The Estate of Pauline Vernuse Butler v. Paul v. Peeples, Sr.

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
May 3, 2011 Session
THE ESTATE OF PAULINE VERNUSE BUTLER, v. PAUL V. PEEPLES,
SR.
Appeal from the Chancery Court for Hamilton County
No. 09P669 Hon. Jeffrey M. Atherton, Chancellor
No. E2010-01991-COA-R3-CV - FILED - MAY 26, 2011
The representative of this Estate filed a "Motion to Marshal Assets" alleging that a California
resident held assets of the Estate and had refused to turn them over to the Estate. The Trial
Court summarily ordered the California resident to surrender any assets held and turn them
over to the Estate. Paul V. Peeples, the California resident, filed a Motion in Probate Court
that the Court had no personal jurisdiction over him, along with his affidavit. His Motion
was denied. He appealed to this Court and we hold that he was not subject to the jurisdiction
of the Trial Court and reverse the orders against him and dismiss him as a party to the probate
estate action.
Tenn. R. App. P.3 Appeal as of Right; Judgment of the Chancery Court Reversed,
and Appellant Dismissed from the case.
H ERSCHEL P ICKENS F RANKS, P.J., delivered the opinion of the Court, in which D. M ICHAEL
S WINEY, J., and J OHN W. M CC LARTY, J., joined.
Jerre B. Mosley, and R. Jonathan Guthrie, Chattanooga, Tennessee, for the appellant, Paul
V. Peeples, Sr.
Lynn Dechman, Chattanooga, Tennessee, for the appellee, The Estate of Pauline Vernuse
Butler.
OPINION
This case originated when the Will of the decedent, Pauline Butler was admitted for
probate, and Sharon McCombs was named personal representative in accordance with the
terms of the Will. After the estate was opened McCombs filed a Motion to Marshal Assets,
asking the Court to marshal assets of the estate1 currently in the possession of decedent’s
brother, Paul Peeples. The Executor attached documents indicating that Peeples held assets
that should be paid into the Estate. Subsequently, a Senior Judge designated as Chancellor,
held that Peeples was under the Court's jurisdiction because he was holding assets of the
Butler Estate. Further the Court said Peeples had no right to the assets and ordered Peeples
to turn the assets over to the Estate, which order was mailed to Peeples at a California
Address on G Street, and it was also sent to a California attorney named James Aste.
Peeples then filed a Motion to Alter or Amend Judgment, stating that he was never
properly served with the motion, that he was not properly before the Court as a California
resident, and that the factual allegations were inaccurate.
The Estate then filed a second Motion to Marshal Assets, asserting that Peeples was
under the Court’s jurisdiction because he made an appearance by filing the Motion to Alter
or Amend Judgment. The Clerk and Master, acting as "Chancellor by Designation", entered
an order which stated that Peeples admitted that he was holding assets that belonged to the
Estate, and that Peeples was properly served with the second Motion to Marshal Assets
through his Tennessee attorneys, and overruled the Motion and affirmed the earlier Order.
Peeples filed yet another Motion to Alter or Amend and to Dismiss Judgment, and the
Chancellor ruled against Peeples, and Peeples then filed a timely Notice of Appeal.
The issues on appeal are:
1. Whether the Trial Court erred in entering the Order to Marshal Assets?
2. Whether Peeples entered a general appearance in the action and waived the
1
The Estate relied upon Tenn. Code Ann. §35-50-110 as authority for its motion, but this statutory
section deals with the executor’s powers/duties, and does not in any way enable the executor or the court to
circumvent the filing of a complaint or rules regarding service of process. Marshaling of Assets is a tool used
by probate courts to apply the rules of equity to assets before the court and in some instances determine what
assets should be paid out for the debts against the estate. See, Archer, et al., v. Archer, et al., 3 Tenn. Ct.
App. 623 (1925).
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issue of personal jurisdiction?
Appellant argues the Trial Court erred in entering Judgment on an Order to Marshal
Assets, because the Estate failed to file a complaint against him, failed to obtain proper
service of process, and thus he was denied due process. Appellee argues that Peeples made
a general appearance in the case by filing his motion, and that the Court attained personal
jurisdiction over him.
Appellant is a resident of the State of California. The assets in question are undeniably
held in the State of California, but the Trial Court entered an Order directing appellant, who
is not a resident and has not even been named as a defendant, to turn over assets that he may
be holding in the State of California. The record demonstrates there has been no complaint
filed against appellant, nor has there been proper service of process upon appellant, and
without these procedural steps, the Trial Court did not have personal jurisdiction over
appellant to order him to respond in this action. See, Tenn. R. Civ. P. 3 and 4. Without the
filing of a complaint and proper service of process, the Court did not acquire jurisdiction over
Paul V. Peeples, Sr. See Proffitt v. Smoky Mountain Woodcarvers Supply, Inc., 2010 WL
1240975 (Tenn. Ct. App. Mar. 31, 2010).
The Estate argues that Peeples cannot now claim a lack of personal jurisdiction by the
Trial Court, because he filed a motion in the case and thus made a general appearance. The
Estate ignores the case law on this subject, however, which states that when a defendant
makes an initial filing that raises the personal jurisdiction issue, there is no waiver. In
Landers v. Jones, 872 S.W.2d 674 (Tenn. 1994), the Supreme Court explained:
Initially, we note that there is a modern legal trend away from the technical
requirement that a defendant must enter a special appearance to contest personal
jurisdiction. For example, both the Federal Rules of Civil Procedure and the
Tennessee Rules of Civil Procedure allow a defendant to raise all defenses, including
a challenge to the personal jurisdiction of the court, in either a pre-trial motion or in
a responsive pleading. See, e.g., Fed.R.Civ.P. 12(b) and Tenn.R.Civ.P. 12.02 (“No
defense or objection is waived by being joined with one or more other defenses or
objections in a responsive pleading or motion.”). Under both the state and federal civil
procedure rules, therefore, a defendant is permitted to raise the defense of lack of
personal jurisdiction at the same time other defenses are raised. Waiver occurs only
if there is no objection to personal jurisdiction in the first filing, either a Rule 12
motion or an answer. The authors of Gibson's Suits in Chancery § 146 (6th ed. 1982)
have commented in that connection that Rule 12 of the Tennessee Rules of Civil
Procedure eliminates a “trap for the unwary.”
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***
The plaintiff, however, contends that this case is controlled by the holding in an
earlier Court of Appeals case, Akers v. Gillentine, 33 Tenn.App. 212, 231 S.W.2d
372, 376 (1950), in which the Court stated:
All appearances are deemed to be general unless the contrary appears. The
filing of any pleading, the making or resisting of any motion, ... the making of
any agreement with the complainant or his solicitor, relative to any proceeding
in the cause, or any other act in the cause, between the filing of the bill and the
rendition of the final decree, whereby the pendency of the suit is recognized
expressly, or by necessary implication, will, if there be record evidence of the
fact, constitute a general and unlimited appearance, unless limited by express
declaration or necessary implication.
Specifically, the plaintiff contends that the joint motion for continuance, coupled with
the alleged agreement of the defendant to submit to blood tests, mentioned in the
juvenile court's final judgment, establish a “general appearance” under Akers.
The Akers court cites with approval the early 1912 decision in Rowsey v. Burkhead,
3 Tenn.Civ.App. 361 (1912), which adopted a hypertechnical rule that “[a] motion
intended to be special should always be made expressly so, because every motion not
appearing to be special will be regarded as general.” Id. at 372. Rule 12.02 of the
Tennessee Rules of Civil Procedure, in our judgment, has superseded the Akers
language relied upon by the plaintiff.
Even under Akers, however, a waiver does not occur if the alleged general appearance
is “limited by express declaration or necessary implication.” Here, the joint motion
specifically stated that the additional time was being sought to allow Jones “to prepare
a defense.” Certainly that reservation necessarily implies that the motion is limited
and could include a defense of lack of personal jurisdiction. As to the alleged private
blood test agreement between counsel, the record is woefully deficient. Its bare
mention in the court's judgment is insufficient without any actual foundation in the
record as to the agreement, its provisions, its timing, or its relationship to personal
jurisdiction.
Finally, and most importantly, as a matter of policy, we are simply unable to conclude
that a joint motion for continuance constitutes a waiver of the right to raise personal
jurisdiction, irrespective of whether the motion contains language which reserves
defenses. Such a motion “in no way recognizes that the cause is properly pending or
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that the court has jurisdiction, and no affirmative action is sought from the court.” In
accordance with the modern trend, and Rule 12.02 of the Tennessee Rules of Civil
Procedure, juvenile courts should only find a general appearance that waives a
defendant's right to contest personal jurisdiction when the defendant has recognized
the proper pendency of the cause by making a motion that goes to the merits or by
filing an answer, without challenging personal jurisdiction. To the extent that prior
judicial decisions can be read as requiring otherwise, they are overruled.
Id. at 676-677 (internal citations omitted).
In the case before us, appellant filed a motion which expressly challenged the Trial
Court's personal jurisdiction as a movant. The fact that Peeples did not simply enter a
“special appearance” solely for the purpose of challenging personal jurisdiction does not
change the fact that his appearance was limited by “express declaration”. See Landers.
Peeples did not waive his right to contest the personal jurisdiction of the Trial Court, as he
complied with the Rules of Civil Procedure to preserve his challenge.
The Probate Court never obtained personal jurisdiction over Peeples in this case. The
Probate Court's Judgment is reversed and Peeples is dismissed from this action, with the cost
of the appeal assessed to The Estate of Pauline Vernuse Butler.
_________________________________
HERSCHEL PICKENS FRANKS, P.J.
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