IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

August 31, 2010 Session

TAMMY L. HAGGARD v. SANTOS AGUILAR, ET AL.

Appeal from the Chancery Court for Hamblen County

No. 2009-307 Thomas R. Frierson, II, Chancellor

No. 2009-02452-COA-R3-CV - FILED DECEMBER 7, 2010

This appeal involves the question of whether the trial court properly dismissed Plaintiff’s

action when another related lawsuit, filed prior to this Hamblen County Chancery Court

action, was pending in Knox County Chancery Court. We hold that the trial court properly

dismissed Plaintiff’s action under the prior suit pending doctrine. Accordingly, we affirm.

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

Affirmed; Case Remanded

JOHN W. MCCLARTY,J., delivered the opinion of the Court, in which HERSCHEL P. FRANKS,

P.J., and CHARLES D. SUSANO, JR., J., joined.

Dudley W. Taylor, Knoxville, Tennessee, for the appellant, Tammy L. Haggard.

Santos Aguilar, Sevierville, Tennessee, pro se appellee.

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Stephen C. Daves, Knoxville, Tennessee, for the appellee, John P. Doyle.

OPINION

I. FACTUAL BACKGROUND

Santos Aguilar, through his counsel, John P. Doyle, (collectively “Defendants”) filed

a suit against Labor Support Management, Inc. (“LSM”) and Tammy L. Haggard, President

The appellee, John P. Doyle, acted as counsel for Mr. Aguilar during the initial suit in the Knox 1

County Chancery Court. Mr. Aguilar has not filed a brief or otherwise participated in this appeal. From the

record, it also appears that Mr. Aguilar did not file any responsive pleadings to the suit filed by Ms. Haggard

in the Hamblen County Chancery Court. 
of LSM, in the Chancery Court of Knox County, Tennessee. In the complaint, Mr. Aguilar,

as a shareholder of LSM, alleged various causes of action, including derivative claims

against Ms. Haggard. Mr. Aguilar later filed an amended complaint (“Aguilar Complaint”),

where he alleged that Ms. Haggard used LSM’s assets “to pay for improvements to real

property and residence titled in her name in Hamblen County, Tennessee.” Under a theory

of constructive trust, Mr. Aguilar requested that the Knox County court “affix” a lien lis

pendens to Ms. Haggard’s property. The amount of the claim was $100,000. Thereafter, Mr.

Doyle - Mr. Aguilar’s counsel - filed a notice of a lien lis pendens on Ms. Haggard’s property

in the Register of Deeds Office for Hamblen County, Tennessee.

In response, Ms. Haggard filed an answer and counter-claim, denying liability, raising

various affirmative defenses, and alleging that Mr. Aguilar obtained his shares of stock

through coercion. At some point during litigation, Ms. Haggard learned of the lien lis

pendens on her property, and through counsel, demanded that Mr. Doyle remove the lien lis

pendens. Ms. Haggard learned of the lien lis pendens during the closing stages of a

transaction to sell the property. The parties could not come to an agreement regarding the

lien lis pendens, and Ms. Haggard subsequently filed a suit against Mr. Aguilar and Mr.

Doyle in the Hamblen County Chancery Court. In Ms. Haggard’s complaint, she sought

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a declaratory judgment to declare the lien lis pendens void and an award of compensatory and

punitive damages. Shortly after filing the complaint, Ms. Haggard also filed a motion for

summary judgment asking the trial court to determine that “the filing of the lien lis pendens

by Defendants in this cause was improper and therefore, does not constitute an encumbrance

on the title with the issue of damages to be reserved.”

Mr. Doyle responded to Ms. Haggard’s pleadings by filing an answer, a response to

the motion for summary judgment, and a motion to dismiss under the doctrine of prior suit

pending. Mr. Doyle referenced the suit he filed on behalf of Mr. Aguilar in the Knox County

court and attached the Aguilar Complaint and Ms. Haggard’s answer as exhibits to the

motion to dismiss.

The trial court conducted a hearing on Mr. Doyle’s motion to dismiss. After finding

that the elements of the prior suit pending doctrine were met, the trial court dismissed Ms.

Haggard’s suit. Ms. Haggard then filed a timely notice of appeal, claiming that the trial

court’s grant of the motion to dismiss was improper.

II. ISSUE

The sole issue for appeal is whether the trial court erred in granting the motion to

For clarification, the Hamblen County Chancery Court is the trial court in this appeal.

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dismiss under the prior suit pending doctrine.

III. STANDARD OF REVIEW

The issue of whether the trial court properly dismissed the suit pursuant to the doctrine

of prior suit pending is a question of law. West v. Vought Aircraft Indus., Inc., 256 S.W.3d

618, 623 (Tenn. 2008). We review the trial court’s conclusions of law under a de novo

standard without any presumption of correctness. Fidelity & Guar. Life Ins. Co. v. Corley,

No. W2002-0263-COA-R9-CV, 2003 WL 23099685, at *3 (Tenn. Ct. App. W.S., Dec. 31,

2003)

IV. DISCUSSION

Ms. Haggard takes issue with the trial court’s grant of the motion to dismiss. She

argues that there was no basis for the trial court to grant the motion. Ms. Haggard claims that

the trial court failed to articulate whether it treated the motion as one for summary judgment

under Rule 56 or as a motion to dismiss under Rule 12.02(6) of the Tennessee Rules of Civil

Procedure.

The trial court dismissed Ms. Haggard’s claim based on the defense of prior suit

pending. The trial court’s order stated:

Plaintiff’s counsel stipulated in open court that he was not disputing that the

parties in the prior suit and in this case were identical. After having reviewed

the record, and having heard further argument of counsel, it is the opinion of

this Court that all of the elements of the defense of prior suit pending are met

and that the lawsuit should be dismissed in its entirety based on this defense.

Under the doctrine of prior suit pending, “where two courts have concurrent jurisdiction over

a matter, the court taking first jurisdiction acquires exclusive jurisdiction over the matter, and

the subsequent action must be dismissed.” Corley, 2003 WL 23099685, at *3 (citation

omitted). To dismiss an action under the doctrine, the following four elements must be met:

(1) the lawsuits must involve the identical subject matter; (2) the lawsuit must involve the

same parties; (3) the lawsuits must be pending in a court having subject matter jurisdiction

over the matter; and (4) the first lawsuit must be pending in a court having personal

jurisdiction over the parties. West, 256 S.W.3d at 623 (citing Cockburn v. Howard Johnson,

Inc., 385 S.W.2d 101, 102 (Tenn. 1964)).

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The doctrine of prior suit pending invokes whether a court has subject matter jurisdiction to

hear a suit. See generally Taylor v. Transmission Corp. of Am., Inc., No.

E2003-02529-COA-R3-CV, 2004 WL 2853300, at *1 (Tenn. Ct. App. E.S., Dec. 13, 2004).

Contrary to Ms. Haggard’s contentions, by dismissing the case under the prior suit pending

doctrine, the trial court dismissed the suit under Rule 12.02(1) of the Tennessee Rules of

Civil Procedure for a lack of subject matter jurisdiction. Thus, it was not necessary for the

trial court to address other grounds for dismissal. We now consider whether the trial court

properly dismissed Ms. Haggard’s suit.

In this case, the first two elements of the prior suit pending doctrine are easily

satisfied. First, Ms. Haggard filed a lawsuit to void the lien lis pendens. Ms. Haggard only

filed her lawsuit after the lien lis pendens interfered with a contract to sell her property.

Instead of challenging subject matter jurisdiction or attacking the validity of the lien lis

pendens in the Knox County court through appropriate motions, Ms. Haggard attacked the

validity of the lien lis pendens in another court by filing a separate lawsuit. Ms. Haggard’s

subsequent action concerns the same subject matter as Mr. Aguilar’s first suit. Second, the

trial court noted in its order that Ms. Haggard’s counsel acknowledged in open court that the

parties are identical in both suits. Without anything in the record to indicate otherwise, the

second suit filed by Ms. Haggard involves the same subject matter and the same parties as

the first suit filed by Defendants.

Turning to the third element, we consider whether the Knox County court has subject

matter jurisdiction to hear the suit. Ms. Haggard argues that the Knox County court does not

have jurisdiction to hear the first suit because it lacks subject matter jurisdiction to resolve

the title issues concerning property located in Hamblen County under Tenn. Code Ann. §

20-3-101 (2010). Section 20-3-101(a) provides as follows:

When any person, in any court of record, by declaration, petition, bill or cross

bill, seeks to fix a lien lis pendens on real estate, or any interest in real estate,

situated in the county of suit, in furtherance of the setting aside of a fraudulent

conveyance, of subjection of property under return of nulla bona, tracing a

trust fund, enforcing an equitable vendor’s lien, or otherwise, that person shall

file for record in the register’s office of the county an abstract, certified by the

clerk, containing the names of the parties to the suit, a description of the real

estate affected, its ownership and a brief statement of the nature and amount

of the lien sought to be fixed.

Tenn. Code Ann. § 20-3-101(a) (2010). Ms. Haggard also cites Tenn. Code Ann. §

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16-11-114 to support her assertion that the trial court rightfully had jurisdiction to hear the

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suit concerning the property. This court has previously tackled the issue of parties initiating

a lawsuit in one county and filing a lien lis pendens in a different county where the property

is situated.

In Knobler v. Knobler, a couple with properties in Williamson County and Davidson

County, initiated divorce proceedings in the Williamson County Chancery Court. 697

S.W.2d 583, 585 (Tenn. Ct. App. 1985). After the Williamson County court entered a

judgment granting the divorce and ordering the sale of the properties in Davidson County,

a judgment creditor obtained a judgment against the husband in the Davidson County

Chancery Court and recorded the judgment in the Register’s Office for Davidson County.

Id. Eventually, the Davidson County court entered an order directing questions concerning

the validity of the judgment creditor’s lien be determined by the Williamson County court.

Id. The Williamson County court then entered orders directing the sales of the Davidson

County properties and transferring the judgment creditor’s lien to the husband’s proceeds

from the sale. Id. at 585. The judgment creditor appealed, claiming that the Williamson

County court did not have jurisdiction over the Davidson County properties. Id. at 584.

Noting the statutory exceptions to Tenn. Code Ann. § 16-11-114, this court held that the

Williamson County court had subject matter jurisdiction over the property located in

Davidson County under Tenn. Code Ann. § 36-4-121. Id. at 585-86. This court further

noted, in dictum, as follows:

We do not mean to say that Mrs. Knobler could not have protected her claim

on the Davidson County property. Under the doctrine of lis pendens the

recording of an abstract of the complaint - if properly drawn - in the Register’s

Office for Davidson County is notice to the world that any interest attempted

to be asserted in the property whether by lien, encumbrance, or transfer would

be subject to the determination of the Chancery Court for Williamson County

in the pending divorce action.

Tenn. Code Ann. § 16-11-114(1) (2010) states: 3

The local jurisdiction of the chancery court is subject to the following rules:

(1) All bills filed in any court seeking to divest or clear the title to land, or to enforce the

specific execution of contracts relating to realty, or to foreclose a mortgage or deed of trust

by a sale of personal property or realty, shall be filed in the county in which the land, or a

material part of it, lies, or in which the deed or mortgage is registered[.]

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Id. at 587.

Similarly, addressing the same issue on interlocutory appeal, this court later held that

a lien lis pendens can be fixed on real property in one county by an action filed in another

county in Figlio v. Shelley Ford, Inc., 1988 WL 63497, at *1 (Tenn. Ct. App. M.S., June 22,

1988). This court reasoned:

Thus, the filing of the abstract is simply to give notice of a pending action

affecting the title or right to possession of the property described in the

abstract. The filing of the abstract does not create the lien. It simply gives

notice that the plaintiff in the pending action has a claim that would adversely

effect the title of a prospective purchaser if the plaintiff is successful in the

litigation. We see no reason why the plaintiff in a suit in one county, alleging

rights in property situated in another county, should be restricted in his ability

to give notice to prospective purchasers or encumbrancers in the county where

the land is located, that the rights of the record owner of the property are in

doubt. . . . It seems to us an absurd result to require the plaintiff to file suits

and lis pendens notices in both counties when the only process effective to

bind subsequent purchasers and encumbrancers is the notice.

Id. at *3. The Figlio court observed that a literal reading of Tenn. Code Ann. § 20-3-101,

a reading advocated by Ms. Haggard, “would restrict a lis pendens lien to property situated

in the county of suit.” Id. at *2. Nevertheless, when reading Section 20-3-101 in context of

other statutes in the Tennessee Code Annotated, Ms. Haggard’s argument fails. As noted in

Figlio, the language of Tenn. Code Ann. § 25-5-107 contemplates that a lawsuit and a lien

lis pendens may be filed in different counties. Id. Tenn. Code Ann. § 25-5-107(a) (2010)

states, in part, “[t]he title to real estate in counties other than the county in which the

judgment or decree is rendered . . . or lis pendens is filed . . . shall not be in any manner

affected, as to third parties. . . .” (emphasis added).

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In the instant case, after reviewing the record and the relevant laws, we find that the

Knox County court properly exercised subject matter jurisdiction in this matter. The third

element of the prior suit pending doctrine is met because Defendants originally filed a suit

In interpreting Tenn. Code Ann. § 25-5-107 and explaining its relevance to filing a lien lis pendens

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where a lawsuit began in another county, the Figlio court stated: “Although this statute appears in the

chapter of the Code dealing with the lien of a judgment, it is clear from the context that it applies to

proceedings other than one to establish a judgment lien on property outside the county where the judgment

was rendered.” 1988 WL 63497, at *2.

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seeking to enforce the rights of Mr. Aguilar as a shareholder to LSM, a corporation with its

principal office in Knoxville, Tennessee. With regard to Mr. Aguilar’s claims, he alleged

that the trial court had subject matter jurisdiction pursuant to Tenn. Code Ann. § 48-18-109;

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§ 48-26-104; § 48-24-301; § 49-17-401. Pursuant to the above statutes, the Knox County

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court had subject matter jurisdiction to hear Mr. Aguilar’s claims. Because the Knox County

court had the power to adjudicate the claims and rights of the parties concerning the

derivative shareholder claims, it follows that it was not improper for Defendants to file a lien

lis pendens under a constructive trust theory because those claims are inextricably linked to

the lien lis pendens. A notice of a lien lis pendens concerning Ms. Haggard’s property

merely puts third parties on notice that the Knox County action may affect future interests

in the property. While the Hamblen County court has jurisdiction over Ms. Haggard’s

property by virtue of Tenn. Code Ann. § 20-3-101, it does not have subject matter

jurisdiction over Mr. Aguilar’s claims as a shareholder of LSM. The Code provides that the

equity court in the county of the corporation’s principal office is the appropriate forum to

resolve shareholder suits, which in this case is the Knox County court.

Therefore, we observe that the Figlio and Knobler holdings are persuasive. The third

element - the first suit must be pending in a court with subject matter jurisdiction - was

established in the instant case. The Knox County court is the appropriate forum to resolve

Mr. Aguilar’s claims as a shareholder. Because the property in Hamblen County is

connected to Mr. Aguilar’s claims, the filing of the lien lis pendens on that property was also

appropriate. Thus, it follows that the Knox County court maintains subject matter

jurisdiction to hear Mr. Aguilar’s shareholder claims even though those claims involve

Tenn. Code Ann. § 48-18-109(a) (2010) provides: “Any court of record having equity jurisdiction 5

in the county where a corporation’s principal office (or, if none in this state, its registered office) is located

may remove a director of the corporation from office in a proceeding commenced either by the corporation

or by its shareholders holding at least ten percent (10%) of the outstanding shares of any class. . . [.]”

Tenn. Code Ann. § 48-26-104(a) (2010) provides: “If a corporation does not allow a shareholder 6

who complies with § 48-26-102(a)to inspect and copy any records required by that subsection to be available

for inspection, a court of record having equity jurisdiction in the county where the corporation’s principal

office (or, if none in this state, its registered office) is located may summarily order inspection and copying

of the records demanded at the corporation’s expense upon application of the shareholder.”

Tenn. Code Ann. § 48-24-301(2010) allows “any court of record with proper venue in accordance

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with § 48-24-302 may dissolve a corporation. . . [.]” Tenn. Code Ann. § 48-24-302 states that “[v]enue for

a proceeding brought by any other party named in § 48-24-301 lies in the county where the corporation’s

principal office (or, if none in this state, its registered office) is or was last located.”

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property located in a different county. It is undisputed that the Knox County court had

personal jurisdiction over the parties in this matter, which satisfies the fourth element of the

prior suit pending doctrine. Upon finding that all four elements of the prior suit pending

doctrine were met, we conclude that the trial court correctly dismissed Ms. Haggard’s suit.

Accordingly, we affirm.

V. CONCLUSION

The judgment of the trial court is affirmed. Costs of this appeal are taxed to the

appellant, Tammy L. Haggard. This case is remanded, pursuant to applicable law, for the

collection of costs assessed below.

_________________________________

JOHN W. McCLARTY, JUDGE

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