Janet Wynn Snyder v. First Tennessee Bank, N.A.

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

October 26, 2015 Session

JANET WYNN SNYDER v. FIRST TENNESSEE BANK, N.A.

Appeal from the Chancery Court for Knox County

No. 183863-1 John F. Weaver, Chancellor

No. E2015-00530-COA-R3-CV-FILED-FEBRUARY 3, 2016

This case involves the trial court‟s award of litigation costs, inclusive of attorney‟s fees,

pursuant to Tennessee Code Annotated § 20-12-119(c) (Supp. 2015), upon granting the

defendant‟s Tennessee Rule of Civil Procedure 12.02(6) motion to dismiss the plaintiff‟s

action. The trial court entered a judgment in favor of the defendant in the amount of

$10,000, the statutory maximum, against the plaintiff and her surety. The plaintiff

appeals the portion of the ruling holding the surety liable for the $10,000 judgment of

litigation costs in the event the principal fails to satisfy the judgment. Having determined

that the surety‟s cost bond explicitly referred to “costs” as defined in Tennessee Code

Annotated § 20-12-120 (2009), rather than as defined in subsection -119(c), we reverse

the trial court‟s judgment as to the surety. We affirm the trial court‟s judgment against

the principal and remand for enforcement of that judgment.

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

Affirmed in Part, Reversed in Part; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL

SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.

Mark E. Brown, Knoxville, Tennessee, for the appellant, Janet Wynn Snyder.

J. Michael Winchester, Knoxville, Tennessee, for the appellee, First Tennessee Bank,

N.A.

OPINION

I. Factual and Procedural Background

This is the second time the instant action has come before this Court on appeal.

The plaintiff, Janet Wynn Snyder, originally commenced the action on October 1, 2012,

by filing a complaint alleging breach of contract against the defendant, First Tennessee

Bank, N.A. (“the Bank”). Upon a motion to dismiss filed by the Bank pursuant to

Tennessee Rule of Civil Procedure 12.02(6), the trial court conducted a hearing and

subsequently granted the motion in an order entered May 31, 2013. Upon Ms. Snyder‟s

appeal, this Court affirmed the dismissal of her complaint. See Snyder v. First Tenn.

Bank, N.A., 450 S.W.3d 515 (Tenn. Ct. App. 2014), perm. app. denied (Tenn. Oct. 15,

2014) (“Snyder I”). Determining that Ms. Snyder‟s breach of contract claim alleged

wrongful acceleration of a note in default, this Court held that “wrongful acceleration is

not an existing cause of action in this state, and we decline the invitation to create such a

cause of action.” Id. at 516. This Court therefore affirmed the trial court‟s dismissal of

the complaint for failure to state a claim upon which relief could be granted. Id.

In Snyder I, this Court described the factual and procedural background underlying

the original action as follows:

Snyder‟s complaint alleges the key background facts of this case. In

1988, Snyder‟s father executed a last will and testament which created a

trust (“the Trust”) out of the remainder of his estate. Some years after

executing this will, Snyder‟s father died. Snyder and certain members of

her family were beneficiaries of the Trust. Under the terms of the Trust,

Snyder received 30% of the income from the Trust annually. The Bank

eventually was appointed trustee. The value of the Trust on the date of

appointment was $1,464,315.57 with a market value of $1,506,841.21.

Snyder and her husband signed a note and deed of trust for their

home as well as a note and deed of trust on a home equity line of credit.

These loans were from the Bank. In 2005, Snyder, in the midst of financial

difficulties, asked for help from the Trust in making her monthly mortgage

payments. Snyder‟s requests were denied. In the fall of 2005, Snyder

asked that the Trust be terminated and that the proceeds be paid to the

beneficiaries. The Bank announced that it would resign as trustee. The

Bank, however, refused to join the beneficiaries in dissolving the Trust.

In December 2005, Snyder asked the Bank for a “hardship advance”

pending the Trust‟s dissolution so that Snyder could make mortgage

2

payments due the Bank. The Bank did not grant Snyder‟s request. Snyder

alleged that she then had no choice but to hire an attorney to seek

dissolution of the Trust. Snyder entered into a contingent fee arrangement

with an attorney to seek court approval of the dissolution of the Trust. In

March 2006, the Bank filed a petition in the Trial Court seeking the

appointment of a successor trustee. Snyder filed a counter-claim.

The Bank threatened foreclosure and served notice on Snyder that it

was accelerating its loans on Snyder‟s home. At this point, Snyder‟s share

of the Trust would have been sufficient to cover the loan shortfall. Snyder

obtained several delays of the foreclosure. In November 2006, the Trust

was dissolved by agreed order. The Bank wrote itself a check from the

corpus of the Trust to cover . . . Snyder‟s loan deficiency. The Bank failed

to make distributions to the beneficiaries. Snyder filed a motion to compel

the Bank to make the distributions, which the Bank subsequently did.

In October 2012, Snyder sued the Bank seeking compensatory and

punitive damages. Snyder alleged breach of contract in that the Bank acted

in bad faith and forced Snyder to incur needless attorney‟s fees in

dissolving the Trust. The Bank filed a motion to dismiss for failure to state

a claim upon which relief can be granted and failure to join a party. Snyder

filed a response to the motion, clarifying that her complaint alleged “breach

of the Deed of Trust contract on the real property.”

In March 2013, the Trial Court heard arguments on the Bank‟s

motion to dismiss. In May 2013, the Trial Court granted the Bank‟s motion

to dismiss for failure to state a claim upon which relief can be granted. In

its memorandum opinion incorporated into the final judgment of dismissal,

the Trial Court held, inter alia: any breach of fiduciary duty claim was

time-barred; no foreclosure occurred and any wrongful foreclosure claim

failed; and, there was no breach of contract claim as any such claim was

time-barred, and, in any event, the Bank did not breach its contracts. The

Trial Court stayed the issue of costs and attorney‟s fees sought by the Bank

under Tenn. Code Ann. § 20-12-119(c) pending resolution of any appeal.

Thereafter, Snyder timely appealed to this Court.

Id. at 516-17 (footnotes omitted). This Court remanded the case to the trial court “for

collection of the costs below and further proceedings pursuant to Tenn. Code Ann. § 20-

12-119(c).” Id. at 519.

3

Upon remand, the Bank filed a motion to award costs and attorney‟s fees, pursuant

to Tennessee Code Annotated §§ 20-12-119(c) and 20-12-135, on October 29, 2014. The

Bank attached to its motion a memorandum and affidavit setting forth attorney‟s fees in

the amount of $57,238.75 and a court reporter‟s fee in the amount of $403.25, for a total

amount of $57,642.00. The Bank requested that, pursuant to subsection -119(c), the trial

court impose a judgment for the maximum statutory amount of $10,000 in litigation

costs, inclusive of attorney‟s fees, against Ms. Snyder. The Bank also specifically

requested that the court find Ms. Snyder‟s surety liable for the statutory maximum of

$10,000 in the event that Ms. Snyder failed to satisfy the judgment as principal.

Concomitant with Ms. Snyder‟s original complaint, her counsel, Menefee &

Brown, Inc. (hereinafter, “the Surety”), had filed a cost bond pursuant to Tennessee Code

Annotated § 20-12-120, recognizing itself “as surety for all costs and taxes in this cause.”

Ms. Snyder filed a response to the Bank‟s motion, arguing, as pertinent to this appeal,

that the plain language of the statute does not implicate liability of the Surety for

litigation costs beyond court costs.1

The trial court conducted a hearing on January 21, 2015, during which the Bank‟s

counsel presented an affidavit supporting the reasonableness of the costs and attorney‟s

fees presented. On February 27, 2015, the court issued a Memorandum Opinion, finding,

inter alia, that the court reporter‟s fee and attorney‟s fees presented were reasonable. The

court awarded the Bank a judgment for litigation costs, inclusive of attorney‟s fees, in the

maximum statutory amount of $10,000. See Tenn. Code Ann. § 20-12-119(c).

Regarding the Bank‟s argument that this award should be taxed against the Surety as well

as against Ms. Snyder, the court requested that the parties submit post-trial briefs, which

each did respectively. Upon consideration, the court entered a judgment on March 27,

2015, taxing the $10,000 award of litigation costs against both Ms. Snyder and the

Surety. Ms. Snyder timely appealed.2

1

Ms. Snyder also argued in her response that as Tennessee Code Annotated § 20-12-119(c) is written, it

violates the equal protection and separation of powers clauses of the United States and Tennessee

Constitutions. Her counsel announced during the final hearing on this matter, however, that Ms. Snyder

had elected to waive any constitutional argument.

2

We address the issue of whether the Surety is a party to this appeal in a subsequent section of this

opinion.

4

Issues Presented

Ms. Snyder presents one issue on appeal, which we have restated as follows:

1. Whether the trial court erred by ruling that Tennessee Code

Annotated § 20-12-119(c) applies to a party‟s surety, as well as to

the party, when the party‟s case is dismissed upon a Tennessee Rule

of Civil Procedure 12.02(6) motion to dismiss for failure to state a

claim upon which relief can be granted.

The Bank presents two additional issues, which we have similarly restated as follows:

2. Whether either Ms. Snyder or her surety has standing to pursue a

claim or remedy in this appeal.

3. Whether this appeal is frivolous pursuant to Tennessee Code

Annotated § 27-1-122.

III. Standard of Review

The issues raised are primarily questions of law, specifically involving

interpretation of Tennessee Code Annotated § 20-12-119(c). We review questions of

law, including those of statutory construction, de novo with no presumption of

correctness. See Cunningham v. Williamson Cnty. Hosp. Dist., 405 S.W.3d 41, 43 (Tenn.

2013) (citing Mills v. Fulmarque, Inc., 360 S.W.3d 362, 366 (Tenn. 2012)). Our

Supreme Court has summarized the principles involved in statutory construction as

follows:

When dealing with statutory interpretation, well-defined precepts apply.

Our primary objective is to carry out legislative intent without broadening

or restricting the statute beyond its intended scope. Houghton v. Aramark

Educ. Res., Inc., 90 S.W.3d 676, 678 (Tenn. 2002). In construing

legislative enactments, we presume that every word in a statute has

meaning and purpose and should be given full effect if the obvious

intention of the General Assembly is not violated by so doing. In re

C.K.G., 173 S.W.3d 714, 722 (Tenn. 2005). When a statute is clear, we

apply the plain meaning without complicating the task. Eastman Chem.

Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). Our obligation is

simply to enforce the written language. Abels ex rel. Hunt v. Genie Indus.,

Inc., 202 S.W.3d 99, 102 (Tenn. 2006). It is only when a statute is

ambiguous that we may reference the broader statutory scheme, the history

5

of the legislation, or other sources. Parks v. Tenn. Mun. League Risk

Mgmt. Pool, 974 S.W.2d 677, 679 (Tenn. 1998). Further, the language of a

statute cannot be considered in a vacuum, but “should be construed, if

practicable, so that its component parts are consistent and reasonable.”

Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968). Any

interpretation of the statute that “would render one section of the act

repugnant to another” should be avoided. Tenn. Elec. Power Co. v. City of

Chattanooga, 172 Tenn. 505, 114 S.W.2d 441, 444 (1937). We also must

presume that the General Assembly was aware of any prior enactments at

the time the legislation passed. Owens v. State, 908 S.W.2d 923, 926

(Tenn. 1995).

In re Estate of Tanner, 295 S.W.3d 610, 613-14 (Tenn. 2009).

To the extent that we need also review the factual findings of the trial court, we

presume those findings to be correct and will not overturn them unless the evidence

preponderates against them. See Tenn. R. App. P. 13(d); Morrison v. Allen, 338 S.W.3d

417, 425-26 (Tenn. 2011). “In order for the evidence to preponderate against the trial

court‟s findings of fact, the evidence must support another finding of fact with greater

convincing effect.” Wood v. Starko, 197 S.W.3d 255, 257 (Tenn. Ct. App. 2006).

IV. Standing

We first address the threshold issue of standing to raise the issue of the Surety‟s

liability on appeal. The Bank contends that because the Surety was not named as a party

before the trial court or on the notice of appeal, it cannot raise an issue on its own behalf.

The Bank further contends that Ms. Snyder cannot raise the issue of a judgment not

entered against her. Ms. Snyder asserts that the trial court joined the Surety to the action

by including the Surety in the judgment. Upon careful consideration, we conclude that

the Surety has standing to appeal the judgment entered against it.

This Court has explained the elements constituting standing as follows:

In order to establish standing, a party must demonstrate three essential

elements. First, the party must demonstrate that it has suffered an injury

which is “distinct and palpable,” Metropolitan Air Research Testing Auth.,

Inc., 842 S.W.2d [611,] 615 [(Tenn. Ct. App. 1992)], and not conjectural or

hypothetical. Second, the party must establish a causal connection between

that injury and the conduct of which he complains. Third, it must be likely

that a favorable decision will redress that injury.

6

Petty v. Daimler/Chrysler Corp., 91 S.W.3d 765, 767 (Tenn. Ct. App. 2002) (additional

internal citations omitted).

The Bank, in its motion for costs and attorney‟s fees, expressly requested that the

trial court hold the Surety liable for the maximum statutory amount in addition to holding

Ms. Snyder liable. Upon the trial court‟s request at the close of the hearing on the

motion, the Bank and Ms. Snyder each respectively submitted a post-trial brief on the

issue, which the trial court carefully considered. As Ms. Snyder notes, the record reveals

that the Bank at no time introduced a standing argument to the trial court regarding the

Surety. We therefore determine that the Bank has not properly raised the issue on appeal

of standing before the trial court. See Dorrier v. Dark, 537 S.W.2d 888, 890 (Tenn.

1976) (“This is a court of appeals and errors, and we are limited in authority to the

adjudication of issues that are presented and decided in the trial courts . . . .”).

Moreover, we determine that the requirements for standing as to the Surety on

appeal are met. In having a $10,000 judgment rendered against it as well as the principal,

the Surety arguably suffered a distinct and palpable injury as a result of the trial court‟s

application of the statute, an injury that would be redressed if this Court found in the

Surety‟s favor. See Petty, 91 S.W.3d at 767. To rule that the Surety has no standing in

this action would deprive the Surety of due process to seek relief from the judgment.3

This Court has the discretion to add a party pursuant to Tennessee Rule of Appellate

Procedure 19(e), which provides that “[p]arties may be added or dropped by order of the

appellate court on its own motion or on motion of a party and on such terms as are just.”

We therefore, on our own motion and in the interest of justice, join the Surety as a party

to this appeal.

V. Applicability of Tennessee Code Annotated § 20-12-119(c) to Surety

The Surety contends that the trial court erred by applying Tennessee Code

Annotated § 20-12-119(c) to assess attorney‟s fees against the Surety as well as against

Ms. Snyder as the principal plaintiff. Subsection 119(c) provides for a defendant to

recover up to $10,000 in “reasonable and necessary litigation costs,” including court

reporter‟s and attorney‟s fees, from a plaintiff when the plaintiff‟s action is dismissed for

failure to state a claim upon which relief can be granted. The Bank contends that the trial

court properly interpreted the statute to find the Surety liable for $10,000 in litigation

costs, inclusive of the court reporter‟s fee and attorney‟s fees, in the event that Ms.

Snyder failed to pay the judgment. Upon our careful review, we conclude that under the

terms of the cost bond filed in the instant action, the Surety limited its liability to “costs”

as defined in Tennessee Code Annotated § 20-12-120 and is therefore not liable for the

3

We are not persuaded by the Bank‟s argument that the Surety‟s only avenue of redress from the

judgment should be to sue its own client if she should fail to pay the judgment.

7

$10,000 in fees awarded to the Bank for litigation costs if Ms. Snyder fails to satisfy the

judgment.

The General Assembly amended Tennessee Code Annotated § 20-12-119 to add

subsection (c) effective July 1, 2012. See 2012 Pub. Acts, Ch. 1046 § 1 (H.B. 3124).

Section -119 provides in full:

(a) In all civil cases, whether tried by a jury or before the court without

a jury, the presiding judge shall have a right to adjudge the cost.

(b) In doing so, the presiding judge shall be authorized, in the presiding

judge‟s discretion, to apportion the cost between the litigants, as in

the presiding judge‟s opinion the equities of the case demand.

(c)(1) Notwithstanding subsection (a) or (b), in a civil proceeding, where a

trial court grants a motion to dismiss pursuant to Rule 12 of the

Tennessee Rules of Civil Procedure for failure to state a claim upon

which relief may be granted, the court shall award the party or

parties against whom the dismissed claims were pending at the time

the successful motion to dismiss was granted the costs and

reasonable and necessary attorney‟s fees incurred in the proceedings

as a consequence of the dismissed claims by that party or parties.

The awarded costs and fees shall be paid by the party or parties

whose claim or claims were dismissed as a result of the granted

motion to dismiss.

(2) Costs shall include all reasonable and necessary litigation costs

actually incurred due to the proceedings that resulted from the filing

of the dismissed claims, including, but not limited to:

(A) Court costs;

(B) Attorneys‟ fees;

(C) Court reporter fees;

(D) Interpreter fees; and

(E) Guardian ad litem fees.

(3) An award of costs pursuant to this subsection (c) shall be made only

after all appeals of the issue of the granting of the motion to dismiss

have been exhausted and if the final outcome is the granting of the

motion to dismiss. The award of costs and attorneys‟ fees pursuant

to this section shall be stayed until a final decision which is not

subject to appeal is rendered.

8

(4) Notwithstanding any other provision of this section, the court shall

not require a party to pay costs under this section in excess of a

combined total of ten thousand dollars ($10,000) in any single

lawsuit. Where multiple parties are entitled to recover their costs

from a single party under this section and those parties‟ combined

actual costs under this section exceed ten thousand dollars ($10,000),

then the court shall apportion the awarded costs to the moving

parties in proportion to the amount of each moving party‟s incurred

costs unless agreed otherwise by the moving parties. Nothing in this

section shall be construed to limit the award of costs as provided for

in other sections of the code or at common law.

(5) This subsection (c) shall not apply to:

(A) Actions by or against the state, other governmental entities, or

public officials acting in their official capacity or under color

of law;

(B) Any claim that is dismissed by the granting of a motion to

dismiss that was filed more than sixty (60) days after the

moving party received service of the latest complaint,

counter-complaint or cross-complaint in which that dismissed

claim was made;

(C) Any claim that the party against whom the motion to dismiss

was filed withdrew, or in good faith amended to state a claim

upon which relief may be granted; however, this subdivision

(c)(5)(C) shall not apply unless a pleading providing notice of

the withdrawal or amendment was filed with the court and

delivered to the opposing party or parties at least three (3)

days before the date set for the hearing of the motion to

dismiss or by the deadline for the filing of a response to the

motion to dismiss, whichever is earlier. Nothing in this

section shall be construed to prevent a party from striking its

own motion to dismiss.

(D) Actions by pro se litigants, except where the court also finds

that the pro se party acted unreasonably in bringing, or

refusing to voluntarily withdraw, the dismissed claim;

9

(E) Any claim which is a good faith, non-frivolous claim filed for

the express purpose of extending, modifying, or reversing

existing precedent, law or regulation, or for the express

purpose of establishing the meaning, lawfulness or

constitutionality of a law, regulation or United States or

Tennessee constitutional right where the meaning, lawfulness

or constitutionality is a matter of first impression that has not

been established by precedent in a published opinion by the

Tennessee supreme court, court of appeals, court of criminal

appeals, a United States district court in Tennessee, or by the

United States supreme court. This subdivision (c)(5)(E) shall

not apply unless at the time the successful motion to dismiss

was filed the party that made the dismissed claim had

specially pleaded in its latest complaint, counter-complaint or

cross-complaint that the dismissed claim was made for one

(1) of the express purposes listed above and cited the contrary

precedent or interpretation the party seeks to distinguish or

overcome, or whether the issue to be decided is a matter of

first impression as described in this subdivision (c)(5)(E); or

(F) Any claim for which relief could be granted under a law, a

court precedent published by a court described in subdivision

(c)(5)(E), or a regulation, that was in effect and applicable to

the claim at the time the motion to dismiss was filed; where

that law, precedent or regulation was cited in the pleading in

which the dismissed claim was made or in the response to the

motion to dismiss; and where the motion to dismiss the claim

was granted due to the subsequent repeal, amendment,

overruling or distinguishing of that law, regulation or

published court precedent.

(6) This section shall not be construed to limit the ability of any court to

dismiss a claim or assess costs against a party whose claim has been

dismissed, where permitted or required by other law, court rule or at

common law.

Upon affirming the trial court‟s grant of the Bank‟s motion to dismiss Ms.

Snyder‟s action for failure to state a claim upon which relief could be granted, this Court

remanded the case to the trial court “for collection of the costs below and further

proceedings pursuant to Tenn. Code Ann. § 20-12-119(c).” Snyder I, 450 S.W.3d at 519.

On remand, the Bank filed a motion for costs and attorney‟s fees, arguing that, pursuant

10

to subsection -119(c), the maximum amount allowed should be taxed to the Surety as

well as to Ms. Snyder. During the hearing on the motion, the Bank presented

documentation of a $403.25 court reporter‟s fee and $57,238.75 in attorney‟s fees

expended to defend against Ms. Snyder‟s complaint. The Bank conceded that pursuant to

Tennessee Code Annotated § 20-12-119(c)(4), $10,000 was the maximum amount the

court could award for costs and fees.

During the hearing, Ms. Snyder did not dispute the applicability of Tennessee

Code Annotated § 20-12-119(c) to this case or the reasonableness of the Bank‟s claimed

court reporter‟s fee and attorney‟s fees. It was also undisputed that none of the statutory

exceptions delineated in Tennessee Code Annotated § 20-12-119(c)(5) applied in this

case.4 At the close of the hearing, the trial court accordingly awarded the Bank $10,000

in litigation costs. The court initially took under advisement the Bank‟s argument that

this award should be taxed against the Surety as well as against Ms. Snyder. Upon

consideration of supplemental briefs filed by the parties, the court entered a judgment

taxing the statutory maximum of $10,000 in litigation costs to both Ms. Snyder and the

Surety. In its argument on appeal, the Surety concentrates on the applicability of the

award for attorney‟s fees without directly addressing the court reporter‟s fee.

Whether an award of attorney‟s fees pursuant to Tennessee Code Annotated § 20-

12-119(c) properly may be entered against a principal‟s surety as well as the principal is a

matter of first impression.5 Prior to the filing of this opinion, Tennessee appellate courts

have been called upon to review the recently enacted subsection -119(c) in only a handful

of decisions, none of which has addressed the statute‟s applicability to a party‟s surety.

See, e.g., Baxter Bailey Invs. LLC v. APL Ltd., Inc., No. W2015-00067-COA-R3-CV,

2015 WL 5560563 at *9 (Tenn. Ct. App. Sept. 21, 2015) (noting subsection 119(c) as an

exception to the American Rule generally followed in Tennessee); Davidson v. Baydoun,

No. M2014-01486-COA-R3-CV, 2015 WL 3455426 at *4 (Tenn. Ct. App. May 29,

2015) (concluding that the plaintiff erroneously invoked subsection 119(c) when

appealing a grant of summary judgment on behalf of the defendant and when the original

4

We note that in her January 2013 response to the motion to dismiss, Ms. Snyder stated: “While there

are no reported cases in Tennessee, the Plaintiff has found authority from other jurisdictions which clearly

shows that creditors must exercise a degree of caution when enforcing acceleration clauses in their

mortgage [documents].” Ms. Snyder did not, however, plead that her claim was filed for “the express

purpose of extending, modifying, or reversing existing precedent, law or regulation . . . .” See Tenn. Code

Ann. § 20-12-119(c)(5)(E). Ms. Snyder did not argue the applicability of the exception contained in

Tennessee Code Annotated § 20-12-119(c)(5)(E) during the hearing on the Bank‟s motion to award costs

and attorney‟s fees, nor does she argue on appeal that this exception applies. Moreover, we determine

that, under the specific facts of this case, Tennessee Code Annotated § 20-12-119(c)(5)(E) does not apply.

5

Recognizing this issue of first impression as embracing an important question of law, we further note

that the question may be appropriate for review by the Tennessee Supreme Court.

11

complaint had been filed prior to the subsection‟s enactment); Arledge v. Arledge, No.

M2014-01344-COA-R3-CV, 2015 WL 3429918 at *1 (Tenn. Ct. App. May 28, 2015)

(concluding that a trial court‟s grant of a motion to dismiss must specify the ground of

failure to state a claim upon which relief can be granted in order to trigger application of

subsection -119(c)).

The trial court in its Memorandum Opinion, incorporated into the final judgment,

properly began statutory interpretation of Tennessee Code Annotated § 20-12-119(c) by

interpreting the plain meaning of the statute. See In re Estate of Tanner, 295 S.W.3d at

613 (“When a statute is clear, we apply the plain meaning without complicating the

task.”). The trial court stated in pertinent part:

Looking to the language of Tenn. Code Ann. § 20-12-119 itself, it is clear

the General Assembly does not use the term “surety,” but only refers to the

“party or parties.” The statute uses the phrase “party or parties” numerous

times, but never refers to a “surety.” Thus, the literal wording of the statute

does not address the situation in which a surety would be responsible for

the costs under these circumstances.

We agree with the trial court that the plain language of Tennessee Code Annotated § 20-

19-119(c) makes no mention of taxing a surety with litigation costs as defined in

subsection -119.

The trial court also analyzed the plain language of Tennessee Code Annotated §

20-12-119(c) in terms of whether the directives therein are mandatory or discretionary,

finding that they are mandatory. We agree with this determination also. As the trial

court noted, the General Assembly used the auxiliary verb, “shall,” throughout the

subsection rather than the auxiliary verb, “may.” See Bellamy v. Cracker Barrel Old

Country Store, Inc., 302 S.W.3d 278, 281 (Tenn. 2009) (“„When „shall‟ is used . . . it is

ordinarily construed as being mandatory and not discretionary.‟”) (quoting Stubbs v.

State, 393 S.W.2d 150, 154 (Tenn. 1965)). Our Supreme Court has explained further that

“[t]o determine whether the use of the word „shall‟ in a statute is mandatory or merely

directory, we look to see „whether the prescribed mode of action is of the essence of the

thing to be accomplished.‟” Myers v. AMISUB (SFH), Inc., 382 S.W.3d 300, 309 (Tenn.

2012) (quoting 3 Norman J. Singer & J.D. Singer, Statutes and Statutory Construction §

57:2 (7th ed. 2008)). We determine that the award to the party or parties against whom

the dismissed claims were pending, the items to be included in that award, and the

manner in which the award is to be granted are fundamental to the award of litigation

costs set forth in the statute. The implementation of “shall” in the statute therefore

dictates that we construe such requirements as mandatory. See, e.g., Myers, 382 S.W.3d

at 309.

12

We generally review an award of discretionary costs according to an abuse of

discretion standard. See Tenn. Code Ann. § 20-12-119(a)-(b); Placencia v. Placencia, 3

S.W.3d 497, 503 (Tenn. Ct. App. 1999) (“Absent a clear abuse of discretion, appellate

courts generally will not alter a trial court‟s ruling with respect to costs.”). Under

Tennessee Code Annotated § 20-12-119(c), this Court continues to review the trial

court‟s factual determination of whether litigation costs, including attorney‟s fees, are

reasonable under an abuse of discretion standard. See Wright ex rel. Wright v. Wright,

337 S.W.3d 166, 176 (Tenn. 2011). In addition, in applicable cases, a trial court‟s

determination of whether a pro se litigant has “acted unreasonably in bringing, or

refusing to voluntarily withdraw, the dismissed claim” would be reviewed under an abuse

of discretion standard. See Tenn. Code Ann. § 12-20-119(c)(5)(D) (excepting a pro se

litigant from application of -119(c) in certain circumstances). However, apart from these

specific factual determinations, the standard of review for the award of litigation costs

pursuant to Tennessee Code Annotated § 20-12-119(c) is a matter of law due to the

mandatory language of the statute. As noted previously, we review matters of law de

novo with no presumption of correctness. See Cunningham, 405 S.W.3d at 43.

The trial court in its Memorandum Opinion proceeded to analyze Tennessee Code

Annotated § 20-12-119(c) within the statutory scheme of Title 20 (“Civil Procedure”) and

Chapter 12 (“Costs”) as a whole, concluding that “the mere absence of „surety‟ from this

specific provision is not conclusive as to the intent of the General Assembly.” Rather

than moving immediately to such global analysis, however, we determine it necessary to

further analyze the plain language of subsection -119(c) itself.

Subsection -119(c) specifically defines “costs” for the purposes of this subsection

as including:

all reasonable and necessary litigation costs actually incurred due to the

proceedings that resulted from the filing of the dismissed claims, including,

but not limited to:

(A) Court costs;

(B) Attorney‟s fees;

(C) Court reporter fees;

(D) Interpreter fees; and

(E) Guardian ad litem fees.

Tenn. Code Ann. § 20-12-119(c)(2) (emphasis added). We stress that when a term is

expressly defined in a statute, we must look to the statutory definition rather than other

sources unless the statutory definition proves insufficient or ambiguous. See, e.g.,

13

Shockley v. Mental Health Coop., Inc., 429 S.W.3d 582, 591 (Tenn. 2013) (defining a

term according to its “plain and ordinary” meaning, “including dictionary definitions,”

only after determining that the statute at issue did not define the term); see also Najo

Equip. Leasing, LLC v. Comm’r of Revenue, ___ S.W.3d ___, ___, No. W2014-01096-

COA-R3-CV, 2015 WL 1873215 at *8 (Tenn. Ct. App. Apr. 23, 2015) (“„If the statute

does not sufficiently define a word used therein, the court may consider all known

definitions of the word, including dictionary definitions, in order to determine the plain

and ordinary meaning of the word.‟”) (quoting 82 C.J.S. Statutes § 415) (emphasis

added).

In contrast to the inclusion of attorney‟s fees in this statutory definition, Tennessee

generally adheres to the “American Rule,” under which “„attorneys‟ fees are not

recoverable in the absence of a statute or contract specifically providing for such recovery

. . . .‟” Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 309 (Tenn.

2009) (quoting Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985)

(emphasis in Cracker Barrel). It is undisputed, however, that in enacting Tennessee

Code Annotated § 20-12-119(c), the General Assembly has specifically provided for the

recovery of attorney‟s fees within the maximum amount of litigation costs to be awarded.

Furthermore, the General Assembly has specifically defined litigation “costs” for the

purposes of this statute as including attorney‟s fees. See Tenn. Code Ann. § 20-12-

119(c)(2).

The Surety does not dispute that the definition of litigation “costs” provided in

Tennessee Code Annotated § 20-12-119(c)(2) includes attorney‟s fees insofar as which

costs the trial court shall tax to the party whose complaint is dismissed pursuant to Rule

12.02(6). The Surety focuses its argument on the absence of the word “surety” in the

statute, contending that taxing costs to a “party” does not include taxing those costs to the

party‟s surety. In the instant action, the Surety drafted the following cost bond, which

was attached to the complaint:

COST BOND

We recognize ourselves as surety for all costs and taxes in this cause

in accordance with Tenn. Code Ann. §20-12-120.

(Underlined emphasis added.) The cost bond was signed by Mark E. Brown, as counsel

for Ms. Snyder and President of the Surety. The Surety indicated in its cost bond that it

was complying with Tennessee Code Annotated § 20-12-120, which provides:

Security given by plaintiff. – No leading process shall issue from any

court without security being given by the party at whose instance the action

14

is brought for the successful prosecution of the party‟s action, and, in case

of failure, for the payment of court costs and taxes that may be awarded

against the party, unless in cases and instances specifically excepted.

(Emphasis added.)

The Surety asserts that the trial court‟s interpretation of Tennessee Code

Annotated § 20-12-119(c) as applicable to the Surety is in conflict with the requirement

of security for “court costs and taxes” set forth in Tennessee Code Annotated § 20-12-

120. The Surety argues that “[t]he statute [subsection 119(c)] itself creates a distinction

between costs and attorney fees.” We disagree with the Surety‟s interpretation in this

regard. The plain language of subsection -119(c) creates a distinction between “court

costs” and “attorney‟s fees,” both of which are specifically included within the statutory

definition of litigation “costs” for purposes of defining “all reasonable and necessary

litigation costs actually incurred due to the proceedings that resulted from the filing of the

dismissed claims . . . .” See Tenn. Code Ann. § 20-12-119(c)(2). The statute thus also

creates a distinction, for purposes of applying subsection -119(c), between litigation

“costs” in the broader sense and specific “court costs.”

We do find, however, that in the case at bar, the Surety limited its liability through

the language of its cost bond. The trial court stated in its Memorandum Opinion that the

Surety had “used no words of limitation in this self-authored cost bond.” To the contrary,

we determine that in explicitly drafting its cost bond “in accordance with” Tennessee

Code Annotated § 20-12-120, the Surety limited its liability to “court costs and taxes” as

defined in section -120, rather than the broader umbrella of litigation “costs” as defined

in subsection -119(c). We therefore conclude that pursuant to the plain language of

Tennessee Code Annotated §§ 20-12-119(c) and 20-12-120, the cost bond, as drafted and

filed in this case, did not commit the Surety to liability for the court reporter‟s fee and

attorney‟s fees.6 Inasmuch as we determine the plain language of Tennessee Code

Annotated § 20-12-119(c) to be clear and unambiguous as pertinent to this issue, we

further determine the trial court‟s detailed analysis of the surrounding statutory scheme 7

6

Confining our analysis to the facts of this case, we do not address whether a surety who had not limited

its liability for “costs” in any way would be liable for the full $10,000 judgment of litigation costs

pursuant to Tennessee Code Annotated 20-12-119(c). As a point of practice, we suggest that attorneys

acting as sureties draft cost bonds with the distinction between “court costs” and broader litigation

“costs,” as defined in Tennessee Code Annotated § 20-12-119(c), clearly in mind.

7

In particular, upon the Bank‟s argument that the General Assembly previously had specifically excluded

an attorney standing as a surety from liability for certain types of costs whenever such exclusion was

intended, the trial court reviewed Tennessee Code Annotated § 20-12-135, -136 (2009) (excluding the

surety from liability for “discretionary costs”). The trial court determined that pursuant to the mandatory

language of Tennessee Code Annotated § 20-12-119(c), the costs adjudged were not discretionary.

15

and the applicable legislative history8 to be unnecessary. See In re Estate of Tanner, 295

S.W.3d at 614 (“It is only when a statute is ambiguous that we may reference the broader

statutory scheme, the history of the legislation, or other sources.”).

VI. Costs and Attorney‟s Fees on Appeal

The Bank asserts that this appeal is frivolous. The Bank thereby requests an

award of costs and attorney‟s fees on appeal pursuant to Tennessee Code Annotated § 27-

1-122 (2000), which provides:

When it appears to any reviewing court that the appeal from any court of

record was frivolous or taken solely for delay, the court may, either upon

motion of a party or of its own motion, award just damages against the

appellant, which may include, but need not be limited to, costs, interest on

the judgment, and expenses incurred by the appellee as a result of the

appeal.

We determine that this appeal was not frivolous or taken solely for delay.

Moreover, as this Court has stated:

[I]t is in the sole discretion of this court whether to award attorney‟s fees on

appeal. As such, when this Court considers whether to award attorney‟s

fees on appeal, we must be mindful of “the ability of the requesting party to

pay the accrued fees, the requesting party‟s success in the appeal, whether

the requesting party sought the appeal in good faith, and any other equitable

factor that need be considered.”

Parris v. Parris, No. M2006-02068-COA-R3-CV, 2007 WL 2713723 at *13 (Tenn. Ct.

App. Sept. 18, 2007) (quoting Dulin v. Dulin, No. W2001-02969-COA-R3-CV, 2003 WL

22071454 at *10 (Tenn. Ct. App. Sept. 3, 2003)) (other internal citations omitted). Upon

careful consideration of all the factors listed above, particularly the Surety‟s success on

appeal, the Bank‟s request for costs and attorney‟s fees on appeal is denied.

8

Upon Ms. Snyder‟s motion, this Court entered an order on July 31, 2015, taking “judicial notice of the

legislative history of the statute submitted as an addendum to the appellant‟s brief.” Ms. Snyder

subsequently resubmitted to this Court audio recordings of the legislative discussion surrounding the

enactment of Tennessee Code Annotated § 20-12-119(c) with no objection from the Bank. These audio

recordings had also been submitted to and reviewed by the trial court. See Debate on H.B. 3124 Before

the House, 107th Gen. Assemb. (Apr. 24, 2012).

16

VII. Conclusion

For the reasons stated above, we reverse the trial court‟s judgment against the

Surety for $10,000 in litigation costs. We affirm the trial court‟s judgment against the

principal. The Bank‟s request for an award of costs and attorney‟s fees on appeal is

denied. This case is remanded to the trial court for enforcement of the judgment against

the principal and collection of costs below. Costs on appeal are taxed to the appellee,

First Tennessee Bank, N.A.

_________________________________

THOMAS R. FRIERSON, II, JUDGE

17