Belton v. City of Memphis, W2015-01785-COA-R3-CV

CourtCourt of Appeals of Tennessee
Writing for the CourtJ. STEVEN STAFFORD, JUDGE
Docket NumberNo. W2015-01785-COA-R3-CV,W2015-01785-COA-R3-CV
Decision Date10 May 2016


No. W2015-01785-COA-R3-CV


April 1, 2016 Session
May 10, 2016

Appeal from the Circuit Court for Shelby County
Robert Samual Weiss, Judge

Plaintiff/Appellant appeals from the dismissal of his civil rights claims based upon the expiration of the one-year statute of limitations contained in Tennessee Code Annotated Section 28-3-104. Because Appellant's complaint, taken as true at the motion to dismiss stage, sufficiently alleges post-contract formation conduct on the part of the Defendants/Appellees, we conclude that the four-year federal catchall statute of limitations under 28 U.S.C. § 1658 applies to Appellant's claims in this case. Accordingly, we reverse the trial court's dismissal of Appellant's civil rights claims and remand for further proceedings. Because Appellant did not designate the dismissal of his state law contract claims as issues on appeal, however, we affirm the dismissal of those claims.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in Part; Reversed in Part; and Remanded

J. STEVEN STAFFORD, P.J.,W.S., delivered the opinion of the Court, in which ARNOLD B. GOLDIN, and BRANDON O. GIBSON, JJ., joined.

Drayton D. Berkley, Memphis, Tennessee, for the appellant, Marcus Belton.

Donald A. Donati and Bryce W. Ashby, Memphis, Tennessee, for the appellee, A C Wharton.

Sean Antone Hunt and Salwa Adnan Bahhur, Memphis, Tennessee, for the appellees, City of Memphis and Martha Lott.

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On September 12, 2014, Plaintiff/Appellant Marcus Belton ("Appellant"), individually and d/b/a Big Foot Tires and Trucking ("Big Foot"), filed a complaint against Defendant/Appellees the City of Memphis ("the City"), A C Wharton in his individual and official capacity as Mayor of the City ("Mayor Wharton"), and Martha Lott in her individual and official capacity as Director of General Services for the City (collectively, "Appellees"), alleging breach of contract and various violations of the federal Civil Rights Act ("Civil Rights Act"), 42 U.S.C. §§ 1981, 1983, 1988. Appellant asserted that in August 2010, the City of Memphis solicited bids for a contract to replace its tire fleet servicer and that Appellant, an African-American, was the successful bidder through his company Big Foot. According to Appellant, he entered into a "one-year contract with a three-year extension option." Thus, Appellant alleged there was a four-year commitment, evidenced by various purchase orders, memorandums, and verbal terms. According to the complaint, Appellant was induced by City employees to move his business location in order to maintain the contract. Despite his acquiescence to the City's alleged directive that he move his business, Appellant alleged in his complaint that the City advised Appellant in October 2012 that it was "terminating his services and his contract," despite the fact that he had never received a negative evaluation from the City. The City thereafter contracted with two majority Caucasian firms for the services that Big Foot had previously provided. Appellant requested "not less than" $3,000,000.00 in compensatory damages and $3,000,000.00 in punitive damages.

The City moved to dismiss the complaint based upon the expiration of the applicable one-year statute of limitations, Tennessee Code Annotated Section 28-3-104, and the expiration of the term of the contract in October 2012. The City attached to its motion what it represented to be the written contract between the parties. Appellant responded that the four-year statute of limitations under 28 U.S.C. § 1658 applied. Specifically, Appellant asserted that the parties had an ongoing contract that was not set to expire in October 2012 when the City wrongfully terminated the contract. The City's motion was granted when Appellant's attorney failed to appear at the hearing on the motion to dismiss.

Mayor Wharton filed his own motion to dismiss based upon the expiration of the statute of limitations and the fact that he could not be sued in his individual capacity under Section 1981. The trial court granted Mayor Wharton's motion, concluding that the statute of limitations had expired because the claim involved the failure to enter into a new contract, falling within the ambit of the Section 28-3-104 statute of limitations, rather than the 28 U.S.C. §1658 statute of limitations. The trial court thus granted Mayor

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Wharton's motion to dismiss because the one-year statute of limitations contained in Section 28-3-104 had expired. The trial court also indicated that the complaint alleged no actions taken by Mayor Wharton in his individual capacity. Ms. Lott subsequently filed a motion to dismiss the claims against her, again on the basis of the expiration of the one-year statute of limitations. Ms. Lott's motion was granted by order of June 3, 2015. Appellant filed a motion to alter or amend, which the trial court eventually denied. Appellant thereafter appealed to this Court.

Issues Presented

Appellant raises several issues, which are taken, and slightly restated, from his appellate brief:

1. The trial court erred in finding that a written contract cannot orally be modified.
2. The trial court failed to apply the four (4) year statute of limitations found at 28 U.S.C. § 1658, which applies to Appellant's 42 U.S.C. § 1983, § 1981, and § 1988 claims.
3. The trial court erred in failing to conclude that § 1983 imposes individual liability against a municipal employee for actions taken in his municipal capacity.
4. The trial court erred in failing to find that Ms. Lott and Mayor Wharton are subject to § 1981 liability via § 1983 in their personal or individual capacity and they are not entitled to qualified immunity.
5. The trial court was not authorized to convert any motion to dismiss to a summary judgment motion without notice and an opportunity to conduct discovery.
6. The trial court's orders and judgment violate the standard for granting a motion to dismiss for failure to state a claim.

In the posture of appellee, Appellees raise an additional issue, arguing that regardless of whether Appellant's complaint concerns pre-contract formation conduct, the 28 U.S.C. §1658 statute of limitations does not apply to 42 U.S.C. § 1983 claims against state actors.

Standard of Review

Here, some confusion exists as to what standard of review is applicable in this case: the standard applicable to motions to dismiss for failure to state a claim, see Tenn. Civ. P. R. 12.02(6), or the standard applicable in reviewing orders granting or denying

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motions for summary judgment. See Tenn. R. Civ. P. 56. Under the standard of review applicable to motions to dismiss, review is "limited to an examination of the complaint alone." PNC Multifamily Capital Institutional Fund XXVI Ltd. P'ship v. Bluff City Cmty. Dev. Corp., 387 S.W.3d 525, 537 (Tenn. Ct. App. 2012) (citing Wolcotts Fin. Serv., Inc. v. McReynolds, 807 S.W.2d 708, 710 (Tenn. Ct. App. 1990)). "The basis for the motion is that the allegations in the complaint, when considered alone and taken as true, are insufficient to state a claim as a matter of law." PNC, 387 S.W.3d at 537 (citing Cornpropst v. Sloan, 528 S.W.2d 188 (Tenn. 1975)).1 In contrast, when considering a motion for summary judgment, "[s]ummary judgment is appropriate when 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Rye v. Women's Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015) (citing Tenn. R. Civ. P. 56.04). When a properly supported motion for summary judgment is made, "to survive summary judgment, the nonmoving party 'may not rest upon the mere allegations or denials of [its] pleading,' but must respond, and by affidavits or one of the other means provided in Tennessee Rule 56, 'set forth specific facts' at the summary judgment stage 'showing that there is a genuine issue for trial.'" Rye, 477 S.W.3d at 265 (Tenn. 2015) (citing Tenn. R.

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Civ. P. 56.06). Thus, while a motion to dismiss focuses only on the allegations made by the plaintiff in his or her complaint, a motion for summary judgment often depends on the evidence presented by the non-moving party.

In this case, all three Appellees filed motions to dismiss, rather than motions for summary judgment. In its order dismissing the City, the trial court titled its order as an "Order Granting City of Memphis' Motion to Dismiss," but indicated that it was applying the summary judgment standard. The same is true with regard to the order granting Ms. Lott's motion. The order granting Mayor Wharton's motion, however, did not indicate that it was relying on the summary judgment standard.

Here, there is no dispute that the parties attached various documents to their motions and responses for the trial court's consideration. Appellant asserts that by relying on these documents, Appellees' motions to dismiss were converted to motions for summary judgment. Indeed, Rule 12.02 provides, in relevant part:

If, on a motion asserting the defense numbered (6) to dismiss for failure to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Thus, where a trial court considers matters outside the pleadings, a motion to dismiss is converted to a motion for summary judgment and an appropriate opportunity for discovery must be provided to the parties. See Farmer v. Hersh, No. W2006-01937-COA-R3CV, 2007 WL 2264435, at *4 (Tenn. Ct. App. Aug. 9, 2007) ("Thus, under the rule, a motion to...

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