### IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON January 20, 2016 Session

AURORA LOAN SERVICES LLC, ET AL. v. LINDA S. ELAM, ET AL.

Appeal from the Chancery Court for Fayette County No. 15895 Martha Brasfield, Chancellor

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No. W2015

- 01097

- COA

- R3

- CV

– Filed February 18, 2016

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This is an appeal of a grant of summary judgment. Defendant Linda Elam conveyed property owned by her individually to Defendant Trust. This property was then p ledged as collateral

to secure a construction loan for the T rust. Defendants Fred and Linda Elam then obtained another loan in their individual capacities. Appellee’s predecessor in interest obtained ownership of the Defendants’ individual loan and broug ht suit seeking to have the conveyance of the property to the Trust declared void. On the Appellee’s first motion for summary judgment, the trial court found the conveyance of the property to the trust to be valid. On Appellee’s second motion for summary judgment, the trial court found that the
property owned by the trust had been pledged as collateral for the second loan made to

Defendants Fred and Linda Elam . Appell ant, Fred Elam, appeal ed in his individual capacity. We conclude that Appellant cannot p rosecute the appeal, and the appeal is dismissed

.

Tenn. R. App. P. 3 Appeal as of Right ; Appeal Dismissed

K ENNY A RMSTRONG

, J.

, delivered the opinion of the Court, in which J. S TEVEN S TAFFORD

, P.J., W.S., and B RANDON O. G IBSON

, J.

, joined.

Fred Elam

, Piperton, Tennessee, pro se

.

James. A. Crislip

, Memphis , Tennessee, for the appellee, NationStar Mortgage, LLC.2 OPINION

I. Background

On December 2, 2002, Linda Elam acquired title to real p roperty located at 50 Brierwood Circle, Piperton , Tennessee (“the P roperty”). On December 12, 2002, Linda and Fred Elam (“the Elams”) filed a Certificate of Trust creating the “ L & F Irrevocable Trust dated December 12, 2002” ( “L & F Trust” or “Trust”)

. The Certificate of Trust named Fred

Elam as the t rustee

. Also on December 12, 2002, Linda Elam conveyed the P roperty , owned by her individually, to the Trust by quitclaim deed. On December 23, 2002, Fred Elam, in his capacity as trustee, executed a d eed of t rust pledging the Property as collateral to s ecure a construction loan from Merchants & Farmers Bank in the amount of $386,669.63

.

On March 31, 2004, the Elams, in their individual capacities, received a loan from Realty Mortgage Corporation in the amount of $540,000 .00

. To secure the loan , the E lams, purportedly in their individual capacities, executed a deed of trust pledging the Property as

collateral. T he Elams used the $540,000 .00 loan to repa y their loan to Merchants & Farmers

Bank as well as to make improvements to the house located on the Property

. Aurora Loan Services, LLC (“Aurora”) eventually obtained ownership of the Elams’ note and loan held by Realty Mortgage Corporation

. On July 18, 2007, the Elams obtained a loan from FirstBank in the amount of $148,000 .00

. On December 13, 2007, the Elams executed a “Workout Agreement” with Aurora regarding late payments on the $540,000.00 loan . On May 28, 2008, the Elams executed a “Loan Modification Agreement” with Aurora , also regarding the Elams’ ability to repay their loan

. In the years fo llowing these agreements, t he Elams filed multiple bankruptcy actions.

On April 27, 2012, Aurora filed suit against the Elams and the L & F Trust (together,

“ Defendant s”), seeking a declaratory judgment that the December 12, 2002 deed conveying the Prop erty from Linda Elam to the L & F Trust was void. In the alternative, Aurora sought to “assume the priority position of the Merchant s & Farmers Bank mortgage.” In addition, Aurora sought to have the trial court find that the P roperty was pledged as colla teral for the $540,000 .00 loan, or, in the alternative, that Aurora held an equitable lien on the Defendants ’
property. The lawsuit also named several other defendants for notice purposes.

On July 31, 2012, Defendants filed their answer. That same day, First B ank, which

was one of the parties named as a defendant by Aurora for notice purposes, filed its answer

and cross

- complaint. By its cross

- complaint, FirstBank sought a declaratory judgment that the quitclaim deed conveying the P roperty from Linda Ela m to the Trust was void, and

averred that “all subsequent properly recorded deeds of trust, tax liens, judgment liens, and liens of any sort were properly perfected on the date and time of recordation.” The cross

-3

complaint also asserted a claim for neglig ence against Sharon K. Anderson , the closing
attorney, in the amount of $148,500 .00 for improperly preparing closing documents. On September 20, 2012, Defendant s answered First B ank’s counter

- complaint. Sharon Anderson

filed her answer to First B ank’s complaint on October 4, 2012. On May 16, 2013, the trial court entered a consent order substituting Nation S tar Mortgage, LLC (“Nation s tar” or “Appellee”) as the plaintiff for Aurora. 1

On June 7, 2013, Nation s tar filed a motion for summary judgmen t seeking a

declaration that the deed from Linda Elam to the Trust was void. In its motion for summary judgment, Nation s tar argued that because Linda Elam deeded the Property to the Trust, as opposed to its trustee, the deed was rendered void, arguing tha t under Tennessee law a
conveyance to a trust , rather than to its trustee, is void. On July 10, 2013, FirstBank filed a
“notice of non

- opposition” to Nationstar’s motion for summary judgment. On August 7, 2013, Defendants filed their response to Nationst ar’s motion for summary judgment.

On May 20, 2014, the trial court entered an order denying Nationstar’s motion for summary judgment . In this order, t he trial court found that Linda Elam’s intentions were

“ obvious ” in light of the Certificate of Trust and the q uitclaim d eed, and that the P roperty was “being conveyed for trust purposes

. ” Based on these findings, the trial court followed the rule of construction that documents should be given constructions that render them valid

instead of void and foun d that the December 2, 2002 quitclaim deed conveying the Property

from Linda Elam to the L & F Trust was valid. On December 4, 2014, the trial court entered a consent order dismissing FirstBank’s claims against Sharon Anderson.

On January 20, 2015, Nat ionstar filed a second motion for summary judgment. This

motion asked the trial court to declare that the Property was pledged as collateral to secure the March 31, 2004 $540,000 .00 loan from Realty Mortgage Corporation . In the alternative, the motion sought to have the court declare that Nationstar held a priority position “of the

Merchant s & Farmers Bank mortgage” or that Nationstar held a “first priority equitable lien” on the Property. On April 17, 2015, Defendants responded to the motion for summary judgment. On May 14, 2015, the trial court entered an order granting Nationstar’s second motion for summary judgment and dismissing the cross

- complaint. This order found that it

was the intention of the Elams, the Tru st and Realty Mortgage that the Property wou ld be collateral for the loan and ordered that the March 31, 2004 deed of trust securing the Property as collateral for the $540,000 .00 loan “be reformed to reflect that the interest of the [L & F
Irrevocable Tru st] was effectively conveyed in said deed of trust through its Trustee, Fred
Elam.” Fred Elam (“Appellant”) filed the instant appeal in his individual capacity on June 10, 2015.

1 Nationstar o btained ownership of the Elams’ loan and so became the party in interest.4 II. Issues

Although Appellant present s two issues for review, we restate the issue on this appeal as whether the trial court erred in granting Appellee’s second motion for summary judgment.

I II . Analysis

We recognize at the outset that Appellant represent s himself in this appeal

. Pro se

li tigants are entitled to fair and equal treatment by the courts. See Hessmer v. Hessmer , 138 S.W.3d 901, 903 (Tenn. Ct. App. 2003). While we take into account that Mr. Elam has no formal legal training, we must “be mindful of the boundary between fairness to a pro se litigant and unfairness to the pro se litigant’s adversary. Thus, the courts must not excuse pro se litigants from complying with the same substantive and procedural rules that represented parties are expected to observe.” Id. “Even though the courts cannot create claims or

defenses for pro se litigants where none exist, they should give effect to the substance, rather than the form or terminology, of a pro se litigant’s papers.” Id. at 90 4 (internal citations omitted).

To begin, we note that t he only party listed on the Notice of Appeal is “Fred Elam .” Consequently, Mr. Elam has perfected an appeal to this Court in his individual capacity only. However, “[u]nder our case law only an aggrieved party has a right to prosecut e an appeal.” Koontz v. Epperson Elec. Co. , 643 S.W.2d 333, 335 (Tenn. Ct. App. 1982). “An aggrieved party has been defined as one having an interest recognized by law which is injuriously affected by the judgment whose property rights or personal intere st are directly affected by its operation.” Id. (internal citations omitted) ( see also Clark v. Perry , No. 02A01

- 9704

- CH

00080, 1998 WL 34190562 (Tenn. Ct. App. March 19, 1998)) . Under this test, we conclude that Mr. Elam, in his individual capacity, is n ot an aggrieved party.

T he trial court’s order finding Linda Elam’s conveyance of the Property to the L & F
Trust valid is not being appealed . Thus, the Property is now indisputably owned by the Trust. Mr. Elam is not a beneficiary of the L & F Trust. Although the Certificate of Trust creating the L & F Trust does not name any beneficiaries, the record reveals that Mrs. Elam and the Elams’ daughters are the intended beneficiaries of the Trust. In his individual capacity, Mr.

Elam does not have , and has never had

, any legal interest in the Property owned by the Trust

. T he trial court’s order simply find s that the Property is collateral securing the $540,000 .00

loan made to the Elams in their individual capacities

. T h e order does not affect Mr. Elam’s

loan obligation to the Appellee . Rather

, it merely secure s his loan with property held by a third party, which does not affect any of Mr. Elam’s property rights. Accordingly , we conclude that in his individual capacity Mr. Elam is not aggrieved by the tr ial court’s order and, consequently, he cannot prosecute this appeal in his individual capacity.5

Furthermore, Mr. Elam cannot prosecute this appeal in his capacity as trustee of the L & F Trust. There is no indication that Mr. Elam intended to appeal on behalf of the Trust, as the notice of appeal only lists “Fred Elam” as the appealing party, with no mention of the Trust or Mr. Elam’s position as its trustee. However, e ven if we were to assume that Appellant intended to file the Notice of Appeal in h is capacity as the trustee of the L & F Trust, we still would not reach the merits of the case.

This Court has previously determined that “ a non

- attorney trustee may not represent a trust in our Tennessee courts.” Elm’s Children’s Educational Trust v. Wells Fargo Bank,

N.A. , 468 S.W.3d 529, 533 (Tenn. Ct. App. 2014). In Elm , the only party appearing on the Notice of Appeal was a trust. Id. at 531. The issue before the Elm Court was whether the

trust’s non

- attorney trustee could appear on the Trust’s b ehalf. Id. In reaching its conclusion, t he Elm court stated that

Tenn. R. Civ. P. 11 requires that “[e]very pleading, written motion, and other paper shall be signed by at least one attorney of record in the attorney’s individual name, or, if the party is not represented by an attorney, shall be signed by the party,” an d the Notice of Appeal in this case was not signed by
an attorney, the Notice of Appeal was insufficient to initiate an appeal on behalf of the Trust. We, therefore, dismiss this appeal for lack of jurisdiction.

Id. at 533. Therefore , even if we allowe d that Appellant signed the Notice of Appeal in his capacity as trustee for the L & F Trust

, th is Court would not have subject ma tter jurisdiction

over the case. Because Mr. Elam , individually, is not aggrieved by the trial court’s order, and

because he c annot perfect an appeal on behalf of the Trust , t he appeal is dismissed.

I V. Conclusion

For the foregoing reasons, the appeal is dismissed. The case is remanded for such further proceedings as may be necessary and are consistent with this opinion. Costs of the appeal are taxed to the Appellant, Fred Elam, for all of which execution may issue if

necessary.

_________________________________ KENNY ARMSTRONG, JUDGE