Court Opinion

ID: 1050628
Source: CourtListenerOpinion
Date Created: 2013-10-08 20:07:37.604458+00
Date Added: 2024-06-11T11:51:18.334197
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                               AT JACKSON
                                      May 20, 2009 Session

             THE CITY OF JACKSON, TENNESSEE
                                v.
DAVID HERSH, PROFESSIONAL SPORTS AND ENTERTAINMENT OF
               TENNESSEE, INC., and PSET, L.P.
                                 v.
  RON BARRY, Individually and in his Administrative Capacities, and
CHARLES H. FARMER, Individually and in his Official Capacity as Mayor
                of the City of Jackson, Tennessee

                     Appeal from the Chancery Court for Madison County
                         No. 60282 Martha Brasfield, Chancellor

                    No. W2008-02360-COA-R3-CV - Filed August 25, 2009

This appeal addresses whether a judgment is final and appealable. The plaintiff municipality sued
the defendant owner of the city’s minor league baseball team for breach of contract. The city also
sought prejudgment interest and attorney’s fees. A consent order was entered allowing the
defendants to complete a planned sale of the team to a third party; the third party was to forward the
sales proceeds to the court clerk to be held in escrow. The defendants then filed a counterclaim
against the city, sounding in both contract and tort, as well as third-party claims against the mayor
and a city employee. The contract issues were tried, and the trial court held that the city was entitled
to damages and dismissed the defendants’ contract counterclaim against the city. The trial court did
not address the city’s request for prejudgment interest and attorney’s fees. The defendants non-
suited their remaining claims and an order was entered dismissing the claims on June 11, 2007. The
city filed a motion to assess attorney’s fees and prejudgement interest, and the defendants filed a
motion to release the funds held in escrow. On September 15, 2008, the trial court denied the city’s
motion for prejudgment interest and attorney’s fees, finding that the June 11, 2007 order was a final
judgment because the request for prejudgment interest and attorney’s fees was not a claim but was
instead an amount of the city’s recovery of damages. The trial court found that it did not have
jurisdiction to consider the city’s request for prejudgment interest or attorney’s fees because the city
failed to file a timely motion to alter or amend the judgment. The issue of the funds held in escrow
was not addressed by the trial court. The city now appeals the September 15, 2008 order, arguing
that the June 11, 2007 order was not final. We find that the trial court erred in holding that the June
11, 2007 order was a final judgment, and conclude that this Court does not have jurisdiction to hear
this appeal. Therefore, we dismiss the appeal and remand the case to the trial court.

      Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed and Cause Remanded
HOLLY M. KIRBY , J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and
J. STEVEN STAFFORD , J., joined.

Lewis L. Cobb and Catherine B. Clayton, Jackson, Tennessee for the Plaintiff/Appellant City of
Jackson

Randall J. Fishman and C. Barry Ward, Memphis, Tennessee, for the Defendants/Appellees David
Hersh, Professional Sports and Entertainment of Tennessee, Inc., and PSET, L.P.

                                                    OPINION

                                     FACTS AND PROCEDURAL HISTORY

         Defendant/Appellee David Hersh (“Hersh”) is President of Defendant/Appellee Professional
Sports and Entertainment of Tennessee, Inc. (“PSET, Inc.”), which is the general partner in the
limited partnership of Defendant/Appellee PSET, L.P. (the “Limited Partnership” or collectively,
the “Defendants”). The Limited Partnership is the owner of the West Tennessee Diamond Jaxx,1 a
Class “AA” minor league baseball team (“Team”). In February 1997, Plaintiff/Appellant the City
of Jackson, Tennessee (“City”) entered into a Stadium License and Use Agreement (“Agreement”)
with the Defendants, under which the Defendants were obligated to pay the City surcharges on all
of the tickets sold at baseball games played by the Team according to a schedule that was outlined
in the Agreement.

        The City filed this lawsuit to enforce the Agreement, alleging that the Defendants owed the
City unpaid surcharges from April to July 2002 in the amount of $175,000. The City’s complaint
also sought an award of prejudgement interest, attorney’s fees, expenses and court costs under the
terms of the Agreement.2 At the time the complaint was filed, the Defendants had entered into a
contract for the sale of the Team to a third party. Initially, the City sought to prohibit the Defendants
from distributing any proceeds from the sale of the Team. Later, however, the parties reached an
agreement, and the trial court entered a consent order allowing the sale to the third party to proceed,
in exchange for the Defendants’ instruction to the third party to make the check for the $175,000
proceeds of the sale payable to the Clerk and Master of the Madison County Chancery Court, upon
the closing of the sale. The monies were to be held in escrow until the issues between the City and

        1
          The team w as formerly the Memphis Chicks and had been located in M emphis since the 1900’s. It was
renamed the Diamond Jaxx upon its move to Jackson, Tennessee.
        2
            Article IX, Paragraph 7 of the Stadium Agreement states:

                   Attorneys’ Fees and Expenses. If either party shall institute any action or proceeding to
                   enforce the terms, covenants or provisions of this Agreement, then the party so prevailing
                   in such proceeding or dispute shall be entitled to receive from the other party reasonable
                   attorneys’s fees and expenses incurred by the prevailing party in prosecuting or defending the
                    prevailing party in connection with such action or proceeding, and whether or not suit was
                   actually instituted by a party.

                                                         -2-
the Defendants were resolved, or upon other orders from the Court. The Defendants then filed a
counterclaim against the City, asserting that the City breached its duty of good faith and was unjustly
enriched. The Defendants also filed third-party claims against the Mayor of Jackson, Charles H.
Farmer, individually and in his official capacity, and Jackson’s Chief Administrator, Ron Barry,
individually and in his official capacity.

        The trial began on September 11, 2006. After the trial concluded, on April 12, 2007, the trial
court issued an oral ruling addressing only the City’s claim for breach of contract and the
Defendants’ contract counterclaim against the City. The trial court found that no damages were due
to the Defendants, but that the City was entitled to $112,000 for the ticket surcharges that were not
paid. An order incorporating the trial court’s oral ruling was entered on May 1, 2007. On June 7,
2007, the Defendants filed a non-suit as to their remaining claims, which were subsequently
dismissed in an order dated June 11, 2007.

         On November 13, 2007, the City filed a motion to assess attorney’s fees under the terms of
the Agreement and prejudgment interest under Tennessee Code Annotated § 47-14-123. On
December 3, 2007, the Defendants filed a motion to release the funds held in escrow. On September
15, 2008, the trial court filed a lengthy order on the City’s motion for attorney’s fees and
prejudgment interest. The trial court first reviewed the complicated proceedings, with part heard by
the trial judge below and part heard by a specially appointed senior judge. It then carefully analyzed
the issue of whether the June 11, 2007 order was a final order that disposed of all remaining rights,
claims, and liabilities of the parties. Citing Christus Gardens, Inc. v. Baker, Donelson, Bearman,
Caldwell & Berkowitz, P.C., M2007-01104-COA-R3-CV, 2008 WL 3833613 (Tenn. Ct. App. Aug.
15, 2008), the trial court found that the June 11, 2007 order on the Defendants’ nonsuit of their
remaining counterclaims and third-party claims resolved all of the parties’ claims and liabilities.
Based on Christus, the trial court reasoned that the requests for prejudgment interest and attorney’s
fees were contingent on whether the Defendants obtained a judgment against the City, and thus are
“not claims under Tenn. R. Civ. Proc. 54.02, but are . . . separate types of recovery or damages.”
The trial court found that, under Rule 59 of the Tennessee Rules of Civil Procedure, after the June
11, 2007 order was entered, the City had thirty days in which to request payment of attorney’s fees
and pre-judgment interest; after that, the June 11, 2007 order became final and the trial court lost
jurisdiction. The issue of the funds held in escrow was not addressed by the trial court. The City
then filed this appeal.

                         ISSUES ON APPEAL AND STANDARD OF REVIEW

        The issue on appeal is whether the trial court erred in holding that the June 11, 2007 order
dismissing the Defendants’ remaining counterclaim and third-party claims was a final order and in
dismissing the City’s motion for attorney’s fees and prejudgment interest because the motion was
not timely filed under Rule 59 of the Tennessee Rules of Civil Procedure.
        On appeal, the interpretation of the Tennessee Rules of Civil Procedure is a question of law.
Lacy v. Cox, 152 S.W.3d 480, 483 (Tenn. 2004) (citations omitted). Questions of law are reviewed
de novo with no presumption of correctness. S. Constructors, Inc. v. Loudon County Bd. of Educ.,
58 S.W.3d 706, 710 (Tenn. 2001).

                                                 -3-
                                               ANALYSIS

        In order to address whether the trial court erred in dismissing the City’s motion for attorney’s
fees and prejudgment interest, we must first address the threshold issue of whether this Court has
subject matter jurisdiction to hear this appeal. See Tenn. R. App. P. 13(b). “Subject matter
jurisdiction concerns the authority of a particular court to hear a particular controversy.” Meighan
v. U.S. Sprint Commc’ns Co., 924 S.W.2d 632, 639 (Tenn. 1996) (citing Landers v. Jones, 872
S.W.2d 674, 675 (Tenn. 1994)). Rule 3(a) of the Tennessee Rules of Appellate Procedure provides
that, except as otherwise permitted by Rules 9 and 10 of the Tennessee Rules of Appellate Procedure
or Rule 54.02 of the Tennessee Rules of Civil Procedure, when multiple parties or multiple claims
are involved, an order that adjudicates fewer than all of the claims or the rights and liabilities of the
parties is not a final, appealable order. See Tenn. R. App. P. 3(a). The Court of Appeals does not
have subject matter jurisdiction over orders that are not final, unless otherwise provided by statute
or the Rules of Appellate Procedure. See Bayberry Assocs. v. Jones, 783 S.W.2d 553, 559 (Tenn.
1990). In this case, there was no application for permission to appeal under Rules 9 or 10 of the
Tennessee Rules of Appellate Procedure and the order was not certified as final under Rule 54.02
of the Tennessee Rules of Civil Procedure. Therefore, in order for this Court to have jurisdiction
to hear this appeal, the order appealed must adjudicate all of the claims and the rights and liabilities
of the parties. See Ikbariah v. Williams, No. W2008-00126-COA-R3-CV, 2008 WL 4613952, at
*1 (Tenn. Ct. App. Oct. 17, 2008).

         In this case, at the time the trial court was presented with the City’s motion to assess
attorney’s fees and prejudgment interest, the monies held in escrow had not been disbursed by the
trial court. “A final judgment is one that resolves all the issues in the case, ‘leaving nothing else for
the trial court to do.’ ” King v. Spain, No. M2006-02178-COA-R3-CV, 2007 WL 3202757, at *8
(Tenn. Ct. App. Oct. 31, 2007) (quoting In re Estate of Henderson, 121 S.W.3d 643, 645 (Tenn.
2003)). In King, the trial court adopted a special master report that left several issues unresolved.
When one of the parties asserted that this was not a final, appealable judgment, the trial court found
that all of the issues had been resolved by the special master and that its order adopting the special
master report was therefore a final order. The appellate court disagreed, noting that one of the issues
that remained unresolved was the disbursement of funds held in escrow. “Neither the parties nor this
Court can discern how the funds in escrow are to be distributed,” and without an effective order
resolving the issue, “[t]his Court cannot complete its responsibility to conduct effective appellate
review.” Id. at *8–9.

         In this case, under the consent order, the escrow monies were to be “deposited and held by
[the Clerk and Master] until the issues between the City of Jackson and the Defendants have been
resolved, or upon such Orders as the Court may deem appropriate.” The issue of the monies in the
escrow account remains unresolved. To be a final order, all of the claims and the rights and
liabilities of the parties must be resolved. Thus, in this case, we do not have a final order that “fully
and completely defines the parties’ rights with regard to the issue[s], leaving nothing else for the trial
court to do.” State ex rel. McAllister v. Goode, 968 S.W.2d 834, 840 (Tenn. Ct. App. 1997)
(citations omitted). “If there are matters pending before the trial court, and the provisions of
[Tennessee Rule of Civil Procedure] 54.02 are not implicated and not invoked in the judgment or
order appealed from, a direct appeal pursuant to [Tennessee Rule of Appellate Procedure] 3(a) is not

                                                   -4-
appropriate.” King, 2007 WL 3202757, at *9 (citing Hutchinson v. ARO Corp., 653 S.W.2d 738,
740 (Tenn. Ct. App. 1983)). In the absence of an order disbursing the escrow funds, the June 11,
2007 order cannot be considered a final order.

        Moreover, at the time the City filed its motion to assess attorney’s fees and prejudgment
interest, the City’s claim for attorney’s fees included in the City’s complaint had not been addressed.
We respectfully disagree with the trial court’s finding that the request for attorney’s fees in this case
is an amount of recovery of damages rather than a claim. The Christus Gardens decision held that,
in a case asserting multiple theories of legal malpractice in pursuit of one recovery, it was not
appropriate for the trial court to make the judgment final under Rule 54.02 when only one of the
theories had been addressed. Thus, Christus Gardens did not address the issue presented in the case
at bar and we find it inapplicable in this case. Here, the City’s claim for attorney’s fees may be
contingent on the resolution of the parties’ primary claims, but it is nevertheless in addition to its
other claims for damages. This Court has concluded on several occasions that an order that fails
to address an outstanding request for attorney’s fees is not final. See Grand Valley Lakes Prop.
Owners’ Ass’n, Inc. v. Gunn, W2008-01116-COA-R3-CV, 2009 WL 981697, at *3 (Tenn. Ct. App.
Apr. 13, 2009) (unresolved motion for attorney’s fees meant that order being appealed was not final);
Homebuilders McGee & Story, LLC v. Buckner, No. M2008-00291-COA-R3-CV, 2008 WL
3896749, at *3 (Tenn. Ct. App. Aug. 21, 2008) (concluding that the order appealed from in the first
appeal of the case was not a final order because there was a claim for attorney’s fees that had not
been adjudicated); Headrick v. Headrick, No. E2004-00730-COA-R3-CV, 2005 WL 524807, at *3
(Tenn. Ct. App. Mar. 7, 2005) (concluding that there was no final order when the trial court reserved
the issue of attorney’s fees); Scott v. Noland Co., No. 03A01-9407-CV-00248, 1995 WL 11177, at
*1 (Tenn. Ct. App. Jan. 12, 1995) (concluding that there was no final order when the trial court did
not award a specific amount of attorney’s fees).

                                             CONCLUSION

         As stated in Gunn: “We would like nothing more than to bring about a final resolution of
this litigation. Alas, it is not to be.” Gunn, 2009 WL 981697, at *4. We must conclude that there
is not a final, appealable order in this case and that we do not have jurisdiction to hear this appeal.
See Tenn. R. App. P. 3(a).

                                                  -5-
       The appeal is dismissed and the cause is remanded for further proceedings consistent with
this Opinion. The costs of this appeal are taxed to the Appellees David Hersh, Professional Sports
and Entertainment of Tennessee, Inc., and PSET, L.P., for which execution may issue if necessary.

                                                     ___________________________________
                                                     HOLLY M. KIRBY, JUDGE

                                               -6-