Kenneth Brown, Sandra McCulley, and Shawn McCulley v. Samir Shtaya - Dissenting

IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

October 24, 2012 Session

KENNETH BROWN, SANDRA McCULLEY, AND SHAWN McCULLEY

v.

SAMIR SHTAYA

An Appeal from the Circuit Court for Shelby County

No. CT-003801-10 (CT-004711-10) Robert L. Childers, Judge

No. W2012-00875-COA-R3-CV - Filed March 6, 2013

DISSENTING OPINION

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

In this case, the majority concludes that the plaintiffs’ payment of $211.50 to the General

Sessions Court clerk satisfied the requirements of Tennessee Code Annotated section 27-5-

103, and therefore, that the Circuit Court erred in dismissing their appeal for lack of subject-

matter jurisdiction. In reaching this conclusion, the majority relies upon the recent case of

Bernatsky v. Designer Baths & Kitchens, LLC, No. W2012-00803-COA-R3-CV, 2013 WL

593911 (Tenn. Ct. App. Feb. 15, 2013). Because I believe Bernatsky is based upon a flawed

premise, I respectfully dissent.

The Bernatsky majority finds it appropriate to overrule two previous decisions of this Court,

which squarely address the issue presented in Bernatksy, and in which the Supreme Court

recently denied permission to appeal: Jacob v. Partee, No. W2012-00205-COA-R3-CV,

2012 WL 3249605 (Tenn. Ct. App. Aug. 10, 2012) perm. app. denied (Tenn. Dec. 12, 2012)

and University Partners Development v. Bliss, No. M2008-00020-COA-R3-CV, 2009 WL

112571 (Tenn. Ct. App. W.S. Jan. 14, 2009) perm. app. denied (Tenn. Aug. 17, 2009). In

both Jacob and University Partners, this Court held that an appellant who sought to appeal

from general sessions court to circuit court could not satisfy the bond requirements of

Tennessee Code Annotated section 27-5-103 by merely remitting payment of the initial filing

fee. In both cases, this Court reasoned that payment of the initial filing fee did not constitute

giving “bond with good security” for “the cost of the cause on appeal[,]” and therefore, that

the circuit court never acquired jurisdiction over the attempted appeal. See Jacob, 2012 WL

3249605, at *3; Univ. Partners, 2009 WL 112571, at *3. In Jacob, we expressly rejected

the appellants’ argument that section 27-5-103 was ambiguous. 2012 WL 3249605, at *2.

Instead, we found that “[t]he requirements of a ‘bond with good security’ could not be more

clear: an appeal bond which secures all costs incurred throughout the appeal, as opposed to

an initial appeal filing fee, is required.” Id. at *2.

Just two months after the Supreme Court denied permission to appeal in Jacob, however, a

different panel of this Court, in an apparent effort to overcome perceived difficulties in

securing a bond to cover circuit court costs, suddenly discovered ambiguities within section

27-5-103 which, in its opinion, necessitated consideration of copious amounts of legislative

history. In fact, the Bernatksy majority suddenly located not one, but two, ambiguities within

section 27-5-103.1 First, the majority found that “the costs of the appeal” “‘may refer to the

costs of the entire appeal taxed at the conclusion of the litigation . . . or it may simply refer

to a ‘fee’ charged by the court to commence litigation.’” Bernatsky, 2013 WL 593911, at *6.

Additionally, the majority found that section 27-5-103(a)’s use of the phrase “as hereinafter

provided” created an ambiguity because, it reasoned, the phrase “could be a reference to

giving further definition regarding any number of facts, such as the type of security given,

the amount of the bond, whether the ‘cost’ is a designated cost for commencing or initiating

that appeal or for all of the costs that will ever be incurred in the case, or some other factor

entirely.” Id.

Based upon these perceived ambiguities, the Bernatsky majority consulted the legislative

history of the 1988 amendment to section 27-5-103. The majority noted that the amendment

was a legislative response to the case of Maddock, Kenny & Associates, Inc. v. Management

Assistance and Service, Inc., 1986 WL 8811 (Tenn. Ct. App. Aug. 14, 1986), in which this

Court held that a defendant appealing to circuit court was required to post a bond in the

amount of the judgment rendered against him in the general sessions court. The majority

acknowledged that the legislative discussion centered on whether a bond to cover the general

sessions judgment against an appealing defendant was statutorily required. However, the

majority held tight to this Court’s statement in Maddock that “[i]n the case of an appealing

plaintiff, the appeal bond, ‘with good security,’ must be in the minimum amount of $250 for

costs[,]” and it insisted that the absence of legislative discussion regarding the plaintiff’s

appeal requirements necessarily indicated its conclusion that payment of the initial filing fee

satisfied the requirements of 27-5-103.

1

It is significant that in the entire history of the statute, no court prior to Bernatsky had ever

found an ambiguity.

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Beyond the absence of legislative discussion regarding the amount of a plaintiff’s bond, the

Bernatsky majority clung to the concern of at least some legislators that requiring a bond in

the amount of the judgment would create a detriment to the “working poor” and, in effect,

foreclose the class’ ability to bring an appeal. The majority then presumed that requiring an

appeal bond to cover all of the court costs on appeal–which, of course, would not include the

amount of the general sessions judgment–would likewise deprive would-be appellants of

their day in court.

Finally, in discussing section 27-5-103’s alleged ambiguity, the Bernatsky majority focused

upon cases which, in considering other issues, merely referenced the payment of a sum

certain, and it again focused on legislative inaction in the face of these judicial references.

The majority then concluded–in light of the absence of legislative discussion requiring the

payment of a sum certain, some legislators’ concerns regarding the working poor’s ability

to secure a bond covering a judgment, and legislative inaction following judicial references

to a sum certain–that the requirements of section 27-5-103 are satisfied by the payment of

an amount certain “to be determined ‘as hereinafter provided[.]’” Id. at *12 (quoting Tenn.

Code Ann. § 27-5-103(a)). It then determined that section 27-5-103's requirement that an

appealing party “give bond with good security” could be satisfied either by remittance of a

cash payment or the filing of a surety bond.

Finally, in an effort to determine the amount of the requisite payment or bond, the majority

consulted Tennessee Code Annotated section 8-21-401. Because sections 27-5-103 and 8-

21-401 both “relate to . . . the commencement of an appeal from General Sessions court to

Circuit court[,]” the Bernatsky majority concluded that “Section 8-21-401(b)(1)(C)(i) was

intended by the legislature to dovetail with Section 27-5-103, to supply the amount of ‘the

costs of the appeal’ that are to be secured by the statutory appeal bond.” Id. at *17.

However, the majority acknowledged that section 8-21-401 does not reference section 27-5-

103, and therefore, it somehow found it appropriate to consider the legislative history of

section 8-21-401.

The Bernatsky majority stated that section 8-21-401 was intended to address both a lack of

uniformity in court costs and monies lost in uncollected court costs. According to the

majority, the legislative history of section 8-21-401 revealed its sponsor’s intention that court

costs be paid in advance, eliminating the need for a cost bond. Id. at *18. Indeed, the

majority stated that the bill sponsor and Judicial Council representatives had indicated that

“the standardized amount of court costs was intended to be essentially inclusive of all costs

to be charged in the litigation.” Id. (footnote omitted). Thus, the Bernatsky majority

concluded that “payment of the dollar amount in ‘standard court cost’ listed in Section 8-21-

401(b)(1)(C)(i) at the time an appeal from General Sessions Court to Circuit Court is

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instituted fulfills the Section 27-5-103 appeal-bond requirement.” Id. at *19.

At the outset, I simply cannot agree with the conclusion that any portion of section 27-5-103

is ambiguous. This “ambiguity” issue was specifically raised and specifically rejected in the

recent Jacob decision. Section 27-5-103 provides:

(a) Before the appeal is granted, the person appealing shall give bond with

good security, as hereinafter provided, for the costs of the appeal, or take the

oath for poor persons.

(b) An appeal bond filed by a plaintiff or defendant pursuant to this chapter

shall be considered sufficient if it secures the cost of the cause on appeal.

As aptly explained in Judge Stafford’s concurrence in Bernatsky:

[T]he majority concludes that the statute “lacks precision” in that the phrase

“as hereinafter provided” may refer to another statute to establish the costs of

the appeal, specifically the later-enacted Tennessee Code Annotated Section

8–21–401. However, the later enactment of subsection (b) is not relevant to

the inquiry of whether Tennessee Code Annotated Section 27–5–103 is

ambiguous. Courts must only consider the statutory text in determining

whether an ambiguity exists. See Nye v. Bayer Cropscience, Inc., 347 S.W.3d

686, 694 (Tenn. 2011). Only if a statute is determined to be ambiguous may

the court then “consider matters beyond the statutory text, including public

policy, historical facts relevant to the enactment of the statute, the

background and purpose of the statute, and the entire statutory scheme. Mills

v. Fulmarque, Inc., 360 S.W.3d 362, 368 (Tenn. 2012) (citing Lee Med., Inc.,

312 S.W.3d at 527–28) (emphasis added). Thus, consideration of matters such

as “historical facts preceding or contemporaneous with the enactment of the

statute being construed ... [and] earlier versions of the statute” is only

permitted once the statute is determined to be ambiguous. Am. Jur. 2d Statutes

§ 64 n. 5 (citing Lee Med., Inc., 312 S.W.3d at 527–28). However, “these non-

codified external sources cannot provide a basis for departing from clear

codified statutory provisions.” Mills, 360 S.W.3d at 368. Disregarding the

historical context of the amendment to Tennessee Code Annotated Section

27–5–103 and considering only the current statutory text, as I must at this stage

in the analysis, I cannot conclude that there is an ambiguity in the statute at issue.

To hold that the simple phrase “as hereinafter provided” alone causes an

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ambiguity creates a forced interpretation at odds with the established rules of

statutory construction. See Mooney v. Sneed, 30 S.W.3d 304, 306 (Tenn.

2000) (holding that a court's job in interpreting a statute is to ascertain the

intention of the legislature without employing a “forced or subtle interpretation

that would limit or extend the statute's application”). Indeed, the Tennessee

Supreme Court has held that “it is improper to take a word or a few words

from its context and, with them isolated, attempt to determine their meaning.”

Eastman Chem. Co. v. Johnson, 151 S.W.3d 503 (Tenn. 2004). In this case, the

majority seeks to find an ambiguity in the isolated phrase “as hereinafter

provided,” while ignoring the fact that the most natural interpretation of the

statute's text requires us to hold that the “as hereinafter provided” language

clearly refers to the following subsection of the statute.

Bernatsky, 2013 WL 593911, at *16; Bernatsky, 2013 WL 593911, at *24 (J. Stafford,

concurring and seemingly partially dissenting).

Moreover, I cannot agree with the Bernatsky Court’s finding that the phrase “costs of the

appeal” renders section 27-5-103 ambiguous. In finding such ambiguity, the Bernatsky Court

focused upon subsection (a)’s “costs of the appeal” without looking to subsection (b) for

further clarification of the phrase. Read together, subsections (a) and (b) require that an

appellant give “[a]n appeal bond” “with good security” to “secure[] the cost of the cause on

appeal.” Thus, the statute does not simply require that some unspecified “costs” be secured;

it specifically requires that those “costs” secure the “cost of the cause on appeal.” It is

elementary that a payment to commence an appeal–whether termed a “fee,” a “cost,” or a

“bond”–does not provide security for the “cost of the cause”–the “cause,” of course, being

the appeal. Thus, the plain language of section 27-5-103 requires a litigant appealing from

a judgment in the general sessions court to file a bond for all of the costs of the appeal. The

plain language of the statute does not place a monetary limit on the appeal bond. Because the

costs of the appeal are unknown at the time of commencing the appeal, the statute clearly

requires a bond in an undetermined amount. Therefore, by its plain language, the statute

requires a bond for all the costs of the litigation in order to successfully perfect an appeal

from the general sessions court.

In the absence of ambiguities within section 27-5-103, its legislative history may not properly

be considered. See Keen v. State, --- S.W.3d ----, 2012 WL 6631245, at *12 (Tenn. 2012)

(citations omitted) (“If the statutory language is clear and unambiguous, we apply the

statute’s plain language in its normal and accepted use. We need look no further than the

statute itself, enforcing it just as it is written.”). In any event, the legislative history of

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section 27-5-103 cited by the Bernatsky majority, is, in my opinion, less than compelling.

As was acknowledged by the Bernatsky majority, the 1988 amendment to section 27-5-103

was a legislative response to a decision by this Court to require a bond for the amount of the

judgment2 –an entirely different issue from that presented in Bernatsky and in the instant case.

Moreover, the legislators apparently expressed concern regarding the “working poor’s”

potential inability to secure a bond for the amount of the judgment–as opposed to the amount

of courts costs incurred throughout the appeal. The legislators’ reasoning does not pour over

as easily as the Bernatsky Court suggests. The requirement that a litigant secure a bond to

cover all court costs incurred throughout the appeal–necessarily excluding the judgment

amount–requires only a bond for a not-yet-known amount. It does not require an

“unlimited” bond. A bonding company could easily issue a bond “securing all court

costs”–the exact amount of which is unknown until the case is resolved.

Moreover, I find less-than-compelling the Bernatsky majority’s reliance upon perceived

legislative “acquiescence” in light of case law referencing payment of a sum certain. In City

of Red Boiling Springs v. Whitley, 777 S.W.2d 706 (Tenn. Ct. App. 1989), cited by the

Bernatsky majority, a city court defendant erroneously paid a $250.00 fee to the circuit court

clerk–as opposed to the city court clerk–to appeal his case. On appeal, this Court held that

filing the bond in the wrong court did not warrant dismissal; however, it found the appeal had

not been perfected because the bond lacked a surety. Id. at 708. The Court, referencing

section 27-5-103, stated, “We know of no case that says an appeal bond without a surety filed

in the circuit court substantially complies with the statutory provisions governing appeals

from inferior courts.” Id.; see also City of Maryville v. Scholem, No. 03A01-9111-CV-401,

1992 WL 62007, at *2 (Tenn. Ct. App. E.S. Mar. 31, 1992) perm. app. denied (Tenn. Aug.

24, 1992) (“In the Red Boiling Springs case, the court found the appellant failed to properly

perfect his appeal because he had no surety on the appeal bond as required by the statute.”).

Although the Bernatsky majority is correct that City of Red Boiling Springs refers to the

payment of the $250 fee as a “bond,” it nonetheless finds such is deficient unless a surety is

included. Thus, City of Red Boiling Springs stands for the proposition that some type of bond

beyond a fee payment is required–precisely what a different panel of this Court held in Jacob

2

The Bernatsky majority states that the legislature did not “indicate any intent to disturb the

Maddock Court’s holding that an appeal bond for costs in ‘the minimum amount of $250’ was

sufficient under the statute to secure ‘the costs of the appeal’” Bernatsky, 2013 WL 593911, at *8.

However, the Maddock Court clearly envisioned that appealing plaintiffs would not simply file a

$250 fee, as it stated that a defendant subject to a non-prosecuting plaintiff/appellant would be

entitled to dismissal of the appeal and a judgment against the plaintiff “and his sureties on the appeal

bond for costs.” Maddock, 1986 WL 8811, at *2 (emphasis added).

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v. Partee. See also Tejwani v. Trammell, No. 02A01-9103-CV-00036, 1991 WL 136224, at

*2 (Tenn. Ct. App. W.S. July 26, 1991) (mentioning a $250 sum, but requiring a surety).

Simply put, I am more than skeptical that the cases relied upon by the Bernatksy

majority–which mostly relate to other issues–in fact, support its contention that the legislature

has acquiesced to mere payment of an initial filing fee.

However, I find it curious that the majority would rely so heavily upon purported legislative

acquiescence, while all but ignoring our Supreme Court’s recent implicit affirmance of our

holding in Jacob which addressed the exact issues raised in Bernatsky and now in the instant

case. See Rose Const. Co., Inc. v. Raintree Dev. Co., LLC, No. W2003-01845-COA-R3-

CV, 2004 WL 2607766, at *2 (Tenn. Ct. App. Nov. 16, 2004) perm. app. denied (Tenn. May

9, 2004) (stating that a decision was “implicitly affirmed” when the Supreme Court denied

application for permission to appeal).3

Finally, I disagree with the Bernatsky majority’s reliance upon Tennessee Code Annotated

section 8-21-401. As previously stated, 27-5-103 unambiguously requires a bond covering

all appeal costs. Therefore, it is unnecessary to consider section 8-21-401 to determine the

sum sufficient to satisfy the requirements of section 27-5-103. In any event, I would note

that section 8-21-401 is clear on its face; it explicitly declares that the “[i]f a party . . . pays

costs at the time the services are requested, such payment shall be deemed to satisfy the

requirement for security to be given for costs, pursuant to § 20-12-120.” (emphasis added).

Section 20-12-120 is not the cost bond requirement of Section 27-5-103. Applying the canon

of construction “expressio unius est exclusio alterius,” which holds that the expression of one

thing implies the exclusion of others, the Court should infer that had the legislature intended

for payment of section 8-21-401 costs to satisfy the requirements of section 27-5-103, it

would have included specific language to that effect. See Rich v. Tenn. Bd. of Med. Exam.,

350 S.W.3d 919, 927 (Tenn. 2011).

Moreover, without a finding of ambiguity within section 8-21-401, the Bernatsky Court

clearly lacked the authority to consider the statute’s legislative history.4 No matter what the

bill sponsor or a representative of the Judicial Council–who is not a member of the General

3

To the same effect as Jacob v. Partee, see Atty. Gen. Op., No. 12-23, 2012 WL 682072, at

*2 (Feb. 23, 2012). Neither the Attorney General nor the Supreme Court, in denying permission to

appeal in Jacob v. Partee, noted any ambiguity in the statute.

4

The Bernatsky court purportedly found an ambiguity in section 27-5-103. Section 8-21-401

is a separate statute entirely, found in a different title of the Code.

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Assembly–may have said at the time of the statute’s enactment, the legislature did not enact

a statute in which payment of the sums contemplated in section 8-21-401 were deemed to

satisfy the requirements of section 27-5-103. In holding this, the Bernatsky Court departed

from the express language found in section 8-21-401.

Additionally, assuming that section 8-21-401's legislative history could be properly

considered, the history does not fully support the Bernatksy Court’s conclusions. According

to the Court, the 2005 amendment to section 8-21-401 was conceived, in part, to address the

problem of lost court costs revenue. In light of this purported mission, it is doubtful that the

legislature would eliminate the appeal bond requirement, and simply allow upfront payment

of the litigation commencement fee.

As expressed in Jacob, I believe that section 27-5-103 unambiguously requires an appeal

bond which secures all costs incurred throughout the appeal, as opposed to payment of an

initial appeal filing fee. Accordingly, I cannot subscribe to the conclusions reached in

Bernatsky which underlie the result in the instant case. For these reasons, I respectfully

dissent.

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

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