IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

MARCH 3, 2005 Session

CITY OF NEW JOHNSONVILLE v. KEVIN E. HANDLEY, ET AL.

and

GENE PLANT, ET AL. v. KEVIN E. HANDLEY, ET AL.

Direct Appeal from the Chancery Court for Humphreys County

Nos. CH-01-179 & CH-01-211 Robert E. Burch, Chancellor

No. M2003-00549-COA-R3-CV - Filed August 16, 2005

This appeal involves protracted litigation over a parcel of land conveyed by the City of New

Johnsonville, Tennessee, to a member of the New Johnsonville City Council. The mayor, on behalf

of the city, subsequently filed suit against the councilman seeking to nullify the transaction. During

the pendency of that litigation, several taxpayers filed their own suit against the councilman alleging

the same causes of action set forth in the city’s complaint. The city and the councilman ultimately

settled their lawsuit. The taxpayers’ lawsuit continued, ultimately naming the city as a defendant.

The trial court partially granted the defendants’ motions for summary judgment by ruling that the

taxpayers did not have standing to contest the land transaction between the city and the councilman.

The court ruled that the taxpayers did have standing to continue with their other causes of action

concerning allegations that the councilman engaged in illegal business transactions with the city.

The taxpayers subsequently took a voluntary nonsuit on their remaining claims and filed an appeal

to this Court to contest the trial court’s grant of summary judgment on their claim regarding the land

transaction. We vacate the trial court’s decision regarding the land transaction, and we remand for

further proceedings not inconsistent with this opinion.

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

Remanded

ALAN E. HIGHERS,J., delivered the opinion of the court, in which DAVID R. FARMER,J., joined, and

HOLLY M. KIRBY, J., concurred separately.

R. Eric Thornton, Dickson, TN, for Appellants

T. Holland McKinnie, City Attorney, Franklin, TN; Michael R. Hill, Milan, TN, for Appellee, City

of New Johnsonville, TN

Benjamin C. Regen, Dickson, TN, for Appellees, Kevin E. Handley & Gloria J. Handley
1Mayor Hethcoat served as Mayor of New Johnsonville from 1988 to 2000.

2

Councilman Handley took office in September of 1998.

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Stephen D. Wakefield, Memphis, TN, for Appellee, E. I. Dupont De Nemours and Company

John Lee Williams, Robert I. Thomason, Jr., Waverly, TN, for Appellee, Volunteer Title

Company, Inc., Trustee

Lewis L. Cobb, Jerry P. Spore, J. Brandon McWherter, Jackson, TN, for Appellee, Union

Planters Bank

OPINION

I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This appeal involves protracted litigation between numerous parties concerning the transfer

of a parcel of land located in New Johnsonville, Humphreys County, Tennessee. The facts, as set

forth in over 2,000 pages of technical record, are largely undisputed.

In 1986, Mr. and Mrs. E. W. Lucas (the “Lucases”) conveyed, as a gift, approximately eighty

(80) acres of property (the “Lucas Property”) located in the City of New Johnsonville (“City”) to the

City. Although not expressly stated in the deed, the Lucases and the City apparently reached an oral

agreement that the City would use the property for industrial development. Specifically, the City

agreed to convey the Lucas Property at no cost to entities desiring to engage in industrial and/or

commercial development on the Lucas Property for the overall benefit of the City.

The City subsequently created an industrial park on the Lucas Property by conveying several

tracts of land to various industries at no cost. In approximately July of 1999, Mayor Lawrence A.

Hethcoat (“Mayor Hethcoat”)1 began negotiating with E. I. DuPont de Nemours & Company

(“DuPont”), an already existing industry in the City, about locating its new warehouse and

distribution facility in the City’s industrial park. DuPont expressed its desire to have someone else

build the facility on the property which DuPont would, in turn, lease. The City offered to convey

a portion of the Lucas Property to an entity selected by DuPont to build the facility. 

During the course of the City’s negotiations with DuPont, Kevin E. Handley (“Councilman

Handley”) served as a member of the New JohnsonvilleCity Council (“City Council”).2 Councilman

Handley alleged that, in August of 1999, he had a chance meeting with a DuPont employee at a local

restaurant. Councilman Handley learned from the employee that DuPont had decided to accept the

City’s offer. During the course of their conversation, Councilman Handley inquired about bidding
3

Pursuant to its mortgage with the Handleys, Union Planters took a security interest in the Deed of Trust to

secure the mortgage. As further security for the mortgage, the Handleys also executed an Assignment of Leases and

Rents in favor of Union Planters.

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on the construction of the DuPont facility. In September of 1999, DuPont mailed Councilman

Handley a “Request for Proposal” form. Councilman Handley completed his bid proposal and

submitted it to DuPont. On November 1, 1999, DuPont sent a letter to Councilman Handley

notifying him that it had, in essence, selected his bid proposal over the others submitted.

Thereafter, Councilman Handley communicated to Mayor Hethcoatthat he had been selected

by DuPont to build the facility. Mayor Hethcoat convened a special called meeting of the City

Council on November 19, 1999, to discuss conveying a portion of the Lucas Property to Councilman

Handley and his wife (along with Councilman Handley, collectively referred to as “the Handleys”).

Councilman Handley came to the meeting and informed the other members of the City Council that

he had been selected to build the DuPont facility. At the special called meeting, the City Council

passed a resolution for the conveyance of 32.657 acres of the Lucas Property to the Handleys. That

same day, Mayor Hethcoat, on behalf of the City, executed a “Warranty Deed” conveying 32.657

acres of the Lucas Property in consideration of $1.00 to the Handleys, d/b/a Mid South Logistics. 

In the interim, the Handleys secured a loan from Union Planters Bank, N.A. (“Union

Planters”) in the amount of $5,373,181.69 to construct the DuPont facility.3 On January 3, 2000, the

Lucases conveyed an additional 19.11 acres of property located adjacent to the parcel at issue to the

Handleys in consideration of $38,220.00. On January 17, 2000, the Handleys executed a lease

agreement with DuPont calling for the construction and subsequent lease of a warehouse. A “Side

Letter” executed by the Handleys and DuPont set forth DuPont’s specifications and called for the

construction of a warehouse 297,5000 square feet in size. Councilman Handley proceeded to build

an industrial warehouse partially located on the parcel obtained from the City and partially located

on the parcel obtained from the Lucases. 

At some point, the citizens of the City elected Mayor Gene Plant (“Mayor Plant”) as their

new mayor. After the transaction between the City and the Handleys had been concluded, the

Comptroller of the Treasury for the State of Tennessee (the “Comptroller”) conducted an

investigation and audit of the City’s records for a period spanning July 1, 1998, through March 31,

2000, “to determine the extent of the [City’s] compliance with certain laws and regulations.” On

December 12, 2000, the Comptroller issued his findings which revealed several problem areas. The

first area discussed in the Comptroller’s report addressed the transaction between the City and

Councilman Handley, providing: 

1. FINDING: Apparent conflict of interest

Two city councilmen had apparent direct conflicts of

interest between their official duties and personal

interests. The City purchased goods and services
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from two councilmen as well as conveying a 32-acre

tract of land to one of them. Section 12-4-101(a)(1),

Tennessee Code Annotated, states:

It is unlawful for any officer,

committee member, director, or other

person whose duty it is to vote for, let

out, overlook, or in any manner to

superintend any work or any contract

in which any municipal corporation,

county, state, development district,

utility district, human resource agency,

or other political subdivision created

by statute shall or may be interested,

to be directly interested in any such

contract. “Directly interested” means

any contract with the official

personally or with any business in

which the official is the sole

proprietor, a partner, or the person

having the controlling interest. . . .

In addition, the New Johnsonville municipal code,

Section 4-101, states, “Except for the receipt of such

compensation as may be lawfully provided for the

performance of his municipal duties, it shall be

unlawful for any municipal officer or employee to be

privately interested in, or to profit, directly or

indirectly, from business dealings with the

municipality.”

RECOMMENDATION:

To provide impartial decisions regarding the city’s

contracts, official should ensure that unlawful

conflicts of interest, as defined in Section 12-4-101,

Tennessee Code Annotated, are avoided. Business

dealings between the officials and the city should be

avoided as required by Section 4-101 of the municipal

code. The mayor and members of the city council

should seek legal advice and take appropriate

corrective action.
4

The original complaint filed by the City did not name DuPont as a defendant. The Handleys subsequently filed

a motion with the trial court, pursuant to Tennessee Rule of Civil Procedure 12.02(7), seeking to dismiss the action for

the City’s failure to join an indispensable party. The trial court denied the Handleys’ motion and granted the City thirty

(30) days to amend its complaint to name DuPont as a defendant.

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MANAGEMENT’S RESPONSE:

Mayor Plant and Councilmen C. Dellinger, J.

Dellinger, Handley, Harbison,and James:

We concur. The city will abide and enforce Section

12-4-101, Tennessee Code Annotated, and will seek

legal advice from the city attorney.

Former Mayor Hethcoat:

Failed to respond.

Councilman Laughlin:

I concur. Unused land should be returned

immediately. An agreement should be negotiated for

the land used. 

The City’s attorney subsequently issued an opinion letter expressing his opinion that the City could

not lawfully convey real property to a member of the City Council. 

On July 31, 2001, Mayor Plant, acting on behalf of the City, filed a complaint in the

Chancery Court of Humphreys County against the Handleys individually; their business, Mid South

Logistics; Volunteer Title Company, Inc., the trustee holding title to the property at issue; and Union

Planters as mortgagee.4 The complaint alleged that the transaction between the City and Councilman

Handley violated several provisions of the City’s municipal code and state law, specifically Section

12-4-101(a)(1) of the Tennessee Code. The City requested that the trial court issue a temporary

restraining order against the Handleys to prevent further construction on the subject parcel; enter an

order requiring the rental payments under the DuPont lease be paid into the court pending resolution

of the matter; an accounting of all profits received in connection with the use of said property; an

order requiring the Handleys to turn over to the City all rents or profits received in connection with

the use of the property; an order finding the transaction failed for lack of consideration; an order

finding the execution of the deed by the City in favor of the Handleys constituted an ultra vires act;

an order finding the special called meeting a nullity in violation of section 8-44-103(b) of the

Tennessee Code; and an order terminating and extinguishing all liens the Handleys placed on the

property. Mr. R. Eric Thornton (“Mr.Thornton”), with the law firm Ramsey & Thornton, PLC in

Dickson, Tennessee, filed the complaint on behalf of the City.
5

During the course of this litigation, attempts were made to disqualify Mr. Thornton from representing both the

City and the Taxpayers. Despite such efforts, the trial court allowed Mr. Thornton to represent both parties during the

course of the proceedings below. Mr. Thornton is now representing the Taxpayers as the Appellants on appeal.

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In August of 2001, several citizens of the City appeared at a special called meeting of the City

Council to present a petition signed by numerous citizens asking the City Council to support the

lawsuit filed by Mayor Plant. A motion was made at the meeting to support the lawsuit, but the

motion failed to pass. On September 4, 2001, several citizens of the City (hereinafter referred to as

the “Taxpayers”) filed a motion with the trial court asking, pursuant to Rule 20.02 of the Tennessee

Rules of Civil Procedure, to join the lawsuit. That same day, the City filed a motion to amend its

complaint to allege that the Handleys were trespassers and had vandalized the subject property. The

trial court subsequently granted the City’s motion. On September 17, 2001, the Taxpayers filed a

complaint in the trial court against the Handleys, individually; the Handley’s business, Mid South

Logistics; Volunteer Title Company, Inc.; Union Planters; and DuPont. Mr. Thornton represented

the Taxpayers in this lawsuit as well.5 The Taxpayers’ complaint alleged the same violations and

requested the same relief as the complaint filed by the City, particularly a violation of Section 12-4-

101(a)(1) of the Tennessee Code. On December 3, 2001, the City filed a motion to amend its

complaint once more to add allegations that Councilman Handley, since taking office, had engaged

in at least twenty-eight (28) illegal business transactions with the City.

On January 17, 2002, the trial court entered an order on the City’s second motion to amend

its complaint. In that order, the trial court stated as follows:

Came the Plaintiff, City of New Johnsonville, by and through

its attorney, and moved the Court for permission to amend its

Complaint to add an additional party, averments and prayers for

relief.

The Court upon consideration of said motion . . . is of the

opinion that said motion should be granted. Plaintiff has sixty (60)

days to file a consolidated complaint with all amendments and

prayers for relief in this cause.

(emphasis added). Thereafter, on January 24, 2002, Mr. Thornton filed an “Amended and

Consolidated Complaint” with the trial court which stated as follows: “Come now the Plaintiffs,

pursuant to Court Order consolidating the actions filed by Plaintiffs, and file this Amended and

Consolidated Complaint restating the allegations of the Plaintiffs in one action, consolidated under

Docket Number CH-01-179.” (emphasis added). In the “consolidated” complaint, Mr. Thornton

restated the various allegations lodged against the Handleys and other defendants, namely, that the

land transaction between Councilman Handley and the City violated city and state laws; that the

Handleys were trespassers; that the Handleys had vandalized the property; and that Councilman
6

Even the Appellees appear confused as to whether these actions were joined or consolidated by the trial court.

In the fact section of their brief, the Handleys assert that the January 17, 2002, order entered by the trial court constituted

“an order consolidating the City Action and the Individuals’ Action for discovery and trial, and directed that an amended

and consolidated complaint in both actions be filed.” To support this fact, the Handleys cite to the trial court’s January

17, 2002, order in the record. They further assert that the consolidated complaint filed by Mr. Thornton was in response

to this order.

7

Due to an apparent oversight, the City Council had to re-vote on the Handleys’ proposed settlement at its

October 7, 2002, meeting. The City Council, by resolution, voted to re-affirm its decision to accept the Handleys’

proposed settlement offer.

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Handley had engaged in at least twenty-eight (28) illegal business transactions with the City since

taking office.6

On September 9, 2002, Mayor Carolyn Ingram (“Mayor Ingram”) took office as the City’s

newly elected mayor. On the same day that Mayor Ingram took office, Councilman Handley’s term

of office apparently ended. Additionally, Mayor Ingram, on the same day she took office, issued a

letter to Mr. Thornton terminating his representation of the City in this matter. Also on September

9, 2002, the Handleys tendered a settlement offer to the City. The settlement offer called for the City

to dismiss with prejudice all claims filed in its lawsuit against the Handleys and other defendants.

In turn, the Handleys agreed to dismiss all of their counterclaims filed in the case. In addition, the

agreement called for the City to execute a quitclaim deed in favor of the Handleys re-conveying the

property originally conveyed in the November 16, 1999, deed. Finally, the agreement proposed that

the parties enter into a mutual covenant not to sue. The new City Council discussed the Handleys’

proposal at its September 9, 2002, scheduled meeting and passed a resolution accepting the offer.7

Thereafter, the Handleys and the City entered into a “Mutual General Release and Covenant Not to

Sue,” and Mayor Ingram executed a “Quitclaim Deed” in favor of the Handleys. 

On September 10, 2002, the City filed a “Notice of Voluntary Dismissal” with the trial court

seeking to voluntarily dismiss all claims filed in the case. In turn, the Handleys filed their “Notice

of Dismissal” seeking to dismiss all of their counterclaims against the City that same day. On

September 12, 2002, the Taxpayers, still represented by Mr. Thornton, filed a motion for summary

judgment seeking a ruling that, as a matter of law, the City’s grant of a portion of the Lucas Property

to the Handleys was null and void as an ultra vires act, and any subsequent attempt by the City to

convey the property to the Handleys remained an ultra vires act. That same day, the Taxpayers filed

a motion seeking partial summary judgment by asserting that some 20.31 acres of the entire 32.657

acres conveyed to the Handleys was not encumbered by Union Planters’ mortgage, and they sought

a ruling that, as a matter of law, the Taxpayers were entitled to a judgment on the issue of liability

for damages to and profits from the 20.31 acres of land. 

On October 4, 2002, the Handleys filed their response to the Taxpayers’ motions and alleged

that genuine issues of fact remained to be resolved by trial of the matter. In their response, the

Handleys argued, in essence, that the Taxpayers did not have standing to contest the City’s

conveyance of the property at issue to the Handleys, and the Taxpayers’ action became moot when
8

Union Planters filed its response to the Taxpayer’s motions for summary judgment that same day as well.

DuPont filed its response to the Taxpayers’ motions on October 9, 2002, adopting, pursuant toTennessee Rules of Civil

Procedure 10.04, Union Planters’ responses to the motions. Likewise, Volunteer Title Company, Inc. filed a response

on October 9, 2004, adopting the responses contained in Union Planters’ response. 

9

The trial court subsequently granted these motions.

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the City settled the action with the Handleys, thereby extinguishing any claims the Taxpayers had.

That same day, the Handleys filed their own motion for summary judgment against the Taxpayers

reiterating the arguments in their response to the Taxpayers’ motions.8 In addition, the Handleys

filed a motion with the trial court seeking to amend their counterclaim to include additional causes

of action against the Taxpayers, and a motion to amend their answer to include additional affirmative

defenses.9 

On October 9, 2002, the trial court entered an order, pursuant to the agreement between the

Handleys and the City, dismissing the City’s claims and the Handleys’ counterclaims with prejudice.

On October 24, 2002, the Taxpayers filed a motion asking the trial court to alter or amend its

October 9, 2002, order to reflect that the dismissal was not with prejudice. On November 8, 2002,

Union Planters filed its motion for summary judgment in this case. On November 25, 2002, DuPont

joined Union Planters’ motion for summary judgment.

On January 27, 2003, the trial court entered an order addressing the Taxpayers’ motion to

alter or amend the court’s October 9, 2002, order, stating:

These consolidated civil actions came on to be heard . . . upon

the motion of Gene Plant and other individual plaintiffs in Gene Plant

et al. v. Kevin E. Handley et al., Civil Action No. CH-10-211 before

the Court (the “Individuals’ Action”), to alter or amend the Court’s

order entered on October 9, 2002, dismissing with prejudice the

claims and counterclaims asserted by the parties in City of New

Johnsonville, Tennessee v. Kevin E. Handley, et al., Civil Action No.

CH-01-179 before the court (the “City Action” . . . .)[.]

I.

IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED

that the motion of Gene Plant and others to alter or amend the Order

of Dismissal be and the same hereby is denied, to the extent the said

motion seeks to affect the rights and claims of the parties to the

CityAction or the legal effect of the Order of Dismissal upon those

rights and claims.

II.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

the motion of Gene Plant and others to alter or amend the Order of

Dismissal be and the same hereby is granted, to the extent that the

said motion seeks a clarification by the Court that the Order of
10The Taxpayers’ notice of appeal provides that they are contesting the trial court’s January 23, 2003, order.

However, the order, although signed by the trial judge on January 23, 2003, was not filed until January 27, 2003.

Therefore, it became effective as of January 27, 2003. See Tenn. R. Civ. P. 58 (2004).

11This Order is entitled “Memorandum Opinion on Defendants’ Motion for Summary Judgment.” The order

provides that this order is to address Civil Action “No. CH-01-211.” As noted below, the trial court uses the same

number when addressing the Taxpayers’ motion.

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Dismissal does not, in and of itself, alter the present procedural

posture of the Individuals’ Action.

III.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that,

notwithstanding the Order of Dismissal does not in and of itself affect

the procedural posture of the Individuals’ Action, the Court does not

hereby rule or purport to rule upon the legal effect of the Order of

Dismissal on the claims asserted by the plaintiffs in the Individuals’

Action. The legal effect of the Order of Dismissal on those claims

shall be and remain as provided by applicable law.

. . . .

V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

for all purposes this order is a final order inCity of New Johnsonville,

Tennessee v. Kevin Handley, Gloria J. Handley, Volunteer Title

Company, Inc., Trustee, and Union Planters Bank, N.A., Civil Action

No. CH-01-179 before this Court, and the Order of Dismissal shall

operate as a complete and final adjudication of all the right [sic] and

claims of all parties thereto.

(emphasis added). On February 21, 2003, the Taxpayers filed a motion, pursuant to Rule 60.02 of

the Tennessee Rules of Civil Procedure, asking the court to set aside its October 9, 2002, order.

On February 21, 2003, the Taxpayers filed a motion asking the trial court for permission to

amend their complaint to add additional causes of action related to the City’s alleged attempt to ratify

the land transaction by settling with the Handleys. That same day, the Taxpayers filed a notice of

appeal to this Court to contest the trial court’s January 27, 2003 order.10 

On August 29, 2003, the trial court entered two memorandum opinions addressing the

motions for summary judgment filed by the parties. In the first memorandum opinion, the trial court

addressed the defendants’ motions for summary judgment.11 The court began by examining the

standing issue. The court found that any demand by the taxpayers to the City Council requesting it

to correct any illegality would be futile, therefore, any failure on the part of the Taxpayers to make

such demand was excused. Next, the trial court concluded that land, especially land gifted to a city,

does not constitute “public funds.” Therefore, the court concluded that the Taxpayers did not have

standing to challenge the City’s transfer of 32.657 acres of the Lucas Property to the Handleys.
12This order is entitled “Memorandum Opinion on Plaintiff’s Motion for Summary Judgment and for Partial

Summary Judgment.” Interestingly, this order provides that it too is addressing Civil Action “No. CH-01-211.” 

13Once again, the trial court’s order provides that it is addressing Civil Action “No. CH-01-211.”

14Although we find no such motion in the record, the court’s order states that the Handleys filed a motion to

dismiss for the Taxpayers’ failure to add the City as an indispensable party.

15On March 13, 2003, the City had filed a motion seeking to disqualify Mr. Thornton from representing the

Taxpayers due to an alleged conflict of interest. The trial court apparently found that no conflict existed and permitted

Mr. Thornton to continue his representation of the Taxpayers. On March 22, 2004, the City filed another motion

renewing its objection to Mr. Thornton’s representation of the Taxpayers in the instant litigation. A hearing was

apparently set for June 7, 2004, to argue the motion before the trial court, but subsequent events made the need for a

decision on this motion moot. 

16On February 18, 2004, the Handleys filed an amended notice of their intent to take a voluntary nonsuit on their

counterclaims due to a typographical error in their prior notice.

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Conversely, the trial court held that the Taxpayers did have standing to contest the allegedly illegal

business transactions occurring between Councilman Handley and the City. Thus, the trial court

granted in part and denied in part the defendants’ motions for summary judgment.

Next, the trial court issued a memorandum opinion addressing the Taxpayers’ motions for

summary judgment.12 Alluding to its previous finding that the Taxpayers did not have standing to

contest the transfer of land by the City to the Handleys, the trial court denied the Taxpayers’ motions.

On September 19, 2003, the trial court entered an order incorporating the findings from its

memorandum opinions.13 On December 16, 2003, the trial court entered an order setting the case

for trial and granting the Taxpayers thirty (30) days to name the City as a defendant in their civil

action.14 

On January 16, 2004, the Taxpayers filed an amended complaint adding the City as a

defendant to their civil action.15 Since the Taxpayers’ amended complaint contained essentially the

same causes of action and requests for relief related to the land transaction between the Handleys and

the City that they previously asserted, the Handleys, on February 17, 2004, filed a renewed motion

for summary judgment. That same day, the Handleys filed a notice of their intent to take a voluntary

nonsuit as to all of their counterclaims.16 On March 5, 2004, the trial court entered an order

dismissing the Handleys’ counterclaims without prejudice. On April 5, 2004, the trial court entered

an order, based upon the agreement of the parties, granting the Handleys’ renewed motion for

summary judgment to the extent the court had already ruled on the land transaction in its previous

September 19, 2003, order. On May 27, 2004, the Taxpayers filed a notice of voluntary dismissal

regarding their remaining claims. That same day, the Taxpayers filed a second notice of appeal to

this Court. On June 2, 2004, the trial court entered an order dismissing the Taxpayers’ remaining

claims without prejudice. 

On appeal, the Taxpayers have presented two issues for our review. At the outset, we must

place these issues in the proper context. The Taxpayers are, in essence, asking this Court to
17The Appellees have presented numerous issues similar in nature to those raised by the Appellants. However,

for reasons more fully explained below, we need not address these additional issues.

18Ordinarily, “[i]n a civil action, if a timely motion under the Tennessee Rules of Civil Procedure is filed in the

trial court by any party . . . under Rule 59.04 to alter or amend the judgment[,] the time for appeal for all parties shall

run from the entry of the order denying a new trial or granting or denying any other such motion.” Tenn. R. App. P. 4(b)

(2004).

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determine whether the trial court erred in granting summary judgment to the Handleys and the other

defendants on the Taxpayers’ claim contesting the land transaction between the City and Councilman

Handley. When considering this primary issue, the Taxpayers ask this Court to entertain the

following issues:

I. Whether the taxpayers of a municipality have standing to challenge an illegal conveyance of

real property from a municipality to an elected official of that municipality; and

II. Whether an illegal conveyance of real property from a municipality to an elected official of

that municipality is void under the doctrine of ultra vires.

17

 

For the reasons set forth more fully herein, we vacate the trial court’s order granting the Appellees’

partial summary judgment and remand this case to the trial court. 

II.

JURISDICTION TO ENTERTAIN CERTAIN ISSUES

This Court is required to consider whether or not we have subject matter jurisdiction over

an appeal regardless of whether a party presented such issue for our review. See Tenn. R. App. P.

13(b) (2004); Martin v. Washmaster Auto Ctr., Inc., No. 01-A-01-9305-CV-00224, 1993 Tenn. App.

LEXIS 464, at *3 (Tenn. Ct. App. July 2, 1993); Huntington Nat’l Bank v. Hooker, 840 S.W.2d 916,

922 (Tenn. Ct. App. 1991). On appeal, the Handleys assert that this Court is without jurisdiction to

entertain the appeal filed by the Taxpayers. Specifically, the Handleys assert that, since the

Taxpayers were not parties to the City’s action against them, the Taxpayers could not file a motion

to alter or amend the court’s order dismissing that case. Therefore, the Handleys argue that the

Taxpayers’ motion, filed on October 24, 2002, did not toll the running of the thirty (30) day period

for filing an appeal.18 See Tenn. R. App. P. 4(a) (2004). In turn, they contend that, even if the

Taxpayers could file an appeal of the order dismissing the City’s action against them, the time for

filing an appeal began to run from October 9, 2002, the date the trial court entered the order. Since

the Taxpayers did not file their first notice of appeal until February 21, 2003, well beyond the

allowed thirty (30) day period, the Handleys argue that this Court has no jurisdiction to review the

lawsuit filed by the City. See Tenn. R. App. P. 2 (2004) (noting that the Court is without authority

to extend the time for filing a notice of appeal set forth in Tenn. R. App. P. 4(a)); Am. Steinwinter

Investor Group v. Am. Steinwinter Inc., 964 S.W.2d 569, 571 (Tenn. Ct. App. 1997) (“The 30-day

rule for notices of appeal is mandatory and jurisdictional and may be not waived . . . .”). In turn, the

Taxpayers argue that their motion to alter or amend tolled the running of the thirty (30) day period.
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Furthermore, the Taxpayers contend that, even if the first notice of appeal is not timely, their second

notice of appeal permits them to raise all issues related to this consolidated action.

It is apparent to this Court that the parties lost sight of the exact nature of these actions during

the course of the proceedings below. On September 4, 2001, the Taxpayers filed a motion with the

trial court entitled “Motion to Join in Lawsuit” in which they sought to join the City’s lawsuit against

the Handleys and other defendants “pursuant to Rule 20.01.” On September 17, 2001, Mr. Thornton

filed a complaint in the trial court on behalf of the Taxpayers. On January 17, 2002, the trial court

entered an order entitled “Order on Motion to Amend Complaint and Second Motion to Amend

Complaint” in which the trial court stated as follows:

Came the Plaintiff, City of New Johnsonville . . . and moved the Court

for permission to amend its Complaint to add an additional party,

averments and prayers for relief.

The Court . . . is of the opinion that said motion should be

granted. Plaintiff has sixty (60) days to file a consolidated complaint

with all amendments and prayers for relief in this cause.

(emphasis added). Thereafter, on January 24, 2002, Mr. Thornton filed a complaint entitled

“Amended and Consolidated Complaint” which provided:

Come now the Plaintiffs, pursuant to Court Order consolidating the

actions filed by Plaintiffs, and file this Amended and Consolidated

Complaint restating the allegations of the Plaintiffs in one action,

consolidated under Docket Number: CH-01-179.

(emphasis added). 

Nowhere in the voluminous record filed in this case do we find an order from the trial court

either joining or consolidating the actions filed in this case. On appeal, the Handleys refer to the trial

court’s January 17, 2002, order in their briefs as “an order consolidating the City Action and the

Individuals’ Action for discovery and trial.” The trial court’s January 17, 2002, order does nothing

of the sort. To the contrary, the order, by its express language, only addressed the City’s motion to

amend its complaint.

Whether these cases have been joined or consolidated is a matter we do not take lightly due

to the effect the characterization of a lawsuit has on our appellate review. The Taxpayers’ motion

asked for permission to join the lawsuit already filed by the City. Permissive joinder of parties is

provided for in Rule 20.01 of the Tennessee Rules of Civil Procedure, which states:

All persons may join in one action as plaintiffs if they assert any right

to relief jointly, severally, or in the alternative in respect of or arising

out of the same transaction, occurrence, or series of transactions or
19See Tenn. R. App. P. 3(a) (2004); Tenn. R. Civ. P. 54.02 (2004).

-13-

occurrences and if any question of law or fact common to all these

persons will arise in the action . . . .

Tenn. R. Civ. P. 20.01 (2004); see also Fred’s Fin. Co. v. Fred’s of Dyersburg, Inc., 741 S.W.2d

903, 907-09 (Tenn. Ct. App. 1987). Consolidation of two separate trials is provided for in Rule

42.01 of the Tennessee Rules of Civil Procedure, and it states:

When actions involving a common question of law or fact are

pending before a court, the court may order all the actions

consolidated or heard jointly, and may make such orders concerning

proceedings therein as may tend to avoid unnecessary costs or delay.

Tenn. R. Civ. P. 42.01 (2004).

The interplay between these two procedural rules can be explained in the following terms:

To understand the requirements for and the consequences of

permissive joinder of parties under Rule 20.01, it is useful to

distinguish joinder of parties from consolidation of actions under

Rule 42.01. Plaintiffs and defendants properly joined under Rule

20.01 are all parties to the same civil action, even when the claims by

or against them are several, as opposed to joint. Consolidation of

separate actions under Rule 42.01, on the other hand, does not create

one action or make those who are parties in one suit parties in

another. Consolidation simply allows a single trial of common issues

and permits joint discovery for purposes of judicial economy.

Several consequences may follow from the distinction

between joinder and consolidation. When parties are joined in an

action, they and the claims by or against them must be taken into

account for a number of important purposes such as determining

whether . . . a judgment is a final appealable order19 . . . . When

actions are consolidated, on the other hand, a party or a claim in

only one of the actions may not be taken into account for these

purposes in the other consolidated actions.

The prerequisites for joinder and consolidation also differ.

Consolidation is proper when there are “actions involving a common

question of law or fact pending before a court.” For joinder of parties

in one action, on the other hand, the additional “transaction or

occurrence” test must be satisfied. The claims by or against the

parties must be “in respect of or arising out of the same transaction,

occurrence, or series of transactions or occurrences.” When,
20“Consolidation does not, however, create one lawsuit where there were two. It simply allows a single trial

and permits joint discovery.” ROBERT BANKS, JR. & JUNE F. ENTMAN, TENNESSEE CIVIL PROCEDURE § 6-12(b) (1999).

-14-

therefore, multiple claims that will entail decisions on common issues

of law or fact cannot be joined because of limitations on joinder,

consolidation may provide a beneficial alternative for achieving

judicial economy.

ROBERT BANKS, JR. & JUNE F. ENTMAN, TENNESSEE CIVIL PROCEDURE § 6-5(b) (1999)

(emphasis added).

The complaint filed by Mr. Thornton on January 24, 2002, rather confusingly refers to the

actions as consolidated, yet it states that the actions have become “one action, consolidated under

Docket Number: CH-01-179.”20 However, it is apparent after reviewing the record, that despite the

lack of a definitive order, the trial court treated these two lawsuits as consolidated, not joined. The

City’s lawsuit was originally docketed as “Civil Action No. CH-01-179.” TheTaxpayers’ action was

originally docketed as “Civil Action No. CH-01-211.” When the Handleys responded to the

Taxpayers’ motions for summary judgment, their response indicated that it addressed “Civil Action

No. CH-01-211.” When the City and the Handleys moved to dismiss their respective claims against

each other, the parties’ motions both reflected that they were addressing a case docketed as “Civil

Action No. CH-01-179.” The trial court’s order dismissing the City’s lawsuit provides that the order

is addressing “Civil Action No. CH-01-179.” When Union Planters filed its motion for summary

judgment against the Taxpayers, it listed “Civil Action No. CH-01-211,” but the “211" was marked

through and “179" written above it. When the trial court issued the order on the Taxpayers’ motion

to alter or amend the court’s previous order dismissing the City’s lawsuit, the order listed both

docket numbers, called the cases “consolidated,” and referred to them as separate actions. The trial

court’s orders addressing the motions for summary judgment filed between the Taxpayers, the
21The trial court ultimately allowed the Taxpayers to name the City as a defendant in their lawsuit.

Interestingly, a determination that these cases had been joined would necessarily mean that the City would be both a

plaintiff and a defendant in the same case.

-15-

Handleys, and the other defendants all refer to the action as “Civil Action No. CH-01-211.” The trial

court’s final order dismissing the Taxpayers’ remaining claims refers to the case as “Civil Action

No. CH-01-211.”21 

Additionally, this Court received a consolidated record, and the parties have briefed these

actions as if they were consolidated. Accordingly, we will regard the two cases as consolidated by

the trial court. See Local 2173 of the Am. Fed’n of State, County, and Mun. Employees v.

McWherter, No. 87-34-II, 1987 Tenn. App. LEXIS 2726, at *1 (Tenn. Ct. App. June 5, 1987). Thus,

the City’s action and the Taxpayers’ action remained distinct and separate lawsuits throughout the

proceedings below. Patton v. Aerojet Ordinance Co., 765 F.2d 604, 606 (6th Cir. 1985); Masson

v. Anderson, 62 Tenn. (3 Baxt.) 290, 298-99 (Tenn. 1873); Chitwood v. Myers, 443 S.W.2d, 830-31

(Tenn. Ct. App. 1969).

Having characterized these lawsuits, we first address the effect of the trial court’s order

dismissing the lawsuit between the City and the Handleys. “A consent decree is a contract made

final and binding upon the parties by the approval of the court.” City of Shelbyville v. State ex rel.

Bedford County, 415 S.W.2d 139, 144 (Tenn. 1967) (citing Boyce v. Stanton, 83 Tenn. 346 (Tenn.

1885)). “Consent decrees, compromise and settlement agreements, and agreed orders are favored

by the courts and represent the achievement of an amicable result to pending litigation.” In re Estate

of Williams, No. M2000-02434-COA-R3-CV, 2003 Tenn. App. LEXIS 313, at *33 (Tenn. Ct. App.
-16-

Apr. 28, 2003). “In the absence of duress, fraud, mistake or collusion a consent judgment is valid

and binding, as such, as between the parties thereto and their privies.” 49 C.J.S. Judgments § 187

(1997) (emphasis added). Absent the existence of one of the limited exceptions, a consent order is

not appealable by the parties entering into the agreement. See City of Shelbyville, 415 S.W.2d at

144; Bacardi v. Tenn. Bd. of Registration in Podiatry, 124 S.W.3d 553, 562 (Tenn. Ct. App. 2003);

Bickers v. Lake County Bd. of Educ., No. 02A01-9307-CV-00163, 1994 Tenn. App. LEXIS 7, at *3-

4 (Tenn. Ct. App. Jan. 13, 1994). Thus, when the City and the Handleys agreed to settle their case

and the trial court subsequently entered an order dismissing the City’s and the Handleys’ claims

against each other, neither party could appeal the trial court’s order.

Since the Taxpayers’ action remained a separate and distinct lawsuit, the Taxpayers could

not file a motion to alter or amend or to set aside the trial court’s order dismissing the suit between

the City and the Handleys. “It is fundamental that ‘[a] person who is not a party of record to a

lawsuit has no standing therein which enables him or her to take part in the proceedings.’” In re

Estate of Reed, No. W2003-00210-COA-R3-CV, 2004 Tenn.App.LEXIS 424, at *5 (Tenn. Ct. App.

July 1, 2004) (citations omitted);see also 47 Am. Jur. 2d Judgments § 757 (2004) (“The general rule

is that strangers to the record, unless authorized by statute, ordinarily have no standing on which to

base an application to vacate a judgment.”). Moreover, the Taxpayers could not file an appeal

contesting the trial court’s order regarding the lawsuit between the City and the Handleys. “A party

to one action may not appeal from a judgment or order in a second action with which the first is

consolidated for trial.” 4 C.J.S. Appeal and Error § 157 (1993). Accordingly, the Taxpayers have

no standing to raise any issues in the instant appeal related to the trial court’s disposition of the
-17-

City’s suit against the Handleys and other defendants. Likewise, this Court is without jurisdiction

to entertain any issues raised by the Appellees concerning the City’s action against the Handleys.

We also note that, since the Taxpayers voluntarily nonsuited their claim regarding the

allegedly illegal business transactions between the City and Councilman Handley, we cannot

entertain any issues raised by the parties regarding that claim in this appeal. A plaintiff is generally

permitted to take a voluntary nonsuit of his case. See Tenn. R. Civ. P. 41.01 (2004). Upon doing

so, however, there is no longer any existing controversy regarding those claims to which the plaintiff

voluntarily dismissed. Accordingly, this Court cannot entertain an appeal of issues related to the

allegedly illegal business transactions between the City and Councilman Handley which the

Taxpayers voluntarily dismissed. See Payne v. Savell, No. 03A01-9708-CV-00352, 1998 Tenn.

App. LEXIS 81, at *5–6 (Tenn. Ct. App. Feb. 5, 1998) (noting that, when a party takes a voluntary

nonsuit, the parties cannot appeal the resulting order of dismissal without prejudice); Bickers v. Lake

County Bd. of Educ., No. 02A01-9307-CV-00163, 1994 Tenn. App. LEXIS 7, at *4 (Tenn. Ct. App.

Jan. 13, 1994) (“A party is estopped or waives his right to appeal when judgment is entered at his

request.”); Oliver v. Hydro-Vac Services, Inc., 873 S.W.2d 694, 696 (Tenn. Ct. App. 1993)

(concluding that a party is ordinarily not aggrieved when no judgment is rendered against him);

Martin v. Washmaster Auto Ctr., Inc., No. 01-A-01-9305-CV-00224, 1993 Tenn. App. LEXIS 464,

at *6 (Tenn. Ct. App. July 2, 1993) (“No present controversy exists after the plaintiff takes a

nonsuit.”); Huggins v. Nichols, 440 S.W.2d 618, 620 (Tenn. Ct. App. 1968) (“Although there are

some exceptions to the rule, the general rule is that a plaintiff or defendant cannot appeal or
-18-

prosecute a writ of error from or to a judgment, order, or decree in his own favor, since he is not

aggrieved thereby.”).

III.

SUMMARY JUDGMENT ON THE TAXPAYERS’ CLAIM CHALLENGING THE LAND TRANSACTION

Having determined that the Taxpayers’ suit remained separate from the City’s action against

Councilman Handley, we now address the correctness of the trial court’s decision to grant partial

summary judgment to the Appellees by ruling that “plaintiffs have no standing to challenge the

transfer of the 32.657 acres to Defendant Handley and this part of the action must be dismissed.”

A.

Standard of Review

“Summary judgments are proper in virtually any civil case that can be resolved on the basis

of legal issues alone.” Summers v. Cherokee Children & Family Services, Inc., 112 S.W.3d 486, 507

(Tenn. Ct. App. 2002). “A party is entitled to summary judgment where he or she establishes that

there is no genuine issue as to any material fact and that a judgment may be rendered as a matter of

law.” Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003) (citing Penley v. Honda Motor Co., 31

S.W.3d 181, 183 (Tenn. 2000)); see also Tenn. R. Civ. P. 56.04 (2003). The party moving for

summary judgment has the burden of proving that the motion satisfies these requirements. Bain v.

Wells, 936 S.W.2d 618, 622 (Tenn. 1997) (citing Downen v. Allstate Ins. Co., 811 S.W.2d 523, 524
-19-

(Tenn. 1991)). Once the moving party has established that there is no genuine issue of material fact,

the burden shifts to the non-moving party to demonstrate, by affidavits or other discovery materials,

that there is a genuine issue of material fact to be resolved by trial of the matter. Byrd v. Hall, 847

S.W.2d 208, 211 (Tenn. 1993) (citations omitted). “In reviewing a motion for summary judgment,

the Court must examine the evidence and all reasonable inferences from the evidence in the light

most favorable to the non-moving party.” Stovall, 113 S.W.3d at 721 (citing Webber v. State Farm

Mut. Auto Ins. Co., 49 S.W.3d 265, 269 (Tenn. 2001)). The trial court should grant a motion for

summary judgment “only when both the facts and the conclusions to be drawn from the facts permit

a reasonable person to reach only one conclusion.” Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn.

1995) (citing Byrd, 847 S.W.2d at 210-11)). 

“Summary judgments enjoy no presumption of correctness on appeal.” Summers, 112

S.W.3d at 508. “Our task on appeal is to review the record to determine whether the requirements

for granting summary judgment have been met.” Church v. Perales, 39 S.W.3d 149, 157 (Tenn. Ct.

App. 2000). “This court must use the same standard [as the trial court] in reviewing a trial court’s

judgment granting summary judgment.” Prince v. Saint Thomas Hosp., 945 S.W.2d 731, 733 (Tenn.

Ct. App. 1996) (citing Clifton v. Bass, 908 S.W.2d 205, 208 (Tenn. Ct. App. 1995)). Since our

inquiry on appeal involves purely questions of law, Carvell, 900 S.W.2d at 26, “the standard for

reviewing a grant of summary judgment is de novo without any presumption that the trial court’s

conclusions were correct.” Webber, 49 S.W.3d at 269; see also Kelley, 133 S.W.3d at 591; Bain,

936 S.W.2d at 622.
-20-

B.

Taxpayer Standing

“A citizen’s standing to sue a governmental entity is a threshold issue that should be resolved

before addressing the merits of the case.” Ragsdale v. City of Memphis, 70 S.W.3d 56, 62 (Tenn.

Ct. App. 2001). As our supreme court previously stated in a similar case:

The initial question is whether our courts will entertain a

taxpayer suit contesting the legality of payments made to county

officials from public funds; that is, whether a taxpayer/citizen has

standing to litigate the issue presented in the complaint.

It is not at this point appropriate to examine the merits of the

ultimate question. The Court should determine whether a party may

litigate the legality of a public officer’s payments to himself, without

first deciding whether those payments are, in fact and law, illegal.

Because citizen suits do burden the conduct of public affairs, a

defendant entity or officer should not be obliged to defend on the

merits if he is entitled to a dismissal for lack of standing. Nor should

the court critique the conduct of public officials if the cause is not

justiciable.
-21-

Cobb v. Shelby County Bd. of Commissioners, 771 S.W.2d 124, 125 (Tenn. 1989). Standing is a

judge-made doctrine used by the courts of this state “‘to refuse to determine the merits of a legal

controversy irrespective of its correctness where the party advancing it is not properly situated to

prosecute the action.’” Phillips v. County of Anderson, No. E2000-01204-COA-R3-CV, 2001 Tenn.

App. LEXIS 308, at *9 (Tenn. Ct. App. Apr. 30, 2001) (quoting Knierim v. Leatherwood, 542

S.W.2d 806, 808 (Tenn. 1976)). Accordingly, we will begin by addressing the Taxpayers’ first issue

— whether they have standing to challenge the conveyance of real property from the municipality

to an elected official of that municipality.

“The rule in Tennessee is well established that citizens and taxpayers are without standing

to maintain a lawsuit to restrain or direct governmental action unless they first allege and establish

that they will suffer some special injury not common to citizens and taxpayers generally.” LaFollette

Med. Ctr. v. City of LaFollette, 115 S.W.3d 500, 503 (Tenn. Ct. App. 2003) (citing Patton v. City

of Chattanooga, 65 S.W. 414, 420–21 (Tenn. 1901)); see also Badgett v. Rogers, 436 S.W.2d 292,

294 (Tenn. 1968); Reams v. Bd. of Mayor & Alderman of McMinnville, 291 S.W. 1067, 1068 (Tenn.

1927). As a policy justification for this general rule, the Tennessee Supreme Court has stated as

follows:

On the one hand, it is undeniably the right of a taxpayer to know that

his taxes are expended properly and are not unlawfully diverted or

misused. On the other hand, the courts have long recognized the

necessity of allowing municipal officials to perform their duties
-22-

without interference from frequent and possibly frivolous litigation

and the inexpedience of putting municipal officers at hazard to defend

their acts whenever any member of the community sees fit to make

the assault, whether for honorable motives or not. The courts have

been commensurately reluctant to usurp or supersede the discretion

of municipal authorities to determine which municipal undertakings

are necessary and appropriate.

Badgett, 436 S.W.2d at 293–94; see also Parks v. Alexander, 608 S.W.2d 881, 885 (Tenn. Ct. App.

1980) (“The generally acknowledged purpose of this requirement of special damage or private harm

to the individual rests in the public policy of protecting public corporations from a profusion of

suits.”).

However, the general rule regarding taxpayer standing is not without exception. “[T]he

courts have recognized an exception to the general rule where it is asserted that the assessment or

levy of a tax is illegal or that public funds are misused or unlawfully diverted from stated purposes.”

Badgett, 436 S.W.2d at 294; see also LaFollette Med. Ctr., 115 S.W.3d at 504. The Taxpayers in

the instant case, being unable to establish any specific injury not sustained by the citizens of the City

in general, rely on this exception to assert they possess standing to contest the land transaction

between the City and Councilman Handley. Specifically, the Taxpayers seek to establish that the

land transaction at issue constituted an illegal use of “public funds.”
-23-

In order for a taxpayer to have standing to challenge the legality of the expenditure of public

funds, the following elements must be found to exist: (1) the plaintiff/taxpayers have taxpayer status;

(2) the taxpayers allege a specific illegality in the expenditure of public funds; and (3) the taxpayers

have made a prior demand on the governmental entity asking it to correct the alleged illegality. Cobb

v. Shelby County Bd. of Commissioners, 771 S.W.2d 124, 126 (Tenn. 1989); Ragsdale v. City of

Memphis, 70 S.W.3d 56, 62 (Tenn. Ct. App. 2001).

The trial court used this three-prong test in this case to evaluate whether the Taxpayers had

standing to challenge the land transaction. Regarding the first element, the trial court ruled that

“there is no material dispute of fact that some of the plaintiffs are taxpayers of the City of New

Johnsonville.” Turning to the third element, the trial court ruled that “any prior demand by the

taxpayers to correct the alleged illegality would have been a futile gesture. This being the case,

failure to make a prior demand is excused.” The largest area of contention between the parties on

appeal is the second element required in order for the Taxpayers to have standing to pursue their

claim against the Appellees (i.e., whether they allege a specific illegality in the expenditure of

“public funds”). The trial court ruled that, as a matter of law, “[l]and, especially land given to the

city, is not ‘public funds.’” Accordingly, the trial court held that, since the Taxpayers failed to satisfy

the second element of taxpayer standing, summary judgment was appropriate as to this claim. 

The Taxpayers argue that this ruling constitutes error because “the ordinary and plain

meaning of public funds includes property held by a municipality for the benefit of its citizens.”

Conversely, the Appellees contend that the term “public funds” must mean the diversion of funds
-24-

in the form of money derived from taxation in order for taxpayers to have standing. Since the real

property at issue was not acquired with tax revenue (i.e., it was a gift), the Appellees argue that a

subsequent disposition of the land cannot be considered a disposition of “public funds.” 

Our independent review of the law applicable to the present case reveals that the trial court

applied an incorrect legal standard when granting partial summary judgment to the Appellees in this

case. Stated differently, to ascertain if the Taxpayers in the instant case have standing, we need not

determine if land owned by a municipality constitutes “public funds” as the parties suggest in their

briefs.

The Taxpayers alleged in their complaint that the land transaction between the City and

Councilman Handley violated provisions in the City Charter as well as section 12-4-101(a)(1) of the

Tennessee Code. Section 12-4-101(a)(1) provides, in relevant part, as follows:

It is unlawful for any officer, committee member, director, or other

person whose duty it is to vote for, let out, overlook, or in any manner

to superintend any work or any contract in which any municipal

corporation, county, state, development district, utility district, human

resource agency, or other political subdivision created by statute shall

or may be interested, to be directly interested in any such contract.

“Directly interested” means any contract with the official personally

or with any business in which the official is the sole proprietor, a
-25-

partner, or the person having the controlling interest. “Controlling

interest” includes the individual with the ownership or control of the

largest number of outstanding shares owned by any single individual

or corporation. . . .

Tenn. Code Ann. § 12-4-101(a)(1) (2003). The legislature also set forth the penalty for violating

section 12-4-101(a)(1) of the Tennessee Code, stating:

Should any person, acting as such officer, committee member,

director, or other person referred to in § 12-4-101, be or become

directly or unlawfully indirectly interested in any such contract, such

person shall forfeit all pay and compensation therefor. Such officer

shall be dismissed from such office the officer then occupies, and be

ineligible for the same or a similar position for ten (10) years.

Tenn. Code Ann. § 12-4-102 (2003).

In State ex rel. Wallen v. Miller, 304 S.W.2d 654, 656 (Tenn. 1957), our supreme court noted

that the legislature did not include within section 12-4-101 and section 12-4-102 of the Tennessee

Code a procedure for enforcing these provisions. Accordingly, the supreme court stated that “it is

fundamental that for the enforcement of a statute of this kind where there is no statute prescribing

the procedure that the proceedings should be prosecuted according to the practice under the common
-26-

law[.]” Miller, 304 S.W.2d at 657 (citing Olsen v. Sharpe, 235 S.W.2d 11 (Tenn. 1950)). In setting

forth the procedure to apply when a violation of section 12-4-101 of the Tennessee Code is alleged,

the court stated:

Under such circumstances it seems to us that this statement is

applicable:

“Public wrongs or neglect or breach of public duty

cannot be redressed at a suit in the name of an

individual or individuals whose interest in the right

asserted does not differ from that of the public

generally, or who suffers injury in common with the

public generally, even, it seems, though his loss be

greater in degree, unless such right of action is given

by statute. In cases of purely public concern and in

actions for wrongs against the public, whether actually

committed or only apprehended, the remedy, whether

civil or criminal, is as a general rule by a prosecution

instituted by the state in its political character, or by

some officer authorized by law to act in its behalf, or

by some of those local agencies created by the state
-27-

for the arrangement of such of the local affairs of the

community as may be intrusted to them by law.”

“In the enforcement of matters of public interest it is

generally recognized that the attorney general

appearing as a public officer is a proper party to

maintain litigation.” 39 Am.Jur., p. 863, Sec. 11.

In a proceeding of this kind it is well said that:

“In the absence of constitutional or statutory

regulations providing otherwise, quo warranto

proceedings are the only proper remedy in cases in

which they are available.” 74 C.J.S. Quo Warranto,

sec. 4, p. 179; State ex rel. Bryant v. Maxwell, 189

Tenn. 187, 224 S.W.2d 833.
22 Quo warranto is a common law remedy characterized in the following terms:

“In its broadest sense, quo warranto is a writ of inquiry as to the warrant for doing

the acts of which complaint is made. It is the remedy or proceeding by which the

sovereign or state determines the legality of a claim which a party asserts the use or

exercise of an office or franchise and ousts the holder from its enjoyment, if the

claim is not well founded, or if the right to enjoy the privilege has been forfeited or

lost.” 44 Am.Jur., p. 88, Sec. 2.

Miller, 304 S.W.2d at 658.

23 “Article VII, section 1, of the [Tennessee] Constitution declares that county officers . . . shall be removable

from office for malfeasance or neglect of duty and clothes the legislature with power to prescribe the mode of procedure

through which removal may be affected.” State ex rel. Complainant v. Ward, 43 S.W.2d 217, 219 (Tenn. 1931). We

are cognizant of the fact that the legislature has provided for a suit by private citizens to challenge the legality of a public

officials actions. Section 6-54-107 of the Tennessee Code provides, in relevant part, as follows:

(a) No person holding office under any municipal corporation shall, during the time

(continued...)

-28-

Id. at 657–58 (emphasis added). “Here a civil remedy, that of quo warranto,

22 is the only one that

is available in view of the fact the legislators did not see fit to provide any additional procedure for

their enforcement.” Id. at 658 (emphasis added); see also State ex rel. Abernathy v. Anthony, 335

S.W.2d 832, 833 (Tenn. 1960).

The legislature has chosen to codify the common law remedy of quo warranto in section 29-

35-101 et seq. of the Tennessee Code. See City of Fairview v. Spears, 359 S.W.2d 824, 825 (Tenn.

1962) (applying the statutory codification of the quo warranto to a citizen’s private suit against a

municipality); Miller, 304 S.W.2d at 658. “Actions based upon violations of T.C.A. § 12-4-101 et

seq. are governed by the procedure set out in T.C.A. § 29-35-101 et seq. . . .” Town of Smyrna ex

rel. Odom v. Ridley, 730 S.W.2d 318, 321 (Tenn. 1987). Accordingly, since the Taxpayers seek

relief under section 12-4-101 of the Tennessee Code, their lawsuit must be evaluated for its

compliance with section 29-35-101 et seq. of the Tennessee Code.23 
23(...continued)

for which such person was elected or appointed, be capable of contracting with such

corporation for the performance of any work which is to be paid for out of the

treasury. Nor shall such person be capable of holding or having any other direct

interest in such a contract. “Direct interest” means any contract with any business

in which the official is the sole proprietor, a partner, or the person having the

controlling interest. “Controlling interest” includes the individual with the

ownership or control of the largest number of outstanding shares owned by any

single individual or corporation.

(b) No officer in a municipality shall be indirectly interested in any contract to

which the municipality is a party unless the officer publicly acknowledges such

officer’s interest. “Indirectly interested” means any contract in which the officer is

interested but not directly so, but includes contracts where the officer is directly

interested but is the sole supplier of goods or services in a municipality.

Tenn. Code Ann. § 6-54-107 (2003) (emphasis added). Section 6-54-108 of the Tennessee Code provides as follows:

Every officer of such corporation who shall unlawfully be concerned in making

such contract, or who shall unlawfully pay money upon the same to or for any

person declared incapable in § 6-54-107, shall forfeit the amount so paid; and such

officer shall be jointly and severally liable to an action for the same, which action

may be prosecuted by any citizen of the corporation in its name.

Tenn. Code Ann. § 6-54-108 (2003) (emphasis added).

One member of this Court has explained the operation of the aforementioned statutes by stating:

Standing is a judge-made doctrine whose purpose is to determine whether

a party should be permitted to pursue a claim. Knierim v. Leatherwood. 542

S.W.2d 806, 808 (Tenn. 1976) and Curve Elementary School Parent and Teacher’s

Organization v. Lauderdale County School Board, 608 S.W.2d 855, 858 (Tenn. Ct.

App. 1980). It calls upon the court to determine whether the plaintiff has alleged

such a personal stake in the outcome to warrant its invocation of the court's

jurisdiction and to justify the exercise of the court’s powers on its behalf. See

Browning-Ferris Industries, Inc. v. City of Oak Ridge, 644 S.W.2d 400, 402 (Tenn.

Ct. App. 1982).

In cases involving statutory causes of action, a party’s standing may

depend upon requirements contained in the statute creating the cause of action. If

these requirements have been defined by statute, it is proper for the courts to

conclude that the General Assembly has exercised its constitutional prerogative to

determine the conditions under which a party will be permitted access to the courts.

Thus, courts should defer to legislative standing criteria contained in statutes

creating new causes of action.

Private citizens have rarely been given standing to bring suit to challenge

the actions of public officials. Metropolitan Government ex rel. Anderson v.

Fulton, 701 S.W.2d 597, 601 (Tenn. 1985). Thus, in the absence of legislative

authority, a private citizen must demonstrate either a special interest, status or

wrong not common to the public as a whole or that the proper public officials have

not taken remedial action after being called upon to do so. See Bennett v. Stutts,

(continued...)

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23(...continued)

521 S.W.2d 575, 576 (Tenn. 1975); Badgett v. Rogers, 222 Tenn. 374, 379, 436

S.W.2d 292, 294 (1968); Bayless v. Knox County, 199 Tenn. 268, 274, 286 S.W.2d

579, 582 (1955); and State ex rel. Vaughn v. King, 653 S.W.2d 727, 729 (Tenn. Ct.

App. 1982).

Cases involving municipal officials’ self-dealing in public contracts are

among the rare situations where the General Assembly has specifically authorized

private citizens to challenge the legality of the actions of public officials. . . . It is

reasonable to infer from the enactment of this statute that the General Assembly

understood that a contract involving self-dealing by public officials is the very type

of case in which the cooperation of other public officials should not be reasonably

expected. See Burns v. City of Nashville, 142 Tenn. 541, 574, 221 S.W. 828, 837

(1920). It is also reasonable to infer that the General Assembly determined that

conflicts of interest of local governmental officials were so inimical to the public

interest that private citizens should be permitted to take remedial action.

Metro. Gov’t for Nashville & Davidson County ex rel. Anderson v. Fulton, No. 86-221-II, 1986 Tenn. App. LEXIS 3615,

at *25–28 (Tenn. Ct. App. Dec. 31, 1986) (Koch, J., concurring). 

Our supreme court has also had occasion to address an instance where a quo warranto proceeding under section

12-4-101 of the Tennessee Code was joined with a citizen’s private suit brought pursuant to section 6-54-108 of the

Tennessee Code. Town of Smyrna ex rel. Odom v. Ridley, 730 S.W.2d 318, 319 (Tenn. 1987). In dismissing the

citizen’s private suit, the court stated:

The city cannot recover two forfeitures, one under T.C.A. § 12-4-102 and the other

under T.C.A. § 6-54-108. In either case, the money forfeited belongs to the city,

but it is not due a double recovery. We find no legislative intent for such a double

recovery and forfeiture in the circumstances of this case. These statutes were

intended to provide alternative remedies. . . .The quo warranto action by the State

affords complete relief in this case and must take precedence over the § 6-54-107

action by the city; the latter should have been dismissed. The error is so plain that

we notice it now and dismiss the complaint insofar as it seeks to join the “action of

debt” under T.C.A., § 6-54-107 et seq. with the quo warranto under T.C.A., §

12-4-101 et seq.

Ridley, 730 S.W.2d at 322 (emphasis added). The Taxpayers in the instant case did not file a claim under section 6-54-

108 of the Tennessee Code. Therefore, we need not evaluate whether the Taxpayers lawsuit is in actuality a suit under

section 6-54-108 of the Tennessee Code. Since the Taxpayers expressly stated in their complaint that they are alleging

a violation of section 12-4-101 of the Tennessee Code, we are only concerned with their ability to pursue a claim under

that statute.

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Section 29-35-101 of the Tennessee Code provides, in relevant part, as follows:

An action lies in the name of the state against the person or

corporation offending, in the following cases:
24 The statutory scheme also sets forth the procedure for filing the suit on behalf of a private individual, Tenn.

Code Ann. § 29-35-110 (2003), the proper venue for filing the suit, Tenn. Code Ann. § 29-35-111 (2003), and the

content of the complaint, Tenn. Code Ann. § 29-35-112 (2003). Even when a suit is brought on behalf of private citizens,

“it must be in the name of the Attorney General.” State ex rel. Wallen v. Miller, 304 S.W.2d 654, 659 (Tenn. 1957).

The district attorney general, at his discretion, may dismiss the suit should he determine that it is improperly instituted.

Id. “[I]f the district attorney general has the right to dismiss the suit at any stage when it appears to him that the suit is

improperly brought, he would have the right to refuse to bring it in the first place, if he thought it was not in the interest

of the public to do so.” State v. Parker, 315 S.W.2d 396, 397 (Tenn. 1958). 

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. . . . 

(2) Whenever any public officer has done, or suffered to be done, any

act which works a forfeiture of that officer’s office[.]

Tenn. Code Ann. § 29-35-101 (2003) (emphasis added). Pursuant to section 12-4-102 of the

Tennessee Code, a public officer found to have violated section 12-4-101 of the Tennessee Code

“shall be dismissed from such office the officer then occupies.” Tenn. Code Ann. § 12-4-102 (2003)

(emphasis added). Moreover, the legislature has expressly provided as follows:

The suit is brought by the attorney general for the district or county,

when directed so to do by the general assembly, or by the governor

and attorney general of the state concurring.

Tenn. Code Ann. § 29-35-109 (2003) (emphasis added).24 At no point during the proceedings below

did the Taxpayers seek to comply with section 29-35-101 et seq. of the Tennessee Code by having

the district attorney general prosecute the lawsuit on their behalf. However, this omission does not

end our inquiry.
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Our supreme court has allowed for a limited exception to the requirement that suits be

instituted by the district attorney general, stating:

It is the settled law in this state that private citizens, as such,

cannot maintain an action complaining of the wrongful acts of public

officials unless such private citizens aver special interest or a special

injury not common to the public generally. Patton v. City of

Chattanooga, 108 Tenn. 197, 65 S.W. 414 (1901); Skelton v. Barnett,

190 Tenn. 70, 227 S.W.2d 774 (1950);Badgett v. Broome, 219 Tenn.

264, 409 S.W.2d 354 (1966).

. . . .

If theDistrict Attorney General, in matters such as this, should

act arbitrarily or capriciously or should be guilty of palpable abuse of

his discretion in declining to bring such an action, or in authorizing

its institution, the courts will take jurisdiction upon the relation of a

private citizen, in the name of the State of Tennessee. See People ex

rel. Graves v. District Court of Second Judicial Circuit, 37 Colo. 443,

86 P. 87; White v. Eagle Oil & Ref. Co. v. Gunderson, 48 S.D. 608,

205 N.W. 614, 43 A.L.R. 397; State ex rel. Lamb v. Cunningham, 83

Wis. 90, 53 N.W. 35. 

When citizens sue to rectify a public wrong, under these

circumstances, a copy of the complaint shall be served upon the
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District Attorney General. It shall be the duty of the trial court

forthwith to conduct an in limine hearing designed to determine

whether to permit plaintiffs to proceed. If it be determined that the

District Attorney General’s refusal to bring the action, or to authorize

the use of his name in its institution, was improper or unjustified, or

that plaintiff’s case is prima facie meritorious, the trial court shall

permit the action to proceed.

Bennett v. Stutts, 521 S.W.2d 575, 577 (Tenn. 1975); see also Metro. Gov’t for Nashville &

Davidson County ex rel. Anderson v. Fulton, No. 86-221-II, 1986 Tenn. App. LEXIS 3615, at *6

(Tenn. Ct. App. Dec. 31, 1986) (“Private citizens may not maintain a quo warranto action without

first showing that the acts of public officials affected a special interest or caused them loss not a

common injury to the public generally and may not do so unless the District Attorney has

unreasonably or improperly refused to bring the suit.”); Wooten v. Macon County, 1988 Tenn. App.

LEXIS 83, at *16–17 (Tenn. Ct. App. Feb. 17, 1988) (“It appears to be well established that actions

to enforce T.C.A. § 12-4-101 et seq. are suits in the nature of quo warranto which generally may be

prosecuted only by the District Attorney General on behalf of the State and that a private citizen has

no standing to pursue an action for illegal actions of a public official without showing a special

injury thereform.”); State ex rel. Vaughn v. King, 653 S.W.2d 727, 729 (Tenn. Ct. App. 1982) (“Our

supreme court has held in [Bennett] that private citizens cannot maintain a quo warranto action

complaining of the acts of public officials unless the private individuals aver a special interest or

injury not common to the public generally.”).
25 Ordinarily, we will affirm a trial court’s decision correct in result, but rendered upon an erroneous legal basis.

See Cont’l Cas. Co. v. Smith, 720 S.W.2d 48, 50 (Tenn. 1986); Arnold v. City of Chattanooga, 19 S.W.3d 779, 789

(Tenn. Ct. App. 1999). 

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As previously noted, the Taxpayers in the instant case sought to establish that the exception

set forth in Badgett applied because they were unable to establish an injury different from the public

at large. See Badgett v. Rogers, 436 S.W.2d 292, 294 (Tenn. 1968) (stating that taxpayers may

proceed with a lawsuit alleging an illegal use of public funds even though they are unable to establish

an injury different from that sustained by the public at large). Having failed to allege an injury

different from that sustained by the public at large in that instance, the Taxpayers necessarily fail to

do so in this instance as well. Moreover, a copy of the Taxpayers’ complaint was never submitted

to the district attorney general, and the record is devoid of any mention of a hearing held by the trial

court to determine if the Taxpayers should be allowed to proceed without the district attorney

general’s approval. Accordingly, the Taxpayers cannot avail themselves of the limited exception set

forth in Bennett. As such, the trial court, albeit for an erroneous reason, was correct to conclude that

the Taxpayers do not have standing to pursue their claim against the Appellees.25

Although the Taxpayers do not have standing to pursue their claim in its present form, we

are not inclined to dismiss their lawsuit outright by affirming the trial court’s grant of partial

summary judgment on this claim. In resolving this issue, we are guided by a prior decision of this

Court, stating:

The present record does not demonstrate that the relators or

any of them has sustained any special damage resulting from the
-35-

wrongful acts complained of, that is, no damage which would not be

sustained in common with all other citizens of Macon County.

Therefore, relators have no standing to pursue this suit except in the

name of the District Attorney General or by special authority granted

by the Trial Court under Bennett v. Stutts, supra . . . . 

In this posture of the proceeding, it does not appear to be in

order to summarily dismiss the suit. The reason for this is that the

relators have undertaken to state and support a suit on behalf of the

public which, if meritorious ought to be prosecuted by the District

Attorney General. It would therefore be manifestly unfair to the

public and to the District Attorney General to dismiss this suit

without an adequate opportunity to the District Attorney to pursue the

suit on behalf of the public.

Under the authorities discussed herein, the Trial Judge should

require the District Attorney General, after investigating and

considering all elements of the present suit, to make his discretionary

decision as to whether the suit has merit and should be prosecuted,

and to ask that his name be substituted for the present relators and

proceed with the prosecution of the case, including resistance to the

defendant’s motion for summary judgment, to authorize the relators

to proceed in his name or to move for dismissal.
26 We are mindful that DuPont and the City have raised for this Court’s consideration the issue of whether the

trial court should have disqualified Mr. Thornton from representing the Taxpayers in this case. However, the trial court

never rendered a decision on the motion due to the grant of partial summary judgment and the Taxpayers’ subsequent

decision to nonsuit their remaining claims prior to the hearing on the motion. During the pendency of this appeal, the

City filed a motion asking this Court to disqualify Mr. Thornton from representing the Taxpayers on appeal. This Court

(continued...)

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If the Trial Court finds that the motion of the District Attorney

General to dismiss or his failure to enter or authorize prosecution of

the suit is reasonably within his discretionary powers, the motion

should be sustained.

If the Trial Court finds that the decision of the District

Attorney General not to prosecute or authorize prosecution, or failure

to make a decision is “arbitrary, capricious, or a palpable abuse of

discretion”, the Trial Court should overrule the motion to dismiss and

grant special permission to the relators to proceed without

participation of the District Attorney General as provided in Bennett

v. Stutts, supra.

Wooten v. Macon County, 1988 Tenn. App. LEXIS 83, at *20–22; see also Munsey v. Russell Bros.,

213 S.W.2d 286, 289 (Tenn. Ct. App. 1948).

In accordance with our statement in Wooten, we vacate that portion of the trial court’s order

awarding summary judgment to the Appellees on this issue. The Taxpayers’ cause of action

challenging the land transaction between the City and Councilman Handley is remanded to the trial

court for further proceedings not inconsistent with this opinion.26 Due to our holding in this case,
26(...continued)

denied the City’s motion.

Rule 6 of the Rules of the Court of Appeals of Tennessee provides, in relevant part, as follows:

(a) Written argument in regard to each issue on appeal shall contain:

(1) A statement by the appellant of the alleged erroneous action of the trial court

which raises the issue . . . with citation to the record where the erroneous or

corrective action is recorded.

(2) A statement showing how such alleged error was seasonably called to the

attention of the trial judge with citation to that part of the record where appellant’s

challenge of the alleged error is recorded.

Since the trial court never had an opportunity to rule upon this motion, we have no alleged error to review on appeal.

Moreover, this Court may only entertain a trial court’s final judgments. See Tenn. R. App. P. 3(a) (2004). Since the trial

court never entered a judgment on the City’s motion, we have no judgment on this issue to review on appeal. See

Thompson v. Dickerson, No. 02A01-9702-CV-00034, 1997 Tenn. App. LEXIS 547, at *8 (Tenn. Ct. App. Aug. 1, 1997).

In passing on this issue, we must also take into account our holding in this case. The district attorney general’s

potential involvement in this case on remand may render a decision on the issue moot. We are also mindful that, in

compliance with our holding and the aforementioned authorities, the potential exists that the Taxpayers may be permitted

to pursue their claim without the involvement of the district attorney general. In the event that this contingency occurs,

the City is free to re-file its motion at the appropriate time so that the trial court may render a decision on the issue.

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it is not necessary that we reach the second issue raised by the Taxpayers on appeal, therefore, it is

pretermitted.

IV.

CONCLUSION

Since these lawsuits were consolidated and not joined, this Court is without jurisdiction to

entertain the issues presented by the parties relating to the City’s lawsuit against the Handleys and

other defendants. We are also without jurisdiction to entertain any issues related to the claim which

the Taxpayers voluntarily nonsuited. As for the trial court’s decision to grant the Appellees summary

judgment on the Taxpayers’ challenge to the land transaction between the City and Councilman

Handley, we vacate the trial court’s order and remand this case to the trial court for further
-38-

proceedings not inconsistent with this opinion. Costs of this appeal are taxed to the Appellants,

Gene Plant, et al. and their surety, for which execution may issue if necessary.

___________________________________ 

ALAN E. HIGHERS, JUDGE