Associates Asset Management, LLC v. Angela Blackburn
W2016-00801-COA-R3-CV
| Tenn. Ct. App. | Mar 22, 2017Background
- Blackburn bought a house in 2004 and executed two notes: an 80% adjustable first mortgage and a 20% fixed-rate second (the Note at issue). The first mortgage later foreclosed and the property was sold.
- Blackburn defaulted on the second-note payments in 2005. She alleged predatory lending and lender misconduct in 2008 but did not pursue those claims.
- Associates Asset Management (AAM) purchased the defaulted second Note as part of a loan package on November 20, 2007, and sent collection letters in 2007–2009. AAM filed suit for breach of contract on February 7, 2011.
- At trial (Dec. 2015) AAM sought roughly $92,736 (principal + accrued interest). The trial court found AAM guilty of gross laches and dismissed AAM’s claim.
- On appeal the Court of Appeals reversed, holding gross laches was improperly applied because Blackburn’s asserted prejudice was purely economic and she showed no loss of evidence or witnesses that impaired her defense.
Issues
| Issue | Plaintiff's Argument (AAM) | Defendant's Argument (Blackburn) | Held |
|---|---|---|---|
| Whether laches (gross laches) bars AAM’s breach of contract claim | AAM’s delay in litigation and intermittent collection letters do not bar enforcement; statute of limitations governs breach claims | Blackburn argued AAM waited unreasonably long, causing prejudice (she incurred new mortgage debt and accrued interest) and thus laches should bar enforcement | Reversed trial court: gross laches not shown; economic harm alone (accrued interest/new debt) without loss of evidence/witnesses or impairment of defense is insufficient to invoke gross laches |
| Whether pleading “laches” (not specifically “gross laches”) waived the defense | (implicit) AAM argued lack of specificity in defense pleading | Blackburn pled laches as affirmative defense without specifying gross laches | Court: pleading “laches” was sufficient; court determines whether gross or ordinary laches applies based on applicable statute of limitations |
| Whether Blackburn was prejudiced in raising independent claims (predatory lending/misrepresentation) by AAM’s delay | AAM implied delay could have prejudiced Blackburn’s ability to pursue other claims | Blackburn claimed she lost ability to assert those claims due to delay | Court found Blackburn could have, but did not, pursue those independent claims; any detriment to them was caused by her own inaction |
| Remedy and remand | AAM sought enforcement/award on the Note | Blackburn sought dismissal on equitable grounds | Court remanded for further proceedings on the contract claim and permitted trial court to address Blackburn’s other defenses on the merits |
Key Cases Cited
- Brown v. Ogle, 46 S.W.3d 721 (Tenn. Ct. App. 2000) (laches is an equitable defense applied where delay prejudices the party asserting it)
- John P. Saad & Sons, Inc. v. Nashville Thermal Transfer Corp., 715 S.W.2d 41 (Tenn. 1986) (defines gross laches as long and unreasonable acquiescence in adverse rights)
- Freeman v. Martin Robowash, Inc., 457 S.W.2d 606 (Tenn. Ct. App. 1970) (laches presents mixed questions of fact and law; must show negligence/unexcused delay causing injury)
- In re Estate of Baker v. King, 207 S.W.3d 254 (Tenn. Ct. App. 2006) (trial court’s laches determination reviewed for abuse of discretion)
- Evans v. Steele, 145 S.W. 162 (Tenn. 1912) (prejudice contemplated by laches includes loss of evidence, death of witnesses, or failure of memory impairing ascertainment of truth)
- Dennis Joslin Co. v. Johnson, 138 S.W.3d 197 (Tenn. Ct. App. 2003) (gross laches can bar claims governed by a statute of limitations when delay causes significant prejudice, including loss of witnesses)
- Finova Capital Corp. v. Regel, 195 S.W.3d 656 (Tenn. Ct. App. 2005) (economic damages plus loss of evidence can support laches)
- Gleason v. Gleason, 164 S.W.3d 588 (Tenn. Ct. App. 2004) (accrued financial liability alone does not establish gross laches when no other prejudice to defense exists)