Duncan v. Duncan

• Decision Date: 25 June 1984
• Citation: 672 S.W.2d 765
• Parties: Angelia Nicholson DUNCAN, Plaintiff-Appellee, v. Joseph Frank DUNCAN, Sr., Defendant-Appellant.
• Court: Tennessee Supreme Court

Page 765

672 S.W.2d 765

Angelia Nicholson DUNCAN, Plaintiff-Appellee, v. Joseph Frank DUNCAN, Sr., Defendant-Appellant.

Supreme Court of Tennessee at Nashville.

June 25, 1984.

Charles H. Warfield, James G. Martin, III, Nashville, for defendant-appellant.

John W. Nolan, III, Philip W. Duer, William R. Willis, Nashville, for plaintiff-appellee.

OPINION

BROCK, Justice.

I

We granted the defendant's application for an extraordinary appeal pursuant to Rule 10, Tennessee Rules of Appellate Procedure, in order to consider the propriety of the action of the Court of Appeals in granting the plaintiff's motion to consider certain post-judgment facts under Rule 14, Tennessee Rules of Appellate Procedure.

This appeal arose out of an action for divorce filed in the Fifth Circuit Court for Davidson County, Tennessee. At the trial of this cause in May and July, 1982, the valuation of the defendant's interest in Security Alarms and Services, Inc., was a major point of contention. The defendant and the company's other major shareholder had formed Security Alarms and Services in 1966. The defendant had worked exclusively for the company since 1969. The stock in the company was closely held with the defendant owning a 47% interest. The plaintiff did not own any company stock in her own name.

On September 30, 1982, the trial court granted the plaintiff a divorce in a decree which included a detailed division of property. Both parties owned substantial assets in their own names, and for the most part the decree did not disturb this ownership. The trial court determined, however, that the Security Alarms stock was accumulated through the joint effort of the parties, and therefore awarded the plaintiff a 1/4 interest in the defendant's stock.

At trial, three accountants testified as to the value of the stock, two testifying for the defendant and one for the plaintiff. The trial court determined that the 47% share was worth $400,000.00, resulting in a $100,000.00 interest for the plaintiff. Because the stock was closely held, the court awarded the plaintiff other property and cash equivalent in value to and in lieu of her 1/4 interest on the defendant's stock. Accordingly, the final decree divested the plaintiff of her interest in the stock, reinvesting it in the defendant.

The plaintiff filed her notice of appeal on October 26, 1982. After the filing of briefs by both parties in the Court of Appeals, but prior to oral argument, the plaintiff on May 24, 1983, filed a motion under Rule 14, Tennessee Rules of Appellate Procedure. The plaintiff, in an attached affidavit, stated that just after the September 30 divorce decree, she was told that the company had been offered for sale at a price in the range of $7 million dollars; that in January, 1983, she learned that the company had been sold, the price remaining secret; that on May 2, 1983, the company comptroller told her the business had been sold but would not disclose the sale price; and that she believed that the negotiations for the sale began shortly after entry of the September divorce decree with the defendant and the other major stockholder agreeing to sell the business in secret to the prejudice of her rights.

Newspaper articles attached to the motion stated that Security Alarms was sold on May 23, 1983, for a reported $4 million. One of the articles quoted the defendant to the effect that the reported sale price "is pretty close." The plaintiff requested that additional proof be taken concerning the sale, or in the alternative, that the case be remanded to the trial court for additional proof.

The Court of Appeals noted that the plaintiff had not offered admissible evidence of the post-judgment facts. It granted the motion, however, and "remanded to the Trial Court for the limited purpose of developing the facts in regard to an alleged sale by appellee of the Security Alarms and Services, Inc. since the entry of the judgment from which appeal is pending in this Court." This appeal from that order followed.

II

Rule 14 empowers an appellate court, in its discretion, to consider certain facts which occur after judgment. The rule contains no hard and fast standard for its application. Rather it provides as follows:

"While neither controlling nor fully measuring the court's discretion, consideration generally will extend only to those facts, capable of ready demonstration, affecting the positions of the parties or the subject matter of the action such as mootness, bankruptcy, divorce, death, other judgments or proceedings, relief from the judgment requested or granted in the trial court, and other similar matters. Nothing in this rule shall be construed as a substitute for or limitation on relief from the judgment available under the Tennessee Rules of Civil Procedure or the Post-Conviction Procedure Act."

Additional guidance as to the scope of Rule 14 is found in the Advisory Commission Comment to the Rule:

"Although the appellate court should generally consider only those facts established at trial, it occasionally is necessary for the appellate court to be advised of matters arising after judgment. These facts, unrelated to the merits and not genuinely disputed, are necessary to keep the record up to date. This rule gives the appellate court discretion to consider such facts. This rule is not intended to permit a retrial in the appellate court."

Rule 14 must also be understood in the context of the constitutional and statutory powers of this Court and the Court of Appeals. The jurisdiction of the Court is appellate only. ¹ Tenn. Const. Art. VI, § 2. In Fine v. Lawless, 140 Tenn. 453, 205 S.W. 124 (1918), the Court was asked to consider certain facts which had taken place pending appeal. The facts were controverted, involving a dispute as to the intention of a party vacating the premises of a building. The Court held that to consider these facts involved the exercise of original jurisdiction. The Court stated:

" 'Appellate jurisdiction' of a case involving such an issue necessarily implies that the issue has been formulated and passed upon in some inferior tribunal. In the exercise thereof we look only to the record sent up from such inferior court. The phrase 'appellate jurisdiction' refutes any idea of framing and settling issues in a court of such jurisdiction in regard to such a matter transpiring pending the appeal." Id. at 455, 205 S.W. 124.

On the basis of similar constitutional provisions, some appellate courts have held it beyond their power to receive any evidence not produced at trial. See, e.g., Schmidt v. Equitable Life Assur. Soc., 376 Ill. 183, 33 N.E.2d 485 (1941); Southern Pacific Transportation Co. v. Lueck, 111 Ariz. 560, 535 P.2d 599, 615 (1975). There is no need, however, to go so far as to prohibit consideration of all post-judgment facts. In Crawford v. Crawford, 163 Kan. 126, 181 P.2d 526, 531-32 (1947), the court held that a statute permitting appellate courts to receive additional evidence would be unconstitutional if construed to authorize prolongation or renewal of the trial of issues of fact or appeal. But the Court held it constitutional if interpreted as merely providing a means of exercising its appellate jurisdiction. Accordingly, it limited the scope of such evidence so as not to include

" '... what would be mere cumulative evidence, nor evidence which it would be possible to controvert or dispute in the trial court, nor concerning the effect of which there might be differences of opinion, or from which different conclusions could possibly be drawn.' " Id. 181 P.2d at 532, quoting Wideman v. Faivre, 100 Kan. 102, 163 P. 619 (1918).

As to those matters which could be considered the court stated

" 'Sometimes the court is in need of extraneous evidence respecting some situation or fact to enable it to determine, not the propriety of the conduct of the district court, but the nature of the judgment to be directed. Sometimes a document, or public record, or other item of evidence of like character, material to a proper determination of the appeal and substantially incontestible, is called for, or is examined if produced, and then is treated in the same way as an admission of the parties would be treated if found in the record.' " Id. quoting Hess v. Conway, 93 Kan. 246, 144 P. 205 (1914).

We...