                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                February 16, 2016 Session

  COMMERCE UNION BANK, BRENTWOOD, TENNESSEE D/B/A RELIANT
                BANK V. KELLY D. BUSH ET AL.

               Appeal from the Chancery Court for Williamson County
                   No. 41461    James G. Martin, III, Chancellor


                 No. M2015-00396-COA-R3-CV – Filed June 29, 2016


This is a post-foreclosure action in which the lender seeks to recover a deficiency
judgment, interest, and the costs of collection. In their answer, the borrowers asserted that
the loan was a nonrecourse debt; thus, they were not liable for the deficiency.
Alternatively, they asserted that the property sold at foreclosure for an amount materially
less than its fair market value. Following a bench trial, the trial court concluded that the
loan was a full recourse debt as to both borrowers. This determination was based on the
finding, inter alia, that all parties intended the borrowers to be personally liable. The trial
court also concluded that the lender was entitled to a deficiency judgment, finding that
the borrowers failed to overcome the rebuttable presumption that the foreclosure sale
price was equal to the fair market value of the property at the time of the foreclosure sale.
See Tenn. Code Ann. § 35-5-118. The trial court awarded the lender a judgment of
$640,783.41, plus interest and attorney‟s fees, against the borrowers jointly and severally.
As the foregoing indicates, our review is benefited by the trial court‟s Tenn. R. Civ. P.
52.01 findings of facts and conclusions of law, which disclose the reasoned steps by
which the trial court reached its ultimate conclusion and enhance the authority of the trial
court‟s decision. Having reviewed the trial court‟s findings of fact in accordance with
Tenn. R. App. P. 13(d), we have concluded that the evidence does not preponderate
against the trial court‟s findings and that the trial court identified and properly applied the
applicable legal principles. For these reasons, we affirm.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which ANDY D.
BENNETT and RICHARD H. DINKINS, JJ., joined.

Byron V. Bush, Brentwood, Tennessee, Pro se.

M. Todd Sandahl, Franklin, Tennessee, for the appellant Kelly D. Bush.
Marc T. McNamee and Stephen M. Montgomery, Nashville, Tennessee, for the appellee,
Commerce Union Bank, Brentwood, TN d/b/a Reliant Bank.

                                       OPINION

       In 2006, Byron V. Bush, D.D.S., purchased approximately five acres of
unimproved commercial property in Davidson County, Tennessee, located at the
southeastern corner of the intersection of Old Hickory Boulevard and Interstate 24,
referred to as “StarPointe property” or “StarPointe.”

       On November 30, 2007, Dr. Bush and his wife, Kelly Bush (collectively “the
Bushes”), entered into a Multipurpose Note and Security Agreement (the “Original
Note”) with Commerce Union Bank, Brentwood, Tennessee, d/b/a Reliant Bank
(“Reliant”) for the original principal amount of $1,500,000. To secure the Original Note,
the Bushes concomitantly executed a deed of trust. Thereafter, the Original Note was
renewed on three occasions to defer the due date: January 14, 2010; January 14, 2011;
and May 14, 2011.

       When the note matured on December 30, 2011, the entire principal balance
remained unpaid and outstanding. Thereafter, the Bushes entered into a Forbearance
Agreement in which they acknowledged that they were in default in the amount of
$1,547,906.26 and waived all claims against Reliant. The agreement temporarily
modified their payments due under the note until June 30, 2012, and provided the Bushes
an opportunity to either (1) complete a sale of StarPointe prior to the expiration of the
forbearance period and pay to Reliant $1,400,000 at closing, or (2) pay Reliant
$1,400,000 prior to the expiration of the forbearance period. The Bushes failed to satisfy
the requirements under the agreement, and by letter dated July 23, 2012, Reliant declared
the note in default, accelerated the entire principal and interest balance, and made a
demand for payment in full. When the Bushes did not cure the default, Reliant initiated
foreclosure proceedings on StarPointe.

        The foreclosure sale was scheduled to occur on September 28, 2012, but was
postponed following Dr. Bush‟s petition for relief under Chapter 13 of the United States
Bankruptcy Code, which he filed moments before the foreclosure sale was to begin. The
bankruptcy petition was dismissed shortly after it was filed, and the foreclosure sale was
rescheduled for December 4, 2012. The Bushes did not attend the foreclosure sale either
in person or by representation. Reliant was the only bidder, bidding $1,050,000 based
upon the appraisal Reliant ordered from B.G. Jones & Company, LLC prior to the
original scheduled foreclosure date that valued the property at $1,050,000, with an
effective date of September 19, 2012. Due to the foreclosure being delayed, B.G. Jones &
Company, LLC, provided a second appraisal, with an effective date of January 2, 2013,
that also valued the property at $1,050,000.

                                          -2-
       Because the foreclosure sale price did not fully satisfy the amount due under the
note, Reliant filed a complaint seeking a deficiency judgment against the Bushes in the
amount of $569,706.65, plus interest and costs of collection including attorneys‟ fees. In
their answer, the Bushes alleged that they were not personally liable for the deficiency
because the note was a nonrecourse note. They also alleged that StarPointe was sold at
foreclosure for an amount “materially less” than its fair market value, which the Bushes
claimed was “at least $1.8 million dollars.”

       During the four-day bench trial, the court heard testimony from the parties
including Dr. Bush, Mrs. Bush, DeVan Ard, the president of Reliant, and Rick Belote, the
senior vice president of Reliant. Ben Jones, who prepared two appraisals, testified for
Reliant, and Eric Boozer, who prepared one appraisal, testified for the Bushes. A third
appraiser, Marvin Maes, testified for the Bushes, but he did not appraise the property.

       The parties agreed and the trial court found that there were two issues to be
decided: (1) whether the note made by the Bushes to the order of Reliant was intended by
the parties to be a nonrecourse note; and (2) whether Reliant bid materially less than fair
market value for StarPointe at the foreclosure sale.

        At the conclusion of the trial, the court entered separate orders addressing each
issue, which include extensive findings of fact and conclusions of law. As to the first
issue, by Order entered October 14, 2014, the trial found that the loan from Reliant to the
Bushes is a full recourse transaction and that they are liable to Reliant for the entire
amount of the deficiency. Concerning the foreclosure sale price of StarPointe, by order
Memorandum and Order entered October 22, 2014, the trial court found that the Bushes‟
evidence concerning value did not overcome the presumption afforded Reliant, pursuant
to Tenn. Code Ann. § 35-5-118, that the foreclosure sale price equaled the fair market
value on the date of the foreclosure sale.

       Throughout the trial court proceedings, the Bushes were represented by attorney
Todd Sandahl. Immediately following the trial, Dr. Bush dismissed Mr. Sandahl as his
attorney, and Mr. Sandahl was granted leave to withdraw from representing Dr. Bush.
However, Mr. Sandahl continued to represent Mrs. Bush during the post-trial proceedings
and in this appeal. Dr. Bush has represented himself since dismissing Mr. Sandahl.

       On October 28, 2015, Reliant filed a Motion for Discretionary Costs, pursuant to
Tennessee Rule of Civil Procedure 54.04, and an Application for Award of Attorneys‟
Fees and Expenses, which was supported by the affidavit of Marc T. McNamee, counsel
for Reliant. Reliant requested an award of $106,749.01 for attorneys‟ fees and expenses,
and $6,969.40 for discretionary costs. Dr. Bush filed a response in opposition to the
Motion for Discretionary Costs and Attorneys‟ Fee Application. Mrs. Bush filed a


                                           -3-
response in opposition to the Motion for Discretionary Costs but no response in
opposition to the Attorneys‟ Fee Application.

       Following a hearing on the motions, the trial court awarded Reliant attorneys‟ fees
and expenses in the amount of $106,749.01 and discretionary costs in the amount of
$3,801.90. Dr. and Mrs. Bush each filed a Motion to Alter or Amend. The trial court
denied both motions finding that neither party asserted grounds authorizing the court to
grant relief.

        On January 12, 2015, Dr. Bush filed a pro se Motion for Recusal and Motion for
New Jury Trial. The trial court denied the motion for recusal finding it to be untimely
filed and not properly supported as required by the Tennessee Supreme Court Rule 10B.
The trial court also denied the motion for new jury trial finding that Dr. Bush waived his
right to a jury trial by failing to demand a jury in accordance with the requirements of
Rule 38 of the Tennessee Rules of Civil Procedure.

       Dr. and Mrs. Bush filed separate notices of appeal, separate briefs, and present
separate issues for our review, some of which are similar and others are not.

                                         ISSUES

       For his part, Dr. Bush presents four issues on appeal, which comprise three full
pages of his brief and are inundated with argument. For clarity, we restate the issues
raised by Dr. Bush as follows: 1) whether the trial court erred by finding that the note
made by the Bushes to the order of Reliant was intended by the parties to be a full
recourse note as to both Dr. and Mrs. Bush; 2) whether the trial court erred by finding
that the foreclosure sale price was not materially less than the fair market value of the
property at the time of the foreclosure sale; 3) whether Reliant committed fraud, breach
of contract, and lender liability; and 4) whether the trial court erred by denying his
recusal motion.

       For his third issue, Dr. Bush asks us to consider whether Reliant committed fraud,
breach of contract, and lender liability; however, the latter two components are being
raised for the first time on appeal. “[I]ssues raised for the first time on appeal are
waived.” Black v. Blount, 938 S.W.2d 394, 403 (Tenn. 1996); see also Norton v.
McCaskill, 12 S.W.3d 789, 795 (Tenn. 2000). Therefore, the issues of breach of contract
and lender liability have been waived. As for the issue of fraud, Dr. Bush has preserved
the issue of fraud to the extent it pertains to Reliant‟s engagement of Ben Jones to
appraise the property, and its reliance on his appraisal in making its bid to purchase the
property at the foreclosure sale.

      For his fourth issue, Dr. Bush contends that the trial judge erred by failing to
recuse himself; however, he failed to provide citations to authorities and appropriate

                                          -4-
references to the record to support his claim of bias as required by Tenn. R. App. P.
27(a)(7). Our courts have consistently held that “the failure to make appropriate
references to the record and to cite relevant authority in the argument section of the brief
as required by Rule 27(a)(7) constitutes a waiver of the issue.” Bean v. Bean, 40 S.W.3d
52, 55-56 (Tenn. Ct. App. 2000) (citations omitted). It is not the duty of this court to
verify unsupported allegations or search the record for facts in support of an appellant‟s
poorly-argued issues. See id. (citing Duchow v. Whalen, 872 S.W.2d 692, 693 (Tenn. Ct.
App. 1993)). For these reasons, we find this issue waived.1

       For her part, Mrs. Bush raises nine issues on appeal, which we consolidate and
restate as follows: 1) whether the trial court erred by finding that the note made by the
Bushes to the order of Reliant was intended by the parties to be a full recourse note as to
both Dr. and Mrs. Bush; 2) whether the trial court erred by finding that the foreclosure
sale price was not materially less than the fair market value of the property at the time of
the foreclosure sale; 3) whether the trial court erred in relying on the appraisal of Ben
Jones; 4) whether the trial court erred by failing to “accept best use of property”; 5)
whether the trial court erred by considering the sales price of StarPointe after foreclosure;
and 6) whether the trial court erred in accepting Reliant‟s proof of damages.

       Regarding issues one and six, Mrs. Bush has failed to provide citations to the
authorities and appropriate references to the record to support her claims as required by
Tenn. R. App. P. 27(a)(7). As such, we find these issues waived.

       For its part, Reliant requests this court to affirm the judgment of the trial court in
all respects, hold that Reliant is entitled to an award of attorney‟s fees on appeal, and
remand the case to the trial court for a determination of the reasonable amount of such
fees, costs, and expenses.

                                                ANALYSIS

       We turn first to the proper standard of review for the issues presented in this
appeal. Because this is an appeal from a decision made by the trial court following a
bench trial, the now-familiar standard in Tenn. R. App. P. 13(d) governs our review. This
rule contains different standards for reviewing a trial court‟s decisions regarding factual
questions and legal questions. Nashville Ford Tractor, Inc. v. Great Am. Ins. Co., 194
S.W.3d 415, 424 (Tenn. Ct. App. 2005).



        1
           Furthermore, the record reveals that Dr. Bush did not seek recusal until after the trial court had
ruled on all issues following a four-day bench trial, including denying the motion of Dr. Bush to alter or
amend the final judgment. Moreover, the trial court correctly denied the motion to recuse as untimely and
for failure to comply with Tenn. Sup. Ct. R. 10B.


                                                   -5-
        In cases such as this where the action is “tried upon the facts without a jury,”
Tenn. R. Civ. P. 52.01 provides that the trial court shall find the facts specially and shall
state separately its conclusions of law and direct the entry of the appropriate judgment.2
The underlying rationale for the Rule 52.01 mandate is that it facilitates appellate review
by “affording a reviewing court a clear understanding of the basis of a trial court‟s
decision,” and enhances the authority of the trial court‟s decision in the absence of
findings of fact and conclusions of law, “this court is left to wonder on what basis the
court reached its ultimate decision.” In re Estate of Oakley, No. M2014-00341-COA-R3-
CV, 2015 WL 572747, at *10 (Tenn. Ct. App. Feb. 10, 2015) (citing Lovlace v. Copley,
418 S.W.3d 1, 35 (Tenn. 2013)).

        Further, compliance with the mandate of Rule 52.01 enhances the authority of the
trial court‟s decision because it affords the reviewing court a clear understanding of the
basis of the trial court‟s reasoning. MLG Enterprises, LLC, v. Richard Johnson, No.
M2014-01205-COA-R3-CV, 2015 WL 4162722, at *4 (Tenn. Ct. App. July 9, 2015)
perm. app. granted (Tenn. Dec. 10, 2015); Gooding v. Gooding, 477 S.W.3d 774, 782
(Tenn. Ct. App. Apr. 29, 2015); In re Zaylen R., No. M2003-00367-COA-R3-JV, 2005
WL 2384703, at *2 (Tenn. Ct. App. Sept. 27, 2005) (“Findings of fact facilitate appellate
review, Kendrick v. Shoemake, 90 S.W.3d 566, 571 (Tenn. 2002), and enhance the
authority of the court‟s decision by providing an explanation of the trial court‟s
reasoning.”).

      Our Supreme Court has explained the reasoning for the Rule 52.01 mandate as
follows:

        Requiring trial courts to make findings of fact and conclusions of law is
        generally viewed by courts as serving three purposes. First, findings and
        conclusions facilitate appellate review by affording a reviewing court a
        clear understanding of the basis of a trial court‟s decision. Second, findings
        and conclusions also serve “to make definite precisely what is being
        decided by the case in order to apply the doctrines of estoppel and res
        judicata in future cases and promote confidence in the trial judge‟s
        decision-making.” A third function served by the requirement is “to evoke

        2
           The last sentence of the rule reads: “Findings of fact and conclusions of law are unnecessary on
decisions of motions under Rules 12 or 56 or any other motion except as provided in Rules 41.02 and
65.04(6).” Tenn. R. Civ. P. 52.01. It should be additionally noted that whenever a trial court grants a
Tenn. R. Civ. P. 41.02 motion for involuntary dismissal, it is required to “find the facts specially and . . .
state separately its conclusions of law.” Tenn. R. Civ. P. 41.02(2). This requirement parallels the mandate
in Tenn. R. Civ. P. 52.01, which applies to all actions tried upon the facts without a jury. See Tenn. R.
Civ. P. 41.02, 2010 Advisory Comm‟n cmt.; see also Tenn. R. Civ. P. 52.01 (“In all actions tried upon the
facts without a jury, the court shall find the facts specially and shall state separately its conclusions of law
. . . .”).


                                                     -6-
        care on the part of the trial judge in ascertaining and applying the facts.”
        Indeed, by clearly expressing the reasons for its decision, the trial court
        may well decrease the likelihood of an appeal.

Lovlace, 418 S.W.3d at 34-35 (internal citations and footnotes omitted).

       There is no bright-line test by which to assess the sufficiency of the trial court‟s
factual findings. Nevertheless, the general rule is that “the findings of fact must include
as much of the subsidiary facts as is necessary to disclose to the reviewing court the steps
by which the trial court reached its ultimate conclusion on each factual issue.” In re
Estate of Oakley, 2015 WL 572747, at *10 (quoting Lovlace, 418 S.W.3d at 35).

        In this case, we have the benefit of comprehensive and detailed findings of fact by
the trial court, which fully comply with the Rule 52.01 mandate. We review a trial court‟s
factual findings de novo, accompanied by a presumption of the correctness of the finding
of fact, unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d);
see Boarman v. Jaynes, 109 S.W.3d 286, 289-90 (Tenn. 2003). For the evidence to
preponderate against a trial court‟s finding of fact, it must support another finding of fact
with greater convincing effect. Walker v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 71
(Tenn. Ct. App. 2000); Realty Shop, Inc. v. R.R. Westminster Holding, Inc., 7 S.W.3d
581, 596 (Tenn. Ct. App. 1999). We will also give great weight to a trial court‟s factual
findings that rest on determinations of credibility and weight of oral testimony. Estate of
Walton v. Young, 950 S.W.2d 956, 959 (Tenn. 1997); Woodward v. Woodward, 240
S.W.3d 825, 828 (Tenn. Ct. App. 2007); B & G Constr., Inc. v. Polk, 37 S.W.3d 462, 465
(Tenn. Ct. App. 2000).

       The presumption of correctness in Tenn. R. App. P. 13(d) applies only to findings
of fact, not to conclusions of law. Blair v. Brownson, 197 S.W.3d 681, 683-84 (Tenn.
2006). Accordingly, no presumption of correctness attaches to the trial court‟s
conclusions of law, and our review is de novo. Id.

                                      I. NONRECOURSE NOTE

        Dr. Bush contends that the trial court erred in finding that the note was intended by
all parties to be a full recourse note. He contends it was a nonrecourse note. In support of
this contention, he relies on the fact that he signed the Third Party Agreement paragraph
on page three of the Original Note.3 The Third Party Agreement reads:

        3
          Mrs. Bush makes the same argument; however, as noted earlier, she failed to provide citations
to the authorities and appropriate references to the record to support her claims as required by Tenn. R.
App. P. 27(a)(7). As such, she waived the issue. Moreover, Mrs. Bush did not sign the Third Party
Agreement paragraph. Therefore, there is no documentation to support the argument that she is not liable
on the Note.


                                                  -7-
      I own the Property described in the Security section of this Note and
      Security Agreement and I agree to give you a security interest in that
      Property. I am not personally liable for payment of this debt. If the
      Borrower defaults, my interest in the secured Property may be used to
      satisfy the Borrower‟s debt. By signing, I agree to the terms of this Note
      and Security Agreement and acknowledge receipt of a complete copy of
      this Loan.

       The Original Note was admitted into evidence, and a scanned copy of the
signature page, as executed by the parties, appears as follows:




                                        -8-
       Dr. Bush does not dispute that he is a borrower under the note. He argues,
however, that he is not personally liable under the note because the Third Party
Agreement paragraph is a “valid and enforceable attached separate rider and provision of
the original contractual loan agreement” that he negotiated with Reliant‟s President,
DeVan Ard. Reliant insists that the note was intended by all parties to be a full recourse
note. Mr. Ard testified that “all of the communication that the bank had with [Dr.] Bush,
the term sheet, the loan approval form, all of the communication was consistent that [Dr.
Bush] would be personally liable on the loan.” Reliant also insists that Dr. Bush‟s
signature of the Third Party Agreement paragraph was a mistake because it contradicts all
other provisions of the note and because a borrower cannot be a third-party to his or her
own loan. The outcome of this issue rests on a contractual interpretation of the note
between Reliant and the Bushes.

       “The cardinal rule for interpretation of contracts is to ascertain the intention of the
parties and to give effect to that intention consistent with legal principles.” Rainey v.
Stansell, 836 S.W.2d 117, 118-19 (quoting Bob Pearsall Motors, Inc. v. Regal Chrysler-
Plymouth, Inc., 521 S.W.2d 578 (Tenn. 1975)). A primary objective in the construction of
a contract is to discover the intention of the parties from a consideration of the whole
contract. Mckay v. Louisville & N. R. Co., 182 S.W. 874, 875 (Tenn. 1916). When
resolving disputes concerning contract interpretation, we are to ascertain the intention of
the parties based upon the “usual, natural, and ordinary meaning” of the contractual
language. Rainey, 836 S.W.2d at 119. “All provisions in the contract should be construed
in harmony with each other, if possible, to promote consistency and to avoid repugnancy
between the various provisions of a single contract.” Guiliano v. Cleo, Inc., 995 S.W.2d
88, 95 (Tenn. 1999) (citing Rainey, 836 S.W.2d at 118-19).

       If the contract language is unambiguous, the written terms control, not the
“unexpressed intention of one of the parties.” Sutton v. First Nat’l Bank of Crossville,
620 S.W.2d 526, 530 (Tenn. Ct. App. 1981). “The language of a contract is ambiguous
when its meaning is uncertain and when it can be fairly construed in more than one way.”
Gredig v. Tennessee Farmers Mut. Ins. Co., 891 S.W.2d 909, 912 (Tenn. Ct. App. 1994)
(citing Farmers-Peoples Bank v. Clemmer, 519 S.W.2d 801, 805 (Tenn. 1975)). “A
strained construction may not be placed on the language used to find ambiguity where
none exists.” Id. (quoting Farmers-Peoples Bank, 519 S.W.2d at 805). “An ambiguous
provision in a contract generally will be construed against the party drafting it.” Allstate
Ins. Co. v. Watson, 195 S.W.3d 609, 612 (Tenn. 2006) (citations omitted). When a
contract provision is ambiguous, courts can use parol evidence, including the contracting
parties‟ conduct and statements regarding the disputed provision, to guide the court in
construing and enforcing the contract. Id. In such situations, interpretation is a question of
fact. Adkins v. Bluegrass Estates, Inc., 360 S.W.3d 404, 412 (Tenn. Ct. App. 2011).

      In the instant case, the trial court specifically found the Original Note ambiguous
in terms of the interplay between the language identifying the borrowers and the

                                            -9-
borrowers‟ personal liability and the language contained in the Third Party Agreement
paragraph. We agree.

        The first page of the note provides: “Borrower: „I‟, „Me‟ and „My‟ Means Each
Borrower Below Jointly and Severally,” and identifies the borrowers as “BYRON V
BUSH, DDS AND KELLY D BUSH.” The paragraph immediately following the
foregoing provides: “NOTE: For value received, I promise to pay to you, or any other
holder, at the address above, the principal sum of: One Million Five Hundred Thousand
and 00/100 [$1,500,000.00].” Consistent with their designation on page one as the
borrowers, the Bushes also signed as the borrowers on page three of the Original Note
where each of them acknowledged that they “understand and agree that my obligation is
to pay this loan amount,” and that “[t]his obligation is separate and independent of any
other person‟s obligation to pay it.” Dr. and Mrs. Bush also agreed that in the event of
default, they would pay all reasonable costs incurred by Reliant Bank to collect the note,
including attorneys‟ fees, court costs, and other legal expenses. All of this indicates a
clear intent by the parties that the note was to be a full recourse note.

       In addition to signing as borrower, Dr. Bush―but not Mrs. Bush―signed the
Third Party Agreement paragraph, which identifies him as the owner of the security
interest of the note and states that he, Dr. Bush, is not personally liable. Dr. Bush insists
that this paragraph is unambiguous and reflects the true intentions of the parties.
Essentially, he requests that we ignore all other provisions of the Original Note wherein
he and Mrs. Bush are specifically and repeatedly identified as the borrowers under the
note with an obligation to pay the loan amount. We decline to do so because “in
determining whether or not there is such an ambiguity as calls for interpretation, the
whole instrument must be considered, and not an isolated part, such as a single sentence
or paragraph.” Adkins, 360 S.W.3d at 412-13.

        Accordingly, in construing the language of the Third Party Agreement paragraph
in the context of the note as a whole, see id., we can only conclude that the Original Note
is susceptible to more than one reasonable interpretation as to Dr. Bush‟s personal
liability, and is, therefore, ambiguous. We therefore affirm the trial court‟s finding that
the language is ambiguous.

       If a contract is ambiguous, a court may look beyond the four corners of the
document and consider extrinsic parol evidence in order to determine the parties‟
intention.4 Cummings Inc. v. Dorgan, 320 S.W.3d 316, 333 (Tenn. Ct. App. 2009)

        4
          To the extent Dr. Bush challenges the admission of extrinsic evidence, although our review of
the record indicates this contention is without merit, we will not unduly lengthen this opinion with further
discussion of this issue because no objection was made to the introduction of extrinsic evidence at trial.
“Failure to object [to] evidence in a timely and specific fashion precludes taking issue on appeal with the
admission of the evidence.” Ottinger v. Stooksbury, 206 S.W.3d 73, 78 (Tenn. Ct. App. 2006) (quoting
                                                                                            (continued…)
                                                  - 10 -
(citation omitted). Accordingly, we now consider whether the trial court, in construing
the Original Note with the help of the parol evidence, arrived at the correct interpretation.

       In ruling on the intended liability of the Bushes under the note, the trial court
concluded that both Dr. and Mrs. Bush are personally liable to Reliant for the entire
amount of the Original Note including interest accrued and attorneys‟ fees, less the fair
market value of StarPointe as of the foreclosure sale date. The trial court‟s conclusion is
based on the finding that the promissory note made by the Bushes to the order of Reliant
was intended by all parties to be a full recourse note as to both Dr. and Mrs. Bush. In
arriving at this conclusion, the trial court‟s order states that it considered all information
presented including the testimony of witnesses at the trial, and all exhibits including but
not limited to the Original Note, the Term Sheet, the Loan Application, and the
Forbearance Agreement. The trial court also set forth its specific findings of fact and
conclusions of law on this issue. The ones that are relevant to this issue read as follows:

              2. Dr. Bush . . . purchased [StartPointe]. . . for $615,000.00, with a
       view to developing that property successfully. . . .

       ....

               5. The Term Sheet is a letter to Dr. and Mrs. Bush from . . . Reliant
       Bank. . . . The Term Sheet refers to Reliant Bank as the lender and Byron
       Bush as the borrower, with no guarantor. This is a clear indication that Dr.
       Bush would be personally liable for the loan in question. On the other hand,
       if the loan was to be made to a yet-to-be-named business entity, then Dr.
       Bush and Mrs. Bush would be required to guarantee the loan.

              6. The Term Sheet provides that the loan . . . would not exceed 75%
       of the appraised value as determined by an independent bank-engaged
       appraisal.

              7. Reliant Bank obtained an appraisal of the StarPointe property
       from Donnell Appraisal Services reflecting a value of $2,400,000, which
       clearly was in excess of the then-contemplated loan amount of $1,500,000
       and results in a loan-to-value ratio of less than 75%.

       ....



Grandstaff v. Hawks, 36 S.W.3d 482, 488 (Tenn. Ct. App. 2000)). We further note that Dr. Bush offered
his own parol evidence regarding the Original Note, and he does not argue that the court erred in
admitting his parol evidence.


                                               - 11 -
       10. On November 30, 2007, Dr. and Mrs. Bush signed a Commercial
Loan Application. This document reflects that the loan is an individual loan
to borrowers Byron V. Bush, DDS and Kelly D. Bush. . . .

       11. The Commercial Loan Application was signed by Dr. and Mrs.
Bush on November 30, 2007, and reflects that they intended to apply for
joint credit. This is further evidence that it was contemplated by Dr. and
Mrs. Bush that this loan would be a recourse loan and that they would be
responsible for paying the debt when it became due.

       12. On November 30, 2007, Dr. and Mrs. Bush signed a
Multipurpose Note and Security Agreement (the “Original Note”) . . . . The
Court characterizes the Original Note as ambiguous at best in terms of the
interplay between the language of the document establishing the names of
the borrowers and the obligations contained in the Note and the language of
the Third Party Agreement paragraph. Because of the ambiguity contained
in the Original Note, the Court is authorized to look to collateral parol
evidence to resolve that ambiguity.

       13. [T]he first page of the Original Note clearly reflects that the
borrower includes “I, me, my” and means each borrower jointly and
severally. . . .

       14. The Original Note reflects that the purposes of the loan were to
refinance the Regions Bank loan, provide additional funds to reimburse Dr.
and Mrs. Bush for the personal funds that had been used in the project, and
provide funds for future site development.

       15. The Court finds paragraph 3 on page 2 of the Original Note to be
instructive, specifically the portion reading “I understand and agree that my
obligation is to pay this loan amount. This obligation is separate and
independent of any other person‟s obligation to pay it.”

       16. The Original Note provides that in the event of a default, Reliant
Bank has the right, without notice, to accelerate the maturity date of the
note and require all of the principal, interest and unpaid charges to be due
and payable immediately. Dr. and Mrs. Bush also agreed that in the event
of default, they would pay all reasonable costs incurred by Reliant Bank to
collect the note, including attorneys‟ fees, court costs, and other legal
expenses.




                                   - 12 -
       17. Dr. and Mrs. Bush both signed the Original Note as borrowers on
page 3. This is consistent with their designation as borrowers on page 1 of
the Original Note.

....

        19. Dr. and Mrs. Bush are the borrowers under the Note.
Accordingly, the Court considers the statement in the Third Party
Agreement that Dr. Bush‟s interest in the secured property may be used to
satisfy the borrower‟s debt “if the borrower defaults” to be a non-sequitur.
The Court also considers the last sentence of Third Party Agreement to be
redundant. Dr. Bush signed the Original Note and the Deed of Trust. There
is no reason for Dr. Bush to separately acknowledge the terms of those
documents. Based on the foregoing, there is an ambiguity created within
the Original Note . . . .

       20. Contemporaneous with the execution of the Original Note, the
parties executed the Deed of Trust. The Deed of Trust is instructive to the
Court because it reflects that Byron V. Bush, DDS and Kelly D. Bush are
the debtors. They are not third parties. They are the makers of the Note.
They are the makers of the Deed of Trust. Reliant Bank is the creditor and
beneficiary of the Deed of Trust.

....

      25. On January 2, 2010, Dr. and Mrs. Bush executed another
Commercial Loan Application to renew the Original Note. This
Commercial Loan Application reflects that Dr. and Mrs. Bush are the
borrowers, individually.

....

       28. [Dr.] and Mrs. Bush executed a second Multipurpose Note and
Security Agreement dated January 14, 2010 (the “January 2010 Renewal
Note”), again reflecting that Dr. and Mrs. Bush are the borrowers.

....

       31. [I]t is instructive to the Court that on the January 2010 Renewal
Note, Dr. and Mrs. Bush signed as borrowers, and there is no signature
under the Third Party Agreement provision.

....

                                   - 13 -
      50. [O]n August 19, 2011, Dr. and Mrs. Bush signed another
Multipurpose Note and Security Agreement (the “August 2011 Renewal
Note”) which was dated May 14, 2011.

        51. The August 2011 Renewal Note changed the interest rate on the
loan . . . . The August 2011 Renewal Note, however, requires that Dr. and
Mrs. Bush make six payments of only $2,000, which is approximately one-
third of what would have been required if Reliant Bank had demanded all
of the interest to which it was entitled on a monthly basis.

       52. The purpose of the August 2011 Renewal Note, as clearly stated
on page 1, was to extend the maturity date for six months and modify the
payment structure and rate. There is no signature here for the Third Party
Agreement provision, and Reliant Bank did not print any name under that
provision to be signed.

....

      55. Dr. Bush consistently has testified that all of the documents that
were provided to him by Reliant Bank for signature were provided to him
in advance. He also testified that he reviewed those documents and
understood them before he went to Reliant Bank and signed them. . . .

       56. Dr. and Mrs. Bush went to Reliant Bank on February 28, 2012
and signed the Forbearance Agreement. The Court finds this document to
be important in discerning the intent of the parties when the loan was first
made and the Original Note was signed. . . .

        57. Importantly, Reliant Bank agreed in the Forbearance Agreement
that if Dr. and Mrs. Bush would pay the sum of $1,400,000, Reliant Bank
would deem Dr. and Mrs. Bush‟s obligations to be satisfied. This is, in the
Court‟s mind, a serious concession to Dr. and Mrs. Bush, essentially
writing off approximately $150,000 in principal and accrued interest.

        58. Reliant Bank wanted to be paid the legal fees it incurred to
prepare the Forbearance Agreement. Dr. Bush refused to pay those, and that
provision in paragraph 9(b) was deleted. Dr. and Mrs. Bush and Mr. Belote
initialed that change.

      59. Paragraph 15 of the Forbearance Agreement entitled “Final
Agreement” was . . . designed to put Dr. and Mrs. Bush on notice that this
was the last relief that Reliant Bank would agree to give. . . .

                                   - 14 -
              60. On July 23, 2012, Reliant Bank sent a letter to Dr. and Mrs. Bush
       declaring them to be in default, stating that all obligations under the note
       were accelerated and demanding payment within five days. Payment was
       not made.

       ....

              74. Dr. Bush has gone to great lengths to argue to the Court that his
       understanding with Reliant Bank concerning this obligation was a non-
       recourse transaction. However, as far as Mrs. Bush is concerned, there is
       absolutely no evidence in the record that any document she signed would
       be non-recourse in any way. As far as Mrs. Bush is concerned, the only
       evidence before the Court is that she is fully responsible for the entire
       indebtedness under the terms of the Note. As far as Dr. Bush‟s testimony is
       concerned regarding the conversations that he allegedly had with various
       individuals, his testimony is simply not supported by the record, and the
       Court does not find it to be credible.

       All of the evidence in this case except the testimony of Dr. Bush which the trial
court found was not credible, supports a finding that Dr. Bush knew that he was
personally liable under the note. As noted earlier, we presume that the trial court‟s
findings of fact are correct unless the preponderance of the evidence is otherwise. Walker
v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 71 (Tenn. Ct. App. 2000); Realty Shop, Inc.
v. R.R. Westminster Holding, Inc., 7 S.W.3d 581, 596 (Tenn. Ct. App. 1999). Further, the
trial court‟s findings are accorded strong deference when they are based on witness
testimony, “especially where issues of credibility and weight of oral testimony are
involved.” Pierce, 2008 WL 2557363, at *6 (quoting Allstar Consulting Group, 2007 WL
120046, at *5.

        Considering the evidence in this record, we have concluded that the evidence does
not preponderate against the trial court‟s findings, and we agree with the court‟s
conclusion based upon these findings. We therefore affirm the trial court‟s holding that
the note is a full recourse transaction and that Dr. and Mrs. Bush are both personally
liable under the note.

                                II. DEFICIENCY JUDGMENT

        When a foreclosure sale of real property secured by a deed of trust fails to satisfy
an indebtedness, the creditor may recover a “deficiency judgment in an amount sufficient
to satisfy fully the indebtedness.” Tenn. Code Ann. § 35-5-118(a). This statute, which
applies to all trustee or foreclosure sales of real property secured by a deed of trust for
which the first foreclosure publication is given on or after September 1, 2010, provides

                                           - 15 -
that, absent fraud, collusion, misconduct, or irregularity in the foreclosure sale, “the
deficiency judgment shall be for the total amount of indebtedness prior to the sale plus
the costs of the foreclosure and sale, less the fair market value of the property at the time
of the sale.” Tenn. Code Ann. § 35-5-118(b). In such cases, “[t]he creditor shall be
entitled to a rebuttable prima facie presumption that the sale price of the property is equal
to the fair market value of the property at the time of the sale.” Id. If a defendant raises
inadequacy of the foreclosure price as a defense to the deficiency claim, the defendant
“must prove by a preponderance of the evidence that the property sold for an amount
materially less than the fair market value of property at the time of the foreclosure sale.”
Tenn. Code Ann. § 35-5-118(c); see also Lost Mountain Dev. Co. v. King, No. M2004-
02663-COA-R3-CV, 2006 WL 3740791, at *8 (Tenn. Ct. App. Dec. 19, 2006) (“[T]he
issue in deficiency actions is the fair market value of the property at the time it was
sold.”).

        Dr. Bush contends that the foreclosure sale process involved fraud, misconduct, or
irregularity. According to him, Reliant knew of two appraisals prior to the foreclosure
sale and alleges: “it is fraud, misconduct or irregular for [Reliant] to arbitrarily use for
their sole benefit the lower and least accurate of two appraisals at foreclosure to
determine the Fair Market Value of the highest and Best Use, when questionable
appraiser selection protocol was repeatedly used by [Reliant] when only the [Bushes]
higher appraisal was currently-zoned and currently appraised at the date of foreclosure
sale. . . .”5 In addition, both Dr. and Mrs. Bush contend the trial court erred by finding
that the foreclosure sale price of $1,050,000 was not materially less than the fair market
value of the property at the time of the foreclosure sale. We shall first address Dr. Bush‟s
contention that Reliant engaged in “fraud, misconduct or irregularity.”

                                A. Fraud, Misconduct, or Irregularity

       Dr. Bush contends there was fraud, misconduct, or irregularity in connection with
the selection of Ben Jones as Reliant‟s appraiser and that Reliant‟s decision to use Mr.
Jones‟s appraisal rather than Mr. Boozer‟s was “arbitrary.” Mrs. Bush does not allege
fraud but she makes the general assertion that “misconduct exists in the foreclosure
process.”
       5
           The issue as stated by Dr. Bush reads:

       a. Whether in the presence of two appraisals known by the Plaintiff and their attorneys
       prior to foreclosure, whose values differ by 46% or $835,000, it is fraud, misconduct or
       irregular for a Tennessee lending institution to arbitrarily use for their sole benefit the
       lower and least accurate of two appraisals at foreclosure to determine the Fair Market
       Value for the Highest and Best Use, when questionable appraiser selection protocol was
       repeatedly used by Plaintiff and when only the Defendants/Appellant‟s higher appraisal
       was currently-zoned and currently appraised at the date of foreclosure sale; and whether
       the “prima fascia presumption” no longer exists per Tenn. Code Ann. # 35-5-118(b).


                                                    - 16 -
       In rejecting the argument that Reliant engaged in fraud or misconduct when it
selected Mr. Jones to appraise StarPointe, the trial court made the following pertinent
findings of fact:

             33. [In September 2010, between] . . . the time the January 2010
      Renewal Note was signed and its maturity on January 14, 2011, Reliant
      Bank solicited proposals from appraisers to appraise [StarPointe]. Mr. Ben
      Jones was the successful bidder. He appraised [StarPointe] and found an
      “as is” market value of $970,000 and a liquidation value of $680,000.
      There is no evidence that indicates that Dr. and Mrs. Bush were told about
      Mr. Jones‟ appraisal at that time.

              34. There was a great deal of effort made on behalf of [Defendants]
      at trial to establish that there was some sort of collusion between Reliant
      Bank and Mr. Jones, or that there was some sort of inappropriate procedure
      that was followed, or that Reliant Bank was remiss in continuing to use Mr.
      Jones to appraise [StarPointe]. The Court finds that the evidence simply
      does not establish that conclusion.

              35. Based on the consistent testimony of Reliant Bank officers, it is
      Reliant Bank‟s policy that the lending officer does not deal with the
      appraiser. Reliant Bank‟s procedure in requesting an appraisal is for the
      lending officer to ask an administrative assistant to obtain an appraisal on
      the property to be valued. The administrative assistant then sends out a
      request for proposals to several appraisers. Each appraiser responds and
      either agrees or does not agree to appraise the property. If the appraiser
      agrees to appraise the property, the appraiser provides Reliant Bank with
      his fee and estimated turnaround time.

            36. Based upon the needs of Reliant Bank in terms of speed and also
      the expediency of the case in terms of cost, the lending officer, without
      knowing who the appraiser is, either approves the low bidder or does not
      approve the low bidder.

              37. Reliant Bank‟s lending committee annually reviews and
      approves a list of appraisers. The only inconsistency in the testimony that
      the Court heard on this issue is whether Reliant Bank‟s approved appraiser
      list is a rotating list. There was some testimony that the persons to whom
      requests for appraisals are sent would be rotated, and that is not consistent.
      But otherwise, the testimony is very consistent that it is a blind request. The
      lending officer does not know which appraiser is selected.


                                          - 17 -
             38. Mr. Jones appraised [StarPointe] for the first time in September
      2010. He then appraised it again in September 2012, just before the
      proposed foreclosure. Mr. Jones appraised the property in January 2013,
      within 30 days of the time Reliant Bank purchased the property at
      foreclosure on December 4, 2012, because bank regulations require the
      appraisal within 30 days of the time Reliant Bank acquires the property.
      Mr. Jones appraised the property again in December 2013.

             39. The Court finds that the methodology used by Reliant Bank was
      consistent. It is understandable that the low bid for each appraisal could
      have come from Mr. Jones because he had appraised the property
      previously. It would be less expensive for Mr. Jones to bid as a reappraisal,
      meaning he would simply have to update his prior appraisal as opposed to
      preparing a brand new appraisal, which would require a higher fee. That
      may explain why Mr. Jones ended up appraising [StarPointe] four of the six
      times it has been appraised.

             40. The Court also does not find that the relationship between John
      Souder, who worked for Mr. Jones, and Reliant Bank was inappropriate in
      any way. Mr. Souder is the son of a friend of one of Reliant Bank‟s
      officers. Mr. Souder needed a job and wanted to be in the appraisal field.
      Mr. Souder‟s father asked the Reliant Bank officer to let him know if he
      heard of any available jobs in that field. A referral was made to Mr. Jones‟
      company. The Reliant Bank officer then learned that Mr. Souder had gone
      to work for Mr. Jones because he got positive feedback about Mr. Souder
      from Mr. Jones. There is nothing to indicate to the Court that there is any
      conflict of interest or inappropriate behavior involved the foregoing.

             41. The Court finds that the suggestion of Dr. and Mrs. Bush that the
      Court should not give weight to Mr. Jones‟ appraisals, which is based on
      their effort to show that Reliant Bank did not follow proper procedures or
      engaged in some kind of inappropriate behavior in selecting Mr. Jones, is
      not supported by the record.

             42. The Court also finds that the suggestion that Reliant Bank
      wanted to influence the value of the appraisal is not supported by the
      record. . . .

       Contrary to the allegations of fraud, misconduct, collusion, or irregularity, the
record supports the trial court‟s finding that Reliant followed proper procedures in
selecting an appraiser and that Reliant did not influence the value of the appraisal for
which it relied upon in placing its bid at the foreclosure sale.


                                         - 18 -
        The trial court also rejected Dr. Bush‟s allegation that it was “fraud, misconduct or
irregular” for Reliant to “arbitrarily use . . . the lower and least accurate of two appraisals
at foreclosure to determine the Fair Market Value for the Highest and Best Use,” finding
as follows:

       [T]he evidence in this case establishes that Mr. Boozer‟s appraisal was in
       Dr. Bush‟s possession, but, of course, there was no way for Reliant Bank to
       evaluate the appraisal without having a copy in its possession. Reliant Bank
       also had in its possession its own appraisal performed by Mr. Jones in
       September 2012 that reflects a market value of $1,050,000. The fact that
       Dr. Bush had an appraisal by Mr. Boozer and shared the number with
       Reliant Bank, without sharing the content of the appraisal with Reliant
       Bank, is not of much instruction to the Court. The Court does not place any
       weight on that part of the evidence.

(Emphasis added).

       The record amply supports the trial court‟s finding, which largely depended upon
its findings of credibility, and we give considerable deference to the trial court‟s
credibility findings. Pierce, 2008 WL 2557363, at *6 (quoting Allstar Consulting Group,
2007 WL 120046, at *5. Despite Dr. Bush‟s allegations that Reliant “arbitrarily” relied
on Mr. Jones‟s appraisal, the record supports the trial court findings that Reliant was not
afforded an opportunity to evaluate the Boozer Appraisal prior to the foreclosure sale
because it never received a copy of the appraisal and, as such, was justified in relying on
the appraisal in its possession.

       Specifically, Rick Belote, Reliant‟s Senior Vice President, testified that, although
Dr. Bush sent an email to Reliant two days prior to the foreclosure sale in which he stated
that he had an appraisal estimating a higher value for the property, Dr. Bush did not
provide a copy of the Boozer Appraisal. Mr. Belote further testified that the first time he
reviewed a copy of the Boozer Appraisal was two weeks before the trial in August 2014.
When Dr. Bush was asked whether he provided a copy of the Boozer Appraisal to Reliant
prior to the foreclosure sale, Dr. Bush equivocated “I believe so,” “I don‟t know for a
fact,” and “I thought I did.” When asked if he discussed the contents of the Boozer
Appraisal with anyone at Reliant prior to the foreclosure sale, Dr. Bush testified that he
“did not have direct knowledge that [he] had a discussion with [Reliant] regarding that.”

        For the foregoing reasons, we find that the evidence does not preponderate against
the trial court‟s finding that there was no fraud, collusion, misconduct, or irregularity in
connection with the foreclosure process.




                                            - 19 -
                                      B. Mr. Jones‟s Appraisals

       Dr. and Mrs. Bush contend the trial court erred by relying on Mr. Jones‟s
appraisals. Both at trial and on appeal, they essentially argue that Mr. Jones‟s appraisals
are not credible because they are untimely, based on an incorrect opinion of highest and
best use of StarPointe, and do not consider two letters of interest that Dr. Bush received
from a hotel developer.

       Notwithstanding these arguments, the trial court found the appraisals by Mr. Jones
were credible. The court found that Mr. Jones‟s supported his opinion concerning the
highest and best use for the property with substantial data and analysis. The court further
found that Reliant was justified in relying on the appraisal of Mr. Jones whose testimony
confirmed that as of the foreclosure sale date, StarPointe had a value of $1,050,000. The
court found that it was undisputed that after Reliant acquired the property on December
4, 2012, it listed the property for sale and, by the time of the trial of this case, had
reduced the asking price to $870,000. The court also noted that no buyer had been found,
and in fact, no offer had ever been received by Reliant for the purchase of the property.6

        The trial court‟s findings related to the differing opinions of fair market value and
the property‟s highest and best use are supported by the testimony of the Bushes‟ own
witness, Marvin Maes. Mr. Maes, another appraiser, did not appraise Starpointe himself.
Instead, he reviewed the appraisals provided by Mr. Jones and Mr. Boozer, and testified
that the appraisals prepared by Mr. Jones and Mr. Boozer were credible. As to the
difference in fair market value between the appraisals prepared by Mr. Jones and Mr.
Boozer, Mr. Maes attributed the variance to the differing opinions of the property‟s
highest and best use. He testified that two certified appraisers can appraise the same
property and come to a different conclusion as to the property‟s highest and best use, and
that the fact two appraisers could come to different conclusions of value does not render
either appraisal deficient, as along as the appraisal is credible. Mr. Maes did however
testify that he favored the Boozer Appraisal because the property was already zoned for
the stated highest and best use.

      Concerning Mr. Boozer‟s opinion of the fair market value of the property, Mr.
Maes testified that the $1,885,000 estimate is “the bulk sell-out price, and . . . they

        6
          Dr. and Mrs. Bush contend that the trial court committed “reversible error” by considering the
listed sale price of StarPointe two years after foreclosure as evidence of fair market value. See Lost
Mountain Dev. Co., 2006 WL 3740791, at *8 (“[T]he issue in deficiency actions is the fair market value
of the property at the time it was sold.”). We find no merit to this contention because the trial court‟s
ruling clearly indicates that the only value evidence it relied upon was the value opinions of Mr. Jones and
Mr. Boozer. In this case, the trial court‟s consideration of the listed sale price aided the court in its
assessment of the appraisals prepared by Mr. Jones and Mr. Boozer.


                                                  - 20 -
probably could have gotten that eventually.” (Emphasis added). Furthermore, when Mr.
Maes was informed that Reliant listed the property for sale after it acquired the property
on December 4, 2012, and the property was still listed even though the listing price had
been reduced to $870,000, and no offer had ever been received by Reliant, “Mr. Maes
expressed surprise that the StarPointe property still has not sold, even after it was listed
for $870,000.”

        Despite the foregoing, Dr. and Mrs. Bush contend that Mr. Jones‟s appraisals with
effective dates of September 3, 2012, and January 2, 2013, are untimely and thus not
probative of the value of StarPointe at the date of foreclosure, December 4, 2012. We
find not merit to this contention because this court has held that appraisals done within
weeks of the foreclosure date is sufficient to show the fair market value of the properties
at the time of foreclosure. Halliman v. Heritage Bank, No. M2014-00244-COA-R3-CV,
2015 WL 1955448, at *5 (Tenn. Ct. App. Apr. 30, 2015) (citing State of Franklin Bank v.
Riggs, No. E2010-01505-COA-R3-CV, 2011 WL 5090888, at *6 (Tenn. Ct. App. Oct.
27, 2011) (appraisal that provided a range of values for the property shortly before the
foreclosure sale and after the foreclosure sale was sufficient evidence to show the fair
market value of the property at the time of foreclosure)). Further, Mr. Jones testified that
his opinion as to fair market value would not have changed as of the date of the
foreclosure sale.

       The Bushes also contend that Mr. Jones‟s appraisals are inaccurate because Mr.
Jones did not consider the two letters of interest that Dr. Bush received from a hotel
developer. The first letter of intent, dated November 1, 2012, proposed a purchase price
of $900,000 for “approximately [two] useable acres” of StarPointe, leaving
approximately three acres unsold. It was not accepted and there was no written
counteroffer from Dr. Bush. The second letter of intent, dated November 12, 2012,
increased the proposed purchase price to $975,000 for “approximately [two] useable
acres.” Dr. Bush did not accept the second letter of intent; instead, Dr. Bush submitted a
counteroffer in a letter he identified as a “Conditional Letter to LOI.” The hotel developer
did not accept the counteroffer; thus, the parties never agreed upon a letter of intent.

        The trial court found that the letters of intent had little weight concerning the value
of StarPointe, and the evidence does not preponderate against this finding. Dr. Bush did
not accept either letter of intent. Mr. Maes testified that a letter of intent has little value to
an appraiser if both parties have not accepted all of its terms and signed it. He further
stated that when he prepares an appraisal, he considers the letters of intent as information
of interest in the property, but only gives it “50 percent” weight because “whether you get
a meeting of the minds or not is probably 50/50 . . . .” In this case, Mr. Maes did not see
the letters of intent at issue and Dr. Bush‟s “Conditional Letter to LOI” until he was
testifying at trial. After reviewing them, the trial court asked Mr. Maes: “If you were
doing the appraisal and were given these papers . . . , would you conclude that they were
of much benefit to you in reaching an opinion of value?” Mr. Maes responded by stating:

                                              - 21 -
“I would say the benefit to me in reaching the opinion of value was that if [Dr.] Bush
took this thing, it would knock the value below [$]1,885,000. . . .” Significantly, Mr.
Maes went on to explain that Dr. Bush‟s conditional letter pointed out that what the
potential buyer was proposing would create problems for him; specifically, he would
have to recreate the site plan for the property, which would materially affect his ability to
develop the remainder of the property.

       For the foregoing reasons, the evidence does not preponderate against the trial
court‟s finding that Mr. Jones‟s $1,050,000 valuation of the property was credible.

                                   C. “Materially Less”

        The Bushes also contend the trial court erred in finding the foreclosure price of the
property at foreclosure was not “materially less” than fair market value. In support of this
contention, they rely on the appraisal of Mr. Boozer and assert that the trial court erred by
failing to accept his valuation of StarPointe as “more credible.”

       Tennessee Code Annotated § 35-5-118 does not provide a definition of the
“materially less” standard. Eastman Credit Union v. Bennett, No. E2015-01339-COA-
R3-CV, 2016 WL 1276275, at *9 (Tenn. Ct. App. Mar. 31, 2016) (citations omitted). Our
General Assembly has explained that, “It‟s a very difficult burden for the debtor to
overcome. . . . You have to show a „strong‟ difference, a „material‟ difference.” Halliman
v. Heritage Bank, No. M2014-00244-COA-R3-CV, 2015 WL 1955448, at *6 (Tenn. Ct.
App. Apr. 30, 2015) (citing GreenBank v. Sterling Ventures, LLC, No. M2012-01312-
COA-R3-CV, 2012 WL 6115015, at *9 (Tenn. Ct. App. Dec. 7, 2012) (quoting
Representative Vance Dennis, the Sponsor of HB 3057 in the Tennessee House of
Representatives)). In prior cases analyzing this statute, we have refrained from
establishing a “bright-line percentage, above or below which the statutory presumption is
rebutted.” Eastman Credit Union, 2016 WL 1276275, at *10 (citing FirstBank v. Horizon
Capital Partners, LLC, No. E2013-00686-COA-R3-CV, 2014 WL 407908 at *3 (Tenn.
Ct. App. Feb. 3, 2014).

       The trial court concluded that the Bushes did not overcome the statutory
presumption that the foreclosure sale price of StarPointe is equal to the fair market value
of the property at the time of the sale. Tenn. Code Ann. § 35-5-118(b). The court‟s order
reads as follows:

       Based on an analysis of the totality of the circumstances, Dr. and Mrs. Bush
       have not overcome the presumption set forth in T.C.A. § 35-5-118(b). Dr.
       and Mrs. Bush have not shown that the $1,050,000 paid by Reliant Bank at
       foreclosure was materially less than fair market value at the time of
       foreclosure. Even if the Court were to agree with [the Bushes] and conclude
       that Eric Boozer‟s opinion of value is superior to the opinion of value

                                           - 22 -
        offered by Ben Jones, and accept the result reached by Eric Boozer of fair
        market value, $1,885,000, based upon the standard set forth in FirstBank v.
        Horizon Capital Partners, LLC et al., [No. E2013-00686-COA-R3-CV,
        2014 WL 407908 (Tenn. Ct. App. Feb. 3, 2014)], the Court would have to
        presume that the appraisal price set by Eric Boozer was equal to fair market
        value. As stated by the Court of Appeals in FirstBank “such is not the
        standard.” Dr. and Mrs. Bush have offered no credible evidence to establish
        that the price paid by Reliant Bank at foreclosure on December 4, 2012 was
        “materially less” than the fair market value of the subject property other
        than the Boozer appraisal. The unsigned, and unacceptable, letter of intent
        is of no probative value to the Court just as the lease/purchase agreement
        was of no probative value to the Court in FirstBank.

       In this case, the presumptive fair market value of the property is $1,050,000, see
Tenn. Code Ann. § 35-5-118(b), and this value is corroborated by Mr. Jones‟s two
appraisals of the same value. At trial, the Bushes attempted to rebut the fair-market-value
presumption by providing evidence (i.e. the Boozer Appraisal) indicating that StarPointe
was worth $1,885,000; however, that evidence was entitled to no more and no less
credibility than Mr. Jones‟s appraisals until the specifics are considered. As previously
discussed, the Bushes‟ own witness, Mr. Maes, opined that all of the appraisals by Mr.
Jones and the appraisal by Mr. Boozer were credible. He also acknowledged that
competent appraisers often base their appraisals on different uses, meaning highest and
best uses. Although Mr. Maes favored the Boozer Appraisal because the property was
already zoned for the highest and best use applied by Mr. Boozer, Mr. Maes went on to
qualify his assessment of Mr. Boozer‟s value of StarPointe by stating that the $1,885,000
estimate is “the bulk sell-out price, and . . . they probably could have gotten that
eventually.” (Emphasis added). This statement is significant because evidence of fair
market value must be “at the time of foreclosure.” See Capital Bank v. Brock, No. E2013-
01140-COA-R3-CV, 2014 WL 2993844, at *6 (Tenn. Ct. App. June 30, 2014); Lost
Mountain, 2006 WL 3740791, at *8 (“[T]he issue in deficiency actions is the fair market
value of the property at the time it was sold.”). Therefore, what the Bushes probably
could have gotten eventually is inconsequential when the issue is the fair market value at
the time of the foreclosure sale. Moreover, the efficacy of the $1,885,000 valuation is
undermined by the letters of intent that only pertained to “the approximately [two]
useable acres” of the StarPointe property because, as Mr. Maes stated, it “would knock
the value below [$]1,885,000. . . .” if Dr. Bush accepted the offer.7



        7
          As Mr. Maes explained, and as Dr. Bush‟s Conditional Letter to LOI indicated, what the
potential buyer was proposing would create problems for Dr. Bush because if he accepted it he would
have to recreate the site plan for the property, which would materially affect his ability to develop the
remainder of the property.


                                                 - 23 -
       The trial court found that the evidence presented by the Bushes when considered
along with Mr. Jones‟s appraisals was insufficient to overcome the presumptive value of
$1,050,000 established at the foreclosure sale. We find that the evidence does not
preponderate against this finding. Thus, the trial court correctly determined that the
foreclosure sale price of $1,050,000 was not “materially less” than the fair market value.

                             III. ATTORNEY‟S FEES ON APPEAL

        Reliant asserts that it is entitled to an award of attorney fees on appeal pursuant to
the terms of the loan documents. Tennessee follows the American Rule, which provides
that “litigants pay their own attorney‟s fees absent a statute or an agreement providing
otherwise.” Chambers v. City of Chattanooga, 71 S.W.3d 281, 284 (Tenn. Ct. App. 2001)
(citing Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985)).
“Under the American [R]ule, a party in a civil action may recover attorney fees only if:
(1) a contractual or statutory provision creates a right to recover attorney fees; or (2)
some other recognized exception to the American [R]ule applies, allowing for recovery
of such fees in a particular case.” Cracker Barrel Old Country Store, Inc. v. Epperson,
284 S.W.3d 303, 308 (Tenn. 2009) (citing Taylor, 158 S.W.3d at 359; John Kohl & Co. v.
Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn.1998)). Having reviewed the pertinent
documents, we conclude that an award of attorney fees on appeal was contemplated in
the loan documents. Therefore, we remand with instructions for the trial court to award
Reliant reasonable and necessary attorney‟s fees incurred in this appeal.

                                      IN CONCLUSION

       The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed equally, and jointly and severally, against Byron and Kelly Bush
equally.


                                                      ______________________________
                                                      FRANK G. CLEMENT, JR., JUDGE




                                            - 24 -
