Court Opinion

ID: 1048260
Source: CourtListenerOpinion
Date Created: 2013-10-08 02:55:36.766023+00
Date Added: 2024-06-11T11:51:55.204528
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT JACKSON
                               January 25, 2011 Session

RENASANT BANK, a Mississippi Charter Bank Doing Business in Tennessee
             v. WILLIAM R. HYNEMAN, ET AL.,

              Direct Appeal from the Circuit Court for Shelby County
           No. CT-003753-08     D.J. Alissandratos, Judge by Designation

                No. W2010-01387-COA-R3-CV - Filed March 7, 2011

This is a breach of contract case. The trial court found two defendants liable for breaches
of continuing guaranty agreements related to a construction loan and awarded judgment for
the plaintiff. The trial court, however, did not adjudicate a pending cross-complaint.
Although the court attempted to certify the judgment as final pursuant to Rule 54.02 of the
Tennessee Rules of Civil Procedure, the court’s order did not make the express findings
essential to certification. Because the trial court did not properly certify the judgment as
final, we do not have jurisdiction to consider the issues raised before us. We dismiss the
appeal.

               Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed

D AVID R. F ARMER, J., delivered the opinion of the Court, in which A LAN E. H IGHERS, P.J.,
W.S., and J. S TEVEN S TAFFORD, J., joined.

Allan J. Wade and Brandy S. Parrish, Memphis, Tennessee, for the appellant, William R.
Hyneman.

Stephen W. Vescovo and Jonathan Louis May, Memphis, Tennessee, for the appellee,
Renasant Bank.
                                   MEMORANDUM OPINION 1

        This appeal concerns the enforceability of a guaranty agreement.                    The
plaintiff/appellee, Renasant Bank (“Renasant”), made a commercial loan to H.B.O. Holdings,
LLC (“HBO”) in October 2006. The loan agreement provided HBO a $6.7 million revolving
line of credit and a $250,000 provisional letter of credit to use in the development of property
in Fayette County, Tennessee. The defendants in this lawsuit, William R. Hyneman
(“Hyneman”) and Michael Bourne (“Bourne”), each signed a continuing guaranty agreement
(“2006 Guaranty”) in connection with the HBO loan. The 2006 Guaranty made the guarantor
liable for $3.475 million, one-half of the total debt, in the event of HBO’s default.2 In 2007,
Hyneman and Bourne each signed a revised guaranty agreement (“2007 Guaranty”) making
the individual guarantors liable for $4.02 million.

        Renasant filed this action against Hyneman and Bourne alleging breaches of their
separate 2007 Guaranty Agreements. Renasant alleged the defendants’ obligations matured
as a result of the default by HBO on the construction loan, but the defendants had refused to
honor their individual continuing guaranty agreements. Renasant requested damages against
each defendant in the amount of $4.02 million plus interest, expenses, attorney’s fees, and
costs. Hyneman filed an answer alleging in part that Renasant fraudulently induced him to
enter into the 2007 Guaranty and that the 2007 Guaranty was unenforceable due to a lack of
consideration. Hyneman also filed a cross-complaint alleging in part that Bourne and HBO
collectively received loan advances in excess of $2,000,000 which were not used for the
benefit of HBO and that Renasant’s losses were attributable in whole or in part to Bourne.

        On March 9, 2010, the court entered a judgment for Renasant against both defendants
in the total amount of $4.31 million, limiting each defendant’s individual liability to $4.02
million. The court’s order nonetheless did not expressly resolve the issue of attorney’s fees,
which it had reserved at the conclusion of trial for further consideration. Hyneman thereafter
moved to alter or amend the judgment, arguing the March 9 order was not an appealable final

       1
           Rule 10 of the Rules of the Court of Appeals of Tennessee provides:

       This Court, with the concurrence of all judges participating in the case, may affirm, reverse
       or modify the actions of the trial court by memorandum opinion when a formal opinion
       would have no precedential value. When a case is decided by memorandum opinion it shall
       be designated “MEMORANDUM OPINION”, shall not be published, and shall not be cited
       or relied on for any reason in any unrelated case.
       2
        Hyneman suggests the 2006 Guaranty did not bind him individually as the guarantor because he
executed the agreement as follows: “Guarantor: H.B.O. Holdings LLC By: William R. Hyneman.”

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judgment because it did not adjudicate the issue of attorney’s fees. In its response, Renasant
argued the order was final because the plaintiff had previously waived the issue of attorney’s
fees. On April 23, 2010, the Court entered an amended order stating Renasant waived its
request for attorney’s fees prior to the entry of the March 9 order and communicated waiver
of this issue to Hyneman’s counsel in writing on March 5, 2010. The amended order further
stated it was a “final order for purposes of appeal pursuant to Rule 54.01 of the Tennessee
Rules of Civil Procedure.” 3 Hyneman appealed.

        Hyneman presents two issues for our review concerning the enforceability of the 2007
Guaranty. The dispositive issue, however, concerns this Court’s jurisdiction to consider the
issues presented. “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)). The question of
subject matter jurisdiction is one that appellate courts must consider even if the parties do not
raise the issue. Tenn. R. App. P. 13(b); Osborn v. Marr, 127 S.W.3d 737, 740 (Tenn. 2004).
“[P]arties cannot confer subject matter jurisdiction on a trial or an appellate court by
appearance, plea, consent, silence, or waiver.” Dishmon v. Shelby State Cmty. Coll., 15
S.W.3d 477, 480 (Tenn. Ct. App. 1999) (citing Caton v. Pic-Walsh Freight Co., 364 S.W.2d
931, 933 (Tenn. 1963); Brown v. Brown, 281 S.W.2d 492, 501 (Tenn. 1955)).

         This Court’s subject matter jurisdiction is limited to final judgments except where
otherwise provided by procedural rule or statute. Bayberry Assocs. v. Jones, 783 S.W.2d
553, 559 (Tenn. 1990) (citing Aetna Cas. & Sur. Co. v. Miller, 491 S.W.2d 85, 86 (Tenn.
1973)). An order adjudicating fewer than all the claims, rights, and liabilities of fewer than
all the parties is not a final judgment that is appealable as of right. See Tenn. R. App. P. 3(a).
Rule 3(a) of the Tennessee Rules of Appellate Procedure nevertheless permits parties to
appeal an order that does not adjudicate all of the claims, rights, and liabilities of all parties
if the trial court certifies its judgment as final pursuant to Rule 54.02 of the Tennessee Rules
of Civil Procedure. Rule 54.02 provides:

        When more than one claim for relief is present in an action, whether as a
        claim, counterclaim, cross-claim, or third party claim, or when multiple parties
        are involved, the Court, whether at law or in equity, may direct the entry of a
        final judgment as to one or more but fewer than all of the claims or parties
        only upon an express determination that there is no just reason for delay and

        3
         The trial court’s order is susceptible to two interpretations. The first interpretation is that the order
merely articulated the trial court’s belief that it was a judgment from which an appeal lies as defined in Rule
54.01. The second interpretation is that the court intended to certify the judgment as final pursuant to Rule
54.02. We presume for the purposes of this appeal the trial court intended the latter.

                                                       -3-
       upon an express direction for the entry of judgment. In the absence of such
       determination and direction, any order or other form of decision, however
       designated, that adjudicates fewer than all the claims or the rights and
       liabilities of fewer than all the parties shall not terminate the action as to any
       of the claims or parties, and the order or other form of decision is subject to
       revision at any time before the entry of the judgment adjudicating all the
       claims and the rights and liabilities of all the parties.

Tenn. R. Civ. P. 54.02.

        It is an “absolute prerequisite” to certification under Rule 54.02 that the trial court
direct the entry of a final judgment as to one or more but fewer than all of the claims or
parties and make an express determination that there is no just reason for delay. Fox v. Fox,
657 S.W.2d 747, 749 (Tenn. 1983). Only a proper Rule 54.02 certification creates a
judgment that is appealable as of right. Id. “In the absence of such direction and
determination by the trial judge, the order is interlocutory and can be revised at any time
before the entry of judgment adjudicating all the claims and rights and liabilities of all
parties.” Id. (citing Stidham v. Fickle Heirs, 643 S.W.2d 324, 325 (Tenn. 1982)). An
interlocutory order that does not contain a proper Rule 54.02 certification is not subject to
an appeal as of right. Fagg v. Hutch Mfg. Co., 755 S.W.2d 446, 447 (Tenn. 1988) (citation
omitted).

        This Court discovered upon review of the record that the April 23 amended order was
not a Rule 3(a) final judgment because it did not adjudicate Hyneman’s cross-complaint.4
It further appeared to this Court that the trial court did not properly certify the April 23
amended order as a Rule 54.02 final judgment because it did not contain the requisite express
findings. We accordingly ordered Hyneman to show cause why his appeal should not be
dismissed. Hyneman conceded in his response that the April 23 amended order did not
contain the findings required by Rule 54.02 and deferred to this Court’s judgment on the
issue of appealability. We conclude the April 23 amended order does not contain the
requisite express findings and, thus, is not an appealable judgment. We accordingly dismiss
this appeal.

       4
       We note Hyneman also filed a “Motion to Amend and Supplement Answer and to File Third Party
Complaint.” The record is silent on whether the trial court granted or denied this motion.

                                               -4-
                                      Conclusion

       For the foregoing reasons, we dismiss this appeal for lack of an appealable
judgment. Costs of this appeal are assessed to the appellant, William R. Hyneman, and
his surety for which execution may issue if necessary.

                                                _________________________________
                                                DAVID R. FARMER, JUDGE

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