TN Supreme Court Clarifies Standing Requirements in Tennessee and Holds No Common Law Cause of Action for “Wrongful Foreclosure”

Nashville, Tenn- The Tennessee Supreme Court today issued an Opinion in Case v. Wilmington, involving a man who claimed he experienced “wrongful foreclosure” of his property.

In the Opinion, the Court held that state law does not recognize a common law claim of “wrongful foreclosure.”  Rather, such claims must be brought as existing breach of contract, tort, or statutory causes of action. 

The plaintiff, Terry Case, filed the underlying action to stop the foreclosure of his property.  After the foreclosure was allowed to proceed, Case filed an amended complaint asserting claims for “wrongful foreclosure,” among others.  The trial court dismissed Case’s claims.  The Court of Appeals reversed on the “wrongful foreclosure” claim and upheld dismissal of the remaining claims. 

The Supreme Court granted defendant Wilmington’s application for permission to appeal and requested additional briefing on whether Case satisfied the requirements for constitutional standing.  The Court first clarified that to establish standing in private rights cases, the Tennessee Constitution only requires a legal injury. The Court distinguished Tennessee constitutional requirements from the federal requirement of an injury in fact in all federal cases under the United States Constitution.  

Because Case’s “wrongful foreclosure” claim was not a recognized cause of action, the Supreme Court reversed the Court of Appeals and sent the case back to the trial court to enter an order of dismissal.

Chief Justice Kirby filed a separate opinion concurring in the judgment.  

To read the Supreme Court’s opinion in Case v. Wilmington, authored by Justice Dwight E. Tarwater, click here.