FILED

July 9, 1997

Cecil W. Crowson

Appellate Court Clerk

Susanna Gillespie, a/k/a Susanna )

Grezegorcyk, a/k/a Susanna Kantack, )

a/k/a Susanna Gregg, )

) Appeal No.

Plaintiff/Appellant, ) 01-A-01-9702-CH-00083

)

v. ) Chancery Court No.

) 20508

Steven D. Graham, )

Defendant/Appellee )

and )

Lori G. Graham, )

Defendant. )

COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEAL FOR THE CHANCERY COURT OF WILLIAMSON COUNTY

AT FRANKLIN, TENNESSEE

THE HONORABLE HENRY DENMARK BELL, CHANCELLOR

MARK C. ADAMS

1113 Murfreesboro Road

Franklin, Tennessee 37064

ATTORNEY FOR PLAINTIFF/APPELLANT

DOUGLAS S. HALE

312 First Tennessee Bank Bldg.

Franklin, Tennessee 37064

ATTORNEY FOR DEFENDANTS/APPELLEES

AFFIRMED AND REMANDED

SAMUEL L. LEWIS, JUDGE
1

 (E) Payment of Note Holder’s Costs and Expenses

If the Note Holder has required me to pay immediately in full as described above, the Note Holder will

have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not

prohibited by applicable law. Those expenses include, for example, reasonable attorneys’ fees.

2

Opinion

This is an appeal from the decision of the Williamson County Chancery Court.

Plaintiff/appellant, Susanna Gregg, claims the chancery court erred when it denied

her claim to attorney’s fees, and defendant/appellee, Steven D. Graham, claims the

chancery court erred when it failed to dismiss the claim as outside the statute of

limitations. The facts out of which this matter arose are as follows:

Defendant and his ex-wife, Lori G. Graham, entered into an agreement with

Plaintiff and her husband, Donald Kanatack, for the lease/purchase of a piece of real

estate. Defendant executed a note and a deed of trust in favor of Plaintiff and her

husband on 15 March 1986. In exchange for the note, Plaintiff and her husband gave

Defendant and Ms. Graham $10,477.17, which they used to pay real estate

commissions and to set up an escrow account for repairs. The note listed the date of

maturity as “on or at closing,” and the lease/purchase agreement listed the date of

closing as 17 February 1988. Both the note and the deed contained provisions

allowing Plaintiff to recover attorney’s fees if Plaintiff had to file suit to recover

under each agreement. At the time of execution, however, the parties modified the

note by drawing an “X” over five consecutive paragraphs. One of these paragraphs

included the provision allowing the note holder to recover costs and expenses under

certain circumstances.1 The parties failed to pay the note on 17 February 1988. The

parties extended the original lease/purchase agreement for an additional year by

executing an addendum on 27 May 1988. The new closing date passed without

incident and both parties continued as they had in the contract for two additional

years. A fire occurred on the property in 1990 while Plaintiff still occupied it. After

the insurance company paid the settlement to Defendant, he evicted Plaintiff from the

property.

Plaintiff filed a complaint against Defendant and Ms. Graham on 28 February
2

 In addition, Defendant refers to Ms. Graham in his brief as the dismissed defendant. 

Plaintiff does not contest this reference, however, there is no evidence in the record of any type

of dismissal as to Ms. Graham.

3

 It is interesting to note that Plaintiff never recorded the deed.

3

1991. The complaint originally sought an accounting of insurance proceeds awarded

to Defendant and contained the following allegation:

That on March 15, 1986, Respondents, Steven D. and Lori G.

Graham, as “Borrowers”, signed a promissory note in the amount of

$10,477.17, accompanied by said Deed of Trust. See Exhibits F1-F2.

Plaintiff amended the complaint on 28 December 1992 to allege fraud on the part of

Defendant. On 12 September 1996, Plaintiff filed a second amended complaint

which contained a claim for the loan amount evidenced by the note executed on 15

March 1986. The parties agreed at trial that after the second amendment the only

issue before the court was whether Plaintiff could recover the loan principle and

interest and her attorney’s fees.2 The chancery court ruled in favor of Plaintiff in the

amount of $13,987.02. This amount included the loan principle and pre-judgment

interest, but no attorney’s fees. Plaintiff moved for an amended judgment awarding

her attorney’s fees, but the court denied her motion. Thereafter, both parties filed

notices of appeal and later agreed on the designation of Plaintiff as Appellant.

Attorney’s Fees

Plaintiff relies on the provision in the deed of trust allowing a party to recover

attorney’s fees to support her claim to fees in this action on the note. Defendant

argues that the deed of trust and the note are separate documents and that Plaintiff

may not recover attorney’s fees under the note because the parties deleted the

particular provision of the note which dealt with attorney’s fees.

It is the opinion of this court that Plaintiff is not entitled to attorney’s fees. To

explain, given the parties actions, we must conclude they intended to delete the

provision in the note referring to attorney’s fees. In addition, although the deed of

trust provision relied on by Plaintiff did allow for attorney’s fees, it only applied to

an action for enforcement of the deed of trust. The present action is on the note, not

to enforce the deed3. Therefore, even if the attorney’s fee provision from the deed
4

 In Gamble v. Hospital Corporation of America, 676 S.W.2d 340 (Tenn. App. 1984),

this court held that an amendment did not to relate back to the original complaint which caused

the action to be barred by the statute of limitations. In this case, which dealt with medical

malpractice, an amended complaint alleging that a physician was negligent in an operation did

not arise out of the same conduct, transaction or occurrence set forth in the original complaint,

which alleged that physician had used undue force in a previous surgery. 

4

were to apply to the action on the note, Plaintiff would still be unable to recover her

attorney’s fees.

Statute of Limitations

Defendant contends the applicable statute of limitations is Tennessee Code

Annotated section 28-3-109(a)(3). This section provides: “The following actions

shall be commenced within six (6) years after the cause of action accrued: . . . (3)

Actions on contracts not otherwise expressly provided for.” Tenn. Code Ann. 28-3-

109(a)(3) (1980). Thus, Defendant argues Plaintiff had to file her complaint within

six years of the maturity date or by 17 February 1994. Defendant then argues

Plaintiff’s complaint was not timely because she did not actually state a cause of

action to recover the loan principle and interest until she filed the second amended

complaint on 12 September 1996. In response, Plaintiff contends the statute of

limitations did not bar her claim because the second amended complaint related back

to the date of the original complaint.

Rule 15.03 of the Tennessee Rules of Civil Procedure is relevant and provides:

“Whenever the claim or defense asserted in amended pleadings arose out of the

conduct, transaction, or occurrence set forth or attempted to be set forth in the

original pleading, the amendment relates back to the date of the original pleading.”

Tenn. R. Civ. P. 15.03(West 1995). This Rule replaced the previous code section

20—1505 which gave the trial judges more discretion in deciding whether

amendments relate back. Karash v. Pigot, 530 S.W.2d 775, 777 (Tenn. 1975).

In Karash, the court held that an amended complaint alleging assault and

battery due to a nonconsensual blood transfusion would relate back to the original

complaint which was brought for physician negligence.4 In interpreting Rule 15.03,
5

the court stated:

Rule 15.03 has never been construed by our courts; however, its

language is so clear and unequivocal that it is virtually self-construing.

. . The great liberality of this Rule is convincingly demonstrated by the

ensuing provisions permitting a new party, under certain circumstances,

to be brought in notwithstanding the fact that the statute has run at the

time of the amendment. . . The New Rules of Civil Procedure are

designed to insure that cases and controversies be determined upon their

merits and not upon legal technicalities or procedural niceties.

Id. at 777. In addition, they stated that “leave (to amend) shall be freely given when

justice so requires,” again showing the liberality of the Rule. Id. (quoting Branch v.

Warren, 527 S.W.2d 89 (Tenn. 1975)).

The original complaint contained allegations concerning the agreement

between the parties. Clearly, the action on the note arose out of the same conduct,

transaction or occurrence set forth or attempted to be set forth in the original

complaint. Both the original and second amended complaints revolved around the

same real estate transaction which spread over an extended period of time. It is the

opinion of this court that Plaintiff’s claim was not barred by the statute of limitations

because her second amended complaint related back to the initial complaint.

Therefore, it follows that the judgement of the chancery court is affirmed and

the case is remanded to the chancery court for any further necessary proceedings.

Costs on appeal are taxed to defendant/appellee, Steven D. Graham.

___________________________________

SAMUEL L. LEWIS, JUDGE

CONCUR:

___________________________________

BEN H. CANTRELL, JUDGE

___________________________________

WILLIAM C. KOCH, JR., JUDGE