Dominion Bank of Middle Tennessee v. Crane

843 S.W.2d 14, 1992 Tenn. App. LEXIS 655
CourtCourt of Appeals of Tennessee
DecidedJuly 31, 1992
StatusPublished
Cited by8 cases

This text of 843 S.W.2d 14 (Dominion Bank of Middle Tennessee v. Crane) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dominion Bank of Middle Tennessee v. Crane, 843 S.W.2d 14, 1992 Tenn. App. LEXIS 655 (Tenn. Ct. App. 1992).

Opinion

OPINION

KOCH, Judge.

This consolidated appeal involves two limited partners’ liability on their personal guaranties of a partnership note. After the partnership defaulted, the bank assigned the note and the guaranties to one of the general partners. The general partner filed separate suits against each of the guarantors in Davidson and Sumner Counties. The Chancery Court for Sumner County granted summary judgments dismissing the general partner’s suit and finding in favor of one of the guarantors on his counterclaim. The Chancery Court for Davidson County conducted a bench trial and entered a judgment for the general partner against the other guarantor. The general partner has appealed from the Sumner County court’s summary judgment dismissing its complaint, and one of the guarantors has appealed from the Davidson County court’s judgment. We have determined that the guarantors’ liability has not been extinguished and that their individual guaranties remain enforceable.

I.

Nashville Barge Associates, Ltd. (“Nashville Barge”) was a limited partnership formed in 1981 for the purpose of acquiring five barges to be operated on the Mississippi River by the Ingram Barge Company. Its general partners consisted of T. Michael Patton and Union Street Leasing Corporation (“Union Street”).1 It had twenty limited partners, including David Leo Crane, Sr. and Dr. R.K. Galloway.

On October 6, 1981, Nashville Barge and Union Street borrowed $964,950 from Nashville City Bank to finance the purchase of the barges. Their note was secured by a first secured ship’s mortgage on the barges and by the individual guaranties of the general and the limited partners. Dr. Galloway executed his limited guaranty on August 18, 1981, and Mr. Crane executed his on August 27, 1981.

The venture did not prove to be profitable. Beginning in 1983, Nashville Barge began to borrow additional funds from its limited partners in order to cover the debt service and interest on the Nashville City Bank loan and to meet its operating expenses. Nashville Barge defaulted on its Nashville City Bank note in January, 1987. Three months later, Dominion Bank of Middle Tennessee (“Dominion Bank”)2 sold the barges for $410,000 and called upon the limited partners, including Dr. Galloway and Mr. Crane, for the $496,956 deficiency.

Most of the limited partners honored their guaranties, and by February 1989, the deficiency had been reduced to $104,043 plus interest. On February 14, 1989, Dominion Bank assigned the partnership’s October 1981 note and five of the individual guaranties to Mr. Patton. On the same day, Mr. Patton executed a $104,043 note in his own name as well as a “collateral assignment of promissory note” giving Dominion Bank a security interest in the partnership’s October 1981 note and the five individual guaranties.

Mr. Patton then set about trying to require the remaining limited partners to honor their guaranties. In April 1989, he [17]*17sued Dr. Galloway in the Chancery Court for Sumner County. On the same day, he filed an identical suit against Mr. Crane in the Chancery Court for Davidson County.

Dr. Galloway denied liability and filed a counterclaim against Mr. Patton for the loans he had made to the partnership between April 1983 and August 1986. On July 11, 1990, the Sumner County court granted Dr. Galloway’s motion for summary judgment and dismissed Mr. Patton’s complaint on the ground that Dr. Galloway’s liability on his individual guaranty was extinguished when Dominion Bank assigned the note to Mr. Patton in February 1989.

The Davidson County court heard Mr. Patton’s suit against Mr. Crane without a jury on August 22, 1990, and approximately one week later, filed an order awarding Mr. Patton a judgment against Mr. Crane. The Davidson County court differed with the Sumner County court’s conclusions by finding that Mr. Patton was not a party to the partnership’s October 1981 note and, therefore, that Dominion Bank’s assignment of the note to Mr. Patton did not constitute a discharge under Tenn.Code Ann. § 47-3-601 (1979).

In September 1990, the Sumner County court held a hearing on Mr. Patton’s motion to alter or amend the July 1990 order summarily dismissing his claim and on Dr. Galloway’s motion for a summary judgment on his counterclaim. On October 8, 1990, the Sumner County court entered an order denying Mr. Patton’s motion, granting Dr. Galloway’s motion, and awarding Dr. Galloway a $7,512 judgment against Mr. Patton personally and an $18,150 judgment that could be satisfied only from Nashville Barge assets.3

Both Mr. Patton and Mr. Crane perfected timely appeals. While these appeals were pending, Mr. Patton filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Middle District of Tennessee. The bankruptcy court granted Dominion Bank relief from the automatic stay and permitted it to pursue its interest as a holder of the partnership note and the guaranties. Accordingly, on April 19,1991, this court entered an order substituting Dominion Bank for Mr. Patton as the appellant in the Sumner County case. On May 28, 1991, this court entered an order substituting Dominion Bank for Mr. Patton as the appellee in the Davidson County case and consolidating the two cases for briefing and argument.

II.

At the outset, we will take up Mr. Crane’s appeal. He filed a timely notice of appeal from the Davidson County court’s judgment on September 20, 1990. On February 28, 1991, the day after the clerk and master filed the appellate record with this court, Mr. Patton requested that Mr. Crane’s appeal be stayed because of the pending bankruptcy petition. The presiding judge granted the stay on April 12, 1991.

After Dominion Bank obtained relief from the automatic stay, this court entered an order on May 28, 1991, substituting Dominion Bank for Mr. Patton as the ap-pellee and directing the parties to file briefs in accordance with the timetable in Tenn.R.App.P. 29(a). Mr. Crane did not file a brief or request an extension of time within thirty days after the entry of this court’s May 28, 1991 order. Accordingly, Dominion Bank moved to dismiss his appeal in accordance with Tenn.R.App.P. 29(c). Several weeks later, Mr. Crane too filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Middle District of Tennessee. Neither Mr. Crane nor the trustee has filed a brief in this court, nor have they responded to Dominion Bank’s motion.

The automatic stay attendant to the filing of Mr. Crane’s Chapter 7 bankruptcy petition did not take effect until July 19,1991. By that time, Mr. Crane had [18]*18already failed to file a timely brief or to request an extension of time, and Dominion Bank had already moved to dismiss the appeal pursuant to Tenn.R.App.P. 29(c). Commencing bankruptcy proceedings does not excuse a party from its past failure to comply with the requirements of the Tennessee Rules of Appellate Procedure. Since the record contains no explanation concerning Mr. Crane’s good faith efforts to comply with the Tennessee Rules of Appellate Procedure, see H.D. Edgemon Contracting Co. v. King, 803 S.W.2d 220, 223 (Tenn.1991), we grant Dominion Bank’s motion to dismiss Mr. Crane’s appeal for failure to file a timely brief.

III.

Dr.

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843 S.W.2d 14, 1992 Tenn. App. LEXIS 655, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dominion-bank-of-middle-tennessee-v-crane-tennctapp-1992.