In The News

Bone McAllester Norton Welcomes Habitat for Humanity of Tennessee for Legislative Reception

On March 5, 2019, Bone McAllester Norton welcomed Habitat for Humanity affiliate leaders, board members and supporters from across Tennessee at the firm’s Nashville office to celebrate more than 40 years of building strength, stability and self-reliance in our state. The legislative reception was hosted by Lieutenant Governor Randy McNally, Speaker Glen Casada, Senator Jeff Yarbo, Representative Karen Camper, Representative William Lamberth, Representative Ryan Williams, and Representative and Bone McAllester Norton attorney Johnny Garrett.

From the firm’s beginning, the leaders at Bone McAllester Norton have valued creating a culture founded upon making a positive change. Bone McAllester Norton’s attorneys partner with more than 130 local organizations, including Habitat for Humanity. Sam McAllester, a founder and vice chairman of the law firm, has been a member of the Finance Committee for Habitat since 2012 and currently serves as a member of Habitat’s Board of Directors in Nashville.


For more information about Habitat for Humanity of Tennessee, visit their website.

 

Penny Jude Charles W Bone Habitat 2019 Legislative EventPenny Jude Charles W Bone Habitat 2019 Legislative EventPenny Jude Charles W Bone Habitat 2019 Legislative EventPenny Jude Charles W Bone Habitat 2019 Legislative Event

Bonelaw Attorneys Involved in Court Decision of “Materially Less” in Foreclosure Sales

Tennessee Court of Appeals Issues First Opinion Examining Tennessee Deficiency Judgment Statute
Background:  In the wake of the real estate market collapse, the Tennessee legislature passed, effective September 1, 2010, a statute dealing with deficiency judgment on real property after a trustee’s or foreclosure sale. The statute created a rebuttable presumption that the amount bid at a foreclosure sale equal the fair market value of the property. Debtors could overcome this presumption by showing that the bid was “materially less” than the fair market value.

Case:  Bone McAllester Norton PLLC attorneys David Anthony, Sean Kirk and Tucker Herndon represented the Lender who filed suit to obtain a judgment for the deficiency against the Borrower and Guarantors ( the “Defendants”) after completion of foreclosure against the real property collateral. The Defendants contested the foreclosure sale price as being materially less than fair market value. On a motion for summary judgment filed by the Lender,  the Trial Court and Tennessee Court of Appeals examined the deficiency statute and decided what “materially less” means.  The phrase “materially less” had never been used in any other Tennessee statute or court opinion.

The Lender purchased its own collateral at foreclosure for a mid-range bid based upon a current appraisal. Based upon an Affidavit, the debtor asserted that the fair market value of the property was greater. On Motion for Summary Judgment, the Trial Court held in favor of the Lender that a sales price of 89% - 91% of the recent appraisal was not “materially less.”

On appeal, the Tennessee Court of Appeals agreed with the Bone McAllester Norton PLLC attorneys, affirming the Trial Court decision on summary judgment, finding that the foreclosure bid price of 89% of the highest appraisal was not “materially less” and finding that the debtor had failed to raise sufficient facts to present a defense to summary judgment and the deficiency lawsuit.  The Court did not set a bright line percentage above or below which the statutory presumption is rebutted.

Lenders are well advised to continue the practice of obtaining current appraisals prior to foreclosure and base the foreclosure bid price on the current appraisals, taking into account costs of foreclosure and costs of owning the property.