                                                                                             04/21/2017




                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                  March 22, 2017 Session

     DAVID TURNER, ET AL v. KARL KENDRICK, ET AL. v. DANNY
                       ANDERSON, ET AL.

               Appeal from the Chancery Court for Williamson County
                      No. 42527 James G. Martin, III, Judge
                      ___________________________________

                            No. M2016-00884-COA-R3-CV
                        ___________________________________


This appeal arises from the dismissal of a third-party complaint, which was filed two
years after the third-party plaintiffs filed its answer to the original complaint. The trial
court found that the third-party plaintiffs failed to seek leave of the court to join the third-
party defendants as required by Tennessee Rule of Civil Procedure 14.01. The trial court
also determined that the third-party plaintiffs failed to state a claim which would support
the trial court granting leave to file a third-party complaint, and, accordingly, dismissed
the Appellants’ third-party complaint. The third-party plaintiffs appealed. Discerning no
error, we affirm.

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

KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J. joined.

Joseph M. Barrett and Jordan B. Osborn, Dickson, Tennessee, for the appellants, Karl
Kendrick and Stacey Kendrick.

David A. Bates, Spring Hill, Tennessee, for the appellee, Cindy Garvey.


                                          OPINION

                                     I.     Background

      This appeal arises from a contract to purchase real estate. On September 30, 2012,
David Turner and Tracy Maddox (together “Sellers”) entered into a purchase and sale
agreement to purchase improved property from Karl and Stacey Kendrick (“Buyers,”
“Third-Party Plaintiffs,” “Appellants”). On November 17, 2012, the parties entered into
a separate purchase and sale agreement to purchase the adjoining vacant lot. Pursuant to
the November 2012 agreement, Appellants were to purchase the adjoining lot for $75,000
within five days of the sale of their home. On December 12, 2012, the buyers purchased
the improved property. On June 21, 2013, the Appellants sold their home but did not
proceed to closing on the adjoining lot. On September 30, 2013, the Sellers filed a
complaint against Buyers alleging breach of the November 2012 agreement. The Sellers
sought specific performance and compensatory damages. On December 11, 2013, the
Kendricks filed an answer and counter-complaint alleging breach of contract,
misrepresentation, and violation of the Tennessee Consumer Protection Act on the part of
the Sellers.

       Two years later, on November 24, 2015, the Kendricks filed a third-party
complaint against the third-party defendants Cindy Garvey (d/b/a United Country Leipers
Fork), Danny Anderson, and Bob Parks Realty. Ms. Garvey was the agent representing
the Kendricks during the negotiations for the purchase of the vacant lot. Appellants
allege that Ms. Garvey breached the contract and violated the Tennessee Consumer
Protection Act, as well as the Tennessee Real Estate Broker License Act by failing to
advise them of the documents being signed throughout the negotiations and failing to
disclose all facts of which she had knowledge with respect to the residential lot. It is
undisputed that the Kendricks did not file a motion seeking leave of the court to file the
third-party complaint. On January 11, 2016, Ms. Garvey filed a motion to dismiss the
third-party complaint. On February 5, 2016, Mr. Anderson and Bob Parks Realty filed a
joint motion to dismiss. The trial court heard the motions on February 19, 2016 and
entered an order granting the motions to dismiss on March 15, 2016. The Kendricks
appeal. Upon stipulation of the Kendricks, Mr. Anderson and Bob Parks Realty were
dismissed from this appeal by order entered, by this Court, on November 21, 2016, thus
leaving Cindy Garvey, d/b/a United Country Leipers Fork, as the sole Appellee.

                                        II. Issues

We restate Appellants’ issues as follows:

      1.     Whether the trial court erred in dismissing the third-party complaint?

      2.     Whether a third-party defendant has grounds to dismiss an action
             under TRCP 14.01?

                                III. Standard of Review

      Interpretation of the Tennessee Rules of Civil Procedure is a question of law,
which we review de novo with no presumption of correctness. Lacy v. Cox, 152 S.W.3d
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480, 483 (Tenn. 2004). The rules of statutory construction guide our interpretation of
these rules. Thomas v. Oldfield, 279 S.W.3d 259, 261 (Tenn. 2009). We achieve this
objective by examining the text, and if the language is unambiguous, we simply apply the
plain meaning of the words used. Garrison v. Bickford, 377 S.W.3d 659, 663 (Tenn.
2012). In construing the Tennessee Rules of Civil Procedure, our goal is to ascertain and
give effect to the Tennessee Supreme Court’s intent in adopting these rules. Thomas,
279 S.W.3d at 261; see State v. Mallard, 40 S.W.3d 473, 480-81 (Tenn. 2001); see also
Tenn. Code Ann. §§ 16-3-401 & 402 (1994). Our duty is to enforce the rule as written.
Fair v. Cochran, 418 S.W.3d 542, 544 (Tenn. 2013); see Waldschmidt v. Reassure Am.
Life Ins. Co., 271 S.W.3d 173, 176 (Tenn. 2008).

        Appellate courts review a trial court’s ruling on a party’s motion to file a third-
party complaint under an abuse of discretion standard. Dayton v. Ackerman, No.
M2010-00922-COA-R3-CV, 2011 WL 5183763, at *5 (Tenn. Ct. App. Oct. 31, 2011)
(citing Tennessee Farmers Mut. Ins. Co. v. Bradford, No. 02A01-9711-CV-00284, 1999
WL 528835, at *7 (Tenn. Ct. App. July 23, 1999)). A trial court abuses its discretion
“only when it applies an incorrect legal standard, or reaches a decision which is against
logic or reasoning that causes an injustice to the party complaining.” Eldridge v.
Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001). Under this standard, we will not substitute our
judgment for the judgment of the trial court. Id. The abuse of discretion standard
“reflects an awareness that the decision being reviewed involved a choice among several
acceptable alternatives,” and therefore “envisions a less rigorous review of the lower
court’s decision and a decreased likelihood that the decision will be reversed on appeal.”
Allen v. Albea, 476 S.W.3d 366, 373 (Tenn. Ct. App. 2015), perm. app. denied (Tenn.
Sept. 16, 2015) (quoting Henderson v. SAIA, Inc., 318 S.W.3d 328, 335 (Tenn. 2010)).

                                       IV. Analysis

       Tennessee Rule of Civil Procedure 14.01 outlines when and how a defendant may
bring in a third-party complaint:

      At any time after commencement of the action a defending party, as a third-
      party plaintiff, may cause a summons and complaint to be served upon a
      person not a party to the action who is or may be liable to the third-party
      plaintiff for all or part of the plaintiff’s claim against the third-party
      plaintiff. The third-party plaintiff need not obtain leave to make the service
      if the third-party complaint is filed not later than 10 days after service of the
      third-party plaintiff’s original answer. Otherwise the third-party plaintiff
      must obtain leave on motion upon notice to all parties to the action. . . .
      Any party may move to strike the third-party claim, or for its severance or
      separate trial. A third-party defendant may proceed under this rule against
      any person not a party to the action who is or may be liable to the third-
      party defendant for all or part of the claim made in the action against the
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       third-party defendant.

Tenn. R. Civ. P. 14.01 (emphasis added).

       Appellants’ third-party complaint alleges “that septic and sewage disposal system
for the residential lot is defective and not suitable for normal use. Furthermore, the
residential lot is subject to flooding following periods of moderate or heavy rain. . . .”
With regard to the Appellee, the complaint specifically alleges that “as agent and broker
for the [Appellants], [Appellee] owed a duty . . . to diligently exercise reasonable skill
and care in providing services as agent to the [Appellants], disclose any adverse facts of
which she had knowledge, provide services with honesty and good faith, be loyal to the
interests of the clients, and to disclose all known adverse facts pertaining to the property.
. . .” Ultimately, the Appellants allege that Appellee’s negligence caused the litigation
between the Appellants and the Sellers, causing Appellants to incur “substantial costs” in
defending the litigation. Appellants argue that because all of the claims involved arise
from the same transaction, any liability Appellants have to the Sellers is the direct result
of Appellee’s alleged negligence and statutory violations. For these reasons, Appellants
argue that impleader is proper and should be permitted in order to ascertain liability.

        Appellee argues that Appellants failed to state a legal basis on which the third-
party defendants could be held liable for all or part of the original plaintiffs’ claim.
Specifically, Appellee argues that the third-party complaint asserts an independent cause
of action against Appellee, (i.e., that but for the alleged negligence of Appellee, the
Kendricks would not have been involved in the instant litigation and would not have
incurred litigation costs). The third-party complaint does not seek to have Appellee held
liable for all or part of the original plaintiffs’ claim. Instead, the third-party complaint
seeks a judgment in favor of the Appellants for damages resulting from the alleged
negligence of Appellee.

       In making its ruling, the trial court relied on Valley Fid. Bank & Trust Co. v.
Ayers, 861 S.W.2d 366 (Tenn. Ct. App. 1993), perm. app. denied (Tenn. Aug. 2, 1993),
in which we opined that “a third-party action cannot be maintained where an alleged
indebtedness of the third-party to the defendant did not arise out of, or have a causal
connection with, the principal demand. . . . It has been said that the only instances
providing a predicate for third-party practice are where the third-party plaintiff has a
claim for indemnification, contribution, or subrogation.” Id. at 368. “Under certain
provisions, the third-party claim must arise out of the transaction or occurrence that is the
basis of the plaintiff’s claim and must contain common questions of fact.” Id. In the
present case, the trial court stated in its order:

       [T]he third-party complaint fails to otherwise allege grounds cited by the
       Tennessee Court of Appeals in Valley Fid. Bank & Trust Co. v. Ayers, in
       which it held that “the only instances providing a predicate for third-party
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      practice are where the third-party plaintiff has a claim for indemnification,
      contribution, or subrogation.” 861 S.W.2d 366, 368 (Tenn. Ct. App.
      1993)(citing 59 Am. Jur. 2d, Parties at §196).

              First the court finds that there is no allegation whatsoever by Karl
      and Stacey Kendrick (the third- party plaintiffs) that they have a claim for
      indemnification from the third-party defendants, nor do they otherwise
      allege a factual basis for indemnification. Second, there is no allegation
      whatsoever by the Kendricks that they have a claim for contribution from
      the third-party defendants, nor do they otherwise allege a factual basis for
      contribution. Third, there is no allegation whatsoever by the Kendricks that
      they have a claim for subrogation against the third-party defendants, nor do
      they otherwise allege a factual basis for subrogation. The Court further
      notes that the third-party plaintiffs have failed to cite any case supporting a
      basis for third-party action other than the grounds stated in Valley Fid.
      Bank & Trust Co. v. Ayers. Therefore, as the third-party complaint fails to
      state a claim upon which relief can be granted, the same must be dismissed
      as a matter of law.

In their third-party complaint, Appellants allege that Appellee breached the contract and
violated the Tennessee Consumer Protection Act, as well as the Tennessee Real Estate
Broker License Act. Appellants do not allege a claim for indemnification, subrogation,
or contribution, nor does the complaint present a fact pattern that would support such a
claim. Accordingly, we conclude that the trial court properly dismissed Appellants’
third-party complaint.

        Appellants also question whether a third-party defendant has grounds to dismiss
an action under Tennessee Rule of Civil Procedure 14.01 and argue that their third -party
complaint should be severed pursuant to Rule 14.01 rather than dismissed. The language
of Tennessee Rule of Civil Procedure 14.01 is plain and unambiguous. The rule clearly
states that “[a]ny party may move to strike the third-party claim, or for its severance or
separate trial.” Therefore, Appellee was within her right to request the dismissal of
Appellant’s third-party claim under this rule.

      The trial court addressed Appellants’ argument that the third-party claim should
have been severed or consolidated as follows:

              In response to the motions to dismiss, third-party plaintiffs argue that
      the third-party proceeding is proper because, even if they had filed a
      separate action against the third-party defendants, consolidation of such
      action with the present action would be proper under TRCP 42.01. First,
      the court notes that consolidation of two actions would only become an
      issue if the actions are proper, here, the court has found that this third-party
                                            -5-
       action is not proper. Second, the court would note TRCP 42.01 provides
       that it is this court, not the litigants, who has the authority to decide whether
       two or more actions should be consolidated; in other words, a presumed
       action of the court is not a basis for by-passing the court’s authority. The
       third-party plaintiffs also argued that, pursuant to Rule 19.01 Tenn. R. Civ.
       P., once they assert a property third-party claim, they may join additional
       claims that they may have against the third-party defendants. The court
       finds that the third-party plaintiffs failed to state a proper third-party claim
       in the first place, however, and therefore Rule 19.01 is not applicable.

        Appellees argue that Tennessee Rule of Civil Procedure 14.01 allows a third-party
plaintiff to file a third-party complaint “if the third-party complaint is filed not later than
10 days after service of the third-party plaintiff’s original answer.” However, if a third-
party plaintiff waits longer than 10 days, the rule plainly states that “the third-party
plaintiff must obtain leave on motion upon notice to all parties to the action.” Tenn. R.
Civ. P. 14.01. In this case, Appellants waited almost two years to file their third-party
complaint, and they did so without permission from the trial court. In addressing this
issue, the trial court stated:

       The requirements of Rule 14.01 are very plain that, whenever a litigant
       waits more than 10 days after their Answer to file a third-party action (as in
       this case, where they waited almost two years), a motion for leave must be
       filed and that it is the court, not a party, who decides whether a third-party
       action will be allowed.
              In the present case, the third-party plaintiffs admit that no motion
       seeking leave to implead third-parties was ever filed. Moreover, this court
       never granted leave for the third-party plaintiffs to file their third-party
       complaint; no order was ever entered by Judge Martin permitting the filing
       of the third-party complaint. The court only speaks through its order.
       Therefore, as the third-party complaint was filed without this Court’s leave
       on motion, the third-party complaint must be dismissed based upon this
       additional ground.

Here, Appellants presented no reason for the two year delay in filing their third-party
complaint. We must review the trial court’s decision as a “choice among several
acceptable alternatives.” Allen, 476 S.W.3d at 373. After waiting nearly two years,
Appellants filed a third-party claim without seeking leave from the trial court as required
by the rules of civil procedure. Furthermore, the third-party complaint filed by
Appellants did not allege a claim for indemnification, subrogation, or contribution, nor
did the complaint present a fact pattern that would support such a claim. Accordingly,
we conclude that the trial court did not abuse its discretion in dismissing Appellants’
third-party complaint.

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                                    V. Conclusion

       For the foregoing reasons, we affirm the order of the trial court. We remand the
case for such further proceedings as may be necessary and are consistent with this
opinion. Costs of the appeal are assessed against Appellants, Karl and Stacey Kendrick,
and their surety, for all of which execution may issue if necessary.


                                               _________________________________
                                               KENNY ARMSTRONG, JUDGE




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