Court Opinion

ID: 3173640
Source: CourtListenerOpinion
Date Created: 2016-01-29 21:06:34.673357+00
Date Added: 2024-06-11T12:01:21.252169
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT JACKSON
                                January 20, 2016 Session

  W & H LLC, ET AL. v. COMMUNITY BANK N.A. v. WILLIE NELSON

                 Appeal from the Chancery Court for Shelby County
                  No. CH1106821 Walter L. Evans, Chancellor

                         ________________________________

               No. W2015-00878-COA-R3-CV – Filed January 29, 2016
                      ________________________________

The trial court entered a final judgment confirming an arbitration award in favor of the
appellee. Appellants appealed. Due to deficiencies in the appellants‟ brief to this Court, we
conclude that they have waived their issues on appeal. The appeal is dismissed.
               Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed

J. STEVEN STAFFORD, P.J.,W.S., delivered the opinion of the Court, in which BRANDON O.
GIBSON, and KENNY ARMSTRONG, JJ., joined.

Ted I. Jones, Memphis, Tennessee, for the appellants, Willie Nelson and W&H LLC.

Robert F. Miller and Allison Kay Moody, Memphis, Tennessee, for the appellee, Community
Bank, N.A.

                                        OPINION

                                       Background
       On May 18, 2005, Defendant-Appellee Community Bank, N.A., (“Appellee”) loaned
Willie Nelson $366,015.00 pursuant to a promissory note (“Nelson Note”), secured by a
Deed of Trust, pledging commercial real property located at 3311 Elvis Presley Boulevard in
Memphis, Tennessee (“EP property”) as collateral. Mr. Nelson subsequently renewed the
Nelson Note on April 21, 2008. Nearly a year later, on March 9, 2009, Mr. Nelson transferred
the EP property via quitclaim deed to W&H LLC1 (together with Mr. Nelson, “Appellants”)2
but allegedly failed to provide notice of the transfer to Appellee. The Deed of Trust for the
EP property contained a Due on Sale clause that required the entire balance of the debt be
immediately due and owing (at Appellee‟s option) upon sale of the EP property.
        In April 2010, Mr. Nelson made his last payment toward the Nelson Note and
subsequently defaulted on the loan. Eventually, on December 29, 2010, Appellee conducted a
foreclosure sale of the EP property.3 Prior to the foreclosure sale, Community Bank sent two
letters to Mr. Nelson noticing him of his default on the Nelson Note and Appellee‟s intent to
foreclose on the property. Both letters were mailed to Mr. Nelson‟s Post Office Box in
Mississippi, which is the address listed for Mr. Nelson in the Nelson Note, its 2008 renewal,
and the EP property‟s Deed of Trust. Additionally, the foreclosure sale was advertised in the
Daily News, a daily newspaper in Shelby County, Tennessee, that is qualified to publish
public notices, for three consecutive weeks on December 7, 2010,4 December 14, 2010, and
December 21, 2010. The property sold at public auction for $325,000.00.
       On April 20, 2011, Appellants filed a Petition to Set Aside Trustee‟s Sale and for
Injunctive Relief in the Shelby County Chancery Court. Appellants requested that the trial
court set aside the foreclosure sale and permit Appellants to cure the default on the loan
secured by the EP property.
       On May 25, 2011, Appellee filed a motion to dismiss or stay the proceedings and refer
the case to arbitration based on the contractual agreement between the parties. On November
18, 2011, the trial court entered a consent order staying the proceedings5 and referring the
case to arbitration. Appellants filed their complaint to the Arbitrator on March 30, 2012,
challenging Appellee‟s actions in connection with the foreclosure of the EP property. On
April 16, 2012, Appellee filed an answer and counter-complaint alleging that Mr. Nelson and
the other businesses in which he had an ownership interest had defaulted on a separate group
of loans that had been consolidated into a single note (“Master Note”); that the property
securing the Master Note had been foreclosed; and that Mr. Nelson was individually liable

        1
        Appellants‟ petition to set aside the foreclosure sale filed in this case indicates that Mr. Nelson is the
“Managing Member” of W&H LLC.
        2
          Appellees argue that Mr. Nelson is the sole appellant in this appeal because neither of the two notices
of appeal filed include W&H LLC as a party on appeal. Because we are dismissing this appeal, we need not
decide this issue. However, for purposes of this appeal, we will refer to the plural Appellants.
        3
        Throughout these proceedings, it does not appear that Mr. Nelson has ever challenged the underlying
debt owed under the Nelson Note.
        4
          The first publication occurred twenty-two days prior to the foreclosure on the property.
        5
          On August 31, 2012, the trial court lifted the stay of the proceedings for the limited purpose of
permitting the parties to issue subpoenas for depositions.

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for the remaining balance of approximately $661,000.00. Appellants filed an answer to the
counter-complaint, denying the material allegations contained therein. The parties proceeded
to an arbitration hearing. After opening statements, Appellants raised the issue of whether the
claims raised by Appellee in its counter-complaint were properly before the Arbitrator. The
case was then referred back to the trial court to clarify the scope of arbitration. The trial court
entered an order on November 8, 2012, stating that “all of the matters and issues in the
pleadings and court papers submitted or filed in the arbitration proceedings are to be heard by
the arbitrator.”
       Subsequently, the parties proceeded again to an arbitration hearing. The Arbitrator
conducted hearings on September 17, 2013, and October 16, 2013. Mr. Nelson alleged that
the foreclosure sale was improper because he did not receive notice of the foreclosure. The
Arbitrator disagreed, and on June 9, 2014, the Arbitrator issued his written decision finding
that the foreclosure was proper. The Arbitrator also found that it was undisputed that Mr.
Nelson and his businesses had defaulted on several loan obligations owed to Appellee. In his
Decision, the Arbitrator denied all claims asserted by Appellants and held that Mr. Nelson
was individually liable to Appellee for the balances remaining on the Nelson Note and the
Master Note in the amount of $711,889.58, as of October 17, 2013, plus the per diem rate of
interest and $53,305.30 in attorney‟s fees.
        On June 13, 2014, Appellee filed a motion requesting the trial court confirm the
arbitration award and enter final judgment. On October 27, 2014, the trial court granted
Appellee‟s motion in part in a written order, finding that the Arbitrator‟s decision should be
“confirmed in all respects, except as to the award of attorney[‟s] fees[.]” The trial court
referred the case back to the Arbitrator “for a determination of whether the award of
attorney[‟s] fees was appropriate under the circumstances of this case.”
       On February 1, 2015, the Arbitrator issued an Addendum to his decision, finding that
the award of attorney‟s fees to Appellee was appropriate and awarding a total recovery of
attorney‟s fees and expenses in the amount of $53,305.30. Appellee filed a motion to confirm
the addendum to the Arbitrator‟s Decision on February 12, 2015, which the trial court
granted on March 4, 2015. In the final order, the trial court entered judgment in favor of
Appellee against Mr. Nelson individually in the total amount of $796,705.42, including
attorney‟s fees, expenses, and interest.
        Appellants timely appealed.
                                                   Issues6

        6
         Oral argument in this case was conducted on January 20, 2016. However, counsel for Appellants did
not appear. Appellants‟ counsel subsequently sent the Court a letter explaining that the date for oral argument
had been mistakenly placed on his calendar for the following day.
                                                    -3-
       Appellants raise one issue on appeal: whether the trial court erred in confirming the
Arbitrator‟s award as to monetary damages and attorney‟s fees?
       Appellee raises two additional issues, as taken from its brief:
              1. Whether Appellant[s] ha[ve] waived [their appeal] because
              [they] failed to cite to the record, failed to set forth the relevant
              facts, and failed to otherwise comply with the Tennessee Rules
              of Appellate Procedure and the Rules of the Tennessee Court of
              Appeals.
              2. Whether Appellee is entitled to frivolous appeal damages.
                                           Analysis
       Unfortunately, our review of the issues presented in this appeal is substantially
hindered because Appellants‟ brief is woefully deficient. Rule 27 of the Tennessee Rules of
Appellate Procedure specifically provides that an appellant‟s brief “shall contain”:
              (1) A table of contents, with references to the pages in the brief;
              (2) A table of authorities, including cases (alphabetically
              arranged), statutes and other authorities cited, with references to
              the pages in the brief where they are cited;
              (3) A jurisdictional statement in cases appealed to the Supreme
              Court directly from the trial court indicating briefly the
              jurisdictional grounds for the appeal to the Supreme Court;
              (4) A statement of the issues presented for review;
              (5) A statement of the case, indicating briefly the nature of the
              case, the course of proceedings, and its disposition in the court
              below;
              (6) A statement of facts, setting forth the facts relevant to the
              issues presented for review with appropriate references to the
              record;
              (7) An argument, which may be preceded by a summary of
              argument, setting forth: (A) the contentions of the appellant with
              respect to the issues presented, and the reasons therefor,
              including the reasons why the contentions require appellate
              relief, with citations to the authorities and appropriate references
              to the record (which may be quoted verbatim) relied on; and (B)
              for each issue, a concise statement of the applicable standard of
                                              -4-
                review (which may appear in the discussion of the issue or under
                a separate heading placed before the discussion of the issues);
                (8) A short conclusion, stating the precise relief sought.
Tenn. R. App. P. 27(a). Similarly, Rule 6 of the Rules of the Court of Appeals of Tennessee
requires an appellate brief to include a written argument addressing the issues appealed, a
statement of the trial court‟s allegedly erroneous action, and a specific reference to the record
where the action is recorded. Rule 6 further provides:
                No complaint of or reliance upon action by the trial court will be
                considered on appeal unless the argument contains a specific
                reference to the page or pages of the record where such action is
                recorded. No assertion of fact will be considered on appeal
                unless the argument contains a reference to the page or pages of
                the record where evidence of such fact is recorded.
Tenn. R. Ct. App. 6(b).
        The brief submitted by Appellants fails to comply with these requirements. Appellants
described the record as “substantial,”7 yet failed to include any citations to the record in their
fact section, which includes only five sentences. Indeed, Appellants‟ factual recitation
contains no actual facts regarding the circumstances involved in the transfer of the property
to W&H LLC, the alleged default, or the foreclosure sale. With regard to the few allegations
that are contained in Appellants‟ statement of facts, none are supported by an appropriate
reference to the record, as required by Rule 27(a)(6). Appellants‟ brief also omits a section
detailing the applicable standard of review, an important requirement given the limited
review involved in arbitration awards. See Arnold v. Morgan Keegan & Co., 914 S.W.2d
445, 450 (Tenn. 1996) (“Judicial review of arbitration decisions is statutorily limited, and any
judicial review must be conducted within those limits.”). Appellants‟ brief admittedly
contains two citations to the record in the argument section; however, the second citation
cites to “See Exhibit 2, Complaint for Breach of Contract and Money Damages.” From our
review, however, no such document exists in the exhibits submitted to this Court on appeal.
Furthermore, although Appellants apparently take issue with the arbitrator‟s ruling that Mr.
Nelson would be individually liable on the debt, neither individual liability nor the scope of
the arbitrator‟s authority was specifically raised as an issue on appeal. Finally, we note that
while Appellants do cite to Tennessee Code Annotated Section 35-1-101 to support their
argument that the foreclosure sale was deficient for failing to comply with the advertising
scheme contained therein, Appellants cite no law, statutory or otherwise, that suggests that

        7
          Despite Appellants‟ contention that the record was “substantial,” the record includes only two
volumes of technical record, two volumes of transcript, and one volume of exhibits. Even assuming arguendo
the record was voluminous, that does not excuse an appellant from complying with the rules of this Court.

                                                  -5-
such a failure is sufficient to void a foreclosure sale. Indeed, as pointed out by Appellee,
Tennessee Code Annotated Section 35-1-106 specifically provides that: “Should the officer,
or other person making the sale, proceed to sell without pursuing the provisions of this
chapter, the sale shall not, on that account, be either void or voidable.”8
       Although this Court has thoroughly reviewed the record, “[i]t is not the function of the
appellate court to research and construct the parties‟ arguments.” Coleman v. Coleman, No.
2011-00585-COA-R3-CV, 2015 WL 479830, at *9 (Tenn. Ct. App. Feb. 4, 2015) (citing
U.S. v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)). In Clayton v. Herron, No. M2014-
01497-COA-R3-CV, 2015 WL 757240, at *3 (Tenn. Ct. App. Feb. 20, 2015), we stated:
                         “„Courts have routinely 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.‟” Forbess v. Forbess, 370
S.W.3d 347, 355 (Tenn. Ct. App. 2011) (quoting Bean v. Bean,
                 40 S.W.3d 52, 55-56 (Tenn. Ct. App. 2000)); see also Tellico
                 Village Property Owners Ass’n, Inc. v. Health Solutions, LLC,
                 No. E2012-00101-COA-R3-CV, 2013 WL 362815, at *3 (Tenn.
                 Ct. App. Jan. 30, 2013) (no perm. app. filed) (quoting Branum
                 v. Akins, 978 S.W.2d 554, 557 n.2 (Tenn. Ct. App. 2001))
                 (“„Where a party makes no legal argument and cites no authority
                 in support of a position, such issue is deemed to be waived and
                 will not be considered on appeal.‟”) In addition, “Appellants . . .
                 must include in their . . . brief a statement of the issues they
                 desire to present to the court and an argument with respect to
                 each of the issues presented.” Craig v. Hodge, 382 S.W.3d 325,
                 334-335 (Tenn. 2012). “[A]n issue may be deemed waived when
                 it is argued in the brief but is not designated as an issue in
                 accordance with Tenn. R. App. P. 27(a)(4).” Id. (citing ABN
                 AMRO Mortg. Grp., Inc. v. S. Sec. Fed. Credit Union, 372
S.W.3d 121, 132 (Tenn. Ct. App. 2011); Childress v. Union
                 Realty Co., 97 S.W.3d 573, 578 (Tenn. Ct. App. 2002)). “The
                 requirement of a statement of the issues raised on appeal is no

        8
           Only in Appellants‟ reply brief do they consider this statute, in essence arguing that it is
unconstitutional. The Tennessee Supreme Court has noted, however, that the failure to provide notice of a
constitutional challenge to the Attorney General as mandated by Tennessee Code Annotated § 29-14-107 and
Rule 24.04 of the Tennessee Rules of Civil Procedure is fatal “except to the extent the challenged statutes are
so clearly or blatantly unconstitutional as to obviate the necessity for any discussion.” In re Adoption of
E.N.R., 42 S.W.3d 26, 28 (Tenn. 2001). Nothing in the record suggests that notice of a constitutional challenge
was ever given to the Attorney General. Moreover, Tennessee Code Annotated Section 35-1-106 is not clearly
or blatantly unconstitutional. Therefore, any argument that Tennessee Code Annotated Section 35-1-106 is
unconstitutional is also waived on appeal.
                                                    -6-
               mere technicality.” Owen v. Long Tire, LLC, No. W2011-
               01227-COA-R3-CV, 2011 WL 6777014, at *4 (Tenn. Ct. App.
               Dec. 22, 2011). The appellee is entitled to fair notice of the
               appellate issues so as to prepare his or her response, and more
               importantly, “this Court is not charged with the responsibility of
               scouring the appellate record for any reversible error the trial
               court may have committed.” Id. “It is not the role of the courts,
               trial or appellate, to research or construct a litigant‟s case or
               arguments for him or her, and where a party fails to develop an
               argument in support of his or her contention or merely
               constructs a skeletal argument, the issue is waived.” Sneed v.
               Bd. of Prof’l Responsibility of Sup. Ct., 301 S.W.3d 603, 615
               (Tenn. 2010).

       After Appellee‟s brief referenced the deficiencies in Appellants‟ brief, Appellants
filed a reply brief. The reply brief includes more citations to authority but does little to
correct the other various deficiencies discussed above. Still, a “reply brief is a response to the
arguments of the appellee. It is not a vehicle for raising new issues.” Owens v. Owens, 241
S.W.3d 478, 499 (Tenn. Ct. App. 2007) (citing Tenn. R. App. P. 27(c). Permitting an
appellant to advance new arguments in a reply brief not addressed in the initial brief “would
be fundamentally unfair as the appellee may not respond to a reply brief.” Denver Area Meat
Cutters & Employers Pension Plan v. Clayton, 209 S.W.3d 584 (Tenn. Ct. App. 2006).
Accordingly, Appellants‟ reply brief does not rectify the deficiencies present in their initial
brief.

       We recognize that there are times when this Court, in the discretion afforded it under
Rule 2 of the Tennessee Rules of Appellate Procedure, may waive the briefing requirements
to adjudicate the issues on their merits. Here, in light of Appellants‟ declination to explain to
this Court the facts and legal concerns surrounding this appeal, we decline to soldier on.
See Pandey v. Shrivastava, No. W2012-00059-COA-R3-CV, 2013 WL 657799, at *5 (Tenn.
Ct. App. Jan. 24, 2013) (noting that, despite deficiencies in the record, we are sometimes able
to “soldier on” to review a case upon its merits, where the issues are sufficiently clear).
       Based on the foregoing, we decline to address the merits of any issue on appeal.
Additionally, Appellee has requested this Court determine that Appellants‟ appeal is
frivolous and award damages pursuant to Tennessee Code Annotated Section 27-1-122.
Section 27-1-122 provides that:
               When it appears to any reviewing court that the appeal from any
               court of record was frivolous or taken solely for delay, the court
               may, either upon motion of a party or of its own motion, award
               just damages against the appellant, which may include but need

                                              -7-
              not be limited to, costs, interest on the judgment, and expenses
              incurred by the appellee as a result of the appeal.
The decision to award damages for the filing of a frivolous appeal rests solely in the
discretion of this Court. See Banks v. St. Francis Hosp., 697 S.W.2d 340, 343 (Tenn. 1985).
“A frivolous appeal is one that is „devoid of merit,‟ or one in which there is little prospect
that it can ever succeed.” Indus. Dev. Bd. v. Hancock, 901 S.W.2d 382, 385 (Tenn. Ct. App.
1995) (citing Combustion Eng’g, Inc. v. Kennedy, 562 S.W.2d 202 (Tenn. 1978)). Based on
our review of the record and Appellants‟ woefully deficient brief, we conclude that this
appeal is frivolous. Accordingly, we remand this case to the trial court for a determination of
the award for frivolous appeal damages.
       All other issues are pretermitted.
                                         Conclusion
       The appeal is hereby dismissed. This cause is remanded for the determination of
Appellee‟s reasonable and necessary attorney‟s fees incurred in responding to this appeal.
Costs of this appeal are taxed to the Appellants W&H LLC and Willie Nelson, for which
execution may issue if necessary.

                                                   _________________________________
                                                   J. STEVEN STAFFORD, JUDGE

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