# FILED
Au gust 19, 1997 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COURT OF AP PEALS OF

TENNESSEE, WESTE RN SECTION AT JACKS ON

_______________________________________________________ ) DECATUR COUNTY BANK , ) Decatur County Chanc ery Court ) No. 2032 Plaintiff/Counter-Defendant/Appellee. ) ) VS. ) C.A. No. 02A01-9603-CH-00057 ) WELBORN B. DUCK , ) ) Defend ant/Counte

r-Plainti ff/Appe

llant. ) ) AND ) ) CECIL DUCK , ) ) Defend ant. )

______________________________________________________________________________ From the Chancery

Court of Decatur County a t Decaturville. Honorable Walton West, Chancellor

Welborn B. Duck , Pro Se Edwin Townsend , TOWNSEND AND TOWNSEND, Parsons, Tennessee Attorney for Plaintiff/Counter- Defendant/Appellee.

OPINI ON FIL

ED: AFFI RMED AND

REMANDED FARMER, J. CRAWF ORD, P. J., W.S. : (Concur s) HIGHERS, J. : (Concur s)1 Cecil Duck was joined as a defendant in the suit as a cosigner of the fourth note. He has

not appea led from t he judg ment of the

trial cou rt and is n ot a part

y to this appe al.
2 It appears from the r

ecord that after obtaining counsel Duc k filed an amended answer wherein he denie s owing t

his amount
. Appellee, Decatu

r County Bank (B ank), fi led su it agai nst Appell ant, Welb orn B. Du ck (Duck), for reformation of a trust dee d and default upon four promissory notes. Bank specific ally

alleged that Duck was in default on a note dat ed October 10, 1986 in the principal amount of $59,518.73; a note dated June 27, 1988 in the principal amount of $1,003.10; a note dated March21, 1988 in the principal amount of $25,043; and a note dated March 23, 1989 in the principal amount of $6,000, 1 for a tota l principa l indebte dness of $ 91,564.83 . Bank a lleged that the f irst 3 notes were secured by

deeds of trust dated August 16, 1982 and that the March 21, 1988 note w as additiona lly secured by

a separate deed of trust dated that same da y. Duck filed an answer, prose, wherein he conceded his indebtedness to Bank to the extent of $59,518.73, but de nied o wing any additional monies or that reformation was necessary . It was asserted that the A

ugust 16 , 1982 trus t deeds di d n ot ac t t o s ec ur e t he pr om is so ry n otes and were void. Duck also file d a counte rclaim alleging that the addition a l monies (a bove the $ 59,518.73 amount) w ere bor rowed under “fa

lse pretens es” as it was ag

reed the y w ere mer

ely “the first installments of the additional money promised by [Bank] to continue the development of [Duck’s properties for his fish farming ventures].” Bank deni ed any ag

reement with Duck other than that as expressed in the deeds of trust and notes sue d upon. Pursuant t

o motion, the trial court entered a partial summary judgme

nt in favor of Bank in the amount of $59,518.73 based

upon Duck’s sworn pleadings, which had not been a mended. 2 Bank then filed a motion for summary judg ment asserting its entitlement to such relief on grounds of judicial and equitable estoppel, estoppel of record, t he statute of

frauds, violation of the parol evidence rule and

the statute of limitations. The trial court granted summary judgme

nt in favor of Bank on several grounds and

dismissed Duck’s counterclaim. Duck has appealed, presenting wha t
we perceive to be the single issue of whet her the trial co urt was correct in granting the summary judgmen t. For re asons set

forth below, we a

ffirm.

The following facts are

not in dispu

te: On Aug

ust 16, 1982, Duck borrowed $28,000 from Bank ev idenced by a promissory note secured by two deed s of trust c overing propert ies in Decatur and Perry

Counties, respectively. Ea ch trust deed contains the following provision:3 Th e t ru st de ed gr an te d B an k a se co nd mo rt ga ge on th e p ro pe rt y. 4 Accord ing to the affida vit of Ba nk presid ent, James A . Engla

nd, the 19 88 deed o f trust was executed because the amount loaned ($25,043), in addition to the other monies loaned, exceeded the $65,000 limitation on additional advances under the 1982 trust deeds. The latter de ed of tr us t a ls o g ra nt ed Ba nk a f ir st mo rt ga ge on th e for ty a cr e t ra ct in Pe rr y Co un ty. That is to say, I

am justly indebt

ed to [Bank] in the amount of $28, 000.00 as evidenced by my promissory

note of even date wit h this instrumen

t, and due six months with

interest from date ; and to secure and make certain the pay ment of t his note a

ccordin g to its terms, or for a

ny r enewal s, extensions, or additiona l advanc es not to exceeda total indebtedness of $65,000.00 that mig ht be granted us under the life of this instrument, this deed of trust is executed.

The deed of trust describing the Perry County property identifies“40 acres, more or less.” 3 The other deedof trust describes the Decatur County property a s containing thirteen acr es but expressly exclud es there from an u

ndivided o ne-half

interest in 3.3 acr

es of the tract pr eviously convey ed to Duck. It is the latter trust deed which Bank seeks to reform to delete any reference to the exclusion. In August 1985 , Duck

paid off the original loan amount of $28,000. The trust deeds we re not released. A few months later, Duck began borrowing additi onal fund s from Ba nk from tim

e to time withvarious payments made thereon. On October 10, 1986, the different loan amounts were reduced to one note, totaling $59,518.73. The note states tha t it “is sec ured by a separ ate D/T Comm. and Farm . . . Res. R.E. dated 8-16-82.” A promissory note in the amount of $1,003.10 was executed by Duck on June 27, 1988. It indicates that the loan amount was “Adv. under D.T. dtd 8/16/82 (2)” and that “this note is secured by 2 separate D/T R.E. (Perry and Dec. Cos.) dated 8/16/82.” On March 21 , 1988, Duck executed a promissory note in favor of Bank in the amount of $25,043. Th e not e indica tes th at it is secured by a deed of trust dated 3/21/88 and further states “Adv. under D /T (2) dated8/16/82.” 4 Fi na ll y, on March 23, 1989, a personal loan of $6,000 was made by Bank to Duck, evidenced

by a pro mi ss ory n ot e wh ich was co- si gne d by C eci l Du ck. In his deposition, Duck admits to rece iving the funds fr om Bank a s design ated in the notes.

After obtaining counsel Du ck filed an amended counter claim asserting that the parties had agreed that Bank w ould loan him up to $65,000 for each of the properties convey

ed under the 1982 trust dee ds; that in

August 1985, he paid off his loan in full and had a “zero balanc e due” and believedthat the mortgages on the properties ha d been released; that in

October 1985 Duck informed Bank that he wo

uld be will

ing to put u p both pieces of his prope rty as colla teral fo r funding tocomplete

his fish farming venture and that Bank a greed to do so; that in the first part of 1989, Bank informedDuck tha

t he would

have to se

ll some of h

is assets “in order

to satisfy the Ba

nk examiners before . . . [B]ank would advance him any more money ”; that as a result, Duck agree d to sell the 3.3
acres of Deca

tur County

propert y a nd made a

rrang ements for an auction of the property ; that Bank refused to release the property

to the buyers at the a

uction, stating it had received a higher offer; that
on February

15, 1985, Bank president England falsified and c hanged the amount on a

l oan form datedthat day ; that Ba

nk violate d state la

w by failing to release the paid off

mortgages and by

failing to create a new mortgage afte

r a new loan agreeme

nt was entered into regarding the Dec atur Coun

ty property; that B ank

took posse ssion and s old the De catur Cou nty propert y to itself wit hout a val id deedof trust; that Bank “made such promises and assurance s to [Duck] that were of a nature to cause him to rely upon such promises with the under standing that he could and would receive adequat e financing to comple

te all of h is project s related to his various enterprises”; and that Bank r eversed its position regarding its agree ment for future advances to Duck at a time whe n he had no other
means of obtaining financing. As a result, Duck alleged that

Bank was liable for neglig ence, breach of contract, conversion, trespass, fraudulent and/or ne gligent misrepresentation, fraudulent and/or negligent inducement to contract and slander of title. Duck sought, inter alia , monetary dama ges in the amount of $250,000 and a bill quieting title to the Decatur and Perry County properties.

In support of its motion for summary judgment, B ank relied upon various portions of the plea dings a nd ex hibits thereto, Duck’s deposition and the affidavits of James England and James Smith. Exhibit 10 to Bank’s complaint is a disclosure s tatement filed by Duck, t hrough counsel, in January

1990 in the

bankrup tcy

court wherein

Duck sought

Chapter 1 1 protec tion. I

n it, Duck acknowl edges Bank’ s “lien on approximately 40 acre s of real estate . . . in Perry County, . .

. and approximately 13.9 acre s of real estate . . . in Decatur County ” and that “[t]hese two tract s
secure an indebtedness of

approximately $91,500.00.” Duck identified no unsecured creditors. The record al so in cl ud es Du ck ’s ba nk ru pt cy p eti tion (schedule of liabilities), filed under penalty of pe rj ur y, acknowledging Bank a s a secured creditor to the extent of $91,500. The schedule describes the security held by

Bank as “40 acres, in Perry County, TN” and “ 13.9 acre s i n D ec at ur Co un ty, TN.” It is signed by

Duck and

dated Sep te mber 12, 1989. The record further includes a proof of5 Bank listed a secured claim in the amount of $85,564.83 plus interest and a $6,000 plus

interest unsecur ed claim. claim filed by Ba

nk in the bankruptcy c ourt for a total amount of $91,564.83 plus accrue d intere st. 5

In granting Bank’s motion for summary judgment, the trial court ruled that Duck is judiciall y es to pp ed to de ny the valid it y of his indebtedness to Ba nk because of the Chapter 11 bankrup tcy

petition w

herein he “fully recognized the indebtedness to Bank as being $91,500.00, .

. . and confirmed that

it is secured by 40 ac

res in Perry County

and 13.9 acres in Decatur County .” The court further found the languag e of the documents suedupon (with the exception of the $6,000 loan) to cl early a

nd unambiguously re

present additional advances to Duck under the Aug ust 16, 1982 trust deeds as each specifically referred to the two trust dee ds and “st at[ed] by plain language that
sameare sec

ured the reby . . . .” Cons equently , the cour t held that parol evidence could not be used to vary or c ontradict the plain language of the documents (including the $6,000 promissory note). The court held that Duck was both judicially and equitably estopped to asser t any of the claim s in his counterclaim for the foregoing reasons and, additionally, f or never object

i ng to further transactions between himself and Bank as being secured by

the 1982 trust deeds until Bank notified him in December 1990 of the allege d error or mistake in the description of the 13 acre tr a ct. Th e court also found that the statute of fra uds, spe cifically T.C.A. § 29-2- 101(b)(1), precluded Duck from asserting any ac tion for Bank’s alleged brea ch of an agreement to lend money or extend credit for
an amount other than that as expressed u nder the written te rms of the promissory notes in question.

In considering a mot ion for su mmary judgmen t, we are to take the strong est leg itima t e view of the evidence i n favor o f the nonm oving pa rty , allow all reason able inf erence s in their

favor, and discard all countervailing evidence. I f a dispute exists as to any material fa ct or any do ubt as to the conclusions to be drawn from that fact, we must deny

the motion. Clifton v. Ba ss , 908 S.W.2d 205 (Tenn. App. 1995). It has remained Duc k’s position throughout these proceedings that once the original loan of $28,000 was repaid withou t him rec eiving a ny a dditional a

dvance ments up to $65,000 as of the

date of p ay off, Ba

nk was obl

igated at that time

to execute a formal deed of release. Thus, Duck maintains that Bank was unsecured as to the a ddi tional lo ans made. However, the statemen ts made by Duc

k under penalty of

perjury in the bankrup tcy procee ding est

ablishing his indebt edness to Bank in the amount of $91,500 and that such indebtedness is secured by the two6 T.C.A. § 29 -2-101( b)(1) pr ovides: Writing r

equired for

action. -- . . . . (b)(1) No action shall be brought ag ainst a lender or creditor upon any promise or commitment to lend money or to extend credit, or upon a ny promise or commitment to alter, amend, renew, extend or otherwise modify or supplement any written p romise, a greem ent or co mmitment to l end money or extend c

redit, unless the promise or agreement, upon which such a ction shall be brought, or some memorandum or note thereof, shall be in writing and signed by the lende r or creditor, or some other person by him thereunto lawfully authorized. tracts of land in question contradict such assertion. We agree with the trial c ourt that such stat ements operate to estop Duck from deny ing his indebtedness under the doctrine of judicial estoppel. The law of judicia

l estoppel ordinar

ily a pplies to one who has made oath to a state of facts in a former judicial proceeding which in a later proc eeding he undertakes to contradict. Alle n v. Neal , 396 S.W.2d 344, 346 (Tenn. 1 965). The doctrine is intende d to suppre ss fraud and proh ibit the delib erate shifting of position

to suit the e

xigencie s of each partic ular ca se that may arise c oncerning the subject matter in controversy
. Carter v. E .T. & W. N. C

. Transp. Co. , 243 S.W.2d 505, 509 (Tenn. App. 1949).

Moreov er, the language of the docume nts themselves clearly

and unambiguous l y reveal the circumstances under which these loans wer e made: that

with the exception of the $6,000 personal loan, the monies were advanced in exchange for Bank’s receipt

of a security

interest in the 2 properties in question a s set out in the 1982 deeds of trust. With respect to the $6,000 personal loan, the language of the promissory note in regard thereto is equally clear and una

m biguous
. Alth ough Duck argues that he should no t be held responsible for the indebtedness due to alleged fraudulent

repres entation s by

Bank tha t it would f

inance D uck’s de

velopmen t of his f ish farmi n g operations until completion, no writing to this effect is found within the rec ord. Cl early, the allegationcannot be pursued absent some writing memorializing same. 6 We conclude that the trial court wa s corre ct in ente

ring sum mary judgmen t for Ba nk on the is sue of Du ck’s inde btedness
.

As to the issue of r eform ation, Bank’s position is stated in the affidavit of Mr. Englan d as follo ws:

[Bank] at a

ll times thought

it had a f irst lien o n the enti

re inter est in the 13 acre tract of

land described in the Deed of Trust dated August 16, 1982, and was not aware of the exclusion by the

description of a7 Bank alleges in its compla int that in p

repari ng the d

eed of tr ust, its sec

retary mistakenl

y typ ed the de scription

of the pr operty as it appe ared in t

he warr anty deed co nvey

ing the p roperty to Duck wh

ich conta ined an e xclusion fo

r a portio n of the pr

operty (3.3 acr es) previously conveye d to Duck.

one-half intere st in 3.3 acre s thereo f until brought to its attention by James M. Smith, its attorney during the course of the foreclosure of the Deed of Trust on December 1, 1990, when it became obvious that a mutual mista

ke had been ma de in drafting the Dee d of Trust because : (a) The Bank’s policy

prohibite d it from e

xtending c

redit secured by

an undivided interest in real estate; (b) The Bank knew that Welborn B. Duc k had acquired the entire interest in the 3.3 acre parcel ther eof; and, (c) Welborn B. Duck had been advised prior to the making of the loan that he would have to have the entire interest in said tract of land for security purposes . 7

Co nv er se ly, Duck argues that the parties were not operating under a mutual mistake and intended the exclusion in the deed of trust. The only response to Bank’s motion for summary judgmen t appear s to be Duc

k’s depos ition wher

ein he sta tes as fo llows:
Q. Now in any event, it was y our intention and the intentio n of the bank and your unde

rstanding that on August 16, 198 2 that t he Decatur County Bank would have had a mor

tgag e on y our whole

13 acres? A. Yes.

. . . . Q. I said on Aug ust 12, 1982 when you borrowed the $28,000 and you had an

agree ment to borrow u

p [to] $65,000 , that at th at time it was your understandi ng that Decatur co unty Ba nk had two mortga ges, I guess you’re sa

yin g, on the

Decatu r County propert y coverin g the en

tire inte rest. A. Two mortg ages c overing the entir e intere st. Q. All right. But whet he r it was one or two, it was y our understanding that y

our whole interest in the Decat

ur County propert y was mortgaged? A. Yes.

Alth ough the issue of ref

ormation i s not one g enerally s uited for summary disp osition , we hold that under

these fact s, wherein Duck concedes that he believe d Bank was obtaining an interest in the entire 13 acre tract, summary judgment was properly

granted on the issue.It results that the judgment

of the trial court is affirmed and this cause remande d for any further proceedings here with consisten t. Costs are assessed against Appellant, for which
ex ec ut io n m ay i ss ue if

ne ce ss ar y.

____________________________________

FAR MER , J.

______________________________ CRAWFORD, P.J., W.S. (Conc urs)

______________________________ HIG HERS, J. (Conc

urs)