King v. Kelly
| Decision Date | 28 June 2016 |
| Docket Number | No. M2015-02376-COA-R3-CV,M2015-02376-COA-R3-CV |
| Parties | TERRY K. KING, ET AL. v. STEPHEN S. KELLY |
| Court | Tennessee Court of Appeals |
Appeal from the Circuit Court for Davidson County
Plaintiffs appeal from the trial court's order denying their motion to enforce two offers of judgment offered serially by the defendant. Because the trial court improperly certified its judgment as final pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure, we dismiss this appeal for lack of subject matter jurisdiction.
H. Anthony Duncan, Nashville, Tennessee, for the appellants, Terry K. King, and Roger A. King.
C. Benton Patton and Christopher M. Jones, Nashville, Tennessee, for the appellee, Stephen S. Kelly.
OPINIONOn September 8, 2014, Plaintiffs/Appellants Terry K. King ("Ms. King") and Roger A. King ("Mr. King," and together with Ms. King, "Appellants") filed a personal injury lawsuit against Defendant/Appellee Stephen S. Kelly ("Appellee"). The complaint alleged that Appellee was negligently operating his vehicle when he rear-ended Ms. King's automobile on October 28, 2013, causing her injuries. Appellants sought a total of $350,000.00 in damages for medical expenses, loss of earning capacity, pain and suffering, loss of enjoyment of life, permanent injury and loss of consortium. Appellee filed an answer on September 7, 2014, raising the affirmative defense of comparative negligence and denying that Appellants were entitled to any relief.
On October 16, 2015, Appellee's counsel emailed counsel for Appellants with an offer of settlement in the amount of $7,195.00. On the same day, Appellee's counsel also mailed an offer of judgment pursuant to Rule 68 of the Tennessee Rules of Civil Procedure1 in the same amount to Appellants. According to a later affidavit filed by Appellee's counsel, she and counsel for Plaintiffs engaged in negotiations in which Appellants made a demand of $19,995.00. In response, on October 19, 2015, Appellee's counsel then made another offer of judgment in the amount of $8,000.00. On October 23, 2015, Appellants filed a notice in the trial court of their acceptance of the two offers of judgment for a combined award of $15,195.00. On October 26, 2015, Appellee filed a motion to stay the entry of judgment and instead, to enforce the first offer of judgment in the amount of $7,195.00.
The trial court held a hearing on November 13, 2015. At the hearing, Appellants argued that based upon our holding in McGinnis v. Cox, 465 S.W.3d 157 (Tenn. Ct. App. 2014), the first offer of judgment could not be revoked by the Appellee within the ten-day period for acceptance. Because Appellants accepted both offers of judgment within ten days of their initial offer, Appellants contended that both offers were valid and that they were entitled to accept both offers for a combined judgment of $15,195.00. In contrast, Appellee asserted that in responding to the first offer of judgment with a demand for $19,995.00, the first offer had in fact been rejected by the Appellants, leaving Appellee free to make another offer of judgment. Appellee further asserted that McGinnis indicated that good cause could be utilized to revoke an offer of judgment; Appellee thus argued that his counsel's mistaken belief that the first offer had been rejected was sufficient good cause to allow revocation.
On November 24, 2015, the trial court entered an order finding that the McGinnis case was distinguishable because it did not involve the particular situation presented in the case-at-bar. The trial court therefore ruled that Appellants were not entitled to combine both offers of judgment. The trial court also denied Appellee's motion to enforce the first offer of judgment. Instead, the trial court ruled that Appellants "may elect to accept" either the first offer of judgment in the amount of $7,195.00, or the second offer of judgment in the amount of $8,000.00. The trial court further found that there was no just reason for delay and directed that a final judgment be entered pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure. Appellants immediately appealed to this Court.
Appellants raise only one issue in this appeal: "Whether the trial court erred in failing to render judgment upon two irrevocable offers of judgment made under Rule 68 after Appellants simultaneously accepted both offers?" In addition to this issue, Appellee argues that the trial court's decision to certify its judgment as final was not proper under Rule 54.02 of the Tennessee Rules of Civil Procedure and that therefore this Court lacks subject matter jurisdiction to consider this appeal. Because our ability to rule on Appellants' substantive issue is predicated on this Court having subject matter jurisdiction over this appeal, we begin with Appellee's contention that we lack subject matter jurisdiction due to the lack of a final judgment.
This Court "cannot exercise jurisdictional powers that have not been conferred directly to [us] expressly or by necessary implication." Tennessee Envtl. Council v. Water Quality Control Bd., 250 S.W.3d 44, 55 (Tenn. Ct. App. 2007) (citations omitted). Our subject matter jurisdiction is limited to final judgments except where otherwise provided by procedural rule or statute. Bayberry Assocs. v. Jones, 783 S.W.2d 553, 559 (Tenn. 1990) (citing Aetna Cas. & Sur. Co. v. Miller, 491 S.W.2d 85, 86 (Tenn. 1973)). An order that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is typically not a final judgment that is appealable as of right. See Tenn. R. App. P. 3(a). Rule 3(a) of the Tennessee Rules of Appellate Procedure nevertheless permits parties to appeal an order that does not adjudicate all of the claims, rights, and liabilities of all parties if the trial court certifies its judgment as final pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure. Rule 54.02 provides:
When more than one claim for relief is present in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the Court, whether at law or in equity, may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delayand upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of the judgment adjudicating all the claims and the rights and liabilities of all the parties.
As this Court explained:
Rule 54.02 creates two prerequisites to the certification of final judgment: (1) the order must eliminate one or more but fewer than all of the claims or parties, Bayberry, 783 S.W.2d at 558, and (2) the order must expressly direct the entry of final judgment upon an express finding of "no just reason for delay," Fox v. Fox, 657 S.W.2d 747, 749 (Tenn. 1983). If the trial court certifies a judgment that is not conclusive as to "one or more but less than all of the claims in the action or the rights and liabilities of one or more parties, an appeal from it will be dismissed, even though the trial court decided to treat the order as final." 10 Charles Alan Wright et al., Federal Practice and Procedure § 2655 & n. 8 (3d ed.1998) (collecting cases). Similarly, an appeal will be dismissed if this Court determines that a certified judgment does not contain the requisite express findings, Fagg v. Hutch Manufacturing Co., 755 S.W.2d 446, 447 (Tenn. 1988) (citation omitted), or improperly holds that "no just reason for delay" exists, Huntington National Bank v. Hooker, 840 S.W.2d 916, 922 (Tenn. Ct. App. 1991).
Carr v. Valinezhad, No. M2009-00634-COA-R3-CV, 2010 WL 1633467, at *2 (Tenn. Ct. App. Apr. 22, 2010).
We review the question of whether a trial court properly certified a judgment as final under a dual standard. Carr, 2010 WL 1633467, at *2 (citing Brown v. John Roebuck & Assocs., Inc., No. M2008-02619-COA-R3-CV, 2009 WL 4878621, at *5 (Tenn. Ct. App. Dec. 16, 2009)). "Appellate courts must first determine whether an order disposes of one or more but fewer than all of the claims or parties, which is a question of law we review de novo." Carr, 2010 WL 1633467, at *2 (citing Brown, 2009 WL 4878621, at *5). If the orderproperly disposes of one or more but fewer than all of the claims or parties, "appellate courts must then, and only then, determine whether there is no just reason for delay, a question we review under an abuse of discretion standard." Carr, 2010 WL 1633467, at *2. Accordingly, we begin with the question of whether the trial court's order disposes of one or more but fewer than all of the claims before it.
A "claim" for the purposes of Rule 54.02 is defined as the "'aggregate of operative facts which give rise to a right enforceable in the courts.'" Brown, 2009 WL 4878621, at *6 (quoting McIntyre v. First Nat'l Bank of Cincinnati, 585 F.2d 190, 192 (6th Cir. 1978) (per curiam)). In Carr v. Valinezhad, this Court indicated that an order that adjudicates "only two transactions on a single count alleged in the complaint" does not dispose of a claim for purposes of Rule 54.02. Carr, 2010 WL 1633467, at *4. In another case, this Court ruled that Rule 54.02 certification was improper because the plaintiff's various claims involving violations of property association rules "all involve the same parties and arise out...
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