Where plaintiff filed a notice of voluntary dismissal in his defamation case before defendants filed their petition to dismiss under the TPPA, the trial court erred by granting defendants’ petition for dismissal and awarding them attorneys’ fees and sanctions after plaintiff’s nonsuit.
In Adamson v. Grove, No. M2020-01651-COA-R3-CV, 2022 WL 17334223 (Tenn. Ct. App. Nov. 30, 2022), plaintiff filed a complaint against defendants asserting claims for defamation, invasion of privacy, and intentional interference with business relations. Six weeks after filing the complaint and prior to defendants filing an answer or other pleading, plaintiff filed a notice of voluntary dismissal pursuant to Rule 41.01, and the trial court entered an order dismissing the case without prejudice four days later.
More than two weeks after the order of dismissal was entered, defendants filed a “combined motion to alter or amend and petition to dismiss with prejudice pursuant to the Tennessee Public Participation Act” (TPPA). Defendants asserted that the TPPA applied to this action, that the TPPA gave defendants 60 days from receipt of the complaint to file their petition for dismissal, and that defendants had a vested right to seek dismissal with prejudice and sanctions under the TPPA. After several replies and responses, the trial court ultimately agreed with defendants and granted the petition for dismissal with prejudice. The trial court also awarded defendants $15,000 in attorney fees and $24,000 in sanctions. These rulings were reversed and vacated on appeal.
After rejecting defendants’ argument that plaintiff had waived the issue of whether the trial court had jurisdiction to grant the TPPA dismissal and noting that “a challenge to subject matter jurisdiction cannot be waived and may be raised at any time,” the Court began its analysis by looking at the caselaw surrounding Rule 41.01 voluntary dismissals in Tennessee. (internal citation omitted). Under Tennessee Rule of Civil Procedure 41.01, “the right of the plaintiff to dismiss the action without prejudice is free and unrestricted except in limited and well-defined circumstances.” (internal citation omitted). Rule 41.01 is subject to limitations contained in certain other rules of civil procedure and some statutes, as well as the implied exception invoked when the allowance of a voluntary dismissal would deprive defendant of a “vested right.” (internal citation omitted).
In this case, plaintiff argued that defendants’ TPPA petition for dismissal should be treated as a counterclaim. Rule 41.01 states that “[i]f a counterclaim has been pleaded by a defendant prior to the service upon the defendant of plaintiff’s motion to dismiss, the defendant may elect to proceed on such counterclaim in the capacity of a plaintiff.” Plaintiff asserted that because defendants’ TPPA petition was not filed until after the notice and order of voluntary dismissal, “Defendants could not file and proceed on their counterclaim after the nonsuit.” The Court of Appeals agreed that a court “has no jurisdiction over a counterclaim filed after the suit is voluntarily dismissed,” and ultimately agreed with plaintiff that the TPPA petition to dismiss should be treated as a counterclaim for purposes of Rule 41.01. (internal citation omitted). Looking to other caselaw analyzing what qualifies as a counterclaim under Rule 41.01, the Court explained:
[W]e conclude that Defendant’s TPPA Petition to dismiss and request for attorney fees and sanctions would be considered a counterclaim within the meaning of Rule 41.01. It amounted to more than mere denials of the plaintiff’s cause of action and sought affirmative relief under the TPPA including attorney fees and sanctions. The TPPA itself explains that the statutory scheme provides a substantive remedy.
(internal citations and quotations omitted). Accordingly, defendants were only free to proceed with this counterclaim if it was pleaded prior to service of plaintiff’s voluntary dismissal. Here, the counterclaim petition was clearly filed after plaintiff’s nonsuit, so “unless some exception applied, Plaintiff maintained the right to take a nonsuit shortly after the complaint was filed when Defendants had not yet filed any type of pleading.”
On appeal, defendants advanced three arguments for why the trial court had jurisdiction over the TPPA petition to dismiss and was correct to grant the petition even after the filing of the voluntary dismissal. First, defendants argued that prior caselaw established that a “motion for sanctions could be considered following a nonsuit[.]” The Court of Appeals quickly rejected this argument, however, noting that in the case cited by defendants in support of this argument, the motion for sanctions had been filed and was pending prior to the voluntary dismissal. Here, the motion for sanctions was not filed until after plaintiff had voluntarily dismissed his action.
Second, defendants argued that the “statutory rights” exception in Rule 41.01 applied and that “Plaintiff’s right to take a nonsuit was subject to their statutory rights under the TPPA.” (internal quotations omitted). After looking at HCLA cases where similar arguments were made by defendants, the Court cited previous caselaw stating that, in the context of Rule 41.01, “’of any statute’ must refer to statutes that specifically limit a party’s right to obtain a voluntary nonsuit or otherwise relate specifically to the effect of a voluntary nonsuit.” (internal citation omitted). Because the TPPA “does not specifically limit a party’s right to obtain a voluntary nonsuit or otherwise relate specifically to the effect of a voluntary nonsuit,” the Court ruled that it was “not the type of ‘statute’ contemplated by the exception stated in Rule 41.01.” (internal citation omitted).
Finally, defendants argued that allowing plaintiff to take a nonsuit here deprived them of a vested right. The Court noted that “it is hard to pin down the definition of a vested right,” and it looked at several examples of when a vested right was found to exist and when courts declined to find vested rights. (internal citations omitted). The Court ultimately ruled that defendants here did not have a vested right in having their TPPA petition heard, stating:
Comparing the facts of the case before us to those in the aforementioned cases, it becomes clear that the Plaintiff’s nonsuit in this case did not deprive the defendant of some right that became vested during the pendency of the case. Plaintiff took a nonsuit just six weeks after the initial complaint was filed, at a point when Defendants had not even responded to the complaint or filed any type of pleading in this case. Defendants argued in their combined motion to alter or amend and TPPA petition that they had a vested right to dismissal with prejudice under the TPPA and its mandatory award of attorney fees, and they insisted that their statutory rights vested upon the filing of the Plaintiff’s Amended Complaint against them. However, at the point when plaintiff took a voluntary nonsuit, Defendants had not petitioned the court to dismiss the complaint or submitted any evidence in an attempt to meet its burdens under the burden-shifting mechanism of the TPPA. Thus, Defendants did not, at that point, have a vested right to dismissal with prejudice or discretionary sanctions under the TPPA.
(internal citations omitted).
Because defendants’ TPPA petition was filed after plaintiff took his nonsuit, and because no exception applied limiting plaintiff’s ability to take a voluntary nonsuit, the Court of Appeals reversed the trial court’s ruling amending the initial dismissal without prejudice, vacated the award of attorney’s fees and damages, and remanded for entry of an order granting plaintiff dismissal without prejudice.
We’ve seen a flurry of cases surrounding application of the TPPA, a relatively new statute, and this opinion addresses nonsuits and TPPA petitions together for the first time. This opinion contains important holdings regarding nonsuits in cases where the TPPA might come into play, and it also contains an in-depth analysis of Rule 41.01 exceptions in general.
This opinion was released six months after oral arguments in this case.
Note: Chapter 28, Section 14 of Day on Torts: Leading Cases in Tennessee Tort Law has been updated to include this decision.
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