text:
    ADT SECURITY SERVICES, INC. v. Ruth E. JOHNSON, Commissioner of Revenue, State of Tennessee.
    Court of Appeals of Tennessee, at Nashville.
    Sept. 15, 2009 Session.
    Nov. 19, 2009.
    Order Denying on Rehearing Dec. 16, 2009.
    Application for Permission to Appeal Denied by Supreme Court June 17, 2010.

      Robert E. Cooper, Jr., Attorney General and Reporter, Michael E. Moore, Solicitor General, and Jonathan N. Wike, for the Appellant, Ruth E. Johnson, Commissioner of Revenue, State of Tennessee.
    Brett R. Carter, Charles Arthur Trost, Christopher Andrew Wilson, Nashville, and Michael G. Stewart, for the Appellee, ADT Security Services, Inc.
   OPINION

DAVID R. FARMER, J.,

delivered the opinion of the court,

in which ALAN E. HIGHERS, P.J., W.S., and HOLLY M. KIRBY, J., joined.

The trial court ruled that taxpayer ADT Security Services was liable for sales and use tax on equipment it installed as part of its security monitoring service contracts. The trial court also ruled that taxpayer was entitled to offset its liability for sales and use taxes, under the doctrine of equitable recoupment, by taxes taxpayer had charged and remitted on the installation of the equipment. We affirm the trial court’s judgment with respect to taxpayer’s liability for sales and use taxes, and reverse with respect to taxpayer’s entitlement to an offset under the doctrine of equitable recoupment.

The Plaintiff/Appellee in this tax action, ADT Security Services, Inc. (“ADT”), sells security and monitoring services and equipment to residential and commercial customers. The Tennessee Department of Revenue (“the Department”) conducted an audit of ADT for franchise and excise taxes for the period of January 1, 1994, through December 31, 1996, and for sales and use taxes for the period of December 1, 1994, through November 30, 1997 (“the audit period”). By notice dated June 22, 2000, the Department notified ADT that it had been assessed $1,021,325.43 in tax and interest. This dispute concerns the assessment of $973,478.43 in sales and use taxes, and interest, on security monitoring equipment installed by ADT in connection with its monitoring service contracts.

In July 2001, ADT filed a complaint in the Chancery Court for Davidson County seeking a declaration that the Department’s assessment of a sales and use tax deficiency in the amount of $973,473.43 for the audit period was incorrect, invalid, wrong and void. In its complaint, ADT asserted that it had purchased the monitoring equipment as equipment for re-sale or lease to its customers in connection with its monitoring services contracts. ADT asserted that its customers who purchased monitoring services leased the monitoring equipment, including repair parts, and that the Department’s assessment of use tax on ADT’s purchase of the equipment was unlawful because it imposed a use tax on equipment purchased by ADT for resale or lease. It further asserted that the Department’s assessment imposed a double tax on a single integrated transaction in a manner that provided ADT with no adequate remedy at law for avoiding the double taxation.

The Department answered in October 2001. In its answer, the Department denied that ADT leased monitoring equipment to its customers who contracted for monitoring services during the audit period. The Department asserted that ADT’s purchases of the equipment at issue on a resale certificate under Tennessee Code Annotated § 67-6-102(31)(A) were not proper. The Department counterclaimed, asserting the assessment of sales and use tax in the amount of $666,653, plus interest in the amount of $306,825.43, was proper. It sought judgment in its favor, plus additional statutory interest, and an award of attorney’s fee and expenses pursuant to Tennessee Code Annotated § 67-1-1803(d). The Department further asserted that collection of the amount due under the assessment was not stayed because ADT had not posted a bond or irrevocable letter of credit or any documents pursuant to Tennessee Code Annotated § 67-1-1801(c)(1)(B) — (C).

ADT posted bond on October 26, 2001, and answered the Department’s counterclaim in January 2002. In its answer, ADT again asserted that the Department’s assessment of sales and use taxes for the audit period was incorrect and invalid.

The matter was tried on August 2 and 3, 2006, and closing arguments were heard on December 6, 2006. During closing argument, ADT asserted that, even if the Department was correct in its assertion that ADT was using the monitoring equipment in the performance of its security monitoring contracts, and although it did not characterize its contracts as “leases” of installed equipment, the installation fees it charged its customers incorporated a chai'ge for the lease of equipment. ADT argued that when it charged and remitted the taxes on the installation of the equipment, it collected and remitted the amount of sales tax that would have been due had it charged separately for the lease and the installation of the equipment. It argued that the Department could collect taxes under only one theory, and that, if there had been no sale or lease of equipment, then there should have been no tax collected and remitted on the installation of that equipment. ADT asserted,

[n]ot surprisingly ... there is no tax in Tennessee on your act of installing your own stuff.... I’ll tell you, the statute in this area is kind of squirrely. But luckily, the Department has issued regulations which are absolutely binding on the Department. And what the Department’s regulation says is: Tax on installation services, which we know we collected, is only owed in connection with a sale. See, you only pay tax on installation services in two instances. You pay charges for installing tangible personal property, whether made as part of and in connection with the sale of the tangible personal property .... or whether made for installing tangible [personal] property, which has been sold in a separate bona fide transaction when the property remains tangible personal property.
.... But in each case, you’ve got to have a sale.... You have to have a sale with the installation of the thing that’s to be installed in order for it to be taxed. And in this case, we, of course, recognize there was a sale or, in this case, a lease, and equivalent event. So we collected tax on these installation services.

In its closing argument, ADT asserted that it was liable for either a sales, and use tax on the monitoring equipment or an installation tax, but not both. It asserted that, under the doctrine of equitable re-coupment, the Department could not “have it both ways.” ADT argued that the Department could not assess taxes on one transaction under two separate theories. ADT asserted that, under the doctrine of equitable recoupment, if it was liable for sales and use taxes on the equipment, it was entitled to a credit for the amount of taxes collected and remitted on the installation of that equipment.

The Department, on the other hand, argued that ADT had not demonstrated that it ever leased its equipment to a customer who could then obtain monitoring services from a competitor. The Department asserted that, although ADT customers could subscribe to ADT’s monitoring services without purchasing or leasing equipment from ADT, and that customers could purchase alarm equipment from ADT without subscribing to monitoring services, customers could not lease equipment from ADT without subscribing to monitoring services. The Department argued that ADT did not lease the equipment in question, but used it in the provision of its monitoring services. The Department stated, “[t]here is no leasing separate and apart from its service. It’s not even theoretically possible because they say [‘]we don’t do it.[’]”

In its closing argument, the Department further asserted that ADT had not pled the doctrine of equitable recoupment. It also argued that the exhibits offered by ADT did not demonstrate that ADT had collected sales tax on the equipment installed in connection with its monitoring services. The Department asserted, “[a]ll we know in this case is that they collected a tax on an installation charge .... so you have a question here, well, how much— how much of that equipment and that installation charge, how much of that is attributable to the — to the ADT — owned equipment?” The Department argued that ADT owed sales tax on the equipment it purchased for use in its monitoring contracts. The Department further argued that ADT had failed to carry its burden to demonstrate that a portion of the installation charge paid by its customers was in fact a lease charge, and that a portion of the installation taxes collected should therefore be credited to the sales and use tax amounts assessed against ADT. The Department asserted that the “equitable recoupment argument may make some sense, but how much is the offset going' to be? The taxpayer [ADT] hasn’t proved it. They have — an installation charge for what? How much of that was for equipment, how much of that was for labor? They haven’t demonstrated that[.]” The Department contended that ADT would not provide

this property to you without a two — or three — year agreement. And what they were doing was they were pushing off the costs, what they were paying their vendor for their monitoring equipment and what they were paying for labor. They’re- pushing these costs off into their — this two or three-year service contract for which they’re paying no taxes....
.... They’re never paying a tax, in essence, on the property they bought.

On June 25, 2008, the trial court entered an order holding that ADT had not met its burden of demonstrating that it was exempt from sales and use tax on equipment installed in connection with its monitoring services. The trial court found that the evidence demonstrated that ADT was using the equipment to provide its monitoring services rather than leasing it to its customers. The trial court found, “ADT secures the necessary equipment to provide. the service for which the customer had contracted; this is the sole purpose of ADT’s purchase of the equipment.... As respects the ADT-owned equipment, it had no value separate from the monitoring ser-' vice.” The trial court further determined that

ADT. charge[d] a one-time fee for the cost of installation and use of the equipment and collects sales tax on these charges. The use charge is intended to cover the cost of the equipment to ADT. A sales tax is charged on the amount charged for installation of ADT-owned equipment; the installation charge is not broken down into labor and materials, as is the case in installation of outright sales.

The trial court sustained the Department’s assessment of sales and use tax against ADT. The trial court also determined that the assessment amount should be offset by the “amount paid by ADT in sales tax on the installation of the ADT-owned equipment.” The court stated, however, that it was “not clear to the [c]ourt ... how much of the sales tax paid by [ADT] [was] attributable to the installation of ADT-owned equipment.” The trial court ordered ADT to file a statement of the amount it contended it was entitled to as an offset against the assessment of sales and use taxes.

On July 3, 2008, ADT submitted its statement of the amount for which it asserted an offset. In its statement, ADT asserted it had collected and remitted sales tax on the fee charged for ADT-owned security systems, which included the price of the equipment installed, in the amount of $684,305. It asserted that, because it had collected more than the sales and use tax amount assessed by the Department, it was not liable for any additional tax amounts.

The Department filed a motion to alter, amend, and/or reconsider on July 18, 2008. In its motion, the Department submitted that the trial court had erred in concluding that ADT was entitled to offset its sales tax liability by the tax amounts it collected and remitted on the installation of equipment. The Department contended that if the court determined that ADT should not have charged taxes on the installation of the equipment, then those amounts should be refunded to ADT’s customers rather than used to offset ADT’s sales and use tax liability. In its accompanying memorandum, the Department asserted that ADT was liable for sales tax on the equipment it purchased for use in its monitoring contracts where that equipment was not purchased for “retail sale” or “sale at retail.” The Department further argued that the tax on installation imposed by Tennessee Code Annotated § 67-6-102(34)(F)(vi) is a tax on “a particular type of service” that is imposed without reference to the cost of the components installed. The Department argued that the installation tax is distinct from the sales tax, if any, imposed on the tangible personal property that is installed. It asserted, “the tax on installation is not a complementary or offsetting tax with respect to the tax on sales of tangible personal prop-ei'tyU” but “an independent tax on a service[.]”

The trial court issued its final order in the matter on August 5, 2008. The trial court sustained its order of June 25 and denied the Department’s motion to alter, amend, or reconsider. The trial court also determined that the “undisputed offset amount ... exceeded] the $522,482 use tax assessment on ADT-owned equipment” and that ADT was entitled to a full offset. It held that, because the original sales and use tax assessment amounted to $666,653, including amounts other than the $522,482 disputed in the proceedings relevant to ADT-owned equipment, ADT remained liable for the remaining assessment in the amount of $144,171, plus applicable interest. The Department filed a timely notice of appeal to this Court.

Issues Presented

The Department presents the following issue for our review:

Whether the trial court erred in holding that Plaintiff/Appellee ADT Security Services, Inc. (“ADT”) is entitled to apply the amount of tax ADT collected from its customers on initial charges for installation of monitoring equipment as an offset against ADT’s use tax liability for its own purchase of the monitoring equipment from various vendors.

ADT cross-appeals and presents the following issue for our review:

Whether the Chancellor erred in determining that ADT’s security monitoring equipment was not leased to ADT’s customers because it did not have value separate and apart from the security monitoring services, and therefore holding that ADT was not entitled to the “sale for resale” exemption form Tennessee sales tax and was liable for use tax on the equipment.

Standard of Review

We review the trial court’s findings of fact with a presumption of correctness unless the evidence preponderates otherwise. Tenn. R.App. P. 13(d). Accordingly, we will not reverse the trial court’s factual findings unless they are contrary to the preponderance of the evidence. The construction of a statute is a question of law which we review de novo, however, with no presumption of correctness attached to the determination of the trial court. Hill v. City of Germantown, 31 S.W.3d 234, 237 (Tenn.2000).

Our objective when construing a statute is to effectuate the purposes of the General Assembly. Lipscomb v. Doe, 32 S.W.3d 840, 844 (Tenn.2000). Insofar as possible, the intent of the General Assembly should be determined by the natural and ordinary meaning of the words used in the statute, and not by a construction that is forced or which limits or extends the meaning. Id. When the language of a statute is clear, we must utilize the plain, accepted meaning of the words used by the General Assembly to ascertain the statute’s purpose and application. If the wording is ambiguous, we must look to the entire statutory scheme and at the legislative history to ascertain the General Assembly’s intent and purpose. We must construe statutes in their entirety, neither constricting nor expanding the General Assembly’s intent. In so doing, we assume that the General Assembly chose the words of the statute purposely, and that the words chosen “convey some intent and have a meaning and a purpose” when considered within the context of the entire statute. Eastman Chem. Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn.2004) (citations omitted).

This Court must construe taxation and exemption statutes differently. Covington Pike Toyota, Inc. v. Cardwell, Comm’r of Revenue, 829 S.W.2d 132, 135 (Tenn.1992). Taxation statutes must be construed liberally in favor of the taxpayer and strictly against the taxing authority. Id. They will not, therefore, be extended beyond the clear intention of the General Assembly. Id. Statutes providing exemptions from taxation, on the other hand, must be strictly construed against the taxpayer, and the taxpayer carries the burden of demonstrating an entitlement to an exemption. Id.

Analysis

We begin our analysis by noting that this dispute does not pertain to monitoring equipment sold by ADT to its customers as outright sales. Rather, this dispute pertains to ADT-owned equipment installed in conjunction with ADT’s security monitoring services, services for which ADT charged a monthly fee. The questions presented, as we perceive them, are 1) whether ADT has demonstrated that it was exempt from liability for sales and use taxes on security system components that it purchased under a certifícate of resale and then installed in conjunction with its security monitoring services; and 2) if ADT was liable for the sales and use taxes assessed by the Department, whether, under the doctrine of equitable recoupment, ADT’s liability should be offset by taxes charged and remitted on the installation of equipment. We turn first to whether ADT carried its burden of demonstrating that it was exempt from the sales and use taxes assessed by the Department.

Liability for Sales and Use Tax

ADT’s argument, as we perceive it, is that it leased the security systems to its customers, and that it charged and remitted sales taxes on the leased systems as an element of the one-time installation fees it charged its customers. ADT contends that the “lease” price was included in the installation fee. The Department does not assert that ADT would be liable for sales and use taxes on leased equipment where sales taxes were charged and remitted on the lease amounts. Rather, the Department argues that the proof does not demonstrate that ADT “leased” the equipment to its customers. The Department contends that ADT installed the security system components as part of its security monitoring contracts, and therefore used the equipment in fulfillment of its own contracts. It asserts that the proof demonstrates that ADT charged its customers for installation of security systems, not for the lease of equipment. The trial court determined that ADT did not lease the equipment, but used it in the performance of its own security monitoring services and that ADT was, therefore, liable for sales and use taxes on the various components.

As we have noted in similar circumstances, the determinative inquiry in this case is whether ADT purchased the equipment components for the purpose of leasing equipment to its customers or in order to provide its security monitoring services to its customers. See Cape Fear Paging Co. v. Huddleston, 937 S.W.2d 787, 788 (Tenn.1996); Nashville Mobilphone Co., Inc. v. Woods, 655 S.W.2d 934, 937 (Tenn.1983); Sec. Fire Prot. Co., Inc. v. Huddleston, 138 S.W.3d 829, 839 (Tenn.Ct.App.2003). Upon review of the record, we cannot say the evidence preponderates against the finding of the trial court that ADT did not lease the ADT-owned equipment to its customers, but used it in the performance of its security monitoring contracts. The ADT customer contracts contained in the record clearly indicate that ADT charged its customers only an installation charge for the installation of a security monitoring system to be utilized in conjunction with ADT’s monitoring services. Installation taxes were collected on this amount. No equipment fee or lease fee is indicated on the contracts. Additionally, ADT employees testified that the equipment was known as and generally referred to as “ADT-owned” equipment. Department auditors testified at trial that ADT never indicated that the equipment was leased equipment before the notice of assessment was issued. Additionally, although a customer could contract for ADT monitoring services using other equipment, the testimony in the record indicates that a customer could not lease equipment from ADT and obtain monitoring services from another provider. We agree with the trial court that ADT used the equipment components in furtherance of its own security monitoring contracts. ADT has failed, therefore, to carry its burden to demonstrate that its purchases of monitoring system components were exempt from sales and use taxes as a sale for resale under Tennessee Code Annotated § 67-6-102(34)(A)(2006).

Offset Under Doctrine of Equitable Recoupment

We next turn to whether, under the doctrine of equitable recoupment, ADT is entitled to offset its liability for sales and use taxes by tax amounts collected and remitted on the installation of ADT-owned monitoring equipment. Equitable recoupment is “[a] doctrine allowing a taxpayer to' offset previously overpaid taxes against current taxes due, even though a taxpayer is time-barred from claiming a refund on the previous taxes .... this type of re-coupment can be asserted only if the statute of limitations has created an inequitable result.” Blacks Law Dictionary 579 (8th ed.2004). Ordinarily, it is a defensive remedy which ■ is applicable to mitigate damages. Id. Equitable recoupment is “a judicial doctrine ... that allows taxpayers and the government to offset obligations to each other with amounts arising out of the same transaction, which are otherwise time-barred.” WG & L Tax Dictionary 232 (2002). “If an overpayment in one tax liability and a deficiency in another tax liability arise from the same transaction, the doctrine of equitable recoupment allows the [taxing authority] to recoup the deficiency to the extent of the overpayment, even through the assessment of the deficiency is otherwise barred.” Rev. Rul. 81-287, 1981-2 C.B. 83 (citing See Stone v. White, 301 U.S. 532, 57 S.Ct. 851, 81 L.Ed. 1265 (1937), Ct. D. 1232, 1937-1 C.B. 224; Bull v. United States, 295 U.S. 247, 55 S.Ct. 695, 79 L.Ed. 1421 (1935), Ct. D. 969, XIV-1 C.B. 310; United States v. Herring, 240 F.2d 225 (4th Cir.1957); Rev. Rul. 71-56, 1971-1 C.B. 404). The doctrine similarly provides an affirmative defense to a taxpayer seeking to offset a tax deficiency by the amount of an overpayment arising out of the same transaction when a claim for refund is time-barred. Menard, Inc. v. Comm’r, 130 T.C. 54, 62 (2008).

In the present case, the Department asserts the trial court erred in allowing ADT to offset its liability for sales and use tax by taxes collected oh the installation of the equipment. The Department asserts that the trial court erred by permitting an offset under the doctrine of equitable re-coupment because ADT did not assert the doctrine until after the matter was tried. The Department asserts ADT therefore waived the right to raise the doctrine as a defense. The Department also submits that, “without discussion or support,” the trial court directed ADT to submit a statement of the offset amount; that ADT submitted an amount which it claimed represented the portion of the installation charge that was, in fact, an equipment cost; and that the trial court, “again without discussion or support,” permitted ADT an offset in the amount ADT claimed. The Department contends that the trial court’s ruling is not supported by Tennessee statutes or case law, and that it is contrary to its ruling that ADT did not lease or sell the ADT-owned equipment to its customers. The Department further argues that sales and use taxes are distinct from installation taxes. The Department submits that installation taxes levied under Tennessee Code Annotated §§ 67-6-102(34)(F)(vi) and 67-6-205(c)(6) are taxes on a particular type of service, and are distinct from and independent of sales and use taxes. The Department asserts that, unlike use tax, the tax on installation is not complementary to the sales tax on tangible personal property.

ADT, on the other hand, asserts the trial court properly allowed it to offset its liability for sales and use taxes by amounts ADT collected and remitted as installation taxes. ADT asserts that the Department’s contention that the trial court erred in allowing the offset is “flawed” as inconsistent with the Department’s argument that ADT purchased the monitoring equipment for its own use in its security monitoring contracts. ÁDT asserts that there is no tax on the installation of property installed for one’s own use. ADT submits that there must be a separate “sale” of the installed property in order for the installation service to be taxed. It concludes that, if the monitoring equipment was neither sold nor leased but merely installed for ADT’s own use in providing monitoring services, the installation tax was not applicable. ADT contends that the levy of a sales and use tax in addition to an installation tax would result in a double taxation.

We begin our analysis of this issue by noting that equitable recoupment is an affirmative defense. Menard, 130 T.C. at 68. Under Tennessee Rule of Civil Procedure 8.03, “any ... matter constituting an affirmative defense” must be set forth in a pleading prior to trial. Failure to pled an affirmative defense generally results in a waiver of the defense. E.g., C & W Asset Acquisition, LLC v. Oggs, 230 S.W.3d 671, 678 (Tenn.Ct.App.2007). In its brief to this Court, ADT asserts that, contrary to the Department’s contention that ADT failed to assert the defense at trial, ADT asserted an entitlement to an offset in its pre-trial brief and at the trial of this matter in August 2006. Upon review of the record, we note that ADT did not assert the defense of equitable recoupment in its reply to the Department’s counter-claim. In its July 2006 pre-trial brief to the trial court, ADT asserted that it was entitled to an exemption from sales and use tax on monitoring equipment because the equipment was leased to ADT’s customers. It further asserted that the equipment remained personal property but that, if the monitoring systems were to be deemed fixtures, it would be entitled to an offset of the assessed sales and use tax for the tax collected on installation. Similarly, at the August 2006 hearing of the matter, ADT addressed the question of offset within the context of asserting that the monitoring equipment remained personal property and did not become fixtures.

We agree with the Department that ADT failed to specifically assert the doctrine of equitable recoupment until final closing arguments after the close of proof. ADT’s claim to an offset in the trial court arose • solely within the context of determining whether a monitoring system became a fixture. In its brief to this Court, ADT quotes 631 BNA Tax Management Portfolio at A-29-30 for the rule that “[ejquitable recoupment is only allowed where: (1) the tax and the refund arise out of a single transaction; and (2) the single transaction is subject to two taxes based on inconsistent legal theories.” The party claiming the defense of equitable recoupment carries the burden to demonstrate that it applies. Menard, Inc. v. Comm’r, 130 T.C. 54, 68 (2008). In order to establish the defense, the party must prove that “(1) the overpayment or deficiency for which recoupment is sought by way of offset is barred by an expired period of limitation; (2) the time-barred overpayment or deficiency arose out of the same transaction, item, or taxable event as the overpayment or deficiency before the Court; (3) the transaction, item, or taxable event has been inconsistently subjected to two taxes; and (4) if the transaction, item, or taxable event involves two or more taxpayers, there is sufficient identity of interest between the taxpayers subject to the two taxes that the taxpayers should be treated as one.” Id. Upon review of the record, we agree with the Department that these elements were not pled or tried by implication in the trial court. Accordingly, ADT waived the affirmative defense of equitable recoupment where it neither pled it in accordance with Tennessee Rule of Civil Procedure 8.03 and where it was not tried by implication. .

Holding

In light of the foregoing, the judgment of the trial court is affirmed with respect to ADT’s liability for sales and use taxes as assessed by the Department. The trial court’s judgment is reversed with respect to ADT’s entitlement to an offset under the doctrine of equitable recoupment. This matter is remanded for determination of ADT’s tax liability in light of this Opinion. Costs of this appeal are taxed to the Appellee, ADT Security Services, Inc.

ORDER

The Appellee/Cross-Appellant, ADT Security Services, Inc., has filed a petition for rehearing. After due consideration, the petition is denied. Costs are assessed to ADT Security Services. Inc. IT IS SO ORDERED.

      . It is undisputed that ADT's monitoring services are not subject to Tennessee sales and use tax. It is also undisputed that ADT paid the taxes applicable to the installation of monitoring equipment. This appeal does not involve equipment sold by ADT as outright sales.

      . The security equipment includes smoke and motion detectors; sensors; glass breaks; touch pads; horn modules; water flow detectors; heat therms; wiring; pull stations; and control panels.

      . We note that this issue is properly analyzed under the Code as it existed during the audit period. However, because the applicable Code provisions remain substantially the same under the current Code for the purposes of this lawsuit, we will reference die current Code sections here.


source: Caselaw Access Project

author: DAVID R. FARMER, J.,

license: Public Domain

text:
    In the Matter of the ESTATE OF Maynie Bess MORRIS, Deceased, et al. v. Anita MORRIS, et al.
    Court of Appeals of Tennessee, at Jackson.
    Nov. 17, 2009 Session,
    Dec. 9, 2009.
    Application for Permission to Appeal Denied by Supreme Court June 17, 2010.

      Charles M. Agee, Jr., Dyersburg, Tennessee, for the appellants, Lee Angela Agee and Page Morris Mathis.
    Charles S. Kelly, Sr., Dyersburg, Tennessee, for the Appellee, Anita Moms.
   OPINION

DAVID R. FARMER, J.,

delivered the opinion of the court,

in which ALAN E. HIGHERS, P.J., W.S. and HOLLY M. KIRBY, J., joined.

The trial court awarded summary judgment to Defendant based on the statute of limitations in this will contest action. We affirm.

This appeal arises from an action alleging Decedent Maynie Bess Morris (“Decedent”) altered her will as a result of undue influence exercised by Defendant Anita Morris (Ms. Morris). The Plaintiffs, Lee Angela Agee (Ms. Agee) and Page Morris Mathis (Ms. Mathis; collectively, “Plaintiffs”) are Decedent’s only grandchildren. Plaintiffs’ father, Herbert A. Morris, Jr. (Mr. Morris) was Decedent’s only child, and Ms. Morris is Plaintiffs’ stepmother.

Plaintiffs assert that in April 1977, Ms. Morris unduly influenced Decedent to execute a holographic Will that named Mr. Morris as her only beneficiary. They assert that, prior to April 1977, Decedent had executed a Will devising Mr. Morris a life estate in real property, with a remainder to Plaintiffs. Decedent died in February 1980, and her estate was admitted to probate on February 15, 1980. Mr. Morris was appointed executor of Decedent’s estate. Plaintiffs had both reached the age of majority by April 1981.

In March 2007, Plaintiffs filed a complaint to contest Decedent’s will in the Chancery Court for Obion County. They filed an amended complaint in May 2007. In their amended complaint, Plaintiffs asserted that Decedents’s April 1977 will was the result of undue influence exerted by Ms. Moms. They asserted that they were minors in April 1977, and that Ms. Morris therefore had an affirmative duty to protect their financial interests. They alleged that, when Decedent executed her holographic will in April 1977, she was dependent on Mr. Morris and Ms. Morris for advice and assistance, and that she lacked testamentary capacity to execute the document. They further alleged that, prior to April 2006, Ms. Morris “fraudulently concealed from Plaintiffs the facts and circumstances of the undue influence she exerted over Maynie Bess Morris and that said fraudulent concealment tolled the applicable statute of limitations for the time to file a will contest.” They alleged that, prior to April 1977, Decedent had a valid will that was presently “unavailable” but that named them as beneficiaries. They prayed that Decedent’s valid pre-1977 will be established as her last Will and admitted to probate.

In March 2008, Ms. Morris filed an answer denying Plaintiffs’ allegations and asserting the defenses of the statute of limitations provided at Tennessee Code Annotated § 32-4-108, lack of standing, and laches. She asserted that Plaintiffs were aware of their potential claim for many years but failed to bring any action until after the death of Mr. Morris. She further asserted that Mr. Morris was the person with the most complete knowledge of the facts and circumstances surrounding Decedent’s decision to execute the 1977 will. Ms. Morris also asserted that Plaintiffs lacked standing because they would not have taken any property from Decedent in 1980 under the laws of intestate succession. Ms. Morris also filed a motion for summary judgment or to dismiss the case, asserting that no genuine issues of material fact existed and that the action was barred by the expiration of the statute of limitations and lack of standing. She further asserted that Plaintiffs had failed to state a claim for fraudulent concealment sufficient to toll the statute of limitations.

Following considerable discovery, the trial court heard Ms. Morris’s motion for summary judgment in June 2008. In September 2008, the trial court granted the motion based on lack of standing. In its September 2008 order, the trial court found that Plaintiffs lacked standing where they failed to establish a lost Will and where they were not intestate heirs of Decedent. Plaintiffs filed a motion to alter or amend, asserting that the court had not yet held a hearing on the issue of the alleged lost Will. The matter was heard on November 17, 2008, and the trial court set aside its September order awarding summary judgment to Ms. Morris based on standing. The court stated that it would “reconsider” Ms. Morris’s motion for summary judgment, and permitted Plaintiffs to file a supplemental memorandum of law and facts. In February 2009, the trial court awarded summary judgment to Ms. Morris based on the statute of limitations. Plaintiffs filed a timely notice of appeal to this Court.

Issue Presented

Plaintiffs present the following issue for our review:

Did the trial court err in granting summary judgment in favor of Defendant based on the expiration of [the] statute of limitations for will contests set forth in Tennessee Code Annotated § 32-4-108?

Standard of Review

We review a trial court’s award of summary judgment de novo, with no presumption of correctness, reviewing the evidence in the light most favorable to the nonmov-ing party and drawing all reasonable inferences in that party’s favor. Martin v. Norfolk Southern Ry. Co., 271 S.W.3d 76, 84 (Tenn.2008) (citations omitted). Summary judgment is appropriate only where the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Id. at 83 (quoting Tenn. R. Civ. P. 56.04). The burden is on the moving party to demonstrate that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Id. (citations omitted).

After the moving party has made a properly supported motion, the nonmoving party must establish the existence of genuine issues of material fact. Id. (citations omitted). To satisfy its burden, the non-moving party may: (1) point to evidence of over-looked or disregarded material factual disputes; (2) rehabilitate evidence discredited by the moving party; (3) produce additional evidence that establishes the existence of a genuine issue for trial; or (4) submit an affidavit asserting the need for additional discovery pursuant to Rule 56.06 of the Tennessee Rules of Civil Procedure. Id. (citations omitted). The court must accept the nonmoving party’s evidence as true, resolving any doubts regarding the existence of a genuine issue of material fact in that party’s favor. Id. (citations omitted). A disputed fact that must be decided to resolve a substantive claim or defense is material, and it presents a genuine issue if it reasonably could be resolved in favor of either one party or the other. Id. (citations omitted).

Discussion

Section 32-4-108 of the code provides:

All actions or proceedings to set aside the probate of any will, or petitions to certify a will for an issue of devisavit vel non, must be brought within two (2) years from entry of the order admitting the will to probate, or be forever barred, saving, however, to persons under the age of eighteen (18) years or of unsound mind, at the time the cause of action accrues, the rights conferred by § 28-1-106.

Tenn.Code Ann. § 32-4-108 (2007). Section 28-1-106 provides:

If the person entitled to commence an action is, at the time the cause of action accrued, either within the age of eighteen (18) years, or of unsound mind, such person, or such person’s representatives and privies, as the case may be, may commence the action, after the removal of such disability, within the time of limitation for the particular cause of action, unless it exceeds three (3) years, and in that case within three (3).years from the removal of such disability.

Tenn.Code Ann. § 28-1-106 (2000).

' There is no dispute in this case that, absent any tolling of the statute, the statute of limitations applicable to Will contests as provided by the Code has long expired. Plaintiffs argue, however, that the statute should be tolled because they could not have discovered that they had a cause of action prior to April 2, 2006, when Ms. Agee discovered, during conversation with Ms. Morris and Mr. Morris, that Ms. Morris had told Decedent that Mr. Morris’s ex-wife (Plaintiffs’ mother) could have him killed for $200.00. Plaintiffs assert that, prior to the April 2006 conversation, they knew only that Ms. Morris had told Decedent that Mr. Morris could not survive financially with only a life estate and that they could not have known about Ms. Morris’s alleged “sinister” conduct until the April 2006 conversation took place. They further assert the trial court erred by failing to apply the doctrine of fraudulent concealment to toll the statute.

We turn first to whether Plaintiffs should have been aware that they had a cause of action prior to April 2006. The discovery rule provides that a cause of action accrues when the plaintiff knows or, in the exercise of reasonable care and diligence, should have discovered that he has sustained an injury as a result of the wrongful or tortious conduct of the defendant. E.g., Doe, v. Catholic Bishop for the Diocese of Memphis, 306 S.W.3d 712, 718-19 (Tenn.Ct.App.2008), perm. app. denied (Tenn. Mar. 16, 2009) (citing Potts v. Celotex Corp., 796 S.W.2d 678, 680 (Tenn.1990) (citing McCroskey v. Bryant Air Conditioning Co., 524 S.W.2d 487, 491 (Tenn.1975); Teeters v. Currey, 518 S.W.2d 512, 515 (Tenn.1974))). It applies to toll the statute of limitations only where the plaintiff ‘does not discover and reasonably could not be expected to discover that he had a right of action.’ ” Id. The statute of limitations will not be tolled, however, in cases where “the plaintiff has information that would place a reasonable person on inquiry notice that he may have a cause of action.” Id. (citations omitted). In cases where the plaintiff discovers an injury but the source remains hidden, the statute has been tolled until the plaintiff can discover the identity of the wrongdoer or source of his injury. Id. (citations omitted).

In this case, Plaintiffs do not dispute that they knew that Decedent executed a holographic Will in 1977 at the urging of Ms. Morris. In her response to Ms. Morris’s interrogatories and request for production of documents, Ms. Agee stated, “[b]efore April, 2006, Anita had only told me that she had gotten my grandmother to change her Will be telling her that my dad could not make it financially with a life-estate only.” Ms. Mathis stated in her deposition- that “Anita Morris has shared with me for years that she got my grandmother to change her Will.” She further stated that by the term, “years” she meant “all of [her] adult life.” Ms. Mathis stated that Ms. Morris had

said she had to get my grandmother to change her Will because everything was tied up to me and my sister. My father had a life estate. And had they not gotten her to change her Will, it would ruin our father financially, and he would not be able to pay his taxes.

Clearly, Plaintiffs were aware during the limitations period that, assuming Decedent had a validly executed Will prior to 1977, it was altered at Ms. Morris’s urging. They also were aware that the alterations were against their interests where Decedent’s estate was left to Mr. Morris, and that they did take under the Will. Thus, Plaintiffs were aware of their injury and of its cause. We agree with the trial court that the discovery rule does not toll the statute of limitations in this case.

We next turn to Plaintiffs’ assertion that the trial court erred by not applying the doctrine of fraudulent concealment to toll the statute of limitations in this case. Fraudulent concealment has been called a “ ‘close cousin of the discovery rule.’ ” Id. at 719 (quoting Mark K. v. Roman Catholic Archbishop of L.A., 67 Cal.App.4th 603, 79 Cal.Rptr.2d 73, 78 (Cal.Ct.App.1998) (quoting Benson v. Browning-Ferris, 7 Cal.4th 926, 30 Cal. Rptr.2d 440, 873 P.2d 613 (Cal.1994))). The elements of fraudulent concealment as set forth by the Tennessee Supreme Court are: (1) an affirmative act by the defendant to conceal the cause of action or the failure to disclose material facts despite a duty to speak; (2) that the plaintiff “could not have discovered the cause of action despite exercising reasonable care and diligence”; (3) the defendant must be aware of the wrong; (4) the “concealment of material information from the plaintiff.” Shadrick v. Coker, 963 S.W.2d 726, 735 (Tenn.1998) (citations omitted).

In this case, Plaintiffs assert that Ms. Morris concealed her statement to Decedent that Plaintiffs mother could have Mr. Morris killed for $200, thereby implying that their mother would have their father killed in order to gain control over property which would come into the possession of her minor daughters. They assert that they could not have discovered this statement prior to the conversation of April 2, 2006. They further assert that Ms. Morris had a duty to speak resulting from a confidential relationship where they were minors when the Will was executed in 1977.

The Shad,nek court noted that, in general, the affirmative act to conceal material information must be more than mere silence. Id. However, the “failure to speak where there is a duty to speak is the equivalent of some positive act or artifice planned to prevent inquiry or escape investigation.” Id,, (quoting Hall v. De Saussure, 41 Tenn.App. 572, 297 S.W.2d 81, 85 (1956)). The court noted that a duty arises when a confidential relationship exists, for example, between a patient and his physician. Id. “In such cases, there is a duty to disclose, and that duty may render silence or failure to disclose known facts fraudulent.” Id. (quoting Benton v. Snyder, 825 S.W.2d 409, 414 (Tenn.1992)).

In Shadñck, the supreme court noted:

The rationale for this rule has been explained as follows:
Fiduciary relationship, confidential relationship, constructive fraud and fraudulent concealment are all parts of the same concept. [T]he nature of the relationship which creates a duty to disclose, and a breach of [that] duty constitutes constructive fraud or fraudulent concealment, springs from the confidence and trust reposed by one in another, who by reason of a specific skill, knowledge, training, judgment or expertise, is in a superior position to advise or act on behalf of the party bestowing trust and confidence in him. Once the relationship exists ‘there exists a duty to speak ... [and] mere silence constitutes fraudulent concealment.’

Id. at 736 (quoting Garcia v. Presbyterian Hospital Ctr., 92 N.M. 652, 593 P.2d 487, 489-90 (1979)) (citations omitted).

Plaintiffs’ argument, as we perceive it, is that Ms. Morris had a duty to Plaintiffs, by virtue of their stepparent-child relationship, to disclose the fact that she exerted undue influence over Decedent in order to convince her to change her Will. They assert that the statute of limitations should be tolled because Ms. Morris failed to disclose the full extent of the influence she exerted upon Decedent until April 2006. Plaintiffs assert that it was not until April 2006 that they realized Ms. Morris was “up to no good.”

In considering Plaintiffs’ argument, we note that the April 2, 2006, conversation took place in the presence of Mr. Morris, who was extremely ill and in bed. In her deposition, Ms. Agee stated that her father was awake during the conversation and that the only comment he made was “I heard it was a thousand dollars.” Mr. Morris died shortly thereafter, and Ms. Morris was appointed executrix of his estate on May 24, 2006. Following Mr. Morris’s death, Decedent’s property passed to Ms. Morris. Plaintiffs argue, in essence, that, although they knew that Ms. Morris had influenced Decedent to change her Will, Ms. Morris owed them a duty to reveal the alleged statement concerning their mother’s ability to have their father killed.

In Phillips v. Phillips, the supreme court refused to toll the statute of limitations to allow an action filed by three of decedent’s siblings to set aside decedent’s Will on the grounds of forgery where the Will devised the entirety of the estate to a fourth sibling, E.T. Phillips (“E. T.”). Phillips v. Phillips, 526 S.W.2d 439 (Tenn.1975). The plaintiffs in Phillips filed their action more than nine years later, following the death of E.T., when E.T.’s entire estate, including decedent/testatrix’s property, passed to E.T.’s wife. Id. at 439-440. The plaintiffs in Phillips asserted that E.T. knew or should have known that decedent’s Will was a forgery, and that a fraud had been perpetrated on the court. Id. The court held that the statute of limitations was not tolled by fraudulent concealment where the Will had been available throughout the limitations period and where there has been no concealment of the cause of action. The Phillips court stated, “ ‘[i]t is not the fraud,- but its concealment by the party perpetrating it, unmixed with fault or negligence on the part of him who. complains,’” that tolls the statute of limitations. Id. at 440 (quoting Woodfolk v. Marley, 98 Tenn. 467, 471, 40 S.W. 479, 480 (1896)) (emphasis added).

In Roza v. Estate of Reed, No. 01A01-9303-CV-00135," 1993 WL 439872 (Tenn. Ct.App. Oct. 29, 1993), perm. app. denied (Tenn. Mar. 7, 1994), we declined to toll the statute of limitations to allow an action by a plaintiff who alleged he was decedent’s sole remaining heir and that decedent’s Will, which was probated in 1947, was a fraud where it stated that decedent had no wife or child. Id. In Roza, we noted:

To invoke the doctrine that fraudulent concealment of a cause of action tolls the statute of limitations, it is the existence of facts giving rise to a cause of action independent of the concealment, which must have been withheld. “In order for the statute of limitations to be tolled by fraudulent concealment, there must be an allegation that the cause of action was known to the defendant and fraudulently concealed by him; the running of the statute is not prevented by the mere ignorance of the plaintiff and his failure to discover the existence of the cause of action within the statutory limitation does not prevent its running, and if the plaintiff either knew or neglected or failed to discover the cause of action, the statute would not be tolled
In the absence of a fiduciary relátionship, concealment, in order to toll the statute of limitations, must be evidenced by some overt act, but where a fiduciary relationship exists and there is a duty to speak, mere silence may constitute a fraudulent concealment.

Id. at *2 (quoting Soldano v. Owens-Coming Fiberglass Corp., 696 S.W.2d 887, 889 (Tenn.1985)(quoting 18 Tennessee Jurisprudence, Limitations of Actions § 42 (1984))). In Roza, plaintiff was decedent’s grandson, and had been placed in an orphanage when his mother was declared mentally incompetent. Id. at *1. When plaintiff filed his action, his grandfather’s estate had passed to the wife of plaintiffs alleged father. Id. We held that the plaintiff in Roza had failed to assert that defendants had concealed facts, either by acts or by silence, that might have established his alleged relationship with his grandfather. Id. at *3.

In this case, Plaintiffs do not allege that Ms. Morris concealed the fact that she influenced Decedent to change her Will. On the contrary, they concede that they were aware since childhood that Ms. Morris had influenced Decedent. Additionally, Plaintiffs were aware that their father, Decedent’s only child, would take under Decedent’s 1977 Will. It appears to us that what Plaintiffs were unaware of was that them father failed to devise Decedent’s property to them upon his death.

Plaintiffs were or should have been aware that they had a cause of action for undue influence against Ms. Morris for all of their adult lives. Even assuming Ms. Morris had a duty to speak by virtue of her relationship with Plaintiffs, who were minors in 1977, Plaintiffs have not demonstrated that Ms. Morris concealed the nature of her relationship with Decedent, or that she concealed the fact that she had influenced Decedent to change her Will. We agree with the trial court that Plaintiffs have failed to allege sufficient facts to demonstrate that Ms. Morris concealed, either by an affirmative act or by silence, facts that were material to putting Plaintiffs on notice of a claim of undue influence such that the statute of limitations should be tolled in this case.

Holding

In light of the foregoing, the judgment of the trial court is affirmed. Costs are taxed to the Plaintiffs/Appellants, Lee Angela Agee and Page Morris Mathis, and their surety, for which execution may issue if necessary.

      . We note that Decedent's alleged pre-1977 Will had not been established when this matter was heard.


author: D. MICHAEL SWINEY, J.,

text:
    James W. GENTRY, Jr., et al. v. Todd Clark McCAIN, et al.
    Court of Appeals of Tennessee, at Knoxville.
    Assigned on Briefs Feb. 20, 2010.
    May 6, 2010.
    Permission to Appeal Denied by Supreme Court Oct. 18, 2010.

      Hugh P. Garner, Chattanooga, Tennessee, for the appellants, James W. Gentry, Jr., and Margaret A. Gentry.
    John P. Konvalinka, Charles G. Fisher, and Joseph W. Dickson, Chattanooga, Tennessee, for the appellees, Todd Clark McCain and Christy McCain.
    Phillip A. Noblett and Patrick P.H. Bobo, Chattanooga, Tennessee, for the ap-pellee, City of Chattanooga.
   OPINION

D. MICHAEL SWINEY, J.,

delivered the opinion of the Court,

in which HERSCHEL P. FRANKS, P.J., and JOHN W. McCLARTY, J., joined.

James W. Gentry, Jr., Margaret A. Gentry (“the Gentrys”), Paul Mallchok, and Lowranee Mallchok sued Todd Clark McCain, Christy McCain (“the McCains”), and the City of Chattanooga (“the City”) seeking, in part, a declaration of ownership with regard to a right-of-way known as Manchester Avenue, and a restraining order preventing the McCains from entering the right-of-way. After a hearing, the Trial Court denied the Gentrys’ request for a temporary injunction to bar the McCains and the City from the right-of-way and further held that Manchester Avenue had been dedicated, the City had accepted the dedication, the City had never formally abandoned the portion of Manchester Avenue at issue in this case, and that the City held title to the Manchester Avenue right-of-way as a public right-of-way. The Gen-trys appeal to this Court claiming that the Trial Court erred in denying them title to the Manchester Avenue right-of-way. We affirm.

Background

The Gentrys, the McCains, and the Mallchoks own real property adjacent to the Manchester Avenue right-of-way. The McCains sought permission from the City for a temporary usage of the right-of-way to install a private drive with future improvement and dedication to the City. The Gentrys opposed the McCains’ proposed use and claimed that they owned title to the Manchester right-of-way. The Gentrys filed suit and sought first a Restraining Order and then a temporary injunction preventing the McCains from entering on to the right-of-way and preventing the City from entering on to the right-of-way for any purpose other than to maintain the sanitary sewer located in the right-of-way. The Gentrys also sought to be declared the owners of the property. The Trial Court held a hearing in September of 2008.

Mr. Gentry is an attorney who has been practicing law since 1956. He testified that a plat showing the Manchester right-of-way was filed in 1914 with the City of Riverview and that “the plat, the plat retained, retained the fee to all of the unopened streets.” Mr. Gentry admitted that he was aware that the City had put in a sewer line prior to his purchasing his property. There is a sewer manhole in front of the Gentrys’ real property and Mr. Gentry admitted that the manhole has been there the entire time he has owned the property.

William E. Cannon, a civil engineer employed by the City, testified that he reviewed the McCains’ request for temporary usage of the right-of-way.. As part of this review, Mr. Cannon located the 1914 plat. He testified:

I then reviewed the later recordings. Then I took my site visit to verify the current conditions of the site, and reviewed some of the deeds in the area of the right-of-way, and our GIS, Geographic Information System, which shows the current condition of the property lines right-of-ways and sanitary sewer, other infrastructure.

Mr. Cannon found no evidence of abandonment of the Manchester Avenue right-of-way “above or below the south line of Center Street.” The City had abandoned other nearby areas by ordinance. Mr. Cannon testified that the southern portion of Manchester Avenue, which is the area at issue in this case, was not abandoned by the City in 2003. Mr. Cannon testified that he looked, but located no evidence showing that the portion of Manchester Avenue adjacent to the Gentrys’, the Mr. Mallchoks’, and the McCains’ properties was ever abandoned by the City.

Mr. Cannon testified that a sanitary sewer passes through the Manchester Avenue right-of-way. He reviewed old plats that showed a sanitary sewer in that area in the 1920s. The sanitary sewer in the northernmost section of Manchester Avenue was replaced in 2001. When asked if there had been any repair of or work on the sewer line other than in 2001, Mr. Cannon stated:

Yes. I believe the manholes, the one at the northern — well, it’s actually very close to Mr. Gentry’s western property line, was reworked. And I know during the course of the replacement in the northern portion that some of the paved area was, was somewhat damaged, and some of the paving was repaired at that section of Glenn and Manchester.

Mr. Cannon explained that the Manchester Avenue right-of-way is 40 feet wide. When asked if the McCains’ proposed usage of the right-of-way is any different from the usage that the Gentrys have had for years, Mr. Cannon answered: “No. No. It would be exactly the same.”

William Calvin Payne, the City Engineer for the City, testified:

[Tjhere are sewer improvements that connect the upper — the upstream end of it is near the intersection where Manchester Avenue is shown on the 1914 plat, and those improvements come all the way down to what is Glenn Street or Glenn Road, also shown as South Street on the 1914 plat. Those sewers did go through, and we do have connections from multiple houses along that line.

When asked about the sewer line, Mr. Payne testified: “A portion of the southern section is shown on a — on one of our sewer index maps dated 1928, so the construction occurred between 1926 and 1928. So that portion has existed since that time.” He further testified: “The sewer line maintenance can vary depending on the situation, anywhere from annual cleanings to either more frequent or less frequent TB inspections, and root cleanings and other things that are necessary in maintaining proper flow to the sewage in the lines.” When asked how many manholes there are between Glenn Road and the Gentrys’ driveway, Mr. Payne testified:

Well, there’s one in Glenn Road, there’s another one shown within the area within Manchester Drive that Mr. Gentry uses, and then there’s another one further up beyond Mr. Gentry’s driveway in the, in the portion of Manchester Avenue. And the remainder of these one, two, three, four manholes are also in the section which has now been abandoned.

Mr. Payne was asked how dedications to the City occur, and he testified: “The, the dedication of the right-of-way occurs as, as property owners or developers come in to subdivide the land and record the plats, and then as, as is necessary for the public improvements.” When asked what uses are possible on public right-of-ways in addition to roads, Mr. Payne testified: “We have many right-of-ways within the City that have sanitary sewers, that may have drainage systems installed in them, or may have other public utilities such as power, and telephone cable, or natural gas.”

When asked if there had been any action by the City to abandon the area of Manchester Avenue at issue, Mr. Payne testified: “Not on the southern section between Center Street and Glenn Road. The only action we have found is the northern piece between Edgewood Circle and Center Street which happened actually, I believe, in 1951.”

Steven Claude Leach, the Administrator of Public Works'for the City, testified that there is a manhole in the Manchester right-of-way approximately 50 feet from the intersection of Glenn Road and Manchester Avenue. There is a new manhole cover on this manhole.

Gordon Wood Phillips, who works for the City engineering department on the sewers testified. Mr. Phillips testified that replacement of the existing sewer was done in 2001. At that time, work was done on the Manchester Avenue right-of-way. He explained that when they did the work, they broke up part of the Gentrys’ driveway where the manhole was located, and they then re-paved part of it.

After trial, the Trial Court entered its detailed Memorandum and Order on June 12, 2009 finding and holding, inter alia:

This real property dispute involves unique facts. In 1914 a plat of a proposed subdivision (Ex. 19) in the City of Riverview was filed in the Register’s Office for Hamilton County, Tennessee. Manchester Avenue was one of the streets designated on the plat of the subdivision and it is shown to be 40 feet wide on the plat. It has never been opened or used as a thoroughfare by the public. In 1930, the City of Chattanooga acquired the City of Riverview. Records maintained by the City of Chattanooga show that a sewer line was placed in the right of way of Manchester Avenue sometime between 1926 and 1928. Evidence presented in this case establishes that the City of Chattanooga made repairs to a portion of said sewer line in 2001, and the sewer line is still in use. While the City of Chattanooga has taken affirmative steps to abandon portions of the platted streets shown on the Ex. 19 plat (See Ex. 25), and has, by ordinance, abandoned part of Manchester Avenue, the City has taken no formal action to abandon the portion of Manchester Avenue in dispute in this ease.
James Gentry testified that he did legal work for Chattanooga Estates Company, the developer of the subdivision containing Manchester Avenue, that Chattanooga Estates Company did not leave unplatted property to the city or state, and that Manchester Avenue was not dedicated to the city. Mr. Gentry testified, at one point, that a man named Ferguson, and at another point, that a man named McDonald acquired all fee to the unopened roads in the subdivision around 1969-70, and that Gentry made claim to Mr. McDonald for the portion of Manchester Avenue that contains Gentry’s driveway down to Glen Road. No deeds or other documents were presented to support or substantiate the testimony that Chattanooga Estates Company retained the fee to the streets, or that the fee in the streets was later conveyed to a man named Ferguson or McDonald. While Mr. Gentry claimed that he had asked for part of Manchester Avenue to be assessed to him by the Hamilton County Assessor of Property, Mr. Gentry was unable to state that he has paid taxes on the portion of Manchester Avenue where his driveway is located.
The fact that Chattanooga Estates recorded, in the Register’s Office for Hamilton County, a subdivision plat in 1914 showing Manchester Avenue as a street is undisputed. It is also undisputed that the Gentrys and the McCains, and their predecessors in title, purchased their properties with reference to the subdivision plat.
[T]he law in effect at the time the Chattanooga Estates subdivision plat was recorded provided to purchasers of lots in that subdivision the right to use the platted streets and ways, whether accepted by the City or not. Because the McCains and their predecessors in title purchased property in reference to the recorded plat (Ex. 19), the Court finds that the McCains have an easement to use Manchester Avenue as necessary or convenient to enable them to reach a highway, unless the Gentrys can establish that the McCains or their predecessors have abandoned the easement or lost it by adverse possession or acquiescence.
As for [the Gentrys’] insistence that the City never accepted the dedication of Manchester Avenue, the action of the City in placing and maintaining a sewer line in the right of way of Manchester Avenue constituted an acceptance of the dedication.
In the case at bar, a sewer line was placed in the right of way of Manchester Avenue in 1926-28 by the City of River-view, later annexed by the City of Chattanooga. The City has also taken formal action, by ordinance, to abandon other parts of Manchester Avenue not in dispute in this case. Certainly, it would not be necessary to formally abandon a street if it had never been accepted by the City. Under the authorities cited, the Court finds that the City did accept the dedication of Manchester Avenue as a public street.
While there is testimony that a portion of Manchester Avenue has been abandoned, by ordinance of the City of Chattanooga, the portion at issue in this case has not been formally abandoned and the evidence clearly establishes that the City of Chattanooga has continued to maintain the sewer line with work being done thereon as recently as 2001. Since there has been no abandonment by the City of Chattanooga of the portion of Manchester Avenue at issue herein, the Gentrys may not acquire ownership by adverse possession.
The Gentrys made an additional claim of title by acquiescence.... In the case at bar, the Gentrys have not shown that there existed any dispute or doubt as to the location of the lines of the parties by the Gentrys, the McCains and the City and/or their predecessors. Nor have the Gentrys established that there existed mutual recognition and knowledge of the line as asserted by Gentrys in Manchester Avenue. The evidence does not prove title by acquiescence.
Finally, the Gentrys assert that this Court, in a prior lawsuit styled, Gentry v. Moore, No. 99-0028, held that the Gentrys own the area of Manchester Avenue in dispute in this litigation. As the Gentrys note in their Verified Complaint and Petition for Restraining Order filed herein: “The Court found that the Gentrys had ‘more rights’ or a ‘higher and stronger’ claim than their adversary, David F. Moore. Other persons who may claim an interest were not before the Court. Except for this fact, Mr. Gentry would have been awarded the fee to that part of Manchester Avenue that he claimed.” (Ver. Compl. and Pet. for Rest. Ord., para. 7). In this case, two parties not involved in the Gentry v. Moore suit have submitted proof and legal authority to rebut the claims made by the Gentrys to exclusive use of Manchester Avenue. The City and the McCains were not parties to the prior suit and are not bound by the findings made in Gentry v. Moore.

After finding and holding that a dedication of Manchester Avenue had been made; that the City had accepted this dedication; that the City, therefore, held title to Manchester Avenue; and that the City had not abandoned the portion of the Manchester Avenue right-of-way at issue in this case, the Trial Court denied the Gentrys’ request for a temporary injunction.

The Gentrys appeal to this Court.

Discussion

Although not stated exactly as such, the Gentrys raise one issue on appeal: whether the Trial Court erred in finding that the Gentrys do not hold title to the Manchester Avenue right-of-way. The McCains and the City both contend on appeal that the Gentrys failed to raise an issue on appeal as to whether the Trial Court erred in denying a temporary injunction, and have thus waived the ultimate issue. We disagree. As the Trial Court denied the temporary injunction based upon its finding that the Gentrys do not hold title to the Manchester Avenue right-of-way, the issue raised strikes directly at the heart of the matter, even if the other parties would have phrased the issue differently.

Our review is de novo upon the record, accompanied by a presumption of correctness of the findings of fact of the trial court, unless the preponderance of the evidence is otherwise. Tenn. R.App. P. 13(d); Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn.2001). A trial court’s conclusions of law are subject to a de novo review with no presumption of correctness. S. Constrictors, Inc. v. Loudon County Bd. of Educ., 58 S.W.3d 706, 710 (Tenn.2001).

As this Court explained in South Central Tennessee Railroad Authority v. Harakas:

A temporary injunction may be granted during the pendency of an action if it is clearly shown by verified complaint, affidavit or other evidence that the mov-ant’s rights are being or will be violated by an adverse party and the movant will suffer immediate and irreparable injury, loss or damage pending a final judgment in the action, or that the acts or omissions of the adverse party will tend to render such final judgment ineffectual.

S. Cent. Tenn. R.R. Auth. v. Harakas, 44 S.W.3d 912, 919 (Tenn.Ct.App.2000) (quoting Tenn. R. Civ. P. 65.04(2)) (footnote omitted). The Harakas Court further explained:

“The most common description of the standard for preliminary injunction in federal and state courts is a four-factor test: (1) the threat of irreparable harm to plaintiff if the injunction is not granted; (2) the balance between this harm and the injury that granting the injunction would inflict on the defendant; (3) the probability that plaintiff will succeed on the merits; and (4) the public interest.” Robert Banks, Jr. & June F. Ent-inan, Tennessee Civil Procedure §.4-3(l) (1999).

Id. at n. 6. Thus, if the Trial Court correctly held that the Gentrys do not hold title to the Manchester Avenue right-of-way, the probability that the Gentrys would succeed on the merits would be nil, and the Trial Court would be correct in denying a temporary injunction.

“We review a trial court’s decision to issue or not to issue injunctive relief under an abuse of discretion standard.” Eluhu v. HCA Health, Services of Tennessee, Inc., No. M2008-01152-CO A-R3-CV, 2009 WL 3460370, at *21, 2009 Tenn.App. LEXIS 712, at *61 (Tenn.Ct.App. Oct. 27, 2009), Rule 11 appl. perm, appeal denied April 23, 2010. As this Court has explained:

Our Supreme Court discussed the abuse of discretion standard in Eldridge v. El-dridge, stating:
Under the abuse of discretion standard, a trial court’s ruling “will be upheld so long as reasonable minds can disagree as to [the] propriety of the decision made.” A trial court abuses its discretion only when it “ap-plie[s] an incorrect legal standard, or reachefs] a decision which is against logic or reasoning that cause[s] an injustice to the party complaining.” The abuse of discretion standard does not permit the appellate court to substitute its judgment for that of the trial court.
Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn.2001) (citations omitted).
Appellate courts ordinarily permit discretionary decisions to stand when reasonable judicial minds can differ concerning their soundness. Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 709 (Tenn.Ct.App.1999). A trial court’s discretionary decision must take into account applicable law and be consistent with the facts before the court. Id. When reviewing a discretionary decision by the trial court, the “appellate courts should begin with the presumption that the decision is correct and should review the evidence in the light most favorable to the decision.” Id.

DeLapp v. Pratt, 152 S.W.3d 530, 538 (Tenn.Ct.App.2004).

The Gentrys argue, in part, that they hold title to the Manchester Avenue right-of-way by virtue of adverse possession. The Trial Court specifically found and held, inter alia, that the Gentrys could not establish adverse possession, in part, because “the disputed area of Manchester Avenue was dedicated and accepted by the City and ... it has not been abandoned.”

As this Court discussed in West Meade Homeowners Ass’n, Inc. v. WPMC, Inc.:

To establish a dedicated public right-of-way, there must be a showing of an offer of dedication and a public acceptance of the offer. Both the offer of dedication and the public acceptance may be express or implied.

West Meade Homeowners Ass’n, Inc. v. WPMC, Inc., 788 S.W.2d 365, 366-67 (Tenn.Ct.App.1989). As this Court stated in Varallo v. Metro. Gov’t of Nashville and Davidson Cty.: “Where an owner makes a sale of land with reference to a map or plat, in the absence of a manifestation of a contrary intention, he thereby manifests an intention to dedicate the streets and alleys shown thereon to the public use.” Varallo v. Metro. Gov’t of Nashville and Davidson County, 508 S.W.2d 342, 346 (Tenn.Ct.App.1973) (quoting 26 C.J.S. Dedication § 23). “[Wjhere a dedication is made, it cannot be lost or forfeited by mere nonuser by the public and is not subject to adverse possession, since the Statute of Limitations will not run against the City as to public rights.” Id. at 347.

In the case now before us, the Trial Court found that the 1914 plat operated as a dedication and that the City had accepted this dedication by placing and maintaining a sewer line in the Manchester Avenue right-of-way. The evidence does not preponderate against these findings. The Trial Court further found that although Mr. Gentry had asserted that someone named either Ferguson or McDonald had acquired title to the Manchester Avenue right-of-way in 1969 or 1970, there was no documentary evidence which supported this assertion. The Trial Court did find, however, that there was clear documentary evidence, i.e., the 1914 plat, that rebutted the assertion that the fee to the streets had been retained by someone other than the City. The Trial Court further found that the Gentrys, the McCains, and them predecessors in title had purchased them properties with reference to the 1914 plat. As the evidence preponderates in favor of a finding that the 1914 plat operated as a dedication, neither Ferguson nor McDonald could have obtained a fee to the Manchester Avenue right-of-way from someone other than the City in 1969 or 1970.

The Trial Court found that the City had accepted the dedication when it placed and maintained a sanitary sewer line in the Manchester Avenue right-of-way. The evidence does not preponderate against this finding. The Trial Court also found that the portion of Manchester Avenue at issue in this case had never been abandoned by the City. The evidence does not preponderate against this finding.

The evidence as found by the Trial Court shows that the Manchester Avenue right-of-way was dedicated, was accepted by the City, and has not been abandoned by the City. As such, the Gentrys could not gain title to the Manchester Avenue right-of-way by virtue of adverse possession.

With regard to the Gentrys’ claim that they acquired title to the Manchester Avenue right-of-way by acquiescence, the Gentrys rely upon the case of Roane County v. Anderson County, 89 Tenn. 259, 14 S.W. 1079 (1890) for the proposition that “the doctrine of acquiescence applies in cases involving government entities.” This case, however, is easily distinguished from the case now before us on appeal.

To begin, we note that Roane County v. Anderson County was a case wherein one county sued another county. Id. Thus, Roane County v. Anderson County involved two governmental entities opposing one another, not an individual landowner opposing a governmental entity as in the case now before us on appeal. Given this crucial fact, we decline to accept a blanket assertion that the doctrine of acquiescence applies to all cases involving government entities. Furthermore, the doctrine of acquiescence applies to boundary line disputes between adjoining land owners. E.g., Roane County v. Anderson County, 89 Tenn. 259, 14 S.W. 1079 (1890); Bingham v. Doles, No. W2002-00104-COA-R3-CV, 2002 WL 32335659, 2002 Tenn.App. LEXIS 749 (Tenn.Ct.App. Oct. 17, 2002), no appl. perm, appeal filed. The case now before us on appeal, however, involves a public right-of-way and not a boundary dispute between adjoining land owners. Finally, with regard to this contention the Trial Court specifically found:

In the case at bar, the Gentrys have not shown that there existed any dispute or doubt as to the location of the lines of the parties by the Gentrys, the McCains and the City and/or their predecessors. Nor have the Gentrys established that there existed mutual recognition and knowledge of the line as asserted by Gentrys in Manchester Avenue. The evidence does not prove title by acquiescence.

The evidence does not preponderate against these findings made by the Trial Court. The Gentrys’ argument that they hold title to the Manchester Avenue right-of-way by virtue of acquiescence is without merit.

The Gentrys also claim that they obtained title to the Manchester Avenue right-of-way by virtue of a previous lawsuit styled Gentry v. Moore. In Gentry v. Moore, the Trial Court entered its Memorandum Opinion and Order on September 21', 1999 finding and holding, inter alia:

Mr. Gentry wanted the court to declare that the Gentrys own all of the unopened area known as Manchester Avenue, at least to the end of his lot. Mr. Gentry testified that he told Ms. Betterton that he owned Manchester Avenue. Further, he testified that the fee owner of the unopened Manchester Avenue property at one time was Chattanooga Estates Company. That firm later sold its interest to Joe McDonald. Mr. Gentry told Joe McDonald once that he claimed ownership of Manchester Avenue. Evidently Mr. McDonald’s response could not be repeated in the courtroom. The City owns a sewer located under Manchester Avenue. The court cannot declare the Gentrys the owners of the fee because the persons, other than Mr. Moore, who might assert an ownership interest in Manchester Avenue are not parties to this lawsuit. The court can declare that the Gentrys have the right to use the entire right of way from their driveway to Glen Road as well as the rest of Manchester Avenue lying northwesterly above their driveway. Mr. Moore also has the right to use the paved roadway between Glen Road and his driveway. He can also use the area east of the paved roadway (eastern side) adjacent to Lot 19-C.
The normal rule of law regarding claims of ownership to the land used as a street is set forth in 23 Tenn. Juris., Streets and Highways, § 45 as follows:
“An abutting owner is presumed to own the fee to the center of the highway, in the absence of something to indicate the contrary.... ”
Here, the other parties who could assert an ownership interest are not before the court and their rights cannot be determined or terminated. It is obvious that the Gentrys “have more rights” or- a “higher and stronger” claim than does Mr. Moore and the Gentrys, as opposed to Mr. Moore, would be declared the fee owner if such were the only choice. However, there are other possibilities.
It is the court’s position that the only decree, regarding ownership interests and rights over Manchester Avenue, that can be entered binds only the Gen-trys and Mr. Moore. It is a fundamental rule of law that a person, to be deprived of his property, must be brought before the court and given the opportunity to present his/her/its case. See Article I, Sections 8 and 17 of the Tennessee Constitution. Neither Joe McDonald, The Chattanooga Estates Co., the City of Chattanooga, nor any other property owners whose land abuts Manchester Avenue are parties to this suit. The court cannot declare their rights or lack of rights unless they are before the court and have an opportunity to present their case.
Although no disrespect is meant to the Gentrys, it is conceivable that a person could claim part of Manchester Avenue. Even if the claim “looks good and smells good,” there is no one to test the claim unless those persons who would be adversely affected by the claim have the right to present their case and contest the granting or ratification of the claim. Thus, the court cannot grant the Gen-trys their fee claim in this lawsuit devoid of parties other than Mr. Moore.

After entering the September 21, 1999 order in Gentry v. Moore, the Trial Court entered an order on January 21, 2000 finding and holding, inter alia:

After the ease was completed, Mr. Terry Kilgore of Hopkins Surveying Group, Inc. called the court. Mr. Kilgore was in the process of resurveying Mr. Moore’s property in accordance with the court’s order and had a couple of questions. The court has discussed these questions with Mr. Kilgore and the attorneys for both parties and received their input.
Based upon the court’s earlier ruling, it is ORDERED:
1. That, regardless of the rule of law applicable to these type cases, the court’s memorandum opinion and order filed September 21, 1999 does not apply to Lot 19D because the owner(s) of Lot 19D was not before the court and did not participate in the case;
2. The Gentrys are declared to be the owners of all the unimproved land, that is, all non-paved areas between the parties’ driveways and the paved area where the driveways join adjacent to Manchester Avenue,....

In their brief on appeal, the Gentrys argue: “The facts clearly establish, as between [the Gentrys] and all other individuals, [the Gentrys] have acquired title to Manchester Avenue by adverse possession. [The Gentrys] believe this is what Chancellor Brown held in his Memorandum and Orders of 1999 and 2000.”

The Gentrys are wrong. In Gentry v. Moore, the Trial Court clearly, expressly, and correctly held that “the other parties who could assert an ownership interest are not before the court and their rights cannot be determined or terminated.... ” The Trial Court recognized that there were possibilities with regard to ownership and rights to Manchester Avenue other than those presented by the parties in Gentry v. Moore. As discussed fully above, the Manchester Avenue right-of-way is a public right-of-way and it is not possible for the Gentrys to have acquired title by adverse possession against the City. Furthermore, we note that the Trial Court in Gentry v. Moore determined ownership as to the land between the Gentrys’ and Mr. Moore’s driveways “adjacent to Manchester Avenue” only, not ownership or rights as to the Manchester Avenue right-of-way. This argument is without merit.

We find and hold that the Trial Court did not err in finding that the Gentrys do not hold title to the Manchester right-of-way. We further find that with regard to the request for a temporary injunction, the Trial Court did not apply an incorrect legal standard or reach a decision which is against logic or reasoning that causes an injustice. As the Trial Court found and held that the Gentrys had no ownership interest in the property in question here, a decision we have affirmed, the Trial Court’s denial of injunctive relief was not error. We, therefore, affirm the Trial Court’s June 12, 2009 Memorandum and Order.

Conclusion

The judgment of the Trial Court is affirmed and this cause is remanded to the Trial Court for collection of the costs below. The costs on appeal are assessed against the appellants, James W. Gentry, Jr., and Margaret A. Gentry, and their surety.

      . The Verified Complaint and Petition for Restraining Order was filed on September 3, 2008. On September 4, 2008, Paul Mallchok and Lowranee Mallchok filed a Voluntary Dismissal as to their claims.

      . The City annexed the area from the City of Riverview in the 1930s.

      . It is apparent from the Trial Court's Memorandum and Order that the Trial Court and the parties tried this action on its merits at the hearing on the temporary injunction. See Tenn. R. Civ. P. 65.04(7). The Gentrys have not claimed any error by the Trial Court in proceeding with this consolidated hearing, and such acquiescence by the Gentrys is clear from their having appealed the Trial Court's Memorandum and Order as a final order subject to appeal.