Court Opinion

ID: 8484380
Source: CourtListenerOpinion
Date Created: 2022-11-17 00:08:06.235925+00
Date Added: 2024-06-11T16:49:53.147402
License: Public Domain

11/16/2022
                       IN THE COURT OF APPEALS OF TENNESSEE
                                    AT NASHVILLE
                              Assigned on Briefs July 1, 2022

     LORI S. FERNANDEZ v. TENNESSEE DEPARTMENT OF REVENUE

                     Appeal from the Circuit Court for Davidson County
                         No. 21c442 Thomas W. Brothers, Judge
                         ___________________________________

                               No. M2021-01417-COA-R3-CV
                           ___________________________________

Lori S. Fernandez (“Appellant”) was employed by the Tennessee Department of Revenue
from 2014 until March 6, 2020, when she resigned. Following her resignation, Appellant
sued the Department and several of its employees (the “Appellees”) for various causes of
action including, inter alia, racial and disability discrimination. Appellees filed a motion
to dismiss which the trial court granted. Thereafter, Appellant filed a Tenn. R. Civ. P. 59
motion to alter or amend the trial court’s order, as well as an amended complaint. The trial
court denied the motion to alter or amend and declined to address the outstanding amended
complaint. Appellant timely appealed to this court. We conclude that the order appealed
from is non-final. Accordingly, this Court lacks subject matter jurisdiction, and the appeal
must be dismissed.

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

KRISTI M. DAVIS, J., delivered the opinion of the Court, in which J. STEVEN STAFFORD,
P.J., W.S., and W. NEAL MCBRAYER, J. joined.

Lori S. Fernandez, White House, Tennessee, Pro se.

Herbert H. Slatery III, Attorney General and Reporter, Andrée Sophia Blumstein, Solicitor
General, and Melissa Brodhag and Shanell L. Tyler, Assistant Attorneys General for the
appellees, Tennessee Department of Revenue, David Gerregano, Rosie McClurkan, Kenya
Watson, and Genna Preston.

                                  MEMORANDUM OPINION1

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

       This Court, with the concurrence of all judges participating in the case, may affirm, reverse
        Appellant was employed by the Tennessee Department of Revenue from 2014
through March 6, 2020, when she resigned. On March 5, 2021, Appellant filed a complaint
against the Appellees in the Circuit Court for Davidson County (the “trial court”).
Appellant alleged causes of action for racial and disability discrimination, retaliation, and
malicious harassment under the Tennessee Human Rights Act (“THRA”), the Americans
with Disabilities Act (“ADA”), and the Tennessee Disability Act (“TDA”). Appellees did
not file an answer but filed a motion to dismiss on April 12, 2021. Appellees asserted that
several of Appellant’s claims were time-barred by statutes of limitation, that the federal
claims were barred by sovereign immunity, and that Appellant failed to state a claim for
which relief could be granted because her allegations were conclusory.

        The trial court granted Appellees’ motion to dismiss on August 19, 2021. Within
thirty days of the entry of that order, Appellant filed a motion to alter or amend, as well as
her first amended complaint. On October 29, 2021, the trial court entered an order denying
Appellant’s motion to alter or amend and determining that the first amended complaint was
of no “procedural effect”:

               In order for a post-judgment amended complaint to have any
       procedural effect, a Plaintiff must first move the Court to set aside its
       judgment, and then move the court for leave to amend. Lee v. State Volunteer
       Mut. Ins. Co., Inc., No. E2002-03127-COA-R3-CV, 2005 WL 123492 at *11
       (Tenn. Ct. App. Jan. 21, 2005). Here, Plaintiff has moved the Court to alter
       or amend its judgment on Defendant’s original Motion to Dismiss, however,
       Plaintiff failed to set a hearing date and this Court never considered the
       motion nor set aside the prior judgment. Accordingly, the previous judgment
       of this Court still stands.

              Considering Plaintiff’s Motion, sua sponte, the Court respectfully
       DENIES Plaintiff’s Motion to Alter or Amend Judgment. Therefore,
       Plaintiff’s First Amended Complaint lacks any procedural effect.

       Appellant timely appealed to this Court.

                                             Issues

       Appellant raises two issues in her principal brief, which we have rephrased and
consolidated: Whether the trial court erred in determining that Appellant’s amended
complaint lacked any procedural effect.

       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-
                                                Discussion

      This appeal concerns Tenn. R. Civ. P. 15.01 and the trial court’s treatment of
Appellant’s first amended complaint, which was filed post-judgment but prior to the
judgment becoming final. Tenn. R. Civ. P. 15.01 provides, as relevant:

                A party may amend the party’s pleadings once as a matter of course
        at any time before a responsive pleading is served or, if the pleading is one
        to which no responsive pleading is permitted and the action has not been set
        for trial, the party may so amend it at any time within 15 days after it is
        served. Otherwise a party may amend the party’s pleadings only by written
        consent of the adverse party or by leave of court; and leave shall be freely
        given when justice so requires.

        This Court recently construed Rule 15.01 under circumstances similar to those in
the case at bar. In Justice v. Nordquist, No. E2020-01152-COA-R3-CV, 2021 WL
2661008 (Tenn. Ct. App. June 29, 2020), the plaintiff sued a psychologist for various
causes of action related to the psychologist’s treatment of the plaintiff’s son during the
course of the plaintiff’s divorce. The psychologist did not file an answer to the original
complaint but did file a motion to dismiss for failure to state a claim for which relief may
be granted. Id. at *1; see also Tenn. R. Civ. P. 12.02. Among other things, the psychologist
argued that he was immune from liability for statements made during judicial proceedings,
that the plaintiff lacked standing, and that the applicable statutes of limitation and repose
had passed. Id. The trial court entered an order granting the motion to dismiss on February
28, 2020. Id. at *2. The plaintiff then filed motions to alter or amend, which were denied
on May 7, 2020. Id. On June 8, 2020, the plaintiff filed his first amended complaint. Id.
Several months later, the plaintiff filed a motion for default because the first amended
complaint was still unanswered. Id. While the defendant psychologist responded to the
first amended complaint with a motion to dismiss, the motion was never ruled on, and the
plaintiff “filed his Notice of Appeal with this Court ‘out of an abundance of caution’ as he
put it in his appellate brief.” Id.

        On appeal, the seminal issue was whether this Court had jurisdiction, insofar as the
first amended complaint was not addressed in the lower court.2 Id. We determined that
because the defendant psychologist never filed a responsive pleading to the original
complaint, the plaintiff’s right to file his first amended complaint remained intact while the

        2
           In civil cases, “an appeal as of right may be taken only after the entry of a final judgment.” In re
Est. of Henderson, 121 S.W.3d 643, 645 (Tenn. 2003) (citing Tenn. R. App. P. 3(a)). A final judgment
adjudicates all “claims, rights, and liabilities of all the parties,” Discover Bank v. Morgan, 363 S.W.3d 479,
488 n.17 (Tenn. 2012), and “resolves all the issues in the case, leaving nothing else for the trial court to
do.” Est. of Henderson, 121 S.W.3d at 645. When an order is non-final, this Court lacks subject matter
jurisdiction to review it. See id.

                                                    -3-
trial court’s judgment was still non-final. As Justice is highly analogous to the present
case, we quote it at length:

             Plaintiff contends that, as Defendant never filed a responsive pleading
      to his original complaint, he had an absolute right to file an amended
      complaint notwithstanding that the Trial Court already entered an order of
      dismissal as to his original complaint. In support of his contention, Plaintiff
      cites Justice v. Nelson, No. E2018-02020-COA-R3-CV, 2019 WL 6716300
      (Tenn. Ct. App. Dec. 10, 2019), no appl. perm. appeal filed, incidentally
      another case involving Plaintiff. In Justice, the trial court granted defendants’
      motion to dismiss plaintiff’s complaint. Id. at *1. Thirty days later, plaintiff
      filed an amended complaint. Id. Acknowledging the legitimacy of this
      procedural move, we noted:

          On September 4, 2018, the trial court entered an order clarifying that
          “Mr. Justice filed a First Amended Complaint not a motion to be
          allowed to file an amended complaint.” (Emphasis in original.) The
          court was reminding defendants that “[a] party may amend the
          party’s pleadings once as a matter of course at any time before a
          responsive pleading is served[.]” See Tenn. R. Civ. P. 15.01; see
          also Adams v. Carter Cty. Memorial Hosp., 548 S.W.2d 307, 308-
          09 (Tenn. 1977) (holding that the plaintiff could file an amended
          complaint as a matter of course after the trial court granted the
          defendants’ motion to dismiss and before that order of dismissal
          became a final judgment). Despite finding that “[t]here was never a
          motion to dismiss the amended complaint[,]” the trial court ruled
          that “[t]he response to the amended complaint reads like a motion to
          dismiss and the Court will consider it a motion to dismiss.” The court
          also requested additional briefing on the issue.

      Justice, 2019 WL 6716300, at *1. The trial court dismissed the lawsuit. Id. at
      *2. On appeal, we held that defendants’ response to plaintiff’s amended
      complaint was not a motion to dismiss in form or in substance, and that the
      trial court erred in effectively dismissing the amended complaint sua
      sponte without adequate justification. Id. at *3, 5. For purposes of the instant
      case, however, the main point from Justice is that this Court has recognized
      a scenario in which a party may file an amended complaint to continue her
      case even though the trial court already has dismissed her original complaint
      if no responsive pleading to the original complaint was filed and the order of
      dismissal has not become final. The first consideration in this scenario is
      whether a responsive pleading has been filed. Here, Defendant filed only a
      motion to dismiss; he never filed an answer. Regarding the effect this has on
      a plaintiff’s ability to amend her complaint, this Court has stated: “[A]

                                            -4-
plaintiff must seek permission from the court to file an amended complaint
only when a responsive pleading has been filed. It is well-settled in
Tennessee that a motion to dismiss is not a responsive pleading.” Mosley v.
State, 475 S.W.3d 767, 774 (Tenn. Ct. App. 2015) (citations omitted).
Defendant’s Motion to Dismiss and to Strike the Complaint does not
constitute a responsive pleading. The next consideration is whether
Plaintiff’s amended complaint was timely filed before the order of dismissal
became final. Regarding the different senses in which a judgment may be
deemed “final,” this Court has stated:

    Generally, “a trial court’s judgment becomes final thirty days after
    its entry unless a party files a timely notice of appeal or specified
    post-trial motion.” Id. (citing State v. Pendergrass, 937 S.W.2d 834,
    837 (Tenn. 1996); Tenn. R. App. P. 4(a)-(c)); see also McBurney v.
    Aldrich, 816 S.W.2d 30, 34 (Tenn. Ct. App. 1991). Before that time,
    the judgment lies “within the bosom of the court” and “may be set
    aside or amended on motion of a party or upon the court’s own
    motion.” McBurney, 816 S.W.2d at 34. It is in this slightly different,
    but substantially related, sense of a final judgment in which the
    doctrine of res judicata is implicated here. This Court has referred
    to this as the concept of “final completion.” Swift v. Campbell, 159
    S.W.3d 565, 573 (Tenn. Ct. App. 2004); see also Lawrence A.
    Pivnick, Tennessee Circuit Court Practice § 27:9 n. 22 (2010). In
    this sense, then, a judgment may be considered “final” in order to
    confer jurisdiction on an appellate court pursuant to Tennessee Rules
    of Appellate Procedure Rule 3(a), while not being “final” for
    purposes of res judicata because such an appeal is pending.

    This is, in fact, the rule in Tennessee, where a “‘a judgment is not
    final and res judicata where an appeal is pending.’” Creech [v.
    Addington], 281 S.W.3d [363,] . . . 377-78 [(Tenn. 2009)]
    (quoting McBurney, 816 S.W.2d at 34); see also Freeman v. Marco
    Transp. Co., 27 S.W.3d 909, 913 (Tenn. 2000). Our Supreme Court,
    citing the Restatement (Second) of Judgments § 13 cmt. f, has noted
    that Tennessee’s rule is a minority position and that the predominant
    view in other jurisdictions is that the “taking of an appeal does not
    affect the finality of a judgment for res judicata purposes.” Creech,
    281 S.W.3d at 378 n. 17 (collecting cases from other
    jurisdictions). However, it is an inescapable conclusion that, in
    Tennessee, a judgment from a case in which an appeal is pending is
    not final and cannot be res judicata until all appellate remedies have
    been exhausted.

                                    -5-
       In re Shyronne D.H., No. W2011-00328-COA-R3-PT, 2011 WL 2651097,
       at *6 (Tenn. Ct. App. July 7, 2011), no appl. perm. appeal filed (footnote
       omitted).

       On May 7, 2020, the Trial Court denied Plaintiff’s motions to alter or amend.
       Plaintiff filed his amended complaint on June 8, 2020, within the time for
       appeal (the thirty-day mark landed on a Saturday; the amended complaint
       was filed that Monday). For this thirty-day period, the Trial Court’s order
       remained non-final and ‘within the bosom of the court,’ thus subject to
       change or appeal. As was the scenario in Justice, Plaintiff’s timely filing of
       an amended complaint when no responsive pleading was filed had the effect
       of keeping the case alive in the Trial Court. However, in the present case, the
       Trial Court never ruled on Plaintiff’s amended complaint. Therefore, we lack
       a final judgment and, consequently, subject matter jurisdiction to hear this
       appeal.

Justice, 2021 WL 2661008, at *3–4.

        On appeal, Appellant argues that Justice is highly analogous to the present case and
that the trial court erred in treating Appellant’s first amended complaint as “lack[ing] any
procedural effect.” On the other hand, Appellees argue that the trial court correctly
determined that the judgment of dismissal must have been set aside for the first amended
complaint to become operative.

       We understand the difficulties created by parties filing an amended complaint post-
judgment. Indeed, prior to its amendment in 2009, the federal analog to Rule 15.01 was
the same as our current rule regarding amended complaints as of right, and the issue now
before us caused confusion amongst the federal courts.3 Nonetheless, we agree with

       3
           The commentary to Federal Rule of Civil Procedure 15 provides:

       Under the prior version of Rule 15, it was common for plaintiffs to attempt to amend their
       complaints “as of right” after the court had granted a motion to dismiss under Rule
       12(b)(6). Technically, the window for the amendment was still open because the defendant
       had not yet answered (under the old rule, only the filing of an answer closed the time to
       amend as of right), but courts understandably puzzled over whether an amendment as of
       right was appropriate under those circumstances. Under the old scheme, some cases
       asserted that the right to amend once as a matter of course terminated upon
       dismissal. Some decisions seemed to say that the right to amend once as a matter of course
       continued but that the court nevertheless could deny the amendment if it would be futile.
       Other decisions held that the right to amend once as a matter of course continued during
       the period between when the court granted the motion to dismiss and when the court
       entered final judgment. Regardless of which approach applied, however, once the court
       entered final judgment, the party seeking to amend needed to seek post-judgment relief
       under Rule 59 or Rule 60.

                                                  -6-
Appellant that there is no meaningful difference in this case and Justice. 2021 WL
2661008. Rule 15.01 unequivocally provides that a complaint may be amended “once as
a matter of course at any time before a responsive pleading is served.” Tenn. R. Civ. P.
15.01. And this Court made clear in Justice that the rule contemplates post-judgment first
amended complaints when two criteria are satisfied: 1) no responsive pleading has been
filed, and 2) the first amended complaint is filed within thirty days of the entry of the
judgment, such that the judgment is not yet final and still “within the bosom” of the trial
court. 2021 WL 2661008, at *3 (quoting In re Shyronne D.H., 2011 WL 2651097, at *6).

        Appellees argue that Justice is distinguishable from the present case, and that
Carson v. Daimlerchrysler Corp., No. W2001-03088-COA-R3-CV, 2003 WL 1618076
(Tenn. Ct. App. Mar. 19, 2003), is actually controlling. In Carson, a Chrysler customer
filed suit against the company over an allegedly defective vehicle. Id. at *1. She alleged
causes of action for unjust enrichment, indemnity, breach of warranty and violations of the
Tennessee Consumer Protection Act, and requested plaintiff class certification. Id. There
were no allegations in the plaintiff’s complaint that she was actually injured as a result of
her car’s defects. Id. DaimlerChrysler moved to dismiss for lack of subject matter
jurisdiction. Id. The trial court “dismissed the cause of action for mootness and based on
the primary jurisdiction doctrine. The trial court further addressed [the plaintiff’s]
substantive claims and awarded DaimlerChrysler’s motion to dismiss for failure to state a
claim.” Id. Although the timeline is not entirely clear from the opinion, at some point
following entry of the judgment, the plaintiff sought leave to amend her complaint to add
another plaintiff to the suit. Id. at *5. The trial court did not allow the amendment, which
the plaintiff challenged on appeal. Id. This Court agreed with the trial court, explaining
that a court’s decision to deny leave to amend is discretionary, but is “tempered by the
Tennessee Rules of Civil Procedure, which provide that leave to amend shall be freely
given when justice so requires.” Id. (citing Tenn. R. Civ. P. 15.01). The Carson court
noted that “[s]ome of the factors to be considered by the court in considering a motion to
amend include: undue delay in filing; lack of notice to the opposing party; bad faith by the
moving party, repeated failure to cure deficiencies by previous amendments, undue
prejudice to the opposing party, and futility of amendment.” Id. (citing Merriman v. Cont’l
Bankers Life Ins. Co., 599 S.W.2d 548, 559 (Tenn. Ct. App. 1979)). The court ultimately
held that justice did not require “the trial court to grant [the plaintiff’s] post-
judgment motion to amend the complaint to add an additional plaintiff[,]” explaining that
“[i]n order to take further action on this case, including granting [the plaintiff’s] requested
motion to amend, the trial court would first have had to set aside or vacate its final order
dismissing the cause of action.” Id. As “there was no basis to vacate the court’s judgment
dismissing this case[,]” we upheld the trial court’s ruling. Id.

       Because the new version of Rule 15(a) cuts off the ability to amend as of right 21 days after
       service of a Rule 12(b)(6) motion, this particular problem is not likely to occur.

       Fed. R. Civ. P. 15.01, Rules and Commentary (Feb. 2022 Update) (footnotes omitted).

                                                  -7-
        The circumstances of this case are more analogous to Justice than they are to
Carson. Indeed, procedurally, the case before us is almost indistinguishable from Justice.
While in Carson the issue on appeal was whether the trial court erred in denying the
plaintiff’s motion for leave to amend, here, Justice tells us that Appellant was not required
to seek leave to amend because no responsive pleading was ever filed by Appellees. 2021
WL 2661008, at *4. The analysis employed in Carson is inapposite, then, insofar as the
factors regarding whether leave to amend should be granted do not apply to a first amended
complaint filed as a matter of right. Id.

        Appellees also suggest that the present case is different from Justice because
Appellees sought dismissal for reasons other than Appellant’s failure to properly state
claims, such as immunity and statutes of limitation. As such, Appellees note that
amendment would be futile. This was also true in Justice, as the defendant in that case
sought dismissal based on statutes of limitation and repose, and on the basis that statements
made during the course of judicial proceedings are shielded by immunity. Id. at *1. Futility
of amendment played no role in our analysis in Justice because the amended complaint at
issue was a first amended complaint, filed as a matter of right prior to service of a
responsive pleading. Nor did it matter in Justice that the plaintiff attempted,
unsuccessfully, to have the judgment of dismissal altered or amended pursuant to Rule 59.
Id. at *2.

       Again, while we are cognizant of the practical issues created by Justice v. Nordquist,
the present case is highly analogous, and a plain reading of Tenn. R. Civ. P. 15.01 is
congruous with Justice. See Fair v. Cochran, 418 S.W.3d 542, 543 (Tenn. 2013) (noting
that “the rules of statutory construction guide” interpretation of the Rules of Civil
Procedure, and that “if the language is unambiguous, we simply apply the plain meaning
of the words used”). Further, Appellant has appropriately raised this issue in her principal
brief. Under these circumstances, we conclude that the trial court erred in determining that
Appellant’s first amended complaint “lacks any procedural effect.” As we did in Justice,
we must conclude that the outstanding first amended complaint renders this an appeal from
a non-final order, meaning this Court lacks subject matter jurisdiction, and the appeal must
be dismissed.

                                        Conclusion

       This Court lacks subject matter jurisdiction over this appeal, and the appeal is
dismissed. This case is remanded to the Circuit Court for Davidson County. Costs of this
appeal are taxed to the Appellees.

                                                  _________________________________
                                                  KRISTI M. DAVIS, JUDGE

                                            -8-