Court Opinion

ID: 9966065
Source: CourtListenerOpinion
Date Created: 2024-05-03 22:08:52.657227+00
Date Added: 2024-06-11T08:25:08.376222
License: Public Domain

05/03/2024
                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                  April 9, 2024 Session

          TIMBERLAKE HOMEOWNERS’ ASSOCIATION, INC. v.
              TIMBERLAKE DEVELOPMENT, LLC, ET AL.

                Appeal from the Chancery Court for Knox County
          No. 203640-2           Richard B. Armstrong, Jr., Chancellor

                             No. E2023-00808-COA-R3-CV

This is an appeal from the trial court’s order dismissing, for failure to state a claim upon
which relief could be granted, an action for declaratory judgment filed by the petitioner
homeowners’ association against the respondent developer. The developer had formed the
homeowners’ association to oversee the development of Timberlake Subdivision in Knox
County and had executed a declaration of covenants and restrictions that provided, inter
alia, that the developer retained the exclusive right to appoint a three-member review board
to oversee construction of the subdivision until such time as the developer assigned its
rights to the homeowners’ association. The declaration also included a waiver provision
that enabled the developer to unilaterally amend and waive any portion of the declaration
at any time. In October 2020, the developer and homeowners’ association executed and
recorded a document assigning to the homeowners’ association the developer’s rights to
appoint members to the review board, expressly excluding from the assignment any lots
still owned by the developer or its affiliate company. The developer then executed a waiver
document waiving its obligation to submit its remaining lots to board review. The
homeowners’ association filed a complaint for declaratory judgment, seeking a declaration
from the trial court that (1) the developer had assigned to the homeowners’ association all
rights to appoint members of the oversight board; 2) there existed only one oversight board,
which was now controlled by the homeowners’ association; and (3) the waiver document
was null and void. Upon a motion to dismiss filed pursuant to Tennessee Rule of Civil
Procedure 12.02(6) by the developer, the trial court dismissed the declaratory judgment
action for failure to state a claim upon which relief could be granted, finding that the
declaration, the assignment, and the waiver documents were unambiguous as a matter of
law and that they granted the developer the power to retain oversight of its lots and to waive
any portion of the declaration. The trial court further determined that because the president
of the homeowners’ association had signed the assignment, the homeowners’ association
was estopped from arguing that the developer had assigned all authority to appoint
members to the review board to the association. The homeowners’ association filed a
motion to alter or amend the judgment, arguing, inter alia, that dismissal of a declaratory
judgment action based on a motion to dismiss pursuant to Tennessee Rule of Civil
Procedure 12.02(6) is generally improper and that the trial court should instead have
declared the rights and obligations of the parties with respect to the documents. The trial
court denied the motion to alter or amend and the homeowners’ association timely
appealed. Upon careful review, we find that the trial court improperly dismissed the
declaratory judgment action for failure to state a claim after determining that the documents
at issue were unambiguous as a matter of law and essentially declaring the rights of the
parties. Accordingly, we vacate the trial court’s dismissal of the complaint and its award
of attorney’s fees to the developer based on that dismissal, and we affirm that portion of
the trial court’s order declaring certain rights and responsibilities of the parties.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                Affirmed in Part, Vacated in Part; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and KRISTI M. DAVIS, JJ., joined.

F. Clinton Little, Knoxville, Tennessee, for the appellant, Timberlake Homeowners’
Association, Inc.

W. Edward Shipe, Avery C. Lovingfoss, and Molli A. Guinn, Knoxville, Tennessee, for
the appellees, Timberlake Development, LLC, and Smithbilt, LLC.

                                        OPINION

                          I. Factual and Procedural Background

      Timberlake Subdivision (“Timberlake”) is a residential subdivision located in Knox
County, developed by the respondent, Timberlake Development, LLC (“Developer”). On
September 16, 2000, Developer adopted a “Declaration of Covenants and Restrictions of
Timberlake Subdivision (Phase I)” (“the Declaration”). To enforce the provisions of the
Declaration, Developer created the petitioner, Timberlake Homeowners’ Association
(“HOA”), a nonprofit corporation.

       Article XII of the Declaration governs the formation and responsibilities of an
Architectural Review Committee (“ARC”) whose purpose is to review and approve any
plans for building on the Timberlake lots. The section provides in pertinent part:

       The [ARC] shall be composed of three members appointed by [Developer].
       . . . [Developer] shall continue to have the exclusive authority to appoint the
       Members of the [ARC] until such time as it shall in writing expressly confer
       such authority to [HOA].

                                             2
On May 14, 2001, the Declaration was amended to add the Charter and Bylaws of the
HOA.1 In relevant part, the bylaws provide: “The terms and provisions of [the] Charter
and [Declaration] are incorporated herein by reference and shall be controlling wherever
the same may be in conflict herewith.”

       On October 16, 2020, Developer and HOA executed and recorded an “Assignment
of Developer’s Right to Appoint ARC Members” (“the Assignment”) in accordance with
the provisions in Articles XII and XXIV of the Declaration. Article XXIV of the
Declaration provides in pertinent portion: “Any and all of the rights and powers, titles,
easements and estates reserved or given to [Developer] in [the Declaration] may be
assigned to any one or more corporations or assigns.” The Assignment states in pertinent
part:

               KNOW ALL BY THESE PRESENTS, [Developer] hereby transfers
        and assigns to [HOA] its authority to appoint members to the [ARC], in
        accordance with Article XII of the [Declaration] of Timberlake Subdivision
        (Phase I) . . . for all Lots not owned by [Developer] or Smithbilt, LLC. The
        parties acknowledge and agree that [Developer] shall retain ARC authority
        over excluded Lots for so long as such Lots are owned by [Developer] or
        Smithbilt, LLC; and

              FURTHER, [HOA] hereby accepts such assignment and the rights
        and powers granted thereunder[.]

(Emphasis added.) The Assignment was agreed upon and signed by Developer’s chief
manager and the HOA president, notarized as to both parties, and recorded with the Knox
County Register of Deeds.

      On June 29, 2021, Developer unilaterally executed an “Architectural Review
Committee Waiver” (the “Waiver”) pursuant to Article XXIII of the Declaration, which
provides in pertinent part:

                                WAIVER AND MODIFICATIONS

               Developer hereby reserves the right in its absolute discretion at any
        time to annul, waive[,] change or modify any of the restrictions, conditions
        or covenants contained herein[.]

In accordance with this provision, the Waiver document states:
1
  In its appellate brief, HOA asserts that “[o]n or about April 2014, [Developer] assigned all its membership
interest in [HOA] to the lot owners of [Timberlake], effectively relinquishing control of same.” However,
there is no document in the record memorializing such an assignment of authority.

                                                     3
               KNOW ALL BY THESE PRESENTS, [Developer] has exercised its
       right reserved in Article XXIII of the Declaration to, in its absolute discretion
       and at any time, waive any restriction or condition of the Declaration.
       [Developer] has waived all restrictions and conditions in Article XII ([ARC])
       of the Declaration[] otherwise applicable to those Lots owned by [Developer]
       or Smithbilt, LLC or to [Developer] or Smithbilt, LLC, as Owners of such
       Lots, for so [long] as these Lots continue to be owned by either [Developer]
       or Smithbilt, LLC. Pursuant to this [Waiver], by way of illustration only,
       [Developer] and Smithbilt, LLC shall not be required to submit plans and
       specification to the [ARC] for approval, shall not be prohibited from erecting
       or modifying buildings on Lots owned by either even absent [ARC] approval,
       shall not be required to obtain [ARC] approval of any builder or landscaper,
       and shall not be required to permit the [ARC] to inspect the buildings on any
       Lot for which Article XII conditions and restrictions have been waived.

       After the Assignment and Waiver documents were executed, HOA filed a Petition
for Declaratory Judgment with the Knox County Chancery Court (“trial court”) asking the
trial court to declare that (1) “only one [ARC] exists with regard to any lot in
[Timberlake]”; (2) Developer “assigned all its power to appoint ARC Members to [HOA]”
when it executed the Assignment; (3) the Waiver is “null and void” because the Declaration
does not permit a “retroactive waiver with regard to the ARC’s authority over lots owned
by [Developer] or Smithbilt, LLC”; and (4) any lots owned by Developer and Smithbilt,
LLC, remain subject to HOA-controlled ARC restrictions.

        Developer moved to dismiss the action for failure to state a claim upon which relief
could be granted pursuant to Tennessee Rule of Civil Procedure 12.02(6). Subsequently,
the trial court entered an agreed order joining Smithbilt, LLC, as an indispensable and
necessary party pursuant to Tennessee Rule of Civil Procedure 19.01. In turn, Smithbilt,
LLC, adopted Developer’s motion to dismiss. Following a hearing conducted on October
12, 2022, the trial court entered a final order wherein the court (1) determined that the
Declaration, the Assignment, and the Waiver documents were unambiguous and should be
interpreted as a matter of law, (2) included several paragraphs of findings and
determinations concerning the parties’ respective rights predicated on the trial court’s
interpretation of those documents, and (3) dismissed with prejudice the petition for
declaratory judgment for failure to state a claim upon which relief can be granted pursuant
to Rule 12.02(6). The court also determined that HOA was “estopped from arguing that
Developer assigned all authority to appoint members to the [ARC]” because both parties
had executed the Assignment in agreement. The trial court then awarded to Developer
attorney’s fees pursuant to Tennessee Code Annotated Section 20-12-119(c) (West July 1,
2012, to current) (providing for an award of attorney’s fees to the prevailing party on a
successful motion to dismiss pursuant to Tennessee Rules of Civil Procedure 12).

                                              4
       HOA filed a motion to alter or amend the trial court’s order pursuant to Tennessee
Rule of Civil Procedure 59.04, arguing that the trial court should not have dismissed the
action pursuant to Rule 12.02(6) and instead should have proceeded to render a judgment
declaring the respective rights of the parties. HOA also objected to the fact that counsel
for Developer had prepared the final order and argued that the order did not comport with
the requirements for “party-prepared” orders set forth by the Tennessee Supreme Court in
Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316 (Tenn. 2014).2 HOA further
contended that Developer had presented “improper evidence from outside the pleadings”
during the hearing on the motion to dismiss and that the trial court had awarded attorney’s
fees to Developer without affording HOA an opportunity to cross-examine Developer’s
attorneys or otherwise put on its own proof regarding said fees.

        Developer filed a response in opposition to the motion to alter or amend, asserting
that to the extent the trial court believed that an order on a motion to dismiss was “not the
correct vehicle, it ha[d] the power to alter the Order and, instead title it a final ‘declaratory
judgment.’” Developer posited that the trial court had already ruled “on the legal
interpretation of the documents at issue” and thereby could “grant final relief now, without
further proceedings.” Developer included as an exhibit to its opposition a proposed
“Declaratory Judgment and Order.” The trial court subsequently entered an order on May
2, 2023, denying the motion to alter or amend in full and declining to enter Developer’s
proposed declaratory judgment order. Instead, the trial court sua sponte amended its order
to add that if Developer prevailed “following the exhaustion of all appeals[,]” it would be
entitled to “attorney’s fees and expenses up to $10,000 under Tenn. Code Ann. § 20-12-
119.” HOA timely appealed.

                                           II. Issues Presented

       HOA presents two issues for this Court’s review, which we have combined and
restated as follows:

        1.       Whether the trial court erred by granting Developer’s motion to
                 dismiss and by dismissing HOA’s Petition for Declaratory Judgment.

        Developer presents the following additional issue, which we have restated
slightly:

2
  HOA also asserts on appeal that the party-prepared order was improper. However, because HOA did not
properly include this argument in the issue section of its appellate brief, the issue is waived. See Tenn. R.
App. P. 27(a)(4) (“The brief of the appellant shall contain under appropriate headings . . . a statement of the
issues presented for review[.]”); Hodge v. Craig, 382 S.W.3d 325, 335 (Tenn. 2012) (“[A]n issue may be
deemed waived when it is argued in the brief but is not designated as an issue in accordance with [Tennessee
Rule of Appellate Procedure] 27(a)(4)”); see also Forbess v. Forbess, 370 S.W.3d 347, 356 (Tenn. Ct. App.
2011) (“We may consider an issue waived where it is argued in the brief but not designated as an issue.”).
                                                      5
       2.     Whether the trial court properly interpreted the Declaration,
              Assignment, and Waiver documents in making its declaratory
              judgment ruling.

                                  III. Standard of Review

        Generally, our standard of review is de novo with a presumption of correctness as
to the trial court’s findings of fact unless the preponderance of the evidence is otherwise.
Tenn. R. App. P. 13(d); McCarty v. McCarty, 863 S.W.2d 716, 719 (Tenn. Ct. App. 1992).
No presumption of correctness attaches to the trial court’s legal conclusions. Union
Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn.1993).

      Regarding our review of a trial court’s dismissal of an action pursuant to Tennessee
Rule of Civil Procedure 12.02(6), our Supreme Court has explained:

               A Rule 12.02(6) motion to dismiss only seeks to determine whether
       the pleadings state a claim upon which relief can be granted. Such a motion
       challenges the legal sufficiency of the complaint, not the strength of the
       plaintiff’s proof, and, therefore, matters outside the pleadings should not be
       considered in deciding whether to grant the motion. In reviewing a motion
       to dismiss, the appellate court must construe the complaint liberally,
       presuming all factual allegations to be true and giving the plaintiff the benefit
       of all reasonable inferences. It is well-settled that a complaint should not be
       dismissed for failure to state a claim unless it appears that the plaintiff can
       prove no set of facts in support of his or her claim that would warrant relief.
       Great specificity in the pleadings is ordinarily not required to survive a
       motion to dismiss; it is enough that the complaint set forth “a short and plain
       statement of the claim showing that the pleader is entitled to relief.”

Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn. 2002) (internal
citations omitted).

       When, as here, the trial court has dismissed a declaratory judgment action pursuant
to Rule 12.02(6):

       [T]he standard by which we review a Rule 12 dismissal of the complaint is
       somewhat different from that applied in most civil actions. This is because,
       as this court explained in Cannon Cnty. Bd. of Educ. v. Wade, 178 S.W.3d
       725 (Tenn. Ct. App. 2005), Tennessee Rule of Civil Procedure 12.02(6)
       motions to dismiss are seldom appropriate in declaratory judgment actions
       provided there is an actual controversy that may be resolved by means of a
       declaration of the parties’ respective rights. Id. at 730 (citing Glover v.
       Glendening, 376 Md. 142, 829 A.2d 532, 539 (Md. 2003)).

                                              6
Blackwell v. Haslam, No. M2011-00588-COA-R3-CV, 2012 WL 113655, at *7 (Tenn. Ct.
App. Jan. 11, 2012).

      We review issues of contract interpretation de novo. See Dick Broad. Co., Inc. of
Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 659 (Tenn. 2013). As this Court has
previously explained:

       In resolving a dispute concerning contract interpretation, our task is to
       ascertain the intention of the parties based upon the usual, natural, and
       ordinary meaning of the contract language. Planters Gin Co. v. Fed.
       Compress & Warehouse Co., Inc., 78 S.W.3d 885, 889-90 (Tenn. 2002)
       (citing Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999)). A
       determination of the intention of the parties “is generally treated as a question
       of law because the words of the contract are definite and undisputed, and in
       deciding the legal effect of the words, there is no genuine factual issue left
       for a jury to decide.” Planters Gin Co., 78 S.W.3d at 890 (citing 5 Joseph
       M. Perillo, Corbin on Contracts, § 24.30 (rev. ed. 1998); Doe v. HCA Health
       Servs. of Tenn., Inc., 46 S.W.3d 191, 196 (Tenn. 2001)). The central tenet of
       contract construction is that the intent of the contracting parties at the time
       of executing the agreement should govern. Planters Gin Co., 78 S.W.3d at
       890. The parties’ intent is presumed to be that specifically expressed in the
       body of the contract. “In other words, the object to be attained in construing
       a contract is to ascertain the meaning and intent of the parties as expressed
       in the language used and to give effect to such intent if it does not conflict
       with any rule of law, good morals, or public policy.” Id. (quoting 17 Am.
       Jur. 2d, Contracts, § 245).

Kafozi v. Windward Cove, LLC, 184 S.W.3d 693, 698 (Tenn. Ct. App. 2005). “Courts must
look at the plain meaning of the words in a contract to determine the parties’ intent. If the
contractual language is clear and unambiguous, the literal meaning controls. . . .” Allmand
v. Pavletic, 292 S.W.3d 618, 630 (Tenn. 2009) (internal citation omitted).

                IV. Dismissal of Declaratory Judgment Action pursuant to
                       Tennessee Rule of Civil Procedure 12.02(6)

       HOA posits that the trial court erred in dismissing its petition for declaratory
judgment pursuant to Tennessee Rule of Civil Procedure 12.02(6) because Tennessee
courts generally disfavor dismissals of declaratory judgment actions for failure to state a
claim upon which relief can be granted. HOA also argues that the trial court did not follow
the standard for a Rule 12 dismissal because it considered facts “outside the pleadings” that
were improperly introduced by Developer in its motion to dismiss, and did not accept all
of HOA’s “factual averments as true.”

                                              7
       Regarding dismissal of a declaratory judgment action pursuant to Tennessee Rule
of Civil Procedure 12.02(6), this Court has explained:

      Tenn. R. Civ. P. 12.02(6) motions are rarely appropriate in declaratory
      judgment actions. See Glover v. Glendening, 376 Md. 142, 829 A.2d 532,
      539 (2003). The prevailing rule is that when a party seeking a declaratory
      judgment alleges facts demonstrating the existence of an actual controversy
      concerning a matter covered by the declaratory judgment statute, the court
      should not grant a Tenn. R. Civ. P. 12.02(6) motion to dismiss but, instead,
      proceed to render a declaratory judgment as the facts and law require.
      Hudson v. Jones, 278 S.W.2d 799, 804 (Mo. Ct. App. 1955); 1 Walter H.
      Anderson, Actions for Declaratory Judgments, § 318, at 740 (2d ed. 1951).

              The Tennessee Supreme Court followed this protocol in Frazier v.
      City of Chattanooga, 156 Tenn. 346, 1 S.W.2d 786 (1928). A resident of
      Chattanooga sought a declaratory judgment concerning whether a private act
      conferring powers on the City of Chattanooga had been repealed by
      implication by another private act. The City filed a demurrer, being the
      former equivalent of today’s Tenn. R. Civ. P. 12.02(6) motion to dismiss for
      failure to state a claim. Rather than ruling against the resident on the merits
      of the case, the trial court sustained the City’s demurrer (dismissed the
      action). The Tennessee Supreme Court observed: “It seems to us that the
      better practice in a case brought under the Declaratory Judgment Law . . . is
      to enter a decree, sometimes referred to as a ‘declaration,’ defining the rights
      of the parties under the issues made, even though such decree is adverse to
      the contentions in the bill.” Frazier, 1 S.W.2d at 786.

              The purpose of a declaratory judgment action is to resolve a dispute,
      afford relief from uncertainty with respect to rights, status, and other legal
      relations. Snow v. Pearman, 222 Tenn. 458, 436 S.W.2d 861, 863 (1968);
      Tenn. Code Ann. § 29-14-103 (2000). The fact that the party seeking
      declaratory relief is not entitled to the judgment sought (that it is on the losing
      side of the controversy) does not mean that the parties are not entitled to the
      relief from uncertainty that a declaratory judgment affords. Thus, a party
      seeking a declaratory judgment is not required to allege facts in its complaint
      demonstrating that it is entitled to a favorable decision. Maguire v. Hibernia
      Savings & Loan Society, 23 Cal.2d 719, 146 P.2d 673, 678 (1944) (holding
      a complaint for declaratory relief which recites the dispute between the
      parties and prays for a declaration of rights, states facts sufficient to
      constitute a cause of action against a motion to dismiss for insufficiency of
      the complaint although it is on the wrong side of the controversy); see also

                                              8
       State v. Brown & Williamson Tobacco Corp., 18 S.W.3d 186 (Tenn. 2000)
       (holding the essential element to be a justiciable controversy exists.)

Cannon Cnty. Bd. of Educ. v. Wade, 178 S.W.3d 725, 730 (Tenn. Ct. App. 2005).

       Significantly, both parties rely heavily on Wade in their appellate briefs to argue
that the better practice in a declaratory judgment action is for the trial court to declare the
respective rights of the parties. We agree that Wade and other relevant case law stands for
the principle that in a declaratory judgment action, a trial court should, when appropriate,
declare the respective rights of the parties in order to grant parties “the relief from
uncertainty that a declaratory judgment affords.” Id.; see also Parsley v. City of
Manchester, No. M2021-00200-COA-R3-CV, 2021 WL 6139210, at *4-5 (Tenn. Ct. App.
Dec. 20, 2021); Karsonovich v. Kempe, No. M2017-01052-COA-R3-CV, 2018 WL
1091735, AT *2-5 (Tenn. Ct. App. Feb. 27, 2018) (reversing the trial court’s dismissal of
the declaratory judgment complaint pursuant to Rule 12.02(6) but affirming the trial court’s
declaration on the merits); Blackwell, 2012 WL 113655, at *1, 7-8 (relying on Wade and
reversing the trial court’s Rule 12.02(6) dismissal of a declaratory judgment action).

        In Blackwell, this Court considered an appeal of a trial court’s dismissal of a
declaratory judgment action pursuant to Rule 12.02(6) wherein the trial court did not
declare the parties’ respective rights. See 2012 WL 113655, at *9. This Court reversed
the trial court’s Rule 12.02(6) dismissal, reinstated the complaint for declaratory judgment,
and remanded the matter to the trial court to determine the respective rights of the parties.
Id. at *10. The Blackwell Court explained that its review on appeal was “hampered” by
the trial court’s dismissal of the matter “without an expressed declaration of the parties’
respective rights.” Id. at *9 (citing Wade, 178 S.W.3d at 730 and Frazier, 1 S.W.2d at
786).

        By contrast, in Karsonovich, the trial court had dismissed a post-divorce declaratory
judgment complaint on the defendant’s Rule 12.02(6) motion, granted the defendant her
attorney’s fees pursuant to Tennessee Code Annotated § 20-12-119(c), and then proceeded
to declare the rights of the parties, specifically that the alimony provision at issue was
unambiguous and not violative of public policy. Karsonovich, 2018 WL 1091735, at *1.
On appeal, the Karsonovich Court reversed the trial court’s Rule 12.02(6) dismissal and
related grant of attorney’s fees, but, after conducting its own independent review, affirmed
the trial court’s ruling on the merits of the declaratory judgment complaint. Id. In so
determining, the Karsonovich Court concluded:

              The trial court granted Ms. Kempe’s motion to dismiss and then ruled
       on the merits of the complaint. This illustrates that there was a controversy
       for the trial court to decide. Therefore, the trial court erred in granting Ms.
       Kempe’s motion to dismiss because there was an actual controversy which it
       subsequently ruled on.

                                              9
              Next, we elect to rule on the merits of Mr. Karsonovich’s petition.
       Generally, in order to preserve judicial resources, we prefer to rule on the
       merits of the case. Blackwell, 2012 WL 113655, at *10 (citing Lindsay v.
       Drane, 285 S.W. 705 (Tenn. 1926), and Parlor v. Buckner, 300 S.W. 565
       (Tenn. 1927). The Blackwell court chose not to rule on the merits because
       the case presented constitutional issues to which the State had yet to respond
       and it was possible the court needed to consider additional facts. However,
       the present case is distinguishable because both parties briefed the issues and
       there does not appear to be a need for any additional facts.

Karsonovich, 2018 WL 1091735, at *3.

        In the instant case, the trial court’s actions were more similar to those in
Karsonovich than in Blackwell because here, as in Karsonovich, the trial court dismissed
the case pursuant to Rule 12.02(6) and then proceeded to declare the parties’ respective
rights in its order of dismissal after both parties had fully briefed the issues and all relevant
facts had been presented.

        The facts and procedure in Parsley, 2021 WL 6139210, are instructive because they
are very similar to the case at bar. In Parsley, the plaintiff had filed a complaint for
declaratory judgment seeking a ruling that he, as the “next highest vote getter” in the most
recent election for the Board of Aldermen of the City of Manchester, was entitled to fill a
“mid-term vacancy on the Board” when a seat became vacant. See id. at *1. The trial
court, upon motion by the city, had dismissed the complaint for failure to state a claim after
determining that the unambiguous language of the city’s charter document did not entitle
the plaintiff to the vacant seat. Id. at *3. The trial court explained that it would not have
dismissed the complaint had the court “interpreted the Charter language to entitle Plaintiff
to the Alderman position or [found] that it was unclear whether or not Plaintiff was entitled
to the position[.]” Id.

       On appeal, the Parsley Court determined that the trial court’s decision to dismiss
the declaratory judgment complaint pursuant to Rule 12 constituted procedural error but
also discerned that such error was harmless because the court had contemporaneously
declared the rights of the parties:

              “A final judgment from which relief is available and otherwise
       appropriate shall not be set aside unless, considering the whole record, error
       involving a substantial right more probably than not affected the judgment
       or would result in prejudice to the judicial process.” Tenn. R. App. P. 36(b).
       As the City correctly contends, the procedural error in disposing of the case
       under Rule 12.02(6) was harmless because the trial court essentially
       “declared” that Plaintiff had no rights under the Charter as “the next highest

                                               10
       vote getter.” Moreover, we agree with the trial court’s determination that
       Plaintiff is not entitled to fill the vacancy.

Id. at *7. After conducting an independent review of the merits of the case, the Parsley
Court remanded the matter to the trial court with instructions for the court to enter a
judgment holding that the plaintiff was not entitled to fill the Board vacancy as established
by the plain language of the city charter. Id.

       As in Parsley, the trial court herein dismissed HOA’s complaint for declaratory
judgment pursuant to Rule 12.02(6) while also declaring certain rights of the parties upon
determining that the Declaration, Assignment, and Waiver were unambiguous and could
be interpreted as a matter of law. Specifically, the trial court ruled:

             The three documents [the Declaration, the Assignment, and the
       Waiver] are unambiguous and must therefore be interpreted as a matter of
       law.

             [Developer] retained [ARC] control over all lots in [Timberlake]
       through the [Declaration].

             The Assignment expressly assigned [HOA] authority to appoint
       members to the [ARC] only for those lots that either [Developer] or
       Smithbilt, LLC did not own.

            The Assignment also expressly states that [Developer] retained its
       [ARC] authority over the lots it or Smithbilt, LLC owns.

              Because both [Developer] and the President of [HOA] signed the
       Assignment, [HOA] is estopped from arguing that [Developer] assigned all
       authority to appoint members to the [ARC].

              As an alternative to the aforementioned factual findings, the Waiver
       memorializes a valid exercise of [Developer’s] power pursuant to Article
       XXIII of the [Declaration]. According to its plain language of the Waiver,
       [Developer] and Smithbilt, LLC are not required to submit plans and
       specifications to the [ARC], are not prohibited from erecting or modifying
       buildings on Lots owned by either even absent [ARC] approval, are not
       required to obtain [ARC] approval of any building or landscaper, and are not
       required to permit the [ARC] to inspect the buildings on any Lot for which
       Article XII of the [Declaration] conditions and restrictions have been waived.

(Paragraph numbering omitted.) The trial court further determined that HOA was not
entitled to a number of the declarations it sought, such as that there could only be one ARC,

                                             11
that Developer had assigned authority over all Timberlake lots to HOA, and that the Waiver
was null and void. The court also concluded that Developer was entitled to recover costs
and attorney’s fees pursuant to Tennessee Code Annotated § 20-12-119(c).

        Upon careful review, we determine that HOA’s complaint for declaratory judgment
sufficiently alleged facts demonstrating the existence of an actual controversy
contemplated by the declaratory judgment statute. Therefore, the trial court erred in
dismissing this action pursuant to Rule 12.02(6). Accordingly, we vacate the portion of
the trial court’s order dismissing the action for failure to state a claim upon which relief
can be granted and also vacate the trial court’s award to Developer of attorney’s fees
pursuant to Tennessee Code Annotated § 20-12-119(c).3 Because the trial court’s dismissal
of the action is vacated, we do not reach the arguments presented by HOA that in
dismissing HOA’s complaint, the trial court improperly considered matters outside the
pleadings and failed to accept all of HOA’s factual averments as true.

        However, despite the procedural error in dismissing the action pursuant to
Tennessee Rule of Civil Procedure 12.02(6), we find, after conducting our own review on
the merits, see Karsonovich, 2018 WL 1091735, at *3; Parsley, 2021 WL 6139210, at *5,
that the trial court nonetheless ultimately accomplished the correct result in its
interpretation of the documents in question and its declaration of the parties’ respective
rights thereunder. For this reason, we affirm that portion of the trial court’s order.4

        Specifically, we agree with the trial court that the Declaration, Assignment, and
Waiver documents are unambiguous as a matter of law. We further determine that the trial
court’s conclusions regarding the rights of the parties as established by the plain language
of those documents are proper. See also Dick Broad. Co., Inc. of Tenn. v. Oak Ridge FM,
Inc., 395 S.W.3d 653, 659 (Tenn. 2013) (this Court reviews legal conclusions de novo with
no presumption of correctness); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91
(Tenn.1993) (this Court reviews issues of contract interpretation de novo),

3
    Tennessee Code Annotated § 20-12-119(c) provides, in pertinent part:

          [I]n a civil proceeding, where a trial court grants a motion to dismiss pursuant to Rule 12
          of the Tennessee Rules of Civil Procedure for failure to state a claim upon which relief
          may be granted, the court shall award the party or parties against whom the dismissed
          claims were pending at the time the successful motion to dismiss was granted the costs and
          reasonable and necessary attorney’s fees incurred in the proceedings as a consequence of
          the dismissed claims by that party or parties.

Because we now vacate that portion of the trial court’s order dismissing HOA’s complaint pursuant to Rule
12, we also vacate that portion of the trial court’s order awarding to Developer its attorney’s fees and costs
pursuant to this statute.
4
 This Court may affirm the trial court even if the trial court reached the correct result for the wrong reason.
Torres v. Bridgestone/Firestone N. Am. Tire, LLC, 498 S.W.3d 565, 577 (Tenn. Ct. App. 2016).
                                                     12
        Furthermore, we note that Article XII of the Declaration, entitled “Architectural
Review Committee [ARC],” provides that Developer “shall continue to have the exclusive
authority to appoint the Members of the [ARC] until such time as it shall in writing
expressly confer such authority to [HOA].” Clearly, this portion of the Declaration
afforded Developer full control of the ARC appointments concerning all lots in Timberlake
prior to execution of the Assignment. Nothing in Article XII or the Declaration as a whole
prohibits the formation of more than one ARC, and nothing in the Declaration limits
Developer’s ability to retain authority respecting lots that it or Smithbilt, LLC, owns. The
provision governing assignments in Article XXIV supports this conclusion because it states
that “any or all” of Developer’s rights and powers in the Declaration “may be assigned to
any one or more corporations or assigns[.]” We interpret the plain language of Article
XXIV to mean that Developer could properly assign its rights and powers to HOA either
partially (“any”) or as a whole (“all”). See Allmand, 292 S.W.3d at 630. Thus, the
Declaration did not prohibit Developer from assigning ARC control to HOA for some
Timberlake lots while retaining respective authority over others.

       Accordingly, the Assignment, which was signed by representatives from both
Developer and HOA, properly reserves to Developer the authority to control the lots owned
by Developer or Smithbilt, LLC. Upon careful review, we determine that the Assignment
is unambiguous and expressly states that Developer retained authority respecting those lots
owned by Developer or Smithbilt, LLC.5

        Relative to the Waiver, Article XXIII of the Declaration provides that Developer
“reserves the right in its absolute discretion at any time to annul, waive changes or modify
any of the restrictions, conditions or covenants contained [in the Declaration.]” The
Waiver executed by Developer purports to waive “all restrictions and conditions in Article
XII . . . of the Declaration otherwise applicable to those Lots owned by [Developer] or
Smithbilt LLC[.]” In stating plainly that Developer can waive “any of the restrictions,
conditions or covenants” contained in the Declaration, Article XXIII contemplates such
waiver of the restrictions and conditions of Article XII. We therefore agree with the trial
court that the Waiver “memorialized a valid exercise of Developer’s power pursuant to
Article XXIII[.]”

        Because we find no error in the trial court’s conclusion that the Declaration,
Assignment, and Waiver documents are unambiguous, and because we further determine
that the trial court correctly interpreted the plain language of those documents, see Allmand,

5
  Because we find that the Assignment is unambiguous and its express language provides that Developer
retained ARC authority respecting lots owned by Developer or Smithbilt, LLC, we do not reach the issue
of whether the trial court properly found that HOA was “estopped” from arguing this point. Regardless,
HOA did not raise this argument on appeal, and it is therefore waived. See Dye v. Witco Corp., 216 S.W.3d
317, 321 (Tenn. 2007) (“[I]ssues raised for the first time on appeal are waived.”) (internal quotation marks
omitted).
                                                    13
292 S.W.3d at 630, we conclude that the trial court properly determined that Developer
only assigned ARC authority to HOA for the lots not owned by either Developer or
Smithbilt, LLC. We further conclude that the Waiver constituted a proper exercise of
Developer’s authority as it was contemplated by Article XXIII of the Declaration.
Accordingly, we affirm the trial court’s declaration of the parties’ rights as established by
its interpretation of the unambiguous language of the Declaration, Assignment, and Waiver
documents. See Parsley, 2021 WL 6139210, at *7.

                                V. Attorney’s Fees on Appeal

        In the argument section of its brief, Developer requests an award of attorney’s fees
and expenses incurred on appeal. However, Developer did not properly raise this argument
in the statement of the issues contained in its principal brief. It is well settled that “an issue
may be deemed waived when it is argued in the brief but is not designated as an issue in
accordance with [Tennessee Rule of Appellate Procedure] 27(a)(4).” Hodge v. Craig, 382
S.W.3d 325, 335 (Tenn. 2012); see also Forbess v. Forbess, 370 S.W.3d 347, 356 (Tenn.
Ct. App. 2011) (“We may consider an issue waived where it is argued in the brief but not
designated as an issue.”). Therefore, Developer’s request for attorney’s fees on appeal is
deemed waived.

                                        VI. Conclusion

        For the foregoing reasons, the trial court’s dismissal of HOA’s petition for
declaratory judgment pursuant to Tennessee Rule of Civil Procedure 12.02(6) and the trial
court’s award of costs and attorney’s fees to Developer pursuant to Tennessee Code
Annotated § 20-12-119(c) are vacated. In all other respects, the trial court’s declaration of
the parties’ rights and responsibilities under the Declaration, the Assignment, and the
Waiver documents is affirmed. Developer’s request for an award of attorney’s fees on
appeal is denied as waived. This case is remanded with instructions for the trial court to
enter a judgment declaring the rights of the parties as outlined in its order entered on
January 30, 2023. Costs on appeal are assessed one-half to the appellant, HOA, and one-
half to the appellees, Developer and Smithbilt, LLC.

                                                    s/Thomas R. Frierson, II
                                                    _______________________________

                                                    THOMAS R. FRIERSON, II, JUDGE

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