Joel Diemoz v. Eric Huneycutt

05/06/2020

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

August 6, 2019 Session

JOEL DIEMOZ, ET AL. v. ERIC HUNEYCUTT, ET AL.

Appeal from the Circuit Court for Montgomery County

No. CC-16-CV-1901 Ross H. Hicks, Judge

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No. M2018-01166-COA-R3-CV

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The plaintiffs in this construction defect action appeal the trial court’s dismissal of their

case with prejudice for failure to comply with the court’s orders. They also allege error

concerning the trial court’s refusal to recuse itself, the disqualification of counsel, and the

decision to report counsel’s conduct to the Tennessee Board of Professional

Responsibility. We vacate the order of dismissal with prejudice and direct entry of

dismissal without prejudice. We affirm the court’s order in all other respects.

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

Vacated in Part, Affirmed in Part; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which RICHARD H.

DINKINS and W. NEAL MCBRAYER, JJ., joined.

Melissa A. Morris, Nashville, Tennessee, for the appellants, Joel and Elizabeth Diemoz.

Brian F. Walthart, Nashville, Tennessee, for the appellees, Eric Huneycutt; Huneycutt

Investments, LLC; Huneycutt, LLC; Huneycutt Homebuilders, Inc.; and Huneycutt

Properties, LP.

Stanley M. Ross, Clarksville, Tennessee, for the appellee, Huneycutt Realtors.

OPINION

I. BACKGROUND

On September 9, 2016, Joel and Elizabeth Diemoz (“Plaintiffs”) filed this action

pro se, alleging defects in the construction of their home they purchased from a third

party.1 Plaintiffs named Eric Huneycutt; Huneycutt Investments, LLC; Huneycutt, LLC;

Huneycutt Homebuilders, Inc.; and Huneycutt Properties, LP (collectively “Defendants”)

as defendants due to their involvement with the construction of their home. They

claimed that from the time of their closing in June 2015 through April 2016, they noticed

problems with the foundation of their property.

Plaintiffs then filed an amended complaint signed by counsel, alleging the same

facts. Defendants moved for summary judgment, citing the applicable 4-year statute of

repose for construction defect claims pursuant to Tennessee Code Annotated section 28-

3-202.2 Defendants submitted an affidavit in which Eric Huneycutt attested that the

home was built in 2012 and received its certificate of occupancy on August 18, 2012.

Plaintiffs then filed a motion requesting permission to file a second amended

complaint, adding Huneycutt Realtors as a named defendant3 and alleging that the defects

were actually first noticed in April 2016, not June 2015 as originally pled. Defendants

argued that the requested amendment was clearly an attempt to avoid summary judgment

pursuant to the statute of repose. The matter came before the court for a hearing on

October 20, 2017, after which the court allowed the amendment and granted Defendants

30 days from the date of the hearing to respond to the amended complaint. The court

directed counsel for Defendants to draft the order for the court’s approval.

On October 25, Defendants forwarded the proposed order to Plaintiffs for

approval. Having received no response, Defendants again requested approval on October

27. Having still received no response by November 7, Defendants served Plaintiffs with

a copy of the proposed order that was then lodged with the court on November 9.

Plaintiffs did not object. The court entered the order on November 22. The order

provided, in pertinent part, as follows:

Plaintiffs have filed a proposed Second Amended Complaint with the

Court, as attached to the Motion to Amend. This proposed Second

Amended Complaint will become the actual Second Amended Complaint

1

Plaintiffs purchased the home from Matthew and Sara Hicks, who are not parties to this litigation.

2

“All actions to recover damages for any deficiency in the design, planning, supervision, observation of

construction, or construction of an improvement to real property, for injury to property, real or personal,

arising out of any such deficiency, or for injury to the person or for wrongful death arising out of any such

deficiency, shall be brought against any person performing or furnishing the design, planning,

supervision, observation of construction, or construction of such an improvement within four (4) years

after substantial completion of such an improvement.”

3

While the majority of the conflicts at issue on appeal involved the original defendants, the late added

Huneycutt Realtors filed their own appellate brief supporting the court’s decisions as it pertained to them.

Accordingly, we shall include them in our collective designation of defendants.

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of record. Defendants will have thirty (30) days from the date of entry of

this Order to file an Answer or other response to this Second Amended

Complaint.

On December 12, Plaintiffs filed a motion for default judgment for failure to

answer the amended complaint, alleging that the court’s oral pronouncement differed

from the written order that provided Defendants 30 days to respond. Plaintiffs, by

attorney affidavit, attested that Defendants did not present the proposed order for

approval before lodging the order with the court. On December 18, Defendants

responded with a motion to compel discovery and a safe-harbor letter pursuant to Rule 11

of the Tennessee Rules of Civil Procedure,4 advising Plaintiffs that a motion for sanctions

would be filed if Plaintiffs did not withdraw their default motion within 21 days.

Defendants lodged their responses to the second amended complaint. As pertinent

to this appeal, they denied liability and requested dismissal based upon the applicable

statute of limitations and statute of repose. Defendants also responded to the default

motion, alleging that the order was only submitted to the court when Plaintiffs failed to

respond to defense counsel’s attempt to secure approval of the draft. Huneycutt Realtors

filed its own response to the default motion, alleging that the written order controlled the

time for filing its responsive pleading pursuant to applicable law.

On January 10, 2018, Plaintiffs filed a motion to correct the November 22 order to

conform to the ruling made on the record, namely the grant of 30 days from the time of

the hearing to file a responsive pleading. On February 2, Defendants moved to disqualify

Plaintiffs’ counsel, Melissa Morris (“Counsel”), arguing that Counsel was a necessary

fact witness concerning the timing of the discovery of the alleged defects. In sum,

Defendants argued that Plaintiffs first lodged their complaint pro se, with the assistance

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Providing the trial court with the authority to impose monetary sanctions if counsel’s conduct is in

violation of Rule 11.02 of the Tennessee Rules of Civil Procedure, which provides as follows:

By presenting to the court (whether by signing, filing, submitting, or later advocating) a

pleading, written motion, or other paper, an attorney or unrepresented party is certifying

that to the best of the person’s knowledge, information, and belief, formed after an

inquiry reasonable under the circumstances,

(1) it is not being presented for any improper purpose, such as to harass or to cause

unnecessary delay or needless increase in the cost of litigation;

(2) the claims, defenses, and other legal contentions therein are warranted by existing law

or by a nonfrivolous argument for the extension, modification, or reversal of existing law

or the establishment of new law;

(3) the allegations and other factual contentions have evidentiary support or, if

specifically so identified, are likely to have evidentiary support after a reasonable

opportunity for further investigation or discovery; and

(4) the denial of factual contentions are warranted on the evidence or, if specifically so

identified, are reasonably based on a lack of information or belief.

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of Counsel, a relative who had not yet obtained her license to practice law. Counsel then

filed the amended complaint after she obtained her license. Defendants claimed that

discussions between Counsel and Plaintiffs prior to the filing of the amended complaint

were not privileged and were subject to discovery. Plaintiffs filed no response.

Defendants then filed a motion for Rule 11 sanctions on February 5, claiming that

the default motion, which had not been withdrawn, was made for an improper purpose

and that the allegations lacked evidentiary support. Plaintiffs filed no response.

The parties appeared before the court on February 16. On March 2, 2018, the trial

court entered an order disposing of all outstanding motions. As pertinent to this appeal,

the court denied the default motion and imposed Rule 11 sanctions against Counsel,

finding that Counsel’s position with respect to the time within which Defendants could

answer the second amended complaint was without merit and had no basis in law or fact.

The court found Counsel’s statements made in support of her motion to be “egregious”

and instructed Counsel that a copy of the order and relevant documents would be

presented to the Tennessee Board of Professional Responsibility (“TBPR”). The court

likewise granted the motion to disqualify Counsel and her firm and assessed a fine

against her in the amount of $500, in addition to any additional amount of costs, fees, and

expenses requested by Defendants and ultimately approved by the court. Lastly, the

court ordered Plaintiffs to fully respond to discovery by May 2.

Plaintiffs, through Counsel, requested permission to pursue an interlocutory appeal

pursuant to Rule 9 of the Tennessee Rules of Appellate Procedure5 on April 3 at 12:07

a.m. Plaintiffs filed exhibits in support of its motion on April 9. The court denied the

motion as untimely, finding that the motion was not fully filed until April 9, more than 30

days from the entry of the order appealed from. See Tenn. R. App. P. R. 9(b) (“The party

seeking an appeal must file and serve a motion requesting such relief within 30 days after

the date of entry of the order appealed from.”). However, the court reduced its monetary

fine against Counsel from $500 to $50. The court further ordered Counsel to pay the

reduced fine and additional monetary fees imposed by the court by May 256 and ruled

that any discovery motions would be heard on that day.

Meanwhile, Plaintiffs failed to respond to discovery requests, while Counsel failed

to remit payment for her fines. On May 7, the court entered a show cause order requiring

Counsel to appear on May 25 to show cause why she should not be held in contempt for

failure to comply with the court’s orders. On May 15, Defendants filed a motion for

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“[A]n appeal by permission may be taken from an interlocutory order of a trial court from which an

appeal lies to the Supreme Court, Court of Appeals or Court of Criminal Appeals only upon application

and in the discretion of the trial and appellate court.”

6

This included Defendants’ claimed costs, fees, and expenses of $2,820.18 approved by the court.

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sanctions against Plaintiffs pursuant to Rule 37 of the Tennessee Rules of Civil

Procedure, requesting dismissal with prejudice.

On May 24, the day before the scheduled hearing, Plaintiffs, through Counsel’s

firm, filed a motion, entitled “Motion to Amend Order and for Recusal of Judge,” in

which Plaintiffs again sought permission to appeal the disqualification and moved for

recusal of the trial judge. Plaintiffs also sought a continuance, citing their unavailability

and the pending motion for recusal.

The case proceeded to a hearing on the outstanding motions as previously

scheduled on May 25. Neither Plaintiffs nor Counsel attended the hearing. The court

denied the motion to recuse as untimely and procedurally deficient. The court then

dismissed the case pursuant to Rule 37 due to “the delay of Plaintiffs in failing to comply

with the Rules of Civil Procedure as they relate to written discovery, the failure of

Plaintiffs to comply with the orders of the court, and the inexcusable delay caused by

Plaintiffs’ conduct.”

This appeal followed in which Plaintiffs, through disqualified Counsel, filed a

brief raising numerous issues without regard to the Tennessee Rules of Appellate

Procedure. Defendants request waiver of the issues presented as a result of the state of

the brief. We agree that there are a multitude of problems with the brief and that

Plaintiffs failed to comply with the requirements. However, we will briefly address the

issues raised as pertinent to this appeal in the event of further appellate review.

II. ISSUES

We consolidate and restate the issues on appeal as follows:

A. Whether the court erred in its denial of the motion to recuse.

B. Whether the court erred in its dismissal of the case.

C. Whether the court erred in its reporting of Counsel to the TBPR.

D. Whether the court erred in its disqualification of counsel.

E. Whether Defendants are entitled to attorney fees on appeal.

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III. ANALYSIS

A.

We review a trial court’s ruling on a motion for recusal under a de novo standard

of review with no presumption of correctness. Tenn. Sup. Ct. R. 10B § 2.01. Rule 10B

of the Rules of the Supreme Court of the State of Tennessee provides, in pertinent part, as

follows:

Any party seeking disqualification, recusal, or a determination of

constitutional or statutory incompetence of a judge of a court of record, or a

judge acting as a court of record, shall do so by a timely filed written

motion. The motion shall be supported by an affidavit under oath or a

declaration under penalty of perjury on personal knowledge and by other

appropriate materials. The motion shall state, with specificity, all factual

and legal grounds supporting disqualification of the judge and shall

affirmatively state that it is not being presented for any improper purpose,

such as to harass or to cause unnecessary delay or needless increase in the

cost of litigation. A party who is represented by counsel is not permitted to

file a pro se motion under this rule.

(Emphasis added.). As this Court has explained: “recusal motions must be filed promptly

after the facts forming the basis for the motion become known, and the failure to assert

them in a timely manner results in a waiver of a party’s right to question a judge’s

impartiality.” Duke v. Duke, 398 S.W.3d 665, 670 (Tenn. Ct. App. 2012) (quoting

Kinard v. Kinard, 986 S.W.2d 220, 228 (Tenn. Ct. App. 1998) (internal citations

omitted)). “[A] party may lose the right to challenge a judge’s impartiality by engaging in

strategic conduct” such as waiting for an unfavorable ruling before filing for recusal. Id.

Here, Plaintiffs filed their motion to recuse the day before the scheduled hearing.

The motion was also not supported by an affidavit and was filed by a firm previously

disqualified by the trial court. Under these circumstances, we find no error in the court’s

denial of the recusal motion.

B.

Trial courts have broad authority in discovery matters, including the scope of

discovery, Benton v. Snyder, 825 S.W.2d 409, 416 (Tenn. 1992), the time permitted for

discovery, Payne v. Ramsey, 591 S.W.2d 434, 436 (Tenn. 1979), and the imposition of

sanctions for abuse of discovery, Brooks v. Uniform Co., 682 S.W.2d 913, 915 (Tenn.

1984). Tennessee Rule of Civil Procedure 37.02 authorizes a trial court to impose

penalties for violation of pretrial procedures contained in Rules 26 through 36.

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Subsection (C) authorizes the trial court to enter an order “dismissing the action or

proceeding or any part thereof” for failure to obey an order to provide or permit

discovery. Tenn. R. Civ. P. 37.02(B).

This court has provided the following guidance in such cases:

Dismissal for failure to prosecute or failure to abide by discovery rules is a

severe sanction that runs counter to the judicial system’s general objective

of disposing of cases on the merits. For this reason, the judiciary generally

favors lesser sanctions when appropriate. But the effectiveness of

discovery and procedural rules would diminish if trial courts lacked ample

authority to sanction their violation.

Langlois v. Energy Automation Sys., Inc., 332 S.W.3d 353, 357 (Tenn. Ct. App. 2009)

(internal citations and quotations omitted) (upholding the Rule 37 dismissal of the action

with prejudice). Dismissal is normally appropriate only where there has been a “clear

record of delay or contumacious conduct.” See Shahrdar v. Global Housing, Inc., 938

S.W.2d 230, 236 (Tenn. Ct. App. 1998). The power to dismiss a party’s claims is best

exercised infrequently and only when the punishment fits the offense. Pegues v. Ill. Cent.

R.R. Co., 288 S.W.3d 350, 354 (Tenn. Ct. App. 2008).

However, a dismissal for failure to comply with a discovery order will not be

disturbed by this court in the absence of an affirmative showing that the trial court abused

its discretion. Alexander v. Jackson Radiology Assocs., 156 S.W.3d 11, 14 (Tenn. Ct.

App. 2004); Holt v. Webster, 638 S.W.2d 391, 394 (Tenn. Ct. App. 1982). An abuse of

discretion occurs where the trial court has applied an incorrect legal standard or where its

decision is illogical or unreasoned and causes an injustice to the complaining party. See

Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 131 (Tenn. 2004). “We are not

permitted to substitute our judgment for that of the trial court.” Caldwell v. Hill, 250

S.W.3d 865, 869 (Tenn. Ct. App. 2007).

Plaintiffs claim that dismissal with prejudice for failure to comply with a court

order that had been appealed pursuant to Rule 9 was inappropriate. The record reflects

that Plaintiffs did not file a motion to stay the proceeding pending the outcome of its

motion for permission to appeal. See Tenn. R. App. P. R. 9(f) (“The application for

permission to appeal or the grant thereof shall not stay proceedings in the trial court

unless the trial court or the appellate court or a judge thereof shall so order.”). However,

much of Plaintiffs’ delay throughout the case was a result of Counsel’s longstanding

failure to respond and her disregard of the court’s orders, including her continued

representation following the court’s removal of her from the case. Plaintiffs were given

approximately two months to respond to discovery, presumably pro se or with a newly

hired attorney. Accordingly, we agree with the court’s dismissal of the action but

ultimately conclude that a dismissal with prejudice under these circumstances would

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cause an injustice to Plaintiffs when the merits of the case were not considered by the

trial court. Accordingly, we vacate the court’s dismissal of the action with prejudice and

direct the court to enter an order dismissing the action without prejudice.

C.

Plaintiffs next take issue with the court’s decision to inform the TBPR of

Counsel’s actions. Notably, Plaintiffs offer no argument claiming that the court’s

imposition of sanctions was error or that the court acted without legal authority in

notifying the TBPR of Counsel’s conduct. Rule 10 Rules of the Supreme Court of the

State of Tennessee provides as follows:

A judge having knowledge that a lawyer has committed a violation of the

Rules of Professional Conduct that raises a substantial question regarding

the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other

respects shall inform the appropriate authority.

Tenn. S. Ct. R. 10, RJC 2.15(B). Having reviewed the record, we find no error in the

court’s decision to inform the appropriate authority of Counsel’s conduct.

D.

Plaintiffs next take issue with Counsel’s disqualification due to her status as a

necessary fact witness. Again, Plaintiffs offer very little in the form of argument in

support of their position, merely claiming that disqualification is a “drastic remedy” that

is subject to “strict judicial scrutiny.” The issue of attorney disqualification is yet another

decision subject to the discretion of the trial court. Clinard v. Blackwood, 46 S.W.3d

177, 182 (Tenn. 2001) (“A trial court’s ruling on attorney disqualification, or the

vicarious disqualification of that attorney’s firm, will be reversed only upon a showing of

an abuse of discretion.”). In Tennessee:

(a) A lawyer shall not act as an advocate at a trial in which the lawyer is

likely to be a necessary witness unless:

(1) the testimony relates to an uncontested issue;

(2) the testimony relates to the nature and value of legal services

rendered in the case; or

(3) disqualification of the lawyer would work substantial hardship on

the client.

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Tenn. Sup. Ct. R. 8, RPC 3.7. The comments to this rule provide, in pertinent part, as

follows:

The tribunal has a proper objection when the trier of fact may be confused

or misled by a lawyer serving as both advocate and witness. The opposing

party has a proper objection where the combination of roles may prejudice

that party’s rights in the litigation. A witness is required to testify on the

basis of personal knowledge, while an advocate is expected to explain and

comment on evidence given by others. It may not be clear whether a

statement by an advocate-witness should be taken as proof or as an analysis

of the proof.

Tenn. Sup. Ct. R. 8, RPC 3.7 cmt (1).

Here, Counsel was not licensed to practice law prior to the filing of the suit,

thereby establishing that her discussions with Plaintiffs prior to her licensure were not

subject to the attorney-client privilege. See generally Tenn. Code Ann. § 23-3-105

(codifying the attorney-client privilege once recognized at common law). Defendants

intend to illicit testimony from Counsel concerning the main issue at trial, namely when

the construction defects were discovered. With all of the above considerations in mind,

we affirm the court’s disqualification of counsel.

E.

Defendants request attorney fees on appeal pursuant to Tennessee Code Annotated

section 27-1-122, which provides as follows:

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.

The decision whether to award damages for a frivolous appeal rests solely in our

discretion. Chiozza v. Chiozza, 315 S.W.3d 482, 493 (Tenn. Ct. App. 2009). “A

frivolous appeal is one that is ‘devoid of merit,’ or one in which there is little prospect

that it can ever succeed.” Indus. Dev. Bd. v. Hancock, 901 S.W.2d 382, 385 (Tenn. Ct.

App. 1995). Exercising our discretion in such matters, we decline the request for

attorney fees on appeal.

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IV. CONCLUSION

We vacate the court’s dismissal of the action with prejudice and remand for entry

of an order of dismissal without prejudice. We affirm the decision of the trial court in all

other respects and remand for such further proceedings as may be necessary. Costs of the

appeal are taxed to the appellants, Joel and Elizabeth Diemoz.

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JOHN W. MCCLARTY, JUDGE

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