Tolliver v. Tellico Vill. Prop. Owners Ass'n, Inc.

579 S.W.3d 8

Matthew TOLLIVER et al.

v.TELLICO VILLAGE PROPERTY OWNERS ASSOCIATION, INC.

No. E2018-00090-COA-R3-CV

Court of Appeals of Tennessee, AT KNOXVILLE.

October 17, 2018 Session

FILED January 7, 2019

Thomas M. Leveille, Knoxville, Tennessee, for the appellants, Martha Mosakowski and Joseph Mosakowski.

Kevin C. Stevens, Knoxville, Tennessee, for the appellee, Tellico Village Property Owners Association, Inc.

Charles D. Susano, Jr., J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.

Charles D. Susano, Jr., J.

This litigation finds its genesis in a water pipeline break that caused damage to residential property. At the time of the break, Joseph and Martha Mosakowski were the title owners of the damaged property. Matthew Tolliver, who was purchasing the property under a contract for deed, resided in the home. Mr. Tolliver filed a complaint against Tellico Village Property Owners Association, Inc. (defendant) alleging negligence and breach of contract. The Mosakowskis were later joined to the suit as co-plaintiffs. Pursuant to a court order, the Mosakowskis filed their own complaint, which contained similar factual allegations and asserted the same causes of action as alleged in Mr. Tolliver's complaint. Defendant filed a motion to dismiss the Mosakowskis' negligence claim. The defendant also filed a motion for summary judgment on all claims asserted by Mr. Tolliver and the Mosakowskis. Mr. Tolliver consented to the entry of an agreed order granting summary judgment to the defendant as to all of his claims.¹ The Mosakowskis, however, contested defendant's motions. Ultimately, the trial court granted defendant's motion to dismiss the Mosakowskis' negligence claim because the court determined that the statute of limitations had expired. In a separate order, the court granted the defendant summary judgment on the Mosakowskis' breach of contract claim because the court determined that there was no consideration for the alleged contract. The court denied summary judgment as to the Mosakowskis' negligence claim because the court's order dismissing that claim rendered the issue moot. The Mosakowskis appeal. We affirm the trial court's dismissal of the negligence claim. Although the court erred by dismissing the negligence claim pursuant to Tenn. R. Civ. P. 12.02(6), we find that ruling to be harmless because summary judgment was proper under Tenn. R. Civ. P. 56. Finally, we reverse the trial court's grant of summary judgment on the breach of contract claim and remand for further proceedings.

I.

The plaintiffs alleged that on July 16, 2014, a water pipeline break caused damage to their residential property in Tellico Village. As previously noted, Mr. Tolliver resided in the home. He was in the process of purchasing the property from the Mosakowskis under a "contract for deed."

On December 9, 2015, Mr. Tolliver filed a complaint against defendant seeking damages for the loss of personal and real property. He alleged that defendant was liable in negligence for failing to properly maintain the water pipeline. Mr. Tolliver also alleged that defendant was liable for breach of contract. Specifically, Mr. Tolliver alleged that representatives of defendant promised the Mosakowskis that defendant would pay for all repairs to the property, a commitment that defendant failed to honor. Mr. Tolliver claimed to be a third-party beneficiary to this alleged oral contract.

Although Mr. Tolliver's complaint stated that the Mosakowskis were "necessary parties," his complaint did not name them as such. Months later, Mr. Tolliver filed a motion to amend his complaint, a proposed amended complaint, and a motion to join the Mosakowskis as parties.² Mr. Tolliver's proposed amended complaint did not name the Mosakowskis as co-plaintiffs. Instead, the amended complaint simply reiterated the allegation that "the Mosakowskis are necessary parties in order for the Court to give full relief and Plaintiff moves the Court [to] join them in this case." On June 13, 2016, the trial court entered an order providing that

upon stipulation of the parties, [Mr. Tolliver's] Motion to Amend Complaint and Motion to Join Third Part[ies] are GRANTED. [Mr. Tolliver's] Amended Complaint is deemed filed, and counsel for [Mr. Tolliver] shall have a summons issued and process served upon Joe and Martha Mosakowski to join them as parties to this action.

(Capitalization in original).

On September 23, 2016, the Mosakowskis were served with a summons and Mr. Tolliver's amended complaint. Inexplicably, the summons named the Mosakowskis as defendants. Accordingly, on May 22, 2017, the Mosakowskis filed a "motion to realign the parties." In their motion, the Mosakowskis claimed to hold legal title to the property in question and sought "to be aligned as Plaintiffs seeking recovery." The Mosakowskis were "realigned" as plaintiffs pursuant to an agreed order entered on July 27, 2017. Shortly thereafter, the trial court entered another agreed order that directed the Mosakowskis "to file a Complaint in this matter within 14 days from the entry of the Court's Order."

Pursuant to the court's order, the Mosakowskis filed their own complaint on August 23, 2017. The pleading was styled as a "complaint" and the caption listed only "Martha Mosakowski and Joseph Mosakowski" as plaintiffs. However, the complaint was filed under the same docket number as the civil action initiated by Mr. Tolliver. The Mosakowskis' complaint contained the following factual allegations:

1. The Plaintiffs, Martha and Joseph Mosakowski (hereinafter referred to as "Mosakowskis"), own property upon which they built and house located at 210 Wahahu [sic] Lane, Loudon, Tennessee. The Mosakowskis hold legal title to this property.

2. At all times pertinent hereto, Matthew Tolliver leased the property with an option to purchase.³

3. The Defendant, Tellco [sic] Village Property Owners Association (hereinafter referred to as "Tellco [sic] Village POA"), is an organization created by developers and owners of Tellco [sic] Village to protect, inspect, repair and maintain all common areas and public utilities, to include water pipelines throughout Telco [sic] Village.

4. On July 16, 2014, a section of the underground water pipelines referred to above, burst. Several thousand gallons of water erupted from the ground and flooded the Mosakowskis' yard and house causing extensive damages.

5. Upon information and belief, the water pipelines along Wahahu [sic] Lane have broken on several occasions previously. Tellco [sic] Village POA has knowledge of the deteriorating or defective nature of these water pipelines.

6. Representatives of Tellco [sic] Village POA assured the Mosakowskis that they would pay for damage, but have failed to follow through with that agreement.

Count I of the complaint alleged that "[a]t all times pertinent hereto, [defendant] and the Mosakowskis had entered into a contractual agreement," and that defendant had breached the same. Count II alleged that defendant was liable in negligence for breaching its "duty to maintain, repair, service, troubleshoot and generally keep the water pipelines in good and working order."

On October 16, 2017, defendant filed a motion to dismiss the Mosakowskis' negligence claim. First, defendant argued that the Mosakowskis lacked standing to sue. Defendant also argued that the Mosakowskis' complaint was filed beyond the three-year period of the statute of limitations. The Mosakowskis argued that they did have standing and that their complaint should relate back to the filing of Mr. Tolliver's original complaint pursuant to Tenn. R. Civ. P. 15.03.

On October 20, 2017, defendant also filed a motion for summary judgment "on all claims asserted by the Plaintiffs, Matthew Tolliver, Joe Mosakowski, and Martha Mosakowski[.]" With respect to the negligence claim, defendant argued that plaintiffs had not presented sufficient evidence of defendant's specific duty of care or evidence of how defendant breached that duty of care. With respect to the breach of contract claim, defendant argued that plaintiffs failed to present any evidence of consideration for the alleged oral contract.

After defendant filed its motion for summary judgment, the trial court entered an agreed order stating that Mr. Tolliver and defendant "have announced to the Court that they are in agreement that [defendant's] Motion for Summary Judgment filed on October 20, 2017 should be granted as to Tolliver, and that Tolliver's remaining claims against [defendant] for breach of contract and negligence should be dismissed with prejudice." The Mosakowskis, however, filed a memorandum of law in opposition to defendant's motion for summary judgment. In their memorandum, the Mosakowskis attempted to clarify that their breach of contract claim was supported by the breach of an alleged oral contract as well as defendant's articles of incorporation and bylaws, which arguably operate as a written contract. For the first time, the Mosakowskis attached defendant's articles of incorporation and bylaws as an exhibit. The Mosakowskis also attached two reports prepared by defendant's third-party water loss control company purporting to show that defendant had prior notice of leaks in the community's water pipeline system.

After several hearings on defendant's motions, the trial court contemporaneously entered two orders. In one order, the court found that the Mosakowskis had standing to sue; the same order, however, granted defendant's motion to dismiss the Mosakowskis' negligence claim because the court determined that the statute of limitations had expired. The court found that the Mosakowskis' complaint did not relate back to the filing of Mr. Tolliver's original complaint. In the other order, the court granted summary judgment on the Mosakowskis' breach of contract claim because the court determined that there was no evidence of consideration for the alleged oral contract. The court...