James Bevels, Sr. v. Alma Tubbs and Danny Tubbs

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
August 22, 2013 Session
JAMES BEVELS, SR.
V.
ALMA TUBBS AND DANNY TUBBS
V.
MID-SOUTH FLOORING, LLC, AND BRANDY BENARD AND DANNY
BENARD, JR., INDIVIDUALLY AND D/B/A MID-SOUTH FLOORING, LLC
An Appeal from the Circuit Court for Shelby County
No. CT-000049-10 James F. Russell, Judge
No. W2012-02375-COA-R3-CV - Filed November 27, 2013
This appeal involves removal from general sessions court to circuit court. The defendant
tenants rented residential property from the plaintiff property owner. The owner filed a civil
warrant in general sessions court against the tenants for unpaid rent. The tenants filed an
application in the general sessions court to remove the case to circuit court; they asserted that
the counterclaim they anticipated filing would exceed the jurisdictional limits of the general
sessions court. The general sessions court granted the application for removal, the tenants
filed their counterclaim in the circuit court, and the case proceeded in the circuit court for
over two years. The circuit court then issued a sua sponte order directing the parties to show
cause why the case should not be remanded to the general sessions court, because the
removal statute does not apply in that county and because the tenants did not file a cost bond
when the case was removed. The tenants objected to the remand on several grounds and
alternatively asked the circuit court to retain jurisdiction over the counterclaim even if it
remanded the original claim to general sessions court. The circuit court remanded the
original claim to general sessions court holding, inter alia, that the tenants failed to file a
proper cost bond in connection with the removal. It then held that the counterclaim and all
other pleadings filed in the case were “null and void” and dismissed the counterclaim on that
basis. The tenants now appeal. We reverse the circuit court’s decision that the tenants failed
to file a proper bond, vacate that portion of the circuit court’s order declaring that all
proceedings other than the original claim were a nullity, and remand for reconsideration in
light of Rules 13.09 and Rule 42.02 of the Tennessee Rules of Civil Procedure.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court is
Reversed in Part, Vacated in Part, and Remanded
H OLLY M. K IRBY, J., delivered the opinion of the Court, in which D AVID R. F ARMER, J., and
J. S TEVEN S TAFFORD, J., joined.
Gary K. Smith and Ellen E. Fite, Memphis, Tennessee, for the Defendants/Counter-
Plaintiffs/Third-Party Plaintiffs/Appellants, Alma Tubbs and Danny Tubbs
John P. Wade, Memphis, Tennessee, for the Plaintiff/Appellee, James Bevels, Sr.
Kevin D. Bernstein, Memphis, Tennessee, for the Third-Party Defendants/Appellees, Mid-
South Flooring, LLC, and Brandy Benard and Danny Benard, Jr., individually and d/b/a Mid-
South Flooring, LLC
Robert E. Cooper, Jr., Attorney General & Reporter; William E. Young, Solicitor General;
and Joe Shirley, Senior Counsel, for the Attorney General for the State of Tennessee in
defense of the constitutionality of Tennessee Code Annotated § 16-15-732(e)
OPINION
F ACTS AND P ROCEEDINGS B ELOW
Background
In November 2007, Defendant/Appellants Alma Tubbs and her husband, Danny Tubbs
(collectively “Tenants”), rented residential property from Plaintiff/Appellee James Bevels,
Sr. (“Owner”).1 Almost two years later, on June 9 and 10, 2009, Owner hired
Defendant/Appellee Mid-South Flooring, LLC (“Mid-South Flooring”) to repair water
damage to the wood floors of the property. In repairing the damage, Mid-South Flooring
used a chemical that emitted fumes. Mr. Tubbs allegedly inhaled the fumes and suffered
personal injuries as a result. Tenants vacated the property in June 2009; they claimed that
the dangerous fumes had made the property uninhabitable. They paid Owner rent through
July 2009 and then stopped paying rent.
Despite Tenants’ claim that the property had become uninhabitable, Owner continued to hold
Tenants responsible for the rent under the parties’ lease agreement. On September 21, 2009,
Owner filed a civil warrant against Tenants in the Shelby County General Sessions Court for
1
The parties’ lease agreement is not included in the appellate record.
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unpaid rent and damage to the property; it sought damages in an unspecified amount “under
$25,000.” The matter was continued by consent of the parties.
On November 25, 2009, Tenants filed in the General Sessions Court an Application and
Affidavit for Removal to Shelby County Circuit Court pursuant to Tennessee Code
Annotated § 16-15-732, known as the “removal statute.”2 In the application, Tenants alleged
2
The removal statute provides in relevant part:
(a) At any time at least three (3) or more business days prior to the scheduled trial date of
a civil action commenced in general sessions court, any defendant in the action may apply
to have the action and all the papers of the action removed to a court having jurisdiction of
appeals from courts of general sessions. A case properly removed pursuant to this section
shall be tried by the appellate court in the same manner as appeals from general sessions
court civil actions are currently tried, except there shall be no default or other judgment
entered at the general sessions level, and except that a case removed pursuant to this section
shall not be subject to any monetary jurisdictional limit that would have applied in the
general sessions court if the case had not been removed.
(b) Any defendant seeking to remove an action pursuant to subsection (a) shall file with the
application an affidavit stating that the defendant has a substantial defense to the action
and/or that the defendant's defense will be of such a complex or expensive nature that the
interests of justice require that the defendant not be required to present the defense at the
general sessions level. The affidavit shall state the grounds of the defense and why the
affiant believes it to be sufficiently substantial, complex or expensive to merit the removal
of the case. The affidavit and application shall also be accompanied by a cost bond
sufficient to defray all costs that have accrued prior to the time application for removal is
made.
(c)(1) If the general sessions judge finds that a defendant's defense is substantial, complex
or expensive to present, and that the defendant has posted a sufficient cost bond, the judge
shall order the action removed to the court that would have jurisdiction of an appeal if the
action had been tried in general sessions court. The judge shall direct the clerk to promptly
transmit the papers in the action to the clerk of the court to which the action is removed.
(2) If the judge finds the defense will not be substantial, complex or expensive or that the
cost bond is not sufficient, the judge shall deny the application and proceed to try the action.
...
(e) This section does not apply in any county having a population of not less than seven
hundred seventy thousand (770,000) nor more than seven hundred eighty thousand
(780,000), according to the federal census of 1980 or any subsequent federal census.
Tenn. Code Ann. § 16-15-732 (2009).
-3-
that removal to Circuit Court was proper because they had a substantial defense to Owner’s
claim, and because they had suffered personal injuries as a result of the negligence of Owner
or the flooring company Owner hired to refinish the floors of the property, later identified
as Mid-South Flooring. Tenants indicated in the application that their injuries were so
substantial that their claim against Owner and/or the flooring company would exceed the
$25,000 jurisdictional limit of the General Sessions Court, and that judicial economy required
that the issues be tried together in Circuit Court. See Tenn. Code Ann. § 16-15-501 (d)(1)
(2009) (establishing jurisdictional limit). Tenants stated in their application that, at the time
they filed the application, they posted “a sufficient cost bond.” Actually, instead of posting
a surety bond, Tenants paid the General Sessions Court clerk $150, as requested by the
personnel in the clerk’s office.
On December 15, 2009, the General Sessions Court entered an order granting Tenants’
application for removal pursuant to the removal statute. In its order, the General Sessions
Court noted that Tenants may have a substantial defense to the civil warrant, and that the
damages and personal injuries allegedly suffered as a result of Owner’s negligence “are so
substantial they may exceed the jurisdiction of this Court.” The General Sessions Court
order stated that the application for removal was granted because judicial economy required
that the issues be tried together. It did not address the sufficiency of the cost bond.
Circuit Court Proceedings
On June 3, 2010, Tenants filed an answer in Circuit Court. They also filed a counterclaim
against Owner and a third-party complaint against Mid-South Flooring and its purported
owners, Brandy Benard and Danny C. Benard, Jr., individually and d/b/a Mid-South
Flooring. When they filed the counterclaim and the third-party complaint, Tenants paid $325
to the Circuit Court Clerk for court costs. In the counterclaim, Tenants alleged that Owner
did not comply with applicable building codes and failed to make repairs necessary to keep
the property habitable. Tenants asserted that Owner hired Mid-South Flooring to perform
work on the flooring, and that Mid-South Flooring used a chemical on their floors that
permeated the house. They alleged that Mr. Tubbs suffered ill effects from inhaling the
fumes, including illness and dizziness, and that, as a result, Mr. Tubbs had to go to an urgent
care facility and later to a hospital. Tenants averred that they paid rent through July 2009 and
gave Owner ample notice that they intended to vacate the property because it had become
unsafe and uninhabitable. Tenants claimed that, as a result of the negligence of Owner and
Mid-South Flooring, they incurred health care expenses in the amount of $30,000 plus future
expenses, and that they suffered property damages of about $12,200 and loss of consortium.
Owner and Mid-South Flooring both filed answers to the counterclaim and third-party
complaint that denied liability. Neither raised an issue regarding the subject-matter
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jurisdiction of the Circuit Court or the propriety of the removal of the case from General
Sessions Court to Circuit Court. Discovery ensued, and the litigation proceeded in the
normal course.
On January 17, 2012, the Circuit Court entered a scheduling order in the matter. The order
established deadlines for written discovery, discovery depositions, the designation of expert
witnesses, and all expert depositions. The scheduling order required the parties to file all
dispositive motions by September 29, 2012.
On February 15, 2012, Owner filed a motion to amend his complaint. The motion stated that
Owner sought to make a more definite statement of his claims, to increase the ad damnum
“so as not to be limited by the General Sessions jurisdictional cap of $25,000,” and to assert
a crossclaim against Mid-South Flooring.
Show Cause Order
On April 9, 2012, almost two and a half years after the case was removed from General
Sessions Court, the Circuit Court issued a sua sponte show cause order, ordering the parties
to appear and show cause why the case “should not be remanded to the General Sessions
Court for lack of proper jurisdiction in” the Circuit Court. The Circuit Court indicated that
Tenants’ application for removal was not accompanied by a cost bond, as is required by
Tennessee Code Annotated § 16-15-732(b), and that the General Sessions Court order did
not include a specific finding that Tenants had posted a sufficient cost bond. The show cause
order also indicated that, in any event, the case was improperly removed because the
procedures in the removal statute do not apply in Shelby County, i.e., “any county having a
population of not less than 770,000 nor more than 780,000 according to the federal census
of 1980 or any subsequent federal census.” Tenn. Code Ann. § 16-15-732(e). In light of
this, the order directed the parties “to show cause, if any, why the within cause should not
be remanded to the General Sessions Court for lack of proper jurisdiction in this Court.” The
show cause order did not differentiate between the Owner’s original claim and Tenants’
counterclaim; it simply referred to “the within cause.”
On June 6, 2012, Tenants filed a response to the show cause order. Tenants argued that,
based on current population statistics, Shelby County is no longer excluded from the removal
statute, and in fact “there are now no counties excluded by the statute.” Even if Shelby
County were excluded by the statute, Tenants argued, “the subsection that excludes Shelby
County is unconstitutional . . . .” Despite Tenants’ challenge to the constitutionality of the
removal statute, they did not give notice to the Attorney General of their constitutional
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challenge, as is required by statute. See Tenn. Code Ann. § 29-14-107(b).3 Also in their
response, Tenants cited Section 16-15-729, which states: “No case originating in general
sessions court and carried to a higher court shall be dismissed by such court for any
informality whatsoever but shall be tried on its merits.” Finally, Tenants argued that, because
the damages exceeded the general sessions jurisdictional limits, the case was subject to
transfer from General Sessions Court to Circuit Court pursuant to the “transfer statute,”
Section 16-1-116.4 In any event, they asserted, the legislature intended for procedural flaws
in an appeal from general sessions court to circuit court to be regarded “with unusual
indulgence and with great liberality so that the ends of justice may be reached.” Spencer v.
Dixie Fin. Co., 327 S.W.2d 301, 303 (Tenn. 1959). For these reasons, they claimed, the
Circuit Court should “deem the case to have been properly transferred.” Tenants also argued
that they had satisfied the bond requirements but suggested that any defect in the bond could
be “adequately addressed by specific orders or bond requirements.”
On the same date they filed their response to the show cause order, Tenants filed a “Motion
to Amend Pleadings and/or to Bifurcate Cause, or, in the Alternative, Petition for Writ of
Certiorari.” In this motion, Tenants conceded that they did not file a surety cost bond, and
that the General Sessions Court order “did not cite that there had been an amount paid
3
That subsection provides:
(b) In any proceeding which involves the validity of a municipal ordinance or franchise,
such municipality shall be made a party, and shall be entitled to be heard, and if the statute,
ordinance, or franchise is of statewide effect and is alleged to be unconstitutional, the
attorney general and reporter shall also be served with a copy of the proceeding and be
entitled to be heard.
Tenn. Code Ann. § 29-14-107(b) (2012).
4
That statute provides:
Notwithstanding any other provision of law or rule of court to the contrary, when an original
civil action, an appeal from the judgment of a court of general sessions, or a petition for
review of a final decision in a contested case under the Uniform Administrative Procedures
Act, compiled in title 4, chapter 5, is filed in a state or county court of record or a general
sessions court and such court determines that it lacks jurisdiction, the court shall, if it is in
the interest of justice, transfer the action or appeal to any other such court in which the
action or appeal could have been brought at the time it was originally filed. Upon such a
transfer, the action or appeal shall proceed as if it had been originally filed in the court to
which it is transferred on the date upon which it was actually filed in the court from which
it was transferred.
Tenn. Code Ann. § 16-1-116 (2009).
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sufficient to defray the costs of removal.” Tenants stated that they “paid the fees requested
by the General Sessions Court Clerk in the amount of $150, which was, indeed, sufficient
under the statute . . . .” Tenants further noted that, when they filed their counterclaim, they
paid the clerk of the Circuit Court an additional $325, “the full amount that would have been
due had this been the original complaint.” Tenants pointed out, “The parties have since
engaged in significant written discovery and Plaintiff has lately moved for leave to amend
to increase his damage prayer to an amount greater than the monetary limit in General
Sessions Court.” Tenants argued that the Circuit Court “has and should exercise jurisdiction
of this cause despite the issue as to the removal statute.”
In the alternative, Tenants asked the Circuit Court to bifurcate the original complaint and the
counterclaim. They argued that the Circuit Court should retain the counterclaim and re-title
it as “Complaint for Personal Injuries.” As to the original complaint, Tenants argued that,
should it be remanded to General Sessions Court, it would then be transferred back to Circuit
Court pursuant to Tennessee Code Annotated § 16-1-116.5 Thus, Tenants prayed “that the
Writ of Certiorari issue to retain this case . . . .” 6
On June 26, 2012, Owner filed his response to the Circuit Court’s show cause order. In his
response, Owner essentially adopted the position outlined by the Circuit Court in its show
cause order. Owner asserted that the removal statute “clearly and unambiguously states that
Defendants’ application [must] be accompanied by a cost bond and, in any event, that the
statute does not apply in Shelby County.” Owner stated that the Circuit Court was “correctly
focused on the language of [the removal] statute alone,” and he argued that 16-15-729 was
inapplicable because the issue was one involving subject matter jurisdiction, and not a mere
formality. In addition, Owner argued that Tenants’ attempt to rely on Section 16-1-116 (the
“transfer statute”) and the circuit court’s power to grant a writ of certiorari were “misguided
as this is not the vehicle that [Tenants] chose for bringing the case before this Court.”
Also on June 26, 2012, Owner filed a response to Tenants’ motion to amend or bifurcate.
Owner argued that the motion should be denied because Tenants had filed an insufficient cost
bond and had improperly removed the case based on a statute that did not apply in Shelby
County. He argued that the Circuit Court did not have authority to bifurcate issues or allow
Tenant to amend pleadings because the Circuit Court “has no jurisdiction over the cause of
5
Tenants claim in their appellate brief that the case was docketed by the Circuit Court clerk’s office as a
transfer, not a removal.
6
On June 18, 2012, after the motion and response to the show cause order were filed, Tenants’ current
counsel appeared as additional counsel on their behalf.
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action.” Owner also contended that Tenants originally had the option to file their case in the
Circuit Court but chose not to do so, a decision that was fatal to their case. For these reasons,
Owner argued that the Circuit Court should deny Tenants’ motion to amend and/or bifurcate
and hold that it did not have subject matter jurisdiction over the case.
Mid-South Flooring was not a party to the General Sessions proceedings but was named as
a defendant in Tenants’ third-party complaint. Consequently, it filed a response to the Circuit
Court’s show cause order, adopting the arguments made by Owner in response to Tenants’
filings. Mid-South Flooring reiterated Owner’s position that the removal statute is
inapplicable in Shelby County and that, even if applicable, Tenants failed to comply with the
statutory cost bond requirements.
Circuit Court Decision
On June 29, 2012, the Circuit Court held a hearing on its show-cause order in which the court
announced that it would decide the issues based only on the parties’ briefs, without oral
argument. In the hearing, the Circuit Court rendered an oral ruling in favor of Owner and
Mid-South Flooring. The Circuit Court decided to remand Owner’s original complaint to the
General Sessions Court, holding that the removal statute is inapplicable in Shelby County,
and that Tenants did not file a cost bond that complied with the removal statute. As to the
remaining pleadings, such as Tenants’ counterclaim and third-party complaint, the Circuit
Court held, “[W]ithout initial jurisdiction, all pleadings documented in this court are to be
deemed null and void.” The Circuit Court noted that Tenants had not given notice to the
Attorney General that they planned to challenge the constitutionality of the statute, but
nevertheless went on to comment on the merits of Tenants’ argument: “[T]his method of
localizing statutes application has withstood multiple challenges as to constitutionality over
the years.” It also held that the transfer statute did not apply in this case. Based on its
conclusion that it lacked subject matter jurisdiction, the Circuit Court denied Tenants’ motion
to amend and/or bifurcate because “there is no basis for this Court to entertain any motion
even if properly brought. . . . [T]he motion is rendered not only void but moot.” The Circuit
Court added that the motion to amend and/or bifurcate was “a complete and absolute nullity”
because it was not signed by counsel for Tenants.7
On August 8, 2012, before the Circuit Court entered a written order, Tenants filed a “Notice
to Attorney General of Challenge as to Constitutionality of Tenn. Code Ann. § 16-15-732 and
Request for Suspension of Proceedings Pending Response From Attorney General.”
7
The Circuit Court also held that any request for the motion to be treated as a petition for writ of certiorari
must be denied, because “the procedure [of bringing a motion for writ of certiorari, rather than a petition]
is completely flawed . . . .”
-8-
On September 17, 2012, the Circuit Court entered a written order consistent with its June
2012 oral ruling. The order incorporated by reference a transcript of its earlier oral ruling.
The Circuit Court order remanded Owner’s original complaint to the General Sessions Court
and held that Tenants’ counterclaim and third-party complaint were “legal nullities.” On the
same day, the Circuit Court issued an order denying Tenants’ request to stay the proceedings
pending a response from the Attorney General.
The next day, on September 18, 2012, once the case was remanded to General Sessions
Court, Owner filed a notice of voluntary nonsuit in the General Sessions Court. The effect
of Owner’s voluntary nonsuit was to deprive Tenants of any avenue for seeking legal
recourse for their damages, as any subsequent independent lawsuit would have been
untimely.
Tenants now appeal the Circuit Court’s two orders entered on September 17, 2012, wherein
the trial court remanded the original claim and dismissed all other proceedings as a “nullity”
and denying the request for a stay.
ISSUES ON A PPEAL AND S TANDARD OF R EVIEW
Tenants list the following as the issues presented on appeal:
1. Whether the Circuit Court erred in its order of September 17, 2012,
remanding the original cause of action and deeming the counterclaim and
third-party complaint void for lack of subject-matter jurisdiction?
2. Whether the Circuit Court erred in its order of September 17, 2012, denying
their request to stay the proceedings pending a response from the Attorney
General?
The pivotal issues in this appeal involve the trial court’s decisions regarding its subject
matter jurisdiction. Whether a court has subject matter jurisdiction over a case is a question
of law, which we review de novo, with no presumption of correctness in the trial court’s
decision. Morgan Keegan & Co. v. Smythe, 401 S.W.3d 595, 602 (Tenn. 2013); Schutte v.
Johnson, 337 S.W.3d 767, 769 (Tenn. Ct. App. 2010).
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A NALYSIS
Cost Bond
We address first the trial court’s holding that it lacked subject matter jurisdiction because
Tenants failed to file a sufficient cost bond when the case was removed from the General
Sessions Court to the Circuit Court. At the time the trial court entered its order, this
Court’s decision in Bernatsky v. Designer Baths & Kitchens, LLC had not yet been
issued, and the trial court apparently relied on a memorandum opinion that was overruled
in Bernatsky, namely, University Partners Development v. Bliss, No. M2008-00020-
COA-R3-CV, 2009 WL 112571 (Tenn. Ct. App. Jan. 14, 2009) (memorandum opinion).8
See Bernatsky v. Designer Baths & Kitchens, LLC, No. W2012-00803-COA-R3-CV,
2013 WL 593911, at *19 n. 21 (Tenn. Ct. App. Feb. 15, 2013). In Bernatsky, this Court
specifically held that a cash bond to secure the costs of an appeal, such as the cash bond
paid by Tenants in the case at bar, was sufficient to fulfill the requirement of a cost bond.
Id. at *19. We find nothing in the appellate record to suggest that the amount of the cash
bond paid by Tenants was insufficient to comply with Tennessee Code Annotated § 16-
15-732. Under these circumstances, we must respectfully hold that the trial court erred in
holding that it lacked subject matter jurisdiction because Tenants “failed to comply with
bond requirements set forth in T.C.A. § 16-15-732(b) and (c)(1).”
Remaining Issues
On appeal, Tenants argue that the Circuit Court erred in “remanding the original cause of
action and deeming the counterclaim and third-party complaint void for lack of subject-
matter jurisdiction.” Expanding on this issue in their appellate briefs, Tenants make the
following sub-arguments:
• Subsection (e) of the removal statute (exempting Shelby County) is
unconstitutional
• The legislative history of the removal statute shows that there was no
rational basis for the legislature’s attempt to carve out an exemption for
Shelby County from the application of the statute
• Population bracket legislation and other “local” legislation such as that used
in the removal statute has been found unconstitutional in Tennessee
• Alternatively, if the removal statute is constitutional, Shelby County is not
excluded on the face of the legislation based on subsequent federal census
8
An opinion designated as a “memorandum opinion” “shall not be published, and shall not be cited or relied
on for any reason in any unrelated case.” Tenn. Ct. App. R. 10.
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figures, which indicate that Shelby County now has a population of more
than 780,000
• The Circuit Court had exclusive jurisdiction over the case because the
amount in controversy came to exceed the jurisdictional limit of the General
Sessions Court, so remanding the original complaint and dismissing the
counterclaim was improper
• The case was subject to transfer from General Sessions Court to Circuit
Court pursuant to the transfer statute, Section 16-1-116, and so jurisdiction
was proper
• The Circuit Court should have deemed the case to have been properly
removed in light of the clear legislative intent expressed in Section 16-15-
729 and to serve the ends of justice.
In addition to the arguments made in their briefs, at oral argument, Tenants asserted that,
even if the Circuit Court acted properly in remanding the original claim to General
Sessions Court, it should have retained jurisdiction over the counterclaim pursuant to
Rule 13 of the Tennessee Rules of Civil Procedure. They noted the undisputed fact that
the Circuit Court had subject matter jurisdiction to hear the substance of the counterclaim,
a typical personal injury action. By remanding the original claim and holding that the
counterclaim was a nullity, Tenants argued, the Circuit Court threw “the baby out with the
bath water.” Tenants conceded that Rule 13 was not specifically cited in their appellate
briefs in support of their overall argument that the trial court erred in deeming Tenants’
counterclaim and third-party complaint void. Nevertheless, counsel for Tenants asserted
at oral argument that “Rule 13 says that the counterclaim survives. . . . It’s that simple.”
Tenants maintain that, if this Court agrees with this position, then the other issues are
moot.9 Tenants characterize their other arguments as “alternative” arguments in the event
that their position on the application of Rule 13 is rejected.
Owner and Mid-South Flooring (collectively, “Appellees”) dispute the arguments made in
Tenants’ appellate briefs. They insist that the removal statute is constitutional, that it
applies to Shelby County notwithstanding the more recent census figures, and that the
Circuit Court properly remanded the original claim and held that the counterclaim was
null and void. They argue that the case was not subject to transfer under Section 16-1-
116, and that lack of subject matter jurisdiction is not a “formality” to which Section 16-
15-729 applies. As to Tenants’ Rule 13 argument, Appellees contend that they are
disadvantaged by the fact that Rule 13 was not cited by Tenants in their appellate briefs in
9
Tenants said specifically that, if this Court accepts their argument that the Circuit Court should have
retained jurisdiction over the counterclaim, then they were “not even going to talk about constitutionality .
. . . We don’t care about the rest of” the issues raised on appeal.
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support of their argument that the trial court erred in dismissing the counterclaim and
third-party complaint as void. They note that Tenants did not specifically appeal the
Circuit Court’s refusal to bifurcate the original action and the counterclaim, nor did they
include in their appellate brief the argument made in the trial court below, that the
counterclaim should have remained in Circuit Court after a remand of the original
lawsuit. Appellees asserted that Tenants’ Rule 13 argument was “not even a restatement
of the issues [raised in the briefs], . . . and those issues should have been brought [in the
briefs].” 10
Tenants’ overarching issue of whether the Circuit Court erred in dismissing their
counterclaim and third-party complaint as void does, indeed, implicate Rules 42.02 and
13.09 of the Tennessee Rules of Civil Procedure. Rule 42.02 of the Tennessee Rules of
Civil Procedure provides:
The court for convenience or to avoid prejudice may in jury trials order a
separate trial of any one or more claims, cross-claims, counterclaims, or
third-party claims, or issues on which a jury trial has been waived by all
parties. For the same purposes the Court may, in nonjury trials, order a
separate trial of any one or more claims, cross-claims, counterclaims,
third-party claims, or issues.
Tenn. R. Civ. P. 42.02. Rule 13.09 in turn refers to Rule 42; Rule 13.09 provides that
when a court separates claims under Rule 42, a judgment may be rendered on a
counterclaim even if the original claim from which it was separated is dismissed, so long
as the court had subject matter jurisdiction over the claim:
If the court orders separate trials as provided in Rule 42, judgment on a
counterclaim or cross-claim may be rendered in accordance with the terms
of Rule 54 when the court has jurisdiction to do so, even if the claims of the
opposing party may have been dismissed or otherwise disposed of.
10
After oral argument in this cause, Tenants filed a motion in this Court to allow additional briefing on the
effect of Rules 42.02 and 13.09 of the Tennessee Rules of Civil Procedure on the trial court’s decision to
dismiss Tenants’ counterclaim and third-party complaint. They conceded that Rules 42 and 13 were not
specifically cited in their appellate briefs, but argued that the record shows that the Circuit Court denied their
motion to amend and/or bifurcate the claims, and that on appeal they challenge the totality of the Circuit
Court’s ruling. In response, the Appellees argued that Tenants’ motion should be denied as untimely and
an attempt to present arguments that were waived on appeal. In light of our ruling herein, Tenants’ motion
is denied.
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Tenn. R. Civ. P. 13.09. The advisory commission comment following Rule 13.09
discusses the interplay between these rules. It explains that “Rule 42 empowers the court,
in order to avoid inconvenience or prejudice to a party, to order separate trials of one or
more cross-claims, counterclaims, etc.,” while “Rule 13.09 empowers the court to enter
judgment on a cross-claim or counterclaim, even though the claims of the opposing party
have been already disposed of.” Tenn. R. Civ. P. 13.09 advisory comm’n comment.
The Appellees quite properly contend that Tenants should be precluded from making an
argument on appeal based on Rules 42 and 13 of the Tennessee Rules of Civil Procedure
where those rules were not cited to the trial court and were not specified in their appellate
briefs. Tennessee Rule of Appellate Procedure 13(b) provides that our “[r]eview
generally will extend only to those issues presented for review.” Tenn. R. App. P. 13(b).
We have routinely held that issues not raised in the appellate brief, or even issues that are
not fully developed or supported by legal authority or citation to the record, are waived on
appeal.11 See Newcomb v. Kohler Co., 222 S.W.3d 368, 401 (Tenn. Ct. App. 2006)
(holding that the failure “to cite to any authority or to construct an argument regarding [a]
position on appeal” constitutes a waiver of the issue); Bean v. Bean, 40 S.W.3d 52, 55-56
(Tenn. Ct. App. 2000) (“Courts have routinely held that the failure to make appropriate
references to the record and to cite relevant authority in the argument section of the brief
as required by Rule 27(a)(7) constitutes a waiver of the issue.”); see also Brown v.
Shtaya, No. W2012-00875-COA-R3-CV, 2013 WL 836949, at *5 n.7 (Tenn. Ct. App.
Mar. 6, 2013) (citing Newcomb, 222 S.W.3d at 401).
Nevertheless, Rules 13(b) and 36(a) of the Tennessee Rules of Appellate Procedure “give
appellate courts considerable discretion to consider issues that have not been properly
presented in order to achieve fairness and justice.” McLemore ex rel. McLemore v.
Elizabethton Med. Investors, Ltd. P’ship, 389 S.W.3d 764, 792 (Tenn. Ct. App. 2012)
(citing Heatherly v. Merrimack Mut. Fire Ins. Co., 43 S.W.3d 911, 916 (Tenn. Ct. App.
2000) (citing Aaron v. Aaron, 909 S.W.2d 408, 412 (Tenn. 1995))); see also Pearson v.
Ross, No. W2011-00321-COA-R3-CV, 2011 WL 6916194, at *5 (Tenn. Ct. App. Dec.
28, 2011). Rule 13(b) first states the general rule that appellate review normally extends
“only to those issues presented for review,” but then goes on to provide that the appellate
court “may in its discretion consider other issues in order, among other reasons: (1) to
prevent needless litigation, (2) to prevent injury to the interests of the public, and (3) to
prevent prejudice to the judicial process.” Tenn. R. App. P. 13(b). Similarly, Rule 36(a)
11
We have also held that, where an argument is not included in the “Statement of the Issues” section of the
appellate brief, the issue is waived, even if an argument is included in the “Argument” section of the brief.
See Rutherford v. Rutherford, No. M2012-01807-COA-R3-CV, 2013 WL 1928542, at *4 n. 5 (Tenn. Ct.
App. May 7, 2013).
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provides that an appellate court “may grant any relief, including the giving of any
judgment and making of any order,” so long as the relief granted is not “in contravention
of the province of the trier of fact.” Tenn. R. App. P. 36(a). This Court has explained:
“When considered together, these rules allow appellate courts to grant relief to the parties
as long as they have been given fair notice and an opportunity to be heard on the
dispositive issues.” Heatherly, 43 S.W.3d at 916.
In this appeal, we exercise our discretion to consider Rules 13.09 and 42.02 of the
Tennessee Rules of Civil Procedure for several reasons. First, we consider the procedural
posture of the case. The case was filed in the General Sessions Court as a typical claim
for past-due rent. In an effort to promote judicial economy, Tenants applied for removal
to Circuit Court because the damages to be sought in the counterclaim they anticipated
filing would exceed the General Sessions Court’s jurisdictional limits.12 This was done
well within the limitations period under the applicable statute of limitations. Owner did
not object to removal, the General Sessions Court granted the removal application, and
Tenants then filed a timely counterclaim for personal injuries in Circuit Court, which has
jurisdiction over such claims. Thus there was no reason for Tenants to file a separate
action in the Circuit Court, because the dispute with Owner was already pending in that
court. The case proceeded in the normal course for over two years before the Circuit
Court filed its sua sponte order suggesting that the case was improperly removed. By this
time, the statute of limitations on Tenants’ counterclaim had long expired, so after the
Circuit Court dismissed the counterclaim and Owner quickly nonsuited the claim that was
remanded to General Sessions Court, Tenants were precluded from seeking recourse in
either General Sessions Court or Circuit Court.
In addition, we consider the manner in which the issue of improper removal was raised
and adjudicated in the trial court below. If the trial court believes that its subject matter
jurisdiction is open to question, it is of course entirely proper for it to raise the issue to the
parties sua sponte and permit them to address the issue. This is precisely what the trial
court below did in this case. However, while the trial court gave the parties an
opportunity to brief the issues as succinctly described in the show cause order, they were
given no opportunity to argue in the hearing, perhaps because the trial court
understandably perceived that the cost bond issue was determinative. At any rate, this
course of events likely had an effect on the development of the issues and arguments, and
it informs our decision to consider the arguments on Rules 13.09 and 42.02.
12
As an alternative to utilizing the removal statute, Tenants could have filed a counterclaim in the General
Sessions Court and then filed a motion to have the case transferred to the Circuit Court in light of the amount
of damages sought in the counterclaim.
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Moreover, the language in the trial court’s show cause order indicated to the parties that
the trial court was treating the entire case, including the counterclaim and the third-party
complaint, as one “cause.” In raising the issue of subject matter jurisdiction sua sponte,
the order does not indicate that the trial court considered whether it could retain the
counterclaim after the original claim was remanded. To the contrary, the order indicates
that the trial court was under the impression that it did not have jurisdiction to do so.
Even after Tenants filed a motion to bifurcate the original claim and the counterclaim, the
trial court denied the motion without hearing oral argument on the issue, again perhaps
because it perceived that the alleged improper cost bond precluded it from retaining any
portion of the case.
We recognize that Tenants did not cite Rules 13 and 42 of the Tennessee Rules of Civil
Procedure to the trial court below. However, “[i]t is incumbent upon the courts to apply
the controlling law, whether or not cited or relied upon by either party.” Haynes v.
Rutherford County, 359 S.W.3d 585, 588 (Tenn. Ct. App. 2011) (quoting Nance by
Nance v. Westside Hosp., 750 S.W.2d 740, 744 (Tenn. 1988)); GRW Enters., Inc. v.
Davis, 797 S.W.2d 606, 612 n.5 (Tenn. Ct. App. 1990); see also Johns v. Johns, No.
W2013-01102-COA-R3-CV, 2013 WL 6050939, at *5 (Tenn. Ct. App. Nov. 15, 2013).
This is perhaps even more imperative where the issue being considered is raised sua
sponte by the court. In this case, the Circuit Court did not apply the controlling law. Rule
42.02 permits separation of the counterclaim from the original complaint in order “to
avoid prejudice,” and Rule 13.09 permits the Circuit Court to render a judgment in the
separate lawsuit, even when the original lawsuit is dismissed. So the Circuit Court had
the authority to separate the actions and to retain jurisdiction over the counterclaim, but it
erred as a matter of law in holding that it did not have this authority. We must conclude
that the Circuit Court committed plain error in holding that Tenants’ counterclaim and
third-party complaint were “null and void” and in failing to consider whether to separate
the claims and retain jurisdiction over them under Rules 13.09 and 42.02.
We recognize a strong preference embodied in the Tennessee Rules of Civil Procedure
for cases stating a valid legal claim to be decided on their merits. Jones v. Prof'l
Motorcycle Escort Serv., L.L.C., 193 S.W.3d 564, 572 (Tenn. 2006) (“The Tennessee
Rules of Civil Procedure are intended ‘to insure that cases and controversies be
determined upon their merits and not upon legal technicalities or procedural niceties.’ ”)
(quoting Karash v. Pigott, 530 S.W.2d 775, 777 (Tenn. 1975)); see also Norton v.
Everhart, 895 S.W.2d 317, 320 (Tenn. 1995); Patton v. Dixon, 58 S.W. 299, 301 (Tenn.
1900). However, at this juncture, we refrain from holding that the trial court was
required to retain Tenants’ counterclaim. Rule 42.02 does not mandate that the trial court
must separate a counterclaim from the original claim, but rather gives it the discretion to
do so “for convenience or to avoid prejudice.” Tenn. R. Civ. P. 42.02. Rule 13.09
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permits the Circuit Court to render a judgment in the separate counterclaim, even when
the original lawsuit is dismissed. Because it perceived that it lacked subject matter
jurisdiction, the trial court below did not make a discretionary decision for us to review
on appeal. Therefore, we must vacate the trial court’s decision insofar as it held that all
proceedings other than the original claim were a “nullity,” and we remand to the Circuit
Court in order to give that court the opportunity to exercise the discretion afforded it
under Rules 42.02 and 13.09. We have the authority to “grant the relief on the law and
facts to which the party is entitled or the proceeding otherwise requires and may grant any
relief” that is “not in contravention of the province of the trier of fact.”13 Tenn. R. App.
P. 36(a) & advisory comm’n comment (“This subdivision makes clear that the appellate
courts are empowered to grant whatever relief an appellate proceeding requires. In
addition, this subdivision states that the appellate court should grant the relief to which a
party is entitled.”).
Thus, we hold that the Circuit Court erred in holding that Tenants’ counterclaim and
third-party complaint were “null and void,” and in disregarding Rules 42.02 and 13.09.
In the interest of justice, we vacate this portion of the Circuit Court’s September 17, 2012
order and remand the case to the Circuit Court with directions to give the parties a full
opportunity to be heard on all relevant issues.
C ONCLUSION
Thus, we reverse the Circuit Court’s holding that Tenants failed to file a proper bond,
and we vacate that portion of the Circuit Court’s September 17, 2012 order declaring that
all proceedings other than the original claim were null and void. As indicated by Tenants
at oral argument, this holding pretermits all other issues raised in this appeal.14 We
13
That subsection provides:
The Supreme Court, Court of Appeals, and Court of Criminal Appeals shall grant the relief
on the law and facts to which the party is entitled or the proceeding otherwise requires and
may grant any relief, including the giving of any judgment and making of any order;
provided, however, relief may not be granted in contravention of the province of the trier
of fact. Nothing in this rule shall be construed as requiring relief be granted to a party
responsible for an error or who failed to take whatever action was reasonably available to
prevent or nullify the harmful effect of an error.
Tenn. R. App. P. 36(a).
14
If the Circuit Court retains jurisdiction over Tenants’ counterclaim, there may be no need for the Circuit
Court to address whether the removal statute is applicable in Shelby County, Tennessee or whether the
(continued...)
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specifically note that our holding herein does not address the propriety of the trial court’s
remand of the original claim, so that portion of the order remains intact.15
The decision of the trial court is reversed in part and vacated in part as set forth above,
and the case is remanded for further proceedings consistent with this opinion. Costs on
appeal are to be taxed one-half to Plaintiff/Appellee James Bevels, Sr., Third-Party
Defendant/Appellee Mid-South Flooring, LLC, and Brandy Benard and Danny Benard,
Jr., Individually and d/b/a Mid-South Flooring, LLC; and one-half to
Defendants/Appellants Alma Tubbs and Danny Tubbs, and their surety, for which
execution may issue, if necessary.
_________________________________
HOLLY M. KIRBY, JUDGE
14
(...continued)
removal statute is unconstitutional. If, however, the Circuit Court declines to adjudicate the counterclaim,
then Tenants may again raise any of these issues in light of the Circuit Court’s decision.
15
Owner did not challenge the Circuit Court’s decision to remand the original claim to the General Sessions
Court.
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