                 IN THE COURT OF APPEALS OF TENNESSEE
                              AT JACKSON
                                JANUARY 22, 2010 Session

CHASE MANHATTAN MORTGAGE CORPORATION v. IDA B. STREET

               Direct Appeal from the Chancery Court for Shelby County
                      No. 04-1559-02   Arnold Goldin, Chancellor


                  No. W2007-02553-COA-R3-CV - Filed April 14, 2010


In 1991, Ms. Street executed a note and deed of trust in favor of National Bank of Commerce.
National Bank of Commerce immediately assigned the deed of trust to Troy & Nichols, Inc. In
1994, Chase acquired Troy & Nichols, and in 2003, National Bank of Commerce released the deed
of trust. Chase brought suit claiming that the deed of trust had been erroneously released, seeking
to rescind the releases and to reinstate the deed of trust. The trial court granted summary judgment
to Chase, and we affirm.




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

A LAN E. H IGHERS, P.J., W.S., delivered the opinion of the Court, in which D AVID R. F ARMER,
J., and J. S TEVEN S TAFFORD, J., joined.

Brenda Oats-Williams, Memphis, Tennessee, for the appellant, Jo Ann Street

H. Keith Morrison, Jason S. Mangrum, Fayetteville, AR, for the appellee, Chase Manhattan
Mortgage Corporation
                                              OPINION

                               I. FACTS & PROCEDURAL HISTORY

        On February 25, 1991, Ida B. Street (“Ms. Street”) executed, in favor of National Bank of
Commerce, both a note for the principal sum of $33,217.00 and a deed of trust for the real property
located at 2327 Shasta Avenue, securing the note. The deed of trust was filed for recording with the
Office of the Register of Shelby County, Tennessee, as Instrument No. CC 0979, and was re-
recorded as Instrument No. CC 2963. On that same date, National Bank of Commerce assigned the
deed of trust to Troy & Nichols, Inc.

        In 1993, after falling behind on her note payments, Ms. Street filed for Chapter 13
bankruptcy. In 1994, Troy & Nichols, Inc. was acquired by Chase Manhattan Mortgage Corporation
(“Chase”). Ms. Street received a discharge in the 1993 bankruptcy case in 1998. Ms. Street again
fell behind on her payments, and a foreclosure sale was scheduled for December 1998. However,
she filed a second bankruptcy petition, which was finalized, and her debts discharged, in October
2003.

        On December 24, 2003, National Bank of Commerce recorded releases of the deed of trust
with the Office of the Register of Shelby County, Tennessee.1 Chase brought suit against Ms. Street
on August 4, 2004, arguing that the deed of trust had been erroneously released, and requesting that
the releases be rescinded and the deed of trust be reinstated. Chase filed a motion for summary
judgment on December 29, 2005, which the trial court granted on October 22, 2007. Pursuant to its
order, the trial court “set aside and cancelled” the deed of trust releases, and it “revived and declared
enforceable” the deed of trust “according to its terms as if the Trust Deed Releases had not been
recorded.” Subsequently, Ida B. Street died, and Jo Ann Street (“Appellant”) was substituted as the
plaintiff pursuant to a January 2009 order.

                                       II. ISSUE PRESENTED

     Appellant has timely filed her notice of appeal and presents the following issue for review,
summarized as follows:

1.      Whether the trial court erred in granting Chase’s motion for summary judgment when Ms.
        Street was not allowed to testify, and when she was not properly summoned.




        1
        A separate “Trust Deed Release” was recorded for both Instrument No. CC 0979 and Instrument
No. CC 2963.

                                                  -2-
                               III.   S TANDARD OF R EVIEW

        In the instant case, we are asked to review the trial court's grant of summary judgment
to a defendant. We are bound by the following standard of review: Summary judgment is
appropriate when “there is no genuine issue as to any material fact and . . . the moving party
is entitled to judgment as a matter of law.” Tenn. R. Civ. P. 56.04. Ruling on a motion for
summary judgment does not involve disputed issues of fact, but only questions of law.
Owner-Operator Indep. Drivers Ass’n v. Concord EFS, Inc., 59 S.W.3d 63, 68 (Tenn.
2001). Thus, our standard for reviewing a grant of summary judgment is de novo with no
presumption of correctness as to the trial court's findings. See Webber v. State Farm Mut.
Auto. Ins. Co., 49 S.W.3d 265, 269 (Tenn. 2001). The evidence must be viewed “in the light
most favorable to the nonmoving party,” and all reasonable inferences must be drawn in the
non-moving party's favor. Staples v. CBL & Assocs., 15 S.W.3d 83, 89 (Tenn. 2000).

                                      IV.   D ISCUSSION

                          A.   Ownership and Payment of Loan

       Although Appellant’s statement of the issues does not address the validity of the
releases, she appears to argue that the deed of trust was rightfully released because Chase did
not own the deed of trust, and because the note secured by the deed of trust had been paid in
full. The evidence presented shows otherwise.

       The record demonstrates, as we stated above, that the original lender, National Bank
of Commerce, assigned all of its rights regarding the deed of trust to Troy & Nichols, Inc.
in 1991, and Chase acquired Troy & Nichols, Inc. the following year. When National Bank
of Commerce released the deed of trust in 2003, it had not owned the loan in over twelve
years.

        Furthermore, the record shows that although Ms. Street received discharges in her two
bankruptcy cases, her debt owed under the note had not been paid. In fact, according to an
“Affidavit of Debt,” as of October 2006, Ms. Street owed a total payoff amount of
$32,205.51. Although a bankruptcy discharge could shield Ms. Street from personal liability,
it would not prevent Chase, as a secured creditor, from foreclosing on her property if the
underlying debt remained unpaid. See 11 U.S.C.A. § 524; In re Perry, 388 B.R. 330, 335-36
(Bankr. E.D. Tenn. 2008); In re Pendlebury, 94 B.R. 120, 122 (Bankr. E.D. Tenn. 1988).
Thus, Ms. Street’s bankruptcy did not “pay off” Chase as Appellant seems to believe such
that a release of the deed of trust was appropriate.




                                              -3-
                                   B.   Service of Process

       Next, Appellant attempts to challenge the sufficiency of the service of process made
upon Ms. Street. Chase claims that after filing both its complaint on August 4, 2004, and its
amended complaint on January 14, 2005, it immediately requested that summonses be issued.
However, after the private process server attempting to serve the amended complaint
indicated that Ms. Street could not be found, a publication order was granted. A legal notice
ran for four consecutive weeks, from March 17, 2005 to April 7, 2005, in The Daily News.

       On appeal, Appellant claims that Chase erred in not serving the summons upon Ms.
Street within thirty days of the filing of its complaint, and in waiting until February 2005 to
issue a notice by publication. She further claims that Chase knew that she had lived at the
same address for more than thirty years and that she had been employed by the State of
Tennessee for more than twenty years, and she maintains that The Daily News is “not readily
read or available to the average Memphian.”

        We need not address the merits of this argument, as we find that Ms. Street waived
the issue by failing to properly invoke the defense. “Insufficiency of service of process is an
affirmative defense that must be presented in the defendant’s answer or in a pre-answer
motion.” Allgood v. Gateway Health Sys., No. M2008-01779-COA-R3-CV, 2009 3129593,
at *6 (Tenn. Ct. App. W.S. Sept. 22, 2009), reh’g denied (Oct. 20, 2009) (citing Tenn. R.
Civ. P. 12.02(5); Eaton v. Portera, No. W2007-02720-COA-R3-CV, 2008 WL 4963512, at
*3 (Tenn. Ct. App. Nov. 21, 2008)). It is unclear whether Ms. Street or Appellant raised
insufficiency of service of process at any point prior to this appeal; however, the issue was
clearly not raised in the manner required by Rule 12.02, and therefore, it is considered
waived.


                                   C. Inability to Testify

        Finally, Appellant asserts that the trial court erred in refusing to allow Ms. Street to
testify before granting Chase’s motion for summary judgment. “[Tennessee Rule of Civil
Procedure 56.04] clearly states that the Court is to use ‘pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any,’ to determine
whether the granting of a motion for summary judgment is proper.” Rural Devs., LLC v.
Tucker, No. M2008-00172-COA-R3-CV, 2009 WL 112541, at *10 (Tenn. Ct. App. Jan. 14,
2009) perm. app. denied (Tenn. Aug. 17, 2009) (quoting Rayburn v. E.J. Constr., No.
03A01-9306-CV-00212, 1994 WL 27616, at *2 (Tenn. Ct. App. Feb. 3, 1995)). “There is
no mention in this Rule of the use of testimony of live witnesses because the Rule simply
does not permit that kind of proof in this type of hearing.” Id. (citing Evco. Corp. v. Ross,

                                              -4-
528 S.W.2d 20 (Tenn. 1975)). Allowing oral testimony during hearings on motions for
summary judgment “would likely turn these hearings into ‘mini trials’” and would thwart the
Rule’s purpose of providing a “‘quick, inexpensive means of concluding cases, in whole or
part, upon issues as to which there is no genuine dispute regarding material facts.’” Id.
(quoting Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993)). Because Appellant had no right to do
so, we find that the trial court did not err in refusing to allow Appellant to testify at the
summary judgment hearing.


                                    V.   C ONCLUSION


       For the aforementioned reasons, we affirm the decision of the chancery court. Costs
of this appeal are taxed to Appellant, Jo Ann Street, for which execution may issue if
necessary.


                                                   _________________________________
                                                   ALAN E. HIGHERS, P.J., W.S.




                                             -5-
