### FILED January 28, 19

99 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS AT KNOXVILLE

FIRST CITIZENS BANK OF CLEVELAND, ) BRADLEY CHANCERY ) C. A. NO. 03A01-9806-CH-00203 ) Plaintiff/Counter-defendant/ ) Appellee ) ) ) vs. ) ) ) CAROL CROSS ) HON. EARL HENLEY ) CHANCELLOR Defendant/Counter-Plaintiff/ ) Third-Party Plaintiff/ ) Appellant ) ) and ) ) MARYLAND ASSURANCE COMPANY OF ) AMERICA, ) ) Defendant ) ) vs. ) ) ) LARRY McSPADDEN, Individually and ) employee/agent for First Citizens ) Bank of Cleveland, ) ) Third-Party Defendant/Appellee ) REVERSED AND REMANDED

RICHARD A. FISHER, Logan, Thompson, Miller, Bilbo, Thompson & Fisher, P.C., Cleveland, for Appellant, Carol Cross.

ROGERE. JENNE, Jenne, Scott & Jenne, Cleveland, for First Citizens Bank of Cleveland and Larry McSpadden.

MICHAEL P. MILLS, Mills & Cooper, Nashville, for Maryland Assurance Company of America.2 O P I N I O N

McMurray, J.

I n its simplest terms, this case originated as a suit on promissorynotes executed by the defendant, Cross (Cross), infavor of the plaintiff, First Citizens Bank of Cleveland (the bank) and secured by deeds of trust on real property owned by Cross. Collateral issues relate to the liability of the defendant, Maryland Assurance Company of America (Maryland) for monies alleged t o be due under a policy of insurance insuring the properties which
were subje c t to the deeds of trust. To the complaint, the defendant, Cross, responded with an answer, counterclaim and thirdpartycomplaint and therein demanded a jury to try the issues joined. The counterclaim and third-party complaint (against Larry McSpadden) alleged, among other things, that the bank through its agents and employees agreed with Cross that it would notify the insurance company that the loans to Cross were to be increased and that additional insurance would be required. Cross further alleges that Larry McSpadden, individually and as empl oyee /agent for the bank, agreed to handle the matter with the insurance company. In short, no additional insurance was p rocured. The property in question was destroyed by fire and the insurance proceeds were insufficient to pay th e ind ebtedness owed by Cross to the bank. Notwithstanding the demand for a jury trial by Cross, the3

Chancellor denied a trial by jury and tried the case at a bench trial. A monetary judgment based on the original complaint was entered against Cross in the aggregate of $85,948.85 inc ludi n g attorney's fees. All other actions were dismissed.

The app ella nt has presented several issues for our consideration and review. However, since we find the issue relating t o the court's denial of a jury trial to be dispositive of this appeal, all other issues are pretermitted. Specifically, we find that the denial of a jury trial was error. Accordingly we reverse the judgment of the trial court and remand the case to the trial court for further proceedings in accordance with prevailing lawand procedural requirements.

Rule 38 of the Tennessee Rules of Civil Procedure provides in pertinent part as follows:

38.01 Right Preserved. — The right of trial by jury as declared by the Constitution or exi stin g laws of the s tate of Tennessee shall be preserved to the par tie s inviolate. 38.02 Demand. — Any party may demand a trial by jury of anyissue triable of right by jury by demanding the same i n an y pleading specified in Rule 7.01 or by endorsin g the demand upon such pleading when it is filed, or by written demand filed with the clerk, with notice to all1 Rule 7.01 Tenn. R. Civ. Pro. specifies the following pleadings: Complaint,

answer, reply to a counterclaim, an answer to a cross-claim, a third-party complaint and a third-party answer. 4 parties, wit hin fifteen (15) days after the service of the last pleading raising an issue of fact. 1

Cross endorsed a jury demand on her answer, counterclaim and third-partycomplaint. The trial court entered an order denying a jury trial on the following grounds:

Upon consideratio n of the record and argument of counsel, the court is of the opinion that defendant's failure to note her demand for a jury, upon the face of h e r responsive pleading in which same was reques ted , pursuant to Local Rule 2.02, deprives her of a right to a jury trial in this case. Further, the court finds that the issues in this case are not appropriate for a jury trial.

The court fa iled to ma ke known in its order why the issues raised in the pleadings "are not appropriate for a jury trial." It appears from the record that he may have concluded that the trial o f the case required a "complicated accounting" and thus was not within the purview of a right to trial by jury in a chancery action.

Tennessee Code Annotated Section 21-1-103 provides as follows:

Right to trial by jury. — Either party to a suit in chanceryis entitled, upon application, to a jury to try and determine anymaterial fact in dispute, save incases5

involving complicated accounting, as to such accounting , and those elsewhere excepted by law or by provisions of this Code, and all the issues of fact in anyproper cases shall be submitted to one (1) jury. (Emphasis added).

Our Supreme Court in Greene County Union Bank v. Miller , 75 S.W.2d 49 (Tenn. App. 1934) enunciated some o f the factors to be considered in determining whether the case in question involved a complicated accounting. The court stated:

I f it is a case for complicated accounting, such partyhas no right to demand or have a t rial by ju ry. T h e foundation of jurisdiction in equity in a case o f complicated accounts is based uponthe inadequacy of the legal remedy, as where there is an embarrassment in making proof, the necessity of discovery, or the production of books and papers, or where it would be difficult, if not impossible, for a jury to unravel the numerous transactions involved, and justice could not be done except by employi n g the methods of investigation peculiar to courts of equity. Id. at 52
We are of the opinion that the case under consideration does not fall within that class of cases requiring such a complicated accounting as contemplated by G r een e . Further, it would appear from a reading of the statute above cited, a party has a right to a jury trial on issues other than those relating to a complicated accounting. In any event , this ca se does not fall within the exception in the statute relating to complicated accounting.6

W e will next turn our attention to the denial of a jury trial because Cross failed to comply with Local Rule 2.02. In Brown v. Daly , 884 S.W.2d 121 (Tenn. App. 1994), this court reiterated the principles set out in Craven v. Dunlap , No. 02A01-9202-CH-00027, 1993 WL 137584 (Tenn. App. May 3, 1993):

... In Craven , the issue involved Rule 21(a) of the Shelby Chancery Court which requires a party requesting a jury to endorse on the face of the pleading the words "JURYDEMANDED." Plaintiffs in that case failed to comply withthat rule, and consequently, a jury pan el was not summoned for the day of trial. The trial was reset, and the chan cell or agreed not to overrule plaintiffs' jury demand if plaintiffs wo u l d pay the other litigants' partial legal expenses incurred during t he delay in summoning a jury. When they refused to do so, the court denied plaintiffs' jury demand on the ground tha t they failed to comply with Local Rule 21(a ). This court reversed on appeal, stating: no rule of court is ever effective to abro gate or modify a substantive rule of law. The Tennessee Rules of Civil Procedure are "laws" of this state. The trial c ourt c ould not limit by rule the means provided by general law for exercising the right to trial by jury. Craven , No. 02A01-9202-00027, at 5 (citations omitted).

Tennessee Code Annotated § 16-2-511 and Rule 18 of the Rules of the Supreme {S.W.2d 124} Court vest in the trial courts the power to adopt local rules. However, the Tennessee Rules of Civil Procedure are laws of this state and no rule of court is ever effective to modify or abrogate a law. See Tennessee Dept. of Human Resources v. Vaughn , 595 S.W.2d 62, 63 (Tenn. 1980). In light of our holding in Craven , this court is of the opinion that ShelbyCounty Chancery Court Rule 21 is null and void ab initio to the full extent that it conflicts with the inviolate right to trial by juryas provided byT.R.C.P. 38. We are of the opinion that the chancellor erred in denying plaintiffs' demand for a jury. ...7

Brown , at 123 & 124.

W e concur in the opinion in Craven as reiterated in Brown . We therefore hold that the chancellor erred in denying the defendant's jurydemand in this case. Accordingly, we reverse the judgment of the trial court and remand the case for a trial by jury in accord ance with prevailing law. Costs are assessed to the appellees.

________________________________ Don T. McMurray, Judge CONCUR:

________________________________ Herschel P. Franks, Judge

________________________________ Charles D. Susano, Jr., JudgeIN THE COURT OF APPEALS AT KNOXVILLE

FIRST CITIZENS BANK OF CLEVELAND, ) BRADLEY CHANCERY ) C. A. NO. 03A01-9806-CH-00203 ) Plaintiff/Counter-defendant/ ) Appellee ) ) ) vs. ) ) ) CAROL CROSS ) HON. EARL HENLEY ) CHANCELLOR Defendant/Counter-Plaintiff/ ) Third-Party Plaintiff/ ) Appellant ) ) and ) ) MARYLAND ASSURANCE COMPANY OF ) AMERICA, ) ) Defendant ) ) vs. ) ) ) LARRY McSPADDEN, Individually and ) employee/agent for First Citizens ) Bank of Cleveland, ) ) Third-Party Defendant/Appellee ) REVERSED AMD REMANDED

JUDGMENT
This appeal came on to be heard upon the record fr om th e Chancery Court of Bradley County, briefs and argument of counsel. Upon consideration thereof, this Court is of the opinion that there was reversible error in the trial court.2

W e reverse the judgment of the trial court and remand the case for a trial by jury in accordance with prevailing law. Costs are assessed to the appellees.

PER CURIAM