Axis Dynamics v. Knox County Tennessee

District Court, E.D. Tennessee·Decided June 24, 2025·No. 3:24-cv-00329·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE AT KNOXVILLE

AXIS DYNAMICS, INC., et al., ) ) Plaintiffs, ) Case No. 3:24 -cv-329 ) v. ) Judge Atchley ) KNOX COUNTY, TENNESSEE, et al., ) Magistrate Judge McCook ) Defendants. ) )

MEMORANDUM OPINION AND ORDER1 Before the Court are Defendant Knox County’s Motion to Dismiss [Doc. 35], Plaintiffs Axis Dynamics, Inc., and Wendy Rose’s Motion to Disqualify Counsel [Doc. 39], Defendant Issac W. Westling’s Motion to Dismiss [Doc. 54], and Defendant A. Reece Brassler’s Motion to Dismiss [Doc. 73]. For the following reasons, the motions to dismiss [Docs. 35, 54, 73] are GRANTED and Plaintiffs’ Motion to Disqualify Counsel [Doc. 39] is DENIED. I. BACKGROUND This case started as a contract dispute but has since grown into a wide-ranging claim of conspiracy. On September 14, 2018, Christopher and Sonja Hawk entered into a construction agreement with Plaintiff Axis Dynamics Inc. to build a home in Knox County, Tennessee. [Doc. 29 at ¶ 15]. This construction agreement contained an arbitration provision requiring Axis and the Hawks to resolve most disputes between them through binding arbitration pursuant to the rules

1 As an initial note, Plaintiffs’ Response to Defendant Westling’s Motion to Dismiss requests that the Court reconsider its rulings on Plaintiffs’ Motion to Amend [Doc. 52] and their Motion to Expedite Discovery [Doc. 25]. [Doc. 69 at 14]. A party cannot seek affirmative relief through a responsive filing. FED. R. CIV. P. 7(b) (“A request for a court order must be made by motion.”); see also Walsh v. Indep. Home Care of Mich., LLC, No. 20-10170, 2021 U.S. Dist. LEXIS 134709, *7 (E.D. Mich. July 20, 2021). Accordingly, the Court has not considered Plaintiffs’ requests for reconsideration as they are not properly before the Court. and procedures of the American Arbitration Association (“AAA”).2 [Id. at ¶ 19]. At first, things went smoothly. The Hawks obtained a construction loan from Defendant First US Bank, and Axis began building the Hawks’ home. [Id. at ¶¶ 22, 26]. By September 2019, however, the Hawks allegedly owed Axis more than $100,000 for materials and labor. [Id. at ¶ 27]. To recover these costs, Axis sent the Hawks and First US Bank a demand letter. [Id. at ¶ 28]. When Axis heard

nothing back, it filed a mechanic’s lien with the Knox County Register of Deeds Office. [Id.]. Thereafter, Axis filed an in rem case in Tennessee state court to both enforce its lien and obtain a declaration that its rights in the Hawks’ property were superior to that of First US Bank. [Id. at ¶ 29]. This in rem case was assigned to former defendant Judge William T. Ailor.3 [Id.]. The Hawks, represented by E. Richard Brabham, III, and Defendant A. Reece Brassler,4 filed counterclaims against both Axis and its owner, Plaintiff Wendy Rose. [Id. at ¶¶ 2, 30]. Judge Ailor held a Zoom hearing in the in rem case on January 21, 2021, which Axis’s counsel did not attend. [Id. at ¶ 33]. Following this hearing, Judge Ailor ordered Axis, Rose, the Hawks, and First US Bank to arbitration. [Id.]. When Axis later moved for reconsideration of this order, its motion was

denied. [Id. at ¶ 34]. Accordingly, Axis filed a demand for arbitration with the AAA. [Id. at ¶ 36]. The AAA responded by sending Axis a panel of “Neutrals” including the arbitrator John T. Blankenship. [Id. at ¶ 37]. After Axis emailed Brassler this list, Brassler filed a motion on the Hawks’ behalf in the

2 Pursuant Axis and the Hawk’s agreement, warranty claims were required to first go through the contract’s warranty procedures before being submitted to arbitration. [Doc. 29 at ¶ 19]. All other claims concerning the construction agreement went straight to arbitration. [Id.].

3 Judge Ailor was dismissed as a defendant on March 5, 2025, due to Plaintiffs’ failure to timely serve him in accordance with the Federal Rules of Civil Procedure. [Doc. 60].

4 Brabham and Brassler both work for the firm Kennerly, Montgomery & Finley P.C. [Doc. 29 at ¶¶ 6,30]. The Amended Complaint refers to Brabham, Brassler, and potentially the firm as the “KMF Defendants.” [Id. at ¶ 30]. Given, however, that only Brassler is a defendant in this action, the Court construes all references to actions taken by either “KMF” or the “KMF Defendants” as actions taken by Brassler. in rem case stating that the parties had agreed to use Blankenship as their arbitrator but that Axis was refusing to sign Blankenship’s arbitration agreement. [Id. at ¶ 38]. A copy of this agreement was attached to the Hawks’ motion. [Id. at ¶ 39]. This surprised Plaintiffs because they had never seen, let alone agreed, to such a contract. [Id. at ¶ 40]. They later learned that Brassler’s legal assistant had been in contact with Blankenship regarding arbitration and that Plaintiffs’ counsel

had not been included in these communications. [Id.]. Axis took the position that it did not need to sign Blankenship’s arbitration agreement given that Judge Ailor had already ordered the parties to arbitration based on the construction agreement’s arbitration clause. [Id. at ¶ 41]. Blankenship agreed and suggested the parties submit a joint submission. [Id. at ¶ 44]. Brassler, however, informed Plaintiffs that the Hawks would not consent to an AAA arbitration at that time. [Id. at ¶ 45]. A month later, Judge Ailor held a status conference to determine, among other things, the proper arbitral forum for the parties’ dispute. [See id. at ¶ 46; Doc. 1-2 at 71–725]. Following this conference, Judge Ailor ordered the parties to initiate an independent arbitration overseen by Blankenship and governed by the AAA’s

Commercial Arbitration Rules and Mediation Procedures. [Doc. 29 at ¶¶ 46, 48; Doc. 1-2 at 71– 72]. In the months that followed, Plaintiffs filed two motions to set aside/vacate orders entered in the in rem case but did not appear at the hearings on those motions, both of which were ultimately denied. [See Doc. 29 at ¶¶ 54–55]. Plaintiffs’ counsel missed at least one of these hearings because the hearing notice was sent via email and ended up in counsel’s spam folder. [Id.

5 The Court may consider this and other exhibits to the First Amended Complaint when ruling on the Defendants’ motions to dismiss without converting those motions into ones for summary judgment. Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008) (“When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto…so long as they are referred to in the Complaint and are central to the claims contained therein”). at ¶ 56]. Plaintiffs later filed one more motion objecting to orders entered in the in rem case, but that motion was also denied. [Id. at ¶¶ 57–58]. As a result, Axis ultimately lost its lien on the Hawks’ property. [See Doc. 1-2 at 98–102]. Feeling stymied at every turn, Plaintiffs turned to this Court. Plaintiffs blame their lack of success in the in rem case on a supposed conspiracy among

several of the Defendants. They claim that Defendants Knox County, Westling, and Brassler (along with Judge Ailor) conspired to deprive them of notice and an opportunity to be heard in the in rem case in retaliation for both (i) their counsel’s involvement in Murphy v. Town of Farragut, 3:23-cv-402, and (ii) Rose’s communications with Knox County officials. [See Doc. 29 at ¶¶ 87– 96]. They seek compensation for injuries allegedly stemming from this conspiracy and a declaration against Knox County altering the doctrine of judicial immunity as relates to claims involving the Federal Arbitration Act, a statute they claim Judge Ailor failed to follow in the in rem case.6 [Id. at ¶¶ 63–79, 87–96].

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