                                                                                                    03/02/2018
                 IN THE COURT OF APPEALS OF TENNESSEE
                              AT JACKSON
                                   January 31, 2018 Session

 DAWN W. KINARD ET AL. v. NATIONSTAR MORTGAGE LLC ET AL.

                   Appeal from the Chancery Court for Shelby County
                    No. CH-14-1266-1 Walter L. Evans, Chancellor
                       ___________________________________

                              No. W2017-01131-COA-R3-CV
                          ___________________________________

This appeal involves various issues related to a mortgage loan transaction and loan
modification efforts. The plaintiffs’ complaint, which was filed just a few days before a
scheduled foreclosure, asserted multiple claims for relief, including breach of contract,
breach of the covenant of good faith and fair dealing, and violation of the Truth-in-
Lending Act. The trial court ultimately dismissed all claims at summary judgment in the
defendants’ favor. For the reasons stated herein, we affirm in part, reverse in part, and
remand for further proceedings consistent with this Opinion

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

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

Webb A. Brewer, Memphis, Tennessee, for the appellants, Dawn W. Kinard, and
William E. Kinard.

Lauren Paxton Roberts and J. Anne Tipps, Nashville, Tennessee, for the appellees,
NationStar Mortgage, LLC, First Horizon National Corporation, and The Bank of New
York Mellon fka Bank of New York.

                                            OPINION

                   BACKGROUND AND PROCEDURAL HISTORY1

      The genesis of this case is traceable to January 24, 2006, when Dawn and William
Kinard (“the Kinards”) refinanced their home in Collierville, Tennessee. On that date,
       1
         Some of the facts outlined herein, most of which are taken from the parties’ summary judgment
papers, were “undisputed for purposes of summary judgment only.”
the Kinards executed a fifteen-year promissory note in the amount of $694,875.00, as
well as a deed of trust that secured their debt obligation. The Kinards’ loan, which was
obtained through First Horizon Home Loan Corporation (“First Horizon”), carried a fixed
interest rate of 6.0%.

        Around 2009, the Kinards began to experience difficulty in making their
scheduled note payments. The downturn in the national economy had presented a
number of challenges to their family businesses, and the Kinards accordingly explored
efforts to secure payment relief from First Horizon. Although they initially sought to
convert their loan to a thirty-year mortgage, the Kinards were unable to get a concrete
response to that request. However, when a First Horizon representative later suggested
that the Kinards should apply for a loan modification, they did so.

       The Kinards pursued a loan modification by taking several actions. In addition to
submitting financial information to First Horizon that had allegedly been requested of
them, the Kinards withheld certain loan payments. With respect to this latter action, the
Kinards claim that a First Horizon representative informed them that a modification was
not possible if their loan payments were current.

       After initially withholding payments and with still no decision from First Horizon
regarding their request for a loan modification, the Kinards began to worry that they were
getting too far behind on their mortgage. They tendered a substantial payment to bring
the loan current, but they were then allegedly instructed to make no more regular
payments pending the decision on the loan modification application. Mrs. Kinard
specifically claims that a First Horizon representative instructed her that she would be
told when and how much she should resume paying. Following this alleged instruction,
payments were once again withheld.

        The Kinards subsequently sent several loan modification packets to First Horizon
as instructed. According to Mrs. Kinard, new packets were sent when old packets were
deemed outdated. However, when Mrs. Kinard made a number of calls to get apprised
about the status of the modification application, she allegedly could get no information.

       It should be noted that, notwithstanding the alleged oral instruction to withhold
payments, subsequent written correspondence plainly indicated that the Kinards’ duty to
make loan payments was not altered. In a letter from First Horizon dated November 10,
2010, following the Kinards’ request for a loan modification, the Kinards were informed
in relevant part as follows:

      We have received your workout package for review. . . . Please be advised
      that:


                                          -2-
    Collection and/or foreclosure activity will continue on your account until
     such time that a workout has been completed.

    Late charge fees may also continue to be assessed.


    Your obligation to make payments is not suspended while we review the
     submission[.]

       In the summer of 2011, the Kinards learned that their loan was being “sold” to
Nationstar Mortgage LLC (“Nationstar”) and that Nationstar would soon begin servicing
the loan. Servicing of the loan was eventually transferred to Nationstar effective August
15, 2011. A “Notice of Assignment, Sale, or Transfer of Servicing Rights” was provided
to the Kinards by letter dated August 25, 2011.

       After servicing transferred to Nationstar, the Kinards found another source to
refinance their loan. As a result, they made multiple requests for payoff figures and
remained in frequent contact with Nationstar representatives about the status of their
application for a loan modification and their requests for payoff information. According
to the Kinards, however, Nationstar was unresponsive and consistently failed to provide
the requested information.

       Nationstar eventually initiated foreclosure proceedings, and a foreclosure sale was
scheduled for August 26, 2014. The present litigation ensued in response to the
threatened foreclosure. On August 21, 2014, the Kinards filed a “Petition to Enjoin
Foreclosure Sale and Complaint for Damages” in the Shelby County Chancery Court. In
addition to seeking injunctive relief with regard to the foreclosure, the complaint asserted
the following claims against First Horizon and/or Nationstar: violation of the Fair Debt
Collection Practices Act, breach of contract, breach of the covenant of good faith and fair
dealing, promissory estoppel, intentional or negligent misrepresentation, and violation of
the Tennessee Consumer Protection Act. The Kinards also sought to recover a judgment
against the Bank of New York Mellon for an alleged violation of the Truth-in-Lending
Act (“TILA”). In advancing their TILA claim, the Kinards asserted that they had learned
of a change in ownership of their mortgage to Bank of New York Mellon but had not
been given notice of the transfer as required by law. A temporary restraining order
enjoining the foreclosure was entered in response to the filing of the complaint, and on
September 4, 2014, the temporary restraining order was extended through entry of a
consent order.

       On July 8, 2016, Nationstar, First Horizon, and the Bank of New York Mellon
filed a joint motion for summary judgment. The motion requested that the Kinards’
complaint be dismissed in its entirety. A statement of undisputed material facts was
submitted contemporaneously to the filing of the defendants’ motion, and on July 11,
                                           -3-
2016, the defendants jointly filed a supporting memorandum of facts and law. The
Kinards filed a response to the defendants’ summary judgment motion on October 24,
2016. On the same date, they filed a response to the defendants’ statement of undisputed
material facts, as well as a statement of additional undisputed material facts. The
Kinards’ filings were soon followed by additional fillings submitted on behalf of the
defendants. On November 1, 2016, the defendants filed a reply in support of their
summary judgment motion and also submitted a response to the Kinards’ statement of
additional undisputed material facts.

       A hearing on the defendants’ motion for summary judgment was held on
November 4, 2016. The motion was taken under advisement following the hearing, and
on April 10, 2017, the Chancery Court entered its “Findings of Fact and Conclusions of
Law,” wherein it concluded that the defendants’ motion for summary judgment should be
granted. A formal “Final Order and Judgment” was later entered on April 28, 2017. In
its April 28 order, the Chancery Court dismissed the Kinards’ claims against the
defendants with prejudice. This appeal followed.

                                ISSUES PRESENTED

      In their appellate brief, the Kinards raise the following issues for our review,
which we rephrase and reorder, as follows:

   1. Whether the Chancery Court erred in dismissing their claims for breach of contract
      and breach of the covenant of good faith and fair dealing.

   2. Whether the Chancery Court erred in dismissing their misrepresentation claims.

   3. Whether the Chancery Court erred in dismissing their claim for promissory
      estoppel.

   4. Whether the Chancery Court erred in dismissing their TILA claim.

                             STANDARD OF REVIEW

       At issue in this appeal is the propriety of the Chancery Court’s grant of summary
judgment in the defendants’ favor. We review summary judgment decisions de novo and
afford no presumption of correctness to the trial court’s determination. Maggart v.
Almany Realtors, Inc., 259 S.W.3d 700, 703 (Tenn. 2008) (citations omitted). In
determining whether a grant of summary judgment is proper, we are obligated to make a
fresh determination that the requirements of Rule 56 of the Tennessee Rules of Civil
Procedure have been satisfied. Hughes v. New Life Dev. Corp., 387 S.W.3d 453, 471
(Tenn. 2012) (citations omitted). By rule, a motion for summary judgment should only
be granted if “the pleadings, depositions, answers to interrogatories, and admissions on
                                            -4-
file, together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of law.”
Tenn. R. Civ. P. 56.04.

       “The moving party has the ultimate burden of persuading the court that . . . there
are no genuine issues of material fact and that it is entitled to judgment as a matter of
law.” Town of Crossville Hous. Auth. v. Murphy, 465 S.W.3d 574, 578 (Tenn. Ct. App.
2014) (citation omitted). If the moving party makes a properly supported motion for
summary judgment, the burden of production shifts to the nonmoving party to
demonstrate the existence of a genuine issue of material fact. Id. (citation omitted).

       The Tennessee Supreme Court has recently explained the proper framework for
evaluating summary judgment orders in its decision in Rye v. Women’s Care Center of
Memphis, MPLLC, 477 S.W.3d 235 (Tenn. 2015). Consequently, our review is guided
by the following standards:2

       [I]n Tennessee, as in the federal system, when the moving party does not
       bear the burden of proof at trial, the moving party may satisfy its burden of
       production either (1) by affirmatively negating an essential element of the
       nonmoving party’s claim or (2) by demonstrating that the nonmoving
       party’s evidence at the summary judgment stage is insufficient to establish
       the nonmoving party’s claim or defense. We reiterate that a moving party
       seeking summary judgment by attacking the nonmoving party’s evidence
       must do more than make a conclusory assertion that summary judgment is
       appropriate on this basis. Rather, Tennessee Rule 56.03 requires the
       moving party to support its motion with “a separate concise statement of
       material facts as to which the moving party contends there is no genuine
       issue for trial.” Tenn. R. Civ. P. 56.03. “Each fact is to be set forth in a
       separate, numbered paragraph and supported by a specific citation to the
       record.” Id. When such a motion is made, any party opposing summary
       judgment must file a response to each fact set forth by the movant in the
       manner provided in Tennessee Rule 56.03. “[W]hen a motion for summary
       judgment is made [and] ... supported as provided in [Tennessee Rule 56],”
       to survive summary judgment, the nonmoving party “may not rest upon the
       mere allegations or denials of [its] pleading,” but must respond, and by
       affidavits or one of the other means provided in Tennessee Rule 56, “set
       forth specific facts” at the summary judgment stage “showing that there is a
       2
          We apply the Rye standards even though the case was filed after July 1, 2011. See Am. Heritage
Apartments, Inc. v. Hamilton Cnty. Water & Wastewater Treatment Auth., 494 S.W.3d 31, 39-40 (Tenn.
2016) (noting that although the trial court considered the motion for summary judgment pursuant to the
standard set forth in Tennessee Code Annotated section 20-16-101 because the lawsuit had been filed
after July 2011, the Rye standards applied); Wallis v. Brainerd Baptist Church, 509 S.W.3d 886, 896
(Tenn. 2016) (noting that the Rye standards do, in fact, apply to cases commenced after July 1, 2011).
                                                 -5-
      genuine issue for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party
      “must do more than simply show that there is some metaphysical doubt as
      to the material facts.” Matsushita Elec. Indus. Co., 475 U.S. at 586, 106
      S.Ct. 1348. The nonmoving party must demonstrate the existence of
      specific facts in the record which could lead a rational trier of fact to find in
      favor of the nonmoving party. If a summary judgment motion is filed
      before adequate time for discovery has been provided, the nonmoving party
      may seek a continuance to engage in additional discovery as provided in
      Tennessee Rule 56.07. However, after adequate time for discovery has
      been provided, summary judgment should be granted if the nonmoving
      party’s evidence at the summary judgment stage is insufficient to establish
      the existence of a genuine issue of material fact for trial. Tenn. R. Civ. P.
      56.04, 56.06. The focus is on the evidence the nonmoving party comes
      forward with at the summary judgment stage, not on hypothetical evidence
      that theoretically could be adduced, despite the passage of discovery
      deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65 (emphasis in original).

                                      DISCUSSION

Breach of Contract/Breach of the Covenant of Good Faith and Fair Dealing

       We first turn our attention to the Kinards’ contract-based claims. According to the
Kinards, they have valid claims for breach of contract and breach of the covenant of good
faith and fair dealing against both First Horizon and Nationstar. We will deal with the
allegations against each defendant separately.

      First Horizon

       In their complaint, the Kinards contended that First Horizon was liable for breach
of contract by transferring the servicing of their loan without making a decision on their
loan modification request. In advancing this claim, the Kinards specifically asserted that
First Horizon had made a “binding and enforceable agreement to process a loan
modification request . . . and to render a decision on the modification request.” The
Kinards also claimed that First Horizon had breached the covenant of good faith and fair
dealing associated with their loan transaction by, among other things, “never providing
meaningful notification . . . regarding their approval or denial for loan modifications.”

       When the Chancery Court concluded at summary judgment that the Kinards could
not recover on these claims, it reasoned as follows:


                                            -6-
       5. First Horizon is entitled to summary judgment on the Plaintiffs’ breach
       of contract claim because there can be no claim for breach of contract in the
       absence of a valid and enforceable contract and because the terms of the
       alleged agreement entered into between First Horizon and the Plaintiffs
       were too vague to support the existence of a valid and enforceable contract.

       6. First Horizon is entitled to summary judgment as a matter of law on the
       Plaintiffs’ claim for breach of the implied covenant of good faith and fair
       dealing because there is no cause of action for breach of the implied
       covenant of good faith and fair dealing absent a valid claim for breach of
       contract and because the terms of the alleged agreement entered into
       between First Horizon and the Plaintiffs were too vague to support the
       existence of a valid and enforceable contract.

As is clear, the essence of the Chancery Court’s holding was that (a) there was no valid
contract and (b) in the absence of a valid contract, there could be no claim for breach of
the implied covenant.

       As we perceive it, the Chancery Court was clearly under the impression that the
Kinards’ contract-based claims were exclusively predicated on the alleged agreement “to
process a loan modification request . . . and to render a decision on the modification
request.” This view of the complaint was inaccurate. Although the Kinards did aver that
First Horizon had agreed to process a loan modification request, a potential basis for
contractual liability also stemmed from the underlying loan documents. For example, the
Kinards asserted that First Horizon had breached the covenant of good faith and fair
dealing “in carrying out the contractual loan servicing responsibilities associated with the
loan transaction.”

       Because the Kinards’ contract-based claims were not solely predicated on a
separate alleged agreement to process a loan modification request, the Chancery Court’s
ruling was, as a threshold matter, overly broad in terms of its reasoning. The Kinards’
claim for breach of the implied covenant of good faith and fair dealing was simply not
dependent only on an agreement to process a loan modification. To this end, we agree
with the Kinards that the Chancery Court “erred in disregarding the basic loan agreement
between [them] and First Horizon as valid and enforceable contracts.”

       However, the fact that the Chancery Court had an imprecise understanding of the
Kinards’ claims does not necessarily mean that its dismissal of those claims should be
reversed. This Court is permitted to affirm a grant of summary judgment on grounds
different than those cited by the trial court. Hill v. Lamberth, 73 S.W.3d 131, 136 (Tenn.
Ct. App. 2001) (citation omitted). For the reasons set forth below, we find no reason to
disturb the Chancery Court’s dismissal of the contract-based claims against First Horizon.

                                           -7-
        To the extent that the Kinards believe they have a valid claim against First
Horizon based on an alleged oral agreement to process a loan modification request, the
issue is waived. Although the trial court dismissed the merits of such a claim by holding
that the terms of such an agreement were “too vague,” the Kinards have devoted virtually
no attention to this issue on appeal. Their principal appellate brief includes a conclusory
assertion that “there was an enforceable agreement that First Horizon would process
[their] loan modification to completion,” but no argument is actually offered in support of
this notion. The only substantive arguments in the Kinards’ brief concerning their
contract claims against First Horizon are those which relate to alleged breaches of the
covenant of good faith and fair dealing and the original loan documents.3 We therefore
affirm the Chancery Court’s decision to dismiss the Kinards’ breach of contract claim to
the extent it is predicated on an agreement separate from the original note and deed of
trust. See Bean v. Bean, 40 S.W.3d 52, 56 (Tenn. Ct. App. 2000) (holding that an issue is
waived “where it is simply raised without any argument regarding its merits”).

       We also affirm the Chancery Court’s dismissal of the Kinards’ claim against First
Horizon for breach of the implied covenant of good faith and fair dealing. As previously
noted, although the Chancery Court’s specific rationale in dismissing that claim was
erroneous, we are free to affirm the grant of summary judgment on a different basis.
Here, the implied covenant claim against First Horizon fails as a matter of law.

        In this case, the Kinards contend that First Horizon breached the implied covenant
of good faith and fair dealing by failing to act reasonably in accordance with the original
note and deed of trust. In general, they take issue with the manner in which First Horizon
acted in connection with their loan modification application. For example, in addition to
arguing that First Horizon acted in bad faith by transferring the loan while a modification
application was pending, the Kinards argue that First Horizon failed to provide a response
to their modification request within a reasonable time and forced them to repeatedly send
applications.

        Similar allegations were at issue in Pugh v. Bank of America, No. 13-2020, 2013
WL 3349649 (W.D. Tenn. July 2, 2013). In that case, the plaintiffs asserted that
defendants had violated the covenant of good faith and fair dealing by: “(1) delaying, and
never providing, notification to Plaintiffs about Defendants’ approval or denial of various
loan modifications; (2) routinely demanding documents Plaintiffs had already submitted;
(3) failing to offer Plaintiffs a HAMP loan modification; (4) failing to offer Plaintiffs a
‘superseding loss mitigation alternative’ after they had been denied a HAMP loan
modification; (5) instructing Plaintiffs to refrain from making mortgage payments
        3
           We also observe that, as phrased in the “Statement of the Issues” section of their brief, the
Kinards’ focus on contractual recovery is related solely to the original note and deed of trust. In pertinent
part, their raised issue asks “whether [First Horizon and Nationstar] breached their contractual obligations
to service the Plaintiffs’ loan under the Promissory Note and Deed of Trust and the covenants of good
faith and fair dealing that attach thereto under Tennessee law.”
                                                   -8-
throughout the loan modification process and then using the default as a basis for
proceeding with foreclosure; (6) failing to have adequate internal procedures in place, or
to supervise employees, to provide Plaintiffs with accurate and consistent information
about their loan status; and (7) proceeding with foreclosure while Plaintiffs’ loan
modification request was pending.” Id. at *10. In noting that the pleaded claim was
legally infirm, the Pugh court held:

      Plaintiffs have not adequately pled a breach of the duty of good faith and
      fair dealing. The gravamen of Plaintiffs’ claim is that Defendants did not
      offer loan modifications to which Plaintiffs were entitled and instructed
      Plaintiffs to stop making payments during the modification process.
      Plaintiffs allege that Defendants used nonpayment as an excuse to proceed
      to foreclosure. Those allegations fall short of establishing a breach of the
      duty of good faith and fair dealing. Defendants were under no duty to offer
      a loan modification or “to assist [Plaintiffs] in preventing foreclosure.”
      Knowles, 2012 U.S. Dist. LEXIS, at *28 (citation omitted). An alleged
      breach of the duty of good faith and fair dealing must be based on the
      contracting parties’ reasonable expectations and the rights established by
      their agreement. Barnes & Robinson Co., 195 S.W.3d at 642. The Note
      and the Deed of Trust explicitly require timely monthly mortgage
      payments, absent which Defendants can proceed with foreclosure. Plaintiffs
      have failed to state a claim for breach of an implied covenant of good faith
      and fair dealing.

Id. at *12 (emphasis added).

       Likewise, in this case, the Kinards’ note called for monthly payments, and the
deed of trust allowed for foreclosure following a default in payment obligations. Of
principal relevance, the loan documents simply did not require First Horizon to entertain
a loan modification request. Accordingly, we fail to see how First Horizon’s alleged
failure to process a loan modification application, and the alleged manner in which it
carried out such failure, violated the implied covenant of good faith and fair dealing. See
Cadence Bank, N.A. v. The Alpha Trust, 473 S.W.3d 756, 769 (Tenn. Ct. App. 2015)
(“The duty of good faith . . . does not extend beyond the terms of the contract and the
reasonable expectations of the parties under the contract.”).

      Nationstar

       Having addressed the contract-based claims asserted against First Horizon, we
now turn to review the allegations brought forth against Nationstar. The Kinards
maintain that Nationstar breached the loan contract/covenant of good faith and fair
dealing by failing to accommodate their request for payoff figures. This claim is
predicated on the allegation that they had found another source to refinance their loan.
                                          -9-
The Kinards reason that because they “had a right to pay off the balance of their loan
under the express terms of the Promissory Note,” “[i]t follows that the covenant of good
faith would require the servicer to facilitate the refinancing of the debt by providing
correct and accurate figures.”

       Although the Chancery Court ultimately denied the Kinards any contract-based
relief against Nationstar, it did not hold that the allegations against Nationstar were
legally insufficient, nor did it hold that Nationstar had affirmatively negated an essential
factual element of the Kinards’ contract/implied covenant claims. Rather, the Chancery
Court’s holding was predicated exclusively on its conclusion that no breach of contract
claim had been asserted against Nationstar. Detailing its reasoning in its final order, the
Chancery Court noted as follows:

       Nationstar Mortgage is entitled to summary judgment as a matter of law on
       the Plaintiffs’ claim for breach of the implied covenant of good faith and
       fair dealing because there is no cause of action for breach of the implied
       covenant of good faith and fair dealing absent a valid claim for breach of
       contract and because no claim for breach of contract was asserted against
       Nationstar Mortgage by the Plaintiffs.

       On appeal, the Kinards argue that the trial court’s basis for dismissal was
improper. They note that a claim for breach of contract was asserted against Nationstar
and specifically point to the prayer in the complaint as evidence of this fact. We agree
with the Kinards’ position on this issue. Although the complaint could have been drafted
with greater clarity and precision to the extent that Nationstar was not specifically listed
under the “Count II: Breach of Contract” heading, the Kinards did specifically pray that
the Chancery Court “enter judgment against Defendants First Horizon and Nationstar and
in favor of Plaintiffs for damages for breach of contract.” Moreover, notwithstanding the
apparent absence of allegations against Nationstar under “Count II,” we note that the first
paragraph of that count began by stating that “[t]he allegations of all other paragraphs and
claims in this pleading are incorporated as if fully rewritten herein.” As a technical
matter, therefore, we cannot conclude that allegations against Nationstar were not
included; other sections of the complaint included factual allegations involving
Nationstar, including allegations relating to Nationstar’s alleged failure to respond to
requests for payoff information. Although not a model of clarity, the complaint did seek
to recover against Nationstar for breach of contract, and therefore, we conclude that the
Chancery Court’s stated rationale for dismissing the implied covenant claim against
Nationstar was in error.

        As noted previously, although we are free to affirm the dismissal of a claim on
different grounds than relied upon by the trial court if it is appropriate, we cannot do so
here. As a factual matter, Nationstar has not affirmatively negated the Kinards’ assertion
that it failed to respond to requests for payoff information. We cannot, therefore, affirm
                                            - 10 -
summary judgment on the basis that the Kinards’ claim against Nationstar is without a
factual foundation. The Kinards’ factual allegations may ultimately be rebutted with
proof, but Nationstar did not attempt to meet its burden on this issue when it filed the
motion for summary judgment presently under review.

       We also cannot hold that the Kinards’ allegations are legally insufficient. At oral
argument, counsel for Nationstar argued that Nationstar could not be liable for failing to
provide payoff information to the Kinards. As explained below, however, we are of the
opinion that the failure to provide payoff information within a reasonable time upon
request can give rise to a claim for breach of the implied covenant of good faith and fair
dealing.

        A duty of good faith and fair dealing is implied in the performance and
enforcement of every contract. Lamar Adver. Co. v. By-Pass Partners, 313 S.W.3d 779,
791 (Tenn. Ct. App. 2009) (citation omitted). The purpose of the implied covenant is
two-fold. Id. First, it honors the reasonable expectations of the contracting parties. Id.
(citation omitted). Second, it protects the rights of the parties to receive the benefits of
the agreement into which they entered. Id. (citation omitted). As we alluded to in our
discussion of the Kinards’ contract-based claims against First Horizon, the implied duty
of good faith and fair dealing cannot be used to create new contractual rights, nor can it
be used to circumvent the specific terms of the parties’ agreement. Id. (citation omitted).
What is required by the duty of good faith depends upon the individual contract in each
case. Barnes & Robinson Co., Inc. v. OneSource Facility Servs., Inc., 195 S.W.3d 637,
643 (Tenn. Ct. App. 2006). “In construing contracts, courts look to the language of the
instrument and to the intention of the parties, and impose a construction which is fair and
reasonable.” TSC Indus., Inc. v. Tomlin, 743 S.W.2d 169, 173 (Tenn. Ct. App. 1987)
(citation omitted).

       Although our research shows that some courts have concluded that the failure to
provide payoff information gives rise to a violation of the implied covenant of good faith
and fair dealing, others have not. Compare In re 201 Forest Street LLC, 409 B.R. 543,
593 (Bankr. D. Mass. 2009) (“[A] borrower in any lending relationship has a reasonable
expectation that its lender will provide accurate written payoff figures upon reasonable
request.”), and KNA Family LLC v. Fazio, 371 Wis. 2d 564, 884 N.W.2d 534 (Wis. Ct.
App. 2016) (unpublished table decision) (finding as persuasive a prior opinion that
recognized that the timely failure to provide a payoff statement can be a breach of the
covenant of good faith), with Graves v. Logan, 404 S.W.3d 582, 586 (Tex. App. 2010)
(finding no precedential authority to support the existence of an implied covenant to
provide a payoff amount in a transaction involving a promissory note and deed of trust).
In our view, the legal viability of an implied covenant claim is entirely dependent on the
nature of the agreement at issue. After all, as we have noted, the covenant of good faith
works to protect the parties’ reasonable expectations and “imposes a duty . . . to do
nothing that will impair or destroy the rights of the other party to receive the benefits of
                                           - 11 -
the contract.” Long v. McAllister-Long, 221 S.W.3d 1, 9 (Tenn. Ct. App. 2006) (citations
omitted).

        In this case, the loan agreement at issue gave the Kinards the right to prepay their
loan. In our opinion, when borrowers have a contractual right to pay off the principal
balance of their loan in full before the scheduled maturity date, those borrowers have a
reasonable expectation that they will be informed of the amounts owed on the loan should
they request such information. We observe that one judge on the Texas Court of Appeals
has applied similar reasoning when addressing this issue. See Graves, 404 S.W.3d at 587
(Sharp, J., concurring and dissenting) (emphasis in original) (“Whenever a contract
recites that a party has a right to an early payoff, there is an implied contractual duty to
provide a payoff statement because failure to do so (and do so in a timely fashion)
nullifies (breaches) that provision of the contract.”).

       Based on the foregoing discussion and the record before us, we are simply unable
to conclude that the Kinards’ implied covenant claim against Nationstar was properly
dismissed. As noted previously, Nationstar never presented evidence at summary
judgment affirmatively negating the Kinards’ assertion that it failed to respond to
requests for payoff information. Having failed to satisfy its burden on this issue,
summary judgment was not appropriate. We therefore reverse the Chancery Court’s
dismissal of the Kinards’ claim against Nationstar for breach of the implied covenant of
good faith and fair dealing.

Misrepresentation Claims

       “Count V” of the Kinards’ complaint asserted claims against First Horizon for
“Intentional or Negligent Misrepresentation.” In order to prove a claim based on an
intentional misrepresentation, a plaintiff must show that:

       1) the defendant made a representation of an existing or past fact; 2) the
       representation was false when made; 3) the representation was in regard to
       a material fact; 4) the false representation was made either knowingly or
       without belief in its truth or recklessly; 5) plaintiff reasonably relied on the
       misrepresented material fact; and 6) plaintiff suffered damage as a result of
       the misrepresentation.

Walker v. Sunrise Pontiac-GMC Truck, Inc., 249 S.W.3d 301, 311 (Tenn. 2008) (quoting
Metro. Gov’t of Nashville & Davidson Cnty. v. McKinney, 852 S.W.2d 233, 237 (Tenn.
Ct. App. 1992)). In order to prove a claim for negligent misrepresentation, a plaintiff
must show that “the defendant supplied information to the plaintiff; the information was
false; the defendant did not exercise reasonable care in obtaining or communicating the
information and the plaintiffs justifiably relied on the information.” Id. (quoting Williams
v. Berube & Assocs., 26 S.W.3d 640, 645 (Tenn. Ct. App. 2000)).
                                             - 12 -
        In this case, we are of the opinion that the allegations leveled against First Horizon
are legally infirm to support the asserted misrepresentation claims. As best as we are able
to understand from this appeal, the Kinards’ grievance underpinning their
misrepresentation claims is that First Horizon falsely communicated to them that their
loan payments were suspended. However, having reviewed their complaint, we observe
that the Kinards did not actually assert that First Horizon provided such information. The
specific assertion from the complaint was that First Horizon representatives “intentionally
or recklessly advised the Plaintiffs to cease making regular mortgage payments during the
loan modification process.” The allegation that First Horizon advised the Kinards to
withhold payments simply does not implicate a representation of an existing or past fact
so as to support a misrepresentation claim; as pled, there is no assertion that First Horizon
made any representation or statement that the Kinards’ payments were, in fact, suspended
during the modification review period.4 However, even if we treated the alleged advice
not to make payments as equivalent to a factual representation that payments were
suspended, we would still affirm dismissal of the misrepresentation claims. As noted
above, a plaintiff must reasonably rely on a false representation in order to recover on a
claim for misrepresentation. Here, we are of the opinion that there is a lack of a genuine
issue concerning the Kinards’ reliance on any supposed statement that payments were
suspended. As First Horizon observed in connection with its motion for summary
judgment, following the Kinards’ request for a loan modification, it sent them a letter
expressly informing them that their obligation to make payments was not suspended. We
therefore affirm the Chancery Court’s judgment as it relates to this issue.5

Promissory Estoppel

       In Tennessee, the doctrine of promissory estoppel is not liberally applied. Barnes
& Robinson Co., Inc., 195 S.W.3d at 645. Because promissory estoppel is an equitable
doctrine, its limits are “defined by equity and reason.” Chavez v. Broadway Elec. Serv.
Corp., 245 S.W.3d 398, 404 (Tenn. Ct. App. 2007) (citations omitted). In order to
succeed on a claim for promissory estoppel, plaintiffs must establish the following
elements: “(1) that a promise was made; (2) that the promise was unambiguous and not



        4
          In support of their misrepresentation claims, the Kinards’ appellate brief also asserts that the
Kinards “were told that they would be instructed as to when and how much they should resume paying.”
The misrepresentation claims are also without merit to the extent that they are predicated on this
allegation. The alleged promise that the Kinards “would be instructed” when to make certain payments
relates to a future event, not a statement of a past or present fact. See Jones v. BAC Home Loans
Servicing, LP, No. W2016-00717-COA-R3-CV, 2017 WL 2972218, at *11 (Tenn. Ct. App. July 12,
2017) (noting that statements of intention and representations of future events are not actionable).
        5
          The Chancery Court’s final order formally dismissed the misrepresentation claims on the basis
that they were barred by the statute of limitations. We do not reach the merits of the statute of limitations
argument but affirm dismissal for the reasons stated herein.
                                                   - 13 -
unenforceably vague; and (3) that they reasonably relied upon the promise to their
detriment.” Id. (citations omitted).

       Here, the Kinards’ promissory estoppel claim is predicated on their allegation that
First Horizon promised them “fair consideration for a permanent loan modification if
they made proper application and provided required information.” According to their
complaint, the Kinards relied on First Horizon’s promise and withheld regular loan
payments as instructed while the modification application was pending. In dismissing the
validity of this claim at summary judgment, the Chancery Court held as follows:

       First Horizon is entitled to summary judgment as a matter of law on the
       Plaintiffs’ promissory estoppel claim for two reasons. First, the Plaintiffs’
       promissory estoppel claim is barred by the applicable three-year statute of
       limitations. Second, First Horizon is entitled to summary judgment on the
       Plaintiffs’ promissory estoppel claim because it was not reasonable for the
       Plaintiffs to refrain from making their monthly payments while their loan
       application was pending, especially after being advised in writing that their
       obligation to make monthly payments was not suspended while their
       application for a loan modification was pending.

       Although the Kinards have claimed detrimental reliance as a result of their
decision to not make monthly payments on the loan, we agree with the Chancery Court’s
conclusion that their actions were not reasonable. As previously noted in connection with
our discussion of the misrepresentation claims, First Horizon sent the Kinards a letter
specifically informing them that their obligation to make payments was not suspended.
Being of the opinion that there is no genuine issue with respect to this matter, we
accordingly affirm the dismissal of the promissory estoppel claim.6

TILA Claim/Regulation Z

        In their last issue on appeal, the Kinards argue that the trial court erred in
dismissing their TILA claim against the Bank of New York Mellon as time-barred. The
Kinards’ claim is predicated on the allegation that the bank did not give the notice
required under 12 C.F.R. § 226.39. That section, and its statutory parallel 15 U.S.C. §
1641(g)(1), generally provide that assignees of mortgage loans must notify consumers
that their loan has been transferred within thirty days of the transfer. See 15 U.S.C. §
1641(g)(1) (“In addition to other disclosures required by this subchapter, not later than 30
days after the date on which a mortgage loan is sold or otherwise transferred or assigned
to a third party, the creditor that is the new owner or assignee of the debt shall notify the
borrower in writing of such transfer[.]”); 12 C.F.R. § 226.39 (providing that a “covered

       6
           We do not express an opinion on the Chancery Court’s conclusion regarding the bar posed by
the statute of limitations. That specific issue is pretermitted.
                                               - 14 -
person” who “becomes the owner of an existing mortgage loan by acquiring legal title to
the debt obligation” shall disclose that the loan was “sold, assigned or otherwise
transferred” “on or before the 30th calendar day following the date of transfer”).

        Specifically at issue in this case is the Kinards’ assertion that no notice was
provided to them following a March 21, 2013 transfer of ownership. Based on the date of
this alleged violation, the Bank of New York Mellon has maintained that the TILA claim
against it was not timely asserted. In developing this point in its appellate brief, it argues
as follows:

       Pursuant to the disclosure requirements of 12 C.F.R. § 226.39, the Bank of
       New York would have had 30 days from the March 21, 2013 Corporate
       Assignment (i.e., until April 20, 2013) in which to give Appellants notice of
       the transfer[.] . . . For purposes of the TILA statute of limitations,
       Appellants had “one year from the date of the occurrence of the violation,”
       i.e., one year from April 20, 2013, in which to file their Complaint. Thus,
       the statute of limitations on Appellants’ TILA claim commenced on April
       21, 2013 and expired on April 21, 2014. However, Appellants did not file
       suit over the alleged TILA violation until August 21, 2014 – four months
       after the statute of limitations had expired.

We agree with the bank’s argument. There is no dispute among the parties that the
Kinards’ TILA claim is subject to the one-year limitation period in 15 U.S.C. § 1640(e).
That statute specifically provides that a claim must be brought “within one year from the
date of the occurrence of the violation.” 15 U.S.C. § 1640(e). As noted by the bank,
although the alleged violation here occurred by failing to give notice within 30 days of
March 21, 2013, the TILA claim was clearly not asserted within one year from that
alleged violation. The Kinards’ complaint was not filed until August 21, 2014.

       Although the Kinards suggest that an issue exists as to when they reasonably
should have discovered the alleged TILA violation, their reliance on the discovery rule is
misplaced. As just highlighted, 15 U.S.C. § 1640(e) provides that an action must be
brought “within one year from the date of the occurrence of the violation.” 15 U.S.C. §
1640(e). Based on the language of the statute, we conclude—as several courts have
done—that the discovery rule does not apply. See Strickland-Lucas v. Citibank, N.A.,
256 F. Supp. 3d 616, 627 (D. Md. 2017) (noting that “TILA’s statute of limitations is not
expressly based on when a claim ‘accrues’”); Rowe v. Aurora Commercial Corp., No.
5:13-21369, 2014 WL 3810786, at *9 (S.D. W. Va. Aug. 1, 2014) (noting that the
“language [in 15 U.S.C. § 1640(e)] is clear and does not contemplate application of the
discovery rule”); Polkampally v. Countrywide Home Loans Inc., No. 13-174 (RBK/JS),
2013 WL 5937000, at *6 (D.N.J. Nov. 6, 2013) (“Courts have rejected the idea that a
discovery rule applies to a TILA violation that causes the claim to accrue whenever the

                                            - 15 -
alleged violation is discovered.”).    We accordingly affirm the trial court’s grant of
summary judgment on this issue.

                                      CONCLUSION

       Although we reverse the Chancery Court’s dismissal of the Kinards’ claim against
Nationstar for breach of the implied covenant of good faith and fair dealing, its final
order is otherwise affirmed. The costs of this appeal are assessed one-half against the
Appellants Dawn W. Kinard and William E. Kinard, and one-half against the Appellee
Nationstar Mortgage, LLC, for all of which execution may issue if necessary. This case
is remanded for the collection of costs, enforcement of this Court’s judgment, and for
such further proceedings as may be necessary and are consistent with this Opinion.

                                                   _________________________________
                                                   ARNOLD B. GOLDIN, JUDGE




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