                                                                                        03/22/2017




               IN THE COURT OF APPEALS OF TENNESSEE
                            AT JACKSON
                               January 17, 2017 Session

 ASSOCIATES ASSET MANAGEMENT LLC v. ANGELA BLACKBURN

                 Appeal from the Chancery Court for Shelby County
                  No. CH-11-0200 James R. Newsom, Chancellor
                      ___________________________________

                           No. W2016-00801-COA-R3-CV
                       ___________________________________

This is a breach of contract case. After Appellant purchased a package of default loans,
which contained Appellee’s second mortgage note, Appellant waited almost four years to
filed suit against Appellee for breach of contract. Appellee raised laches as an
affirmative defense. The trial court held that gross laches applied to bar Appellant’s
lawsuit. We conclude that the trial court abused its discretion in applying gross laches to
bar Appellant’s claim in that Appellee’s injuries were only economic, and Appellee failed
to pursue her claims for predatory lending, misrepresentation, and/or lender misconduct.
Reversed and remanded.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                            Reversed and Remanded

ARNOLD B. GOLDIN, J., delivered the opinion of the court, in which J. STEVEN STAFFORD,
P.J., W.S., and JOHN W. MCCLARTY, J., joined.

Christopher W. Conner and Roman Reese, Maryville, Tennessee, for the appellant,
Associates Asset Management, LLC.

John D. Horne, Memphis, Tennessee, for the appellee, Angela Blackburn.


                                       OPINION

                                     I. Background

       On or about January 21, 2004, Ken McFerrin, an employee of Lifetime Funding
Co., Inc. (“Lifetime”), contacted Appellee Angela Blackburn, by letter, regarding her
possible purchase of property located at 5318 Cherokee Rose Lane, Memphis, Tennessee
(the “Property”). Lifetime acted as the loan broker for NLC, Inc. and as sales agent for
the Property. At trial, Ms. Blackburn testified that after she agreed to purchase the
Property, but prior to closing, Mr. McFerrin informed her that the purchase money
mortgage for the Property would be an 80/20 loan, see discussion infra. Mr. McFerrin
advised Ms. Blackburn that if she entered into the transaction, paid her mortgage on time,
and built her credit, she could refinance the loan after one year to a fixed-rate mortgage.

       Ms. Blackburn closed on the Property on January 30, 2004. At the closing, she
signed two promissory notes; the first note was an eighty percent first mortgage note, in
favor of NLC, Inc.’s affiliated entity, First NLC Financial Services, LLC, in the principle
amount of $162,400.00; this was an adjustable rate mortgage. In conjunction with the
$162,400.00 note, Ms. Blackburn executed a first mortgage deed of trust to secure the
loan. The second note was a twenty-percent, second mortgage, “balloon note,” in favor
of NLC, Inc. in the amount of $40,600.00 (the “Note”). This Note is the subject of the
instant appeal. The Note carried a fixed interest rate of 11.99% and had a term of fifteen
years, with the first payment of interest and principle due on March 1, 2004. The Note
was secured by a second Deed of Trust (the “Deed”) on the Property. The Deed, which
Ms. Blackburn also signed, specified that the Note may be accelerated on breach; allowed
the holder of the Note to collect attorney’s fees; and allowed for foreclosure on the
Property. At the time of closing, Ms. Blackburn received and acknowledged two notices
of Assignment, which she understood to allow NLC, Inc. to transfer the loans to OCWEN
Mortgage. Thereafter, NLC, Inc. and its affiliates assigned the Note and the Deed to
OCWEN Mortgage.1

        On or about January 17, 2005, OCWEN Mortgage sent Ms. Blackburn a letter
informing her that she was in default on her first mortgage. On July 17, 2005, OCWEN
Mortgage’s assignee, Specialized Loan Servicing, LLC (“SLS”), notified Ms. Blackburn
of its intent to foreclose on the Property, and Ms. Blackburn relinquished the Property to
OCWEN Mortgage. On March 6, 2006, OCWEN Mortgage foreclosed on the Property
under the first mortgage note and deed of trust.

      Although Ms. Blackburn testified that she attempted to refinance the mortgage,
she discovered that refinancing could not be accomplished because the value of the
Property was insufficient to support the refinance of the mortgage indebtedness. Ms.
Blackburn obtained an attorney. On March 20, 2008, the attorney notified SLS that Ms.
Blackburn had been the victim of predatory lending, commercial misrepresentation,
and/or lender misconduct, and that she was “unable and unwilling to negotiate any

1
  Although the transcript of the hearing indicates that the foregoing documents were admitted into
evidence, none of the trial exhibits are contained in the appellate record. The Note at issue is attached to
the Complaint. However, any information regarding the nature or content of documents other than the
Note is taken from the testimony adduced at the hearing.
                                                   -2-
repayment plan.” However, Ms. Blackburn did not pursue any of these claims.

      The Note that is the subject of the instant appeal was also assigned to SLS, and
Ms. Blackburn fell into default on that Note. Ms. Blackburn’s last payment on the Note
was on May 10, 2005, and there was no further contact between OCWEN Mortgage and
Ms. Blackburn.

        On November 20, 2007, Appellant Associates Asset Management (“AAM”), a
company that purchases and collects foreclosed debt, purchased Ms. Blackburn’s Note as
part of a default loan package. At the hearing, Mark Mancuso, who is the custodian of
AAM’s records, testified that Appellant bought the Note with the knowledge that the
Property had been sold to satisfy the first mortgage such that the Note was unsecured at
the time Appellant purchased it. According to Mr. Mancuso’s testimony, on December
18, 2007, AAM sent Ms. Blackburn a letter, informing her of its purchase of the Note and
of her default on same. On February 12, 2008, AAM commenced collection efforts on
the Note. Between February of 2008 and February of 2009, AAM sent five additional
letters to Ms. Blackburn demanding payment. Each of these letters warned of the
possibility of legal action and suggested that the parties work out some solution. After
February 4, 2009, there was no further communication between the parties until
Appellant filed suit. On December 23, 2009, Ms. Blackburn closed on another home, in
conjunction with which she incurred a new mortgage debt of approximately $186,459.00.

       AAM filed suit against Ms. Blackburn on February 7, 2011. On February 28,
2011, Ms. Blackburn filed an answer and Tennessee Rule of Civil Procedure 12.02(6)
motion to dismiss, wherein she argued, inter alia, that Appellant’s complaint should be
dismissed on grounds of: (1) the running of the six-year statute of limitations, Tenn. Code
Ann. § 28-3-109(a)(3); (2) laches; (3) equitable estoppel; (4) voluntary assumption of
speculative risks; and (5) unclean hands. AAM opposed the motion to dismiss by
response filed on April 28, 2011. The case proceeded to trial on December 17, 2015. At
the time of the trial, the total amount due on the Note, including principal and interest,
was approximately $92,736.12.

       On March 8, 2016, the trial court entered its findings of fact and conclusions of
law, wherein it found that AAM was guilty of gross laches, thus “defeating its contractual
claim.” On April 14, 2016, the trial court entered a judgment in favor of Ms. Blackburn,
holding that Ms. Blackburn “is hereby awarded Judgment, Dismissing the claim filed
against her by . . . [AAM].” AAM appeals.

                                         II. Issue

      In its appellate brief, AAM states the issue for review as follows:
                                           -3-
      The sole issue is whether or not the trial court properly held that Appellee
      pled and proved her affirmative defense of gross laches and rightly
      dismissed Plaintiff’s entire cause of action.

                                III. Standard of Review

       “The defense of laches is based on the doctrine of equitable estoppel, and is only
applied where the party invoking it has been prejudiced by the delay.” Brown v. Ogle, 46
S.W. 3d 721, 726 (Tenn. Ct. App. 2000). Accordingly, courts are to sustain the defense
of laches only in comparatively rare cases. S.M. Williamson & Co. v. Ragsdale, 170
Tenn. 439, 95 S.W.2d 922 (1936).

        A trial court’s decision regarding whether to apply the doctrine of laches will not
be reversed absent an abuse of discretion. In re Estate of Baker v. King, 207 S.W.3d 254,
264 (Tenn. Ct. App. 2006); Griffin v. Lester, No. W2004-02072-COA-R3-CV, 2005 WL
3199279, at *5 (Tenn. Ct. App. Nov. 30, 2005). Under the abuse of discretion standard,
the trial court’s decision “will be upheld so long as reasonable minds can disagree as to
the propriety of the decision made.” Camp v. Camp, No. W2010-01037-COA-R3-CV,
2011 WL 2567542, at *5 (Tenn. Ct. App. June 29, 2011) (quoting Eldridge v. Eldridge,
42 S.W.3d 82, 85 (Tenn. 2001)). The abuse of discretion standard involves “a less
rigorous review of the lower court’s decision and a decreased likelihood that the decision
will be reversed on appeal.” Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn.
2010) (citing Beard v. Bd. of Prof’l Responsibility, 288 S.W.3d 838, 860 (Tenn. 2009)).
The standard “reflects an awareness that the decision being reviewed involved a choice
among several acceptable alternatives.” Lee Medical, 312 S.W.3d at 524 (citing
Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 708 (Tenn. Ct. App. 1999)). Accordingly,
appellate courts are not permitted to “second guess” the trial court’s determinations or to
substitute their judgment for that of the trial court. Lee Medical, 312 S.W.3d at 524
(citing White v. Vanderbilt Univ., 21 S.W.3d 215, 223 (Tenn. Ct. App. 1999)). “The
abuse of discretion standard of review does not, however, immunize a lower court’s
decision from any meaningful appellate scrutiny.” Lee Medical, 312 S.W.3d at 524
(citing Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 211 (Tenn. Ct. App. 2002)).

       As to whether the defense of laches has been proven, in Freeman v. Martin
Robowash, Inc., 457 S.W.2d 606 (Tenn. Ct. App. 1970), this Court delineated the
questions of fact and the questions of law involved in the defense:

      The defense of laches presents a mixed question of law and fact. Two
      essential elements of fact are negligence and unexcused delay on the part of
      the complainant in asserting his alleged claim, which result in injury to the
      party pleading laches. Sunderhaus v. Perel & Lowenstein (1965) 215
                                           -4-
       Tenn. 619, 388 S.W.2d 140. The question whether in view of the
       established facts, relief is to be denied—that is, whether, it would be
       inequitable or unjust to the defendant to enforce the complainant’s right—is
       a question of law. 27 Am. Jur. 2d, Equity, § 176, pp. 722–723.

Id. at 611. This case was tried without a jury. Therefore, we review the trial court’s
findings of fact de novo with a presumption of correctness unless the evidence
preponderates otherwise. Tenn. R. App. P. 13(d). The trial court’s conclusions of law,
however, are reviewed de novo and “are accorded no presumption of correctness.”
Brunswick Acceptance Co., LLC v. MEJ, LLC, 292 S.W.3d 638, 642 (Tenn. 2008).

                                       IV. Analysis

        As noted above, a breach of contract action, such as the one at bar, is subject to a
statutory, six-year statute of limitations. Tenn. Code Ann. §28-3-109(a)(3). Generally,
the doctrine of laches applies to actions not governed by a statute of limitations. Dennis
Joslin Co. v. Johnson, 138 S.W.3d 197, 201 (Tenn. Ct. App. 2003). However, it may be
applied even where the action is governed by a statute of limitations when the plaintiff is
guilty of gross laches. Id. Because Appellant’s breach of contract action is governed by
the applicable statute of limitations, the doctrine of gross latches, as opposed to ordinary
latches, applies. In its brief, Appellant first asserts that the defense of laches is waived
because it was not properly pled. Specifically, Appellant takes issue with the fact that
Appellee raised “laches” as an affirmative defense, but did not specify “gross laches.” In
the first instance, Tennessee Rule of Appellate Procedure 8.03, which governs affirmative
defenses, requires “laches” to be set forth as an affirmative defense, but the rule does not
make a distinction between gross and ordinary laches. Accordingly, we conclude that
Ms. Blackburn’s plea of “laches” was sufficient to put Appellee on notice that Ms.
Blackburn was claiming the defense. The question of whether gross or ordinary laches
applies is a question of law based on whether there is an applicable statute of limitations.
The type of laches applicable would, therefore, fall to the purview of the court.
Regardless, our holding, infra, that gross laches is not applicable in this case negates
Appellant’s argument that Ms. Blackburn’s pleading of laches was not sufficiently
specific.

       Whether gross or ordinary, the equitable doctrine of laches must be based on a
finding of inexcusable negligent, or unreasonable delay on the part of the party asserting
the claim. Archer v. Archer, 907 S.W.2d 412, 416 (Tenn. Ct. App. 1995). It is an
equitable defense, which requires the finder of fact to determine whether it would be
inequitable or unjust to enforce the claimant’s rights. Id. Gross laches occurs where there
has been a “long and unreasonable acquiescence in adverse rights.” John P. Saad &
Sons, Inc. v. Nashville Thermal Transfer Corp., 715 S.W.2d 41, 46 (Tenn.1986)
                                           -5-
(quoting Ledford v. Lee, 200 S.W.2d 393, 398 (Tenn. Ct. App. 1946)), perm. app. denied
(Tenn.1947) (quoting Gibson’s Suits in Chancery, § 70, p. 87)). Further, gross laches
requires prejudice to the defendant such as the loss of evidence and witnesses. Dennis
Joslin Co., 138 S.W.3d at 201.

       As set out in its findings of fact, the trial court found that AAM’s delay in
pursuing its breach of contract claim prejudiced Ms. Blackburn in two ways.

              In view of the established facts, the court concludes that Ms.
       Blackburn has proven gross laches on the part of [AAM], making it unjust
       to enforce [AAM’s] contractual rights. . . . [AAM] stands accountable for
       the delay in the enforcement of the second mortgage Note from Ms.
       Blackburn’s default on May 10, 2005 until its acquisition of the Note on or
       about December 18, 2007. Thereafter, [AAM] sent five letters to Ms.
       Blackburn demanding payment on the Note from the period of February 12,
       2008 to February 4, 2009. . . .

              During the next two year period, until [AAM] filed the Complaint on
       February 7, 2011, [AAM] failed to communicate with Ms. Blackburn
       concerning its intentions. Hearing nothing, Ms. Blackburn, to her
       prejudice, incurred a substantial new mortgage obligation, which she would
       not have done but for the delay on the part of [AAM]. Moreover, at trial,
       [AAM] sought an award through December 17, 2015 of $92,736.12 on a
       Note, the principal amount of which was $40,412.69—reflecting that
       interest had accrued in more than twice the principal amount of the Note in
       nearly twelve years between the execution of the Note and trial. While Ms.
       Blackburn could not contend that she had suffered a loss of evidence and
       witnesses, the considerable accumulation of interest resulting from the
       unjustified delay of [AAM] bolsters further the court’s conclusion that
       [AAM] is properly cited for gross laches, defeating its contractual claim.
       The court concludes that it would be inequitable or unjust to enforce
       [AAM] rights under the circumstances at bar.

       As acknowledged by the trial court, the “injuries” found in this case are of a purely
economic nature, i.e., Ms. Blackburn took on significant debt and accrued significant
interest on the Note. Although economic damages may certainly be considered in
determining whether a party claiming laches has been injured or prejudiced by delay, see
discussion infra, the nature of the doctrine usually requires some injury or prejudice more
than monetary. As discussed in 30A C.J.S. Equity §147:

              Prejudice is an essential element of the assertion of laches. . . .
                                           -6-
      However, not every change in conditions will constitute prejudice within
      the doctrine of laches, and whether an injury cognizable under the doctrine
      of laches occurs depends on assessing the inherent equities of the particular
      case. Laches is usually involved in situations where the delay in
      prosecuting the claim has made the claim harder to defend against, or where
      money or valuable services will be wasted as a result of the delay.
      Prejudice, supportive of laches, may thus be demonstrated by a showing of
      injury, change of position, loss of evidence, unavailability of witnesses, or
      some other disadvantage resulting from delay, which diminish a
      defendant’s chances of success. . . . Prejudicial harm does not occur merely
      because one loses what he or she otherwise would have kept. There must be
      a delay which causes a disadvantage in asserting and establishing a claimed
      right or defense, or other damage caused by detrimental reliance.

(Footnotes omitted).

       In an early case, Evans v. Steele, the Tennessee Supreme Court discussed the type
of injury or prejudice that is contemplated under the doctrine of gross latches:

              Delay merely is not sufficient to repel complainant in a court of
      equity. The true doctrine concerning laches is believed to be that, in order
      for it to operate as a bar to complainant’s suit, it may have resulted in
      prejudicial delay. Relief is generally refused by courts of equity, because
      of the lapse of time, only in such cases where the loss of evidence, death
      of witnesses or parties, and failure of memory resulting in the
      obscuration of facts to the prejudice of the defendant, render uncertain
      the ascertainment of truth, and make it impossible for the court to
      pronounce a decree with confidence. Bolton v. Dickens, 4 Lea, 577.
      However, it is not essential that the defendants show absolutely that a
      defense has been lost or a right obscured as a result of the delay. It is
      sufficient that it appear to the court that the complainant’s demand is
      uncertain, or that the defendant probably had a good defense to the suit.
      Where entire justice cannot be done by reason of the gross negligence or
      deliberate delay of the complainant to assert his claim, equity will not aid a
      party whose application is “destitute of conscience, good faith, and
      reasonable diligence.” Mackall v. Casilear, 137 U. S. 556, 11 Sup. Ct. 178,
      34 L. Ed. 776. The doctrine of laches in courts of equity is not an arbitrary
      or a technical doctrine. No hard and fast rule for its application can be
      formulated. But, when the court sees negligence on one side and injury
      therefrom on the other, it is a ground for denial of relief. It is not required
      that the defendant should establish by proof an affirmative injury. It is
                                           -7-
       sufficient if by the laches and delay of complainant it has become doubtful
       whether the defendant can command the evidence necessary to a fair
       presentation of the case. Or, if it can be seen that the defendant has been
       deprived of an advantage he might have had if the complainant’s claim had
       been seasonably presented, a court of equity will not interfere to grant
       relief.

Evans v. Steele, 145 S.W. 162, 165 (Tenn. 1912) (emphases added).                As further
explained in Gibson’s Suits in Chancery:

       The Court realizes the difficulty of doing entire justice, when the original
       transaction has become obscured by time and the evidence lost. . . . The
       Court frowns upon attempts to unsettle what has long been at rest, first,
       because of the difficulty, if not impossibility, of making proof; second,
       because, in uprooting an ancient matter, innocent persons are liable to be
       injured; third, because the defendant, even if originally in the wrong, may,
       as a result of the plaintiff’s laches, have acquired such affirmative rights
       that he cannot be placed in statu quo; and fourth, because the delay raises a
       presumption that originally there was, if not a good defense, at least a better
       one than can now be made. . . . Laches based solely on lapse of time is
       generally not a bar to action.

              Laches will bar actions . . . (5) to have a contract either rescinded or
       specifically enforced, when by delay the parties cannot be placed in statu
       quo; (6) or to have any transaction uprooted, or any business unraveled,
       when, in consequence of long acquiescence, the chances are that material
       evidence has been lost, that the memory of the facts has become dimmed,
       that parties or witnesses have died or removed, and that new rights have
       sprung up that should not be unsettled.

William H. Inman, ed. Gibson’s Suits in Chancery §95 (7th ed. 1988).

       As set out in its findings, supra, the trial court specifically acknowledged that Ms.
Blackburn had suffered no detriment to her ability to defend against the lawsuit, e.g. loss
of witnesses or evidence. A review of relevant Tennessee cases indicates that economic
injury, without some accompanying injury or prejudice to the defendant’s ability to
defend against the lawsuit, is not sufficient to invoke the doctrine of gross latches. In
Riggan v. Askew, this Court affirmed the trial court’s denial of appellant’s gross laches
defense, stating, in relevant part, that:

       Askew also asserts on appeal that Riggan’s cause of action is barred by the
                                            -8-
      equitable doctrine of laches. . . . Askew contends that Riggan’s delay in
      filing suit resulted in over $250,000 in interest accruing on a $75,000
      outstanding loan balance over an 18 year period. Askew also notes that
      Riggan lost many of the partnership’s tax and financial records. Askew,
      however, fails to explain how the loss of the records prejudiced his defense.
      Riggan’s expert witness, Robert Hester C.P.A., testified that the partnership
      documents contained all the information necessary to provide an accurate
      accounting of the partnership’s finances.

Riggan v. Askew, No. 02A01-9511-CH-00246, 1997 WL 675462, *7 (Tenn. Ct. App.
Oct. 29, 1997). Although the Riggan appellant, like Ms. Blackburn, was able to prove
financial detriment from appellee’s delay, in the absence of a showing that appellant was
prejudiced in the defense of the lawsuit, laches would not lie. In Gleason v. Gleason, this
Court stated:

             Mr. Gleason asserts Ms. Gleason made no effort to enforce her right
      to alimony for a period of over 12 years, and that he was prejudiced in that
      a substantial award, plus interest, has now been adjudicated against him.
      The trial court, however, determined Ms. Gleason was not guilty of laches.
      The trial court . . . determined that no prejudice had resulted as a result of
      Ms. Gleason’s delay. . . .

             In light of the record, we do not believe gross laches exists in this
      case which would justify restricting the statutory limitations period. In this
      case, there has been no loss of evidence or witnesses, no change in the
      party’s rights, no change in the value of the alimony award over time which
      would prejudice Mr. Gleason. . . .

Gleason v. Gleason, 164 S.W.3d 588, 592-93 (Tenn. Ct. App. 2004). Likewise, in
Brinton v. Brinton, we held:

      Curtis asserted her right under the MDA as to both children when each
      went to college. We do not find her delay in enforcing the MDA
      unreasonable or inexcusable. No evidence was lost. Brinton maintains he
      was prejudiced by her delay in filing the petition because of the amount of
      interest assessed against him. In essence, Brinton maintains that Curtis
      should have made him do right sooner. He breached the MDA based on a
      figure he “just came up with,” and he admits he has the ability to pay. We
      find that neither laches nor gross laches are applicable to this situation.

Brinton v. Brinton, No. M2009-02215-COA-R3-CV, 2010 WL 2025473, *5 (Tenn. Ct.
                                           -9-
App. May 19, 2010).

       However, even in those cases where the accrual of interest and fees has been
found as a ground for gross laches, the economic damages have been coupled with other
damages amounting to prejudice in defending the lawsuit.               For example, in
FinovaCapital Corp. v. Regel, this Court affirmed the trial court’s grant of summary
judgment in favor of appellee on its finding that appellant’s breach of contract suit was
barred by appellant’s laches. Although the appellee suffered economic damages in the
accrual of interest and fees, it had also suffered loss of evidence:

       The record includes affidavits of Regel that, eight years after the dispute
       between the parties arose and it first refused payment to Finova, Regel had
       believed the dispute to be resolved; had undergone several changes in staff,
       including those responsible for the records regarding its transactions with
       Finova; and Regel’s bank had destroyed records pertinent to the time of the
       breach. None of these assertions was disputed by Finova in the trial court.
       Further, as noted above, by the time Finova brought its action against
       Regel, over five years and four months had elapsed since the May 1998
       order of the bankruptcy court, and Finova’s claims for amounts resulting
       from interest and fees was greater than the amount equal to payments due
       under the lease.

Finova Capital Corp. v. Regel, 195 S.W.3d 656, 660-61 (Tenn. Ct. App. 2005).
Likewise, in Dennis Joslin Co., this Court affirmed the trial court’s finding of laches. In
that case, the trial court found that one of the defendant’s injuries was economic, i.e.,
accrual of interest. However, economic damage was not the sole basis for the finding of
laches. Rather, the trial court found that appellee sustained two injuries as a result of
appellant’s delay:

       The lower court then addressed the issue of prejudice, finding that Johnson
       demonstrated prejudice in two ways. First, Johnson presented evidence that
       he was unable to procure certain witnesses who had died since the entry of
       the December 13, 1990 judgment. Next, he demonstrated that the interest
       alone that had accrued during the delay exceeded the principal amount of
       the judgment rendered in 1990. The lower court found that the
       unavailability of witnesses and the unnecessary and preventable increased
       financial obligations occasioned by the delay both warranted application of
       the doctrine of laches. We cannot say that these findings constitute an abuse
       of discretion. The record indicates that at least three potential witnesses
       died during the delay in enforcing the judgment against Johnson. The
       record also shows that many thousands of dollars in interest accrued as a
                                          - 10 -
       direct result of the long delay. The lower court was within its discretion to
       find that these developments warranted application of laches in the case at
       bar.

Dennis Joslin Co., 138 S.W.3d at 201.

        In short, we have found no Tennessee cases in which economic damages alone
have been found to support a court’s finding of gross laches. That being said, even if we
assume, arguendo, that mere economic damages may support the defense, what will
always negate laches is the comparative complacence of the party raising the defense.
For example, in Brinceno v. Brinceno, the trial court denied plaintiff/wife’s contempt
claim, wherein she sought alimony arrears. The trial court found that plaintiff/wife had
failed to pursue her claim such that the trial court barred recovery. This Court reversed
the trial court, finding that defendant/husband was equally at fault in the delay:

       [A]lthough Evelyn Nadine failed to pursue her contempt petition, Mr.
       Briceno likewise failed to pursue his counter-petition to eliminate or
       reduce his alimony obligation. Moreover, we see no prejudice to the
       estate in this case, as there is no loss of evidence, change in rights, or
       change in the value of the alimony award over time. . . . If anything, Mr.
       Briceno benefitted from the delay by retaining amounts he knew he owed.
       Even though Mr. Briceno himself is unable to defend the claim and testify
       to the purported oral agreement to terminate alimony payments, this
       inability does not prejudice the estate's position so much that the delay rises
       to the level of gross laches. Mr. Briceno set out these points in his
       counter-petition yet chose not to pursue the matter beyond the filing.
       We therefore reverse the trial court’s ruling and conclude that Evelyn
       Nadine is entitled to a judgment against the estate for the unpaid alimony
       accruing up to his death.

Brinceno v. Brinceno, No. M2006-01927-COA-R3-CV, 2007 WL 4146280, *4 (Tenn.
Ct. App. Nov. 21, 2007). (emphases added). As discussed above, by March 20, 2008,
Ms. Blackburn had engaged an attorney, who notified Appellant’s predecessor in interest
that Ms. Blackburn had been the victim of predatory lending, commercial
misrepresentation, and/or lender misconduct. Ms. Blackburn’s argument that she lost the
ability to raise these affirmative claims based on AAM’s delay in filing suit is baseless.
In the first instance, claims arising from alleged predatory lending are not simply
affirmative defenses, but may constitute independent claims under the Tennessee Home
Loan Protection Act, Tenn. Code Ann. § 45-20-103, et seq. Without opining as to the
merits of any of these claims, suffice to say that Ms. Blackburn could have filed a lawsuit
raising these claims at any time, whether AAM filed suit or not. Ms. Blackburn knew, at
                                           - 11 -
least by March of 2008, that she had possible recourse to set aside the Note by filing a
complaint; however, she did not pursue the matter beyond the attorney’s letter. Any
detriment to her claims of predatory lending, commercial misrepresentation, and/or
lender misconduct were, therefore, caused by her own delay in pursuing the claims. The
majority of Appellant’s attempts to collect the Note occurred after Ms. Blackburn’s
attorney sent the letter, i.e., between February of 2008 and February of 2009. However,
even after receiving AAM’s demand letters, Ms. Blackburn did not pursue her claims to
set aside the original transaction. “Equity aids the vigilant, not those who sleep upon
their rights.” Gibson’s Suits in Chancery §25. In view of the fact that Ms. Blackburn
neglected to pursue her claims of predatory lending, misrepresentation, or lender
misconduct, and in light of the fact that any injury caused to Ms. Blackburn by
Appellant’s failure to pursue its breach of contract claim was purely economic, and the
lack of any showing of prejudice to Ms. Blackburn concerning her ability to defend the
lawsuit, we conclude that the trial court erred in finding gross laches and in dismissing
Appellant’s lawsuit. Having found that gross laches barred Appellant’s claims, the trial
court did not reach the merits of Ms. Blackburn’s other defenses. Our holding does not
preclude the trial court from considering her remaining defenses on remand.

                                     V. Conclusion

       For the foregoing reasons, we reverse the trial court’s finding of gross latches and
its dismissal of Appellant’s claim for breach of contract. The case is remanded for such
further proceedings as may be necessary and are consistent with this opinion. Costs of
the appeal are assessed to the Appellee, Angela Blackburn, for all of which execution
may issue if necessary.

                                                   _________________________________
                                                   ARNOLD B. GOLDIN, JUDGE




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