Frivilous Appeal?

“An appeal is frivolous when it “has no reasonable chance of success,” Davis v. Gulf Ins. Group, 546 S.W.2d 583, 586 (Tenn. 1977), or is “so utterly devoid of merit as to justify imposition of a penalty,” Combustion Eng’g, Inc. v. Kennedy, 562 S.W.2d 202, 205 (Tenn. 1978).” I see one or two tort decisions a year in Tennessee where damages are imposed under the “frivilous appeal” statute.

Here is one.

Plaintiff sought compensatory and punitive damages against a pharmacy for mis-filing a prescription. A discovery fight ensued. One letter from Plaintiff’s counsel included the following language:

“Certainly, you are at liberty to take whatever next step “in
obtaining the discovery” you believe your zealous representation of Walgreen to require. At least, you know where our differences lie. If you file a motion, you should be prepared for a 10 – 20 page response in opposition; if you win and we eventually become appellants, the order granting your motion will be an error we will assert to be reversible. In short, I hope your client believes enough in the rightness of what you are advocating to spend $5,000 to $10,000 attempting to secure a ruling consistent with what you claim.

You do not know me, and I do not know you. So, we are at the stage of what my mentor used to call “posturing and preening.” This should blow over pretty quickly.

But, it might help you to ask around to confirm that this could become a very expensive lawsuit for your client to try, even in [sic] you ultimately are successful.

I have been told that I operate outside the bubble. You might call my friend . . . .

I tell you this so your adjuster does not have to look back in
a year or two and say, “Why didn’t somebody tell me this before I spent more defending the case than I could have settled for a year or two ago?” [Emphasis added.]

Defendant then filed discovery motions and motions for partial summary judgment on the punitive damage issue and negligence issue. At the hearing on these motions (after hearing the way the judge was going to rule on the motions) Plaintiff announced an intention to take a Rule 41 dismissal as to all claims except the punitive damage claim. An appropriate order was entered later, as was an order granting partial summary judgment on the punitive damage claim.

Plaintiff went to the Court of Appeals. After a nice discussion of the law of Rule 41 dimissals and ruling that “the effective date of the Beals’ nonsuit of their remaining claims was November 18, 2004, the date the trial court, in its discretion, permitted the Beals to take a voluntary nonsuit of their remaining claims by entering the Beals’ proposed order,” the Court then turned to the partial summary judgment issue. Here is the holding:

“After suffering a defeat on their punitive damages claim, the Beals voluntarily nonsuited their remaining claims. Thus, all causes of action which supported an award for compensatory damages have been voluntarily extinguished by the Beals. Even if we were permitted to take jurisdiction of the issue related to punitive damages and ultimately found in favor of the Beals, we certainly could not remand this case to the trial court for a trial on punitive damages alone. Stated differently, there would be no practical benefit to ruling on a stand-alone issue, which the trial court could not adjudicate once we returned the case to the lower court. Such would be in the nature of an advisory opinion, which the Beals could then rely on in the event they sought to re-institute their nonsuited claims. This we decline to do. Accordingly, the present appeal is deemed moot, therefore, it is dismissed.”

It then imposed damages for frivilous appeal.

Is this decision correct? Yes. When the judge announced his intention to dismiss the punitive damages portion of the case, there were only three realistic alternatives available to the plaintiff. First, Plaintiff could ask that the judgment not be made a final judgment, thereby reversing the right to appeal on the issue until after the case was tried. (That motion should have been granted.) Second, Plaintiff could ask that the judgment be a final judgment, ask for an interlocutory appeal on it, and ask that the litigation be stayed in the meantime. Third, Plaintiff could let a final judgment on the issue go down and lose an appeal right. Those were the only alternatives. This appeal was not an option once Plaintiffs asked for and received a nonsuit of the remaining claims. A claim for puntive damages is a dependent claim – it depends (in this type of case) on proof of underlying misconduct of an intentional or reckless nature. If the underlying case is dismissed the claim for punitive damages goes away.

But all of that isn’t why I write this long post this early in the morning. I write it – as suggested by the opening paragraph and the placement of the post in the “Managing Your Practice” category – about the need to use caution when drafting letters and making statements to opposing counsel. There is little doubt in mind that counsel’s letter played a large role in the imposition of frivilous appeal damages here. Indeed, the section of the Court’s opinion that addresses the issue of frivilous appeal addresses Defendant’s support on “among other things, the threat of appeal contained in the letter” from Plaintiff’s counsel.

Litigation is stressful. All of us, from time to time, grab the dictaphone or the keybound and make some statements that could come back to haunt us if we did not put the brakes on before we signed the letter or pressed “Send.” It is easy to – indeed, it is hard not to – “fight back,” and raise the level of controversy with each volley. And it is easy to engage in chest-pounding and not-so-subtle threats.

Such conduct can – and often does – come back to haunt you. Maybe not in that case. Maybe not for 10 years. But it comes back. In spades. And, sometimes, in damages.