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Dialysis Clinic, Inc. v. Medley

Court of Appeals of Tennessee, Nashville

March 27, 2017

DIALYSIS CLINIC, INC.
v.
KEVIN MEDLEY, ET AL.

          Assigned on Briefs February 10, 2017.

         Appeal from the Circuit Court for Davidson County No. 14C4843 Joseph P. Binkley, Jr., Judge

         Appellants appeal the trial court's denial of their motion to recuse on the ground that the trial court conducted an impermissible ex parte communication with counsel for the opposing party. The dispute in this case stems from Appellants' pursuit of several documents that the opposing party claimed were privileged. In the course of hearing proof on the claimed privilege, the trial court announced its intention to conduct an ex parte hearing concerning the documents with only the opposing party present. Appellants did not object to the hearing. After the hearing was conducted, however, Appellants moved to recuse the trial judge on the basis that he had engaged in prohibited ex parte communications. The trial court promptly denied the recusal motion. Discerning no error, we affirm.

         Tenn. Sup. Ct. 10B Interlocutory Appeal as Right; Judgment of the Circuit Court

          L. Vincent Williams, Nashville, Tennessee, for the appellants, Kevin Medley, Kevin Medley, LLC, Canvas Lounge LLC, and 3 Entertainment Group, LLC.

          Peter C. Sales and Frankie N. Spero, Nashville, Tennessee, for the appellee, Dialysis Clinic, Inc. Samuel Lanier Felker, Nashville, Tennessee, for the appellee, OutCentral, Inc.

          J. Steven Stafford, P.J., W.S., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Andy D. Bennett, J., joined.

          OPINION

          J. STEVEN STAFFORD, JUDGE.

         Background

         The facts of this case are not in dispute. On November 25, 2014, Plaintiff/Appellee Dialysis Clinic, Inc. ("Dialysis Clinic") filed a complaint in general sessions court against Defendants/Appellants Kevin Medley, individually and d/b/a Kevin Medley, LLC; Canvas Lounge LLC ("Canvas Lounge"); 3 Entertainment Group LLC d/b/a WKND (collectively, "Appellants"); and Defendant/Appellee OutCentral, Inc. ("OutCentral, " and together with Appellants, "Defendants"). The complaint sought a declaratory judgment for unlawful detainer against Defendants. At some point, the case was removed to Davidson County Circuit Court and Mr. Medley filed a cross-complaint against OutCentral, alleging that it and Dialysis Clinic entered into an agreement by which OutCentral paid Dialysis Clinic to the exclusion of Mr. Medley.

         The parties thereafter engaged in prolonged discovery, which was scheduled to be largely completed in July 2015. In the summer of 2016, however, Defendants filed a motion to extend the time for completing discovery and to compel discovery of certain documents withheld by XMI Commercial Real Estate, Inc. ("XMI"), a brokerage firm that assisted Dialysis Clinic with the purchase of the subject property. XMI refused to produce the requested documents on the grounds of attorney-client privilege and work product. On September 26, 2016, the trial court entered an order indicating that the documents had been submitted to the court for in camera review and that a ruling of their privilege would be forthcoming. Having reviewed the documents, the trial court later determined that an evidentiary hearing on the issue was necessary. The hearing began on November 2, 2016, and continued on November 16, 2016. Counsel for Appellants was present during both hearing dates. Near the conclusion of the second day of the hearing, the following exchange occurred:

THE COURT: Well, a lot of this is really for my benefit. I mean, that's why we're doing most of this. Now, as a side benefit, [Counsel for Appellants] is cross-examining these people. It's a side benefit to him to that extent. But, I mean, I really just want to know the relationship of these parties. That's why we're doing this exercise.
* * *
THE COURT: Well, but it's my responsibility to determine . . . which documents are subject to the privileges. Really, I'm the one that called this meeting. It's for my purposes, really, so I can make intelligent decisions about these documents.
[Counsel for Dialysis Clinic]: I understand. I understand.
THE COURT: So it's really my request. So as far as I'm concerned, I don't need anything else. I think I understand. There are a lot of people. I mean, [Dialysis Clinic] certainly understands the relationship with these parties. [Counsel for Appellants] probably understands as much -- maybe not quite as much about the relationship of the parties as [Dialysis Clinic]'s counsel, but I didn't have any idea and now I do. Now, I understand.
So it is really for my purposes, so I can, again, make an intelligent decision about these documents and whether they are subject to the privileges that are available. And I think I understand now. I don't think I need anything else.
* * *
THE COURT: . . . . Now because I have no law clerk helping -- let me back up. Because I have law clerk help, period, I'm able to set a lot of cases and a lot of motions, you know, complicated motions, complicated matters back to back to back because I have help to prepare. And we disposed of a lot of litigation in this court. And I really think that's my job is to help you guys get your cases moving toward a conclusion. And I can do that very effectively and efficiently with my law clerk help, but I don't have law clerk help for this. So it takes me a little longer.
I'm like my brethren in the rural counties that don't have a law clerk; they do their own work. And you know, some of their litigation is maybe not as complicated as what we have here; some of it ...

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