Tennessee State Bank v. Douglas v. Mashek

Syllabus

This case involves a home equity line of credit (\HELOC\) extended to the co-defendant, Douglas V. Mashek, by the plaintiff, Tennessee State Bank (\the Bank\), via a promissory note secured by a deed of trust encumbering real property titled to Mr. Mashek and acquired during Mr. Mashek's marriage to the co-defendant, Deborah A. Mashek. When the Bank subsequently attempted to foreclose on the property, Mr. Mashek objected based on alterations to the deed of trust and a notice of right of rescission that had allegedly occurred after the deed's execution and prior to recordation. The Bank filed a complaint against the Masheks in the trial court, seeking declaratory judgment that the recorded deed of trust was valid and enforceable, or in the alternative, reformation of the executed deed of trust to conform to the recorded deed. The Bank also named the title company involved in the loan transaction as a third-party defendant, alleging the title company's liability in the event that the trial court found the deed of trust, either as executed or as recorded, to be unenforceable.1 The Masheks, proceeding pro se, filed various pleadings in response to the complaint, including a counterclaim against the Bank, alleging, inter alia, common law fraud, breach of fiduciary duty, negligence, equitable estoppel, slander of title, statutory estoppel, wrongful foreclosure, and unclean hands. Upon the Bank's motion for partial summary judgment and following a hearing, the trial court granted the motion as to reformation of the executed deed of trust, declaring the deed, as reformed, to be enforceable and finding that the Bank was entitled to pursue foreclosure proceedings. The trial court found in part that the Bank or its agent(s) had employed \procedurally questionable and perhaps fraudulent\ methods that were \at the very least negligent and potentially criminal in nature\ to correct mistakes in the executed deed of trust and to, without authorization, affix the Masheks' initials o