Belgravia Square, LLC v. Melvin White

11/07/2019
IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
September 18, 2019 Session
BELGRAVIA SQUARE, LLC. v. MELVIN WHITE ET AL.
Appeal from the Circuit Court for Shelby County
No. CT-005178-18 James F. Russell, Judge
___________________________________
No. W2018-02196-COA-R3-CV
___________________________________
Appellant appeals the trial court’s dismissal of his appeal from general sessions court in
this unlawful detainer action. The general sessions court granted immediate possession
of the disputed property to Appellee, and Appellant appealed to the circuit court.
Although Appellant remained in possession of the property, he did not post the required
possessory bond. Tenn. Code Ann. § 29-18-130(b)(2). The trial court dismissed the
appeal finding that, in the absence of the required bond, it had no subject matter
jurisdiction to hear the case. Because the statutory possessory bond is not jurisdictional,
we conclude that the trial court erred in dismissing Appellant’s appeal.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Reversed and Remanded
KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S. and CARMA D. MCGEE, J., joined.
Drayton D. Berkley, Memphis, Tennessee, for the appellant, Melvin White.
Richard J. Myers, Memphis, Tennessee, for the appellee, Belgravia Square, LLC.
OPINION
I. Background
This case involves possessory rights in real property known as 1436 Oak Lake
Circle, Collierville, Tennessee (the “Property”). Appellant Melvin White purchased the
Property in 2000 and procured a mortgage with Bank of America (the “Bank”). Mr.
White defaulted on his loan, and the Bank foreclosed on the Property. The Property was
scheduled for foreclosure sale on August 30, 2018.
Two days before the foreclosure sale, on August 28, 2018, Mr. White filed suit
against the Bank in the United States District Court for the Western District of Tennessee
(“federal lawsuit”). In the federal lawsuit, Mr. White, who is African American, sought
damages on allegations of discrimination under the Fair Housing Act and Equal Credit
Opportunity Act. Mr. White also sought to enjoin the foreclosure sale. Despite the
pending federal lawsuit,1 the foreclosure sale went forward on August 30, 2018, and
Appellee Belgravia Square, LLC (“Belgravia”) purchased the Property.
Mr. White refused to vacate the Property. On September 28, 2018, Belgravia filed
an unlawful detainer action in the general sessions court. On October 25, 2018, Mr.
White amended his federal lawsuit to name Belgravia as a defendant. Mr. White moved
to dismiss the general sessions court’s detainer action on the ground that the federal court
had primary jurisdiction over the Property, and the federal lawsuit was still pending.
Following a hearing, the general sessions court denied Mr. White’s motion to dismiss.
On October 29, 2018, the general sessions court entered its judgment finding that
Belgravia was entitled to immediate possession of the Property. While retaining
possession of the Property, on October 31, 2018, Mr. White filed a notice of appeal to the
Circuit Court of Shelby County (the “trial court”). On November 28, 2018, Belgravia
moved the trial court for a writ of possession of the Property. Belgravia asserted, inter
alia, that Mr. White “failed to post the statutory bond equal to one year’s rent of the
Subject Property; or $37,116.00.” Mr. White opposed the motion, which the trial court
heard on December 7, 2018. By order of December 10, 2018, the trial court dismissed
Mr. White’s appeal from general sessions court. The trial court held that it lacked subject
matter jurisdiction over the appeal because Mr. White failed to post the bond required
under Tennessee Code Annotated section 29-18-130(b)(2). Mr. White appeals.
II. Issues
Mr. White raises six issues in his brief. However, we perceive that there is one
dispositive issue: Whether the trial court erred in dismissing Mr. White’s appeal for lack
of subject matter jurisdiction based on Mr. White’s failure to post the possessory bond
under Tennessee Code Annotated section 29-18-130(b)(2).2
1
The federal court entered an order on September 13, 2018 denying injunctive relief to stop the
foreclosure sale. However, the discrimination allegations were not dismissed.
2
After this appeal was filed, the parties entered into a “Possession Agreement” on January 24, 2019.
Under the agreement, Mr. White agreed to post the $37,116 possessory bond to remain in possession of
the Property. This agreement, however, does not render this appeal moot. The respective possessory
rights of the parties were not addressed by the trial court because it found that it had no subject matter
jurisdiction. On appeal, this Court must determine whether the trial court erred in dismissing the appeal.
If so, the trial court may address the substantive issues on remand.
-2-
III. Standard of Review
Subject matter jurisdiction involves the court’s lawful authority to adjudicate a
controversy brought before it. Chapman v. DaVita, Inc., 380 S.W.3d 710, 712 (Tenn.
2012); Meighan v. U.S. Sprint Commc’ns Co., 924 S.W.2d 632, 639 (Tenn. 1996).
Subject matter jurisdiction is conferred by statute or the Tennessee Constitution; the
parties cannot confer it by appearance, plea, consent, silence, or waiver. In re Estate of
Trigg, 368 S.W.3d 483, 489 (Tenn. 2012). Any order entered by a court lacking
jurisdiction over the subject matter is void. Id. Therefore, subject matter jurisdiction is a
threshold inquiry, which may be raised at any time in any court. Id.
Where subject matter jurisdiction is challenged, the party asserting that subject
matter jurisdiction exists has the burden of proof. Chapman, 380 S.W.3d at
712; Redwing v. Catholic Bishop for the Diocese of Memphis, 363 S.W.3d 436, 445
(Tenn. 2012). A determination of subject matter jurisdiction involves questions of law;
therefore, rulings on such questions are reviewed de novo on appeal, without any
presumption of correctness. In re Estate of Trigg, 368 S.W.3d at 489; see also Lovlace
v. Copley, 418 S.W.3d 1, 17 (Tenn. 2013); Chapman, 380 S.W.3d at 712-13.
IV. Analysis
Mr. White first contends that his pending federal lawsuit foreclosed the trial
court’s jurisdiction to decide the issue of possession of the Property. As explained by this
court in JP Morgan Chase Bank v. Franklin Na’l Bank, No. M2005-02088-COA-R3-
CV, 2007 WL 2316450, at *5 (Tenn. Ct. App. Aug 13, 2007):
Pursuant to a long-standing general rule reflecting this nation’s dual court
system, the United States Supreme Court has determined that a state court
may neither enjoin proceedings before a federal court nor prevent a party
from pursuing a federal court remedy. Baker ex rel. Thomas v. Gen.
Motors Corp., 522 U.S. 222, 236 n.9 (1998); Gen. Atomic Co. v. Felter,
434 U.S. 12, 15-18 (1977); Donovan v. City of Dallas, 377 U.S. 408, 412-
14 (1964). The Tennessee Supreme Court has also recognized this
principle. Roy v. Brittain, 297 S.W.2d 72, 74 (1956). Deviation from this
general principle has been permitted only under limited circumstances . . . .
Notably, state courts may enjoin proceedings in federal courts in rem or
quasi in rem matters, Princess Lida of Thurn and Taxis v. Thompson, 305
U.S. 456, 465-68 (1939), in order “to protect the jurisdiction of the state
court over property in its custody or under its control.” CHARLES ALAN
WRIGHT, LAW OF FEDERAL COURTS 296 (5th ed. 1994).
(footnotes omitted). Although Mr. White relies on the Princess Lida case to support his
proposition that exclusive jurisdiction over the Property lies with the federal court, the
-3-
holding in Princess Lida applies only in cases where the state and federal courts exercise
in rem or quasi in rem jurisdiction over the same res. It is well settled that a detainer
action is an in personam action to decide the possessory interests over the res as between
the parties. Tenn. Code Ann. § 29-18-119 (“The general sessions judge will try every
case upon its merits and ascertain whether the plaintiff or defendant is entitled to the
possession of the premises . . . . The estate, or merits of the title, shall not be inquired
into.”) (emphasis added). In other words, in a detainer action, “the court is dealing with
the right of one party to have another do a particular thing. The right and the remedy are
not complicated by the rights or interests of others.” U.S. Gypsum Co. v. Am. Sur. Co.
of N.Y., 1931 WL 1607 (Tenn. Ct. App. Dec. 16, 1931), perm. app. denied (Tenn. Mar.
26, 1932) (citing Anderson-Tully v. Thompson, 177 S.W. 66 (Tenn. 1915)). Concerning
jurisdiction over in personam actions versus in rem actions, the Princess Lida Court
explained:
[I]t is settled that where the judgment sought is strictly in personam, both
the state court and the federal court, having concurrent jurisdiction, may
proceed with the litigation at least until judgment is obtained in one of them
which may be set up as res judicata in the other. On the other hand, if the
two suits are in rem, or quasi in rem, so that the court, or its officer, has
possession or must have control of the property which is the subject of the
litigation in order to proceed with the cause and grant the relief sought the
jurisdiction of the one court must yield to that of the other.
Princess Lida, 305 U.S. at 466 (footnote omitted). As noted above, in the federal
lawsuit, the judge denied injunctive relief on the foreclosure action. Although other
questions are pending in the federal court, there is no final judgment that would preclude
the state court from exercising jurisdiction over the in personam detainer action.
We next address whether the trial court erred in concluding that it lacked subject
matter jurisdiction over the appeal from general sessions court because Mr. White failed
to make a possessory bond. Tennessee Code Annotated section 29-18-130(b) provides,
in relevant part:
(a) [. . .] in any action of forcible entry and detainer, forcible detainer, or
unlawful detainer, brought before a judge of the court of general sessions,
and a writ of possession is awarded, the same shall be executed and the
plaintiff restored to the possession immediately.
(b)(1) If the defendant pray an appeal, then, in that case, the plaintiff shall
execute bond, with good and sufficient security, in double the value of (1)
year’s rent of the premises, conditioned to pay all costs and damages
accruing from the wrongful enforcement of such writ, and to abide by and
-4-
perform whatever judgment may be rendered by the appellate court in the
final hearing of the cause.
(2) In the case where the action has been brought by a landlord to recover
possession of leased premises from a tenant on the grounds that the tenant
has breached the contract by failing to pay the rent, and a judgment has
been entered against the tenant, subdivision (b)(1) shall not apply. In that
case, if the defendant prays an appeal, the defendant shall execute bond, or
post either a cash deposit or irrevocable letter of credit from a regulated
financial institution, or provide two (2) good personal sureties with good
and sufficient security in the amount of one (1) year’s rent of the premises,
conditioned to pay all costs and damages accruing from the failure of the
appeal, including rent and interest on the judgment as provided for herein,
and to abide by and perform whatever judgment may be rendered by the
appellate court in the final hearing of the cause. The plaintiff shall not be
required to post a bond to obtain possession in the event the defendant
appeals without complying with this section. The plaintiff shall be entitled
to interest on the judgment, which shall accrue from the date of the
judgment in the event the defendant’s appeal shall fail.
Tenn. Code Ann. § 29-18-130(b). It is undisputed that at the time the trial court
dismissed the appeal, Mr. White had not filed a bond pursuant to Tennessee Code
Annotated section 29-18-130(b)(2). However the Tennessee Supreme Court has
explained that “the bond requirement of section 29-18-130(b)(2) is not jurisdictional and
applies only to those tenants in an unlawful detainer action who wish to stay the writ of
possession after a general sessions court’s judgment in favor of the landlord and retain
possession of the property during the appeal.” Johnson v. Hopkins, 432 S.W.3d 840,
848 (Tenn. 2013). The statute “contemplates that a tenant may appeal without posting
bond,” which “indicates that the bond is not jurisdictional but rather is non-jurisdictional
and designed to stay the landlord’s writ of possession.” Id. at 849.
In line with the Tennessee Supreme Court’s holding in Johnson, this Court has
also held that a tenant’s failure to post a bond pursuant to Tennessee Code Annotated
section 29-18-130(b)(2) does not deprive a trial court of jurisdiction to hear the tenant’s
appeal from general sessions court.3 Rentals v. Appelt, No. E2017-01565-COA-R3-CV,
2018 WL 3701826, at *3 (Tenn. Ct. App. Aug. 3, 2018). In Appelt, we explained that
jurisdiction is established
3
We acknowledge that this Court came to the opposite conclusion in Crye-Leike Prop. Mgmt. v. Dalton,
No. W2015-02437-COA-R3-CV, 2016 WL 4771769 (Tenn. Ct. App. Sept. 12, 2016). However, upon
further consideration, in Rentals v. Appelt we determined that we erred in the earlier opinion. No. E2017-
01565-COA-R3-CV, 2018 WL 3701826, at *5 (Tenn. Ct. App. Aug. 3, 2018).
-5-
even where the tenant fails to surrender possession voluntarily. The
following language from Tenn. Code Ann. § 29-18-130(b)(2) bolsters our
conclusion: “The plaintiff [landlord] shall not be required to post a bond to
obtain possession in the event the defendant [tenant] appeals without
complying with this section.” Tenn. Code Ann. § 29-18-130(b)(2). This
language would be completely unnecessary and meaningless if a tenant in
possession who appealed without posting the bond could have her suit
dismissed for failing to perfect her appeal. “The Court has a duty to
construe a statute so that no part will be inoperative, superfluous, void or
insignificant.” McGee v. Best, 106 S.W.3d 48, 64 (Tenn. Ct. App. 2002).
In short, if a tenant does not post a bond of one year’s rent, her appeal can
continue . . . .
Here, the trial court dismissed Mr. White’s appeal on its finding that “since this
matter is an appeal of a General Sessions possessory judgment in favor of
Plaintiff/Appellee and against Defendants/Appellants, and since Defendants/Appellants
did not post the bond required by T.C.A. § 29-18-130(b)(2), then this court lacks subject
matter jurisdiction over this appeal.” Respectfully, the trial court’s holding is in
contravention of the Supreme Court’s ruling in Johnson and subsequent cases applying
Johnson. The statute and case law make clear that a possessory tenant’s failure to file a
bond in the amount of one year’s rent does not prevent that tenant from perfecting his or
her appeal to circuit court. Tenn. Code Ann. § 29-18-130(b); Appelt, 2018 WL 3701826,
at *3; McLucas v. Nance, No. M2015-00642-COA-R3-CV, 2015 WL 5936935, at *3
(Tenn. Ct. App. Oct. 12, 2015); Valley View Mobile Home Parks, LLC v. Layman
Lessons, Inc., No. M2007-01291-COA-R3-CV, 2008 WL 2219253, at *3 (Tenn. Ct.
App. May 27, 2008). Because the Tennessee Code Annotated section 29-18-130(b) bond
is non-jurisdictional, the trial court erred in dismissing Mr. White’s appeal although he
remained in possession of the Property.
V. Conclusion
For the foregoing reasons, we reverse the trial court’s order dismissing Mr.
White’s appeal. The case is remanded for such further proceedings as may be necessary
and are consistent with this opinion. Costs of this appeal are assessed one-half to
Appellant Melvin White, and one-half to Appellee Belgravia Square, LLC, for all of
which execution may issue if necessary.
_________________________________
KENNY ARMSTRONG, JUDGE
-6-