Nashville, TN - Real Estate lawyer represented mortgagors' with a petition to set aside the non-judicial foreclosure of a piece of real property,

Since 1971, Sylvia L. Benford Daniels and Marian L. Benford had been the joint

owners of a piece of property located in Chattanooga, Tennessee ("the Property”). In 1996,

Marian Benford, Sylvia L. Benford Daniels, and Brady Daniels executed a deed of trust,

and Ms. Benford made all mortgage payments until her death in 2010. As part of the loan

process, the loan application and the "Loan Master Information” listed the address of

Sylvia L. Benford Daniels and Brady Daniels (collectively, "the Daniels”) as being in

Columbia, Maryland. The record also includes a document entitled, "Chattanooga Home

Improvement Program Deed of Trust and Security Agreement,” which states that the

instrument is a "Construction Mortgage.” The lender and beneficiary of the deed of trust

is listed as "the CITY OF CHATTANOOGA, organized and existing under the Laws of

the State of Tennessee.” The deed of trust reflects that the document was prepared by and

filed for the City of Chattanooga c/o Chattanooga Neighborhood Enterprise, Inc.

Following Ms. Benford's death, Sylvia Benford Daniels became the sole owner of

the property due to the right of survivorship clause in the original deed. The Daniels were

both co-debtors to the mortgage on the Property. At all times relevant, the Daniels

continued to reside at their address in Columbia, Maryland as listed in the loan application

document. A relative of Ms. Daniels was residing at the Property and had agreed to pay

the mortgage payments. At some point, the family member ceased making the mortgage

payments, and the City of Chattanooga, as "beneficiary under the Deed of Trust and the

true and lawful owner and holder of the [promissory note],” appointed a successor trustee

to conduct the foreclosure process. The Daniels did not receive notice at their Maryland

address of non-payment of the mortgage or of the upcoming foreclosure sale. Instead, the

foreclosure notices addressed to the Daniels were sent to the Property address in

Chattanooga, Tennessee. The record reflects that the family member residing at the

Property at the time of the foreclosure was also copied on the notice of foreclosure. The

public auction for the Property was advertised in the Chattanooga Times Free Press, and

the Property was purchased at the foreclosure sale by the respondent, Vince Trotter. Title

was transferred to Mr. Trotter by successor trustee's deed in November 2018. The Daniels

did not learn of the foreclosure until after title of the Property had been transferred to Mr.

Trotter.

In January 2019, the Daniels filed a petition to set aside the successor trustee's deed

and to declare Sylvia Daniels the owner of the real property, alleging that they did not

receive notice of the foreclosure sale by the City of Chattanooga and Chattanooga

Neighborhood Enterprise, Inc. Alternatively, the Daniels requested a judgment for fair

market value of the Property, as well as pre-judgment interest and post-judgment interest.

The Daniels filed their action in the Hamilton County Chancery Court (the "Trial Court”).

In their petition, the Daniels also named Vince Trotter as a respondent and alleged that he

- 3 -

was not a bona fide purchaser for value and had not purchased the property in good faith.

1



Mr. Trotter filed an answer to the petition and included a counter-complaint against the

Daniels, alleging that the Daniels "and/or their relatives” have continued to reside on the

Property since the sale to Mr. Trotter and requesting damages and possession of the

Property. Mr. Trotter also included a cross-complaint against the respondents, the City of

Chattanooga and Chattanooga Neighborhood Enterprise, Inc. In October 2019, the Daniels

filed a motion to amend their petition to include the allegation that Tenn. Code Ann. § 35-

5-101, et seq., as applied in the present case violates the Daniels' constitutional rights. The

Trial Court subsequently granted the motion to amend upon agreement of the parties, and

the Daniels filed their amended petition alleging the unconstitutionality of Tenn. Code

Ann. § 35-5-106.

Mr. Trotter filed a motion for summary judgment, requesting that all claims against

him be dismissed. In his memorandum of law, Mr. Trotter argued that the Daniels had

not alleged fraud, had not sought monetary damages from Mr. Trotter, and the foreclosure

sale was not void or voidable pursuant to Tennessee law. According to Mr. Trotter, the

motion for summary judgment "seeks a dismissal of the Daniels' efforts to set aside the

sale only.” Mr. Trotter cited to Tenn. Code Ann. § 35-5-106 and argued that the "mere

failure to identify or provide notice to an interested party does not provide sufficient

grounds to set aside a foreclosure sale.”

The Daniels responded to Mr. Trotter's motion and opposed the dismissal, arguing

that the foreclosure of the Property was a governmental "taking” without due process of

law, that Tenn. Code Ann. § 35-5-106 is unconstitutional as applied to the taking of

property by the government, and that the City of Chattanooga and Chattanooga

Neighborhood Enterprise, Inc. failed to comply with the notice provisions of Tenn. Code

Ann. § 35-5-101(e) by sending notice to the Daniels' last known address. According to

the Daniels, this foreclosure by the City of Chattanooga was "a state action rather than an

action by a private entity” and was, therefore, a governmental taking. The Daniels argued

that because this is a governmental taking, Tenn. Code Ann. § 35-5-106 is unconstitutional

in this case. The record does not reflect that the Daniels or anyone else provided notice to

the Attorney General's Office regarding their allegations that Tenn. Code Ann. § 35-5-106

is unconstitutional as applied.

The Trial Court conducted a hearing on the summary judgment motion. According

to the Trial Court's order, Mr. Trotter conceded for purposes of the summary judgment

motion that the City of Chattanooga and Chattanooga Neighborhood Enterprise, Inc. did

not send proper notice to the Daniels of the foreclosure action, as required by Tenn. Code



1 This appeal involves only the action against the respondent, Vince Trotter. At the time this appeal was

initiated, Plaintiff's action against the City of Chattanooga and Chattanooga Neighborhood Enterprise, Inc.

was still pending in the Trial Court. The judgment dismissing the claims against Mr. Trotter was certified

as a final judgment pursuant to Tenn. R. Civ. P. 54.02.

- 4 -

Ann. § 35-5-101. The Trial Court entered an order in July 2020, granting Mr. Trotter's

motion for summary judgment upon its determination that the foreclosure sale was not void

or voidable pursuant to Tenn. Code Ann. § 35-5-106 and that the chancery court did not

have jurisdiction to set aside the foreclosure sale. Regarding the Daniels' constitutional

claims, the Trial Court distinguished the Daniels' reliance on a Court of Appeals opinion

in Owens v. Hamilton Cty., No. E2017-02395-COA-R3-CV, 2018 WL 6253818, at *5

(Tenn. Ct. App. Nov. 28, 2018), because Owens involved the collection of municipal taxes

and lack of service of process. The Trial Court explained that "[t]he collection of municipal

taxes is a governmental function and differs from a governmental entity pursuing a private

remedy for a breach o[f] contract.” Therefore, the Trial Court found that Tennessee

statutory law related to non-judicial foreclosures provides adequate due process protections

and a "constitutionally adequate remedy for a violation – a claim for monetary damages.”

Mr. Trotter filed a motion requesting that the Trial Court declare the July 2020 order to be

a final order, pursuant to Tenn. R. Civ. P. 54.02, which the Trial Court granted.

The Daniels timely appealed to this Court. Following entry of the Trial Court's

order, the Daniels' allegations against the City of Chattanooga and Chattanooga

Neighborhood Enterprise, Inc. remained pending, as well as the cross-complaint and

counter-complaint filed by Mr. Trotter. In September 2021, this Court entered an order,

directing the parties to brief the issue of whether this Court had jurisdiction to consider this

appeal due to Mr. Trotter's pending cross-complaint and counter-complaint. Subsequently,

Mr. Trotter voluntarily dismissed his cross-complaint and counter-complaint, and the Trial

Court entered an order declaring that the Trial Court's July 2020 order was a final judgment

pursuant to Tenn. R. Civ. P. 54.02. This Court thereafter entered an order relieving the

parties of the obligation of briefing the jurisdictional issue.

Discussion

Although not stated exactly as such, the Daniels raise the following issues for our

review on appeal: (1) whether this Court has jurisdiction to consider this appeal and (2)

whether the lack of adequate notice of a foreclosure sale when the mortgagee is a

governmental entity is a violation of due process and gives a trial court the authority to act

beyond the scope of Tenn. Code Ann. § 35-5-106.

Although the parties were relieved of their obligation to address the issue of this

Court's subject matter jurisdiction, the Daniels have included jurisdiction as their first issue

on appeal. This Court does not have subject matter jurisdiction to adjudicate an appeal if

there is no final judgment. See Tenn. R. App. P. 3(a). A final judgment is "one that resolves

all the issues in the case, 'leaving nothing else for the trial court to do.'” In re Estate of

Henderson, 121 S.W.3d 643, 645 (Tenn. 2003) (quoting State ex rel. McAllister v. Goode,

968 S.W.2d 834, 840 (Tenn. Ct. App. 1997)). "[A]ny trial court order that adjudicates fewer

than all the claims or the rights and liabilities of fewer than all the parties is not final or

- 5 -

appealable as of right.” State ex rel. Garrison v. Scobey, No. W2007-02367-COA-R3-JV,

2008 WL 4648359, at *5 (Tenn. Ct. App. Oct. 22, 2008), no appl. perm. appeal filed.

Even if an order adjudicates fewer than all claims for relief, a trial court may certify

an order as final, pursuant to Tenn. R. Civ. P. 54.02, "only upon an express determination

that there is no just reason for delay and upon an express direction for the entry of

judgment.” However, this Court has held that Tenn. R. Civ. P. 54.02 is applicable in

limited circumstances and "does not apply to all orders that are interlocutory in nature.” E.

Solutions for Buildings, LLC v. Knestrick Contractor, Inc., No. M2017-00732-COA-R3-

CV, 2018 WL 1831116, at *3 (Tenn. Ct. App. April 17, 2018), perm. app. denied (Tenn.

Aug. 9, 2018) (quoting Konvalinka v. Am. Int'l Grp., Inc., No. E2011-00896-COA-R3-CV,

2012 WL 1080820, at *3 (Tenn. Ct. App. Mar. 30, 2012)). For a trial court to properly

certify an order as final pursuant to Tenn. R. Civ. P. 54.02, the order should dispose of, at

least, an entire claim or an entire party. E. Solutions for Buildings, LLC, 2018 WL

1831116, at *3.

When this appeal began, Mr. Trotter's cross-complaint and counter-complaint were

pending before the Trial Court. However, Mr. Trotter later voluntarily dismissed those

claims, and the Trial Court certified its July 2020 order as a final order and found that there

was no just reason for delaying entry of a final order. Because all of the claims involving

Mr. Trotter have been resolved in the Trial Court, we find that the Trial Court's order was

properly certified as final, pursuant to Tenn. R. Civ. P. 54.02, and that this Court has subject

matter jurisdiction over the appeal.

We next address the Daniels' issue regarding whether the Trial Court erred by

relying on Tenn. Code Ann. § 35-5-106 and granting summary judgment in favor of Mr.

Trotter. Concerning summary judgment, our Supreme Court has instructed:

Summary judgment is appropriate when "the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.” Tenn.

R. Civ. P. 56.04. We review a trial court's ruling on a motion for summary

judgment de novo, without a presumption of correctness. Bain v. Wells, 936

S.W.2d 618, 622 (Tenn. 1997); see also Abshure v. Methodist Healthcare–

Memphis Hosp., 325 S.W.3d 98, 103 (Tenn. 2010). In doing so, we make a

fresh determination of whether the requirements of Rule 56 of the Tennessee

Rules of Civil Procedure have been satisfied. Estate of Brown, 402 S.W.3d

193, 198 (Tenn. 2013) (citing Hughes v. New Life Dev. Corp., 387 S.W.3d

453, 471 (Tenn. 2012)).

* * *

- 6 -

[I]n Tennessee, as in the federal system, when the moving party does not bear

the burden of proof at trial, the moving party may satisfy its burden of

production either (1) by affirmatively negating an essential element of the

nonmoving party's claim or (2) by demonstrating that the nonmoving party's

evidence at the summary judgment stage is insufficient to establish the

nonmoving party's claim or defense. We reiterate that a moving party

seeking summary judgment by attacking the nonmoving party's evidence

must do more than make a conclusory assertion that summary judgment is

appropriate on this basis. Rather, Tennessee Rule 56.03 requires the moving

party to support its motion with "a separate concise statement of material

facts as to which the moving party contends there is no genuine issue for

trial.” Tenn. R. Civ. P. 56.03. "Each fact is to be set forth in a separate,

numbered paragraph and supported by a specific citation to the record.” Id.

When such a motion is made, any party opposing summary judgment must

file a response to each fact set forth by the movant in the manner provided in

Tennessee Rule 56.03. "[W]hen a motion for summary judgment is made

[and] . . . supported as provided in [Tennessee Rule 56],” to survive summary

judgment, the nonmoving party "may not rest upon the mere allegations or

denials of [its] pleading,” but must respond, and by affidavits or one of the

other means provided in Tennessee Rule 56, "set forth specific facts” at the

summary judgment stage "showing that there is a genuine issue for trial.”

Tenn. R. Civ. P. 56.06. The nonmoving party "must do more than simply

show that there is some metaphysical doubt as to the material facts.”

Matsushita Elec. Indus. Co., 475 U.S. at 586, 106 S. Ct. 1348. The

nonmoving party must demonstrate the existence of specific facts in the

record which could lead a rational trier of fact to find in favor of the

nonmoving party. If a summary judgment motion is filed before adequate

time for discovery has been provided, the nonmoving party may seek a

continuance to engage in additional discovery as provided in Tennessee Rule

56.07. However, after adequate time for discovery has been provided,

summary judgment should be granted if the nonmoving party's evidence at

the summary judgment stage is insufficient to establish the existence of a

genuine issue of material fact for trial. Tenn. R. Civ. P. 56.04, 56.06. The

focus is on the evidence the nonmoving party comes forward with at the

summary judgment stage, not on hypothetical evidence that theoretically

could be adduced, despite the passage of discovery deadlines, at a future trial.

Rye v. Women's Care Cntr. of Memphis, MPLLC, 477 S.W.3d 235, 250, 264-65 (Tenn.

2015) (emphasis in original).

Tennessee statutory law regulates non-judicial foreclosures. The Trial Court relied

on Tenn. Code Ann. § 35-5-106 in granting summary judgment in favor of Mr. Trotter.

Tenn. Code Ann. § 35-5-101(e) requires that in any sale of real property to foreclose a deed

- 7 -

of trust, mortgage, or other lien, the trustee shall send notice to the debtor and any codebtors. Notice to a co-debtor shall be sent to his or her last known mailing address or any

other address the co-debtor has designated for the specific purpose of receiving notice. See

Tenn. Code Ann. § 35-5-101(e)(2). Additionally, Tenn. Code Ann. § 35-5-106 provides

that "[s]hould the officer, or other person making the sale, proceed to sell without pursuing

the provisions of this chapter, the sale shall not, on that account, be either void or voidable.”

Furthermore, Tenn. Code Ann. § 35-5-107 provides that the officer or other individual

making the sale who fails to comply with the requirements in this chapter of conducting a

private foreclosure sale is guilty of a class C misdemeanor and is liable for all damages

incurred by the party injured due to his or her noncompliance.

As this Court has previously held regarding Tenn. Code Ann. § 35-5-106, it is clear

that in enacting this statute, the General Assembly intended to eliminate the uncertainty

with land titles resulting from foreclosure sales. See McSwain v. Am. Gen. Fin., Inc., No.

02A01-9309-CH-00215, 1994 WL 398819, at *2 (Tenn. Ct. App. July 22, 1994). As the

Court stated in McSwain, in pertinent part:

T.C.A. § 35-5-106 clearly and unequivocally provides that the failure to

pursue the provisions of "this chapter” shall not render the sale void or

voidable. It is apparent that the legislature did not want uncertainty

concerning land titles to prevail. This is made even more clear by the

provisions of T.C.A. § 35-5-107, which specifically provide relief for anyone

affected by noncompliance with the foreclosure statutes.

Id. Our Supreme Court has held in Doty v. Fed. Land Bank of Louisville, 89 S.W.2d 337,

339 (Tenn. 1936), that with Tenn. Code Ann. § 35-5-106, a court "would not be authorized

to set aside” a foreclosure sale not complying with the procedures in chapter 5 and that

compensatory damages would be the remedy prescribed.

According to the Daniels, however, the foreclosure by the City of Chattanooga was

a "taking” by a governmental entity without due process, and the Trial Court should have

been permitted to act beyond the scope of Tenn. Code Ann. § 35-5-106 to consider the

constitutional implications. The Due Process clause of the Fourteenth Amendment of the

United States Constitution prohibits the States from depriving any person of life, liberty,

or property without providing the person with due process of law. Similarly, the Tennessee

Constitution, Article I, section 8 provides: "That no man shall be taken or imprisoned, or

disseized of his freehold, liberties or privileges, or outlawed, or exiled, or in any manner

destroyed or deprived of his life, liberty or property, but by the judgment of his peers or

the law of the land.”

It is well-settled that the due process clause of the Fourteenth Amendment applies

only to state action, not private conduct. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 156-

57 (1978). Tennessee's "law of the land” clause found at Article I, section 8 of the

- 8 -

Tennessee Constitution provides the same protection as the due process clause of the

federal constitution, and a violation of Article I, section 8 also requires state action.

CitiMortgage, Inc. v. Drake, 410 S.W.3d 797, 806 (Tenn. Ct. App. 2013); see also Bryant

v. Tenet, Inc., 969 S.W.2d 923, 925 (Tenn. Ct. App. 1997) ("Since 'state action' is

necessary to invoke the protection of the Fourteenth Amendment, we conclude that the

same is true with respect to Article I, § 8.” (internal citations omitted)).

Typically, private non-judicial foreclosures are not considered state action for

purposes of due process. See CitiMortgage, Inc. v. Drake, 410 S.W.3d at 805-06. Nonjudicial foreclosures generally involve "a contractually-determined act involving private

parties, not the state.” See Drake v. Citimortgage, Inc., No. 1:10-CV-305, 2011 WL

1396774, at *2 (E.D. Tenn. Apr. 13, 2011). This Court has held that even considering

Tennessee's statutory authority enacted to regulate non-judicial foreclosures, see Tenn.

Code Ann. § 35-5-101 et seq., a "private non-judicial foreclosure by auction does not

involve state action.” CitiMortgage, Inc. v. Drake, 410 S.W.3d at 805-06. We agree with

this Court's holding in CitiMortgage, Inc. v. Drake that the General Assembly's enactment

of statutes to govern non-judicial foreclosure sales is not, in itself, considered state action.

However, this Court's opinion in CitiMortgage, Inc. v. Drake involved private parties to a

foreclosure and not a governmental entity.

In the case at bar, there is no question whether a governmental entity was involved

in the foreclosure of the Property; the City of Chattanooga is listed as the beneficiary under

the deed of trust and the owner of the promissory note. Upon our consideration of whether

state action exists when a governmental entity acts as a mortgagee, it is an open question

in Tennessee whether a non-judicial foreclosure by a governmental entity may be subject

to due process protections afforded by the Fourteenth Amendment of the United States

Constitution and Article I, Section 8 of the Tennessee Constitution. See Sprauve v. W.

Indian Co. Ltd., 799 F.3d 226, 229-30 (3d Cir. 2015) (stating that the court could avoid a

determination of whether a private party's conduct constituted state action "when the actor

is the government” and held that the governmental entity was subject to claims under the

United States Constitution (citing Lebron v. Nat'l R.R. Passenger Corp., 513 U.S. 374, 378

(1995))); Lehner v. United States, 685 F.2d 1187, 1190 (9th Cir. 1982) (internal footnote

and citations omitted) ("When the Government acts as mortgagee, clearly the mortgagor

has a right to notice and a hearing prior to the [foreclosure] sale.”); Anderson v. Alaska

Hous. Fin. Corp., 462 P.3d 19, 27 (Alaska 2020) ("As a government entity, AHFC [Alaska

Housing Finance Corporation] must satisfy restrictions imposed on state action by the

Alaska Constitution, including its Due Process Clause.”); but see AgriBank FCB v. Cross

Timbers Ranch, Inc., 919 S.W.2d 263, 268 (Mo. Ct. App. 1996) ("Even a wholly-owned

federal entity can enforce a valid contractual provision for foreclosure under a power of

sale as authorized by Missouri statutes without running afoul of the constraints of the Fifth

Amendment.”).

- 9 -

Although not using the words "state action,” the Trial Court appeared to at least

minimally consider whether the actions of the City of Chattanooga and Chattanooga

Neighborhood Enterprise, Inc. were state action when it distinguished this Court's case of

Owens v. Hamilton Cty., No. E2017-02395-COA-R3-CV, 2018 WL 6253818, at *5 (Tenn.

Ct. App. Nov. 28, 2018), and explained that "[t]he collection of municipal taxes is a

governmental function and differs from a governmental entity pursuing a private remedy

for a breach o[f] contract.” Additionally, the Trial Court went on to determine that

Tennessee statutory law related to non-judicial foreclosures provides adequate due process

protections for mortgagors and a "constitutionally adequate remedy for a violation – a

claim for monetary damages.”

However, upon our review of the record on appeal, we see no evidence that the

Tennessee Attorney General's Office was notified during the trial court proceedings of the

Daniels' claim that Tenn. Code Ann. § 35-5-106 is unconstitutional as applied to

mortgagees that are governmental entities. There is no evidence that the Daniels have

provided notice of their constitutional challenge on appeal. Tenn. Code Ann. § 29-14-

107(b) requires that the Tennessee Attorney General and Reporter be served with a copy

of the proceeding and given an opportunity to be heard if a statute of statewide effect is

alleged to be unconstitutional. Tenn. R. Civ. P. 24.04 further provides that "[w]hen the

validity of a statute of this state . . . is drawn in question in any action to which the State or

an officer or agency is not a party, the court shall require that notice be given the Attorney

General, specifying the pertinent statute . . . .” Additionally, Tenn. R. App. P. 32

necessitates that when the validity or constitutionality of a Tennessee statute is at issue in

an appeal to which the state, a state officer, or a state agency is not a party, the party raising

the issue concerning the validity or constitutionality of the statute shall serve a copy of his

or her appellate brief on the Tennessee Attorney General. While the City of Chattanooga

is a party in this action, the necessity of notifying the Attorney General under the relevant

rules of court and statute is clear as the ultimate resolution of this action will decide the

constitutionality of Tenn. Code Ann. § 35-5-106 specifically when a governmental entity

is the mortgagee.

The Daniels have maintained that Tenn. Code Ann. § 35-5-106 is unconstitutional

as applied since their amended petition and response to Mr. Trotter's summary judgment

motion in the trial court proceedings. The Trial Court was obligated under Tenn. R. Civ.

P. 24.04 to require that notice be provided to the Tennessee Attorney General of the

constitutional challenge to a state statute. As this Court has stated, Rule 24.04 "makes it

clear that the trial court sits as gatekeeper to inquire whether notice has been provided to

the Attorney General by the challenger and to suspend proceeding on the constitutional

challenge until such notice has been provided and a response from the Attorney General

received.” In re Adoption of E.N.R., 42 S.W.3d 26, 33 (Tenn. 2001). We note that the

record in this appeal is lacking any evidence that such notice was provided.

- 10 -

The requirement that notice be provided to the Tennessee Attorney General is

twofold. Waters v. Farr, 291 S.W.3d 873, 918-19 (Tenn. 2009) (J. Koch, concurring in

part). Providing notice to the Attorney General of a constitutional challenge to a state

statute "enables the Office of the Attorney General to discharge its responsibility to defend

the constitutionality of state statutes” and ensures that the contested statute is vigorously

defended. Id. We find nothing in the record that shows that any party provided notice to

the Tennessee Attorney General of the constitutional challenge either during the trial court

proceedings or on appeal. "Before we can consider an attack on the constitutionality of a

statute, the record must reflect compliance with Tennessee Rule of Civil Procedure 24.04,

Tennessee Rule of Appellate Procedure 32, and Tennessee Code Annotated section 29-14-

107(b), which all require that notice be provided to the Attorney General.” Tennison Bros.,

Inc. v. Thomas, 556 S.W.3d 697, 731 (Tenn. Ct. App. 2017); see also In re Cannon H., No.

W2015-01947-COA-R3-JV, 2016 WL 5819218, at *7 (Tenn. Ct. App. Oct. 5, 2016), perm.

app. denied (Tenn. Feb. 21, 2017). Due to lack of evidence in the record that the Tennessee

Attorney General had been notified of the Daniels' constitutional challenge to Tenn. Code

Ann. § 35-5-106 when involving a governmental entity, we vacate the Trial Court's order

granting summary judgment in favor of Mr. Trotter and remand for notice to be provided

to the Tennessee Attorney General of the constitutional challenge to Tenn. Code Ann. §

35-5-106 as applied to governmental entities acting as mortgagees in a non-judicial

foreclosure action. Compliance with Tennessee Rule of Civil Procedure 24.04, Tennessee

Rule of Appellate Procedure 32, and Tennessee Code Annotated Section 29-14-107(b)

requires this result even though the Trial Court in this particular case denied the

constitutional challenge, as the result in the next trial court to face a constitutional challenge

to a statute could go the other way. Upon remand following notice to the Tennessee

Attorney General's Office, the Trial Court shall consider whether state action is involved

in a non-judicial foreclosure where a governmental entity is the mortgagee and, if yes,

whether Tenn. Code Ann. § 35-5-106 is unconstitutional as applied when the government

is the mortgagee.

The judgment of the Trial Court granting summary judgment in favor of Mr. Trotter

is vacated and this cause is remanded to the Trial Court for further proceedings consistent with this Opinion. The costs on appeal are assessed one-half against the appellants, Brady L. Daniels and Sylvia Benford Daniels, and their surety, if any, and one-half against the appellee, Vince Trotter.