether the trial court erred by failing to “accept best use of property”; 5) 

whether the trial court erred by considering the sales price of StarPointe after foreclosure; 

and 6) whether the trial court erred in accepting Reliant‟s proof of damages.

Regarding issues one and six, Mrs. Bush has failed to provide citations to the 

authorities and appropriate references to the record to support her claims as required by 

Tenn. R. App. P. 27(a)(7). As such, we find these issues waived. 

For its part, Reliant requests this court to affirm the judgment of the trial court in 

all respects, hold that Reliant is entitled to an award of attorney‟s fees on appeal, and 

remand the case to the trial court for a determination of the reasonable amount of such 

fees, costs, and expenses.

ANALYSIS

We turn first to the proper standard of review for the issues presented in this 

appeal. Because this is an appeal from a decision made by the trial court following a 

bench trial, the now-familiar standard in Tenn. R. App. P. 13(d) governs our review. This 

rule contains different standards for reviewing a trial court‟s decisions regarding factual 

questions and legal questions. Nashville Ford Tractor, Inc. v. Great Am. Ins. Co., 194 

S.W.3d 415, 424 (Tenn. Ct. App. 2005).

 

1

Furthermore, the record reveals that Dr. Bush did not seek recusal until after the trial court had 

ruled on all issues following a four-day bench trial, including denying the motion of Dr. Bush to alter or 

amend the final judgment. Moreover, the trial court correctly denied the motion to recuse as untimely and 

for failure to comply with Tenn. Sup. Ct. R. 10B.
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In cases such as this where the action is “tried upon the facts without a jury,”

Tenn. R. Civ. P. 52.01 provides that the trial court shall find the facts specially and shall 

state separately its conclusions of law and direct the entry of the appropriate judgment.

2

The underlying rationale for the Rule 52.01 mandate is that it facilitates appellate review 

by “affording a reviewing court a clear understanding of the basis of a trial court‟s 

decision,” and enhances the authority of the trial court‟s decision in the absence of 

findings of fact and conclusions of law, “this court is left to wonder on what basis the 

court reached its ultimate decision.” In re Estate of Oakley, No. M2014-00341-COA-R3-

CV, 2015 WL 572747, at *10 (Tenn. Ct. App. Feb. 10, 2015) (citing Lovlace v. Copley, 

418 S.W.3d 1, 35 (Tenn. 2013)). 

Further, compliance with the mandate of Rule 52.01 enhances the authority of the 

trial court‟s decision because it affords the reviewing court a clear understanding of the 

basis of the trial court‟s reasoning. MLG Enterprises, LLC, v. Richard Johnson, No. 

M2014-01205-COA-R3-CV, 2015 WL 4162722, at *4 (Tenn. Ct. App. July 9, 2015)

perm. app. granted (Tenn. Dec. 10, 2015); Gooding v. Gooding, 477 S.W.3d 774, 782

(Tenn. Ct. App. Apr. 29, 2015); In re Zaylen R., No. M2003-00367-COA-R3-JV, 2005 

WL 2384703, at *2 (Tenn. Ct. App. Sept. 27, 2005) (“Findings of fact facilitate appellate 

review, Kendrick v. Shoemake, 90 S.W.3d 566, 571 (Tenn. 2002), and enhance the 

authority of the court‟s decision by providing an explanation of the trial court‟s 

reasoning.”). 

Our Supreme Court has explained the reasoning for the Rule 52.01 mandate as 

follows: 

Requiring trial courts to make findings of fact and conclusions of law is 

generally viewed by courts as serving three purposes. First, findings and 

conclusions facilitate appellate review by affording a reviewing court a 

clear understanding of the basis of a trial court‟s decision. Second, findings 

and conclusions also serve “to make definite precisely what is being 

decided by the case in order to apply the doctrines of estoppel and res 

judicata in future cases and promote confidence in the trial judge‟s 

decision-making.” A third function served by the requirement is “to evoke 

 

2 The last sentence of the rule reads: “Findings of fact and conclusions of law are unnecessary on 

decisions of motions under Rules 12 or 56 or any other motion except as provided in Rules 41.02 and 

65.04(6).” Tenn. R. Civ. P. 52.01. It should be additionally noted that whenever a trial court grants a 

Tenn. R. Civ. P. 41.02 motion for involuntary dismissal, it is required to “find the facts specially and . . . 

state separately its conclusions of law.” Tenn. R. Civ. P. 41.02(2). This requirement parallels the mandate 

in Tenn. R. Civ. P. 52.01, which applies to all actions tried upon the facts without a jury. See Tenn. R. 

Civ. P. 41.02, 2010 Advisory Comm‟n cmt.; see also Tenn. R. Civ. P. 52.01 (“In all actions tried upon the 

facts without a jury, the court shall find the facts specially and shall state separately its conclusions of law 

. . . .”).
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care on the part of the trial judge in ascertaining and applying the facts.”

Indeed, by clearly expressing the reasons for its decision, the trial court 

may well decrease the likelihood of an appeal.

Lovlace, 418 S.W.3d at 34-35 (internal citations and footnotes omitted). 

There is no bright-line test by which to assess the sufficiency of the trial court‟s 

factual findings. Nevertheless, the general rule is that “the findings of fact must include 

as much of the subsidiary facts as is necessary to disclose to the reviewing court the steps 

by which the trial court reached its ultimate conclusion on each factual issue.” In re 

Estate of Oakley, 2015 WL 572747, at *10 (quoting Lovlace, 418 S.W.3d at 35).

In this case, we have the benefit of comprehensive and detailed findings of fact by 

the trial court, which fully comply with the Rule 52.01 mandate. We review a trial court‟s 

factual findings de novo, accompanied by a presumption of the correctness of the finding

of fact, unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); 

see Boarman v. Jaynes, 109 S.W.3d 286, 289-90 (Tenn. 2003). For the evidence to 

preponderate against a trial court‟s finding of fact, it must support another finding of fact 

with greater convincing effect. Walker v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 71 

(Tenn. Ct. App. 2000); Realty Shop, Inc. v. R.R. Westminster Holding, Inc., 7 S.W.3d 

581, 596 (Tenn. Ct. App. 1999). We will also give great weight to a trial court‟s factual 

findings that rest on determinations of credibility and weight of oral testimony. Estate of 

Walton v. Young, 950 S.W.2d 956, 959 (Tenn. 1997); Woodward v. Woodward, 240 

S.W.3d 825, 828 (Tenn. Ct. App. 2007); B & G Constr., Inc. v. Polk, 37 S.W.3d 462, 465 

(Tenn. Ct. App. 2000).

The presumption of correctness in Tenn. R. App. P. 13(d) applies only to findings 

of fact, not to conclusions of law. Blair v. Brownson, 197 S.W.3d 681, 683-84 (Tenn. 

2006). Accordingly, no presumption of correctness attaches to the trial court‟s 

conclusions of law, and our review is de novo. Id. 

I. NONRECOURSE NOTE 

Dr. Bush contends that the trial court erred in finding that the note was intended by 

all parties to be a full recourse note. He contends it was a nonrecourse note. In support of 

this contention, he relies on the fact that he signed the Third Party Agreement paragraph 

on page three of the Original Note.3The Third Party Agreement reads: 

 

3 Mrs. Bush makes the same argument; however, as noted earlier, she failed to provide citations 

to the authorities and appropriate references to the record to support her claims as required by Tenn. R. 

App. P. 27(a)(7). As such, she waived the issue. Moreover, Mrs. Bush did not sign the Third Party 

Agreement paragraph. Therefore, there is no documentation to support the argument that she is not liable 

on the Note.
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I own the Property described in the Security section of this Note and 

Security Agreement and I agree to give you a security interest in that 

Property. I am not personally liable for payment of this debt. If the 

Borrower defaults, my interest in the secured Property may be used to 

satisfy the Borrower‟s debt. By signing, I agree to the terms of this Note 

and Security Agreement and acknowledge receipt of a complete copy of 

this Loan.

The Original Note was admitted into evidence, and a scanned copy of the 

signature page, as executed by the parties, appears as follows:
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Dr. Bush does not dispute that he is a borrower under the note. He argues,

however, that he is not personally liable under the note because the Third Party 

Agreement paragraph is a “valid and enforceable attached separate rider and provision of 

the original contractual loan agreement” that he negotiated with Reliant‟s President, 

DeVan Ard. Reliant insists that the note was intended by all parties to be a full recourse 

note. Mr. Ard testified that “all of the communication that the bank had with [Dr.] Bush, 

the term sheet, the loan approval form, all of the communication was consistent that [Dr.

Bush] would be personally liable on the loan.” Reliant also insists that Dr. Bush‟s 

signature of the Third Party Agreement paragraph was a mistake because it contradicts all 

other provisions of the note and because a borrower cannot be a third-party to his or her 

own loan. The outcome of this issue rests on a contractual interpretation of the note 

between Reliant and the Bushes.

“The cardinal rule for interpretation of contracts is to ascertain the intention of the 

parties and to give effect to that intention consistent with legal principles.” Rainey v. 

Stansell, 836 S.W.2d 117, 118-19 (quoting Bob Pearsall Motors, Inc. v. Regal ChryslerPlymouth, Inc., 521 S.W.2d 578 (Tenn. 1975)). A primary objective in the construction of 

a contract is to discover the intention of the parties from a consideration of the whole 

contract. Mckay v. Louisville & N. R. Co., 182 S.W. 874, 875 (Tenn. 1916). When 

resolving disputes concerning contract interpretation, we are to ascertain the intention of 

the parties based upon the “usual, natural, and ordinary meaning” of the contractual 

language. Rainey, 836 S.W.2d at 119. “All provisions in the contract should be construed 

in harmony with each other, if possible, to promote consistency and to avoid repugnancy 

between the various provisions of a single contract.” Guiliano v. Cleo, Inc., 995 S.W.2d 

88, 95 (Tenn. 1999) (citing Rainey, 836 S.W.2d at 118-19). 

If the contract language is unambiguous, the written terms control, not the 

“unexpressed intention of one of the parties.” Sutton v. First Nat’l Bank of Crossville, 

620 S.W.2d 526, 530 (Tenn. Ct. App. 1981). “The language of a contract is ambiguous 

when its meaning is uncertain and when it can be fairly construed in more than one way.”

Gredig v. Tennessee Farmers Mut. Ins. Co., 891 S.W.2d 909, 912 (Tenn. Ct. App. 1994) 

(citing Farmers-Peoples Bank v. Clemmer, 519 S.W.2d 801, 805 (Tenn. 1975)). “A 

strained construction may not be placed on the language used to find ambiguity where 

none exists.” Id. (quoting Farmers-Peoples Bank, 519 S.W.2d at 805). “An ambiguous 

provision in a contract generally will be construed against the party drafting it.” Allstate 

Ins. Co. v. Watson, 195 S.W.3d 609, 612 (Tenn. 2006) (citations omitted). When a 

contract provision is ambiguous, courts can use parol evidence, including the contracting 

parties‟ conduct and statements regarding the disputed provision, to guide the court in 

construing and enforcing the contract. Id. In such situations, interpretation is a question of 

fact. Adkins v. Bluegrass Estates, Inc., 360 S.W.3d 404, 412 (Tenn. Ct. App. 2011).

In the instant case, the trial court specifically found the Original Note ambiguous 

in terms of the interplay between the language identifying the borrowers and the 
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borrowers‟ personal liability and the language contained in the Third Party Agreement 

paragraph. We agree.

The first page of the note provides: “Borrower: „I‟, „Me‟ and „My‟ Means Each 

Borrower Below Jointly and Severally,” and identifies the borrowers as “BYRON V 

BUSH, DDS AND KELLY D BUSH.” The paragraph immediately following the 

foregoing provides: “NOTE: For value received, I promise to pay to you, or any other 

holder, at the address above, the principal sum of: One Million Five Hundred Thousand 

and 00/100 [$1,500,000.00].” Consistent with their designation on page one as the 

borrowers, the Bushes also signed as the borrowers on page three of the Original Note

where each of them acknowledged that they “understand and agree that my obligation is 

to pay this loan amount,” and that “[t]his obligation is separate and independent of any 

other person‟s obligation to pay it.” Dr. and Mrs. Bush also agreed that in the event of 

default, they would pay all reasonable costs incurred by Reliant Bank to collect the note, 

including attorneys‟ fees, court costs, and other legal expenses. All of this indicates a 

clear intent by the parties that the note was to be a full recourse note.

In addition to signing as borrower, Dr. Bush―but not Mrs. Bush―signed the 

Third Party Agreement paragraph, which identifies him as the owner of the security 

interest of the note and states that he, Dr. Bush, is not personally liable. Dr. Bush insists 

that this paragraph is unambiguous and reflects the true intentions of the parties. 

Essentially, he requests that we ignore all other provisions of the Original Note wherein 

he and Mrs. Bush are specifically and repeatedly identified as the borrowers under the 

note with an obligation to pay the loan amount. We decline to do so because “in 

determining whether or not there is such an ambiguity as calls for interpretation, the 

whole instrument must be considered, and not an isolated part, such as a single sentence 

or paragraph.” Adkins, 360 S.W.3d at 412-13.

Accordingly, in construing the language of the Third Party Agreement paragraph 

in the context of the note as a whole, see id., we can only conclude that the Original Note 

is susceptible to more than one reasonable interpretation as to Dr. Bush‟s personal 

liability, and is, therefore, ambiguous. We therefore affirm the trial court‟s finding that 

the language is ambiguous.

If a contract is ambiguous, a court may look beyond the four corners of the 

document and consider extrinsic parol evidence in order to determine the parties‟

intention.4 Cummings Inc. v. Dorgan, 320 S.W.3d 316, 333 (Tenn. Ct. App. 2009) 

 

4 To the extent Dr. Bush challenges the admission of extrinsic evidence, although our review of 

the record indicates this contention is without merit, we will not unduly lengthen this opinion with further 

discussion of this issue because no objection was made to the introduction of extrinsic evidence at trial. 

“Failure to object [to] evidence in a timely and specific fashion precludes taking issue on appeal with the 

admission of the evidence.” Ottinger v. Stooksbury, 206 S.W.3d 73, 78 (Tenn. Ct. App. 2006) (quoting 

(continued...)
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(citation omitted). Accordingly, we now consider whether the trial court, in construing 

the Original Note with the help of the parol evidence, arrived at the correct interpretation.

In ruling on the intended liability of the Bushes under the note, the trial court 

concluded that both Dr. and Mrs. Bush are personally liable to Reliant for the entire 

amount of the Original Note including interest accrued and attorneys‟ fees, less the fair 

market value of StarPointe as of the foreclosure sale date. The trial court‟s conclusion is 

based on the finding that the promissory note made by the Bushes to the order of Reliant 

was intended by all parties to be a full recourse note as to both Dr. and Mrs. Bush. In 

arriving at this conclusion, the trial court‟s order states that it considered all information 

presented including the testimony of witnesses at the trial, and all exhibits including but 

not limited to the Original Note, the Term Sheet, the Loan Application, and the 

Forbearance Agreement. The trial court also set forth its specific findings of fact and 

conclusions of law on this issue. The ones that are relevant to this issue read as follows: 

2. Dr. Bush . . . purchased [StartPointe]. . . for $615,000.00, with a 

view to developing that property successfully. . . .

. . . .

5. The Term Sheet is a letter to Dr. and Mrs. Bush from . . . Reliant 

Bank. . . . The Term Sheet refers to Reliant Bank as the lender and Byron 

Bush as the borrower, with no guarantor. This is a clear indication that Dr. 

Bush would be personally liable for the loan in question. On the other hand, 

if the loan was to be made to a yet-to-be-named business entity, then Dr.

Bush and Mrs. Bush would be required to guarantee the loan.

6. The Term Sheet provides that the loan . . . would not exceed 75% 

of the appraised value as determined by an independent bank-engaged 

appraisal.

7. Reliant Bank obtained an appraisal of the StarPointe property 

from Donnell Appraisal Services reflecting a value of $2,400,000, which 

clearly was in excess of the then-contemplated loan amount of $1,500,000 

and results in a loan-to-value ratio of less than 75%.

. . . .

 

Grandstaff v. Hawks, 36 S.W.3d 482, 488 (Tenn. Ct. App. 2000)). We further note that Dr. Bush offered 

his own parol evidence regarding the Original Note, and he does not argue that the court erred in 

admitting his parol evidence.
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10. On November 30, 2007, Dr. and Mrs. Bush signed a Commercial 

Loan Application. This document reflects that the loan is an individual loan 

to borrowers Byron V. Bush, DDS and Kelly D. Bush. . . . 

11. The Commercial Loan Application was signed by Dr. and Mrs. 

Bush on November 30, 2007, and reflects that they intended to apply for 

joint credit. This is further evidence that it was contemplated by Dr. and 

Mrs. Bush that this loan would be a recourse loan and that they would be 

responsible for paying the debt when it became due.

12. On November 30, 2007, Dr. and Mrs. Bush signed a 

Multipurpose Note and Security Agreement (the “Original Note”) . . . . The 

Court characterizes the Original Note as ambiguous at best in terms of the 

interplay between the language of the document establishing the names of 

the borrowers and the obligations contained in the Note and the language of 

the Third Party Agreement paragraph. Because of the ambiguity contained 

in the Original Note, the Court is authorized to look to collateral parol 

evidence to resolve that ambiguity.

13. [T]he first page of the Original Note clearly reflects that the 

borrower includes “I, me, my” and means each borrower jointly and 

severally. . . . 

14. The Original Note reflects that the purposes of the loan were to 

refinance the Regions Bank loan, provide additional funds to reimburse Dr. 

and Mrs. Bush for the personal funds that had been used in the project, and 

provide funds for future site development.

15. The Court finds paragraph 3 on page 2 of the Original Note to be 

instructive, specifically the portion reading “I understand and agree that my 

obligation is to pay this loan amount. This obligation is separate and 

independent of any other person‟s obligation to pay it.”

16. The Original Note provides that in the event of a default, Reliant 

Bank has the right, without notice, to accelerate the maturity date of the 

note and require all of the principal, interest and unpaid charges to be due 

and payable immediately. Dr. and Mrs. Bush also agreed that in the event 

of default, they would pay all reasonable costs incurred by Reliant Bank to 

collect the note, including attorneys‟ fees, court costs, and other legal 

expenses.
- 13 -

17. Dr. and Mrs. Bush both signed the Original Note as borrowers on 

page 3. This is consistent with their designation as borrowers on page 1 of 

the Original Note.

. . . .

19. Dr. and Mrs. Bush are the borrowers under the Note. 

Accordingly, the Court considers the statement in the Third Party 

Agreement that Dr. Bush‟s interest in the secured property may be used to 

satisfy the borrower‟s debt “if the borrower defaults” to be a non-sequitur. 

The Court also considers the last sentence of Third Party Agreement to be 

redundant. Dr. Bush signed the Original Note and the Deed of Trust. There 

is no reason for Dr. Bush to separately acknowledge the terms of those 

documents. Based on the foregoing, there is an ambiguity created within 

the Original Note . . . .

20. Contemporaneous with the execution of the Original Note, the 

parties executed the Deed of Trust. The Deed of Trust is instructive to the 

Court because it reflects that Byron V. Bush, DDS and Kelly D. Bush are 

the debtors. They are not third parties. They are the makers of the Note. 

They are the makers of the Deed of Trust. Reliant Bank is the creditor and 

beneficiary of the Deed of Trust.

. . . . 

25. On January 2, 2010, Dr. and Mrs. Bush executed another 

Commercial Loan Application to renew the Original Note. This 

Commercial Loan Application reflects that Dr. and Mrs. Bush are the 

borrowers, individually.

. . . .

28. [Dr.] and Mrs. Bush executed a second Multipurpose Note and 

Security Agreement dated January 14, 2010 (the “January 2010 Renewal 

Note”), again reflecting that Dr. and Mrs. Bush are the borrowers.

. . . . 

31. [I]t is instructive to the Court that on the January 2010 Renewal 

Note, Dr. and Mrs. Bush signed as borrowers, and there is no signature 

under the Third Party Agreement provision.

. . . . 
- 14 -

50. [O]n August 19, 2011, Dr. and Mrs. Bush signed another 

Multipurpose Note and Security Agreement (the “August 2011 Renewal 

Note”) which was dated May 14, 2011.

51. The August 2011 Renewal Note changed the interest rate on the 

loan . . . . The August 2011 Renewal Note, however, requires that Dr. and 

Mrs. Bush make six payments of only $2,000, which is approximately onethird of what would have been required if Reliant Bank had demanded all 

of the interest to which it was entitled on a monthly basis.

52. The purpose of the August 2011 Renewal Note, as clearly stated 

on page 1, was to extend the maturity date for six months and modify the 

payment structure and rate. There is no signature here for the Third Party 

Agreement provision, and Reliant Bank did not print any name under that 

provision to be signed.

. . . . 

55. Dr. Bush consistently has testified that all of the documents that 

were provided to him by Reliant Bank for signature were provided to him 

in advance. He also testified that he reviewed those documents and 

understood them before he went to Reliant Bank and signed them. . . .

56. Dr. and Mrs. Bush went to Reliant Bank on February 28, 2012 

and signed the Forbearance Agreement. The Court finds this document to 

be important in discerning the intent of the parties when the loan was first 

made and the Original Note was signed. . . . 

57. Importantly, Reliant Bank agreed in the Forbearance Agreement 

that if Dr. and Mrs. Bush would pay the sum of $1,400,000, Reliant Bank 

would deem Dr. and Mrs. Bush‟s obligations to be satisfied. This is, in the 

Court‟s mind, a serious concession to Dr. and Mrs. Bush, essentially 

writing off approximately $150,000 in principal and accrued interest.

58. Reliant Bank wanted to be paid the legal fees it incurred to 

prepare the Forbearance Agreement. Dr. Bush refused to pay those, and that 

provision in paragraph 9(b) was deleted. Dr. and Mrs. Bush and Mr. Belote 

initialed that change.

59. Paragraph 15 of the Forbearance Agreement entitled “Final 

Agreement” was . . . designed to put Dr. and Mrs. Bush on notice that this 

was the last relief that Reliant Bank would agree to give. . . . 
- 15 -

60. On July 23, 2012, Reliant Bank sent a letter to Dr. and Mrs. Bush 

declaring them to be in default, stating that all obligations under the note 

were accelerated and demanding payment within five days. Payment was 

not made.

. . . .

74. Dr. Bush has gone to great lengths to argue to the Court that his 

understanding with Reliant Bank concerning this obligation was a nonrecourse transaction. However, as far as Mrs. Bush is concerned, there is 

absolutely no evidence in the record that any document she signed would 

be non-recourse in any way. As far as Mrs. Bush is concerned, the only 

evidence before the Court is that she is fully responsible for the entire 

indebtedness under the terms of the Note. As far as Dr. Bush‟s testimony is 

concerned regarding the conversations that he allegedly had with various 

individuals, his testimony is simply not supported by the record, and the 

Court does not find it to be credible.

All of the evidence in this case except the testimony of Dr. Bush which the trial 

court found was not credible, supports a finding that Dr. Bush knew that he was 

personally liable under the note. As noted earlier, we presume that the trial court‟s 

findings of fact are correct unless the preponderance of the evidence is otherwise. Walker 

v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 71 (Tenn. Ct. App. 2000); Realty Shop, Inc. 

v. R.R. Westminster Holding, Inc., 7 S.W.3d 581, 596 (Tenn. Ct. App. 1999). Further, the 

trial court‟s findings are accorded strong deference when they are based on witness 

testimony, “especially where issues of credibility and weight of oral testimony are 

involved.” Pierce, 2008 WL 2557363, at *6 (quoting Allstar Consulting Group, 2007 WL 

120046, at *5.

Considering the evidence in this record, we have concluded that the evidence does 

not preponderate against the trial court‟s findings, and we agree with the court‟s 

conclusion based upon these findings. We therefore affirm the trial court‟s holding that 

the note is a full recourse transaction and that Dr. and Mrs. Bush are both personally 

liable under the note.

II. DEFICIENCY JUDGMENT

When a foreclosure sale of real property secured by a deed of trust fails to satisfy 

an indebtedness, the creditor may recover a “deficiency judgment in an amount sufficient 

to satisfy fully the indebtedness.” Tenn. Code Ann. § 35-5-118(a). This statute, which 

applies to all trustee or foreclosure sales of real property secured by a deed of trust for 

which the first foreclosure publication is given on or after September 1, 2010, provides 
- 16 -

that, absent fraud, collusion, misconduct, or irregularity in the foreclosure sale, “the 

deficiency judgment shall be for the total amount of indebtedness prior to the sale plus 

the costs of the foreclosure and sale, less the fair market value of the property at the time 

of the sale.” Tenn. Code Ann. § 35-5-118(b). In such cases, “[t]he creditor shall be 

entitled to a rebuttable prima facie presumption that the sale price of the property is equal 

to the fair market value of the property at the time of the sale.” Id. If a defendant raises 

inadequacy of the foreclosure price as a defense to the deficiency claim, the defendant 

“must prove by a preponderance of the evidence that the property sold for an amount 

materially less than the fair market value of property at the time of the foreclosure sale.”

Tenn. Code Ann. § 35-5-118(c); see also Lost Mountain Dev. Co. v. King, No. M2004-

02663-COA-R3-CV, 2006 WL 3740791, at *8 (Tenn. Ct. App. Dec. 19, 2006) (“[T]he 

issue in deficiency actions is the fair market value of the property at the time it was 

sold.”).

Dr. Bush contends that the foreclosure sale process involved fraud, misconduct, or 

irregularity. According to him, Reliant knew of two appraisals prior to the foreclosure 

sale and alleges: “it is fraud, misconduct or irregular for [Reliant] to arbitrarily use for 

their sole benefit the lower and least accurate of two appraisals at foreclosure to 

determine the Fair Market Value of the highest and Best Use, when questionable 

appraiser selection protocol was repeatedly used by [Reliant] when only the [Bushes] 

higher appraisal was currently-zoned and currently appraised at the date of foreclosure 

sale. . . .”

5

In addition, both Dr. and Mrs. Bush contend the trial court erred by finding 

that the foreclosure sale price of $1,050,000 was not materially less than the fair market 

value of the property at the time of the foreclosure sale. We shall first address Dr. Bush‟s 

contention that Reliant engaged in “fraud, misconduct or irregularity.”

A. Fraud, Misconduct, or Irregularity

Dr. Bush contends there was fraud, misconduct, or irregularity in connection with 

the selection of Ben Jones as Reliant‟s appraiser and that Reliant‟s decision to use Mr. 

Jones‟s appraisal rather than Mr. Boozer‟s was “arbitrary.” Mrs. Bush does not allege 

fraud but she makes the general assertion that “misconduct exists in the foreclosure 

process.”

 

5 The issue as stated by Dr. Bush reads:

a. Whether in the presence of two appraisals known by the Plaintiff and their attorneys 

prior to foreclosure, whose values differ by 46% or $835,000, it is fraud, misconduct or 

irregular for a Tennessee lending institution to arbitrarily use for their sole benefit the 

lower and least accurate of two appraisals at foreclosure to determine the Fair Market 

Value for the Highest and Best Use, when questionable appraiser selection protocol was 

repeatedly used by Plaintiff and when only the Defendants/Appellant‟s higher appraisal 

was currently-zoned and currently appraised at the date of foreclosure sale; and whether 

the “prima fascia presumption” no longer exists per Tenn. Code Ann. # 35-5-118(b).
- 17 -

In rejecting the argument that Reliant engaged in fraud or misconduct when it 

selected Mr. Jones to appraise StarPointe, the trial court made the following pertinent 

findings of fact: 

33. [In September 2010, between] . . . the time the January 2010 

Renewal Note was signed and its maturity on January 14, 2011, Reliant 

Bank solicited proposals from appraisers to appraise [StarPointe]. Mr. Ben 

Jones was the successful bidder. He appraised [StarPointe] and found an 

“as is” market value of $970,000 and a liquidation value of $680,000. 

There is no evidence that indicates that Dr. and Mrs. Bush were told about 

Mr. Jones‟ appraisal at that time.

34. There was a great deal of effort made on behalf of [Defendants] 

at trial to establish that there was some sort of collusion between Reliant 

Bank and Mr. Jones, or that there was some sort of inappropriate procedure 

that was followed, or that Reliant Bank was remiss in continuing to use Mr. 

Jones to appraise [StarPointe]. The Court finds that the evidence simply 

does not establish that conclusion.

35. Based on the consistent testimony of Reliant Bank officers, it is 

Reliant Bank‟s policy that the lending officer does not deal with the 

appraiser. Reliant Bank‟s procedure in requesting an appraisal is for the 

lending officer to ask an administrative assistant to obtain an appraisal on 

the property to be valued. The administrative assistant then sends out a 

request for proposals to several appraisers. Each appraiser responds and 

either agrees or does not agree to appraise the property. If the appraiser 

agrees to appraise the property, the appraiser provides Reliant Bank with 

his fee and estimated turnaround time.

36. Based upon the needs of Reliant Bank in terms of speed and also 

the expediency of the case in terms of cost, the lending officer, without 

knowing who the appraiser is, either approves the low bidder or does not 

approve the low bidder.

37. Reliant Bank‟s lending committee annually reviews and 

approves a list of appraisers. The only inconsistency in the testimony that 

the Court heard on this issue is whether Reliant Bank‟s approved appraiser 

list is a rotating list. There was some testimony that the persons to whom 

requests for appraisals are sent would be rotated, and that is not consistent. 

But otherwise, the testimony is very consistent that it is a blind request. The 

lending officer does not know which appraiser is selected.
- 18 -

38. Mr. Jones appraised [StarPointe] for the first time in September 

2010. He then appraised it again in September 2012, just before the 

proposed foreclosure. Mr. Jones appraised the property in January 2013, 

within 30 days of the time Reliant Bank purchased the property at 

foreclosure on December 4, 2012, because bank regulations require the 

appraisal within 30 days of the time Reliant Bank acquires the property. 

Mr. Jones appraised the property again in December 2013.

39. The Court finds that the methodology used by Reliant Bank was 

consistent. It is understandable that the low bid for each appraisal could 

have come from Mr. Jones because he had appraised the property 

previously. It would be less expensive for Mr. Jones to bid as a reappraisal, 

meaning he would simply have to update his prior appraisal as opposed to 

preparing a brand new appraisal, which would require a higher fee. That 

may explain why Mr. Jones ended up appraising [StarPointe] four of the six 

times it has been appraised.

40. The Court also does not find that the relationship between John 

Souder, who worked for Mr. Jones, and Reliant Bank was inappropriate in 

any way. Mr. Souder is the son of a friend of one of Reliant Bank‟s 

officers. Mr. Souder needed a job and wanted to be in the appraisal field. 

Mr. Souder‟s father asked the Reliant Bank officer to let him know if he 

heard of any available jobs in that field. A referral was made to Mr. Jones‟

company. The Reliant Bank officer then learned that Mr. Souder had gone 

to work for Mr. Jones because he got positive feedback about Mr. Souder 

from Mr. Jones. There is nothing to indicate to the Court that there is any 

conflict of interest or inappropriate behavior involved the foregoing.

41. The Court finds that the suggestion of Dr. and Mrs. Bush that the 

Court should not give weight to Mr. Jones‟ appraisals, which is based on 

their effort to show that Reliant Bank did not follow proper procedures or 

engaged in some kind of inappropriate behavior in selecting Mr. Jones, is 

not supported by the record.

42. The Court also finds that the suggestion that Reliant Bank 

wanted to influence the value of the appraisal is not supported by the 

record. . . . 

Contrary to the allegations of fraud, misconduct, collusion, or irregularity, the 

record supports the trial court‟s finding that Reliant followed proper procedures in 

selecting an appraiser and that Reliant did not influence the value of the appraisal for 

which it relied upon in placing its bid at the foreclosure sale. 
- 19 -

The trial court also rejected Dr. Bush‟s allegation that it was “fraud, misconduct or 

irregular” for Reliant to “arbitrarily use . . . the lower and least accurate of two appraisals 

at foreclosure to determine the Fair Market Value for the Highest and Best Use,” finding

as follows:

[T]he evidence in this case establishes that Mr. Boozer‟s appraisal was in 

Dr. Bush‟s possession, but, of course, there was no way for Reliant Bank to 

evaluate the appraisal without having a copy in its possession. Reliant Bank 

also had in its possession its own appraisal performed by Mr. Jones in 

September 2012 that reflects a market value of $1,050,000. The fact that 

Dr. Bush had an appraisal by Mr. Boozer and shared the number with 

Reliant Bank, without sharing the content of the appraisal with Reliant 

Bank, is not of much instruction to the Court. The Court does not place any 

weight on that part of the evidence.

(Emphasis added). 

The record amply supports the trial court‟s finding, which largely depended upon 

its findings of credibility, and we give considerable deference to the trial court‟s 

credibility findings. Pierce, 2008 WL 2557363, at *6 (quoting Allstar Consulting Group, 

2007 WL 120046, at *5. Despite Dr. Bush‟s allegations that Reliant “arbitrarily” relied 

on Mr. Jones‟s appraisal, the record supports the trial court findings that Reliant was not 

afforded an opportunity to evaluate the Boozer Appraisal prior to the foreclosure sale 

because it never received a copy of the appraisal and, as such, was justified in relying on 

the appraisal in its possession.

Specifically, Rick Belote, Reliant‟s Senior Vice President, testified that, although 

Dr. Bush sent an email to Reliant two days prior to the foreclosure sale in which he stated

that he had an appraisal estimating a higher value for the property, Dr. Bush did not 

provide a copy of the Boozer Appraisal. Mr. Belote further testified that the first time he

reviewed a copy of the Boozer Appraisal was two weeks before the trial in August 2014. 

When Dr. Bush was asked whether he provided a copy of the Boozer Appraisal to Reliant

prior to the foreclosure sale, Dr. Bush equivocated “I believe so,” “I don‟t know for a 

fact,” and “I thought I did.” When asked if he discussed the contents of the Boozer 

Appraisal with anyone at Reliant prior to the foreclosure sale, Dr. Bush testified that he 

“did not have direct knowledge that [he] had a discussion with [Reliant] regarding that.”

For the foregoing reasons, we find that the evidence does not preponderate against 

the trial court‟s finding that there was no fraud, collusion, misconduct, or irregularity in 

connection with the foreclosure process. 
- 20 -

B. Mr. Jones‟s Appraisals

Dr. and Mrs. Bush contend the trial court erred by relying on Mr. Jones‟s 

appraisals. Both at trial and on appeal, they essentially argue that Mr. Jones‟s appraisals 

are not credible because they are untimely, based on an incorrect opinion of highest and 

best use of StarPointe, and do not consider two letters of interest that Dr. Bush received 

from a hotel developer.

Notwithstanding these arguments, the trial court found the appraisals by Mr. Jones 

were credible. The court found that Mr. Jones‟s supported his opinion concerning the 

highest and best use for the property with substantial data and analysis. The court further 

found that Reliant was justified in relying on the appraisal of Mr. Jones whose testimony 

confirmed that as of the foreclosure sale date, StarPointe had a value of $1,050,000. The 

court found that it was undisputed that after Reliant acquired the property on December 

4, 2012, it listed the property for sale and, by the time of the trial of this case, had 

reduced the asking price to $870,000. The court also noted that no buyer had been found, 

and in fact, no offer had ever been received by Reliant for the purchase of the property.6

The trial court‟s findings related to the differing opinions of fair market value and 

the property‟s highest and best use are supported by the testimony of the Bushes‟ own 

witness, Marvin Maes. Mr. Maes, another appraiser, did not appraise Starpointe himself. 

Instead, he reviewed the appraisals provided by Mr. Jones and Mr. Boozer, and testified 

that the appraisals prepared by Mr. Jones and Mr. Boozer were credible. As to the 

difference in fair market value between the appraisals prepared by Mr. Jones and Mr. 

Boozer, Mr. Maes attributed the variance to the differing opinions of the property‟s 

highest and best use. He testified that two certified appraisers can appraise the same 

property and come to a different conclusion as to the property‟s highest and best use, and 

that the fact two appraisers could come to different conclusions of value does not render 

either appraisal deficient, as along as the appraisal is credible. Mr. Maes did however 

testify that he favored the Boozer Appraisal because the property was already zoned for 

the stated highest and best use. 

Concerning Mr. Boozer‟s opinion of the fair market value of the property, Mr. 

Maes testified that the $1,885,000 estimate is “the bulk sell-out price, and . . . they 

 

6 Dr. and Mrs. Bush contend that the trial court committed “reversible error” by considering the 

listed sale price of StarPointe two years after foreclosure as evidence of fair market value. See Lost 

Mountain Dev. Co., 2006 WL 3740791, at *8 (“[T]he issue in deficiency actions is the fair market value 

of the property at the time it was sold.”). We find no merit to this contention because the trial court‟s 

ruling clearly indicates that the only value evidence it relied upon was the value opinions of Mr. Jones and 

Mr. Boozer. In this case, the trial court‟s consideration of the listed sale price aided the court in its 

assessment of the appraisals prepared by Mr. Jones and Mr. Boozer. 
- 21 -

probably could have gotten that eventually.” (Emphasis added). Furthermore, when Mr. 

Maes was informed that Reliant listed the property for sale after it acquired the property 

on December 4, 2012, and the property was still listed even though the listing price had 

been reduced to $870,000, and no offer had ever been received by Reliant, “Mr. Maes 

expressed surprise that the StarPointe property still has not sold, even after it was listed 

for $870,000.”

Despite the foregoing, Dr. and Mrs. Bush contend that Mr. Jones‟s appraisals with 

effective dates of September 3, 2012, and January 2, 2013, are untimely and thus not 

probative of the value of StarPointe at the date of foreclosure, December 4, 2012. We 

find not merit to this contention because this court has held that appraisals done within 

weeks of the foreclosure date is sufficient to show the fair market value of the properties 

at the time of foreclosure. Halliman v. Heritage Bank, No. M2014-00244-COA-R3-CV, 

2015 WL 1955448, at *5 (Tenn. Ct. App. Apr. 30, 2015) (citing State of Franklin Bank v. 

Riggs, No. E2010-01505-COA-R3-CV, 2011 WL 5090888, at *6 (Tenn. Ct. App. Oct. 

27, 2011) (appraisal that provided a range of values for the property shortly before the 

foreclosure sale and after the foreclosure sale was sufficient evidence to show the fair 

market value of the property at the time of foreclosure)). Further, Mr. Jones testified that 

his opinion as to fair market value would not have changed as of the date of the 

foreclosure sale.

The Bushes also contend that Mr. Jones‟s appraisals are inaccurate because Mr. 

Jones did not consider the two letters of interest that Dr. Bush received from a hotel 

developer. The first letter of intent, dated November 1, 2012, proposed a purchase price 

of $900,000 for “approximately [two] useable acres” of StarPointe, leaving 

approximately three acres unsold. It was not accepted and there was no written 

counteroffer from Dr. Bush. The second letter of intent, dated November 12, 2012, 

increased the proposed purchase price to $975,000 for “approximately [two] useable 

acres.” Dr. Bush did not accept the second letter of intent; instead, Dr. Bush submitted a 

counteroffer in a letter he identified as a “Conditional Letter to LOI.” The hotel developer 

did not accept the counteroffer; thus, the parties never agreed upon a letter of intent. 

The trial court found that the letters of intent had little weight concerning the value 

of StarPointe, and the evidence does not preponderate against this finding. Dr. Bush did 

not accept either letter of intent. Mr. Maes testified that a letter of intent has little value to 

an appraiser if both parties have not accepted all of its terms and signed it. He further 

stated that when he prepares an appraisal, he considers the letters of intent as information 

of interest in the property, but only gives it “50 percent” weight because “whether you get 

a meeting of the minds or not is probably 50/50 . . . .” In this case, Mr. Maes did not see 

the letters of intent at issue and Dr. Bush‟s “Conditional Letter to LOI” until he was 

testifying at trial. After reviewing them, the trial court asked Mr. Maes: “If you were 

doing the appraisal and were given these papers . . . , would you conclude that they were 

of much benefit to you in reaching an opinion of value?” Mr. Maes responded by stating: 
- 22 -

“I would say the benefit to me in reaching the opinion of value was that if [Dr.] Bush 

took this thing, it would knock the value below [$]1,885,000. . . .” Significantly, Mr. 

Maes went on to explain that Dr. Bush‟s conditional letter pointed out that what the 

potential buyer was proposing would create problems for him; specifically, he would 

have to recreate the site plan for the property, which would materially affect his ability to 

develop the remainder of the property.

For the foregoing reasons, the evidence does not preponderate against the trial 

court‟s finding that Mr. Jones‟s $1,050,000 valuation of the property was credible. 

C. “Materially Less”

The Bushes also contend the trial court erred in finding the foreclosure price of the 

property at foreclosure was not “materially less” than fair market value. In support of this 

contention, they rely on the appraisal of Mr. Boozer and assert that the trial court erred by 

failing to accept his valuation of StarPointe as “more credible.”

Tennessee Code Annotated § 35-5-118 does not provide a definition of the 

“materially less” standard. Eastman Credit Union v. Bennett, No. E2015-01339-COAR3-CV, 2016 WL 1276275, at *9 (Tenn. Ct. App. Mar. 31, 2016) (citations omitted). Our 

General Assembly has explained that, “It‟s a very difficult burden for the debtor to 

overcome. . . . You have to show a „strong‟ difference, a „material‟ difference.” Halliman 

v. Heritage Bank, No. M2014-00244-COA-R3-CV, 2015 WL 1955448, at *6 (Tenn. Ct. 

App. Apr. 30, 2015) (citing GreenBank v. Sterling Ventures, LLC, No. M2012-01312-

COA-R3-CV, 2012 WL 6115015, at *9 (Tenn. Ct. App. Dec. 7, 2012) (quoting 

Representative Vance Dennis, the Sponsor of HB 3057 in the Tennessee House of 

Representatives)). In prior cases analyzing this statute, we have refrained from 

establishing a “bright-line percentage, above or below which the statutory presumption is 

rebutted.” Eastman Credit Union, 2016 WL 1276275, at *10 (citing FirstBank v. Horizon 

Capital Partners, LLC, No. E2013-00686-COA-R3-CV, 2014 WL 407908 at *3 (Tenn. 

Ct. App. Feb. 3, 2014). 

The trial court concluded that the Bushes did not overcome the statutory 

presumption that the foreclosure sale price of StarPointe is equal to the fair market value 

of the property at the time of the sale. Tenn. Code Ann. § 35-5-118(b). The court‟s order 

reads as follows:

Based on an analysis of the totality of the circumstances, Dr. and Mrs. Bush

have not overcome the presumption set forth in T.C.A. § 35-5-118(b). Dr. 

and Mrs. Bush have not shown that the $1,050,000 paid by Reliant Bank at 

foreclosure was materially less than fair market value at the time of 

foreclosure. Even if the Court were to agree with [the Bushes] and conclude 

that Eric Boozer‟s opinion of value is superior to the opinion of value 
- 23 -

offered by Ben Jones, and accept the result reached by Eric Boozer of fair 

market value, $1,885,000, based upon the standard set forth in FirstBank v. 

Horizon Capital Partners, LLC et al., [No. E2013-00686-COA-R3-CV, 

2014 WL 407908 (Tenn. Ct. App. Feb. 3, 2014)], the Court would have to 

presume that the appraisal price set by Eric Boozer was equal to fair market 

value. As stated by the Court of Appeals in FirstBank “such is not the 

standard.” Dr. and Mrs. Bush have offered no credible evidence to establish 

that the price paid by Reliant Bank at foreclosure on December 4, 2012 was 

“materially less” than the fair market value of the subject property other 

than the Boozer appraisal. The unsigned, and unacceptable, letter of intent 

is of no probative value to the Court just as the lease/purchase agreement 

was of no probative value to the Court in FirstBank. 

In this case, the presumptive fair market value of the property is $1,050,000, see 

Tenn. Code Ann. § 35-5-118(b), and this value is corroborated by Mr. Jones‟s two 

appraisals of the same value. At trial, the Bushes attempted to rebut the fair-market-value 

presumption by providing evidence (i.e. the Boozer Appraisal) indicating that StarPointe 

was worth $1,885,000; however, that evidence was entitled to no more and no less 

credibility than Mr. Jones‟s appraisals until the specifics are considered. As previously 

discussed, the Bushes‟ own witness, Mr. Maes, opined that all of the appraisals by Mr. 

Jones and the appraisal by Mr. Boozer were credible. He also acknowledged that 

competent appraisers often base their appraisals on different uses, meaning highest and 

best uses. Although Mr. Maes favored the Boozer Appraisal because the property was 

already zoned for the highest and best use applied by Mr. Boozer, Mr. Maes went on to 

qualify his assessment of Mr. Boozer‟s value of StarPointe by stating that the $1,885,000 

estimate is “the bulk sell-out price, and . . . they probably could have gotten that 

eventually.” (Emphasis added). This statement is significant because evidence of fair 

market value must be “at the time of foreclosure.” See Capital Bank v. Brock, No. E2013-

01140-COA-R3-CV, 2014 WL 2993844, at *6 (Tenn. Ct. App. June 30, 2014); Lost 

Mountain, 2006 WL 3740791, at *8 (“[T]he issue in deficiency actions is the fair market 

value of the property at the time it was sold.”). Therefore, what the Bushes probably 

could have gotten eventually is inconsequential when the issue is the fair market value at 

the time of the foreclosure sale. Moreover, the efficacy of the $1,885,000 valuation is 

undermined by the letters of intent that only pertained to “the approximately [two] 

useable acres” of the StarPointe property because, as Mr. Maes stated, it “would knock 

the value below [$]1,885,000. . . .” if Dr. Bush accepted the offer.7

 

7 As Mr. Maes explained, and as Dr. Bush‟s Conditional Letter to LOI indicated, what the 

potential buyer was proposing would create problems for Dr. Bush because if he accepted it he would 

have to recreate the site plan for the property, which would materially affect his ability to develop the 

remainder of the property.
- 24 -

The trial court found that the evidence presented by the Bushes when considered 

along with Mr. Jones‟s appraisals was insufficient to overcome the presumptive value of 

$1,050,000 established at the foreclosure sale. We find that the evidence does not 

preponderate against this finding. Thus, the trial court correctly determined that the 

foreclosure sale price of $1,050,000 was not “materially less” than the fair market value.

III. ATTORNEY‟S FEES ON APPEAL

Reliant asserts that it is entitled to an award of attorney fees on appeal pursuant to 

the terms of the loan documents. Tennessee follows the American Rule, which provides 

that “litigants pay their own attorney‟s fees absent a statute or an agreement providing 

otherwise.” Chambers v. City of Chattanooga, 71 S.W.3d 281, 284 (Tenn. Ct. App. 2001) 

(citing Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985)).

“Under the American [R]ule, a party in a civil action may recover attorney fees only if: 

(1) a contractual or statutory provision creates a right to recover attorney fees; or (2) 

some other recognized exception to the American [R]ule applies, allowing for recovery 

of such fees in a particular case.” Cracker Barrel Old Country Store, Inc. v. Epperson, 

284 S.W.3d 303, 308 (Tenn. 2009) (citing Taylor, 158 S.W.3d at 359; John Kohl & Co. v. 

Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn.1998)). Having reviewed the pertinent 

documents, we conclude that an award of attorney fees on appeal was contemplated in 

the loan documents. Therefore, we remand with instructions for the trial court to award 

Reliant reasonable and necessary attorney‟s fees incurred in this appeal.

IN CONCLUSION

The judgment of the trial court is affirmed, and this matter is remanded with costs 

of appeal assessed equally, and jointly and severally, against Byron and Kelly Bush 

equally.

______________________________

FRANK G. CLEMENT, JR., JUDGE