In this case arising out of a secured transaction between Debtor and the predecessor to Plaintiff, Bank, both the trial court and the court of appeals erred in their respective applications of the statutory “rebuttable presumption rule” under Article 9 of the Uniform Commercial Code, as codified at Tenn. Code Ann. 47-9-626. Debtor borrowed more than $2.3 million from Bank’s predecessor for the purchase of an aircraft, which secured the loan. The trial court later found that Debtor had defaulted on the loan agreement, that Bank had disposed of the aircraft in a commercial reasonable manner, and that Bank was entitled to recover a judgment for a deficiency of over $1.6 million. The court of appeals vacated the deficiency judgment, concluding that Bank’s sale of the aircraft had not been commercially reasonable. On remand, the trial court concluded that Bank had met its burden to rebut the presumption under section 47-9-626 and that Bank was entitled to recover a deficiency in the amount of $1.2 million. The court of appeals reversed, concluding that Bank had not rebutted the statutory presumption and was thus not entitled to a deficiency. The Supreme Court reversed the court of appeals, vacated the trial court’s judgment and remanded, holding that Bank sufficiently rebutted the statutory rebuttable presumption. View "Regions Bank v. Thomas" on Justia Law
The president of a company signed a commercial credit application, which contained language immediately above the signature line stating that the individual signing the contract personally guaranteed amounts owed to the vendor. The company defaulted on the balance of the account, and the vendor filed suit against both the company and the president. The trial court granted summary judgment to the vendor, holding that the president had signed the contract both personally and in a representative capacity. The court of appeals reversed, holding that the president had signed the contract only in a representative capacity. The Supreme Court reversed, holding that the application contained clear and unambiguous language sufficient to bind the president as an individual guarantor of the contract. View "84 Lumber Co. v. Smith" on Justia Law
After a local vendor of termite control services discovered that two of its competitors had overbilled Knox County for services, the vendor presented a report of its findings to county officials. When the County delayed taking remedial action, the vendor filed a qui tam suit pursuant to Tenn. Code Ann. 4-18-104(c) against the companies in chancery court. The County joined the vendor's lawsuit and eventually settled with the defendants. When the qui tam plaintiff sought a share of the County's settlement with one of the vendors, the County asserted that the qui tam plaintiff was not eligible to receive any of the settlement proceeds. The trial court held that the qui tam plaintiff was an "original source" for the purpose of section 4-18-104(c) and, therefore, was entitled to receive twenty-eight percent of the settlement proceeds, or $71,546. The court of appeals affirmed but remanded the case to redetermine the value of the settlement proceeds. The Supreme Court affirmed the decisions of both the trial court and the court of appeals that the qui tam plaintiff was an "original source" and, therefore, was eligible to receive a portion of the proceeds from the County's settlement with one of the vendors.