Kabir Afzali Et Al. v. Shirzad Etemadi

This appeal concerns a trial court’s dismissal under Tennessee Rule of Civil Procedure 12.02(6) based on the affirmative defenses of res judicata and waiver. This is the second action between the parties involving the same real property. In the first action, the plaintiffs sought to enforce an option to purchase property they were leasing from the defendant. While the action was pending, the defendant recorded a document with the Davidson County Register of Deeds that purported to create an ingress-egress easement across the property to an adjoining tract he owned. During the pendency of the first action, the parties entered into a settlement agreement, pursuant to which the defendant agreed to sell the property to the plaintiffs, and the parties released all claims against each other. After the first action was dismissed, the plaintiffs discovered the purported easement, which prompted them to file a motion to set aside the dismissal. Meanwhile, the parties set a deadline for closing, and the defendant prepared a warranty deed that reserved the same easement he previously attempted to create. The plaintiffs insisted that the deed be rewritten without the easement. When the defendant refused, they proceeded with the closing. Shortly after the closing, the trial court denied the motion to set aside the dismissal of the first action. The plaintiffs recorded a Notice of Acceptance of Deed under Protest the day after the deed was recorded and commenced this action three weeks later. The complaint asserted that the defendant clouded the property’s title by filing a defective easement and breached the settlement by delivering a deed that did not describe the property as bargained for. On the defendant’s motion to dismiss, the trial court found the matter had been adjudicated in the first action and that the plaintiffs waived their claims by closing on the property. We have determined that neither the doctrine of res judicata nor the doctrine of waiver applies. Accordingly, the judgment of the trial court is reversed, and this matter is remanded for further proceedings consistent with this opinion.