IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

Assigned on Briefs December 10, 2014

LISA DENISE CHURCH v. SHANNON WAYNE BROWN

Appeal from the Circuit Court for Cumberland County

No. CC12013CV5715 John J. Maddux, Jr., Judge

No. E2014-00942-COA-R3-CV-FILED-FEBRUARY 23, 2015

This appeal arises from a claim of fraud in a post-divorce context. Lisa Denise Church

(“Plaintiff”) filed a complaint for fraud in the Circuit Court for Cumberland County (“the

Trial Court”) against her ex-husband, Shannon Wayne Brown (“Defendant”), alleging that

he had misled her during their divorce regarding the valuation of his business interest. This

suit followed an earlier, unsuccessful action on the issue of fraud filed by Plaintiff under

TRCP 60 in the divorce action which had yielded a final judgment after appeal. The Trial

Court granted Defendant’s motion for summary judgment, finding, inter alia, that Plaintiff’s

fraud claim was barred by res judicata. Plaintiff appealed to this Court. We hold that

Plaintiff’s current lawsuit for fraud is a distinct cause of action, namely, common law fraud,

and is not barred by res judicata. However, as the issue of fraud already had been decided

in the earlier post-divorce Rule 60 proceedings, the doctrine of collateral estoppel prevents

Plaintiff from re-litigating the issue of fraud. We affirm the judgment of the Trial Court as

modified.

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

Affirmed as Modified; Case Remanded

D. MICHAEL SWINEY, J., delivered the opinion of the Court, in which JOHN W. MCCLARTY

and THOMAS R. FRIERSON, II, JJ., joined.

W. I. Howell Acuff, Cookeville, Tennessee, for the appellant, Lisa Denise Church.

Kelly A. Tollett and Brett A. York, Crossville, Tennessee, for the appellee, Shannon Wayne

Brown.
OPINION

Background

In 2008, Plaintiff and Defendant executed a Marital Dissolution Agreement

(“the MDA”). The parties acknowledged in the MDA complete disclosure of all marital and

separate property. The parties agreed that Plaintiff would be divested of any interest she had

in a business called Cumberland Components, Inc. Any interest in this business Plaintiff had

would vest in Defendant. In August 2008, the Probate and Family Court for Cumberland

County (“the Probate Court”) granted the parties an absolute divorce incorporating the MDA

by reference.

In November 2010, Plaintiff petitioned the Probate Court to revisit several

issues concerning the MDA. Plaintiff simultaneously filed a motion in the Probate Court

pursuant to Rule 60.02 of the Tennessee Rules of Civil Procedure to allow discovery on the

issue of the valuation of Cumberland Components, Inc. Plaintiff alleged that she had entered

the MDA under the belief that the business interest was of no positive value. Plaintiff

alleged that she had now come to understand that the business interest had a value in the

vicinity of $800,000. In January 2011, the Probate Court held, among other things, that

Plaintiff’s Rule 60.02 motion was “not well taken and is hereby denied.”

Plaintiff appealed this decision of the Probate Court to the Tennessee Court of

Appeals. In our opinion Brown v. Brown, No. E2011-00421-COA-R3-CV, 2012 WL

1267872, at *13 (Tenn. Ct. App. April 13, 2012), Rule 11 perm. app. denied August 15,

2012, this Court in affirming the Probate Court stated: “[W]e find no evidence of record to

support the assertions of [Plaintiff] as to the improper valuation of [Defendant's] company

or that she was fraudulently induced to sign the MDA.”

In September 2012, Plaintiff filed an amended motion based on Rule 60 in the

Probate Court yet again attempting to revisit these issues. In June 2013, Plaintiff filed the

complaint in the Trial Court that is the origin of this appeal. Plaintiff alleged fraud and

sought monetary damages. Defendant filed a motion forsummary judgment. In March 2014,

a hearing was conducted on Defendant’s motion. In April 2014, the Trial Court entered an

order granting Defendant’s motion for summary judgment. In relevant part, the Trial Court

stated:

Based upon the record, it appears to the Court that the issue of fraud

raised by the Plaintiff has been or could have been litigated by these same

parties in the prior proceedings of the Probate and Family Court of

Cumberland County, Tennessee, the Tennessee Court of Appeals, and the

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Supreme Court of Tennessee, which have all rendered final judgments as to

the subject matter at hand. The Plaintiff’s claim of fraud is, therefore, barred

under the doctrine of res judicata.

Further, the Court finds that the issue of fraud as alleged by the

Plaintiff, if fraud indeed existed, would take the form of intrinsic fraud, as it

would be within the subject matter already litigated. Based upon current law

and precedent, in order for this Court to sustain a claim of fraud in the current

matter, the Plaintiff would have to make a claim of extrinsic fraud. The

Plaintiff has failed to make a claim as to matters not at issue in prior litigation

which prevented her from having a fair hearing. Therefore, Plaintiff has no

basis for relief or re-litigation of the issue of fraud.

Plaintiff timely appealed to this Court.

Discussion

Although not stated exactly as such, Plaintiff raises the following issues on

appeal: 1) whether the Trial Court erred in holding that Plaintiff’s claim of fraud was barred

by res judicata; 2) whether the Trial Court erred in holding that Plaintiff had to make a claim

of extrinsic fraud to go forward; and, 3) whether the doctrine of collateral estoppel bars

Plaintiff’s claim. Defendant raises his own issue on appeal: whether Plaintiff’s appeal is

frivolous and he, therefore, should recover his attorney’s fees.

This case was disposed of by summary judgment. With regard to summary

judgments, this Court explained in Estate of Boote v. Roberts:

The trial court’s resolution of a motion for summary judgment is a

conclusion of law, which we review de novo on appeal, according no

deference to the trial court’s decision. Martin v. Norfolk S. Ry. Co., 271

S.W.3d 76, 84 (Tenn. 2008). Summary judgment is appropriate only when the

moving party can demonstrate that there is no genuine issue of material fact,

and that it is entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.04;

see Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 5 (Tenn. 2008); Byrd v. Hall,

847 S.W.2d 208, 214 (Tenn. 1993).

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This action was filed [after July 1, 2011]. Therefore, the trial court was

required to apply the summary-judgment standard set forth in Tennessee Code

Annotated § 20-16-101. That statute provides:

1

In motions for summary judgment in any civil action in

Tennessee, the moving party who does not bear the burden of

proof at trial shall prevail on its motion for summary judgment

if it:

(1) Submits affirmative evidence that

negates an essential element of the nonmoving

party’s claim; or

(2) Demonstrates to the court that the

nonmoving party’s evidence is insufficient to

establish an essential element of the nonmoving

party’s claim.

Tenn. Code Ann. § 20-16-101 (Supp. 2012).

2

Estate of Boote v. Roberts, No. M2012-00865-COA-R3-CV, 2013 WL 1304493, at **8-9

(Tenn. Ct. App. March 28, 2013), no appl. perm. appeal filed (footnotes in original but

renumbered). As a practical matter, this case presents pure questions of law.

We first address whether the Trial Court erred in holding that Plaintiff’s claim

of fraud was barred by res judicata. In Lien v. Couch, 993 S.W.2d 53 (Tenn. Ct. App. 1998),

this Court discussed various aspects of the doctrine of res judicata. We stated:

Res judicata is a claim preclusion doctrine that promotes finality in

litigation. See Moulton v. Ford Motor Co., 533 S.W.2d 295, 296 (Tenn. 1976);

Jordan v. Johns, 168 Tenn. 525, 536-37, 79 S.W.2d 798, 802 (1935). It bars

a second suit between the same parties or their privies on the same cause of

Section 20-16-101 is applicable to all cases filed on or after July 1, 2011. 1

Section 20-16-101 was enacted to abrogate the summary-judgment standard set forth in Hannan,

2

which permitted a trial court to grant summary judgment only if the moving party could either (1)

affirmatively negate an essential element of the nonmoving party’s claim or (2) show that the nonmoving

party cannot prove an essential element of the claim at trial. Hannan, 270 S.W.3d at 5. The statute is

intended “to return the summary judgment burden-shifting analytical framework to that which existed prior

to Hannan, reinstating the ‘put up or shut up’ standard.” Coleman v. S. Tenn. Oil Inc., No. M2011-01329-

COA-R3-CV, 2012 WL 2628617, at *5 n.3 (Tenn. Ct. App. July 5, 2012).

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action with respect to all the issues which were or could have been litigated in

the former suit. See Richardson v. Tennessee Bd. of Dentistry, 913 S.W.2d

446, 459 (Tenn. 1995); Collins v. Greene County Bank, 916 S.W.2d 941, 945

(Tenn. Ct. App. 1995).

Parties asserting a res judicata defense must demonstrate that (1) a court

of competent jurisdiction rendered the prior judgment, (2) the prior judgment

was final and on the merits, (3) the same parties or their privies were involved

in both proceedings, and (4) both proceedings involved the same cause of

action. See Lee v. Hall, 790 S.W.2d 293, 294 (Tenn. Ct. App. 1990). A prior

judgment or decree does not prohibit the later consideration of rights that had

not accrued at the time of the earlier proceeding or the reexamination of the

same question between the same parties when the facts have changed or new

facts have occurred that have altered the parties' legal rights and relations. See

White v. White, 876 S.W.2d 837, 839-40 (Tenn. 1994).

The principle of claim preclusion prevents parties from splitting their

cause of action and requires parties to raise in a single lawsuit all the grounds

for recovery arising from a single transaction or series of transactions that can

be brought together. See Bio-Technology Gen. Corp. v. Genentech, Inc., 80

F.3d 1553, 1563 (Fed. Cir. 1996); Hawkins v. Dawn, 208 Tenn. 544, 548, 347

S.W.2d 480, 481-82 (1961); Vance v. Lancaster, 4 Tenn. (3 Hayw.) 130, 132

(1816). The principle is subject to certain limitations, one of which is that it

will not be applied if the initial forum did not have the power to award the full

measure of relief sought in the later litigation. See Davidson v. Capuano, 792

F.2d 275, 279 (2d Cir. 1986); Carris v. John R. Thomas & Assocs., P.C., 896

P.2d 522, 529-30 (Okla. 1995); see also Rose v. Stalcup, 731 S.W.2d 541, 542

(Tenn. Ct. App. 1987) (holding that a subsequent action was not barred

because the initial court did not have jurisdiction over the claim). Thus, the

Restatement of Judgments points out:

The general rule [against relitigation of a claim] islargely

predicated on the assumption that the jurisdiction in which the

first judgment was rendered was one which put no formal

barriers in the way of a litigant's presenting to a court in one

action the entire claim including any theories of recovery or

demands for relief that might have been available to him under

applicable law. When such formal barriers in fact existed and

were operative against a plaintiff in the first action, it is unfair

to preclude him from a second action in which he can present

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those phases of the claim which he was disabled from presenting

in the first.

Restatement (Second) of Judgments § 26(1)(c) cmt. c (1982).

Lien v. Couch, 993 S.W.2d at 55-56.

The first three elements of res judicata appear to be met in this case. It is much

less clear, however, that the fourth element concerning the same cause of action is met. To

resolve this question, we look to the law regarding avenues of relief from a judgment on the

basis of fraud. Regarding relief from a judgment on the basis of fraud, this Court, analyzing

the Tennessee Supreme Court opinion of Black v. Black, 166 S.W.3d 699 (Tenn. 2005),

stated:

Black offers a thorough analysis of the availability of actions for fraud both

within and outside the parameters of Rule 60.02. A party may seek relief from

judgment within one year of entry of the judgment in the case in which the

fraud occurred, or through an independent action for fraud on the court of an

extrinsic nature under the “savings” clause of the Rule. Apart from Rule

60.02, a party may bring a claim for damages based on another party's

fraudulent conduct in a common-law action for fraud.

Warwick v. Warwick, No. E2011-01969-COA-R3-CV, 2012 WL 5960850, at *9 (Tenn. Ct.

App. Nov. 29, 2012), no. appl. perm. appeal filed.

Based on Warwick and Black, it appears that Plaintiff had an additional avenue

of relief outside of Rule 60. Indeed, Plaintiff is adamant in her briefs on appeal, and the

record reflects, that this latest complaint is not rooted in Rule 60. Rather, this current matter

concerns an allegation of common law fraud. In our judgment, therefore, Plaintiff’s earlier

failed legal efforts under Rule 60 do not preclude her under res judicata from proceeding on

this distinct common law fraud cause of action. Res judicata does not bar Plaintiff’s present

cause of action, and we modify the Trial Court’s judgment accordingly. Our holding on this

issue moots and subsumes the second issue on appeal regarding extrinsic versus intrinsic

fraud.

We next address whether the doctrine of collateral estoppel bars Plaintiff’s

claim. Our Supreme Court has stated:

In the context of a civil case, collateral estoppel (also known as issue

preclusion) has been described as an extension of the doctrine of res judicata

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(also known as claim preclusion) and applicable only when “it affirmatively

appears that the issue involved in the case under consideration has already

been litigated in a prior suit between the same parties, even though based upon

a different cause of action, if the determination of such issue in the former

action was necessary to the judgment....” Id. at 631-32. In Gibson v. Trant, 58

S.W.3d 103 (Tenn. 2001), this Court cited the promotion of finality in the

litigation, the conservation of judicial resources, and the prevention of

inconsistent decisions as policy considerations warranting the application of

collateral estoppel in civil litigation. Id. at 113; see also Standefer v. United

States, 447 U.S. 10, 23, n. 18, 100 S.Ct. 1999, 64 L.Ed.2d 689 (1980) (stating

that the policy behind the doctrine lies in the inherent reliability of final

judgments). Like the federal courts, this Court has held that the party seeking

to invoke collateral estoppel as a bar to litigation “has the burden of proving

that the issue was, in fact, determined in a prior suit between the same parties

and that the issue's determination was necessary to the judgment.” Dickerson

v. Godfrey, 825 S.W.2d 692, 694 (Tenn. 1992); see also Home Ins. Co. v.

Leinart, 698 S.W.2d 335, 336 (Tenn. 1985). A final judgment is essential

under either collateral estoppel or res judicata. Richardson v. Tenn. Bd. Of

Dentistry, 913 S.W.2d 446, 459 (Tenn. 1995).

State v. Thompson, 285 S.W.3d 840, 848 (Tenn. 2009).

We, therefore, move from claim preclusion to issue preclusion. Plaintiff argues

that she could not have brought the present action in the Probate Court because of that court’s

limited power to award the amount of damages Plaintiff seeks. Plaintiff also argues that the

Probate Court made no express findings on the issue of fraud in the valuation of Defendant’s

business interest.

The record reflects that Plaintiff previously pursued this issue of Defendant’s

alleged fraud in the parties’ divorce action. The Probate Court found Plaintiff’s Rule 60

motion not well taken, the Tennessee Court of Appeals affirmed the Probate Court, and the

Tennessee Supreme Court denied permission to appeal. We already have quoted from the

respective courts their resolution of Plaintiff’s fraud allegations, including this Court’s

statement that “[w]e find no evidence of record to support the assertions of [Plaintiff] as to

the improper valuation of [Defendant’s] company or that she was fraudulently induced to

sign the MDA.” Even if not to Plaintiff’s satisfaction, this issue of fraud already has been

litigated and resolved finally. Therefore, the doctrine of collateral estoppel precludes

Plaintiff from re-litigating the specific issue of fraud, even though she rightly argues this is

a new and distinct cause of action. We affirm the Trial Court’s judgment granting

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Defendant’s motion for summary judgment, albeit we modify that judgment such that the

rationale is collateral estoppel and not res judicata.

The final issue we address is Defendant’s contention that this appeal is

frivolous. “‘A frivolous appeal is one that is ‘devoid of merit,’ or one in which there is little

prospect that [an appeal] can ever succeed.’” Morton v. Morton, 182 S.W.3d 821, 838 (Tenn.

Ct. App. 2005) (quoting Industrial Dev. Bd. of the City of Tullahoma v. Hancock, 901

S.W.2d 382, 385 (Tenn. Ct. App. 1995)). Plaintiff’s issues were not so devoid of merit as

to be frivolous, and indeed, while she ultimately lost,she prevailed on some issues on appeal.

We decline to find this appeal frivolous.

Conclusion

The judgment of the Trial Court is affirmed as modified, and this cause is

remanded to the Trial Court for collection of the costs below. The costs on appeal are

assessed against the Appellant, Lisa Denise Church, and her surety, if any.

_________________________________

D. MICHAEL SWINEY, JUDGE

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