IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

August 22, 2013 Session

IN RE: ESTATE OF JOHN J. GOZA v. JAMES M. WELLS, III, ET AL.

Appeal from the Circuit Court for Shelby County

No. CT-00447111 Robert L. Childers, Judge

No. W2012-01745-COA-R3-CV - Filed September 4, 2013

The trial court dismissed this matter for lack of subject matter jurisdiction. We affirm and

grant Appellees’ request for damages for a frivolous appeal.

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

Remanded

DAVID R. FARMER,J., delivered the Opinion of the Court, in which HOLLY M. KIRBY, J. and

J. STEVEN STAFFORD, J., joined.

Larry E. Parrish, Memphis, Tennessee, for the appellant, Estate of John J. Goza.

Kenneth P. Jones and M. Matthew Thornton, Memphis, Tennessee, for the appellees, James

M. Wells, III, Matthew G. Buyer and SunTrust Bank.

MEMORANDUM OPINION

1

This is the third time the question of the validity of the Helen B. Goza Amended and

Restated Revocable Trust (“the Trust”) has been before this Court. In Morrow v. SunTrust

Bank, No. W2010–01547–COA–R3–CV, 2011 WL 334507 (Tenn. Ct. App. Jan. 31,

Rule 10 of the Rules of the Court of Appeals of Tennessee provides:

1

This Court, with the concurrence of all judges participating in the case, may affirm, reverse

or modify the actions of the trial court by memorandum opinion when a formal opinion

would have no precedential value. When a case is decided by memorandum opinion it shall

be designated “MEMORANDUM OPINION”, shall not be published, and shall not be cited

or relied on for any reason in any unrelated case.
2011)(“Goza I”) and In the Matter of Estate of Goza, 397 S.W.3d 564 (Tenn. Ct. App. 2012),

perm. app. denied. (Tenn. Sept. 20, 2012) (“Goza II”), we held that the revocable trust

established by Helen B. Goza (Ms. Goza) in 1991 and amended in 1999 was valid and

provided for the complete disposition of the residue or assets remaining in the Trust

following the death of Ms. Goza’s mentally disabled son, John J. Goza, who died without

issue in September 2007. The appeal in Goza I arose from a final judgment entered by the

Chancery Court for Shelby County, and the appeal in Goza II arose from a final judgment

entered by the Shelby County Probate Court. In both cases, SunTrust Bank was named as

Defendant. In September 2011, after we issued our opinion in Goza I, and while Goza II was

pending in this Court, Plaintiff/Appellant Estate of John J. Goza (hereinafter, “Appellant”)

filed a complaint against SunTrust Bank and James M. Wells (Mr. Wells) and Matthew

Buyer (Mr. Buyer; collectively, Defendants will be referred to as “SunTrust”), SunTrust

Bank officers, in the Circuit Court for Shelby County. Appellant filed an amended complaint

on October 7, 2011 (hereinafter, “complaint”).

2

In December 2011, SunTrust filed a motion to dismiss or, in the alternative, to stay

or for a more definite statement. In its motion, SunTrust asserted, inter alia, that the trial

court lacked subject matter jurisdiction under Tennessee Code Annotated § 35-15-203 where

the case concerned the administration of a trust. It accordingly moved for dismissal pursuant

to Rule 12.02(1) of the Tennessee Rules of Civil Procedure.

Following a hearing on February 17, 2012, the trial court granted SunTrust’s motion

to dismiss for lack of subject matter jurisdiction by order entered June 22, 2012. The trial

court filed an amended order of dismissal on July 16, 2012. In its final order, the trial court

stated that all claims asserted in Appellant’s complaint were premised on the non-existence

of the Trust and “grounded on the contention that the Perpetual Trust was never created and,

therefore, does not exist.” The trial court noted that in order to have subject matter

jurisdiction to adjudicate Appellant’s claim, it must first determine whether the Trust existed.

The trial court held that the question had already been determined by this Court, that the issue

was res judicata, and that it lacked subject matter jurisdiction under Tennessee Code

Annotated § 35-15-203. The trial court accordingly dismissed the matter. The trial court

denied several post-judgment motions, and Appellant filed a notice of appeal to this Court

on August 15, 2012.

Discussion

Appellant raises five issues for our review. Because the trial court dismissed this

Appellant also named R. Michael Potter (Mr. Potter) as a Defendant. Mr. Potter was dismissed from 2

the matter by order entered January 30, 2012. 

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matter for lack of subject matter jurisdiction, however, the sole issue now before this Court

is whether the trial court erred by determining that it did not have subject matter jurisdiction.

This issue presents a question of law that we review de novo with no presumption of

correctness. Morgan Keegan & Co., Inc. v. Smythe, 401 S.W.3d 595, 602 (Tenn.

2013)(citations omitted).

We begin our discussion by noting that, as the trial court observed, the claims asserted

in Appellant’s complaint are predicated on the assertion that the Trust did not exist or was

invalid. Further, Appellant does not dispute that if a valid Trust exists, the circuit court

lacked jurisdiction over this matter pursuant to Tennessee Code Annotated § 35-15-203.

3

Appellant’s arguments here, as we understand them, are 1) that the trial court erred by

determining, at this stage of the proceedings, the “evidentiary matter” of whether a valid trust

exists notwithstanding this Court’s holdings in Goza I and Goza II; 2) that the trial court

erred by failing to convert SunTrust’s motion to dismiss for lack of subject matter to a motion

for summary judgment where the court considered matters outside the pleadings; and 3) that

the trial court erred by not viewing the facts in a light most favorable to Appellant. Appellant

contends that the trial court erred by considering the “fact” of this Court’s holding in Goza

II when determining whether it had subject matter jurisdiction where the fact was not

contained in its complaint. Appellant also contends that the trial court should have

considered SunTrust’s motion under the standard applicable to a 12.02(6) motion or a motion

for summary judgment. Appellant further asserts that the doctrine of res judicata does not

preclude litigation of the question of whether a valid trust exists in the current action. We

disagree with all of Appellant’s contentions.

This Court has previously examined the significant differences between a Tennessee

Rule of Civil Procedure 12.02(1) motion to dismiss for lack of subject matter jurisdiction and

a Rule 12.02(6) motion to dismiss for failure to state a claim, and has explained in detail that

a trial court considering a motion to dismiss for lack of subject matter jurisdiction must

necessarily resolve some factual matters in order to “determine whether the evidence in favor

The section provides:

3

Chancery courts and other courts of record having probate jurisdiction:

(1) To the exclusion of all other courts, have concurrent jurisdiction over

proceedings in this state brought by a trustee or beneficiary concerning the administration

of a trust; and

(2) Have concurrent jurisdiction with other courts of record in this state over other

proceedings involving a trust.

The statute was amended effective May 9, 2012.

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of finding jurisdiction is sufficient to allow the case to proceed.” Chenault v. Walker, 36

S.W.3d 45, 56 (Tenn. 2001); Wilson v. Sentence Information Services,

M1998-00939-COA-R3-CV, 2001 WL 422966 (Tenn. Ct. App. April 26, 2001). In Wilson,

now Justice Koch thoroughly addressed the arguments that Appellant appears to make in this

case. Finding that analysis to be relevant in all respects to the issue now before us, we find

it appropriate to fully repeat it here:

A threshold question in all cases is whether the court has jurisdiction

over the lawsuit’s subject matter. Because courts cannot act where jurisdiction

is lacking, a trial court has an inescapable duty to determine whether the

dispute is within its subject matter jurisdiction. Edwards v. Hawks, 189 Tenn.

17, 23, 222 S.W.2d 28, 31 (1949); State v. Seagraves, 837 S.W.2d 615, 617

(Tenn. Crim. App. 1992). When a court lacks subject matter jurisdiction over

the case, it must dismiss the case without reaching the merits of the complaint.

Scales v. Winston, 760 S.W.2d 952, 953-54 (Tenn. Ct. App. 1988).

Motions to dismiss under Tenn. R. Civ. P. 12.02(1) differ significantly

from Tenn. R. Civ. P. 1 2.02(6) motions to dismiss for failure to state a claim

upon which relief can be granted. While a motion to dismiss for failure to

state a claim requires the court to reach the complaint’s merits, the other

preliminary motions enumerated in Rule 12 deal with procedural defects apart

from the underlying merits of the complaint. Mortensen v. First Fed. Sav. and

Loan Ass’n., 549 F.2d 884, 891 (3rd Cir. 1977). Because a motion to dismiss

for failure to state a claim adjudicates both the legal and factual merits of a

plaintiff’ssuit, courts considering these motions afford plaintiffsthe safeguard

of assuming as true all the plaintiff’s factual allegations and drawing all

reasonable inferences in the plaintiff's favor. Doe v. Sundquist, 2 S.W.3d 919,

922 (Tenn. 1999); Harvey v. Ford Motor Credit Co., 8 S.W.3d 273, 275

(Tenn. Ct. App. 1999). If either or both parties submit evidentiary materials

outside the pleadings either in support of or in opposition to a Tenn. R. Civ.

P. 12.02(6) motion and if the trial court decides to consider these materials, the

trial court must convert the motion to dismiss to a motion for summary

judgment, Pacific Eastern Corp. v. Gulf Life Holding Co., 902 S.W.2d at 952,

and the court must notify the parties that it has made the conversion. Teaster

v. Tennessee Dep’t of Corr., No. 01A01-9608-CH-00358, 1998 WL 195963,

at *3-4 (Tenn. Ct .App. Apr. 24, 1998) (No Tenn. R. App. P. 11 application

filed). Once a motion to dismiss is converted to a motion for summary

judgment, the trial court must deny the motion if there exists any dispute about

the material facts of the case. Byrd v. Hall, 847 S.W.2d at 211; Pate v. Service

Merchandise Co., 959 S.W.2d 569, 573 (Tenn. Ct. App.1996).

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However, as the Tennessee Supreme Court has recently pointed out,

motions to dismiss merely on jurisdictional grounds are not converted to

summary judgment motions when material factual disputes arise. Chenault v.

Walker, 36 S.W.3d 45, 55 (Tenn. 2001). Courts faced with a motion to dismiss

for lack of jurisdiction must make some kind of factual resolution allowing the

court either to grant or to deny the motion. In the court’s words, courts

confronted with such motions must “determine whether the evidence in favor

of finding jurisdiction is sufficient to allow the case to proceed.” Chenault v.

Walker, 36 S.W.3d at 56.

In considering the sufficiency of the evidence at the motion to dismiss

stage, the trial court must keep in mind that the plaintiff bears the burden of

proving facts establishing that the court has jurisdiction. When a defendant

has filed affidavits or other competent evidentiary materials challenging the

case’s underlying jurisdictional facts, the plaintiff may not rely on the

complaint but must make a prima facie showing of facts that establish

jurisdiction. To do so, the plaintiff may submit affidavits or other helpful

evidence. Tenn. R. Civ. P. 43.02; Chenault v. Walker, 36 S.W.3d at 56. When

evaluating the case at that stage, the trial court “will take as true the

allegations of the nonmoving party and resolve all factual disputes in its favor

... [without crediting] conclusory allegations or draw[ing] farfetched

inferences.” Chenault v. Walker, 36 S.W.3d at 56. In doing so, however, the

court does “not make any finding as to whether [the plaintiff's] version of

events is, in fact, correct. That will be for a jury to decide if the case goes to

trial.” Chenault v. Walker, 36 S.W.3d at 56.

While Chenault v. Walker sets out most of the rules for deciding

preliminary motions to dismiss, it does not perfectly fit this case. In cases

where the parties have invoked their constitutional right to trial by jury, a trial

court may not, on its own, make factual findings regarding the merits of the

underlying claim. Tenn. R. Civ. P. 39.01. Still, a trial court must decide

certain factual disputes involving merely incidental motions in such cases. By

incidental motions, we mean motions that do not reach a case’s merits.

Preliminary motions to dismiss, other than Tenn. R. Civ. P. 12.02(6) motions,

do not involve the merits of the underlying claim. Parties losing these motions

ordinarily may remedy the defect causing the dismissal of their suit and, as the

poet said, “live to fight another day.” Accordingly, it is well-settled that

preliminary motions, including motionsto dismissfor want of jurisdiction, and

the facts underlying such motions, may be decided by the court alone.

Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 537-38, 115

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S.Ct. 1043, 1050 (1995); Cameron v. Children's Hosp. Med. Ctr., 131 F.3d

1167, 1170 (6th Cir.1997); Stewart v. RCA Corp., 790 F.2d 624, 628 (7th

Cir.1986).

On the specific facts of Chenault v. Walker, the Tennessee Supreme

Court declined to settle definitively on the plaintiff's factual version of the

defendant’s conduct at the motion to dismiss stage. Had the court done so, it

would have simultaneously adjudged facts that also went to the merits of the

plaintiff’s underlying claim that the defendant had engaged in conspiracy. For

this reason, the court concluded that “[W]e do not make any finding as to

whether [the plaintiff's] version of events is, in fact, correct. That will be for

a jury to decide....” Chenault v. Walker, 36 S.W.3d at 56.

Wilson v. Sentence Information Services, M1998-00939-COA-R3-CV, 2001 WL 422966, at

*4-5 (Tenn. Ct. App. April 26, 2001)(footnotes omitted)(emphasis added).

As in Wilson, in the current case, the “fact” upon which the trial court based its

determination that it did not have jurisdiction was not intertwined with the factual issues

underlying the merits of Appellant’s claim. Whether or not a trust in fact exists does not

affect Appellant’s claim that Appellees committed a wrongful or tortious act. Rather, that

determination governs only whether Appellant filed its current action in the proper court.

This Court has twice held that the Helen B. Goza Amended and Restated Revocable Trust

is a valid trust that provided for the final disposition of the residue of the Trust for John J.

Goza, who died without issue in September 2007. Estate of Goza, 397 S.W.3d 564 (Tenn.

Ct. App 2012).

We must also disagree with Appellant’s contention that this conclusion arises from

an inappropriate application of the doctrine of res judicata where the parties in Goza I and

Goza II are not in privity. As noted in Goza II:

“ [R]es judicata ” broadly refers to ‘[a]n issue that has been definitively settled

by judicial decision.’ Regions Financial Corp. v. Marsh USA, Inc., 310

S.W.3d 382, 392 (Tenn. Ct. App.2009) (quoting Black’s Law Dictionary

1336–37 (8th ed.2004); see Richardson v. Tenn. Bd. of Dentistry, 913 S.W.2d

446, 459 n. 11 (Tenn. 1995)). It is narrowly defined as a “claim preclusion

doctrine that ‘bars a second suit between the same parties or their privies on

the same cause of action with respect to all issues which were or could have

been raised in the former suit.’” Id. (quoting State ex rel. Cihlar v. Crawford,

39 S.W.3d 172, 178 (Tenn. Ct. App. 2000)). The party asserting that a claim

is precluded carries the burden of demonstrating that 1) a court of competent

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jurisdiction rendered the prior judgment; 2) the same parties or their privies

were involved in both lawsuits; 3) both lawsuits concerned the same cause of

action; and 4) that the underlying judgment was a judgment on the merits. Id.

(citation omitted).

The “broad definition” of res judicata in a civil case also generally

includes collateral estoppel, or issue preclusion. State v. Thompson, 285

S.W.3d 840, 848 (Tenn. 2009). Collateral estoppel “has been described as an

extension of the doctrine of res judicata.” Id. It applies when the issue

involved in the current case already was litigated in an earlier suit between the

parties or their privies, even where the suits concern different causes of action,

if the determination of the issue in the earlier action was necessary to the

judgment. Id. (citations omitted). The Tennessee Supreme Court has “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.

(citations omitted). The stated policy of the doctrine is to promote the

“inherent reliability of final judgments.” Id. The party seeking to invoke

collateral estoppel carries the burden of demonstrating that the issue was

determined in a previous action between the parties, that it was necessary to

the judgment in the earlier action, and that a final judgment was rendered in

the prior action. Id. (citations omitted).

“‘Where the litigants have once battled for the court’s decision, they

should neither be required, nor without good reason permitted, to battle for it

again.’ ” Beaty v. McGraw, 15 S.W.3d 819, 824 (Tenn. Ct. App. 1998)(quoting

Zdanok v. Glidden Co., 327 F.2d 944, 953 (2d Cir.1964)). Additionally, “

‘different parties are in privity if they stand in the same relationship to the

subject matter of the litigation.’ ” Trinity Industries, Inc. v. McKinnon Bridge

Co., Inc., 77 S.W.3d 159, 185 (Tenn. Ct. App. 2001). In Aclin v. Speight, we

held that a prior final construction of a Will barred the parties to the earlier

Will construction action, and their privies, from relitigating title to property

devised under the Will. We held that the defendants in that case were

“certainly in privity” where they claimed title to the property through the

original beneficiary under the Will. Aclin v. Speight, 611 S.W.2d 54, 55

(Tenn. App.1980). We noted in Aclin that “the necessary parties then in

existence were parties to the [prior] Will construction case.” We stated that

“[t]he judgment entered therein bound all parties thereto and those in privy....

That construction suit may not now be collaterally attacked.” Id.

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Estate of Goza, 397 S.W.3d at 570-71. In Goza II, we noted that the disputed issue was

identical to the issue presented by Goza I. Id. at 571. We stated, “[t]he only distinction

between the two lawsuits, other than the trial courts in which they were filed, is that Mr.

Morrow filed the first suit in his individual capacity and filed the second suit in his capacity

as Administrator of Mr. Goza’s estate” rather than in his personal capacity. Id. We observed

that Goza I and Goza II involved the identical issue of law, and that the Plaintiffs stood in

the same relationship to the subject matter. Id. Similarly, that the named Plaintiff in the

current action is the Estate rather than the administrator on behalf of the Estate is immaterial

where both stand in the same relationship to the subject matter. The issue upon which the

trial court determined that it did not have subject matter jurisdiction in this case, namely, the

existence of a valid trust, has been decided twice by this Court and cannot be collaterally

challenged here. Accordingly, the trial court did not err by dismissing the matter for lack of

subject matter jurisdiction pursuant to Tennessee Code Annotated § 35-15-203.

We turn next to SunTrust’s prayer for an award of reasonable attorneys’ fees and costs

pursuant to Tennessee Code Annotated § 27-1-122 as damages for a frivolous appeal.

“Successful litigants should not have to bear the expense and vexation of a groundless

appeals.” Davis v. Gulf Ins. Group, 546 S.W.2d 583, 586 (Tenn. 1977). Nor should this

Court.

We neither interpret nor apply Tennessee Code Annotated § 27-1-122 so strictly as

“to discourage legitimate appeals.” Id. However, in light of the foregoing analysis provided

by this court over a decade ago in Wilson; the considerable body of case law addressing the

courts’ obligation to determine whether it has jurisdiction as a fundamental threshold matter;

the undisputed statutory provisions that the existence of a valid trust would preclude

jurisdiction by the circuit court in this matter; and, most significantly, this Court’s holdings

in Goza I and Goza II, we agree with SunTrust that this appeal had no reasonable chance of

success. Appellant has simply attempted to re-litigate the issue of whether the Trust is valid

despite holdings in the probate and chancery courts, two determinations by this Court, and

the supreme court’s denial of Appellant’s application to appeal to that Court. Appellant has

thereby depleted the funds held in the Trust for the benefit of the mentally disabled, and

caused needless expense of resources. The record of the proceedings in the trial court in the

current case alone is comprised of a ten-volume technical record and four volumes of

exhibits. The question raised by this appeal was settled with finality by Goza I in January

2011. We accordingly find this is an appropriate case for an award of damages for a

frivolous appeal. SunTrust is awarded reasonable attorneys’ fees and costs pursuant to

Tennessee Code Annotated § 27-1-122.

Holding

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In light of the foregoing, the judgment of the trial court is affirmed. Appellees

SunTrust Bank, Matthew Buyer, and James M. Wells, III, are awarded damages for a

frivolous appeal pursuant to Tennessee Code Annotated § 27-1-122. Costs on appeal are

taxed to the Appellant, Estate of John J. Goza, and its surety, for which execution may issue

if necessary. This matter is remanded to the trial court to assess damages pursuant to section

27-1-122 and for the collection of costs.

_________________________________

DAVID R. FARMER, JUDGE

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