Tennessee Supreme Court Rules Involuntary Dismissal Of Lawsuit Did Not Preclude Later Refiling

July 8, 2021

The Tennessee Supreme Court today reversed the dismissal of a lawsuit that had been refiled after it previously was dismissed before going to trial.  The Court held that the prior dismissal did not prevent refiling the lawsuit because that dismissal had not resolved the lawsuit on its merits.

In May 2014, Regions Bank filed suit against Nathan Prager in Shelby County seeking to recover money for breach of contract.  The trial court, on its own initiative and without notice to the parties, dismissed the lawsuit in August 2016, finding that Regions had failed to timely prosecute the case.  Not knowing of the dismissal, the parties continued litigating for nearly a year.  Upon learning of the dismissal, Regions asked the trial court to set aside the dismissal and allow the lawsuit to proceed.  The trial court denied the request but stated that the dismissal did not prevent Regions from refiling its lawsuit and beginning the litigation anew.  When Regions refiled the lawsuit, the trial court, in spite of its earlier statement that Regions was permitted to refile, dismissed the lawsuit in accordance with an established rule of law known as res judicata, which dictates that certain dismissals ordinarily resolve a case on its merits and preclude refiling.  A divided panel of the Court of Appeals upheld the trial court’s decision.  The Supreme Court granted Regions permission to appeal.

In a unanimous opinion, the Supreme Court determined that the dismissal of the first lawsuit under these circumstances did not prevent Regions from refiling.  The Court recognized that established Tennessee law provides that certain dismissals, including involuntary dismissals for failure to move a case forward expeditiously, are considered to have resolved the case on its merits.  However, that same rule provides an exception if a trial court specifies otherwise in its order of dismissal.  In this case, the Supreme Court concluded that the trial court’s comments sufficiently specified that the dismissal of the original lawsuit did not resolve the case on its merits.  Thus, the Court held that Regions was not precluded from refiling its lawsuit.

To read the Supreme Court’s opinion in Regions Bank v. Prager, authored by Chief Justice Jeff Bivins, visit the opinions section of TNCourts.gov.