### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE Decem ber 2, 2003 Session

MICKIE R. McBEE v. J. LYNN NANCE Appeal from the Chancery Court for Anderson County No. 01CH1788 William E. Lantrip, Chancellor

FILED JANUARY 28, 2004 No. E2003-00136-COA-R3-CV

Mickie R. McB ee (“Pl ainti ff”) si gn ed a P romissory Note evidenc ing an indebtedness to J. Ly nn Nance (“Defendant”) in the amount of $15,000. The Promissor y No te (“ No te ”) wa s s ec ur ed by a Deed of Trust o n Plaintiff

’s house. After Pla

intiff fa iled to make any pa yments on the Note, Defendant

foreclosed on the house. Plaintiff then filed this lawsuit challenging the adequacy of the consideration supporting the Note. At trial, Defendant testified to various ca sh loa ns he made to Plaintiff which he claimed constituted adequate consideration for the Note. Plaintiff claimed these were gifts, not loans. The Trial Court concluded the Note was supported by adequate consideration and dismiss ed the co mplaint. Pla intiff ap peals. We

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

Court Affir

med; C ase Rem

anded

D. M ICHAEL S WINEY , J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS , J., and C HARLES D. S USANO , J R ., J., joined.

Mickie R. McBee, pro se Appellan t.
Kenneth W. Holbert, Knoxville, Tennessee, for the Appellee J. Ly nn Nance.1 Plaint iff also al leges that

Defendant beg an to harass her af ter she and Defendant ceased dating, and that she even tually had to ob tain an o rder of pro tection

. -2- OPINION Background Plaintiff filed a Complaint for Injunctive Relief in October of 2001. According to the complain t, Plaintif f and Defendant

began dating in 1998. While

they were

dating or otherwise on good terms, 1 Plaintiff experienced financial difficulties and was considering filing for ba nk ru pt cy. Plaintiff claims Defendant convinced her that he could protect her house if she filed for bankr uptcy if she would sign a promissory note showing an indebtedness to Defendant. Plaintiff alleg ed that because of her f inancia l duress, she executed the Note in July of 1998 showing a n indebted

ness to Defe ndant in the am ount of $15,000. Plaintiff stated in her complaint that the Note she signed containedlangua

ge to the effec t that if she did

not file for bankruptcy

or take any

other action on or before January 1, 1999, then the Note would become void and of no effect. Plaintiff denied receivin g any consider

ation to support the Note, much less $15,000. Plaintiff never filed for ba nk ru pt cy. In Februar

y of 2001, she rec eiv ed a letter from Defendant’s attorney demanding pay ment. Plaintiff

did not mak

e any pay ments towa

rd the No te a nd in September of 2001, she learned that Defendant had foreclosed on the Deed of T ru st which allegedly secured the Note. Plaintiff denie d ever e xecu ting a Deed of Trust. After Plaintiff received a letter demanding that she vacate the property, she

filed this lawsuit seeking, among other things, an injunction prohi biting Defendant from evicting her fr om her house. Defendant

filed an answer and a

dmitted Plaintiff had financi a l difficulties. Defendant maintained, however, that he and Plaintiff discussed the potential of her filing for bank ruptcy as well as “Plaintiff’s indebtedness to the Defendant for financial assistance that Defendant provided to the Plaintiff ....” Acc ording t

o Defen dant, these discussions resulted in Plaintiff’s executing the Note at issue, which Defendant clai med was supported by adequ ate consideration. Defendant also claimed there was a valid Deed of Trust securing the Note, and that he foreclosed on the property after providing Plaintiff with proper notice after Plaintiff defaulted on the Note. Defend ant attac

hed to his a

nswer a copy of the Pro missory

Notewhich provides in releva nt part a s follows:

For value received, I , MICKIE R. MCBEE, unmarried , promise to pay to the order

of J. LYNN NANCE the principal sum of FIFTEE

N THOUS AND DOLLA RS A ND 00/100 ($15,000) wit h no interest. This note is due and

pay able as follow s: Pay able with

in thirty da ys of demand, but in no event before January 1, 1999. The

re shall be no penalty for

prepayme

nt of this contract.-3- THE MA KER will pa

y, o n demand, any

attorne y’ s fees a n d related expenses that

the holder incurs (i) in collecting or attempting to collect the indebtedness evidenced by this Note, (ii) in en forcing the deed of trust that

secures this Note, (iii) in protecting the collateral encumbered

by that deed of trust, or (iv) in defending or asse rting the holder’ s rights in that co llatera l. * * * * PRESENTMENT, notice of dishonor, and protest are hereby waived by a

ll makers, sureties, guarantors, and endorse rs hereof.... THE INDEBTEDNE SS evidenced by this note issecured by a Deed of Trust of even da te conve yin g cert

ain rea l proper ty in Anderson County , Tennes see, as t herein d escrib ed, a s security f

or this debt, and the pr

ovisions of

said Dee d of Trust

are inc orporat

ed here in by refe rence.... A hearing was held in Oc tober of 2001 on Plaintiff’s request for a temporar y injunction prohibitin g Defe ndant fr om evictin g her f

rom th e p roperty. The

Trial Court’s order entered after the hearing denied Plaintiff’s r equest and the case was set for trial. The den ial of Plaintiff ’s reque st for tem

porary injunctive

relief i s not at issu e in this ap peal. The trial was on November 25, 2002, and began w ith Plaintiff stipulating that her signatures on the Note a nd the De ed of Tru st were g enuine. P laintiff then was called a s the firs t witness. Plaintiff

testifie d to her version of events surrounding the signing of the Note and whether or not she received any

consideration for entering into that contract. Ac cording to Plaintiff, while she and Def

endant wer e dating, he bought her “lots of gifts” and they would g o on vacations, etc. So me of the “g

ifts” inc luded: (1 ) Defendant’s ma king re pairs to Pla

intiff’s house wit

hout he r requesting that

he do so; ( 2) pay

ing for car re pairs; (3 ) the pur

chase of a car which Plain

tiff cla ims she never really

wanted and eventually

returned to Defendant; (4) a joint checking account established by Defe

ndant on which Plaintiff wrote checks from fun ds deposit ed by Defend ant; and (5) a credit card in Plaintiff’s na me but under Defendant’s primary account for which Defendant ultimately

was responsible. According to Plaintiff, Defenda nt “insisted” that she use the credit card and he neve

r told her that he e xpected to

be repa id for an y charge s she incurred . Plaintiff then explained the reason Defendant insisted she use the cre dit card was because they were dating and Defendant

“was wa nting it to

become a

permane nt rela tionsh ip, he kept saying

that I was an investmentin his future.” Plaintiff claimed she never was told she would be expected to repay Defendant. “I

f I had been told that, I

would never have dated him.” Plaintiff testified that

the Note admitted into evidence at trial contained her signature, butit was not the Note she really signed. Plaintiff stated that the Note she actually

signed contained a statemen t to the ef fect tha t if she did

not file for bankruptcy

or take any

other action by January

1,-4-

1999, then the Note would become null and void. The Note admitted into evidence by Defe ndant didnot conta

in this stat ement. While Plaintiff acknowledged her signatu re was o n the Dee d of Trust , she clai med no mem

ory of ever having signed t hat docum

ent. After Plaintiff co nc luded her proof, D efenda

nt orally moved to ha

ve the ca se dismissed. In deny

ing the motion, the Trial Court statedPlaintiff’s “only issue is consideration ... butthe issue

of consid eration ; was it a

gift, remains an issue.” Based on the comments made by the Trial Court whe

n overruling De fendant ’s motion, i t certainly

believe d the only

issu e at t rial was whether there was sufficient consideration supporting the Note since no ment ion was made about any other issue( s).

Not surprisingly, De

fendant’s version o f eventswas quite differe nt from Pla

intiff’s

. Defendant

testifie d to the various bills he claimed to have paid on Plaintiff’s behalf. For example, Defendant

described at least one occasion wh ere he pai d Plaintiff’s utility bills in cash so her electri city and gas would not beturned off. After these bills were paid, Plaintiff told Defendant that she would repay him. De

fendant cosigned a note to enable Plaintiff to buy a car. WhenPlaintiff was unable to make the pay

ments, Defendant

paid off the car note so his credit w ould not be adverse ly affected. Defendant

testifie d he paid $ 1,300 in c ash to have Plaintiff’s car repaired and $300 to have her father ’s car r

epaire d. Defe

ndant als o claims to

have given

Plaintiff $1,300 in cash for expenses incurred by Plaintiff’s son. Accor ding to Defendant, he a

lso paid credit card charge s made by Plaintiff and for repairs to Plaintiff’s parents’ house.

Defendant

testifie d that prio

r to Pl aint iff’s signing the Note, they discussed the various payments for whic h Defendant expected to be repaid a nd they both agreed Plaintiff owed him in excess of

$15,000. Defendant testified he then told Plaintiff that “I had a gr eat deal of money already invested in it and I

needed securiti es on it. And that is wh y we ag reed on the fifteen thousand dollars and the only tangible asset she had was her house.” Because Plaintiff’s mother was ill and Plaintiff was working only part-time, Defendant

agreed that Plaintiff

would not have to start repaying an y money

until January 1, 1999, and this provision was incorporated into the Not e . Thereafter, bothof Plaintif f’s parents became very

ill and eventually passed a way. De fendant testified that h e did n ot feel it app ropri ate to seek re payment f rom P laint iff du ring t hose diff ic ult times, so he waited until the beginning of 2001 before he sought repay ment. Defendant testified that the purpose o f the Note

and Dee d of Trust

was to sec

ure Plain tiff’s de bt to him inthe agreed upon amou nt of $ 15,000. According to Defendant, he ha d given Plaintiff gifts and their value was not included in the $15, 000 beca

use he did

not expect

repay ment for a

ny g ifts. After the testimony wa s completed, the Trial Court issued a ruling from the bench, stating as follow s: The Court has heard this on two occasions and was convinced at the ear ly hearing that the d eed of tr ust and not

e bore the signatures of Ms. McBee. They

have been stipulated here today

. The Court finds that those

document s were e

xecuted, t hey are val id and existing-5- and the Court finds that the parties, that fun ds, monies, had been advanced, were recognized by the parties and that fifteen thousand dollars was the amount agreed upon by the parties t

o reimbur se Mr. Nance for monies advanc ed to Ms. McBee. That there was g ood and valuable consideration, that these documents are valid a n d binding and enforceable and the complaint filed by Ms. McBee is dismissed. A few weeks after the trial was completed, the Trial Cour t entere d its final

Judgment w

hich state s: “[T]he Court find s that the P romissory Note dated July

20, 1998 a

nd the De ed of Tru st dated A ugust 11, 1998 are authentic documents, that the documents were signed by the Plai ntif f, and that the Plaintiff received full and valuable consideration for the execution of the Promissory Note ... [and] the Complaint is dismissed .... ”

Plaintiff appeals pro se raising the following issues, which we quote: 1. Did

the Chancellor commit reversible error in fi nd ing that sufficient consideration was present to support the promissory note? 2. Did

the Chanc ellor co mmit

reversible error by

failing to find or otherwise address the issue that the defendant failed to give the plaintiff notice before foreclosing on the pla intiff’s home? 3. Did

th e [ Ch an ce ll or ] c om mi t r ev er si bl e e rr or by f ailing to find or otherwis e addre ss the issue th at the consideration for the foreclosure sale was inadequate? Discussion The factual findings of a trial court are acc orded a presumption of correctness, and we will not ove rturn those factual findings unless the evidence pr eponderates against them. See Tenn. R. App. P. 13(d); Bogan v. Bogan , 60 S.W.3d 721, 727 (Tenn. 2001). With respect to legal issues, our review is conducted “under a pure de novo standard of review, according no deference to the conclusions of law made by the lower courts.” Southern Constructors, Inc. v. Loudon Coun ty Bd. Of Educ. , 58 S.W.3d 706, 710 (Tenn. 2001).

Initi ally we will discus s Plaint iff’s claim that the Trial Court erred when it found there was sufficient consideration to support the Note. I n the recent case of Smith v. Riley , No. E200 1

- 00828-COA-R3-CV, 2002 Tenn. App . LEX IS 65 (Tenn. Ct. App. Jan. 30, 2002), appl. perm. appeal denied Sept. 16, 2 002, this Court discu ssed the a dequac y of

consider ation as f ollows: It is a well-settledprinciple of contract law that in order for a contract to be bindi ng, it

must, among other things, be supported by sufficient consideration. See Doe v. HCA Health Services of-6- Tennessee, Inc. , 46 S.W.3d 191, 196 (Tenn. 2001). In expounding on the adequa

cy of consid

eratio n, the Tennessee Supreme Court has stated that [i]t is not nec essary

that the b enefit

conferred or the detriment suffered by the promisee shall be e qual to t he respo nsibility as sumed. Any

consider ation, how ever sma

ll, will supp ort a prom ise. In the

absence of frau d, the cou

rts will no t undertake t o r egulate the amount of the consideration. The parties are lef

t to contra

ct for the mselves, taking for granted that the consideration is one valuable in the ey es of the law. Danheiser

v. Germania Sav. Bank

& Trust Co. , 137 Tenn. 650, 660- 61, 194 S.W. 1094, 1096 (1917). Quoting the Unite d States Sup reme Court, t he Ten nessee Supreme Court went on to state that “[a] stipulation in considera t ion of $1 is just as effectual and valuable a consideration as a larger sum stipulated f or or pai d .” Id. (quoting Lawrence v. McCalmont , 43 U.S. (2 How.) 426, 452, 11 L. Ed. 326 ( 1844)). Indeed, the considera tion of love and affection has bee n deemed sufficient to support a convey ance. See Thomas v. Hedges , 27 Tenn. App. 585, 593, 183 S.W.2d 14, 17 (1944). Smith , 2002 Tenn. App. LEXI S 65, at **8-9.

In the present case, Plaintiff is under the misapprehension that the consideration for the Note must equal the amount of indebtedness, i.e. $15,000, in order for the consideration to be deemed adequate. As set forth above, that is not the law. When rendering its Judgment the Tr ia l Courtobviously credited the testimony of Defe ndant ove r that of P laintiff when con cluding the Note was supported by “full and va luable” consideration, namely funds loaned

or “advanced” to Plaintiff. The Trial Court did not credit Plaintiff’s testimony that those funds were intended by Defend ant to be gifts. “Unlike this Court, the trial court observed the manner and demeanor of the witnesses and was in the bes t position to evaluat e their credibility.” Union Plan ters Nat’l B ank v. Is land Mgmt. Auth., Inc. , 43 S.W.3d 49 8, 502 (Te nn. Ct. App. 2000). The trial court’s determinations rega rding credibi lity

are accorded considerable defe rence by this Court. Id. ; Davis v. Liberty Mutual Ins. Co. , 38 S.W.3d 560, 563 (Tenn. 20 01). “‘ [A]ppellate courts will not re-evaluate a trial judge’s assessment

of wi tn es s c re di bi li ty absen t clear and convincing evidence to the contrary .’” Wells v. Tennessee Bd. of Reg ents , 9 S .W .3d 779 , 78 3 (T enn . 19 99) . In a nutshell, Plaintif f argu es that “ most of the things she received from the defe ndant were gifts” and theref ore cannot count as consideration. This is nothing more than asking us to believe her ove r Defendant, but we

will not undertake to reassess witness credibility unle ss there is clear and conv incing evidence to the co nt ra ry. We co nc lu de th er e i s n o c le ar an d c on vi nc in g e vi de nc e t o t he co nt ra ry, and affirm the Trial Court’s Judgment insofar as it concluded there was adequate consideration to support the Note.-7- Plaintiff’s next two issues center around the propriety of the foreclosure sale itself. Plaintiff ar gues th at she did not receive proper notice of the for eclosure sale and the value of her home far exceeded what the house sold for at foreclosure. Plaintiff claims the Trial Court committed reversible error when it failed to addre ss these two issues.

Based upon our review of the complaint and the rest of the rec ord, we find that Plaintiff did not raise these issues or otherwise put them at issue at the trial court level. It is apparent that throughout the trial, the Trial Court correctly never believed Plaintiff was challenging the validity of the foreclosure based on lack of notice or an inadequate price at the foreclosure, and, theref ore, pro perly never addressed these issues. Plaintiff’s final two issues were not raised in the Trial Court acc ording t

o th e re cor d be for e us . "It is well-settled that issues not raised at trial may not be raised f

or the fir st tim e on appeal ." Dept. of Human Servs. v. Defriece , 937 S.W.2d 954, 960 (Tenn. Ct. App. 1996) (citations omitted). Therefore, Plaintiff cannot challenge the validity of the foreclosurein this app eal, exce pt for he r issue tha t the fore closure was inva lid because there

was no consideration to supportthe promis sory note itself. “No” is the ans wer to Plaintiff’s issues two and three. Conclusion

The Judgmentof the Tr

ial Court isaffirme d and this c ause is remanded to the Trial Courtfor further proceedings a s may be requ ir ed , i f a ny, consistent with this Opinion, and for co llection of the costs below. The costs on appeal are assesse d against the Appellant , Mickie R

. McBee, and her surety , if any.

___________________________________ D. MICHAEL

SWINEY, JUDGE