Rose Construction Company, Inc. v. Raintree Development Company, L.L.C. ( 2004 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
October 11, 2004 Session
ROSE CONSTRUCTION COMPANY, INC. v. RAINTREE
DEVELOPMENT COMPANY, LLC
Direct Appeal from the Chancery Court for Shelby County
No. 110162-1 Walter L. Evans, Chancellor
No. W2003-01845-COA-R3-CV - Filed November 16, 2004
This is the second appeal of this case. In June 1999, an arbitration panel determined Rose
Construction was entitled to damages under the parties’ contract. The trial court vacated the
arbitration award. On appeal, this Court reversed and confirmed the arbitration award in its entirety.
The Tennessee Supreme Court denied Raintree Development’s application for permission to appeal,
issued a mandate, and remanded the case to the trial court for entry of judgment. The trial court
entered judgment for Rose Construction as ordered by this Court. Raintree Development again
appeals. We affirm. We also hold this appeal frivolous and award Rose Construction damages for
a frivolous appeal.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed; and
Remanded
DAVID R. FARMER , J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J., W.S.,
ALAN and E. HIGHERS, J., joined.
Larry E. Parrish and Robert P. Campbell, Jr., Memphis, Tennessee, for the appellant, Raintree
Development Company, LLC.
J. Houston Gordon and Michael I. Less, Covington, Tennessee, for the appellee, Rose Construction
Company, Inc.
MEMORANDUM OPINION1
1
Rule 10 of the Tennessee Court of Appeals provides:
This Court, with the concurrence of all judges participating in the case, may affirm, reverse or modify
the actions of the trial court by memorandum opinion when a formal opinion would have no
precedential value. W hen a case is decided by memorandum opinion it shall be designated
"MEMORANDUM OPINION", shall not be published, and shall not be cited or relied on for any
reason in any unrelated case.
This is the second appeal of this protracted arbitration case. The factual background giving
rise to this appeal is addressed in Rose Construction Co. v. Raintree Development Co., No. W2000-
01388-COA-R3-CV, 2001 WL 1683746 (Tenn. Ct. App. Dec. 31, 2001) perm. app. denied (Tenn.
Oct. 7, 2002), and does not need to be reiterated here. In June 1999, an arbitration panel expressly
determined Raintree Development Company (“Raintree”) had acted in bad faith. Rose Constr., 2001
WL 168746, at *5. It further determined that Rose Construction Company, Inc. (“Rose”) was
entitled to a net award of $974,000, plus interest. Id. at * 2.
In March 2000, the trial court vacated the entire arbitration award. Id. In its memorandum,
the trial court stated “[t]he award of attorney fees under the Prompt Pay Act by the arbitrators
constituted more than a mere error in construing the prevailing law, but was a complete failure to
apply the law or the contract.” Id. Rose appealed and in December 2001, this Court reversed. This
Court held, “[t]he arbitration award must be confirmed in its entirety, and the cause is remanded for
this purpose.” Id. at *6. We denied Raintree’s petition to rehear in January 2002. In October 2002,
the Tennessee Supreme Court denied Raintree’s application for permission to appeal. It also denied
Raintree’s motion to stay the mandate to permit appeal to the United States Supreme Court. The
Tennessee Supreme Court issued its mandate in November 2002, remitting the cause to the trial
court and signifying the end of the case.
Rose moved for entry of the judgment in November 2002. In December 2002, Raintree filed
for bankruptcy. The bankruptcy stay was lifted in November 2003. On May 15, 2003, the trial court
entered judgment for Rose in conformance with the order of this Court and the mandate of the
supreme court. Raintree filed a motion to alter or amend, which the trial court denied in June 2003.
Raintree filed a timely notice of appeal to this Court. Rose filed a motion to dismiss the appeal,
which we denied. Rose now seeks dismissal and sanctions for a frivolous appeal.
Raintree now presents the following issues, as we-restate them, for review by this Court:
(1) Whether the trial court erred in not vacating the arbitration award because the
issues in dispute were not subject to arbitration.
(2) Is Raintree entitled, as a matter of right, to adjudication of questions
pertaining to arbitrability?
(3) Is Raintree entitled to adjudication of its counter-claims?
Rose raises the following additional issues:
(1) Whether this matter was ended by the final decision and mandate of the
supreme court.
(2) Whether Raintree has exhausted or waived further appeals.
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(3) Whether this appeal is frivolous and is part of a pattern of abuse and delay.
We agree with Rose that this matter ended with the Tennessee Supreme Court’s denial of
Raintree’s application for permission to appeal. This Court confirmed the arbitration award “in its
entirety,” the supreme court denied Raintree’s application for permission to appeal, and there
remained nothing to litigate. We accordingly affirm the judgment of the trial court.
We next turn to whether this appeal is frivolous. When it appears to any reviewing court that
the appeal from any court of record was frivolous or taken solely for delay, the court may, either
upon motion of a party or on its own motion, award just damages against the appellant, which may
include, but need not be limited to, costs, interest on the judgment, and expenses incurred by the
appellee as a result of the appeal. Tenn. Code Ann. § 27-1-122(2000). Courts construe this section
of the Code strictly in an effort not to discourage legitimate appeals. Davis v. Gulf Ins. Group, 546
S.W.2d 583, 586 (Tenn.1977). A frivolous appeal is one "devoid of merit" and which cannot
reasonably succeed. Id. It is one completely "lacking in justiciable issues." Id.
We agree with Rose that this is a frivolous appeal. This Court’s opinion of December 2001
unambiguously confirmed the arbitration award in its entirety. This holding was implicitly affirmed
by the Tennessee Supreme Court when it denied Raintree’s application for permission to appeal.
Upon issuance of the supreme court’s mandate and remand to the trial court for enforcement of the
arbitration award, there remained nothing to litigate. We accordingly award Rose damages for a
frivolous appeal pursuant to Tennessee Code Annotated § 27-1-122. We award Rose damages in
the amount equal to expenses and reasonable attorney’s fees incurred by this appeal. We remand to
the trial court for determination of such damages. Costs of this appeal are taxed to the Appellant,
Raintree Development Company, LLC, and its surety, for which execution may issue if necessary.
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DAVID R. FARMER, JUDGE
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