                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                               September 27, 2011 Session

   IN RE: THE MATTER OF THE CONSERVATORSHIP OF MITTIE T.
     ALEXANDER v. JB PARTNERS, A Tennessee General Partnership

             Direct Appeal from the Probate Court for Davidson County
                  No. 09P-1052     David Randall Kennedy, Judge


               No. M2011-00776-COA-R3-CV - Filed November 1, 2011


Plaintiff Conservator filed an action seeking rescission of a warranty deed executed by her
Ward prior to the establishment of the conservatorship. The deed conveyed real property in
Nashville to Defendant without consideration, but retained a life-estate. Plaintiff alleged
incapacity to contract as grounds for recision. Prior to the filing of Plaintiff’s action,
Defendant and Appellee Intervener executed a contract for sale of the property, subject to the
life-estate. The trial court determined that the Intervener held superior title to the real
property under the doctrine of equitable conversion. The trial court entered final judgment
in favor of Intervener pursuant to Tennessee Rule of Civil Procedure 54.02. We affirm in
part, reverse in part, and remand.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Probate Court Affirmed in
                      part, Reversed in part and Remanded

D AVID R. F ARMER, J., delivered the opinion of the Court, in which H OLLY M. K IRBY, J., and
J. S TEVEN S TAFFORD, J., joined.

G. Kline Preston, IV, Nashville, Tennessee, for the appellant, Teresa Ann Alexander,
Conservator, on behalf of Mittie T. Alexander.

Susan Bratton Evans, and Raymond T. Throckmorton, III, Nashville, Tennessee, for the
appellee, JB Partners.

                                         OPINION

       This appeal arises from an action to rescind the conveyance of an interest in real
property. On July 8, 2009, Plaintiff Teresa Alexander (Ms. Alexander) filed a petition for
conservatorship of Mittie Taylor Alexander (“Miss Mittie”)1 , her mother, in the Circuit Court
for Davidson County. In her petition, Ms. Alexander alleged Miss Mittie suffered from
dementia and that she had made financial decisions over the preceding two years that were
ill-advised and that had affected her financial well-being. Ms. Alexander alleged that those
decisions resulted from mental incapacity. She specifically asserted that Miss Mittie had
transferred her interest in real property in Nashville without consideration, and that the
transaction was unfair and “could not have been intentional.” She prayed to be appointed
conservator to handle Miss Mittie’s affairs. Following a hearing in August 2009, the trial
court granted Ms. Alexander’s petition by order entered September 11, 2009.

        On September 22, 2009, Ms. Alexander filed the present action on behalf of Miss
Mittie in the Circuit Court for Davidson County against Starlene Anderson (Ms. Anderson).
In her complaint, Ms. Alexander asserted that Miss Mittie had transferred her interest in real
property in Nashville to Ms. Anderson, Miss Mittie’s niece, without consideration in April
2008.2 Ms. Alexander asserted that Miss Mittie was legally blind and was not mentally
competent when she conveyed the property to Ms. Anderson. She alleged that Ms. Anderson
had “[taken] advantage” of Miss Mittie’s lack of competency and persuaded her to convey
the property “by making false promises about the terms, status and consequences of the
transaction.” She alternatively asserted that Miss Mittie had not understood the transaction
and that she had entered into it by mistake. Ms. Alexander alleged that Miss Mittie “never
understood the terms or effect of the transaction.” She claimed fraud in the inducement of
the contract and, alternatively, mutual mistake. She prayed for the real property to be
returned to Miss Mittie for her use and benefit; compensatory damages in the amount of
$50,000; and punitive damages in an amount equal to the value of the real property. She
attached to her complaint a warranty deed by which Miss Mittie conveyed the property to Ms.
Anderson for consideration in the amount of $10.00, but retained a life-estate.

        On January 6, 2010, Appellee JB Partners filed a motion to intervene in the matter.
In its motion, JB Partners asserted that Ms. Anderson had listed the property for sale on June
20, 2009; that, on July 10, 2009, Bryan Church (Mr. Church) had entered into a contract to
purchase the property; and that Mr. Church had assigned his interest in the property to JB
Partners on August 25, 2009. JB Partners asserted that it was a bona fide purchaser for value
and had an equitable interest in the property under the doctrine of equitable conversion. JB


        1
            Mittie Taylor Alexander was referred to at trial as Miss Mittie.
        2
         Ms. Alexander filed a motion to amend her complaint on May 28, 2010. In her amended complaint,
Ms. Alexander asserted Ms. Anderson attempted to “steal” the property from Miss Mittie, and that she had
told Miss Mittie that she “would pay her for the property.” The trial court granted Ms. Alexander’s motion
to amend on June 18, 2010.

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Partners attached a proposed petition for declaratory judgment to its motion.

       Ms. Anderson answered on January 19, 2010, denying Ms. Alexander’s claims. Ms.
Anderson asserted that Miss Mittie met privately with her attorney prior to the conveyance,
and that the deed transferring the property was drawn by Miss Mittie’s attorney out of Ms.
Anderson’s presence. Ms. Anderson also asserted that Miss Mittie was competent when she
conveyed the property, and that the property was “abandoned.” Ms. Anderson pled the
affirmative defenses of the statute of limitations, laches, promissory estoppel and equitable
estoppel.

         The trial court granted JB Partners’ motion to intervene on January 22, 2010, and JB
Partners filed a complaint for declaratory judgment against Ms. Alexander on the same day.
In its complaint, JB Partners asserted that it was a bona fide purchaser of the property, and
that it held superior title under the doctrine of equitable conversion. Ms. Alexander answered
on March 16, 2010, asserting, inter alia, that JB Partners was not a bona fide purchaser and
that it was guilty of unclean hands. Ms. Alexander also filed a motion to dismiss JB
Partners’ claim for failure to state a claim, asserting it was not a bona fide purchaser and that
the doctrine of equitable conversion was not applicable in this case. Following a hearing on
September 22, 2010, the trial court entered judgment in favor of JB Partners, holding that JB
Partners had superior title to the property based on the doctrine of equitable conversion. It
also entered an order assessing discretionary costs against Ms. Alexander. On March 4,
2011, the trial court entered an order making its judgment in favor of JB Partners final
pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure. Ms. Alexander filed a
timely notice of appeal to this Court.

                                       Issues Presented

       Ms. Alexander raises the following issues for our review:

       (1)    Whether the trial court erred in finding the doctrine of equitable
              conversion applied to the contracts for sale between JB Partners and
              Starlene Anderson.

       (2)    Whether the trial court erred in finding JB Partners to be a bona fide
              purchaser.

       (3)    Whether the trial court erred in not barring JB Partners’ claim based
              on the doctrine of unclean hands.

       (4)    Whether the trial court erred in denying Mittie T Alexander’s motion

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              to dismiss the intervening complaint of JB Partners.

       (5)    Whether the trial court erred in finding that Mittie T. Alexander
              waived the defense of notice of lien lis pendens.

       (6)    Whether the trial court erred in finding that Mittie T. Alexander
              waived the defense of notice of lien lis pendens for failure to attach
              the notice to her complaint.

       (7)    Whether the trial court erred in awarding JB Partners attorney[’s]
              fees for seeking to have a motion to deem requests for admissions
              deemed admitted.

                                     Standard of Review

       We review the trial court’s findings of fact with a presumption of correctness unless
the evidence preponderates otherwise. Tenn. R. App. P. 13(d). Accordingly, we will not
reverse the trial court’s factual findings unless they are contrary to the preponderance of the
evidence. We review the trial court’s conclusions on matters of law de novo, however, with
no presumption of correctness. Tidwell v. Memphis, 193 S.W.3d 555, 559 (Tenn. 2006). Our
review of a trial court’s application of the law to the facts is de novo, with no presumption
of correctness. State v. Ingram, 331 S.W.3d 746, 755 (Tenn. 2011).

                                          Discussion

       We begin our discussion by emphasizing that the gravamen of this lawsuit is whether
the conveyance of real property by Miss Mittie to Ms. Anderson should be set aside due to
incapacity to contract on the part of Miss Mittie when the deed conveying the property was
executed. That issue has not been litigated as far as we can determine from the record before
us. We note, moreover, that as far as we can discern from the record, Ms. Anderson has not
attempted to disavow the contract for sale to JB Partners. Rather, the trial court’s judgment
effectively declares that, under the doctrine of equitable conversion, JB Partners’ interest in
the real property is superior to all others, regardless of whether the conveyance of the
property to Ms. Anderson should be set aside on the basis of incapacity to contract. With this
in mind, we turn to the issues presented.

        We first address Ms. Alexander’s assertion that the trial court erred by determining
that she waived the defense of notice of lien lis pendens. JB Partners asserts in its brief that
this issue is irrelevant and moot. We agree. The trial court’s judgment in this matter was
grounded not on the question of notice of lien lis pendens, but on the doctrine of equitable

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conversion. Although the trial court found that Ms. Alexander’s notice did not comport with
Tennessee Code Annotated § 20-3-101, and accordingly was void, the trial court also
correctly found that the contract executed by Mr. Church and assigned to JB Partners pre-
dated the filing of her complaint against Ms. Anderson. JB Partners was not prejudiced by
any deficiency in the notice.

        We next turn to Ms. Alexander’s assertion that JB Partners’ complaint for declaratory
judgment is barred by the doctrine of unclean hands. Ms. Alexander asserts that, because JB
Partners and Ms. Anderson did not close on the property by the closing date recited in the
initial contract for sale, September 30, 2009, but twice amended the contract to extend the
closing date and to decrease the purchase price, JB Partners deceived the court and its claim
should be barred based on unclean hands.

        Under the doctrine of unclean hands, “‘a complainant, who has been guilty of
unconscientious conduct or bad faith, or has committed any wrong, in reference to a
particular transaction, cannot have the aid of a Court of Equity in enforcing any alleged rights
growing out of such transaction.’” Riverside Surgery Center, LLC v. Methodist Health
Systems, Inc., 182 S.W.3d 805, 813 (Tenn. Ct. App. 2005) (quoting Hogue v. Kroger Co.,
213 Tenn. 365, 373 S.W.2d 714, 716 (1962) (quoting Gibson’s Suits in Chancery § 51)).
“‘Once found to exist, the doctrine of unclean hands repels the unclean plaintiff at the steps
of the Courthouse.’” Id. (quoting Farmers & Merchants Bank v. Templeton, 646 S.W.2d
920, 924 (Tenn. Ct. App.1983)). Upon review of the record, the evidence does not
preponderate against the trial court’s finding that JB Partners did not take actions which
would constitute unclean hands. JB Partners and Ms. Anderson executed a contract for sale
before Ms. Alexander filed her lawsuit. Delaying the closing date pending resolution of the
issues is neither fraudulent nor deceptive, and the amount of the purchase price is irrelevant
to the issues presented by this lawsuit. Accordingly, we find this issue to be without merit.

        We next turn to Ms. Alexander’s contention that the trial court erred by denying her
motion to dismiss for failure to state a claim. A Tennessee Rule of Civil Procedure 12.02(6)
motion to dismiss for failure to state a claim tests only the legal sufficiency of the complaint
itself. Cook v. Spinnakers of Rivergate, Inc., 878 S.W .2d 934, 938 (Tenn. 1994). The
grounds for such a motion are that the allegations of the complaint, if considered true, are not
sufficient to constitute a cause of action as a matter of law. Id. A motion to dismiss should
be granted only if it appears that the plaintiff cannot establish any facts in support of the
claim that would warrant relief. Doe v. Sundquist, 2 S.W.3d 919, 922 (Tenn. 1999). We
review a trial court’s disposition of a motion to dismiss de novo, with no presumption of
correctness. Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997).

       Ms. Alexander asserts that JB Partners’ claim should have been dismissed because,

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as a matter of law, JB Partners was not a bona fide purchaser. Ms. Alexander contends that,
despite the payment of earnest money in the amount of $2500 by Mr. Church to Ms.
Anderson prior to the assignment of the contract to JB Partners, no valid contract existed
where the original closing date expired on September 30, 2010. Her argument, as we
perceive it, is that the contract between Ms. Anderson and JB Partners expired despite
amendments extending the closing date, and that JB Partners accordingly had no interest in
the property.

       It is undisputed that JB Partners and Ms. Anderson executed a contract for sale of the
real property before Ms. Alexander commenced her action against Ms. Anderson, and that
the initial closing date was shortly after Ms. Alexander filed her complaint. It is also
undisputed that the closing date was amended twice during the pendency of this action. JB
Partners filed a complaint for declaratory judgment seeking a declaration of its interests in
light of its contract with Ms. Anderson, and asserted that its rights should be declared
superior. Construing JB Partners’ allegations as true, we agree with the trial court that JB
Partners stated a claim and affirm denial of Ms. Alexander’s motion to dismiss.

       We turn next to Ms. Alexander’s argument that the trial court erred by awarding JB
Partners attorney’s fees incurred for the filing of a motion to deem requests for admissions
admitted. On August 23, 2010, the trial court entered an order following an August 6 hearing
on JB Partners’ motion to have all matters admitted. In its order, the trial court stated:

       It further appearing that the Third Party Intervener has incurred reasonable
       attorney’s fees in the amount of [s]even hundred fifty dollars ($750.00) in
       bringing this motion, it is therefore further ORDERED that Teresa Alexander,
       Plaintiff and her counsel pay [s]even hundred fifty dollars ($750.00) as her
       reasonable expenses in bringing said motion.

        In its brief, JB Partners asserts the trial court ordered Ms. Alexander to pay its
attorney’s fees as sanctions for failing to respond timely to its discovery requests. It asserts
the trial court did not abuse its discretion in awarding sanctions for pre-trial discovery
matters. Ms. Alexander, on the other hand, asserts the Rules of Civil Procedure do not
provide for an award of attorney’s fees for the filing of a motion to deem matters admitted.

       Trial courts generally have broad discretion over discovery matters, including the
determination of appropriate sanctions for discovery abuses. E.g., Parks v. Mid-Atlantic
Finance Co., Inc., 343 S.W.3d 792, 802 (Tenn. Ct. App. 2011). It is well settled, however,
that a court speaks through its orders and not through the transcript. E.g., Steppach v.
Thomas, 346 S.W.3d 488, 522 (Tenn. Ct. App. 2011)(quoting In re Adoption of E.N.R., 42
S.W.3d 26, 31 (Tenn. 2001)). As we noted in Steppach, we review the trial court’s written

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orders on appeal. Id. (quoting Shelby v. Shelby, 696 S.W.2d 360, 361 (Tenn. Ct. App. 1985).

        There is nothing in the trial court’s August 23 order that indicates an award of
sanctions for discovery abuse in this case. Additionally, in its August order, the trial court
ordered, upon agreement of the parties, the deletion of two of JB Partners’ requests for
admissions. Upon review of the record, we find neither a motion for sanctions nor a reply
to such a motion. More importantly, the trial court made no finding of abuse in the
discovery process, and there is nothing in the record to demonstrate abuse. Tennessee courts
generally follow the “American Rule” with respect to attorney’s fees, requiring each party
to pay their own attorney’s fees in the absence of a statute or contractual provision providing
otherwise. Taylor v. Fezell, 158 S.W.3d 352, 359 (Tenn.2005) (citation omitted). In the
absence of an order making a finding of abuse in the discovery process and awarding
attorney’s fees as sanction for such abuse, we reverse the award of attorney’s fees in the
amount of $750.00 to JB Partners.

        We turn next to the dispositive issue which, as we perceive it, is whether the trial court
erred by holding that, under the doctrine of equitable conversion, JP Partners’ claim to the
property is superior to that of all others, and specifically to any claim Miss Mittie would have
if the conveyance to Ms. Anderson is set aside on the grounds of incapacity to contract. JB
Partners asserts that, under Tennessee case law, the doctrine of equitable conversion vests
it with superior title where JB Partners is the purchaser under a validly executed contract for
sale. In its brief to this Court, JB Partners relies on Alley v. McLain’s Inc. Lumber and
Construction for the proposition that

       the general rule is stated that a contract for the sale of land operates as an
       equitable conversion and the vendee’s interest under the contract becomes
       realty and the vendor’s interest becomes personalty, and in equity the vendee
       is regarded as the owner, subject to liability for the unpaid price, and the
       vendor is regarded as holding only the legal title in trust for the vendee from
       the time a valid contract for the purchase of land is entered into.

Alley v. McLain’s Inc., 182 S.W.3d 312, 318 (Tenn. Ct. App. 2005)(quoting Campbell v.
Miller, 562 S.W.2d 827, 831-32 (Tenn. Ct. App. 1977)(quoting 77 Am.Jur.2d 478–479,
“Vendor and Purchaser,” Sec. 317)). Ms. Alexander, on the other hand, asserts that JB
Partners is not a bona fide partner where the sale was not closed.

         We begin our discussion of this issue by noting that the doctrine of equitable
conversion “is not a fixed rule of law.” Id. at 319 (quoting Fowler v. Plunk, 7 Tenn. App.
29, 34, 1928 WL 1991 at *4 (Tenn. Ct. App. 1928)). It does not automatically vest superior
title in a purchaser upon execution of the contract for sale. Indeed, we have emphasized that

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the doctrine should be applied only to accomplish results demanded by equity, and that
“constant watchfulness” must be maintained “to guard against a tendency to make of it a
formal rule de jure, regardless of its real purpose and necessity.” Id. (quoting id. (emphasis
added)). Being so grounded in the principles of equity, application of the doctrine is
“affected by the connection in which it is invoked.” Id. (quoting id.) Under the doctrine,
although no “real conversion” has occurred, the property will be treated as if a conversion
had occurred “for the purpose of [a] will or other instrument so far as may be necessary and
only so far.” Id. (quoting id.).

        In Alley, plaintiff/seller Alley and defendant/buyer Snodgrass executed a contract for
sale of plaintiff’s real property. Snodgrass offered defendant McLain’s Lumber a contract
for the sale of timber on the property, which McLain’s Lumber accepted. The contract
recited that Snodgrass was the owner of the property, and McLain’s Lumber relied on
Snodgrass’s assertion. Upon discovery of the cutting of timber by the real estate agent,
McLain’s Lumber was instructed to cease cutting, which it did immediately. Id. at 314-15.
In an action commenced by Alley to recover damages for the wrongful cutting of timber,
defendants asserted the doctrine of equitable conversion to shield McLain’s Lumber from
liability. The trial court applied the doctrine; we reversed on appeal. Id. at 318.

        As noted above, we observed in Alley that the doctrine of equitable conversion will
be applied despite no actual conversion only when equity so demands. It was undisputed in
Alley that Snodgrass had paid no consideration in support of the contract for sale. We further
stated that, “[m]ore importantly,” nothing in the record suggested that Snodgrass had any
right to take possession of the property before closing. Id. at 318. We distinguished Alley
from Rackley v. DeKalb County Fire Department, a case in which the doctrine of equitable
conversion was applied to shield the defendant fire company from damages for trespass
where the buyers of real property gave the defendant permission to burn a house located on
the property. Id. at 319 (citing Rackley v. DeKalb County Fire Dep’t., No. M2000-00885-
COA-R3-CV, 2000 WL 1586464 (Tenn. Ct. App. Oct. 25, 2000)). We noted that the buyers
in Rackley, in addition to executing a contract for sale and making a down payment on the
property, had the right to take possession of the property, had in fact taken possession, and
“‘treated the property as their own.’” Id. at 318 (quoting id.) .

       In the September 2010 hearing before the trial court in this case, Mr. Church described
JB Partners as a partnership that “invest[s] mainly in local real estate and puts deals together
kind of like puzzle pieces, and that’s about it.” On July 12, 2010, prior to the filing of this
lawsuit and before Ms. Alexander was appointed conservator for Miss Mittie, Mr. Church
and Ms. Anderson entered into a contract for sale and Mr. Church paid earnest money in the
amount of $2500. On August 25, Mr. Church assigned his interest to JB Partners. It is
undisputed that the closing date was postponed at least twice, and that JB Partners had no

                                              -8-
right to take possession of the property before the closing date. Item four of the purchase and
sale contract contained in the record provides that Mr. Church/JB Partners would obtain
possession of the property only upon delivery of the warranty deed and payment of the
purchase price, and item fourteen provided that the seller, Ms. Anderson, would bear all risk
of loss or damage until transfer of title to the property. Further, it is undisputed that Miss
Mittie maintained a life-estate in the property when she conveyed it to Ms. Anderson; that
the contract executed by Mr. Church and Ms. Anderson was for the purchase of Ms.
Anderson’s interest in the property; and that JB Partners knew that Miss Mittie had retained
a life-estate when it executed the contract with Ms. Anderson. Thus, JB Partners obtained
no right to possession, and could not obtain title in fee simple until after the death of Miss
Mittie. Whether Miss Mittie lacked capacity to contract when she conveyed her property to
Ms. Anderson has yet to be adjudicated by the trial court.

       “The doctrine of equitable conversion is the outgrowth of the old maxim that equity
regards that as done which ought to have been done.” Fowler v. Plunk, 7 Tenn. App. 29
(Tenn Ct. App. 1929), 1928 WL 1991, at *4. The equities of this case simply do not demand
application of the doctrine of equitable conversion.

                                           Holding

        In light of the foregoing, we reverse the judgment of the trial court applying the
doctrine of equitable conversion to this case. We also reverse the award of attorney’s fees
in the amount of $750.00 to JB Partners. The judgment of the trial court is otherwise
affirmed. This matter is remanded for further proceedings consistent with this opinion.
Costs of this appeal are taxed to the Appellee, JB Partners.




                                                    _________________________________
                                                    DAVID R. FARMER, JUDGE




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