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584 S.W.3d 418
Tenn. Ct. App.
2019
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Background

  • Rafia Khan (Mrs. Khan) obtained a joint line of credit with her then-husband; she conveyed the residence to the Rafia N. Khan Irrevocable Trust but signed loan papers both individually and as trustee.
  • Husband drew $40,000 on the line before the loan was finally closed; Regions Bank refused to release the deed-of-trust lien, prompting litigation and arbitration.
  • An arbitrator ruled for Regions Bank and awarded fees against "Rafia N. Khan, individually and as trustee." The trial court initially vacated the award, and this Court (Khan I) reversed and instructed confirmation of the award as to the Trust only because Mrs. Khan obtained a personal bankruptcy discharge during the appeal.
  • Post-remand proceedings produced further litigation (including federal bankruptcy adversary proceedings) and multiple state appeals (Khan II, Khan III). The trial court ultimately confirmed the arbitration award and awarded Regions Bank $72,156 in attorney’s fees and $2,094.05 costs, allocating part of the fee award against Mrs. Khan personally for fees Regions incurred defending the bankruptcy adversary.
  • On this appeal the Tennessee Court of Appeals applied the law-of-the-case doctrine to affirm confirmation of the arbitration award and reviewed whether Tenn. Code Ann. § 29-5-315 authorized awarding fees for collateral federal bankruptcy proceedings.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the law-of-the-case from Khan I binds the court to confirm the arbitration award against the Trust Khan contended Khan I was clearly erroneous because the Trust was not a named party and the Bank introduced a new argument in reply Bank argued it never abandoned its request to confirm the award against the Trust and properly clarified scope in reply Court applied law of the case, held Khan I was not clearly erroneous, and affirmed confirmation as to the Trust
Whether Tenn. Code Ann. § 29-5-315 authorized awarding attorney’s fees for Regions’ costs in collateral federal bankruptcy proceedings Khan argued § 29-5-315 does not permit fees for collateral bankruptcy litigation and the TUAA only covers confirmation-related proceedings Bank argued “proceedings subsequent thereto” includes subsequent collateral proceedings and fees should deter protracted challenges and forum shopping Court held § 29-5-315 does not authorize awards for attorney’s fees incurred in collateral federal bankruptcy proceedings; modified fee award to exclude those fees

Key Cases Cited

  • Khan v. Regions Bank, 461 S.W.3d 505 (Tenn. Ct. App. 2014) (prior appellate decision directing confirmation as to the Trust)
  • Eberbach v. Eberbach, 535 S.W.3d 467 (Tenn. 2017) (framework for when contractual or statutory authority permits fee recovery)
  • Memphis Publ’g Co. v. Tenn. Petroleum Underground Storage Tank Bd., 975 S.W.2d 303 (Tenn. 1998) (statement of law-of-the-case doctrine and its exceptions)
  • Mansell v. Bridgestone Firestone N. Am. Tire, LLC, 417 S.W.3d 393 (Tenn. 2013) (statutory construction principles)
Read the full case

Case Details

Case Name: Rafia N. Khan, Individually, And In Her Capacity As Trustee Of The Rafia N. Khan Irrevocable Trust v. Regions Bank
Court Name: Court of Appeals of Tennessee
Date Published: Feb 6, 2019
Citations: 584 S.W.3d 418; E2018-01173-COA-R3-CV
Docket Number: E2018-01173-COA-R3-CV
Court Abbreviation: Tenn. Ct. App.
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    Rafia N. Khan, Individually, And In Her Capacity As Trustee Of The Rafia N. Khan Irrevocable Trust v. Regions Bank, 584 S.W.3d 418