Court Opinion

ID: 4195439
Source: CourtListenerOpinion
Date Created: 2017-08-11 21:10:47.008778+00
Date Added: 2024-06-11T14:40:33.553753
License: Public Domain

08/11/2017
               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                               January 19, 2017 Session

             HOMELIFT OF NASHVILLE, INC. v. PORTA, INC.

                  Appeal from the Circuit Court for Wilson County
                   No. 2010-CV-662 John D. Wootten, Jr., Judge
                      ___________________________________

                           No. M2016-00894-COA-R3-CV
                       ___________________________________

This appeal involves a claim for attorney’s fees and other litigation expenses incurred by
a third-party defendant in a wrongful death action. The third-party plaintiff filed the
third-party complaint against the third-party defendant seeking indemnity. A jury found
both the third-party plaintiff and third-party defendant at fault for the death in the
underlying action, but because the third-party plaintiff was allocated more than 50% of
the fault, the jury determined that the third-party plaintiff was not entitled to
indemnification. The third-party defendant filed a post-trial motion for attorney’s fees
and expenses incurred in defending the third-party action. The trial court denied the
motion, concluding that it lacked subject matter jurisdiction. Although we conclude that
it did not lack subject matter jurisdiction, we affirm the denial of the third-party
defendant’s motion.

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

W. NEAL MCBRAYER, J., delivered the opinion of the court, in which FRANK G.
CLEMENT, JR., P.J., M.S., and ANDY D. BENNETT, J., joined.

Stephen W. Elliott and Fetlework Balite-Panelo, Nashville, Tennessee, for the appellant,
Porta, Inc.

Jefferson C. Orr and Joshua K. Chesser, Nashville, Tennessee, for the appellee, Homelift
of Nashville, Inc.
                                         OPINION

                                              I.

       In February 2010, Ms. Jimmie Dean Browning fell into an elevator shaft in her
home and died as a result of her injuries. Later that year, her estate filed a wrongful death
action against Homelift of Nashville, Inc. (“Homelift”), the seller and installer of the
elevator, and ThyssenKrupp Access Corporation (“ThyssenKrupp”), an alleged successor
to the manufacturer of the elevator. The suit, which was filed in the Circuit Court of
Wilson County, Tennessee, asserted claims of negligence, strict products liability, breach
of warranty, breach of contract, and violations of the Tennessee Consumer Protection
Act.

                                             A.

        On September 14, 2012, Homelift filed a third-party complaint for indemnity
against Porta, Inc. (“Porta”), the alleged manufacturer of certain “interlock devices”
installed on the elevator doors. The third-party complaint averred, in relevant part, as
follows:

              In January 2010, as part of its completion of the elevator installation
       at the Browning home, HomeLift installed three interlock devices at the
       Browning home, one on the hoistway door on the basement floor, one on
       the hoistway door on the main floor, and one on the hoistway door on the
       second floor of the home.

              ....

               In its lawsuit, Ms. Browning’s Estate claims that her death was
       caused in whole or in part by the failure of the interlock device which was
       installed by HomeLift on the second floor hoistway door.

              HomeLift denies that the interlock device on the second floor
       hoistway door of the Browning home failed and/or caused or contributed to
       Ms. Browning’s death. However, to the extent the interlock device failed
       and caused or contributed to Ms. Browning’s death, HomeLift would state
       that such failure resulted from a defect in the design and/or manufacturing
       of the device by Porta.

Thus, Homelift sought indemnification from Porta “for all costs, damages, liabilities, and
expenses, including attorney’s fees, incurred . . . as a result of defects, if any, in Porta’s
product.”
                                            2
1. Amendments to the Third-Party Complaint

       Homelift went on to amend its third-party complaint against Porta four times.
Homelift filed its first amended third-party complaint on January 17, 2013, alleging
additional causes of action against Porta.

       Later, the Browning estate and Homelift reached a settlement, and the court
entered an agreed order dismissing the estate’s claim against Homelift with prejudice.
Prior to the dismissal of Homelift, the court had dismissed the estate’s claims against
ThyssenKrupp on summary judgment. So the agreed order dismissing Homelift also
provided that the third-party action against Porta, which was the only remaining
complaint, “shall remain pending.”

        In light of its settlement, Homelift again sought leave to amend its third-party
complaint to clarify its claims against Porta. After the second amended third-party
complaint was filed in January 2014, Porta responded by filing an answer and
counterclaim. Porta denied being the cause of Ms. Browning’s accident and alleged that
Homelift was solely at fault because of alterations it had made to the lock manufactured
by Porta. In its counterclaim, Porta asserted that Homelift had “intentionally destroyed a
vital piece of evidence in this case, i.e., the subject elevator, without informing Porta of
the intended destruction,” making it “impossible for Porta to present an effective defense
to counter Homelift’s theory as to the cause of the accident.”

       Porta’s answer and counterclaim concluded with a claim for the costs of defending
the third-party action, including attorney’s fees. Specifically, the language provided as
follows:

       Wherefore, counterclaimant Porta prays for judgment of this Court that
       Homelift take nothing, that all of the claims by Homelift against Porta be
       dismissed with prejudice, and that Porta recover from Homelift its costs of
       defense, including, but not limited to, attorney fees, expert witness fees, and
       all other costs of defense, or that said amount be awarded in favor of Porta
       as a diminution in any amount which Homelift may recover in this action.

       In January 2015, Homelift again amended its third-party complaint to include an
additional claim of negligence per se against Porta. In response, Porta filed an answer
and counterclaim, which again concluded with the language quoted above.

       Later, Homelift filed a motion to dismiss Porta’s counterclaim, which the trial
court granted on June 5, 2015. Immediately thereafter, Homelift filed a fourth and final
amended third-party complaint to modify the amount of damages sought in its action
against Porta. Porta responded on July 14, 2015, by filing an answer, which did not
                                          3
include a counterclaim. Notably, Porta’s final answer also failed to include the above
quoted language concerning attorney’s fees and litigation expenses. The only relief Porta
requested was a twelve-person jury and a dismissal.

2. Trial

      In October 2015, the court conducted a jury trial on the fourth amended third-party
complaint. The jury found both Porta and Homelift at fault for Ms. Browning’s death.
But the jury allocated 85% of the fault to Homelift and 15% to Porta. As a result,
Homelift recovered nothing on its third-party complaint.

                                            B.

        Within thirty days following entry of the final judgment, Porta filed a motion
seeking recovery of its attorney’s fees and other litigation expenses incurred in defending
itself in the third-party action, totaling $234,451.59. Although acknowledging that, under
the American Rule, parties generally cannot recover their attorney’s fees unless there is a
statutory or contractual provision permitting an award of attorney’s fees, see Taylor v.
Fezell, 158 S.W.3d 352, 359 (Tenn. 2005) (citing State v. Brown & Williamson Tobacco
Corp., 18 S.W.3d 186, 194 (Tenn. 2000)), Porta argued that an award was appropriate
under two equitable exceptions to the American Rule recognized by the Supreme Court
of Tennessee in Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d 336 (Tenn. 1985).

        The first exception, known as the implied indemnity exception, states that costs
and attorney’s fees may be recoverable on the basis of an implied indemnity contract.
Id. at 338. The right to recovery is “based upon the relationship between the parties and
their respective degrees of fault.” Id. at 339. The second exception, known as the
independent tort exception, permits recovery of reasonable compensation, including
attorney’s fees, by “‘[o]ne who through the tort of another has been required to act in the
protection of his interests by bringing or defending an action against a third person.’” Id.
at 340 (quoting The Restatement (Second) of Torts § 914(2) (1979)).

       The trial court denied Porta’s request, concluding that it lacked subject matter
jurisdiction to award such fees and expenses. The court further concluded that Porta
must commence a separate, independent action to recover its attorney’s fees and expenses
from Homelift.

                                            II.

      Porta appeals the denial of its request. Among other things, it argues that the trial
court possessed subject matter jurisdiction over its request for attorney’s fees and
expenses and that a separate action for attorney’s fees is unnecessary. Homelift, on the

                                             4
other hand, argues that a separate action was necessary because Porta failed to
specifically plead for attorney’s fees in its answer.

        As an initial matter, we must determine whether the trial court had jurisdiction to
consider Porta’s request for an award of attorney’s fees and expenses. Tenn. R. App. P.
13(b); Toms v. Toms, 98 S.W.3d 140, 143 (Tenn. 2003) (“Appellate courts must address
the issue of subject matter jurisdiction even if the issue is not raised in the trial court.”).
Without subject matter jurisdiction a court lacks the “power to adjudicate a particular
type of controversy,” and any resulting order is void. Dishmon v. Shelby State Cmty.
Coll., 15 S.W.3d 477, 480 (Tenn. Ct. App. 1999). A court’s subject matter jurisdiction is
derived—“either explicitly or by necessary implication”—from our Constitution or
legislative acts. Benson v. Herbst, 240 S.W.3d 235, 239 (Tenn. Ct. App. 2007).

       The existence of subject matter jurisdiction depends on “the nature of the cause of
action and the relief sought.” Landers v. Jones, 872 S.W.2d 674, 675 (Tenn. 1994).
Whether a court lacks subject matter jurisdiction presents a question of law, which we
review de novo. Chapman v. DaVita, Inc., 380 S.W.3d 710, 712-13 (Tenn. 2012).

       We conclude that the trial court in this case possessed subject matter jurisdiction.
Circuit courts are courts of general jurisdiction and have jurisdiction over “all debts and
demands on contract over fifty dollars.” Tenn. Code Ann. §§ 16-10-101, -106 (2009).
And the trial court had not lost this jurisdiction as the court’s judgment was not yet final
and no appeal had been perfected when Porta made its request for attorney’s fees and
expenses. See First Am. Tr. Co. v. Franklin-Murray Dev. Co., L.P., 59 S.W.3d 135, 141
(Tenn. Ct. App. 2001) (“[O]nce a party perfects an appeal from a trial court’s final
judgment, the trial court effectively loses its authority to act in the case without leave of
the appellate court.”) (footnote omitted). Thus, we consider whether Porta properly pled
for recovery of attorney’s fees and expenses.

       Rule 9.07 of the Tennessee Rules of Civil Procedure provides that “[w]hen items
of special damage are claimed, they shall be specifically stated.” Tenn. R. Civ. P. 9.07.
“Attorney’s fees are considered special damages because ‘in the absence of a statute,
contract, or equitable rule requiring otherwise, attorneys must generally look to their own
clients for their fees.’” Cremeens v. Cremeens, No. M2014-01186-COA-R3-CV, 2015
WL 4511921, at *11 (Tenn. Ct. App. July 24, 2015) (quoting In re Estate of Greenamyre,
219 S.W.3d 877, 884 (Tenn. Ct. App. 2005)). This Court noted over 35 years ago that
“[s]ince an award of attorneys’ fees is fairly unusual, plaintiff should have the obligation
of specially pleading such an item of damages.” Marshall v. First Nat. Bank of
Lewisburg, 622 S.W.2d 558, 561 (Tenn. Ct. App. 1981). Since then, we have recognized
that “seeking the payment of attorney’s fees is now more commonplace.” In re Estate of
Greenamyre, 219 S.W.3d at 885. As such, our courts have held that, in certain instances,
a failure to comply with Rule 9.07 does not necessarily preclude such an award “where

                                              5
the parties already know that attorney’s fees may be recovered from another party.” Id.;
see also Cremeens, 2015 WL 4511921, at *11.

        For instance, in Killingsworth v. Ted Russell Ford, Inc., this Court upheld an
award for attorney’s fees under the Tennessee Consumer Protection Act despite the fact
that the claimant failed to specifically request such fees in his complaint. 104 S.W.3d
530, 534 (Tenn. Ct. App. 2002). We reasoned that the Act specifically provides “once a
trial court finds there has been a violation of the Act, the court may award the plaintiff
‘reasonable attorney’s fees and costs.’” Id. at 533 (citing Tenn. Code Ann. § 47-18-
109(e)(1) (2001)). Thus, the defendant “was effectively put on notice that the purchasers
were seeking all relief authorized under the Act, including attorney’s fees and costs.” Id.
at 534. Indeed, this Court later approvingly noted that “courts have overlooked failure to
comply with Tenn. R. Civ. P. 9.07 in cases where a statute specifically authorizes the
recovery of attorney’s fees from another party.” In re Estate of Greenamyre, 219 S.W.3d
at 885 n.221 (citing Bloomingdale’s By Mail Ltd. v. Huddleston, 848 S.W.2d 52, 56
(Tenn. 1992); Deas v. Deas, 774 S.W.2d 167, 169 (Tenn. 1989); Hardcastle v. Harris,
170 S.W.3d 67, 91 (Tenn. Ct. App. 2004); Killingsworth, 104 S.W.3d at 533-34).

       We conclude that this is not one of those circumstances in which a failure to
comply with Rule 9.07 is excused. Here, no statute specifically authorized the recovery
of attorney’s fees. Nor was this a situation in which Homelift was otherwise clearly on
notice that Porta was seeking to recover such fees. The relationship of buyer and seller
“does not implicitly carry with it an indemnity obligation.” First Nat’l Bank of Chicago
v. Cumberland Bend Investors, L.P., M2000-00001-COA-R3-CV, 2002 WL 31835693, at
*3 (Tenn. Ct. App. Dec. 19, 2002).

       Additionally, as noted above, Porta twice filed an answer and counterclaim, which
did include a request for attorney’s fees and expenses. However, in both pleadings, the
request was included in a paragraph clearly inserted under the heading “counterclaim,”
and the counterclaim was subsequently dismissed by order of the trial court. The linkage
between Porta’s request for attorney’s fees and expenses and counterclaim is further
supported by Porta’s final answer. The final answer, filed in response to Homelift’s
fourth amended third-party complaint, included neither a counterclaim nor a prayer for
attorney’s fees.

        1
          In In re Estate of Greenamyre, a will construction case, we affirmed an award for attorney’s
fees despite the party’s failure to include a request for such fees in her answer. 219 S.W.3d at 885.
There, we pointed out that will construction cases are “a well-known exception to the American Rule.”
Id. at 884-85 (“If an ambiguity in a will requires litigation to resolve it, the expenses of the litigation,
including the parties’ attorney’s fees may be charged against the estate of the testator who was
responsible for the ambiguity.”) Additionally, despite the party’s oversight, “her pretrial brief clearly put
both the estate and all other parties on notice that she was seeking to have her attorney’s fees paid by the
estate.” Id. at 885.

                                                     6
       Thus, we agree with Homelift that it was not on notice that Porta intended to seek
an award of attorney’s fees and expenses at the time of trial. See Webb v. Nashville Area
Habitat for Humanity, Inc., 346 S.W.3d 422, 426 (Tenn. 2011) (“[T]he primary purpose
of pleadings is to provide notice of the issues presented to the opposing party and
court.”). Porta’s post-trial motion,2 raising for the first time an entitlement to attorney’s
fees under the exceptions to the American Rule recognized by our supreme court in
Pullman, was insufficient to satisfy Rule 9.07.

                                               III.

       For the foregoing reasons, we affirm the trial court’s denial of Porta’s motion for
attorney’s fees and expenses, although on different grounds. Because the court did not
have a claim for such fees and expenses before it at the time of trial and because Porta did
not properly request an award of attorney’s fees in its answer, the trial court properly
denied the motion.

                                                      _________________________________
                                                      W. NEAL MCBRAYER, JUDGE

       2
           The Federal Rules of Civil Procedure, unlike the Tennessee Rules of Civil Procedure, do
contemplate post-trial motions for attorney’s fees. See Fed. R. Civ. P. 54(d)(2)(A) (“A claim for
attorney’s fees and related nontaxable expenses must be made by motion unless the substantive law
requires those fees to be proved at trial as an element of damages.”).
                                                7