                 IN THE COURT OF APPEALS OF TENNESSEE
                              AT JACKSON
                    ASSIGNED ON BRIEFS SEPTEMBER 2, 2008

    TENNESSEE REALTY DEVELOPMENT, INC. v. STATE OF
TENNESSEE (DEPARTMENT OF TRANSPORTATION) and AMERICAN
            TELEPHONE AND TELEGRAPH (AT&T)

                 Direct Appeal from the Chancery Court for Henry County
                         No. 20624    Ron E. Harmon, Chancellor



                  No. W2008-00722-COA-R3-CV - Filed December 29, 2008


In this appeal, we are asked to determine whether the chancery court erred in failing to allow
Appellant to proceed with discovery after the State of Tennessee filed its Motion to Dismiss, in
dismissing Appellant’s Complaint and Amended Complaint based solely on argument, without any
proof by testimony or documentation, and in dismissing Appellant’s Complaint and Amended
Complaint in regards to BellSouth which did not file a motion to dismiss or present evidence or
documentation prior to the court’s dismissal. On appeal, Appellant contends that it was entitled to
proceed with discovery before the court ruled on the State’s motions. Likewise, Appellant argues
that the State should have been required to prove ownership of an easement right of way over
Appellant’s property. Finally, Appellant contends that because BellSouth filed only a Notice of
Appearance, Appellant’s claim against BellSouth should not have been dismissed. We affirm the
trial court’s dismissal.


    Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Affirmed

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

W. Brown Hawley, II, Paris, TN, for Appellant

T. Leigh Jones, Senior Counsel, Office of the Attorney General, Jackson, TN, for Appellee State of
Tennessee

Louis F. Allen, Amy Ferguson Dudek, Memphis,TN, for Appellee BellSouth Telecommunications,
Inc., incorrectly sued as American Telephone and Telegraph (AT&T)



                                           OPINION
                                 I. FACTS & PROCEDURAL HISTORY

        According to the brief of American Telephone and Telegraph (hereinafter “BellSouth” or
“Appellee”),1 on November 14, 2006, a service outage was reported at the post office in Springville,
Tennessee. A BellSouth technician, who was dispatched to investigate the outage, determined that
service was lost when BellSouth’s telephone cable, which was located in the State of Tennessee’s
right of way, “was augured into by someone digging post holes for a fence.” That fence, according
to BellSouth, was being constructed by Tennessee Realty Development, Inc. (“Appellant” or
“Tennessee Realty”), whose primary owner is James Hobbs (“Mr. Hobbs”).

        In December 2006, BellSouth contacted William Hazlerig, the Director of Maintenance for
the Tennessee Department of Transportation (“State”), to advise him of the seeming encroachment
on the State’s right of way by Tennessee Realty. The State commenced an investigation, and verified
that Tennessee Realty’s fence had been built on the State’s right of way. By a letter dated December
15, 2006, Mr. Hazlerig notified Mr. Hobbs that Tennessee Realty’s fence was located within the
State’s right of way and must be removed within ten days or the State would remove the fence,
pursuant to Tennessee Code Annotated section 54-5-136. This letter cited a specific map and parcel
number as well as highway plans and deeds that supported the State’s ownership of the easement.
The State’s brief states that, on February 26, 2007, Mr. Hazlerig received a letter from Tennessee
Realty’s counsel claiming that the State had abandoned its rights of way easement and noting that
other tracts had erected fences on the right of way. According to its Memorandum in Support of
Motion to Dismiss, the State, between February and June 2007, identified those other tracts with
encroachments, and notified the respective owners of the required removal pursuant to Tennessee
Code Annotated section 54-5-136. Again, by a letter dated June 21, 2007, the State notified
Tennessee Realty of its encroachment and further stated that, after reviewing Tennessee Realty’s
legal position, it found that Tennessee Realty was not absolved from moving the fence. A final
notice was sent to Tennessee Realty on August 8, 2007, allowing five additional days from the date
of receipt before the State would remove Tennessee Realty’s fence at Tennessee Realty’s expense.

        Tennessee Realty did not remove its fence from the State’s alleged right of way, but instead
filed a Complaint in the Henry County Chancery Court on August 27, 2007. The action sought “a
Declaratory Judgment as to the rights and interests of the[] parties [in the subject property] . . . [and]
a Permanent Injunction restricting [the State’s and BellSouth’s] future rights to interfere with
[Tennessee Realty’s] future use of the land, and for a judgment awarding [Tennessee Realty’s]
damages, rents and attorney’s fees.” Tennessee Realty’s Complaint essentially alleged three issues:
(1) the State had abandoned its right of way easement; (2) BellSouth was not entitled to use the right
of way; and (3) the State selectively exercised its right to remove encroachments by forcing only
Tennessee Realty and no others to remove the claimed encroachment.



        1
          According to BellSouth’s appellate brief, Appellant’s Complaint and Amended Complaint incorrectly sued
American Telephone & Telegraph (AT&T), which is actually named BellSouth Telecommunications, Inc.
(“BellSouth”).


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         On October 12, 2007, the State filed a Motion to Dismiss, pursuant to Tennessee Rule of
Civil Procedure 12.02, claiming that, under the doctrine of sovereign immunity, Tennessee Realty’s
action was barred, and, further, that Tennessee Realty had failed to state a claim upon which relief
could be granted. Subsequently, Tennessee Realty filed an Amended Complaint on November 6,
2007, alleging inverse condemnation for which compensation must be paid, as an additional cause
of action, under Tennessee Code Annotated section 29-16-123. The State then filed an Amended
Motion to Dismiss and Objection to Amended Complaint on November 29, 2007. The State moved
the court to strike or deny Tennessee Realty’s Amended Complaint pursuant to Tennessee Rule of
Civil Procedure 15.01 because the Amended Complaint was filed without the leave of the Court or
the written consent of the adverse party. Alternatively, the State’s Amended Motion to Dismiss,
again, argued for dismissal based on the court’s lack of jurisdiction and Tennessee Realty’s failure
to state a claim upon which relief could be granted.

        On December 31, 2007, Tennessee Realty filed a Motion to compel the State “to make
arrangements for the discovery deposition of certain of its employees, along with other persons of
interest to [Tennessee Realty], or, in the alternative, to schedule a discovery conference.” Tennessee
Realty claimed that court intervention was necessary because the State refused to schedule discovery
depositions absent a court order requiring such. The State responded to Tennessee Realty’s Motion
by stating that Tennessee Realty was using discovery as a means of “circumvent[ing] the threshold
jurisdictional issues.”

       After a hearing on February 4, 2008, the Henry County Chancery Court entered an Order
Granting Motion to Dismiss and Amended Motion to Dismiss. The court stated:

               After hearing arguments of counsel (which included [Tennessee
               Realty’s] counsel’s insistence that the State of Tennessee should
               prove ownership of the subject easement as a condition precedent
               with or to its Motion), the Court finds that Defendant’s (State of
               Tennessee) Motion to Dismiss and Amended Motion to Dismiss are
               well taken and should be granted. The Court finds that [Tennessee
               Realty’s] Motion to Compel and [its] insistence that the State must
               put on proof as to ownership are therefore not well taken and
               therefore denied.

                        IT IS THEREFORE ORDERED that the Defendant’s (State
               of Tennessee) Motion to Dismiss and Amended Motion to Dismiss
               are granted and that this case is therefore dismissed in its entirety to
               all parties.

This appeal followed.


                                     II. ISSUES PRESENTED


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        Appellant has timely filed its notice of appeal and presents the following issues for review
as stated in its brief:2

1.       Was [Tennessee Realty] entitled to proceed with requested discovery (depositions) after the
         filing of the [State’s] Motion to Dismiss?
2.       Was the Court correct in dismissing the original Complaint as amended based solely on the
         argument of counsel for the [State] without any proof either by testimony or documentation?
3.       Was the Court correct in dismissing the original Complaint as amended in regard to
         “BellSouth,” who filed no Motion to Dismiss and who presented no evidence through
         testimony or documentation prior to the Court’s dismissal of the Complaint?

For the following reasons, we affirm the decision of the chancery court.

                                         III.   STANDARD OF REVIEW

        As grounds for its Motion to Dismiss and Amended Motion to Dismiss, the State generally
cited Tennessee Rule of Civil Procedure 12.02. However, based on the language of both documents,
it appears that the State moved for dismissal based on Rule 12.02(1), arguing that the chancery court
did not have subject matter jurisdiction to adjudicate the claim, and 12.02(6), claiming that
Tennessee Realty had failed to state a claim upon which relief could be granted. In its Order
Granting Motion to Dismiss, the chancery court failed to specify upon which ground the motion was
granted; however, our standard of review is the same regarding both grounds.

        Our Supreme Court, in Northland Ins. Co. v. State, 33 S.W.3d 727, 729 (Tenn. 2000), set
forth the appropriate standard for reviewing a motion to dismiss for lack of subject matter
jurisdiction. The Court stated:

                  A motion to dismiss for lack of subject matter jurisdiction falls under
                  Tennessee Rule of Civil Procedure 12.02(1). The concept of subject
                  matter jurisdiction involves a court’s lawful authority to adjudicate a
                  controversy brought before it. See Meighan v. U.S. Sprint Commc’ns
                  Co., 924 S.W.2d 632, 639 (Tenn. 1996); Standard Sur. & Cas. Co. v.
                  Sloan, 180 Tenn. 220, 230, 173 S.W.2d 436, 440 (1943). Subject
                  matter jurisdiction involves the nature of the cause of action and the
                  relief sought, see Landers v. Jones, 872 S.W.2d 674, 675 (Tenn.
                  1994), and can only be conferred on a court by constitutional or
                  legislative act. See Kane v. Kane, 547 S.W.2d 559, 560 (Tenn. 1977);
                  Computer Shoppe, Inc. v. State, 780 S.W.2d 729, 734 (Tenn. Ct. App.


         2
          Appellant does not ask this Court to consider whether the trial court lacked subject matter jurisdiction or
whether Appellant’s Complaint failed to raise a claim upon which relief could be granted, such that the granting of the
State’s Motion to Dismiss was appropriate. Thus, we will not address those issues on appeal.


                                                         -4-
                1989). Since a determination of whether subject matter jurisdiction
                exists, is a question of law, our standard of review is de novo, without
                a presumption of correctness. See Nelson v. Wal-Mart Stores, Inc.,
                8 S.W.3d 625, 628 (Tenn. 1999).

Northland Ins. Co., 33 S.W.3d at 729.

         Likewise, the determination of whether the trial court erred in ruling on a motion to dismiss
for failure to state a claim upon which relief could be granted is a question of law. Doe v. Catholic
Bishop for Diocese of Memphis, No. W2007-01575-COA-R9-CV, 2008 WL 4253628, at *3 (Tenn.
Ct. App. Sept. 16, 2008) (citing Farris v. Todd, No. E1999-01574-COA-R3-CV, 2000 WL 528408,
at *2 (Tenn. Ct. App. May 3, 2000)). Thus, this Court must review the trial court’s ruling on a Rule
12.02(6) motion to dismiss de novo with no presumption of correctness. Id. (citing Stein v.
Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997)). “‘[W]e must construe the [plaintiff’s]
complaint liberally in favor of the plaintiff, taking all of the allegations of fact therein as true[,]’” Id.
(quoting Randolph v. Dominion Bank of Middle Tenn., 826 S.W.2d 477, 478 (Tenn. Ct. App. 1991)),
as “[a] motion to dismiss for failure to state a claim for which relief can be granted ‘tests only the
legal sufficiency of the complaint[.]’” Id. (quoting Stein, 945 S.W.2d at 716 (Tenn. 1997)).


                                            IV. DISCUSSION

                                              A.   Discovery

        On appeal, Appellant asserts that the chancery court erred when it failed to allow Tennessee
Realty to proceed with requested discovery after the State filed its Motion to Dismiss. Appellant
claims that the appellate briefs submitted by both the State and BellSouth uncovered relevant facts
of which Appellant was unaware. Appellant argues “[i]t was these facts and several more equally
as pertinent which [Appellant] sought to identify and expand through the discovery process denied
by the Trial Court.” However, in Henderson v. Bates, No. W2005-01506-COA-R3-CV, 2006 WL
360844 (Tenn. Ct. App. Feb. 17, 2006), this Court considered this issue. In Henderson, an inmate
plaintiff appealed the trial court’s dismissal of his case, claiming that the trial court erred by
dismissing plaintiff’s civil right action before he could conduct discovery or respond to the
defendant’s motion to dismiss. In affirming the trial court, we stated, “[o]bviously, when
considering a motion to dismiss for failure to state a claim upon which relief can be granted, we are
limited to the examination of the complaint alone.” Id. at *2 (citing Wolcotts Fin. Serv., Inc. v.
McReynolds, 807 S.W.2d 708 (Tenn. Ct. App. 1990)). Thus, we held that the trial court did not err
in suspending discovery and failing to allow plaintiff to respond to the motion to dismiss, as neither
would have benefitted plaintiff. Id. at *4.


       In the instant case, we, likewise, find that further discovery would have been of no benefit
to Appellant, as Rule 12.02 motions to dismiss test only the sufficiency of the complaint. Rose v.
Cookeville Reg’l Med. Ctr., No. M2007-02368-COA-R3-CV, 2008 WL 2078056, at *4 (Tenn. Ct.

                                                    -5-
App. May 14, 2008) (citing Pendleton v. Mills, 73 S.W.3d 115, 120 (Tenn. Ct. App. 2001)). Thus,
we find that the trial court did not err in failing to allow Appellant to proceed with requested
discovery after the State filed its Motion to Dismiss.


                                    B.    Dismissal Without Proof


        Next, Tennessee Realty asserts that the chancery court erred in dismissing its Complaint and
Amended Complaint based solely on the argument by the State’s Counsel, without any proof either
by testimony or documentation. More specifically, Appellant claims that the State should have been
required to prove its ownership of the easement right of way and also that Tennessee Realty’s fence
had encroached upon such.


         In ruling on a Tennessee Rule of Civil Procedure 12.02 motion, the trial court considers only
the sufficiency of the complaint, rather than the strength of the plaintiff’s evidence. Rose, 2008 WL
2078056, at *4 (citing Pendleton v. Mills, 73 S.W.3d 115, 120 (Tenn. Ct. App. 2001)). More
specifically, a Rule 12.02(6) motion for failure to state a claim upon which relief can be granted
claims that even if all of the “relevant and material factual allegations in the complaint” are taken
as true, the facts nonetheless fail to raise a cause of action. Id. (citing Marceaux v. Thompson, 212
S.W.3d 263, 267 (Tenn. Ct. App. 2006)). The trial court must “construe the complaint liberally in
favor of the plaintiff, taking all allegations of fact as true, and deny the motion unless it appears that
the plaintiff can prove no set of facts in support of her claim that would entitle her to relief.” Id.
(citing Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997); see Winchester v. Little, 996
S.W.2d 818, 822 (Tenn. Ct. App. 1998)). Likewise, this Court must presume the factual allegations
contained within the plaintiff’s complaint are true, and “review the trial court’s legal conclusions
regarding the adequacy of the complaint without a presumption of correctness.” Id. (citing
Marceaux, 212 S.W.3d at 267; see League Cent. Credit Union v. Mottern, 660 S.W.2d 787, 789
(Tenn. Ct. App.1983)).


        To determine the appropriate standard of review concerning a Tennessee Rule of Civil
Procedure 12.02(1) motion to dismiss for lack of subject matter jurisdiction, we must first determine
which method the defendant is employing to challenge such jurisdiction. “Two methods are
available to challenge a court’s subject matter jurisdiction. The first, and most common, is a ‘facial’
challenge. The second is a ‘factual’ challenge.” Staats v. McKinnon, 206 S.W.3d 532, 542 (Tenn.
Ct. App. 2006) (citing Thomas v. Mayfield, No. M2000-02533-COA-R3-CV, 2004 WL 904080, at
*4-5 (Tenn. Ct. App. Apr. 27, 2004); 2 James W. Moore et al., Moore’s Federal Practice § 12.30[4]
(3d ed. 2005)).


       Under a facial challenge, the complaint, itself, is attacked. Id. “It asserts that the complaint,
considered from top to bottom, fails to allege facts that show that the court has power to hear the
case.” Staats, 206 S.W.3d at 542 (citing Crawford v. U.S. Dep’t of Justice, 123 F. Supp. 2d 1012,

                                                   -6-
1013-14 (S.D. Miss. 2000)).3 “In deciding a facial challenge, the court considers the impugned
pleading and nothing else.” Id. (citing Laird v. Ramirez, 884 F. Supp. 1265, 1272 (N.D. Iowa
1995); Ensign-Bickford Co. v. ICI Explosives USA, Inc., 817 F. Supp. 1018, 1023 (D. Conn. 1993)).
Under a facial challenge, “[i]f a complaint . . . competently alleges any facts which, if true, would
establish grounds for subject matter jurisdiction, the court must uncritically accept those facts, end
its inquiry, and deny the dismissal motion.” Id. at 542-43 (citing Great Lakes Educ. Consultants v.
Fed. Emergency Mgmt. Agency, 582 F. Supp. 193, 194 (W.D. Mich. 1984)).


       In a factual challenge, the defendant contends that the court lacks subject matter jurisdiction
even though the plaintiff’s complaint “alleges facts tending to show jurisdiction.” Id. at 543. “It
controverts the complaint’s factual allegations regarding jurisdiction, Cedars-Sinai Med. Ctr. v.
Watkins, 11 F.3d 1573, 1583-84 (Fed. Cir. 1993), and puts at issue the sufficiency of the evidence
to prove facts that would bring the case within the court’s subject matter jurisdiction.” Id. (citing
Ensign-Bickford Co., 817 F. Supp. at 1023).


        We construe the State’s Motion to Dismiss and Amended Motion to Dismiss as facial
challenges to the chancery court’s subject matter jurisdiction. Thus, in considering the State’s
Motions, under both Rules 12.02(1) and 12.02(6), the trial court was only required to consider
Appellant’s Complaint and Amended Complaint to determine whether the court had subject matter
jurisdiction to hear Appellant’s claim, and then to determine whether Appellant’s Complaint
sufficiently alleged a claim for relief. Hence, we find no error in the trial court’s ruling on the State’s
motions without “proof either by testimony or documentation.”
                                         C. Dismissal of BellSouth


       In its brief, Tennessee Realty lists as an issue for this Court’s review, whether the chancery
court erred in dismissing its Complaint and Amended Complaint with regard to BellSouth, as
BellSouth did not file a motion to dismiss, and it presented no evidence, through testimony or
documentation, to the court. However, Tennessee Realty has failed to present a sufficient argument
concerning this issue. Tennessee Rule of Civil Procedure 27(a) provides that an appellant’s brief:


                  shall contain . . . [a]n argument, which may be preceded by a
                  summary of argument, setting forth the contention of the appellant
                  with respect to the issues presented, and the reasons therefor,
                  including the reasons why the contentions require appellate relief,



         3
            The Staats Court noted that “Tenn. R. Civ. P. 12 is substantially identical to Fed. R. Civ. P. 12, making
federal court precedents persuasive authority in construing our rule.” Staats, 206 S.W.3d at 543 n.13 (citing Byrd v.
Hall, 847 S.W.2d 208, 211 n.2 (Tenn. 1993); Bayberry Assocs. v. Jones, 783 S.W.2d 553, 557 (Tenn. 1990); Pacific
E. Corp. v. Gulf Life Holding Co., 902 S.W.2d 946, 952 n.7 (Tenn. Ct. App. 1995)).


                                                        -7-
               with citations to the authorities and appropriate references to the
               record . . . relied on[.]


“The failure of a party to cite to any authority or to construct an argument regarding his position on
appeal constitutes waiver of that issue.” Boggs Kurlander Steele, LLC v. Horizon Commc’ns, No.
M2006-00018-COA-R3-CV, 2008 WL 490628, at *4 (Tenn. Ct. App. Feb. 21, 2008) (citing
Newcomb v. Kohler Co., 222 S.W.3d 368, 402 (Tenn. Ct. App. 2006); see also Rector v. Halliburton,
No. M1999-02802-COA-R3-CV, 2003 WL 535924, at *9 (Tenn. Ct. App. Feb. 26, 2003) (per
curiam); Rhea County v. Town of Graysville, No. E2001-02313-COA-R3-CV, 2002 WL 1723681,
at *7 (Tenn. Ct. App. July 25, 2002)).


        On appeal, Tennessee Realty’s only attempt at an argument on this issue comes in the
“Statement of the Case” and “Statement of Facts” sections of its brief which state that “[n]o formal
Answer was filed by either the [State] or [BellSouth], and [BellSouth] only had its attorney’s Notice
of Appearance filed[;] “the respective positions of the parties through their pleadings were presented
to the Court without any proof, testimony or documentation[;]” and “[o]ther than introduction,
counsel for [BellSouth] did not participate in the proceeding, and, like the [State], produced no
evidence of any nature.” These statements do not provide the “argument” and “citation to the
authorities” required by Tennessee Rule of Appellate Procedure 27(a). Thus, we find, under
Tennessee Rule of Appellate Procedure 27(a), that Appellant has waived its right to have the issue
of BellSouth’s dismissal considered by this Court.


                                         V. CONCLUSION


       For the aforementioned reasons, we affirm the decision of the chancery court. Costs of this
appeal are taxed to Appellant, Tennessee Realty Development, LLC, and its surety, for which
execution may issue if necessary.


                                                       ___________________________________
                                                       ALAN E. HIGHERS, P.J., W.S.




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