Regions Bank v. Thomas D. Thomas, et al.

Following a borrower’s default on a loan agreement, Regions Bank (“Regions”) accelerated the loan and filed this lawsuit against the loan’s guarantors to collect the amounts due. After Regions sold the collateral securing the loan, it sought a judgment for the remaining deficiency. This is the second appeal of this case to this Court. Although the trial court awarded Regions a deficiency judgment prior to the first appeal, we vacated that award upon concluding that Regions had failed to provide sufficient notice to the guarantors prior to its disposition of the collateral. We observed that under Tennessee Code Annotated section 47-9-626, a secured party that has not complied with the commercial code’s collection, enforcement, disposition, and acceptance requirements can only recover a deficiency if it proves that compliance with the relevant provisions would have yielded a smaller amount than the secured obligation, together with expenses and attorney’s fees. Because the trial court did not make any findings on this issue, we remanded the case for further proceedings to determine the amount of the deficiency, if any, under Tennessee Code Annotated section 47-9-626. On remand, the trial court entered a deficiency judgment against the guarantors in the amount of $1,210,511.51. Both sides now appeal from this judgment, asserting various issues. Because Regions did not present any evidence that it would have received less than the total amounts due to it had it provided proper notice, we reverse the trial court’s determination that Regions is entitled to a deficiency. We further reject the guarantors’ assertions that they are entitled to a surplus.