644 S.W.3d 354
Tenn. Ct. App.2021Background
- First Community Mortgage (plaintiff) sued Appraisal Services Group and an appraiser alleging negligence for failing to identify a 2015 encroachment in an appraisal, which ultimately led to repurchase of the loan and a foreclosure loss of over $100,000.
- FNMA discovered the encroachment during an audit; AmeriHome repurchased the mortgage and then First Community repurchased it in January 2018; foreclosure sale occurred June 7, 2019.
- Plaintiff filed suit September 12, 2019; defendants moved to dismiss arguing the one-year discovery statute for appraisers (Tenn. Code Ann. § 28-3-104(d)) barred the claim and sought fees under Tenn. Code Ann. § 20-12-119(c).
- Trial court transferred venue, held the cause of action accrued in January 2018 (repurchase), found § 28-3-104(d) applicable, dismissed the complaint as time-barred, and reserved any § 20-12-119(c) fee award.
- On appeal this Court affirmed dismissal but held § 20-12-119(c) does not authorize awarding attorney’s fees for appellate work; appellate fees must be sought, if appropriate, under Tenn. Code Ann. § 27-1-122.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Tenn. Code Ann. § 28-3-104(d) (2017 amendment) | § 28-3-104(d) is inapplicable because the appraisal was performed in 2015 | § 28-3-104(d) applies because the statute covered actions accruing on or after July 1, 2017 | Held: statute applies; enactment applies to actions accruing on or after July 1, 2017 even if appraisal pre-dated that date |
| Retroactivity / impairment of vested rights | Applying § 28-3-104(d) retroactively would impair plaintiff’s vested rights | Amendment is prospective to actions accruing after July 1, 2017; plaintiff had no vested right when statute took effect | Held: no unconstitutional impairment; plaintiff’s cause had not accrued before July 1, 2017 |
| Accrual date of tort claim | Claim accrued at foreclosure sale (June 7, 2019); complaint (Sept. 12, 2019) was timely | Claim accrued when plaintiff was forced to repurchase (January 2018); suit filed >1 year later and is barred | Held: accrual occurred January 2018 when plaintiff repurchased the loan; claim was time-barred under § 28-3-104(d) |
| Award of appellate attorney’s fees under Tenn. Code Ann. § 20-12-119(c) | Fees under § 20-12-119(c) cover costs and reasonable attorney fees incurred as consequence of dismissed claims, including appeals | § 20-12-119(c) is narrow and intended to cover only trial-court fees tied to answering complaint and motion to dismiss | Held: § 20-12-119(c) does not authorize appellate attorney’s fees; appellees may seek appellate fees under § 27-1-122 for frivolous appeals if appropriate |
Key Cases Cited
- Lee Med., Inc. v. Beecher, 312 S.W.3d 515 (Tenn. 2010) (statutory interpretation principles; give words their ordinary meaning and harmonize statutory clauses)
- Mills v. Wong, 155 S.W.3d 916 (Tenn. 2005) (vested tort cause of action accrues when it becomes presently enforceable and is constitutionally protected)
- Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436 (Tenn. 2012) (discovery rule: accrual when plaintiff has actual knowledge or facts that would put a reasonable person on notice of injury)
- Wyatt v. A-Best Co., 910 S.W.2d 851 (Tenn. 1995) (judicial remedy is available when breach causes legally cognizable damage)
- John Kohl & Co. P.C. v. Dearborn & Ewing, 977 S.W.2d 528 (Tenn. 1998) (actual injury element explained; injury may be expense or loss of legal right)
- Killingsworth v. Ted Russell Ford, Inc., 205 S.W.3d 406 (Tenn. 2006) (legislation with broad remedial aims may authorize appellate fees even without explicit appellate reference)
- McCroskey v. Bryant Air Conditioning Co., 524 S.W.2d 487 (Tenn. 1975) (tort accrual: when wrongful force produces injury)