# FILED
Au gust 27, 1997 Cecil W. Crowson Ap pellate Cou rt Clerk IN THE COURT OF APPEALS OF TENNESSEE WESTERN SECTION AT NASHVILLE

______________________________________________ STANLEY HOLDER d/b/a HOLDER’S TOBACCO WAREHOUSE, Plaintiff-Appellee, Vs. C.A. No. 01A01-9702-CV-00080 Trousdale Circuit No. 2959-0-10 BILLY M. CELSOR; BILLY F. CELSOR; E. J. PARKER, JR.; ROBERT N. RICKMAN ; LEWIS BEASLEY , JR. and HARTSVILLE TOBACCO BOARD OF TRADE, Defend ants-App ellants.

____________________________ _______________________________________________ _ FROM THE TRO USDALE CO UNTY CIRCU IT COURT THE HONORABLE BOBBY CAPERS, JUDGE

Jacky O. Bellar; Bellar & Bellar of Carthage Eddie Ta ylor; Dono

ho, Taylo r & Taylor

of Harts ville For Appellee Charles W. Bone and Keith C. Dennen; Wyatt, Tarran t & Combs of H enderso nville For Appellants
REVERSED AND REM ANDED Opinion filed:

W. FRANK CRAWFORD,

PRESIDING J

UDGE, W.S.

CONCUR:
ALAN E. HIGH

ERS, JUDGE DAVID R.FARMER,

JUDGE1 The daily sales opportunity is the amount of tobacco that may b e sold with

in a cer tain tobacco market. Holder took issue with his allocation of daily sales opportunity, asserting that allocation should be based on performance rather than the amount

of e ach warehouse’s floor space. 2 Defend ants, Billy M. Celsor, Billy F. Celsor, E.J. Parker, Jr., Robert N. Rickma

n, Lewis Beasley, Jr., and the Hartsville Tobacco Board of Trade , appeal the trial court’s dismissal of the
case based on a

lack of jurisdiction. The defendants had motion for summary judgment pending against the plaintiff, Stanley H older d/b /a Holder’s Tobacco Warehouse (Holder), on the issue of the amount of

damages allegedly suffered as a result of the wrongf ul issuance of an injunction. On September 21, 1992, Holder filed a complaint and motion for a temporary injunction contesting his allocation of daily sa les opportunity for the 1992-93 tobacco season by the Hartsvil le Tobacco Board of Trade (Board)
. 1 On October 21, 1992, the trial court granted a temporary injunction ordering the defendants to recognize Holde r’s claim to additional floor space for the 1992-93 tobacco selling season. On July 6, 1994, the trial court entere d a final order making the temporary injunction a perma nent injunction as to

the 1992-93 tobacco season. Holder furnished the injunction bond required by thecourt. Th e defendants appealed the trial court’s final order. On appeal, this Court held that the trial court erred in issuing the injunction because the trial court “w as without juri sdiction to interfe re into the

actions o f a priva

te corporation.” Holder v. Celsor , 914 S.W.2d 496, 501 (Tenn. App.), perm. app. denied , (Tenn. 1995). This Court reversed the issuance of a mandatory injunction by the trial court and remanded the cause to the trial court for “ further necessary procee dings.” Id. On remand, the defendants filed a motion for summary judgment o n August 9, 1996 with respect to the damages they allegedly suffered as a r esult of the issuance of the injunction, and Holder filed a response thereto. After a hea ring on the motion for summary judgment, the trial court entered an order on January 6, 1997 dismissing the case. In its order, the trial court stated that, in light of this Court’s opinion stating that the trial court lacked jurisdiction to interf ere in the actions of a private corporation, the trial court did not have jurisdiction to consider t h e defenda nts’ claims for damages incurred as a result of the wrongful issuance of the injunction.

The defendants appeal the trial court’s dismissal and present the f ollowing issues for review, as stated in their brief:3 1) Upon r em and, following the decision by this Court that the trial court er

red in issu

ing an inju

nction, di d the trial cou

rt err in dismissing the defendants’ claim for damages suffe red as a result of the wrongful issuance of the injunctionfor lack of jurisdiction? 2) Are the defendants entitled to summary judgment in light of the failure of the plaintiff

to present any competent evidence of a genuin e issue of material fact with respect to the damag e s incu rre d by the defendants by virtue of the issuance of the injunction? In their first issue, the defenda nts conte nd that the

trial cou rt erre d in dismissi ng the ca se basedon a lack of jurisdiction because a trial court has jurisdiction to award damage s to aparty that has been wrongfully enjoine d even tho ugh the co

urt l acked the authority to issue the injunction in the first place. Holder contends that the trial court interpreted this Court’s decision to mean that it lacked subject matter jurisdiction and that the cases cited by the defenda nts are d istinguisha

ble beca use those cases did not involve a lack of subject matter jurisdiction. We must respectfully disagree wi th plaint iff and the trial court. In Holder , this Court noted the well

settled principle of

law, “that the courts in Tennessee should not interfere in the affairs of an association or priva te corpo ration in the absence of proof of bad faith or f raud on the part of those intrusted with its management.” 914 S.W.2d at 496. Clearly the cou rt has jurisdiction to make the determination of whether there is bad fa ith or fraud, and failure of proof in this regard does not render the proceeding void ab initio as in the case of lack of subject matter jurisdiction. To the contrary, it is merely a failure of proof on the part of the plaintiff as in any other case, thus resulting in the wrongful issuance of the injunction. The injunction

bond req uired by Tenn. R. Civ. P. 65.05 is specifically for “the payment of such c osts and damages as may be incurred or suffered by any pe rson who is found to have been wrongfully restrained or enjoined.” Tenn. R. Civ. P. 65.05. “A surety’s liability may be enforced on motion without the necessity of an independent action.” Te nn. R. Civ. P. 65A. The trial court issuing an inj unct ion later determined to be wrongfully issued has jurisdict ion to de termine the amount of damages incurred by virtue of the wr ongfully issued injunction. See Smith v. Rodgers , 677 S.W.2d 1, 4 (Tenn. App. 1984); James v. W illiams, 20 Tenn. App. 420, 99 S.W.2d 831 (1936). In the case before us, the tri al court issued an injunction upon plaintiff posting an4

injunction bond as required by Tenn. R. Civ. P. 65.05. It was determined that the facts did not warrant the issuance of the injunction; therefore, the injunction was wrongfully issued. Under the above authorities, the trial court has jurisdiction to assess damages for the wrongful issuance of the injunction. In their second

issue, the defendants contend that they are entitled to summary judgment
on the issue of the amount of damages they allegedly suffere d as a result of the injunction. They argue that they

establi shed tha t they lost profits as a result of the injunction and that Holder failedto set for

th specif ic factsto create a genuine issue of materia l fact on the issue of damag es. Therefore, they argue that they ar e entitled to a judgment as a matter of law. On the othe r hand, Holder contends that damages must be proven under Te nn. R. Civ. P. 56.03 and argues that he raised a genuine issue of material fact. In addition, Holder argues that further discover y is nece ssary on t

he issue o f damage s and that the defe ndants fa iled to establish that they were entitled to judgment as a matter of law. Moreover, Holder argues that the defenda

nts did not c omply with T enn. R. Civ . P. 65A requiring notice before proceeding against a surety. At the time the trial c ourt dismis sed this c ase base d on lack o f jurisdic tion, the d efenda nts had a summary judgment motion pending before the court. Given our reversal of the dismissal,
we decline

to rule on this issue i n this case without first allowing the trial court the opportuni

ty to do so. The defendants also ask that if there is a remand, this Court d

irect the trial judg e to rec use himself because of bias or a lack of impar tiality. W

e again d ecline to do as the d

efenda nts request. If grounds exist for recusal, the matter should first be presented to the trial judge. Accordingly, the order of trial cou rt is reve rse d, and this cause is remanded for such further proceedings as necessar y. Costs of appeal are assessed against the appellee
.

_________________________________ W. FRANK CRAWFORD, PRESIDING J

UDGE, W.S. CONCUR:

____________________________________ ALAN E. HIGH

ERS, JUDGE

____________________________________ DAVID R.FARMER,

JUDGE