Deutsche Bank Nat'l Trust Co. v. Birchfield
| Decision Date | 10 August 2017 |
| Docket Number | No.: 2:16-CV-19-TAV-MCLC,: 2:16-CV-19-TAV-MCLC |
| Parties | DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2007-CH4, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2007-CH4, Plaintiff, v. JACQUELINE R. BIRCHFIELD, DONALD BIRCHFIELD, and EASTMAN CREDIT UNION, Defendants. |
| Court | U.S. District Court — Eastern District of Tennessee |
This civil matter is before the Court on plaintiff's Motion for Summary Judgment [Doc. 17], defendant Eastman Credit Union's ("ECU") Cross Motion for Summary Judgment [Doc. 20], and defendants Donald Birchfield and Jacqueline Birchfield's ("the Birchfields") Cross Motion for Summary Judgment [Doc. 24]. The parties each responded to these motions [Docs. 22, 23, 25, 28, 29]. For the reasons stated herein, the Court will grant plaintiff's motion for summary judgment and deny defendants' cross motions.
In 2006, Herbert and Mary Miller conveyed real property located at 351 Lyons Road, Bluff City, Tennessee 37618 ("the property") to the Birchfields pursuant to a warranty deed ("the warranty deed"), which was recorded in the Sullivan County Register's Office in book 2467C, page 330 [Doc. 18 p. 2; Doc. 21 p. 1]. The warranty deed identified three tracts of land that make up 351 Lyons Road—Tract I, Tract II, and Tract III—and included the metes and bounds descriptions of each tract [Doc. 1-1 pp. 31-32; Doc. 18 p. 2; Doc. 21 p. 2]. In order to finance this purchase, the Birchfields obtained a purchase money loan from Chase Bank in the amount of $229,600.00, by which they mortgaged the entire property, and Ms. Birchfield executed a promissory note as evidence of said debt [Doc. 18 p. 2; Doc. 23 p. 1]. To secure repayment of the loan and note, the Birchfields executed a purchase money deed of trust, conveying the property to a Chase Bank trustee, and the deed of trust was recorded on November 3, 2006, in book 2467C, page 333 () [Id.].1 The Birchfields simultaneously obtained a second loan, in the amount of $57,400.00, and executed a second deed of trust conveying the property to the same Chase Bank trustee ("second deed of trust") [Id.; Doc. 18-2].2 The second deed of trust was also recorded on November 3, 2006, in book 2467C, page 352 [Doc. 18 p. 2].
Chase Bank assigned the first deed of trust to plaintiff on September 22, 2011 [Doc. 18-3], and this assignment was recorded on October 14, 2011 [Doc. 18 p. 3; Doc. 21 p. 3]. Plaintiff appointed Wilson and Associates PLLC ("Wilson & Associates") as the successor trustee for the first deed of trust [Doc. 18-4]. The Birchfields defaulted on their loan andfirst deed of trust, and Wilson & Associates conducted a non-judicial foreclosure sale of the property on March 8, 2013 [Doc. 18 p. 3; Doc. 21 p. 3]. Plaintiff purchased the property at the foreclosure sale, and Wilson & Associates conveyed the property to plaintiff pursuant to a trustee's deed, which was recorded on March 20, 2013, in book 3071, page 2379 ("trustee's deed") [Doc. 18 p. 3; Doc. 18-1; Doc. 21 p. 3].3
The first and second deeds of trust (collectively, "deeds of trust"), as well as the trustee's deed, include descriptions of Tract I and Tract II, but they do not specifically reference Tract III—which encompasses the Birchfields' home—or list its metes and bounds description [Doc. 18 p. 3; Doc. 21 p. 2; Doc. 23 p. 2]. Additionally, while the deeds of trust and the trustee's deed include the same description of Tract I as the warranty deed, they do not include the same description of Tract II [Doc. 21 p. 4; compare Doc. 18-1 pp. 4-5, with Doc. 18-1 pp. 26-28]. They instead appear to cite the metes and bounds descriptions from an unrecorded survey prepared in 1994, which contains property to the north of the Birchfields' property that they did not own [Doc. 23 p. 2]. The description in the deeds of trust includes the 0.53-acre tract from Tract II in the warranty deed, but it does not include the 0.38 acres from Tract III of the warranty deed [Id.].4 The deeds of trust and the trustee's deed do, however, list the address of all three tracts, 351 Lyons Road, BluffCity, Tennessee 37618, and contain a derivation clause, stating that the included property was the same property conveyed to the Birchfields by warranty deed [Doc. 18 p. 3; Doc. 18-1 pp. 26, 28, 36].
Defendant ECU holds two judgment liens against all of the Birchfields' property, recorded on June 17 and 21, 2010, and August 11, 2011 [Doc. 18 p. 3; Doc. 21 p. 4]. ECU claims that it possesses the first and second priority liens against Tract III because the deeds of trust and plaintiff's trustee deed do not encompass Tract III [Doc. 21 p. 4]. The Birchfields also contend that ECU possesses a first priority lien on the "property that was omitted in the deed of trust" [Doc. 23 p. 2]. Thus, plaintiff brings the instant action, seeking to rescind the foreclosure and trustee's deed so that it may reform the deeds of trust "to reflect the intended and correct property descriptions in order that [p]laintiff's first position lien may be retained and clear title conveyed" [Doc. 18 p. 4].
Summary judgment under Rule 56 of the Federal Rules of Civil Procedure is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Catrett, 477 U.S. 317, 330 n.2 (1986); Moore v. Philip Morris Cos., 8 F.3d 335, 339 (6th Cir. 1993). All facts and all inferences to be drawn therefrom must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 301 F.3d 937, 942 (6th Cir. 2002).
Yet, "[o]nce the moving party presents evidence sufficient to support a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations." Curtis Through Curtis v. Universal Match Corp., 778 F. Supp. 1421, 1423 (E.D. Tenn. 1991) (citing Celotex, 477 U.S. at 317). To establish a genuine issue as to the existence of a particular element, the nonmoving party must point to evidence in the record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that might affect the outcome of the suit under the governing law. Id.
The Court's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper question for the factfinder. Id. at 250. The Court does not weigh the evidence or determine the truth of the matter. Id. at 249. Nor does the Court search the record "to establish that it is bereft of a genuine issue of material fact." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989). Thus, "the inquiry performed is the threshold inquiry of determining whether there is a need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250.
Each of the three remaining parties in this matter move for summary judgment, arguing that no genuine issue of material fact exists [Docs. 17, 20, 24]. Plaintiff argues that Tract III was not included in the deeds of trust and trustee's deed due to mutual mistakeand that no third party would be prejudiced by reformation of the deeds on this basis. Alternatively, plaintiff contends that the Court should impose an equitable lien on Tract III. The Birchfields appear to agree that a mistake was made in omitting Tract III, but they argue that the deeds may not be reformed because the mistake was unilaterally made by plaintiff and because a third party, defendant ECU, would be prejudiced. ECU contends that the parties did not intend the deeds of trust to encompass Tract III. Alternatively, if the Court determines that failure to include Tract III was a mistake, ECU asserts that the deeds cannot be reformed because the mistake occurred due to plaintiff's negligence and because ECU would suffer prejudice.
In order for a deed to be valid, it "must designate the land intended to be conveyed with reasonable certainty." ABN AMRO Mortg. Grp. v. S. Sec. Fed. Credit Union, 372 S.W.3d 121, 128 (Tenn. Ct. App. 2011) (internal citation and quotation marks omitted). Id. at 127. Thus, courts "will declare a deed void for uncertainty of description only where, after resorting to oral proof or after relying upon other extrinsic or external proof or evidence, that which was intended by the instrumentremains a mere matter of conjecture, or where the description cannot be made applicable to but one definite tract." Id.
Thus, parol evidence "is admissible to show the location and boundaries of the tract," if the deed itself "shows that some particular tract was intended." Dobson v. Litton, 45 Tenn. 616, 619 (1868). Even if the introduction of parol proof would create uncertainty as to what tract of land the deed was meant to convey, this does not bar the introduction of such evidence if there was "no uncertainty upon the face of the deed." Id. In sum, as submitted by the Tennessee Supreme Court, "Where an instrument is so drawn that, upon its face, it refers necessarily to some existing tract of land, and its terms can be applied to that one tract...
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