Filing Notice of Claim Triggers Waiver Provision

The Tennessee Court of Appeals has ruled that giving the State formal notice of a medical negligence (now “health care liability”) claim against an employee waives the right, if any,  to assert that claim against that employee in state court based on the same acts or omissions.

In Sumner v. Campbell Clinic PC, No. W2015-00580-COA-R3-CV (Tenn. Ct. App. Mar. 29, 2016), the dispositive issue was whether plaintiff had waived his medical battery claim against defendant doctor by virtue of his filing with the Tennessee Division of Claims Administration, with the Court of Appeals finding that the claim was waived and affirming dismissal of the case.

Plaintiff was admitted to Campbell Clinic on July 19, 2011 to receive treatment to his injured right leg. Part of this treatment included a bone graft surgery, with the bone graft to come from his hip. Before surgery, plaintiff and his family informed the doctors, including defendant, that plaintiff did not want the graft to come from his right hip as he had recently had a procedure there. During surgery, however, an incision was made in the right hip which caused plaintiff’s peritoneum and small bowel to lacerate, resulting in extensive health problems.

The filing timeline in this case was as follows:

  • On July 5, 2012, plaintiff sent notice of his medical malpractice claim to several parties, including defendant doctor, the only defendant at issue on this appeal. The letter “noted that the claim arose out of ‘medical negligence and willful battery.”
  • On August 3, plaintiff’s counsel “mailed a letter to the Tennessee Division of Claims Administration giving notice of a claim pursuant to Tennessee Code Annotated section 9-8-402,” stating that he “speculated” that some of the treating doctors, including defendant, were employees of the University of Tennessee.
  • On October 16, 2012, a complaint was filed in Shelby County Circuit Court for health care liability, intentional medical battery, and punitive damages.
  • On November 12, 2012, counsel for plaintiff mailed another letter to the Division of Claims Administration noting that the Circuit Court complaint had been filed.
  • After the November letter, there was additional correspondence with the Division of Claims Administration, including a January 2, 2013 letter that stated that plaintiff had learned defendant was in fact an employee of the University and that “I am…advising you that I want to proceed with the claims of medical negligence against the State of Tennessee in this matter.” This January letter also stated: “By pursing the negligence claim against the State of Tennessee in respect to the negligence of [defendant] I am not waiving my client’s rights to pursue their claim against these doctors in the medical malpractice lawsuit in Memphis arising out of these doctors’ intentional misconduct.”
  • Another letter was sent by plaintiff later in January to the Division of Claims Administration that stated: “I do not want there to be any uncertainty as to whether or not I am filing a claim against the State of Tennessee for medical negligence in this matter. It is my position that I have already properly done so.”
  • On May 1, 2013, the Tennessee Claims Commission sent out a notice that the claim had been transferred to it. After this transfer, plaintiff “took steps to disclaim his pursuit of relief against the State,” including writing a letter saying that “any reference to, or inference of, any negligence on [defendant’s] part in the claim that was originally presented to the Claims Commission is withdrawn.”
  • In February 2014, “the Claims Commission entered an order dismissing [plaintiff’s] claim for lack of jurisdiction.” The Commission did not rule on whether the doctor was acting within the scope and course of his employment, and the order was not appealed.
  • In May 2014, plaintiff filed an amended complaint removing allegations of negligence against defendant, instead asserting a claim only for “Intentional Medical Battery.”
  • Following motion by the defendant, the trial court dismissed plaintiff’s battery claim against defendant, finding that it was barred by the statute of limitations.

The Court of Appeals ultimately affirmed dismissal of plaintiff’s claim against defendant, though it did so on different grounds, instead finding that the trial court lacked subject matter jurisdiction over the claim. The Court held that plaintiff’s “decision to assert a claim against the State pursuant to the Tennessee Claims Commission Act waived any other causes of action that he had against [defendant] based on the same acts or omissions.”

The Tennessee Claims Commission Act waives the State’s sovereign immunity and “provides claimants with a ‘deep pocket’ that they would not otherwise be able to pursue,” but it also “imposes a strict election of remedies requirement.” Under the Act, claims filed pursuant to the Act “shall operate as a waiver of any cause of action, based on the same act or omission, which the claimant has against state officer or employee.” Tenn. Code Ann. § 9-8-307.

Here, the dispute was regarding what action triggers the waiver provision under the Act, as no Tennessee court had specifically discussed this issue in a non-tax case. Plaintiff argued that “he never took an action sufficient to trigger the waiver provision” of the Tennessee Claims Commission Act. The Court held, though, that “in non-tax cases such as this, the waiver is activated by the filing of the notice of claim in the Division of Claims Administration.” The Court noted that the Sixth Circuit, when considering this question, had come to the same conclusion and stated that it “fail[ed] to see how a waiver is triggered at any other point in the claims process for non-tax claims.”

In support of its finding, the Court quoted the Sixth Circuit’s reasoning that the filing of the notice triggers the tolling of statutes of limitations, and that “[i]t is highly unlikely that the statute of limitations would be tolled but that, without any mention in the statute whatsoever, a different date for the effectiveness of the waiver would apply.” (citation omitted). Further, in rejecting plaintiff’s assertion that a formal complaint was required to trigger the waiver, the Court pointed out that such an interpretation was unworkable, as plaintiffs may recover without having ever filed a formal complaint since a formal complaint is not required until the claim has been transferred to the Claims Commission. The Court reasoned that under plaintiff’s interpretation “[a] claimant could, for example, accept a settlement for a claim that the Division of Claims Administration decided to honor, thereby removing the need for an ‘appeal’ to the Claims Commission and the filing of a formal complaint. Accepting [plaintiff’s] interpretation of the waiver provision as controlling, this claimant would not be barred from pursuing relief against State employees in other forums based on the same acts of omissions because a complaint would never be filed in the Claims Commission.”

Ultimately, the Court held that “[h]aving made the choice to seek recovery on a claim for which the State had waived immunity, [plaintiff] elected to waive other avenues of recovery against [defendant] ‘based on the same act or omission.’” The Court stated that all of plaintiff’s claims against defendant arose from the July 19th procedure and were therefore covered by the waiver. Once invoked, the waiver remains valid unless the “commission determines that the act or omission was not within the scope of the officer’s or employee’s employment,” which did not happen here, so the dismissal of the claim against defendant was affirmed.

After this case, plaintiffs must be very mindful when filing a notice of claim under the Tennessee Claims Commission Act. As soon as that initial notice is filed, this case holds that the waiver provision in the Act is triggered. Before sending the notice, then, plaintiffs need to carefully evaluate what exactly they will be waiving and determine whether that is the best strategy for their particular situation.  Here, the plaintiff tried to hit a home run by bringing classifying the alleged battery as intentional tort claim, trying to avoid jurisdiction of the Claims Commission and its $300,000 cap on damages.  Instead, he struck out.

One last point.  Classifying the State of Tennessee as a “deep pocket” defendant is a stretch, in my view.  First, while the State may appear to have lots of money, it limits its tort responsibility to its citizens to $300,000.    Don’t get me wrong – $300,000 is a lot of money, but it was a lot more money when the damage cap was enacted in 1984.  In today’s dollars, the cap is about $135,000.  In other words, to have kept up with inflation, the damage cap would have to be about $668,000 today.

So, is the State of Tennessee a “deep pocket” defendant?  Hardly.  It’s more like a watch pocket defendant, getting smaller every year.