                     IN THE COURT OF APPEALS OF TENNESSEE
                                 AT NASHVILLE
                                   Assigned on Briefs March 7, 2005

     BRENDA AND STANLEY MORRISON v. CITIZEN STATE BANK

                           Appeal from the Circuit Court for Marion County
                                No. 14582     Buddy D. Perry, Judge


                      No. M2004-00263-COA-R3-CV - Filed September 20, 2005


This is the third action between Stanley Morrison and Citizen State Bank concerning a series of
promissory notes and security agreements. In the first action, Citizen State Bank filed a civil warrant
in General Sessions Court against Stanley Morrison to recover a deficiency judgment and repossess
a truck that was collateral on a series of loans. The bank obtained a default judgment against
Morrison and repossessed the truck when Morrison failed to appear in court. Morrison failed to
timely appeal the default judgment. Thereafter, Morrison and his wife filed this action challenging
the validity of the default judgment and seeking damages for fraud, misrepresentation, and
conversion of property, contending four of six promissory notes and security agreements that the
judgment was based upon were forgeries. The trial court held this action was barred by res judicata
and dismissed it on summary judgment. We affirm the dismissal of this action on the basis of
collateral estoppel.

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

FRANK G. CLEMENT, JR., J., delivered the opinion of the court, in which WILLIAM C. KOCH , JR., P.J.,
M.S., and WILLIAM B. CAIN , J., joined.

Hallie H. McFadden, Chattanooga, Tennessee, for the appellants, Brenda and Stanley Morrison.

J. Harvey Cameron, Jasper, Tennessee, for the appellee, Citizen State Bank.

                                                     OPINION

       In 1997, Stanley Morrison executed a consumer loan agreement with Citizen State Bank.
Morrison admits signing the loan documents and borrowing the money evidenced by the 1997 loan
agreements. A second and third loan agreement were purportedly signed by Morrison in August
1998 and August 1999.1 On September 11, 1999, Morrison admits that he and his wife, Brenda
Morrison, entered into a loan agreement with the bank – purportedly the fourth in a series of six –



       1
           The bank co ntends M orrison signed them; M orrison insists the signatures are forgeries.
in the amount of $23,000 to purchase a Dodge Ram truck.2 The Morrisons secured this loan with
the Dodge Ram, their deposit accounts with the bank, and a Ford Bronco.

        Thereafter, two additional loan agreements were executed, in December 1999, and April
2000. The Morrisons contend, however, that all but the first and fourth loan agreements were forged
documents for which they are not liable. Specifically, the Morrisons allege a representative of the
bank either forged Stanley Morrison’s signature on four of the six agreements or negligently allowed
someone else to commit the forgeries. The bank has contended throughout all three actions that all
loan documents were signed by Morrison. It is undisputed that Brenda Morrison signed the fourth
agreement along with her husband.

        The first of the three lawsuits among the parties was in the General Sessions Court of Marion
County. It was a civil warrant brought by the bank against Stanley Morrison for a deficiency
judgment on the notes and to recover the collateral securing the note, the Dodge Ram. The bank
alleged that the Morrison loans were cross-collateralized, that one of the loans was in default, which
rendered all of the loans, including the fourth that the Morrisons admit signing, in default. Thus, the
bank sought a deficiency judgment and possession of the the Dodge Ram truck the Morrisons put
up as collateral. Morrison did not file a response to the civil warrant and did not appear at the
hearing in General Sessions Court.3 Because of Morrison’s failure to appear, the General Sessions
Court entered a default judgment on November 27, 2000, awarding the bank a deficiency judgment
and possession of the Dodge Ram truck.

         Morrison attempted to appeal this decision by filing his own Civil Warrant for the Recovery
of Personal Property (the Dodge Ram truck) against Citizen State Bank,4 accompanied by an Appeal
Bond. These were filed by Morrison on December 11, 2000. The appeal, however, came too late,
after the expiration of the ten-day time limit for appeals. Upon motion by the bank, the Circuit Court
of Marion County dismissed Morrison’s civil warrant and attempted appeal due to Morrison’s failure
to timely appeal. Morrison then filed a motion for new trial and, in the alternative, to set aside the
default judgment, which the Circuit Court dismissed by Agreed Order in June of 2001.

        Thereafter, Brenda and Stanley Morrison filed this action against the bank on October 24,
2001, in which they alleged the bank defrauded them or negligently allowed someone else to do so
by forging Morrison’s signature on four of the six loan agreements. Further, they alleged the bank
“illegally converted” the Dodge Ram, contending they were current on the loan secured by the Dodge




         2
             The fourth note is the only one that bears the signature of Brenda M orrison.

         3
          Morrison contends he was no t prop erly served with process, claiming the Sheriff left the warrant and summons
with his mother-in-law next doo r. Unfo rtunately, the reco rd does not contain the sheriff’s return of pro cess.

         4
         This was the second of the three related actions between Morrison and the bank concerning the loans at issue
and the Dodg e Ram truck.

                                                            -2-
Ram, the Dodge Ram was not cross-collateralized for the other loans, and the bank’s conduct5
violated the Tennessee Consumer Protection Act and the Fair Debt Collection Act.

       The bank moved for summary judgment upon the basis of res judicata. The trial court
granted the motion from which the Morrisons appeal.

                                           STANDARD OF REVIEW

        The issues were resolved in the trial court upon summary judgment. Summary judgments
do not enjoy a presumption of correctness on appeal. BellSouth Advertising & Publishing Co. v.
Johnson, 100 S.W.3d 202, 205 (Tenn. 2003). This court must make a fresh determination that the
requirements of Tenn. R. Civ. P. 56 have been satisfied. Hunter v. Brown, 955 S.W.2d 49, 50-51
(Tenn. 1997). We consider the evidence in the light most favorable to the non-moving party and
resolve all inferences in that party's favor. Godfrey v. Ruiz, 90 S.W.3d 692, 695 (Tenn. 2002). When
reviewing the evidence, we first determine whether factual disputes exist. If a factual dispute exists,
we then determine whether the fact is material to the claim or defense upon which the summary
judgment is predicated and whether the disputed fact creates a genuine issue for trial. Byrd v. Hall,
847 S.W.2d 208, 214 (Tenn. 1993); Rutherford v. Polar Tank Trailer, Inc., 978 S.W.2d 102, 104
(Tenn. Ct. App. 1998).

         Summary judgments are proper in virtually all civil cases that can be resolved on the basis
of legal issues alone, Byrd v. Hall, 847 S.W.2d at 210; Pendleton v. Mills, 73 S.W.3d 115, 121
(Tenn. Ct. App. 2001); however, they are not appropriate when genuine disputes regarding material
facts exist. Tenn. R. Civ. P. 56.04. The party seeking a summary judgment bears the burden of
demonstrating that no genuine disputes of material fact exist and that party is entitled to judgment
as a matter of law. Godfrey v. Ruiz, 90 S.W.3d at 695. Summary judgment should be granted at the
trial court level when the undisputed facts, and the inferences reasonably drawn from the undisputed
facts, support one conclusion, which is the party seeking the summary judgment is entitled to a
judgment as a matter of law. Pero's Steak & Spaghetti House v. Lee, 90 S.W.3d 614, 620 (Tenn.
2002); Webber v. State Farm Mutual Automobile Ins. Co., 49 S.W.3d 265, 269 (Tenn. 2001). The
court must take the strongest legitimate view of the evidence in favor of the non-moving party, allow
all reasonable inferences in favor of that party, discard all countervailing evidence, and, if there is
a dispute as to any material fact or if there is any doubt as to the existence of a material fact,
summary judgment cannot be granted. Byrd v. Hall, 847 S.W.2d at 210; EVCO Corp. v. Ross, 528
S.W.2d 20 (Tenn. 1975). To be entitled to summary judgment, the moving party must affirmatively
negate an essential element of the non-moving party's claim or establish an affirmative defense that
conclusively defeats the non-moving party's claim. Cherry v. Williams, 36 S.W.3d 78, 82-83 (Tenn.
Ct. App. 2000).



        5
          W e can only assume that the conduct to which the Morrisons are referring is that concerning the alleged
forgeries on the notes and the possession of the Dodge Ram. Their complaint was not sufficiently specific on that
allegation.

                                                       -3-
                                              ANALYSIS

        The Morrisons’ allegations of forgery and fraud are serious, yet this case does not turn on
these allegations. Instead, the disposition of this appeal hinges on the applicability or inapplicability
of the doctrines of res judicata and collateral estoppel.

         Res judicata and collateral estoppel “promote finality in litigation in order to conserve
judicial resources and to relieve litigants from the cost and vexation of multiple lawsuits.” State ex
rel. Cihlar v. Crawford, 39 S.W.3d 172, 178 (Tenn. Ct. App. 2000). “[P]ublic policy dictates that
litigation should be determined with reasonable expedition, and not protracted through inattention
and lack of diligence on the part of litigants or their counsel.” Henley v. Hastings, 441 S.W.2d 64,
69 (Tenn. Ct. App. 1968) (citing Jordan v. Johns, 79 S.W.2d 798 (Tenn. 1935)).

         “Res judicata bars a second suit between the same parties on the same cause of action as to
all issues which were or could have been litigated in the former suit.” Collins v. Green County Bank,
916 S.W.2d 941, 945 (Tenn. Ct. App. 1995). Collateral estoppel “bars a second suit between the
parties on a different cause of action where the issues were actually litigated and determined in the
former suit.” Collins at 945. Importantly, these doctrines apply not only to those issues that were
actually determined in the prior suit, but also to all issues that could have been determined. Henley
at 69.

        Res judicata bars a second suit on the same cause of action. The first action was a civil
warrant to recover a deficiency judgment on a series of notes and repossess personal property. This
is an action for damages allegedly resulting from fraud, misrepresentation, and for violations of the
Tennessee Consumer Protection Act and the Fair Debt Collection Act. This action is not the same
action as that brought by the bank in General Sessions Court. Thus, res judicata does not apply.

        Collateral estoppel, however, is an issue preclusion doctrine. Hampton v. Tennessee Truck
Sales, Inc., 993 S.W.2d 643, 645. “Once an issue has been actually or necessarily determined by a
court of competent jurisdiction, the doctrine of collateral estoppel renders that determination
conclusive on the parties and their privies in subsequent litigation, even when the claims or causes
of action are different. Cihlar at 178-179 (Tenn. Ct. App. 2000).

        The Morrisons’ failure to defend the civil warrant in General Sessions Court notwithstanding,
the General Sessions Court ruled in favor of the bank on its claims that were based on the promissory
notes and security agreements at issue in this action. By granting a deficiency judgment and
possession of and title to the Dodge Ram truck to the bank, the General Sessions Court determined
that the fourth promissory note and security agreement was validly executed by Brenda and Stanley
Morrison, the Dodge Ram truck was security on the note, the other notes were validly executed by
Stanley Morrison, and one of the notes with which the Dodge Ram truck was cross-collateralized
was in default. See Ingram v. Earthman, 993 S.W.2d 611, 631 (Tenn. Ct. App. 1998) (holding in a
suit on a note, the holder makes out a prima facie case by producing the note signed by the maker
and by showing that there is a balance due on the note.) (citing Crossland Fed. Sav. Bank v. A. Suna


                                                  -4-
& Co., 935 F.Supp. 184, 191 (E.D.N.Y.1996); Smith v. Weindrop, 833 P.2d 856, 857
(Colo.Ct.App.1992); Misemer v. Freda's Restaurant, Inc., 961 S.W.2d 120, 121 (Mo.Ct.App.1998);
L. Harvey & Son, Co. v. Jarman, 76 N.C.App. 191, 333 S.E.2d 47, 52-53 (N.C.App.1985); Judarl,
L.L.C. v. Cycletech, Inc., 246 A.D.2d 736, 667 N.Y.S.2d 451, 452 (1998)); See also First State Bank
& Trust Co. v. McIver, 681 F.Supp. 1562, 1564 (M.D.Ga. 1988); Reifeiss v. Barnes, 192 S.W.2d
427, 430 (Mo. Ct. App.1946); Rubbelke v. Strecker, 53 Wash. App. 20, 765 P.2d 314, 316 (1988)
(holding refusal to pay a note when due results in a breach of the terms of the note for which the
maker dishonors a note, the holder may seek judicial relief on the note itself, the underlying
obligation, if any, or both in the alternative).

        Because the General Sessions Court decided these issues when it rendered judgment against
Morrison in favor of the bank in November of 2000, the Morrisons are now estopped from
challenging the validity of the notes purportedly signed by Morrison, whether one of the notes was
in default, and whether the Dodge Ram truck was subject to being repossessed as collateral for the
notes.

         When the bank brought its action in General Sessions Court to recover the Dodge Ram that
it alleged served as collateral on a promissory note between it and Morrison, Morrison could have
defended that action on the very grounds raised in this action. Specifically, he could have argued
that the promissory note on which the bank relied was invalid due to forgery. He could have
defended the action by arguing that the bank had no right to take the Dodge Ram because the note
secured by the Dodge Ram was not in default. He could have also argued that the note in default was
not secured, cross-collateralized, by the Dodge Ram. Morrison could have defended the first action
on any of these issues, but he failed to do so.

        The General Sessions Court entered a default judgment6, and Morrison failed to file a timely
appeal from that judgment. Therefore, the judgment is conclusive “to all matters which might have
legally been put in issue and determined. . . .” National Cordova Corp. v. City of Memphis, 380
S.W.2d 793 (Tenn. 1964). We therefore affirm the trial court’s summary dismissal of the Morrisons’
complaint on the basis of collateral estoppel.

       The judgment of the trial court is affirmed, and this matter is remanded with costs of appeal
assessed against appellants Brenda and Stanley Morrison.


                                                               ___________________________________
                                                               FRANK G. CLEMENT, JR., JUDGE




         6
           Morrison contends that he was not properly served with notice of this action. This may be so, and if true,
would have been grounds for appealing the default judgment. He failed to timely file his appeal, however, and thus the
issue of proper service has also been conclusively determined against him.

                                                         -5-
