Town of Monterey v. The Garden Inn, LLC

• Docket Number: M2020-01511-COA-R3-CV
• Decision Date: 24 May 2022
• Parties: TOWN OF MONTEREY, TENNESSEE ET AL. v. THE GARDEN INN, LLC ET AL.
• Court: Tennessee Court of Appeals

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TOWN OF MONTEREY, TENNESSEE ET AL. v. THE GARDEN INN, LLC ET AL.

No. M2020-01511-COA-R3-CV

Court of Appeals of Tennessee, Nashville

May 24, 2022

Session March 1, 2022

Appeal from the Circuit Court for Putnam County No. 2019-CV-121 Jonathan L. Young, Judge

This is a declaratory judgment action concerning an express ingress/egress easement that provides access via The Garden Inn at Bee Rock in Monterey, Tennessee, to a neighboring natural landmark owned by the Town of Monterey, Tennessee. After years of public use of the easement to access the landmark, The Garden Inn took steps to physically hinder the public's use of the easement. As a consequence, the Town of Monterey and others commenced this action against The Garden Inn, LLC, to declare the respective rights and responsibilities of the parties. After years of litigation The Garden Inn contended that a conservation foundation was an indispensable party. In doing so, The Garden Inn contended that failure to add the conservation foundation, which holds a conservation easement by which it may prohibit certain uses of the landmark property, would subject The Garden Inn to multiple or otherwise inconsistent obligations. The trial court disagreed, holding that the conservation foundation "has no interest in the fight with respect to the interpretation of this easement for ingress and egress." Thereafter, the court granted summary judgment in favor of the Town of Monterey concerning the scope and uses of the easement. The Garden Inn appealed, challenging only the trial court's determination that the conservation foundation was not an indispensable party. We affirm.

Tenn R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

D Michael Kress II, Sparta, Tennessee, for the appellants, The Garden Inn, LLC; Michael Kopec; and Mirtha Kopec.

Daniel H. Rader IV and André S. Greppin, Cookeville, Tennessee, for the appellees, Town of Monterey, Tennessee; Walker Realty Investments, L.P.; and Robert J. Walker.

Frank G. Clement, Jr., P.J., M.S., delivered the opinion of the Court, in which Andy D. Bennett and Carma Dennis McGee, JJ joined.

OPINION

FRANK G. CLEMENT JR., P.J., M.S.

Facts and Procedural History

For several generations, the property on which The Garden Inn at Bee Rock is located was owned by members of the Walker family and their family limited partnership, Walker Realty Investments, L.P. (collectively, the "Walker Family"). In addition to the parcel encompassing The Garden Inn ("Parcel 1"), the Walker Family owned an adjacent parcel of land that encompassed a natural landmark on the edge of the Cumberland Plateau known as Bee Rock ("Parcel 2").

In 1995, the Walker Family conveyed Parcel 1 to a limited liability company controlled by Mr. Dickie Hinton. The conveyance was subject to a fifty-foot wide ingress/egress express easement across Parcel 1 to access Parcel 2. Thereafter, Mr. Hinton's limited liability company sold Parcel 1 to The Garden Inn, LLC, subject to the express easement.

Acting on a desire to preserve Bee Rock as a nature area in perpetuity, the Walker Family granted a conservation easement on Parcel 2 in 2018 to the Tennessee Parks and Greenways Foundation ("TPGF"), a non-profit organization. On the following day, they donated Parcel 2 to the Town of Monterey, subject to TPGF's conservation easement.

As a result of the express ingress/egress easement, access to Parcel 2 via Parcel 1 was open to the public. However, tensions grew when The Garden Inn took issue with visitors using the easement to access Bee Rock. In fact, The Garden Inn would "run off" visitors to the Bee Rock natural landmark.

As a consequence, the Town of Monterey, Walker Realty Investments L.P., and Robert J. Walker (collectively, "Plaintiffs") commenced this action for declaratory judgment against The Garden Inn, LLC, and its owners/members Michael Kopec and Mirtha Kopec (collectively, "Defendants").^[1] Defendants filed an answer and counterclaim in which they asserted their own claim for declaratory judgment concerning the ingress/egress easement; however, Defendants did not add TPGF as a third-party defendant in their counterclaim. Defendants subsequently filed various motions, but they never filed a motion to make TPGF a party.

On July 21, 2020, Plaintiffs filed a motion for summary judgment that was supported by a statement of undisputed facts and a memorandum of law. Defendants responded by filing their own motion for summary judgment that was supported by a statement of undisputed facts and a memorandum of law in which they asserted for the first time that TPGF was an indispensable party. Significantly, however, Defendants did not dispute the material facts set forth by Plaintiffs, nor did they file a motion to make TPGF a party.

Following a hearing on the competing motions, the trial court granted summary judgment in favor of Plaintiffs, finding that the express easement contained in Defendants' deed permitted visitors to cross Parcel 1 to access Parcel 2. In doing so, the trial court stated:

The Court specifically finds that there is a fifty[-]foot ingress/egress easement to the Bee Rock property that is principally the subject of this suit.

Defendants' position is that there should be qualifications or restrictions concerning the ingress/egress easement. However, there are no restrictions on the express ingress/egress easement expressed in the deed. The Court specifically finds that the easement runs with the land, is alienable, and continues until such time as it may be extinguished. The Court finds that the language of the easement is clear and that the use is contemplated by the easement is substantially wide open, for ingress and egress. . . . The Court further notes the undisputed fact that the express easement was known to the Defendants at the time they acquired their interest in the property.

The Defendants have asserted . . . the existence of an indispensable party, Tennessee Parks and Greenways Foundation. The Court finds that this party was previously known at least to the Defendants, though the Court finds that this is immaterial. The Court has reviewed this conservation easement submitted by the Defendants, but finds that the purported indispensable party does not affect the Court's ability to declare the issues concerning this ingress/egress easement. The Defendants have not carried their burden of proving that this entity is an indispensable party. The Court specifically concludes that the holder of the conservation easement has no interest in the fight with respect to the interpretation of this easement for ingress and egress.

This appeal followed.

Issues

Defendants raise only one issue, stated as follows:

Whether the trial court erred by not requiring a party that was a stakeholder in the outcome of the case to be joined as a necessary and indispensable party for just adjudication to resolve all issues so as to avoid the prospect of incurring double, multiple, or otherwise inconsistent outcomes or obligations.

We, however, have determined that the failure to add an indispensable party in an action governed by the Declaratory Judgments Act leaves the court with "no authority to grant declaratory relief." Tennessee Farmers Mut. Ins. Co. v. DeBruce, 586 S.W.3d 901, 906 (Tenn. 2019). Therefore, we must also determine whether the trial court had subject matter jurisdiction over the matters in dispute without TPGF being added as a party.^[2]

Standard of Review

Whether or not a party is indispensable to a declaratory judgment action is in the discretion of the trial court and will be reviewed using the abuse of discretion standard. Id. at 905. However, "[s]ubject matter jurisdiction involves a court's lawful authority to adjudicate a controversy brought before it." Chapman v. DaVita, Inc., 380 S.W.3d 710, 712 (Tenn. 2012) (citing Meighan v. U.S. Sprint Commc'ns Co., 924 S.W.2d 632, 639 (Tenn. 1996); Standard Sur. & Cas. Co. of New York v. Sloan, 173 S.W.2d 436, 440 (Tenn. 1943)). "Since a determination of whether subject matter jurisdiction exists is a question of law, our standard of review is de novo, without a presumption of correctness." Id. at 712-13 (quoting Northland Ins. Co. v. State, 33 S.W.3d 727, 729 (Tenn. 2000)).

Analysis

I. Waiver of the Issue on Appeal

As a threshold matter, Plaintiffs contend that Defendants waived the issue of whether TPGF is an indispensable party because Defendants failed to "raise the issue in their original answer, and did not file a motion at any time either before or after." Plaintiffs go on to highlight that Defendants "did not move to amend their Answer to assert this defense" and "did not file a motion concerning this defense." We, however, have determined that the failure to add an indispensable party in an action governed by the Declaratory Judgments Act leaves the court with "no authority to grant declaratory relief." DeBruce, 586 S.W.3d at 906 (Tenn. 2019). Therefore, the issue may not be waived. See Morrow v. Bobbit, 943 S.W.2d 384, 392 (Tenn. Ct. App. 1996) ("This Court is required to consider the subject matter jurisdiction of both this Court and the trial court regardless of whether the existence thereof is presented as an issue." (citations omitted)).

Subject matter jurisdiction is an issue that cannot be conferred either by waiver or consent, and one which this court will often address sua sponte. See Osborn v. Marr, 127 S.W.3d 737, 739 (Tenn. 2004) ("Tennessee's courts derive subject matter jurisdiction from the state constitution or from legislative acts."). As our Supreme Court has explained:

To achieve the goal of finality and certainty in a declaratory judgment action, all necessary parties must be joined. . . . The [Declaratory Judgments] Act

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