Susanna Gillespie, a/k/a Susanna    )
Grezegorcyk, a/k/a Susanna Kantack,     )
a/k/a Susanna Gregg,                )
                                    )   Appeal No.
       Plaintiff/Appellant,         )   01-A-01-9702-CH-00083
                                    )
v.                                  )   Chancery Court No.
                                    )   20508
Steven D. Graham,                   )

and
       Defendant/Appellee           )
                                    )              FILED
Lori G. Graham,                     )
       Defendant.                   )                 July 9, 1997

                                                   Cecil W. Crowson
                                                  Appellate Court Clerk


                   COURT OF APPEALS OF TENNESSEE

                    MIDDLE SECTION AT NASHVILLE

   APPEAL FOR THE CHANCERY COURT OF WILLIAMSON COUNTY

                        AT FRANKLIN, TENNESSEE

       THE HONORABLE HENRY DENMARK BELL, CHANCELLOR




MARK C. ADAMS
1113 Murfreesboro Road
Franklin, Tennessee 37064
      ATTORNEY FOR PLAINTIFF/APPELLANT

DOUGLAS S. HALE
312 First Tennessee Bank Bldg.
Franklin, Tennessee 37064
      ATTORNEY FOR DEFENDANTS/APPELLEES



                       AFFIRMED AND REMANDED




                                             SAMUEL L. LEWIS, JUDGE
                                                       Opinion

         This is an appeal from the decision of the Williamson County Chancery Court.
Plaintiff/appellant, Susanna Gregg, claims the chancery court erred when it denied
her claim to attorney’s fees, and defendant/appellee, Steven D. Graham, claims the
chancery court erred when it failed to dismiss the claim as outside the statute of
limitations. The facts out of which this matter arose are as follows:


         Defendant and his ex-wife, Lori G. Graham, entered into an agreement with
Plaintiff and her husband, Donald Kanatack, for the lease/purchase of a piece of real
estate. Defendant executed a note and a deed of trust in favor of Plaintiff and her
husband on 15 March 1986. In exchange for the note, Plaintiff and her husband gave
Defendant and Ms. Graham $10,477.17, which they used to pay real estate
commissions and to set up an escrow account for repairs. The note listed the date of
maturity as “on or at closing,” and the lease/purchase agreement listed the date of
closing as 17 February 1988. Both the note and the deed contained provisions
allowing Plaintiff to recover attorney’s fees if Plaintiff had to file suit to recover
under each agreement. At the time of execution, however, the parties modified the
note by drawing an “X” over five consecutive paragraphs. One of these paragraphs
included the provision allowing the note holder to recover costs and expenses under
certain circumstances.1 The parties failed to pay the note on 17 February 1988. The
parties extended the original lease/purchase agreement for an additional year by
executing an addendum on 27 May 1988. The new closing date passed without
incident and both parties continued as they had in the contract for two additional
years. A fire occurred on the property in 1990 while Plaintiff still occupied it. After
the insurance company paid the settlement to Defendant, he evicted Plaintiff from the
property.


         Plaintiff filed a complaint against Defendant and Ms. Graham on 28 February


         1
             (E) Payment of Note Holder’s Costs and Expenses
          If the N ote H older has re quired m e to pay im me diately in full as described above, the Note H older will
have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not
proh ibited by applicable law. Th ose exp enses include, for ex ample, reason able attorne ys’ fees.




                                                             2
1991. The complaint originally sought an accounting of insurance proceeds awarded
to Defendant and contained the following allegation:
             That on March 15, 1986, Respondents, Steven D. and Lori G.
       Graham, as “Borrowers”, signed a promissory note in the amount of
       $10,477.17, accompanied by said Deed of Trust. See Exhibits F1-F2.
Plaintiff amended the complaint on 28 December 1992 to allege fraud on the part of
Defendant. On 12 September 1996, Plaintiff filed a second amended complaint
which contained a claim for the loan amount evidenced by the note executed on 15
March 1986. The parties agreed at trial that after the second amendment the only
issue before the court was whether Plaintiff could recover the loan principle and
interest and her attorney’s fees.2 The chancery court ruled in favor of Plaintiff in the
amount of $13,987.02. This amount included the loan principle and pre-judgment
interest, but no attorney’s fees. Plaintiff moved for an amended judgment awarding
her attorney’s fees, but the court denied her motion. Thereafter, both parties filed
notices of appeal and later agreed on the designation of Plaintiff as Appellant.


                                        Attorney’s Fees


       Plaintiff relies on the provision in the deed of trust allowing a party to recover
attorney’s fees to support her claim to fees in this action on the note. Defendant
argues that the deed of trust and the note are separate documents and that Plaintiff
may not recover attorney’s fees under the note because the parties deleted the
particular provision of the note which dealt with attorney’s fees.


       It is the opinion of this court that Plaintiff is not entitled to attorney’s fees. To
explain, given the parties actions, we must conclude they intended to delete the
provision in the note referring to attorney’s fees. In addition, although the deed of
trust provision relied on by Plaintiff did allow for attorney’s fees, it only applied to
an action for enforcement of the deed of trust. The present action is on the note, not
to enforce the deed3. Therefore, even if the attorney’s fee provision from the deed



        2
           In addition, Defendant refers to Ms. Graham in his brief as the dismissed defendant.
Plaintiff does not contest this reference, however, there is no evidence in the record of any type
of dismissal as to Ms. Graham.
        3
          It is interesting to note that Plaintiff never recorded the deed.


                                                 3
were to apply to the action on the note, Plaintiff would still be unable to recover her
attorney’s fees.


                                   Statute of Limitations


       Defendant contends the applicable statute of limitations is Tennessee Code
Annotated section 28-3-109(a)(3). This section provides: “The following actions
shall be commenced within six (6) years after the cause of action accrued: . . . (3)
Actions on contracts not otherwise expressly provided for.” Tenn. Code Ann. 28-3-
109(a)(3) (1980). Thus, Defendant argues Plaintiff had to file her complaint within
six years of the maturity date or by 17 February 1994. Defendant then argues
Plaintiff’s complaint was not timely because she did not actually state a cause of
action to recover the loan principle and interest until she filed the second amended
complaint on 12 September 1996. In response, Plaintiff contends the statute of
limitations did not bar her claim because the second amended complaint related back
to the date of the original complaint.


       Rule 15.03 of the Tennessee Rules of Civil Procedure is relevant and provides:
“Whenever the claim or defense asserted in amended pleadings arose out of the
conduct, transaction, or occurrence set forth or attempted to be set forth in the
original pleading, the amendment relates back to the date of the original pleading.”
Tenn. R. Civ. P. 15.03(West 1995). This Rule replaced the previous code section
20—1505 which gave the trial judges more discretion in deciding whether
amendments relate back. Karash v. Pigot, 530 S.W.2d 775, 777 (Tenn. 1975).


       In Karash, the court held that an amended complaint alleging assault and
battery due to a nonconsensual blood transfusion would relate back to the original
complaint which was brought for physician negligence.4 In interpreting Rule 15.03,



        4
          In Gamble v. Hospital Corporation of America, 676 S.W.2d 340 (Tenn. App. 1984),
this court held that an amendment did not to relate back to the original complaint which caused
the action to be barred by the statute of limitations. In this case, which dealt with medical
malpractice, an amended complaint alleging that a physician was negligent in an operation did
not arise out of the same conduct, transaction or occurrence set forth in the original complaint,
which alleged that physician had used undue force in a previous surgery.


                                                 4
the court stated:
      Rule 15.03 has never been construed by our courts; however, its
      language is so clear and unequivocal that it is virtually self-construing.
      . . The great liberality of this Rule is convincingly demonstrated by the
      ensuing provisions permitting a new party, under certain circumstances,
      to be brought in notwithstanding the fact that the statute has run at the
      time of the amendment. . . The New Rules of Civil Procedure are
      designed to insure that cases and controversies be determined upon their
      merits and not upon legal technicalities or procedural niceties.
Id. at 777. In addition, they stated that “leave (to amend) shall be freely given when
justice so requires,” again showing the liberality of the Rule. Id. (quoting Branch v.
Warren, 527 S.W.2d 89 (Tenn. 1975)).


      The original complaint contained allegations concerning the agreement
between the parties. Clearly, the action on the note arose out of the same conduct,
transaction or occurrence set forth or attempted to be set forth in the original
complaint. Both the original and second amended complaints revolved around the
same real estate transaction which spread over an extended period of time. It is the
opinion of this court that Plaintiff’s claim was not barred by the statute of limitations
because her second amended complaint related back to the initial complaint.


      Therefore, it follows that the judgement of the chancery court is affirmed and
the case is remanded to the chancery court for any further necessary proceedings.
Costs on appeal are taxed to defendant/appellee, Steven D. Graham.



                                               ___________________________________
                                               SAMUEL L. LEWIS, JUDGE

CONCUR:


___________________________________
BEN H. CANTRELL, JUDGE


___________________________________
WILLIAM C. KOCH, JR., JUDGE




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