Court Opinion

ID: 4557750
Source: CourtListenerOpinion
Date Created: 2020-08-21 16:10:55.634943+00
Date Added: 2024-06-11T09:27:23.997163
License: Public Domain

08/21/2020
               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                                 July 21, 2020 Session

            REGIONS BANK v. THE BLUMBERG TRUST ET AL.

               Appeal from the Circuit Court for Washington County
                        No. 33556 Jean A. Stanley, Judge
                     ___________________________________

                           No. E2020-00051-COA-R3-CV
                       ___________________________________

Appellant appeals the trial court’s denial of its Tennessee Rule of Civil Procedure 24
motion to intervene. Because the trial court’s order does not state the basis for its denial
of the motion, we cannot review the ultimate decision. Vacated and remanded.

        Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                              Vacated and Remanded

KENNY ARMSTRONG, J., delivered the opinion of the court, in which ARNOLD B. GOLDIN,
and CARMA DENNIS MCGEE, JJ., joined.

Lance W. Thompson, Nashville, Tennessee, and Bradley R. Hightower, Birmingham,
Alabama, for the appellant, Edgefield Holdings, LLC.

Ricky Lee McVey, II, Kingsport, Tennessee, for the appellees, The Blumberg Trust and
John Allan Blumberg.

                                        OPINION

                                      I. Background

       On or about December 16, 2003, AmSouth Bank, Regions Bank’s predecessor in
interest, entered into a promissory note with “Blumberg 2 Trust” in the principal amount
of $480,500.00. The note was executed by John Allan Blumberg, as Trustee for the
Blumberg 2 Trust.

       After acquiring the loan, and following a foreclosure sale, Regions Bank filed suit
against “The Blumberg Trust and John Allan Blumberg” (together, “Appellees”), seeking
a judgment for the deficiency balance on the note, i.e., $193,963.50. On October 29,
2018, the trial court granted Regions Bank’s motion for default judgment and entered
judgment against “The Blumberg Trust and John Allan Blumberg” in the amount of
$193,963.50 plus interest.

       On or about July 1, 2019, Regions Bank assigned the judgment to Appellant
Edgefield Holdings, LLC (“Edgefield”). On November 12, 2019, Edgefield filed a
“Motion to Intervene for Substitution of Regions Bank and to Correct the Mislabeling of
Party Defendant” in the Circuit Court for Washington County, Tennessee (“trial court”).
By its motion, which was brought under Tennessee Rule of Civil Procedure 24, Enfield
sought: (1) to be substituted for Regions Bank on the October 29, 2018 judgment; and (2)
correction or substitution of the defendant on the judgment from “Blumberg Trust” to
“Blumberg 2 Trust.” Appellees filed a response in opposition to Edgefield’s motion to
intervene, arguing that “Edgefield’s Motion purports to [. . .] apply a judgment obtained
against one party – The Blumberg Trust – against a completely separate party – The
Blumberg 2 Trust.” By order of December 20, 2019, the trial court denied Edgefield’s
motion. Edgefield appeals.

                                          II. Issues

       Edgefield raises one issue for review as stated in its brief:

       Whether the Trial Court abused its discretion by not granting Edgefield
       Holdings, LLC’s Motion to Intervene for Substitution of Regions Bank and
       to Correct the Mislabeling of Party Defendant to pursue its Judgment
       against the Appellees?

                                 III. Standard of Review

       Appellant brought its motion “pursuant to Tenn. R. Civ. P. 24.” As discussed in
more detail below, Tennessee Rule of Civil Procedure 24 provides for two types of
intervention, i.e., intervention by right (Tenn. R. Civ. P. 24.01) and intervention by
permission (Tenn. R. Civ. P. 24.02). Appellant’s motion does not clarify which of the
two means of intervention it seeks. Our standard of review for the denial of intervention
as of right is de novo, except for the timeliness of the application, which is reviewed
under an abuse of discretion standard. Michigan State AFL–CIO v. Miller, 103 F.3d
1240, 1245 (6th Cir. 1997). The standard of review for the denial of permissive
intervention is abuse of discretion. Chaille v. Warren, 635 S.W.2d 700, 703 (Tenn. Ct.
App. 1982). A trial court abuses its discretion when the reviewing court is firmly
convinced that the lower court has made a mistake in that it affirmatively appears that the
lower court’s decision has no basis in law or in fact and is, therefore, arbitrary, illogical,
or unconscionable. See Ballard v. Herzke, 924 S.W.2d 652, 661 (Tenn. 1996); State v.
Carter, 890 S.W.2d 449, 454 (Tenn. Crim. App. 1994).

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                                      IV. Analysis

      Because it is unclear whether Edgefield sought intervention by right or by
permission, we will briefly address the requirements for both types of intervention.
Tennessee Rule of Civil Procedure 24 provides:

      24.01. Intervention as of Right. Upon timely application anyone shall be
      permitted to intervene in an action: (1) when a statute confers an
      unconditional right to intervene; or (2) when the applicant claims an
      interest relating to the property or transaction which is the subject of the
      action and the applicant is so situated that the disposition of the action may
      as a practical matter impair or impede the applicant's ability to protect that
      interest, unless the applicant's interest is adequately represented by existing
      parties; or (3) by stipulation of all the parties.

      24.02. Permissive Intervention. Upon timely application anyone may be
      permitted to intervene in an action: (1) when a statute confers a conditional
      right to intervene; or (2) when an applicant's claim or defense and the main
      action have a question of law or fact in common. In exercising discretion
      the court shall consider whether or not the intervention will unduly delay or
      prejudice the adjudication of the rights of the original parties.

Tenn. R. Civ. P. 24.01; Tenn. R. Civ. P. 24.02. In Brown & Williamson Tobacco Corp.,
the Tennessee Supreme Court explained an intervenor’s burden under Rule 24.01, to-wit:

      A party seeking to intervene as of right under Rule 24.01 must establish
      that (1) the application for intervention was timely; (2) the proposed
      intervenor has a substantial legal interest in the subject matter of the
      pending litigation; (3) the proposed intervenor’s ability to protect that
      interest is impaired; and (4) the parties to the underlying suit cannot
      adequately represent the intervenor’s interests. Grubbs v. Norris, 870 F.2d
343, 345 (6th Cir. 1989). The intervenor has the burden of establishing all
      four of these elements or else the motion to intervene will be denied. Id.

State v. Brown & Williamson Tobacco Corp., 18 S.W.3d at 190-91 (Tenn. 2000).

       Concerning permissive intervention under Tennessee Rule of Civil Procedure
24.02, a party seeking permissive intervention must show that there is a common
question of law or fact between an intervenor’s claims and the underlying action. Tenn.
R. Civ. P. 24.02. Once “a common question of law or fact is established, the decision to
allow intervention is a matter entrusted to the trial court’s discretion, and the decision
should not be reversed by an appellate court absent a showing of abuse of
discretion.” Ballard v. Herzke, 924 S.W.2d 652, 658 (Tenn. 1996). Generally,
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permissive intervention is not proper when the intervenor seeks to raise new claims or
issues against the existing parties. Brown & Williamson Tobacco Corp., 18 S.W.3d at
191.

        Regardless of whether a party seeks intervention by right or by permission, a trial
court must evaluate the movant’s motion in relation to the underlying action and must
address the potential effect of intervention on the original parties. Specifically, under
Rule 24.01, a trial court must determine whether the “movant is so situated that the
disposition of the action may as a practical matter impair or impede the movant’s ability
to protect that interest . . . .” Tenn. R. Civ. P. 24.01. Under Rule 24.02, if a trial court
determines there is a common question of law or fact, it must then decide “whether or not
the intervention will unduly delay or prejudice the rights of the original parties.” Tenn. R.
Civ. P. 24.02.

       Turning to the record, the trial court’s order denying Edgefield’s motion to
intervene states:

       Came the Parties on the Motion to Intervene and Correct Mislabeling of
       Party Defendant of Edgefield Holdings, LLC. After consideration of the
       pleadings and arguments of counsel, the Motion is denied in its entirety.
       Enter pursuant to TRCP 58.

It is well-settled that a trial court speaks through its orders. Palmer v. Palmer, 562
S.W.2d 833, 837 (Tenn. Ct. App. 1977). Here, the trial court’s order says very little. In
the first instance, the trial court does not clarify whether it is considering Appellant’s
motion as one for intervention as of right or by permission. Regardless, the order fails to
analyze the Appellant’s motion in relation to the underlying action and fails to address
the potential effect of intervention on the original parties, questions that a trial court must
address regardless of the means of intervention. In short, the order merely states the trial
court’s ultimate conclusion, i.e., denial of Edgefield’s motion for intervention, but it does
not indicate how the trial court arrived at its ultimate decision. Although “[f]indings of
fact and conclusions of law are unnecessary on decisions of motions,” Tenn. R. Civ. P.
52.01, “[w]e are a reviewing court.” Jackson v. Smith, No. W2011-00194-COA-R3-CV,
2011 WL 3963589, at *11 (Tenn. Ct. App. Sept. 9, 2011). As such, a trial court’s order
must contain enough information “to disclose . . . the steps by which the trial court
reached its ultimate conclusion . . . .” In re Estate of Oakley, No. M2014-00341-COA-
R3-CV, 2015 WL 572747, at *11 (Tenn. Ct. App. Feb. 10, 2015) (quoting Lovlace v.
Copley, 418 S.W.3d 1, 35 (Tenn.2013)). Here, the trial court’s order sets out its ultimate
conclusion, but provides no information from which this Court can discern the trial
court’s reasoning. As such, we cannot make a determination as to whether the trial
court’s denial of Edgefield’s Tennessee Rule of Civil Procedure 24 motion was proper.
Accordingly, we vacate the judgment of the trial court and remand for further
proceedings consistent with this opinion.
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                                    V. Conclusion

       For the foregoing reasons, we vacate the trial court’s order and remand for such
further proceedings as may be necessary and are consistent with this opinion. Costs of
this appeal are assessed to the Appellant, Edgefield Holdings, LLC, for all of which
execution may issue if necessary.

                                               _________________________________
                                               KENNY ARMSTRONG, JUDGE

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