                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                   MARCH 3, 2005 Session

      CITY OF NEW JOHNSONVILLE v. KEVIN E. HANDLEY, ET AL.
                                 and
           GENE PLANT, ET AL. v. KEVIN E. HANDLEY, ET AL.

               Direct Appeal from the Chancery Court for Humphreys County
                Nos. CH-01-179 & CH-01-211     Robert E. Burch, Chancellor



                    No. M2003-00549-COA-R3-CV - Filed August 16, 2005


This appeal involves protracted litigation over a parcel of land conveyed by the City of New
Johnsonville, Tennessee, to a member of the New Johnsonville City Council. The mayor, on behalf
of the city, subsequently filed suit against the councilman seeking to nullify the transaction. During
the pendency of that litigation, several taxpayers filed their own suit against the councilman alleging
the same causes of action set forth in the city’s complaint. The city and the councilman ultimately
settled their lawsuit. The taxpayers’ lawsuit continued, ultimately naming the city as a defendant.
The trial court partially granted the defendants’ motions for summary judgment by ruling that the
taxpayers did not have standing to contest the land transaction between the city and the councilman.
The court ruled that the taxpayers did have standing to continue with their other causes of action
concerning allegations that the councilman engaged in illegal business transactions with the city.
The taxpayers subsequently took a voluntary nonsuit on their remaining claims and filed an appeal
to this Court to contest the trial court’s grant of summary judgment on their claim regarding the land
transaction. We vacate the trial court’s decision regarding the land transaction, and we remand for
further proceedings not inconsistent with this opinion.

  Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and
                                        Remanded

ALAN E. HIGHERS, J., delivered the opinion of the court, in which DAVID R. FARMER , J., joined, and
HOLLY M. KIRBY, J., concurred separately.

R. Eric Thornton, Dickson, TN, for Appellants

T. Holland McKinnie, City Attorney, Franklin, TN; Michael R. Hill, Milan, TN, for Appellee, City
of New Johnsonville, TN

Benjamin C. Regen, Dickson, TN, for Appellees, Kevin E. Handley & Gloria J. Handley
Stephen D. Wakefield, Memphis, TN, for Appellee, E. I. Dupont De Nemours and Company

John Lee Williams, Robert I. Thomason, Jr., Waverly, TN, for Appellee, Volunteer Title
Company, Inc., Trustee

Lewis L. Cobb, Jerry P. Spore, J. Brandon McWherter, Jackson, TN, for Appellee, Union
Planters Bank


                                                  OPINION

                                                       I.
                         FACTUAL BACKGROUND AND PROCEDUR AL HISTORY


        This appeal involves protracted litigation between numerous parties concerning the transfer
of a parcel of land located in New Johnsonville, Humphreys County, Tennessee. The facts, as set
forth in over 2,000 pages of technical record, are largely undisputed.

        In 1986, Mr. and Mrs. E. W. Lucas (the “Lucases”) conveyed, as a gift, approximately eighty
(80) acres of property (the “Lucas Property”) located in the City of New Johnsonville (“City”) to the
City. Although not expressly stated in the deed, the Lucases and the City apparently reached an oral
agreement that the City would use the property for industrial development. Specifically, the City
agreed to convey the Lucas Property at no cost to entities desiring to engage in industrial and/or
commercial development on the Lucas Property for the overall benefit of the City.

        The City subsequently created an industrial park on the Lucas Property by conveying several
tracts of land to various industries at no cost. In approximately July of 1999, Mayor Lawrence A.
Hethcoat (“Mayor Hethcoat”)1 began negotiating with E. I. DuPont de Nemours & Company
(“DuPont”), an already existing industry in the City, about locating its new warehouse and
distribution facility in the City’s industrial park. DuPont expressed its desire to have someone else
build the facility on the property which DuPont would, in turn, lease. The City offered to convey
a portion of the Lucas Property to an entity selected by DuPont to build the facility.

        During the course of the City’s negotiations with DuPont, Kevin E. Handley (“Councilman
Handley”) served as a member of the New Johnsonville City Council (“City Council”).2 Councilman
Handley alleged that, in August of 1999, he had a chance meeting with a DuPont employee at a local
restaurant. Councilman Handley learned from the employee that DuPont had decided to accept the
City’s offer. During the course of their conversation, Councilman Handley inquired about bidding


       1
           Mayor Hethcoat served as Mayor of New Johnsonville from 1988 to 2000.

       2
           Councilman Handley took office in September of 1998.

                                                      -2-
on the construction of the DuPont facility. In September of 1999, DuPont mailed Councilman
Handley a “Request for Proposal” form. Councilman Handley completed his bid proposal and
submitted it to DuPont. On November 1, 1999, DuPont sent a letter to Councilman Handley
notifying him that it had, in essence, selected his bid proposal over the others submitted.

        Thereafter, Councilman Handley communicated to Mayor Hethcoat that he had been selected
by DuPont to build the facility. Mayor Hethcoat convened a special called meeting of the City
Council on November 19, 1999, to discuss conveying a portion of the Lucas Property to Councilman
Handley and his wife (along with Councilman Handley, collectively referred to as “the Handleys”).
Councilman Handley came to the meeting and informed the other members of the City Council that
he had been selected to build the DuPont facility. At the special called meeting, the City Council
passed a resolution for the conveyance of 32.657 acres of the Lucas Property to the Handleys. That
same day, Mayor Hethcoat, on behalf of the City, executed a “Warranty Deed” conveying 32.657
acres of the Lucas Property in consideration of $1.00 to the Handleys, d/b/a Mid South Logistics.

        In the interim, the Handleys secured a loan from Union Planters Bank, N.A. (“Union
Planters”) in the amount of $5,373,181.69 to construct the DuPont facility.3 On January 3, 2000, the
Lucases conveyed an additional 19.11 acres of property located adjacent to the parcel at issue to the
Handleys in consideration of $38,220.00. On January 17, 2000, the Handleys executed a lease
agreement with DuPont calling for the construction and subsequent lease of a warehouse. A “Side
Letter” executed by the Handleys and DuPont set forth DuPont’s specifications and called for the
construction of a warehouse 297,5000 square feet in size. Councilman Handley proceeded to build
an industrial warehouse partially located on the parcel obtained from the City and partially located
on the parcel obtained from the Lucases.

         At some point, the citizens of the City elected Mayor Gene Plant (“Mayor Plant”) as their
new mayor. After the transaction between the City and the Handleys had been concluded, the
Comptroller of the Treasury for the State of Tennessee (the “Comptroller”) conducted an
investigation and audit of the City’s records for a period spanning July 1, 1998, through March 31,
2000, “to determine the extent of the [City’s] compliance with certain laws and regulations.” On
December 12, 2000, the Comptroller issued his findings which revealed several problem areas. The
first area discussed in the Comptroller’s report addressed the transaction between the City and
Councilman Handley, providing:

                  1.        FINDING:          Apparent conflict of interest

                            Two city councilmen had apparent direct conflicts of
                            interest between their official duties and personal
                            interests. The City purchased goods and services


         3
          Pursuant to its mortgage with the H andleys, Un ion P lanters took a se curity interest in the D eed of Trust to
secure the mortgage. As further security for the mortgage, the Handleys also executed an Assignment of Leases and
Rents in favor of Union P lanters.

                                                           -3-
from two councilmen as well as conveying a 32-acre
tract of land to one of them. Section 12-4-101(a)(1),
Tennessee Code Annotated, states:

       It is unlawful for any officer,
       committee member, director, or other
       person whose duty it is to vote for, let
       out, overlook, or in any manner to
       superintend any work or any contract
       in which any municipal corporation,
       county, state, development district,
       utility district, human resource agency,
       or other political subdivision created
       by statute shall or may be interested,
       to be directly interested in any such
       contract. “Directly interested” means
       any contract with the official
       personally or with any business in
       which the official is the sole
       proprietor, a partner, or the person
       having the controlling interest. . . .

In addition, the New Johnsonville municipal code,
Section 4-101, states, “Except for the receipt of such
compensation as may be lawfully provided for the
performance of his municipal duties, it shall be
unlawful for any municipal officer or employee to be
privately interested in, or to profit, directly or
indirectly, from business dealings with the
municipality.”

RECOMMENDATION:

To provide impartial decisions regarding the city’s
contracts, official should ensure that unlawful
conflicts of interest, as defined in Section 12-4-101,
Tennessee Code Annotated, are avoided. Business
dealings between the officials and the city should be
avoided as required by Section 4-101 of the municipal
code. The mayor and members of the city council
should seek legal advice and take appropriate
corrective action.



                         -4-
                            MANAGEMENT’S RESPONSE:

                            Mayor Plant and Councilmen C. Dellinger, J.
                            Dellinger, Handley, Harbison,and James:

                            We concur. The city will abide and enforce Section
                            12-4-101, Tennessee Code Annotated, and will seek
                            legal advice from the city attorney.

                            Former Mayor Hethcoat:

                            Failed to respond.

                            Councilman Laughlin:

                            I concur.      Unused land should be returned
                            immediately. An agreement should be negotiated for
                            the land used.

The City’s attorney subsequently issued an opinion letter expressing his opinion that the City could
not lawfully convey real property to a member of the City Council.

        On July 31, 2001, Mayor Plant, acting on behalf of the City, filed a complaint in the
Chancery Court of Humphreys County against the Handleys individually; their business, Mid South
Logistics; Volunteer Title Company, Inc., the trustee holding title to the property at issue; and Union
Planters as mortgagee.4 The complaint alleged that the transaction between the City and Councilman
Handley violated several provisions of the City’s municipal code and state law, specifically Section
12-4-101(a)(1) of the Tennessee Code. The City requested that the trial court issue a temporary
restraining order against the Handleys to prevent further construction on the subject parcel; enter an
order requiring the rental payments under the DuPont lease be paid into the court pending resolution
of the matter; an accounting of all profits received in connection with the use of said property; an
order requiring the Handleys to turn over to the City all rents or profits received in connection with
the use of the property; an order finding the transaction failed for lack of consideration; an order
finding the execution of the deed by the City in favor of the Handleys constituted an ultra vires act;
an order finding the special called meeting a nullity in violation of section 8-44-103(b) of the
Tennessee Code; and an order terminating and extinguishing all liens the Handleys placed on the
property. Mr. R. Eric Thornton (“Mr.Thornton”), with the law firm Ramsey & Thornton, PLC in
Dickson, Tennessee, filed the complaint on behalf of the City.


         4
           The original complaint filed by the City did not name DuPont as a defendant. The Handleys subsequently filed
a motion with the trial court, pursuant to Tennessee Rule of Civil Procedure 12.02(7), seeking to dismiss the action for
the City’s failure to join an indispensable party. The trial court denied the Handleys’ motion and granted the City thirty
(30) days to amend its co mpla int to nam e DuPo nt as a defendant.

                                                           -5-
         In August of 2001, several citizens of the City appeared at a special called meeting of the City
Council to present a petition signed by numerous citizens asking the City Council to support the
lawsuit filed by Mayor Plant. A motion was made at the meeting to support the lawsuit, but the
motion failed to pass. On September 4, 2001, several citizens of the City (hereinafter referred to as
the “Taxpayers”) filed a motion with the trial court asking, pursuant to Rule 20.02 of the Tennessee
Rules of Civil Procedure, to join the lawsuit. That same day, the City filed a motion to amend its
complaint to allege that the Handleys were trespassers and had vandalized the subject property. The
trial court subsequently granted the City’s motion. On September 17, 2001, the Taxpayers filed a
complaint in the trial court against the Handleys, individually; the Handley’s business, Mid South
Logistics; Volunteer Title Company, Inc.; Union Planters; and DuPont. Mr. Thornton represented
the Taxpayers in this lawsuit as well.5 The Taxpayers’ complaint alleged the same violations and
requested the same relief as the complaint filed by the City, particularly a violation of Section 12-4-
101(a)(1) of the Tennessee Code. On December 3, 2001, the City filed a motion to amend its
complaint once more to add allegations that Councilman Handley, since taking office, had engaged
in at least twenty-eight (28) illegal business transactions with the City.

       On January 17, 2002, the trial court entered an order on the City’s second motion to amend
its complaint. In that order, the trial court stated as follows:

                          Came the Plaintiff, City of New Johnsonville, by and through
                  its attorney, and moved the Court for permission to amend its
                  Complaint to add an additional party, averments and prayers for
                  relief.
                          The Court upon consideration of said motion . . . is of the
                  opinion that said motion should be granted. Plaintiff has sixty (60)
                  days to file a consolidated complaint with all amendments and
                  prayers for relief in this cause.

(emphasis added). Thereafter, on January 24, 2002, Mr. Thornton filed an “Amended and
Consolidated Complaint” with the trial court which stated as follows: “Come now the Plaintiffs,
pursuant to Court Order consolidating the actions filed by Plaintiffs, and file this Amended and
Consolidated Complaint restating the allegations of the Plaintiffs in one action, consolidated under
Docket Number CH-01-179.” (emphasis added). In the “consolidated” complaint, Mr. Thornton
restated the various allegations lodged against the Handleys and other defendants, namely, that the
land transaction between Councilman Handley and the City violated city and state laws; that the
Handleys were trespassers; that the Handleys had vandalized the property; and that Councilman




         5
          During the course of this litigation, attem pts were made to disqualify Mr. Thornton from representing both the
City and the T axpayers. Despite such efforts, the trial court allowed Mr. Thornton to represent both parties during the
course of the proceed ings below. M r. Thornto n is now repre senting the Taxpayers as the Ap pellants on ap peal.

                                                          -6-
Handley had engaged in at least twenty-eight (28) illegal business transactions with the City since
taking office.6

         On September 9, 2002, Mayor Carolyn Ingram (“Mayor Ingram”) took office as the City’s
newly elected mayor. On the same day that Mayor Ingram took office, Councilman Handley’s term
of office apparently ended. Additionally, Mayor Ingram, on the same day she took office, issued a
letter to Mr. Thornton terminating his representation of the City in this matter. Also on September
9, 2002, the Handleys tendered a settlement offer to the City. The settlement offer called for the City
to dismiss with prejudice all claims filed in its lawsuit against the Handleys and other defendants.
In turn, the Handleys agreed to dismiss all of their counterclaims filed in the case. In addition, the
agreement called for the City to execute a quitclaim deed in favor of the Handleys re-conveying the
property originally conveyed in the November 16, 1999, deed. Finally, the agreement proposed that
the parties enter into a mutual covenant not to sue. The new City Council discussed the Handleys’
proposal at its September 9, 2002, scheduled meeting and passed a resolution accepting the offer.7
Thereafter, the Handleys and the City entered into a “Mutual General Release and Covenant Not to
Sue,” and Mayor Ingram executed a “Quitclaim Deed” in favor of the Handleys.

        On September 10, 2002, the City filed a “Notice of Voluntary Dismissal” with the trial court
seeking to voluntarily dismiss all claims filed in the case. In turn, the Handleys filed their “Notice
of Dismissal” seeking to dismiss all of their counterclaims against the City that same day. On
September 12, 2002, the Taxpayers, still represented by Mr. Thornton, filed a motion for summary
judgment seeking a ruling that, as a matter of law, the City’s grant of a portion of the Lucas Property
to the Handleys was null and void as an ultra vires act, and any subsequent attempt by the City to
convey the property to the Handleys remained an ultra vires act. That same day, the Taxpayers filed
a motion seeking partial summary judgment by asserting that some 20.31 acres of the entire 32.657
acres conveyed to the Handleys was not encumbered by Union Planters’ mortgage, and they sought
a ruling that, as a matter of law, the Taxpayers were entitled to a judgment on the issue of liability
for damages to and profits from the 20.31 acres of land.

       On October 4, 2002, the Handleys filed their response to the Taxpayers’ motions and alleged
that genuine issues of fact remained to be resolved by trial of the matter. In their response, the
Handleys argued, in essence, that the Taxpayers did not have standing to contest the City’s
conveyance of the property at issue to the Handleys, and the Taxpayers’ action became moot when


         6
            Even the Appellees appear confused as to whether these actions were joined or co nsolidated b y the trial court.
In the fact section o f their brief, the Handleys assert that the January 17, 2002, order entered by the trial court constituted
“an order consolidating the C ity Action and the Individuals’ Action for discovery and trial, and directed that an amended
and consolidated complaint in both actions be filed.” To support this fact, the Handleys cite to the trial court’s January
17, 2002, order in the record. They further assert that the consolidated com plaint filed by Mr. Thornton was in respo nse
to this order.

         7
         Due to an apparent overs ight, the City C ounc il had to re-vote on the Handleys’ prop osed settlement at its
October 7, 20 02, m eeting. T he City Council, by resolution, voted to re-affirm its decision to accept the Hand leys’
proposed settlement offer.

                                                              -7-
the City settled the action with the Handleys, thereby extinguishing any claims the Taxpayers had.
That same day, the Handleys filed their own motion for summary judgment against the Taxpayers
reiterating the arguments in their response to the Taxpayers’ motions.8 In addition, the Handleys
filed a motion with the trial court seeking to amend their counterclaim to include additional causes
of action against the Taxpayers, and a motion to amend their answer to include additional affirmative
defenses.9

       On October 9, 2002, the trial court entered an order, pursuant to the agreement between the
Handleys and the City, dismissing the City’s claims and the Handleys’ counterclaims with prejudice.
On October 24, 2002, the Taxpayers filed a motion asking the trial court to alter or amend its
October 9, 2002, order to reflect that the dismissal was not with prejudice. On November 8, 2002,
Union Planters filed its motion for summary judgment in this case. On November 25, 2002, DuPont
joined Union Planters’ motion for summary judgment.

         On January 27, 2003, the trial court entered an order addressing the Taxpayers’ motion to
alter or amend the court’s October 9, 2002, order, stating:

                              These consolidated civil actions came on to be heard . . . upon
                     the motion of Gene Plant and other individual plaintiffs in Gene Plant
                     et al. v. Kevin E. Handley et al., Civil Action No. CH-10-211 before
                     the Court (the “Individuals’ Action”), to alter or amend the Court’s
                     order entered on October 9, 2002, dismissing with prejudice the
                     claims and counterclaims asserted by the parties in City of New
                     Johnsonville, Tennessee v. Kevin E. Handley, et al., Civil Action No.
                     CH-01-179 before the court (the “City Action” . . . .)[.]
                                                        I.
                     IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED
                     that the motion of Gene Plant and others to alter or amend the Order
                     of Dismissal be and the same hereby is denied, to the extent the said
                     motion seeks to affect the rights and claims of the parties to the
                     CityAction or the legal effect of the Order of Dismissal upon those
                     rights and claims.
                                                        II.
                     IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that
                     the motion of Gene Plant and others to alter or amend the Order of
                     Dismissal be and the same hereby is granted, to the extent that the
                     said motion seeks a clarification by the Court that the Order of

         8
           Union Planters filed its response to the Taxpayer’s motions for sum mary judgm ent that same d ay as well.
DuPo nt filed its respo nse to the T axpayers’ motions on O ctober 9, 2002 , adopting, pursuan t toTennessee R ules of C ivil
Procedure 10.04, Union Planters’ responses to the motions. Likewise, Volunteer Title Co mpany, Inc. filed a response
on O ctober 9, 2004 , adopting the respo nses co ntained in Union P lanters’ response.

         9
             The trial court subsequently granted these mo tions.

                                                            -8-
                  Dismissal does not, in and of itself, alter the present procedural
                  posture of the Individuals’ Action.
                                                      III.
                  IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that,
                  notwithstanding the Order of Dismissal does not in and of itself affect
                  the procedural posture of the Individuals’ Action, the Court does not
                  hereby rule or purport to rule upon the legal effect of the Order of
                  Dismissal on the claims asserted by the plaintiffs in the Individuals’
                  Action. The legal effect of the Order of Dismissal on those claims
                  shall be and remain as provided by applicable law.
                  ....
                                                      V.
                  IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that
                  for all purposes this order is a final order in City of New Johnsonville,
                  Tennessee v. Kevin Handley, Gloria J. Handley, Volunteer Title
                  Company, Inc., Trustee, and Union Planters Bank, N.A., Civil Action
                  No. CH-01-179 before this Court, and the Order of Dismissal shall
                  operate as a complete and final adjudication of all the right [sic] and
                  claims of all parties thereto.

(emphasis added). On February 21, 2003, the Taxpayers filed a motion, pursuant to Rule 60.02 of
the Tennessee Rules of Civil Procedure, asking the court to set aside its October 9, 2002, order.

        On February 21, 2003, the Taxpayers filed a motion asking the trial court for permission to
amend their complaint to add additional causes of action related to the City’s alleged attempt to ratify
the land transaction by settling with the Handleys. That same day, the Taxpayers filed a notice of
appeal to this Court to contest the trial court’s January 27, 2003 order.10

        On August 29, 2003, the trial court entered two memorandum opinions addressing the
motions for summary judgment filed by the parties. In the first memorandum opinion, the trial court
addressed the defendants’ motions for summary judgment.11 The court began by examining the
standing issue. The court found that any demand by the taxpayers to the City Council requesting it
to correct any illegality would be futile, therefore, any failure on the part of the Taxpayers to make
such demand was excused. Next, the trial court concluded that land, especially land gifted to a city,
does not constitute “public funds.” Therefore, the court concluded that the Taxpayers did not have
standing to challenge the City’s transfer of 32.657 acres of the Lucas Property to the Handleys.


         10
           The Taxpayers’ notice of appeal provides that they are co ntesting the trial court’s January 23, 2003, order.
However, the order, although signed by the trial judge on January 23, 2003, was not filed until January 27, 2003.
Therefore, it became effective as of January 27, 20 03. See Tenn. R. Civ. P. 58 (200 4).

         11
           This Order is entitled “Memorandum Opinion on Defendants’ Motion for Summary Judgment.” The order
provides that this order is to address Civil Action “No. CH-01-211.” As noted below, the trial court uses the same
number when addressing the Taxpayers’ motion.

                                                          -9-
Conversely, the trial court held that the Taxpayers did have standing to contest the allegedly illegal
business transactions occurring between Councilman Handley and the City. Thus, the trial court
granted in part and denied in part the defendants’ motions for summary judgment.

         Next, the trial court issued a memorandum opinion addressing the Taxpayers’ motions for
summary judgment.12 Alluding to its previous finding that the Taxpayers did not have standing to
contest the transfer of land by the City to the Handleys, the trial court denied the Taxpayers’ motions.
On September 19, 2003, the trial court entered an order incorporating the findings from its
memorandum opinions.13 On December 16, 2003, the trial court entered an order setting the case
for trial and granting the Taxpayers thirty (30) days to name the City as a defendant in their civil
action.14

        On January 16, 2004, the Taxpayers filed an amended complaint adding the City as a
defendant to their civil action.15 Since the Taxpayers’ amended complaint contained essentially the
same causes of action and requests for relief related to the land transaction between the Handleys and
the City that they previously asserted, the Handleys, on February 17, 2004, filed a renewed motion
for summary judgment. That same day, the Handleys filed a notice of their intent to take a voluntary
nonsuit as to all of their counterclaims.16 On March 5, 2004, the trial court entered an order
dismissing the Handleys’ counterclaims without prejudice. On April 5, 2004, the trial court entered
an order, based upon the agreement of the parties, granting the Handleys’ renewed motion for
summary judgment to the extent the court had already ruled on the land transaction in its previous
September 19, 2003, order. On May 27, 2004, the Taxpayers filed a notice of voluntary dismissal
regarding their remaining claims. That same day, the Taxpayers filed a second notice of appeal to
this Court. On June 2, 2004, the trial court entered an order dismissing the Taxpayers’ remaining
claims without prejudice.

       On appeal, the Taxpayers have presented two issues for our review. At the outset, we must
place these issues in the proper context. The Taxpayers are, in essence, asking this Court to

         12
         This order is entitled “Memo randum Op inion on Plaintiff’s Motion for Summary Judgm ent and for Partial
Summary Judgment.” Interestingly, this order provides that it too is addressing Civil Action “No. CH-01-211.”

         13
              Once again, the trial court’s order provides that it is addressing C ivil Action “No. CH -01-2 11.”

         14
           Although we find no such motion in the record, the court’s order states that the Handleys filed a motio n to
dismiss for the T axpayers’ failure to add the C ity as an indispensable party.

         15
            On March 13, 2003, the City had filed a motion seeking to disqualify Mr. Tho rnton from representing the
Taxpayers due to an alleged conflict of interest. The trial court apparently found that no conflict existed and permitted
M r. Thornton to continue his representation of the Taxpayers. On March 22, 2004, the City filed another motion
renewing its objection to Mr. T hornton’s representation of the Taxpayers in the instant litigation. A hearing was
app arently set for June 7, 2 004 , to argue the motion before the trial court, but subsequent events made the need for a
decision on this mo tion moot.

         16
           On February 18, 2004 , the Handleys filed an amended notice of their intent to take a voluntary nonsuit on their
counterclaims due to a typographical error in their prior notice.

                                                            -10-
determine whether the trial court erred in granting summary judgment to the Handleys and the other
defendants on the Taxpayers’ claim contesting the land transaction between the City and Councilman
Handley. When considering this primary issue, the Taxpayers ask this Court to entertain the
following issues:

I.       Whether the taxpayers of a municipality have standing to challenge an illegal conveyance of
         real property from a municipality to an elected official of that municipality; and
II.      Whether an illegal conveyance of real property from a municipality to an elected official of
         that municipality is void under the doctrine of ultra vires.17

For the reasons set forth more fully herein, we vacate the trial court’s order granting the Appellees’
partial summary judgment and remand this case to the trial court.

                                                             II.
                               JURISDICTION TO ENTERTAIN CERTAIN ISSUES

         This Court is required to consider whether or not we have subject matter jurisdiction over
an appeal regardless of whether a party presented such issue for our review. See Tenn. R. App. P.
13(b) (2004); Martin v. Washmaster Auto Ctr., Inc., No. 01-A-01-9305-CV-00224, 1993 Tenn. App.
LEXIS 464, at *3 (Tenn. Ct. App. July 2, 1993); Huntington Nat’l Bank v. Hooker, 840 S.W.2d 916,
922 (Tenn. Ct. App. 1991). On appeal, the Handleys assert that this Court is without jurisdiction to
entertain the appeal filed by the Taxpayers. Specifically, the Handleys assert that, since the
Taxpayers were not parties to the City’s action against them, the Taxpayers could not file a motion
to alter or amend the court’s order dismissing that case. Therefore, the Handleys argue that the
Taxpayers’ motion, filed on October 24, 2002, did not toll the running of the thirty (30) day period
for filing an appeal.18 See Tenn. R. App. P. 4(a) (2004). In turn, they contend that, even if the
Taxpayers could file an appeal of the order dismissing the City’s action against them, the time for
filing an appeal began to run from October 9, 2002, the date the trial court entered the order. Since
the Taxpayers did not file their first notice of appeal until February 21, 2003, well beyond the
allowed thirty (30) day period, the Handleys argue that this Court has no jurisdiction to review the
lawsuit filed by the City. See Tenn. R. App. P. 2 (2004) (noting that the Court is without authority
to extend the time for filing a notice of appeal set forth in Tenn. R. App. P. 4(a)); Am. Steinwinter
Investor Group v. Am. Steinwinter Inc., 964 S.W.2d 569, 571 (Tenn. Ct. App. 1997) (“The 30-day
rule for notices of appeal is mandatory and jurisdictional and may be not waived . . . .”). In turn, the
Taxpayers argue that their motion to alter or amend tolled the running of the thirty (30) day period.



         17
           The App ellees ha ve presented num erous issues similar in nature to those raised by the Appellants. However,
for reasons m ore fully explained b elow, we need not address these additional issues.

         18
             Ord inarily, “[i]n a civil action, if a timely motion under the Tennessee Rules of Civil Procedure is filed in the
trial court by any p arty . . . under Rule 59.0 4 to alter or amend the judgm ent[,] the time for appeal for all parties shall
run from the entry of the order denying a new trial or granting or denying any other such motion.” Tenn. R. App. P. 4(b)
(2004).

                                                            -11-
Furthermore, the Taxpayers contend that, even if the first notice of appeal is not timely, their second
notice of appeal permits them to raise all issues related to this consolidated action.

         It is apparent to this Court that the parties lost sight of the exact nature of these actions during
the course of the proceedings below. On September 4, 2001, the Taxpayers filed a motion with the
trial court entitled “Motion to Join in Lawsuit” in which they sought to join the City’s lawsuit against
the Handleys and other defendants “pursuant to Rule 20.01.” On September 17, 2001, Mr. Thornton
filed a complaint in the trial court on behalf of the Taxpayers. On January 17, 2002, the trial court
entered an order entitled “Order on Motion to Amend Complaint and Second Motion to Amend
Complaint” in which the trial court stated as follows:

                Came the Plaintiff, City of New Johnsonville . . . and moved the Court
                for permission to amend its Complaint to add an additional party,
                averments and prayers for relief.
                        The Court . . . is of the opinion that said motion should be
                granted. Plaintiff has sixty (60) days to file a consolidated complaint
                with all amendments and prayers for relief in this cause.

(emphasis added). Thereafter, on January 24, 2002, Mr. Thornton filed a complaint entitled
“Amended and Consolidated Complaint” which provided:

                Come now the Plaintiffs, pursuant to Court Order consolidating the
                actions filed by Plaintiffs, and file this Amended and Consolidated
                Complaint restating the allegations of the Plaintiffs in one action,
                consolidated under Docket Number: CH-01-179.

(emphasis added).
         Nowhere in the voluminous record filed in this case do we find an order from the trial court
either joining or consolidating the actions filed in this case. On appeal, the Handleys refer to the trial
court’s January 17, 2002, order in their briefs as “an order consolidating the City Action and the
Individuals’ Action for discovery and trial.” The trial court’s January 17, 2002, order does nothing
of the sort. To the contrary, the order, by its express language, only addressed the City’s motion to
amend its complaint.

        Whether these cases have been joined or consolidated is a matter we do not take lightly due
to the effect the characterization of a lawsuit has on our appellate review. The Taxpayers’ motion
asked for permission to join the lawsuit already filed by the City. Permissive joinder of parties is
provided for in Rule 20.01 of the Tennessee Rules of Civil Procedure, which states:

                All persons may join in one action as plaintiffs if they assert any right
                to relief jointly, severally, or in the alternative in respect of or arising
                out of the same transaction, occurrence, or series of transactions or



                                                    -12-
                   occurrences and if any question of law or fact common to all these
                   persons will arise in the action . . . .

Tenn. R. Civ. P. 20.01 (2004); see also Fred’s Fin. Co. v. Fred’s of Dyersburg, Inc., 741 S.W.2d
903, 907-09 (Tenn. Ct. App. 1987). Consolidation of two separate trials is provided for in Rule
42.01 of the Tennessee Rules of Civil Procedure, and it states:

                   When actions involving a common question of law or fact are
                   pending before a court, the court may order all the actions
                   consolidated or heard jointly, and may make such orders concerning
                   proceedings therein as may tend to avoid unnecessary costs or delay.

Tenn. R. Civ. P. 42.01 (2004).


       The interplay between these two procedural rules can be explained in the following terms:
                      To understand the requirements for and the consequences of
              permissive joinder of parties under Rule 20.01, it is useful to
              distinguish joinder of parties from consolidation of actions under
              Rule 42.01. Plaintiffs and defendants properly joined under Rule
              20.01 are all parties to the same civil action, even when the claims by
              or against them are several, as opposed to joint. Consolidation of
              separate actions under Rule 42.01, on the other hand, does not create
              one action or make those who are parties in one suit parties in
              another. Consolidation simply allows a single trial of common issues
              and permits joint discovery for purposes of judicial economy.
                      Several consequences may follow from the distinction
              between joinder and consolidation. When parties are joined in an
              action, they and the claims by or against them must be taken into
              account for a number of important purposes such as determining
              whether . . . a judgment is a final appealable order19 . . . . When
              actions are consolidated, on the other hand, a party or a claim in
              only one of the actions may not be taken into account for these
              purposes in the other consolidated actions.
                      The prerequisites for joinder and consolidation also differ.
              Consolidation is proper when there are “actions involving a common
              question of law or fact pending before a court.” For joinder of parties
              in one action, on the other hand, the additional “transaction or
              occurrence” test must be satisfied. The claims by or against the
              parties must be “in respect of or arising out of the same transaction,
              occurrence, or series of transactions or occurrences.” When,


       19
            See Tenn. R. App . P. 3(a) (2004); Tenn. R. Civ. P. 54.02 (20 04).

                                                         -13-
                  therefore, multiple claims that will entail decisions on common issues
                  of law or fact cannot be joined because of limitations on joinder,
                  consolidation may provide a beneficial alternative for achieving
                  judicial economy.

ROBERT BANKS , JR. & JUNE F. ENTMAN , TENNESSEE CIVIL PROCEDURE § 6-5(b) (1999)

(emphasis added).

         The complaint filed by Mr. Thornton on January 24, 2002, rather confusingly refers to the

actions as consolidated, yet it states that the actions have become “one action, consolidated under

Docket Number: CH-01-179.”20 However, it is apparent after reviewing the record, that despite the

lack of a definitive order, the trial court treated these two lawsuits as consolidated, not joined. The

City’s lawsuit was originally docketed as “Civil Action No. CH-01-179.” The Taxpayers’ action was

originally docketed as “Civil Action No. CH-01-211.” When the Handleys responded to the

Taxpayers’ motions for summary judgment, their response indicated that it addressed “Civil Action

No. CH-01-211.” When the City and the Handleys moved to dismiss their respective claims against

each other, the parties’ motions both reflected that they were addressing a case docketed as “Civil

Action No. CH-01-179.” The trial court’s order dismissing the City’s lawsuit provides that the order

is addressing “Civil Action No. CH-01-179.” When Union Planters filed its motion for summary

judgment against the Taxpayers, it listed “Civil Action No. CH-01-211,” but the “211" was marked

through and “179" written above it. When the trial court issued the order on the Taxpayers’ motion

to alter or amend the court’s previous order dismissing the City’s lawsuit, the order listed both

docket numbers, called the cases “consolidated,” and referred to them as separate actions. The trial

court’s orders addressing the motions for summary judgment filed between the Taxpayers, the


         20
          “Consolidation does not, however, create one lawsuit where there were two. It simply allows a single trial
and permits joint discovery.” ROBERT B ANKS , J R . & J UNE F. E NTMAN , T ENNESSEE C IVIL P ROCEDURE § 6-12(b) (1999 ).

                                                         -14-
Handleys, and the other defendants all refer to the action as “Civil Action No. CH-01-211.” The trial

court’s final order dismissing the Taxpayers’ remaining claims refers to the case as “Civil Action

No. CH-01-211.”21



         Additionally, this Court received a consolidated record, and the parties have briefed these

actions as if they were consolidated. Accordingly, we will regard the two cases as consolidated by

the trial court. See Local 2173 of the Am. Fed’n of State, County, and Mun. Employees v.

McWherter, No. 87-34-II, 1987 Tenn. App. LEXIS 2726, at *1 (Tenn. Ct. App. June 5, 1987). Thus,

the City’s action and the Taxpayers’ action remained distinct and separate lawsuits throughout the

proceedings below. Patton v. Aerojet Ordinance Co., 765 F.2d 604, 606 (6th Cir. 1985); Masson

v. Anderson, 62 Tenn. (3 Baxt.) 290, 298-99 (Tenn. 1873); Chitwood v. Myers, 443 S.W.2d, 830-31

(Tenn. Ct. App. 1969).



         Having characterized these lawsuits, we first address the effect of the trial court’s order

dismissing the lawsuit between the City and the Handleys. “A consent decree is a contract made

final and binding upon the parties by the approval of the court.” City of Shelbyville v. State ex rel.

Bedford County, 415 S.W.2d 139, 144 (Tenn. 1967) (citing Boyce v. Stanton, 83 Tenn. 346 (Tenn.

1885)). “Consent decrees, compromise and settlement agreements, and agreed orders are favored

by the courts and represent the achievement of an amicable result to pending litigation.” In re Estate

of Williams, No. M2000-02434-COA-R3-CV, 2003 Tenn. App. LEXIS 313, at *33 (Tenn. Ct. App.


         21
            The trial court ultimately allowed the T axpayers to name the City as a defendant in their lawsuit.
Interes tingly, a determination that these cases had been joined would necessarily mean that the City would be both a
plaintiff and a defendant in the same case.

                                                        -15-
Apr. 28, 2003). “In the absence of duress, fraud, mistake or collusion a consent judgment is valid

and binding, as such, as between the parties thereto and their privies.” 49 C.J.S. Judgments § 187

(1997) (emphasis added). Absent the existence of one of the limited exceptions, a consent order is

not appealable by the parties entering into the agreement. See City of Shelbyville, 415 S.W.2d at

144; Bacardi v. Tenn. Bd. of Registration in Podiatry, 124 S.W.3d 553, 562 (Tenn. Ct. App. 2003);

Bickers v. Lake County Bd. of Educ., No. 02A01-9307-CV-00163, 1994 Tenn. App. LEXIS 7, at *3-

4 (Tenn. Ct. App. Jan. 13, 1994). Thus, when the City and the Handleys agreed to settle their case

and the trial court subsequently entered an order dismissing the City’s and the Handleys’ claims

against each other, neither party could appeal the trial court’s order.



       Since the Taxpayers’ action remained a separate and distinct lawsuit, the Taxpayers could

not file a motion to alter or amend or to set aside the trial court’s order dismissing the suit between

the City and the Handleys. “It is fundamental that ‘[a] person who is not a party of record to a

lawsuit has no standing therein which enables him or her to take part in the proceedings.’” In re

Estate of Reed, No. W2003-00210-COA-R3-CV, 2004 Tenn. App. LEXIS 424, at *5 (Tenn. Ct. App.

July 1, 2004) (citations omitted); see also 47 Am. Jur. 2d Judgments § 757 (2004) (“The general rule

is that strangers to the record, unless authorized by statute, ordinarily have no standing on which to

base an application to vacate a judgment.”). Moreover, the Taxpayers could not file an appeal

contesting the trial court’s order regarding the lawsuit between the City and the Handleys. “A party

to one action may not appeal from a judgment or order in a second action with which the first is

consolidated for trial.” 4 C.J.S. Appeal and Error § 157 (1993). Accordingly, the Taxpayers have

no standing to raise any issues in the instant appeal related to the trial court’s disposition of the


                                                 -16-
City’s suit against the Handleys and other defendants. Likewise, this Court is without jurisdiction

to entertain any issues raised by the Appellees concerning the City’s action against the Handleys.



       We also note that, since the Taxpayers voluntarily nonsuited their claim regarding the

allegedly illegal business transactions between the City and Councilman Handley, we cannot

entertain any issues raised by the parties regarding that claim in this appeal. A plaintiff is generally

permitted to take a voluntary nonsuit of his case. See Tenn. R. Civ. P. 41.01 (2004). Upon doing

so, however, there is no longer any existing controversy regarding those claims to which the plaintiff

voluntarily dismissed. Accordingly, this Court cannot entertain an appeal of issues related to the

allegedly illegal business transactions between the City and Councilman Handley which the

Taxpayers voluntarily dismissed. See Payne v. Savell, No. 03A01-9708-CV-00352, 1998 Tenn.

App. LEXIS 81, at *5–6 (Tenn. Ct. App. Feb. 5, 1998) (noting that, when a party takes a voluntary

nonsuit, the parties cannot appeal the resulting order of dismissal without prejudice); Bickers v. Lake

County Bd. of Educ., No. 02A01-9307-CV-00163, 1994 Tenn. App. LEXIS 7, at *4 (Tenn. Ct. App.

Jan. 13, 1994) (“A party is estopped or waives his right to appeal when judgment is entered at his

request.”); Oliver v. Hydro-Vac Services, Inc., 873 S.W.2d 694, 696 (Tenn. Ct. App. 1993)

(concluding that a party is ordinarily not aggrieved when no judgment is rendered against him);

Martin v. Washmaster Auto Ctr., Inc., No. 01-A-01-9305-CV-00224, 1993 Tenn. App. LEXIS 464,

at *6 (Tenn. Ct. App. July 2, 1993) (“No present controversy exists after the plaintiff takes a

nonsuit.”); Huggins v. Nichols, 440 S.W.2d 618, 620 (Tenn. Ct. App. 1968) (“Although there are

some exceptions to the rule, the general rule is that a plaintiff or defendant cannot appeal or




                                                 -17-
prosecute a writ of error from or to a judgment, order, or decree in his own favor, since he is not

aggrieved thereby.”).



                                                III.

SUMMARY JUDGM ENT ON THE TAXPAYERS’ CLAIM CHALLENGING THE LAND TRANSACTION



       Having determined that the Taxpayers’ suit remained separate from the City’s action against

Councilman Handley, we now address the correctness of the trial court’s decision to grant partial

summary judgment to the Appellees by ruling that “plaintiffs have no standing to challenge the

transfer of the 32.657 acres to Defendant Handley and this part of the action must be dismissed.”



                                                A.

                                       Standard of Review



       “Summary judgments are proper in virtually any civil case that can be resolved on the basis

of legal issues alone.” Summers v. Cherokee Children & Family Services, Inc., 112 S.W.3d 486, 507

(Tenn. Ct. App. 2002). “A party is entitled to summary judgment where he or she establishes that

there is no genuine issue as to any material fact and that a judgment may be rendered as a matter of

law.” Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003) (citing Penley v. Honda Motor Co., 31

S.W.3d 181, 183 (Tenn. 2000)); see also Tenn. R. Civ. P. 56.04 (2003). The party moving for

summary judgment has the burden of proving that the motion satisfies these requirements. Bain v.

Wells, 936 S.W.2d 618, 622 (Tenn. 1997) (citing Downen v. Allstate Ins. Co., 811 S.W.2d 523, 524


                                               -18-
(Tenn. 1991)). Once the moving party has established that there is no genuine issue of material fact,

the burden shifts to the non-moving party to demonstrate, by affidavits or other discovery materials,

that there is a genuine issue of material fact to be resolved by trial of the matter. Byrd v. Hall, 847

S.W.2d 208, 211 (Tenn. 1993) (citations omitted). “In reviewing a motion for summary judgment,

the Court must examine the evidence and all reasonable inferences from the evidence in the light

most favorable to the non-moving party.” Stovall, 113 S.W.3d at 721 (citing Webber v. State Farm

Mut. Auto Ins. Co., 49 S.W.3d 265, 269 (Tenn. 2001)). The trial court should grant a motion for

summary judgment “only when both the facts and the conclusions to be drawn from the facts permit

a reasonable person to reach only one conclusion.” Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn.

1995) (citing Byrd, 847 S.W.2d at 210-11)).



       “Summary judgments enjoy no presumption of correctness on appeal.” Summers, 112

S.W.3d at 508. “Our task on appeal is to review the record to determine whether the requirements

for granting summary judgment have been met.” Church v. Perales, 39 S.W.3d 149, 157 (Tenn. Ct.

App. 2000). “This court must use the same standard [as the trial court] in reviewing a trial court’s

judgment granting summary judgment.” Prince v. Saint Thomas Hosp., 945 S.W.2d 731, 733 (Tenn.

Ct. App. 1996) (citing Clifton v. Bass, 908 S.W.2d 205, 208 (Tenn. Ct. App. 1995)). Since our

inquiry on appeal involves purely questions of law, Carvell, 900 S.W.2d at 26, “the standard for

reviewing a grant of summary judgment is de novo without any presumption that the trial court’s

conclusions were correct.” Webber, 49 S.W.3d at 269; see also Kelley, 133 S.W.3d at 591; Bain,

936 S.W.2d at 622.




                                                 -19-
                                                 B.

                                        Taxpayer Standing



       “A citizen’s standing to sue a governmental entity is a threshold issue that should be resolved

before addressing the merits of the case.” Ragsdale v. City of Memphis, 70 S.W.3d 56, 62 (Tenn.

Ct. App. 2001). As our supreme court previously stated in a similar case:



                      The initial question is whether our courts will entertain a

              taxpayer suit contesting the legality of payments made to county

              officials from public funds; that is, whether a taxpayer/citizen has

              standing to litigate the issue presented in the complaint.

                      It is not at this point appropriate to examine the merits of the

              ultimate question. The Court should determine whether a party may

              litigate the legality of a public officer’s payments to himself, without

              first deciding whether those payments are, in fact and law, illegal.

              Because citizen suits do burden the conduct of public affairs, a

              defendant entity or officer should not be obliged to defend on the

              merits if he is entitled to a dismissal for lack of standing. Nor should

              the court critique the conduct of public officials if the cause is not

              justiciable.




                                                -20-
Cobb v. Shelby County Bd. of Commissioners, 771 S.W.2d 124, 125 (Tenn. 1989). Standing is a

judge-made doctrine used by the courts of this state “‘to refuse to determine the merits of a legal

controversy irrespective of its correctness where the party advancing it is not properly situated to

prosecute the action.’” Phillips v. County of Anderson, No. E2000-01204-COA-R3-CV, 2001 Tenn.

App. LEXIS 308, at *9 (Tenn. Ct. App. Apr. 30, 2001) (quoting Knierim v. Leatherwood, 542

S.W.2d 806, 808 (Tenn. 1976)). Accordingly, we will begin by addressing the Taxpayers’ first issue

— whether they have standing to challenge the conveyance of real property from the municipality

to an elected official of that municipality.



       “The rule in Tennessee is well established that citizens and taxpayers are without standing

to maintain a lawsuit to restrain or direct governmental action unless they first allege and establish

that they will suffer some special injury not common to citizens and taxpayers generally.” LaFollette

Med. Ctr. v. City of LaFollette, 115 S.W.3d 500, 503 (Tenn. Ct. App. 2003) (citing Patton v. City

of Chattanooga, 65 S.W. 414, 420–21 (Tenn. 1901)); see also Badgett v. Rogers, 436 S.W.2d 292,

294 (Tenn. 1968); Reams v. Bd. of Mayor & Alderman of McMinnville, 291 S.W. 1067, 1068 (Tenn.

1927). As a policy justification for this general rule, the Tennessee Supreme Court has stated as

follows:



               On the one hand, it is undeniably the right of a taxpayer to know that

               his taxes are expended properly and are not unlawfully diverted or

               misused. On the other hand, the courts have long recognized the

               necessity of allowing municipal officials to perform their duties


                                                -21-
                without interference from frequent and possibly frivolous litigation

                and the inexpedience of putting municipal officers at hazard to defend

                their acts whenever any member of the community sees fit to make

                the assault, whether for honorable motives or not. The courts have

                been commensurately reluctant to usurp or supersede the discretion

                of municipal authorities to determine which municipal undertakings

                are necessary and appropriate.



Badgett, 436 S.W.2d at 293–94; see also Parks v. Alexander, 608 S.W.2d 881, 885 (Tenn. Ct. App.

1980) (“The generally acknowledged purpose of this requirement of special damage or private harm

to the individual rests in the public policy of protecting public corporations from a profusion of

suits.”).



        However, the general rule regarding taxpayer standing is not without exception. “[T]he

courts have recognized an exception to the general rule where it is asserted that the assessment or

levy of a tax is illegal or that public funds are misused or unlawfully diverted from stated purposes.”

Badgett, 436 S.W.2d at 294; see also LaFollette Med. Ctr., 115 S.W.3d at 504. The Taxpayers in

the instant case, being unable to establish any specific injury not sustained by the citizens of the City

in general, rely on this exception to assert they possess standing to contest the land transaction

between the City and Councilman Handley. Specifically, the Taxpayers seek to establish that the

land transaction at issue constituted an illegal use of “public funds.”




                                                  -22-
        In order for a taxpayer to have standing to challenge the legality of the expenditure of public

funds, the following elements must be found to exist: (1) the plaintiff/taxpayers have taxpayer status;

(2) the taxpayers allege a specific illegality in the expenditure of public funds; and (3) the taxpayers

have made a prior demand on the governmental entity asking it to correct the alleged illegality. Cobb

v. Shelby County Bd. of Commissioners, 771 S.W.2d 124, 126 (Tenn. 1989); Ragsdale v. City of

Memphis, 70 S.W.3d 56, 62 (Tenn. Ct. App. 2001).



        The trial court used this three-prong test in this case to evaluate whether the Taxpayers had

standing to challenge the land transaction. Regarding the first element, the trial court ruled that

“there is no material dispute of fact that some of the plaintiffs are taxpayers of the City of New

Johnsonville.” Turning to the third element, the trial court ruled that “any prior demand by the

taxpayers to correct the alleged illegality would have been a futile gesture. This being the case,

failure to make a prior demand is excused.” The largest area of contention between the parties on

appeal is the second element required in order for the Taxpayers to have standing to pursue their

claim against the Appellees (i.e., whether they allege a specific illegality in the expenditure of

“public funds”). The trial court ruled that, as a matter of law, “[l]and, especially land given to the

city, is not ‘public funds.’” Accordingly, the trial court held that, since the Taxpayers failed to satisfy

the second element of taxpayer standing, summary judgment was appropriate as to this claim.



        The Taxpayers argue that this ruling constitutes error because “the ordinary and plain

meaning of public funds includes property held by a municipality for the benefit of its citizens.”

Conversely, the Appellees contend that the term “public funds” must mean the diversion of funds


                                                   -23-
in the form of money derived from taxation in order for taxpayers to have standing. Since the real

property at issue was not acquired with tax revenue (i.e., it was a gift), the Appellees argue that a

subsequent disposition of the land cannot be considered a disposition of “public funds.”



          Our independent review of the law applicable to the present case reveals that the trial court

applied an incorrect legal standard when granting partial summary judgment to the Appellees in this

case. Stated differently, to ascertain if the Taxpayers in the instant case have standing, we need not

determine if land owned by a municipality constitutes “public funds” as the parties suggest in their

briefs.



          The Taxpayers alleged in their complaint that the land transaction between the City and

Councilman Handley violated provisions in the City Charter as well as section 12-4-101(a)(1) of the

Tennessee Code. Section 12-4-101(a)(1) provides, in relevant part, as follows:



                 It is unlawful for any officer, committee member, director, or other

                 person whose duty it is to vote for, let out, overlook, or in any manner

                 to superintend any work or any contract in which any municipal

                 corporation, county, state, development district, utility district, human

                 resource agency, or other political subdivision created by statute shall

                 or may be interested, to be directly interested in any such contract.

                 “Directly interested” means any contract with the official personally

                 or with any business in which the official is the sole proprietor, a


                                                   -24-
               partner, or the person having the controlling interest. “Controlling

               interest” includes the individual with the ownership or control of the

               largest number of outstanding shares owned by any single individual

               or corporation. . . .



Tenn. Code Ann. § 12-4-101(a)(1) (2003). The legislature also set forth the penalty for violating

section 12-4-101(a)(1) of the Tennessee Code, stating:



               Should any person, acting as such officer, committee member,

               director, or other person referred to in § 12-4-101, be or become

               directly or unlawfully indirectly interested in any such contract, such

               person shall forfeit all pay and compensation therefor. Such officer

               shall be dismissed from such office the officer then occupies, and be

               ineligible for the same or a similar position for ten (10) years.



Tenn. Code Ann. § 12-4-102 (2003).



       In State ex rel. Wallen v. Miller, 304 S.W.2d 654, 656 (Tenn. 1957), our supreme court noted

that the legislature did not include within section 12-4-101 and section 12-4-102 of the Tennessee

Code a procedure for enforcing these provisions. Accordingly, the supreme court stated that “it is

fundamental that for the enforcement of a statute of this kind where there is no statute prescribing

the procedure that the proceedings should be prosecuted according to the practice under the common


                                                -25-
law[.]” Miller, 304 S.W.2d at 657 (citing Olsen v. Sharpe, 235 S.W.2d 11 (Tenn. 1950)). In setting

forth the procedure to apply when a violation of section 12-4-101 of the Tennessee Code is alleged,

the court stated:



               Under such circumstances it seems to us that this statement is

               applicable:



                      “Public wrongs or neglect or breach of public duty

                      cannot be redressed at a suit in the name of an

                      individual or individuals whose interest in the right

                      asserted does not differ from that of the public

                      generally, or who suffers injury in common with the

                      public generally, even, it seems, though his loss be

                      greater in degree, unless such right of action is given

                      by statute. In cases of purely public concern and in

                      actions for wrongs against the public, whether actually

                      committed or only apprehended, the remedy, whether

                      civil or criminal, is as a general rule by a prosecution

                      instituted by the state in its political character, or by

                      some officer authorized by law to act in its behalf, or

                      by some of those local agencies created by the state




                                                -26-
        for the arrangement of such of the local affairs of the

        community as may be intrusted to them by law.”

        “In the enforcement of matters of public interest it is

        generally recognized that the attorney general

        appearing as a public officer is a proper party to

        maintain litigation.” 39 Am.Jur., p. 863, Sec. 11.



In a proceeding of this kind it is well said that:



        “In the absence of constitutional or statutory

        regulations providing otherwise, quo warranto

        proceedings are the only proper remedy in cases in

        which they are available.” 74 C.J.S. Quo Warranto,

        sec. 4, p. 179; State ex rel. Bryant v. Maxwell, 189

        Tenn. 187, 224 S.W.2d 833.




                                  -27-
Id. at 657–58 (emphasis added). “Here a civil remedy, that of quo warranto,22 is the only one that

is available in view of the fact the legislators did not see fit to provide any additional procedure for

their enforcement.” Id. at 658 (emphasis added); see also State ex rel. Abernathy v. Anthony, 335

S.W.2d 832, 833 (Tenn. 1960).



          The legislature has chosen to codify the common law remedy of quo warranto in section 29-

35-101 et seq. of the Tennessee Code. See City of Fairview v. Spears, 359 S.W.2d 824, 825 (Tenn.

1962) (applying the statutory codification of the quo warranto to a citizen’s private suit against a

municipality); Miller, 304 S.W.2d at 658. “Actions based upon violations of T.C.A. § 12-4-101 et

seq. are governed by the procedure set out in T.C.A. § 29-35-101 et seq. . . .” Town of Smyrna ex

rel. Odom v. Ridley, 730 S.W.2d 318, 321 (Tenn. 1987). Accordingly, since the Taxpayers seek

relief under section 12-4-101 of the Tennessee Code, their lawsuit must be evaluated for its

compliance with section 29-35-101 et seq. of the Tennessee Code.23


          22
               Qu o warranto is a common law rem edy charac terized in the following terms:

                     “In its broadest sense, quo warranto is a writ of inquiry as to the warrant for doing
                     the acts of which complaint is made. It is the remedy or proceed ing by which the
                     sovereign or state d etermines the legality of a claim which a party asserts the use or
                     exercise of an office or franchise and ousts the holder from its enjoyment, if the
                     claim is not well founded, or if the right to enjoy the privilege has been forfeited or
                     lost.” 44 Am.Jur., p. 88, Sec. 2.

Miller, 304 S.W.2d at 658.


          23
             “Article VII, section 1, of the [Te nnesse e] Co nstitution d eclares that county officers . . . shall be re mov able
from office for malfeasance or neglect of duty and clothes the legislature with power to prescribe the mode of procedure
through which removal may be affected.” State ex rel. Co mplainant v. Ward, 43 S.W .2d 217, 219 (Tenn. 1931 ). W e
are cognizant of the fact that the legislature has provided for a suit by private citizens to challenge the legality of a public
officials actions. Section 6-54 -107 o f the Tennessee Code pro vides, in relevant part, as follows:

                     (a) No person ho lding office under any municipal corporation shall, during the time
                                                                                                                   (continued...)

                                                              -28-
         23
              (...continued)
                      for which such person was elected o r app ointed , be capab le of contracting with such
                      corporation for the performance of any work which is to be paid for out of the
                      treasury. Nor shall such person be capable of holding or having any other direct
                      interest in such a contra ct. “Direct interest” means any contract with any bu siness
                      in which the official is the sole proprietor, a partne r, or the person having the
                      controlling interest. “Controlling interest” includes the individual with the
                      ownership or co ntrol of the largest numb er of outstanding shares owned by any
                      single individual or corporation.
                      (b) No officer in a municipality shall b e indirectly interested in any contract to
                      which the municipality is a party unless the officer publicly acknowledges such
                      officer’s interest. “Indirectly interested” means any contract in which the officer is
                      interested but not directly so, but includes contracts where the officer is directly
                      interested but is the sole supplier of goods or serv ices in a m unicipality.

Tenn. Code A nn. § 6-54-107 (2003) (emp hasis added ). Section 6-54 -108 o f the Tennessee Code pro vides as follows:

                     Every officer o f such co rporation w ho sha ll unlawfully be concerned in making
                     such contract, or who shall unlawfully pay money upon the same to or for any
                     person declared incapable in § 6-54-107, shall forfeit the amount so paid; and such
                     officer shall be jointly and severa lly liable to an action for the same, which action
                     may be prosecuted by any citizen of the corporation in its name.

Tenn. Cod e Ann. § 6-54-108 (20 03) (emphasis added).

         One mem ber of this Court has explained the operation of the aforementioned statutes by stating:

                               Standing is a judge-made doctrine whose purpose is to determine whether
                     a party should be permitted to pursue a claim . Knierim v. Leatherwood. 542
                     S.W.2d 806, 808 (Tenn. 1976) and Curve Elementary School Parent and Teacher’s
                     Organization v. Laud erdale C ounty Scho ol Boa rd, 608 S.W.2d 855 , 858 (Te nn. Ct.
                     App. 19 80). It calls upon the court to determine whether the plaintiff has alleged
                     such a personal stake in the outco me to warrant its invocation of the co urt's
                     jurisdiction and to justify the exercise of the court’s powers on its beha lf. See
                     Bro wning-Ferris Industries, Inc. v. City of Oak Ridge, 644 S.W .2d 400, 402 (Tenn.
                     Ct. App. 1982 ).
                               In cases involving statutory causes of action, a party’s standing may
                     depend upon requirements contained in the statute creating the cause of action. If
                     these requirements have been defined by statute, it is pro per for the co urts to
                     conclude that the General Assembly has exercised its co nstitutional prero gative to
                     determine the conditions under which a party will be permitted access to the co urts.
                     Thus, courts should defer to legislative standing criteria contained in statutes
                     creating new causes of action.
                               Priva te citizens have rarely been given standing to bring suit to challenge
                     the actions o f public officials. Metropolitan Government ex rel. Anderson v.
                     Fulton, 701 S.W.2d 597 , 601 (Tenn. 19 85). Thus, in the absence of legislative
                     authority, a priva te citizen must demonstrate either a special interest, status or
                     wrong not com mon to the public as a whole or that the proper public officials have
                     not taken remed ial action after being called up on to do so. See Bennett v. Stutts,
                                                                                                                (continued...)

                                                              -29-
         Section 29-35-101 of the Tennessee Code provides, in relevant part, as follows:

                     An action lies in the name of the state against the person or

                     corporation offending, in the following cases:



         23
              (...continued)
                      521 S.W .2d 5 75, 5 76 (Tenn. 19 75); Badge tt v. Rog ers, 222 Tenn. 374, 379, 436
                      S.W.2d 292 , 294 (1968); Bayless v. K nox County, 199 Tenn. 268, 274, 286 S.W.2d
                      579, 582 (1955); and State ex rel. Vaughn v. King, 653 S.W .2d 727, 729 (Tenn. Ct.
                      App. 198 2).
                                Cases involving municipal officials’ self-dealing in public contracts are
                      among the rare situations where the General Assembly has specifically authorized
                      private citizens to challenge the legality of the actions of public officials. . . . It is
                      reasonable to infer from the enactm ent of this statute that the General A ssemb ly
                      understood that a contract involving self-dealing by public officials is the very type
                      of case in which the cooperation of other public officials should not be reasonably
                      expected. See Burns v. City o f Nashville, 142 Tenn. 541, 574, 221 S.W. 828, 837
                      (1920). It is also reasonable to infer that the General Assembly determined that
                      conflicts of interest of local governmental officials were so inimical to the public
                      interest that private citizens should be permitted to take remedial action.

Metro. Gov’t for Nashville & Da vidso n Coun ty ex rel. Anderson v. Fulton, No. 86-221-II, 1986 Tenn. App. LEXIS 3615,
at *25–28 (Te nn. Ct. A pp. D ec. 31 , 198 6) (K och, J., concurring).

          Our supreme court has also had occasion to address an instance where a quo warranto proceeding under section
12-4-101 of the T ennessee Code was joined with a citizen’s private suit brought pursuant to section 6-54-108 of the
Tennessee Code. Town of Smyrna ex rel. Odom v. Ridley, 730 S.W .2d 318, 319 (Tenn. 1987 ). In dismissing the
citizen’s private suit, the court stated:

                     The city cannot recover two forfeitures, one under T.C.A. § 12-4-102 and the other
                     under T.C .A. § 6-54-108 . In either case, the m oney forfeited belongs to the city,
                     but it is not due a double recovery. We find no legislative intent for such a double
                     recovery and forfeiture in the circumstances of this case. These statutes were
                     intended to provide alternative remedies. . . .The quo warranto action by the State
                     affords complete relief in this case and must take precedence over the § 6-54-107
                     action by the city; the latter should have been dismissed. The error is so plain that
                     we notice it now and dismiss the complaint insofar as it seeks to join the “action of
                     deb t” under T.C.A., § 6-54-107 et seq. with the quo warranto unde r T.C .A., §
                     12-4-101 et seq.

Ridley, 730 S.W .2d at 322 (emphasis added ). The Taxpayers in the instant case did not file a claim under section 6-54-
108 of the Tennessee Code. Therefore, we need not evaluate whether the Taxpayers lawsuit is in actuality a suit under
section 6-54-108 of the Tennessee Code. Since the T axpayers expressly stated in their complaint that they are alleging
a violation of section 12-4-101 of the Tennessee Code, we are only concerned with their ability to pursue a claim under
that statute.

                                                                -30-
                   ....

                   (2) Whenever any public officer has done, or suffered to be done, any

                   act which works a forfeiture of that officer’s office[.]



Tenn. Code Ann. § 29-35-101 (2003) (emphasis added). Pursuant to section 12-4-102 of the

Tennessee Code, a public officer found to have violated section 12-4-101 of the Tennessee Code

“shall be dismissed from such office the officer then occupies.” Tenn. Code Ann. § 12-4-102 (2003)

(emphasis added). Moreover, the legislature has expressly provided as follows:

                    The suit is brought by the attorney general for the district or county,

                    when directed so to do by the general assembly, or by the governor

                    and attorney general of the state concurring.



Tenn. Code Ann. § 29-35-109 (2003) (emphasis added).24 At no point during the proceedings below

did the Taxpayers seek to comply with section 29-35-101 et seq. of the Tennessee Code by having

the district attorney general prosecute the lawsuit on their behalf. However, this omission does not

end our inquiry.




         24
             The statutory schem e also sets forth the procedure for filing the suit on beha lf of a private individual, Tenn.
Code Ann. § 29-3 5-110 (200 3), the proper venue for filing the suit, Tenn. Cod e Ann. § 29-35-111 (2003), and the
content of the complaint, Tenn. Cod e Ann. § 29-35-112 (2003). Even when a suit is brought on behalf of private citizens,
“it must be in the name of the Attorney General.” State ex rel. Wallen v. Miller, 304 S.W .2d 654, 659 (Tenn. 1957 ).
The district attorney general, at his discretion, may dismiss the suit should he determine that it is improperly instituted.
Id. “[I]f the district attorney general has the right to dismiss the suit at any stage when it appe ars to him that the suit is
imprope rly brought, he would have the right to refuse to bring it in the first place, if he thought it was not in the interest
of the public to do so.” State v. Parker, 315 S.W .2d 3 96, 3 97 (Tenn. 19 58).

                                                            -31-
        Our supreme court has allowed for a limited exception to the requirement that suits be

instituted by the district attorney general, stating:



                        It is the settled law in this state that private citizens, as such,

                cannot maintain an action complaining of the wrongful acts of public

                officials unless such private citizens aver special interest or a special

                injury not common to the public generally.            Patton v. City of

                Chattanooga, 108 Tenn. 197, 65 S.W. 414 (1901); Skelton v. Barnett,

                190 Tenn. 70, 227 S.W.2d 774 (1950); Badgett v. Broome, 219 Tenn.

                264, 409 S.W.2d 354 (1966).

                        ....

                        If the District Attorney General, in matters such as this, should

                act arbitrarily or capriciously or should be guilty of palpable abuse of

                his discretion in declining to bring such an action, or in authorizing

                its institution, the courts will take jurisdiction upon the relation of a

                private citizen, in the name of the State of Tennessee. See People ex

                rel. Graves v. District Court of Second Judicial Circuit, 37 Colo. 443,

                86 P. 87; White v. Eagle Oil & Ref. Co. v. Gunderson, 48 S.D. 608,

                205 N.W. 614, 43 A.L.R. 397; State ex rel. Lamb v. Cunningham, 83

                Wis. 90, 53 N.W. 35.

                        When citizens sue to rectify a public wrong, under these

                circumstances, a copy of the complaint shall be served upon the


                                                  -32-
               District Attorney General. It shall be the duty of the trial court

               forthwith to conduct an in limine hearing designed to determine

               whether to permit plaintiffs to proceed. If it be determined that the

               District Attorney General’s refusal to bring the action, or to authorize

               the use of his name in its institution, was improper or unjustified, or

               that plaintiff’s case is prima facie meritorious, the trial court shall

               permit the action to proceed.



Bennett v. Stutts, 521 S.W.2d 575, 577 (Tenn. 1975); see also Metro. Gov’t for Nashville &

Davidson County ex rel. Anderson v. Fulton, No. 86-221-II, 1986 Tenn. App. LEXIS 3615, at *6

(Tenn. Ct. App. Dec. 31, 1986) (“Private citizens may not maintain a quo warranto action without

first showing that the acts of public officials affected a special interest or caused them loss not a

common injury to the public generally and may not do so unless the District Attorney has

unreasonably or improperly refused to bring the suit.”); Wooten v. Macon County, 1988 Tenn. App.

LEXIS 83, at *16–17 (Tenn. Ct. App. Feb. 17, 1988) (“It appears to be well established that actions

to enforce T.C.A. § 12-4-101 et seq. are suits in the nature of quo warranto which generally may be

prosecuted only by the District Attorney General on behalf of the State and that a private citizen has

no standing to pursue an action for illegal actions of a public official without showing a special

injury thereform.”); State ex rel. Vaughn v. King, 653 S.W.2d 727, 729 (Tenn. Ct. App. 1982) (“Our

supreme court has held in [Bennett] that private citizens cannot maintain a quo warranto action

complaining of the acts of public officials unless the private individuals aver a special interest or

injury not common to the public generally.”).


                                                -33-
         As previously noted, the Taxpayers in the instant case sought to establish that the exception

set forth in Badgett applied because they were unable to establish an injury different from the public

at large. See Badgett v. Rogers, 436 S.W.2d 292, 294 (Tenn. 1968) (stating that taxpayers may

proceed with a lawsuit alleging an illegal use of public funds even though they are unable to establish

an injury different from that sustained by the public at large). Having failed to allege an injury

different from that sustained by the public at large in that instance, the Taxpayers necessarily fail to

do so in this instance as well. Moreover, a copy of the Taxpayers’ complaint was never submitted

to the district attorney general, and the record is devoid of any mention of a hearing held by the trial

court to determine if the Taxpayers should be allowed to proceed without the district attorney

general’s approval. Accordingly, the Taxpayers cannot avail themselves of the limited exception set

forth in Bennett. As such, the trial court, albeit for an erroneous reason, was correct to conclude that

the Taxpayers do not have standing to pursue their claim against the Appellees.25



         Although the Taxpayers do not have standing to pursue their claim in its present form, we

are not inclined to dismiss their lawsuit outright by affirming the trial court’s grant of partial

summary judgment on this claim. In resolving this issue, we are guided by a prior decision of this

Court, stating:



                             The present record does not demonstrate that the relators or

                   any of them has sustained any special damage resulting from the


         25
            Ordinarily, we will affirm a trial court’s dec ision co rrect in result, but rendered upon an erroneo us legal basis.
See Cont’l Ca s. Co. v. Sm ith, 720 S.W.2d 48, 50 (Tenn. 1986); Arnold v. City of Chattanooga, 19 S.W.3d 779, 789
(Tenn. C t. App . 199 9).

                                                             -34-
wrongful acts complained of, that is, no damage which would not be

sustained in common with all other citizens of Macon County.

Therefore, relators have no standing to pursue this suit except in the

name of the District Attorney General or by special authority granted

by the Trial Court under Bennett v. Stutts, supra . . . .

        In this posture of the proceeding, it does not appear to be in

order to summarily dismiss the suit. The reason for this is that the

relators have undertaken to state and support a suit on behalf of the

public which, if meritorious ought to be prosecuted by the District

Attorney General. It would therefore be manifestly unfair to the

public and to the District Attorney General to dismiss this suit

without an adequate opportunity to the District Attorney to pursue the

suit on behalf of the public.

        Under the authorities discussed herein, the Trial Judge should

require the District Attorney General, after investigating and

considering all elements of the present suit, to make his discretionary

decision as to whether the suit has merit and should be prosecuted,

and to ask that his name be substituted for the present relators and

proceed with the prosecution of the case, including resistance to the

defendant’s motion for summary judgment, to authorize the relators

to proceed in his name or to move for dismissal.




                                  -35-
                            If the Trial Court finds that the motion of the District Attorney

                   General to dismiss or his failure to enter or authorize prosecution of

                   the suit is reasonably within his discretionary powers, the motion

                   should be sustained.

                            If the Trial Court finds that the decision of the District

                   Attorney General not to prosecute or authorize prosecution, or failure

                   to make a decision is “arbitrary, capricious, or a palpable abuse of

                   discretion”, the Trial Court should overrule the motion to dismiss and

                   grant special permission to the relators to proceed without

                   participation of the District Attorney General as provided in Bennett

                   v. Stutts, supra.



Wooten v. Macon County, 1988 Tenn. App. LEXIS 83, at *20–22; see also Munsey v. Russell Bros.,

213 S.W.2d 286, 289 (Tenn. Ct. App. 1948).



         In accordance with our statement in Wooten, we vacate that portion of the trial court’s order

awarding summary judgment to the Appellees on this issue. The Taxpayers’ cause of action

challenging the land transaction between the City and Councilman Handley is remanded to the trial

court for further proceedings not inconsistent with this opinion.26 Due to our holding in this case,

         26
             W e are mindful that DuPont and the City have raised for this Court’s consideration the issue of whether the
trial court should have d isqualified M r. Thornto n from repre senting the Taxpayers in this case. However, the trial court
never rendered a decision on the motion due to the grant of partial summary judgment and the Taxp ayers’ subsequent
decision to nonsuit their remaining claims prior to the hearing on the motion. During the pendency of this appeal, the
City filed a motion asking this Court to disqualify Mr. T hornton from representing the Taxpayers on app eal. This Court
                                                                                                             (continued...)

                                                           -36-
it is not necessary that we reach the second issue raised by the Taxpayers on appeal, therefore, it is

pretermitted.



                                                            IV.

                                                      CONCLUSION



         Since these lawsuits were consolidated and not joined, this Court is without jurisdiction to

entertain the issues presented by the parties relating to the City’s lawsuit against the Handleys and

other defendants. We are also without jurisdiction to entertain any issues related to the claim which

the Taxpayers voluntarily nonsuited. As for the trial court’s decision to grant the Appellees summary

judgment on the Taxpayers’ challenge to the land transaction between the City and Councilman

Handley, we vacate the trial court’s order and remand this case to the trial court for further

         26
           (...continued)
denied the City’s motion.

         Rule 6 o f the Rules of the Co urt of App eals of Tennessee pro vides, in relevant part, as follows:

                   (a) Written argument in regard to each issue on appeal shall contain:
                   (1) A statement by the appellant of the alleged erroneo us action of the trial court
                   which raises the issue . . . with citation to the record where the erroneous or
                   corrective action is recorded.
                   (2) A statement showing how such alleged error was sea sonably called to the
                   attention of the trial judge with citation to that part of the record where appellant’s
                   challenge of the alleged error is recorded.

Since the trial court never had an opportunity to rule upon this motion, we have no alleged error to review on ap peal.
Mo reover, this Court may only entertain a trial court’s final judgments. See Tenn. R. App. P. 3(a) (2004). Since the trial
court never entered a judgment on the City’s motion, we have no judgment on this issue to review on ap peal. See
Thompson v. Dickerson, No . 02A 01-9 702 -CV -000 34, 1 997 Tenn. Ap p. LE XIS 547 , at *8 (Tenn. Ct. App. Aug. 1, 1997 ).

          In passing on this issue, we must also take into account our ho lding in this case. T he district attorney general’s
potential involve ment in this case o n remand may render a decision o n the issue moo t. We are also mindful that, in
compliance with our holding and the aforementioned authorities, the potential exists that the Taxpayers may be permitted
to pursue their claim without the involvement of the district attorney general. In the event that this contingency occ urs,
the City is free to re-file its motion at the appropriate time so that the trial court may render a decision on the issue.

                                                            -37-
proceedings not inconsistent with this opinion. Costs of this appeal are taxed to the Appellants,

Gene Plant, et al. and their surety, for which execution may issue if necessary.




                                                      ___________________________________

                                                      ALAN E. HIGHERS, JUDGE




                                               -38-
