Session June 18, 2019
from the Chancery Court for Shelby County No. CH-16-1060 Joe
Dae L. Jenkins, Chancellor
brought suit against Defendants/Appellees over various
business disputes. During the course of the discovery
process, the trial court granted three motions to compel
against Plaintiff, twice reserving Defendants' request
for attorney's fees. Eventually, Defendants moved for
discovery sanctions against Plaintiff, asking the trial court
to award Defendants the attorney's fees and expenses
related to prosecuting the three motions to compel as well as
the motion for sanctions. Shortly after the third motion to
compel was granted, however, Plaintiff requested a voluntary
nonsuit pursuant to Rule 41.01. Because Defendants'
motion for partial summary judgment was pending, the
Defendants were required to agree to the nonsuit. The trial
court granted the nonsuit based on Defendants' consent,
but later held a hearing on the Defendants' motion for
sanctions and awarded the Defendants their attorney's
fees and expenses. Plaintiff appealed to this Court.
Discerning no reversible error, we affirm.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
C. Shelton, III, and J. Bennett Fox, Jr., Memphis, Tennessee,
for the appellant, Solomon Menche.
Joshua Kahane, and Aubrey B. Greer, Memphis, Tennessee, for
the appellees, White Eagle Property Group, LLC, Jeff
Weiskopf, and Israel Orzel.
Steven Stafford, P.J., W.S., delivered the opinion of the
court, in which Carma Dennis McGee, J., joined.
STEVEN STAFFORD, JUDGE.
case arose out of a business dispute between Solomon Menche
("Appellant") and White Eagle Property Group, LLC
and other various defendants (collectively,
"Appellees"). Several years ago Appellant
invested money with Appellees for a real estate venture that
was ultimately unsuccessful; consequently, the relationship
of the parties deteriorated. Appellant brought suit against
Appellees on June 23, 2016, in the Shelby County Chancery
Court ("trial court") alleging, inter
alia, that Appellees were liable to Appellant for breach
of contract, conversion, breach of fiduciary duty, and fraud.
After some discovery, Appellees filed a motion for partial
summary judgment on February 14, 2017.
with their motion for partial summary judgment, Appellees
also filed a motion to stay as to the written discovery that
Appellant had propounded upon Appellees. A lengthy and bitter
discovery dispute between the parties ensued, leading
Appellees to file, on October 20, 2017, their first motion to
compel discovery, alleging that Appellant was refusing to
respond to various discovery requests. The trial court held a
hearing on this motion on November 8, 2017, and thereafter
entered an order granting Appellees' motion to compel;
therein, the trial court ordered Appellant to respond to
Appellees' first set of interrogatories and request for
documents "on or before December 11, 2017." This
order contained no mention of attorney's fees or
expenses. The trial court delayed hearing Appellees'
motion for partial summary judgment.
relationship between the parties did not improve; on December
29, 2017, Appellees filed a second motion to compel,
asserting that Appellant had not timely produced the
discovery previously ordered by the trial court, and that
Appellant had refused to appear at a deposition despite being
noticed by Appellees. In this second motion to compel,
Appellees requested that they be awarded their reasonable
attorney's fees and expenses incurred in the filing of
both the first and second motion to compel, pursuant to
Tennessee Rule of Civil Procedure 37.01. Appellant filed a
response to the second motion to compel asserting that
Appellant had been out of the country in December of 2017,
and that Appellant had produced some discovery on December
29, 2017, but that Appellees responded by simply filing the
second motion to compel.
trial court heard the second motion to compel on January 19,
2018, and thereafter entered an order granting Appellees'
motion. The trial court found that Appellant had failed to
comply with the trial court's previous order and that the
discovery responses that had been provided by Appellant were
insufficient in that they were not timely submitted and
"were not submitted with a verification page." As
such, the trial court ordered Appellant to "file and
serve a duly executed and notarized verification of his
December 29, 2017 [r]esponses no later than February 2,
2018." Further, the trial court stated that Appellant
should make himself available for deposition "no later
than March 5, 2018." In addition, the trial court
ordered the parties to participate in mediation. Finally, the
trial court reserved ruling on Appellees' request for an
award of expenses and attorney's fees incurred in
bringing both motions to compel.
on February 27, 2018, Appellees filed a third motion to
compel, averring that Appellant would not agree to dates for
deposition or mediation, and, further, that Appellant had not
fully complied with the trial court's orders as to
Appellees' interrogatories or requests for
documents. Again, Appellees asserted that they
were entitled to recover their attorney's fees and
expenses in connection with all three motions to compel. The
trial court entered an order granting the third motion to
compel on March 29, 2018, again noting that it would reserve
ruling on "the fees and expenses to be paid by
[Appellant] to [Appellee] associated with the first, second,
and third motions to compel[.]"
on April 16, 2018, Appellees filed a motion entitled
"Motion for Civil Sanctions" wherein Appellees
asserted that Appellant had grossly and willfully abused the
discovery process and that in addition to sanctions in the
form of attorney's fees and expenses, Appellant's
case should be dismissed. However, before this motion could
be heard, Appellant sought a voluntary dismissal pursuant to
Tennessee Rule of Civil Procedure 41.01. Because
Appellees' motion for partial summary judgment remained
pending, however, Appellees were required to consent to
Appellant's request for the nonsuit. See Tenn.
R. Civ. P. 41.01(1) ("[E]xcept when a motion for summary
judgment made by an adverse party is pending, the plaintiff
shall have the right to take a voluntary nonsuit to dismiss
an action without prejudice by filing a written notice of
dismissal[.]"). Appellees agreed to the proposed nonsuit
and the trial court approved this agreement via order entered
April 20, 2018. The agreed order granting dismissal reads as
Before the Court, pursuant to Tenn. R. Civ. Pro. 41.01(3), is
the [Appellant's] request to take a voluntary nonsuit to
dismiss this action in its entirety without prejudice, to
which [Appellees] consent. Based upon [Appellant's]
request, [Appellees'] consent, and the entire record in
this matter, the request is well taken and should be granted.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that
[Appellant's] lawsuit is DISMISSED without prejudice
pursuant to Tenn. R. Civ. Pro. 41.01, with court costs to be
assessed to [Appellant].
the filing of the agreed order, on May 4, 2018, Appellees
filed a notice to set their motion for sanctions for hearing.
Appellees asserted that their motion for civil sanctions was
unaffected by the voluntary dismissal, urging that the trial
court retained jurisdiction to adjudicate the motion.
Appellant filed a response asserting that the trial court
lacked jurisdiction to hear the motion because the voluntary
dismissal had already been granted by agreement, and that the
entry of the order of dismissal effectively ended the case.
Nonetheless, the trial court held a hearing on Appellees'
motion for sanctions on June 8, 2018, and on July 12, 2018,
entered an order granting the motion for sanctions, noting
that the motion had been filed, docketed, and served prior to
the entry of the agreed order of voluntary dismissal. To that
point, the trial court noted that it retained subject matter
jurisdiction over the motion for sanctions and found that
Appellant owed Appellees "any and all reasonable
expenses and attorney fees associated with the actions
culminating in [Appellees'] [m]otions to [c]ompel and
prosecuting the [m]otion on civil sanctions."
Accordingly, the trial court ordered Appellant to pay $51,
000.00 in attorney's fees and expenses to Appellees.
Appellant thereafter filed a timely notice of appeal to this
raises two issues in this appeal:
1.Whether the trial court erred in exercising jurisdiction
over Appellees' motion for discovery sanctions after the
consent order of dismissal was entered.
2. Whether the trial court abused its discretion in ordering
discovery sanctions against [Appellant].
Standard of Review
the parties' primary dispute on appeal is whether the
trial court retained jurisdiction to grant Appellees'
motion for sanctions after the agreed order of voluntary
dismissal was entered. In addressing subject matter
jurisdiction, our supreme court has previously explained:
The concept of subject matter jurisdiction involves a
court's lawful authority to adjudicate a controversy
brought before it. See Meighan v. U.S. Sprint
Communications Co., 924 S.W.2d 632, 639 (Tenn. 1996);
Standard Sur. & Casualty Co. v. Sloan, 180 Tenn.
220, 230, 173 S.W.2d 436, 440 (1943). Subject matter
jurisdiction involves the nature of the cause of action and
the relief sought, see Landers v. Jones, 872 S.W.2d
674, 675 (Tenn. 1994), and can only be conferred on a court
by constitutional or legislative act. See Kane v.
Kane, 547 S.W.2d 559, 560 (Tenn. 1977); Computer
Shoppe, Inc. v. State, 780 S.W.2d 729, 734 (Tenn. Ct.
App. 1989). 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.
See Nelson v. Wal-Mart Stores, Inc., 8 S.W.3d 625,
628 (Tenn. 1999).
Northland Ins. Co. v. State, 33 S.W.3d 727, 729
Appellant asserts that the trial court abused its discretion
in awarding Appellees discovery sanctions. "Appellate
courts review a trial court's decision to impose
sanctions and its determination of the appropriate sanction
under an abuse of discretion standard." Alexander v.
Jackson Radiology Assoc's, P.A., 156 S.W.3d 11, 14
(Tenn. Ct. App. 2004) (citing Lyle v. Exxon Corp.,
746 S.W.2d 694, 699 (Tenn. 1988)). "An abuse of
discretion occurs where the trial court has applied an
incorrect legal standard or where its decision is illogical
or unreasoned and causes an injustice to the complaining
party." Id. (citing Mercer v. Vanderbilt
Univ., Inc., 134 S.W.3d 121, 131 (Tenn. 2004)).
primary dispute in the present appeal is whether it was
appropriate for the trial court to grant Appellees'
motion for sanctions after the parties agreed to enter an
order nonsuiting Appellant's case. According to
Appellant, there is no applicable rule in Tennessee that
extended the trial court's jurisdiction once the case was
dismissed; further, Appellant argues that because Appellees
agreed to the voluntary dismissal, they "held all the
cards" and could have "insisted to the [trial]
court that ruling on pending motions be reserved."
Ultimately, Appellant urges that the trial court lacked
authority to award Appellees sanctions under these
contrast, Appellees assert that the motion for sanctions was
"collateral or ancillary" to Appellant's
original lawsuit, and that the trial court retained
jurisdiction to rule on the motion even after the agreed
order of voluntary dismissal was entered. In support,
Appellees urge that the "ability of [the] trial court to
enforce its orders, and to punish or deter express violations
of orders, is vital to the administration of justice and the
power of the trial court." Appellees further point out
that other states have determined that motions for sanctions
are collateral to an underlying claim; Appellees also argue
that, by analogy, in Tennessee there are circumstances under
which a trial court may take action even after a case has
been dismissed. See, e.g., Tenn. R. Civ. P. 54.04
(involving discretionary costs). To summarize, Appellees aver
that a trial court retains jurisdiction "to entertain
and impose sanctions for pre-voluntary dismissal bad conduct
by a plaintiff after the entry of a voluntary
dismissal." Alternatively, Appellees assert that the
order of dismissal was simply not a final order because the
issue of sanctions was not adjudicated by the order, and that
the trial court acted within its discretion in later entering
the order granting Appellees' motion for sanctions.
parties assert that the case-at-bar turns on the question of
subject matter jurisdiction post-final judgment. Having
reviewed the record and the arguments of the parties,
however, we perceive the dispositive issue here to be whether
the agreed order allowing a nonsuit was in fact a final order
in light of Appellees' unadjudicated motion for
sanctions. To the extent that the agreed order of
dismissal was not a final order, the case was not fully
adjudicated and the trial court was well within its
discretion in ruling on the motion for sanctions.
Consequently, the first question we must address is whether
the agreed order granting a voluntary nonsuit was final
despite the fact that the motion for discovery sanctions was
Rule of Appellate Procedure 3(a) provides that
Except as otherwise permitted in rule 9 and in Rule 54.02
Tennessee Rules of Civil Procedure, if multiple parties or
multiple claims for relief are involved in an action, any
order that adjudicates fewer than all the claims or the
rights and liabilities of fewer than all the parties is not
enforceable or appealable and is subject to revision at any
time before entry of a final judgment adjudicating all the
claims, rights, and liabilities of all parties.
such, a final judgment is "one which determines a
particular cause and terminates all litigation on the same
right." Aetna Cas. & Sur. Co. v. Miller,491 S.W.2d 85, 86 (Tenn. 1973); see also Gaskill v.
Gaskill,936 S.W.2d 626, 634 n.4 (Tenn. Ct. App. 1996)
("A final judgment is one that resolves all the claims
between all the parties."); Shofner v. Shofner,181 S.W.3d 703, 712-13 (Tenn. Ct. App. 2004) ("A final
judgment is primarily one that fully adjudicates all the
claims between all the parties"). Simply put, a final
order "leav[es] nothing else for the trial court to
do." In re Estate of Henderson,121 S.W.3d 643,
645 (Tenn. 2003). An order that is not final is "subject
to revision at any time before entry of a final judgment
adjudicating all the ...