Wilson Bank & Tr. v. Consol. Util. Dist. of Rutherford Cnty.
| Docket Number | M2021-00167-COA-R3-CV |
| Decision Date | 10 June 2022 |
| Parties | WILSON BANK & TRUST ET AL. v. CONSOLIDATED UTILITY DISTRICT OF RUTHERFORD COUNTY ET AL. |
| Court | Court of Appeals of Tennessee |
Session February 17, 2022
Appeal from the Circuit Court for Rutherford County No. 70947 Bonita Jo Atwood, Judge
In 2014, development company KW Group, LLC ("KW") purchased a tract of land located in Rutherford County Tennessee, from Wilson Bank & Trust ("Wilson Bank"). The land was intended for a subdivision. A previous holder of the land, Mid-Cumberland Development, Inc. ("Mid-Cumberland"), had deeded two lots out of the main tract to Consolidated Utility District of Rutherford County ("CUD") in 2011. Desiring to have a portion of the two lots re-consolidated with the primary tract, KW and Wilson Bank filed suit against CUD and Mid-Cumberland in 2016. The plaintiffs sought reformation and/or rescission of the 2011 deed conveying the lots to CUD and stated causes of action for promissory estoppel and unjust enrichment. Following briefing by the parties, the trial court dismissed all of the plaintiffs' claims with prejudice. We affirm.
Tenn R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
Mary Beth Hagan, Murfreesboro, Tennessee, for the appellants Wilson Bank & Trust and KW Group, LLC.
Roger W. Hudson, Murfreesboro, Tennessee, for the appellee, Consolidated Utility District of Rutherford County, Tennessee.
OPINION
This appeal stems from a dispute over a plot of land in Rutherford County, Tennessee. Defendant Mid-Cumberland acquired a tract of land (the "Development") in December of 2008 intending to develop a subdivision. Mid-Cumberland's acquisition was financed by Wilson Bank. The development plan required the installation of a wastewater treatment system by Defendant CUD. An engineering firm was engaged to determine where the system would be constructed in the Development. The engineering drawings provided that the land needed for the system comprised all of what the parties refer to as "Lot 52" and a portion of what the parties call "Lot 50." CUD and Mid-Cumberland established that Mid-Cumberland would deed to CUD the portion of the Development needed for installation of the wastewater system.
On September 6, 2011, Mid-Cumberland conveyed to CUD the entirety of Lot 52 and Lot 50, notwithstanding the fact that CUD did not need the entirety of Lot 50 for the system. The impetus of the present case is the undisputed fact that CUD received, from Mid-Cumberland, land in excess of what was needed to construct the wastewater system. To effectuate the deal, Wilson Bank executed a release for both Lot 52 and Lot 50, in their entirety, on August 3, 2011.
Mid-Cumberland defaulted on its obligation to Wilson Bank, and Wilson Bank foreclosed on the Development. Wilson Bank acquired the Development via substitute trustees deed dated December 10, 2013. Plaintiff KW became interested in the Development and met with CUD employees on March 10, 2014, to discuss Lots 50 and 52. The parties' stipulated facts provide that during this meeting, "it was discussed that CUD did not need certain portions of the property conveyed to it by Mid Cumberland to install" the wastewater system. The stipulated facts also provide that the two CUD employees present at the meeting "told KW's representatives that a decision would have to be made as to the legal requirements for the transfer of any property in excess of that needed" for the wastewater treatment system.
The record does not show that any further discussion between KW and CUD was held regarding the lots at issue. Soon after the meeting, however, KW purchased the remaining Development land from Wilson Bank. The purchase was financed by Wilson Bank, and a deed of trust securing Wilson Bank's interest was executed on June 27, 2014. Lots 50 and 52 were not included in the conveyance from Wilson Bank to KW, as they had been deeded to CUD nearly three years prior.
On February 24, 2016, Wilson Bank and KW (hereinafter together, "Plaintiffs") filed the instant action in the Circuit Court for Rutherford County (the "trial court"). Plaintiffs alleged that the 2011 deed to CUD from Mid-Cumberland should be either reformed or rescinded altogether based on mutual mistake. Plaintiffs also alleged causes of action for unjust enrichment and promissory estoppel. CUD answered the complaint on May 12, 2016.
Nothing occurred in the case for a long period of time until the trial court set the case for a status conference on March 8, 2019. The conference was reset to November 1, 2019. On November 21, 2019, the trial court entered an agreed order regarding how the case would proceed. The order provides:
Per the agreed order, the parties filed their agreed stipulated facts on December 10, 2019.[1] CUD and Plaintiffs also filed their respective memoranda of law on February 3, 2020. CUD argued that: 1) any mistake regarding the 2011 deed to CUD was unilateral, as opposed to mutual, and neither rescission nor reformation of the deed was warranted; 2) neither plaintiff had standing because Wilson Bank's interest in Lots 50 and 52 was released and there was no allegation that its loan to Mid-Cumberland was not satisfied by the foreclosure sale, and KW had incurred no damages because it never acquired Lots 50 and 52; 3) there could be no detrimental reliance by KW on the statements of CUD employees Bryant Bradley and David Jones because, per statute, only CUD's board had the authority to convey CUD land. Finally, CUD argued that the Statute of Frauds barred Plaintiffs' claims.
Plaintiffs argued in their brief that Lots 50 and 52 were never intended to be transferred in their entirety to CUD and that equity demanded the excess land be conveyed to KW. Plaintiffs also took issue with CUD's position that KW did not detrimentally rely on statements made at the March 10, 2014 meeting between CUD and KW. Plaintiffs attached to their memorandum of law an affidavit by Steve Knox (the "Knox affidavit"), a representative for KW, which provided generally that KW purchased the development based on the understanding that CUD would convey a portion of the excess land to KW.[2] In response, CUD filed a motion to strike the Knox affidavit, asserting that the affidavit violated the terms of the November 21, 2019 agreed order. CUD argued that the affidavit violated the order because the Knox affidavit conflicted with the previously filed stipulated facts. The trial court reserved ruling on the motion to strike contingent on whether the court determined, per the terms of the agreed order, that it needed additional facts from the parties.
The parties also filed reply briefs on March 16, 2020. Plaintiffs relied heavily on the disputed Knox affidavit in their reply brief. Nonetheless, the trial court ordered the Knox affidavit stricken on June 19, 2020. The trial court agreed with CUD that the affidavit violated the terms of the November 21, 2019 agreed order. Taking issue with the trial court's interpretation of the agreed order, Plaintiffs filed a motion asking that the case be set for trial. Plaintiffs claimed that the agreed order never contemplated the outright exclusion of disputed facts, and that if the Plaintiffs knew the trial court interpreted the agreed order this way, Plaintiffs never would have signed it. CUD opposed Plaintiffs' motion, asserting that Plaintiffs agreed to the atypical procedure and that Plaintiffs should be prohibited from seeking a trial at that late juncture. The trial court agreed with CUD and entered an order denying Plaintiffs' motion on July 21, 2020. This order provided that the parties, including Plaintiffs' counsel, waived oral argument and that a written ruling based on the stipulated facts was forthcoming.
The trial court's final order was entered January 12, 2021. The trial court concluded that CUD never entered into any contract with KW or Wilson Bank and that neither rescission nor reformation of the 2011 deed was warranted. The trial court also concluded that CUD was not unjustly enriched by the acquisition of Lots 50 and 52 and that Plaintiffs had not shown detrimental reliance on the statements by the CUD employees.
Plaintiffs' case was dismissed with prejudice in its entirety. Plaintiffs filed a timely notice of appeal to this Court.
Plaintiffs raise the following issues on appeal, which are taken verbatim from their appellate brief:
1. Should the trial court ruling be reversed because there are a number of necessary, disputed issues of fact that the parties did not have opportunity to present?
2. Should the trial court ruling be reversed because the...
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