1

FILED

February 5, 1998

Cecil Crowson, Jr.

Appellate C ourt Clerk

IN THE COURT OF APPEALS OF TENNESSEE

STEVE PAYNE, ) C/A NO. 03A01-9708-CV-00352

 )

Plaintiff-Appellee, )

 )

 )

 )

 )

v. ) APPEAL AS OF RIGHT FROM THE

 ) BLOUNT COUNTY CIRCUIT COURT

 )

 )

 )

JAN SAVELL, C.S.J. TRAVEL, INC., )

and CARLEEN STEPHENS, )

 ) HONORABLE W. DALE YOUNG,

Defendants-Appellants. ) JUDGE

For Appellants For Appellee

L. LEE KULL DAVID T. BLACK

Bird, Navratil & Kull MELANIE E. DAVIS

Maryville, Tennessee Kizer & Black

Maryville, Tennessee

O P I N I O N

REVERSED IN PART

AFFIRMED IN PART

REMANDED WITH INSTRUCTIONS Susano, J.
1

For ease of reference, CSJ, Savell and Stephens will collectively be

referred to as “the defendants.”

2

Steve Payne (“Payne”), a stockholder and former

employee of CSJ Travel, Inc. (“CSJ”), sued CSJ and the

corporation’s other stockholders, Jan Savell (“Savell”) and

Carleen Stephens (“Stephens”)1, seeking damages for the

defendants’ alleged breach of a contract to repurchase Payne’s

CSJ stock. Payne’s action was filed in the Blount County General

Sessions Court at a time when earlier litigation between Payne

and CSJ in the Blount County Chancery Court was pending on appeal

to this court. In the instant action, the defendants allowed a

default judgment to be taken against them and thereafter appealed

to the Blount County Circuit Court for a de novo trial. The

Circuit Court denied the defendants’ joint motion for summary

judgment, and instead granted summary judgment in favor of Payne

and against CSJ for $6,666.64. Payne then filed a notice of

voluntary dismissal of his suit against Savell and Stephens. The

defendants appealed, arguing, among other things, that the

Circuit Court erred in failing to grant them summary judgment,

and erred in granting Payne a money judgment against CSJ.

I

Payne was formerly employed as a travel agent with CSJ. 

Savell was the president of CSJ, and Stephens was the

corporation’s secretary. On August 30, 1993, Payne entered into

a contract with CSJ, by the terms of which he agreed that, upon

the termination of his employment, he would refrain from

competing with CSJ for a period of one year and within a radius
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of 250 miles. By separate contract executed the same day, Payne

agreed to purchase 250 shares of stock in CSJ for $10,000. In

the same contract, Payne granted the corporation the option to

repurchase his stock if his employment with the company was

terminated for any reason.

Payne voluntarily terminated his employment with CSJ as

of February 1, 1995. CSJ subsequently informed him of its

intention to exercise its option to repurchase his stock. Payne

later became employed to work in Blount County by a travel agency

located in the Washington, D.C. area.

On March 14, 1995, CSJ filed suit against Payne in

Chancery Court, alleging that Payne had violated the covenant not

to compete by soliciting the business of some of its major

clients. The complaint sought damages and an injunction

prohibiting Payne from engaging in further competition. On May

18, 1995, CSJ notified Payne that it would not make its scheduled

payment under the stock repurchase agreement. To that point, CSJ

had made two payments of $1,666.67 each, but still owed Payne

$6,666.64.

On June 1, 1995, Payne filed a motion in the Chancery

Court action alleging that CSJ had interfered with his attempts

to sell the stock elsewhere. He sought a declaration that he was

free to sell the stock on the open market due to CSJ’s failure to

make the repurchase payments. He also requested an injunction

prohibiting CSJ from further interfering with his efforts to sell
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his stock. The Chancery Court heard the motion but declined to

rule on it, deferring the issue for a later hearing.

The Chancellor ultimately determined that the covenant

not to compete was enforceable, but only to the extent that it

prohibited Payne from soliciting customers of CSJ. After both

parties appealed, the Court of Appeals held that the covenant was

fully enforceable according to its terms, and remanded the case

for further proof on the issue of damages. See CSJ Travel, Inc.

v. Payne, C/A No. 03A01-9604-CH-00142, 1996 WL 469694 (Tenn.App.,

E.S., filed August 20, 1996, Inman, Sr.J.).

On January 16, 1996, while the Chancery Court’s

decision was on appeal to the Court of Appeals, and while Payne’s

motion with respect to the repurchase agreement was still pending

in Chancery Court, Payne filed the instant action in General

Sessions Court. The warrant seeks damages for the defendants’

alleged breach of the contract to repurchase Payne’s stock. As

previously stated, the defendants allowed a default in General

Sessions Court and appealed the adverse ruling to the Circuit

Court for a trial de novo. The parties subsequently filed

various motions, including a motion by the defendants for summary

judgment, and a motion by Payne seeking the same relief. The

Circuit Court denied the defendants’ motion, and proceeded to

award Payne summary judgment, finding that he was entitled to

recover $6,666.64 plus interest against CSJ.

II
2

Neither Savell nor Stephens was a party to the Chancery Court action.

5

The defendants raise several issues regarding the

Circuit Court’s judgment. We shall first address their

contention that the trial court erred in failing to grant Savell

and Stephens summary judgment.2

As previously indicated, the plaintiff took a voluntary

nonsuit, without prejudice, of his action against the individual

defendants. Under Rule 41.01, Tenn.R.Civ.P., the plaintiff

“ha[d] the right to take a voluntary nonsuit” under the terms set

forth in the rule. He complied with those provisions. It is

clear that the individual defendants cannot appeal the order of

dismissal without prejudice, nor can they now appeal the trial

court’s interlocutory judgment denying their motion for summary

judgment.

This matter was addressed in the case of Oliver v.

Hydro-Vac Services, Inc., 873 S.W.2d 694 (Tenn.App. 1993) wherein

this court, citing an unpublished opinion of the Court of

Appeals, opined as follows:

As Judge Koch stated in Harriet Teresa Martin

vs. Washmaster Auto Center, Inc., and

Murfreesboro Road Autowash Association, Inc.,

1993 WL 241315 (Unpublished opinion,

Tenn.App. 1993):

Defendants ordinarily cannot appeal

from the denial of their motion for

summary judgment. The denial of a

summary judgment before trial is an

interlocutory decision that does

not satisfy Tenn.R.App.P. 3(a)’s

finality requirement. (citations

omitted).
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* * *

Taking a voluntary nonsuit does not

render the denial of a summary

judgment any more suitable for

appellate review. No present

controversy exists after the

plaintiff takes a nonsuit. The

lawsuit is concluded and can only

be resurrected if and when the

plaintiff recommences the action. 

The plaintiff’s refiling the suit

is a contingent event that may not

occur. Thus, determining whether

the defendant is entitled to a

summary judgment after the

underlying suit has been dismissed

without prejudice would be

unnecessary and premature.

Id. at 696. This issue is without merit.

III

We next turn to CSJ’s contention that Payne’s action

against it should have been dismissed by the Circuit Court

because of the pending motion in Chancery Court. 

Payne’s motion in Chancery Court regarding the

repurchase agreement brought that contract to the attention of

that court. The motion raises issues that necessarily involve an

analysis of that agreement and of CSJ’s alleged breach of its

terms; in fact, in a letter attached as an exhibit to his motion,

Payne asserts that CSJ had defaulted by failing to make the

agreed-upon payments under the contract. Thus, the Chancery

Court was asked by Payne to determine whether CSJ had committed

an actionable breach. Payne could have sought a determination

that the same breach entitled him to recover monetary damages. 

While he did not do so, it is clear that the Chancery Court had
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jurisdiction over a breach of contract claim seeking monetary

damages. See T.C.A. § 16-11-102.

We acknowledge that the breach of contract claim filed

by Payne in the instant action is not identical to the request

for declaratory and injunctive relief that he submitted to the

Chancery Court. However, as stated above, by raising the issue

of CSJ’s breach in the Chancery Court action, Payne placed before

that court the very same breach that is at the heart of his

action in the instant case.

The parties have argued competing theories in their

briefs as to whether the breach of contract claim was a mandatory

or permissive counterclaim in the Chancery Court action. We do

not believe that this is the issue. Regardless of the proper

classification of this claim under Rule 13, Tenn.R.Civ.P., the

fact remains that the issue common to Payne’s motion in Chancery

Court and his claim in the instant suit -- breach of the

repurchase agreement -- was actually placed before the Chancery

Court by Payne’s motion. Accordingly, Payne was precluded from

pursuing this issue in Circuit Court while the same issue was

pending in Chancery Court. The Circuit Court should have

declined jurisdiction due to the doctrine of former suit pending. 

See Young v. Kittrell, 833 S.W.2d 505, 508 (Tenn.App. 1992) (the

doctrine of “former suit pending” holds that “when two courts

have concurrent jurisdiction of a particular subject matter, that

tribunal which first obtains jurisdiction retains it.”) When this

suit was filed in General Sessions Court and when it was resolved

in Circuit Court, there was, at both times, a claim pending in
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another court in the same courthouse, filed by the same person,

seeking a finding identical to that sought in the instant action

-- that CSJ had committed an actionable breach of the repurchase

contract. This is the exact type of conflict that the doctrine

of prior suit pending is designed to prevent.

IV

We therefore hold that the Circuit Court erred in

failing to dismiss Payne’s claim against CSJ, and erred in

awarding Payne a judgment against CSJ. The Circuit Court’s

judgment as to the plaintiff’s suit against CSJ is hereby

reversed. The remainder of the judgment is affirmed. Costs on

appeal are taxed to the appellee. This case is remanded to the

trial court for the entry of an order dismissing Payne’s suit

against CSJ without prejudice to his right to refile same in

Chancery Court, with all costs below being assessed against

Payne.

__________________________

Charles D. Susano, Jr., J.

CONCUR:

_________________________

Houston M. Goddard, P.J.

_________________________

William H. Inman, Sr.J.