Limitation of Actions

August 9, 2016

Tennessee Legal Malpractice Statute of Limitations

In a recent legal malpractice case, the Tennessee Court of Appeals held that the one-year statute of limitations had run and that the case should accordingly be dismissed in total.

In Story v. Bunstein, No. E2015-02211-COA-R3-CV (Tenn. Ct. App. June 9, 2016), plaintiffs had previously been represented by defendant lawyers in a lender liability suit against three defendants. The timeline of the underlying litigation included the following:

On May 7, 2013, the trial court granted summary judgment to two defendants.
Lawyer “allegedly advised [plaintiffs] that he would fie a motion to correct what he perceived was the erroneous grant of the motion for summary judgment.”
Layer filed a motion to alter or amend, but no hearing was ever set for that motion.
“Shortly before trial on the remaining claims, [lawyer] allegedly informed [plaintiffs] that their damages evidence was not ready for trial” and recommended voluntary dismissal.
Underlying suit was voluntarily dismissed on November 13, 2013, and was not re-filed.

This legal malpractice claim was filed on September 3, 2014.

Defendants filed a motion to dismiss based on the statute of limitations. In response, plaintiffs argued that “the statute of limitations did not begin to run until the order of dismissal as to [plaintiff’s] remaining claims was entered on November 13, 2013.” The trial court held that the statute of limitations barred some of plaintiffs’ malpractice claims, but that plaintiffs’ “allegations with respect to the November 2013 voluntary dismissal of their remaining claim in the underlying case is a discrete allegation of alleged legal malpractice which is not barred by the statute of limitations.” The Court of Appeals disagreed, holding that the entire case was in fact time-barred.

July 6, 2016

Legal Malpractice – Statute of Limitations – Discovery Rule

by The Law Offices of John Day, P.C.

In Credential Leasing Corp. of Tenn., Inc. v. White, No. E2015-01129-COA-R3-CV (Tenn. Ct. App. May 17, 2016), plaintiff lender brought various claims against defendant lawyer, including claims for professional negligence and fraudulent misrepresentation, related to the drafting of a deed of trust. Defendant attorney prepared a 2010 deed of trust in favor of plaintiff, conveying title to a parcel of land owned in part by defendant’s brother. Defendant stated that he would do the title work, prepare the deed of trust, and issue title insurance for the property at issue, though he never actually issued any title insurance.

The property was actually owned by the brother and another man as tenants in common. In 2007 a deed of trust had been executed on the same property to secure a loan from another bank, and defendant attorney had notarized the signatures of the grantors (and correct property owners) on that deed. Despite the fact that the brother only owned a half interest in the property, the 2010 deed of trust did not mention the other owner’s interest. Instead, it listed the brother and the brother’s wife as grantors, even though the wife had no interest in the property. Further, while the warranty deed and previous deed of trust used a “lot and block” description of the property, the 2010 deed of trust described the property by metes and bounds.

In 2011, the brother declared bankruptcy. Plaintiff received a notice of the bankruptcy filing, which showed the other creditor having a first lien, which plaintiff was already aware of. Almost two years later, however, plaintiff learned that the property had been sold at foreclosure, and plaintiff had not received notice. Only after learning of this sale did plaintiff find out that the brother had only owned a one-half interest in the property, and that their deed of trust thus had not covered the entire property.

April 6, 2016

HCLA Statute of Limitations Issue A Jury Question

by The Law Offices of John Day, P.C.

A recent appeal in a claim filed under the Health Care Liability Act (HCLA) turned on when the statute of limitations began to run and whether a doctor was an employee under the Governmental Tort Liability Act (GTLA).

In Rogers v. Blount Memorial Hospital, Inc., No. E2015-00136-COA-R3-CV (Tenn. Ct. App. Feb. 29, 2016), plaintiff arrived at the Blount Memorial Hospital’s (“Hospital”) emergency room on September 8, 2012. He was treated by Dr. Bhatti (“Doctor”), who diagnosed him with and began treating him for Guillain-Barre Syndrome (“GBS”). According to plaintiff, he later found out he never had GBS, but instead had a spinal abscess, and the delay in diagnosis and treatment of the abscess “resulted in permanent and irreplaceable spinal cord damage.”

Plaintiff sent pre-suit notice of this suit to the hospital on August 20, 2013, and to the doctor on October 7, 2013. The complaint was then filed on December 13, 2013. Both defendants filed motions for summary judgment, both of which were granted by the trial court for different reasons.

For the doctor, the trial court granted summary judgment based on the statute of limitations, finding that plaintiff “was aware of facts sufficient to place a reasonable person on inquiry notice that he had suffered an injury as a result of Dr. Bhatti’s alleged misdiagnosis” on September 13, 2012, or at least by October 5, 2012. According to the trial court, plaintiff’s pre-suit notice sent on October 7, 2013, was thus sent outside the statute of limitations. Plaintiff argued, though, that “he had no reason to suspect that the initial diagnosis of GBS was incorrect until he was informed by another medical practitioner in mid-October 2012 that he never had GBS.” Plaintiff asserted that although he had continuing symptoms and was told in the hospital that he would be treated for a spinal abscess, he thought the symptoms and abscess were consequences of the GBS and was never told otherwise.

January 25, 2016

Tolling Due to “Adjudicated Incompetent” Requires That There Was Judicial Intervention

by The Law Offices of John Day, P.C.

In 2011, the Tennessee legislature amended Tenn. Code. Ann. § 28-1-106 regarding tolling of statutes of limitations, replacing the language “of unsound mind” and “after the removal of such disability” with “adjudicated incompetent” and “after legal rights are restored.” The current version of the statute reads:

If the person entitled to commence an action is, at the time the cause of action accrued, either under eighteen (18) years of age, or adjudicated incompetent, such person, or such person’s representatives and privies, as the case may be, may commence the action, after legal rights are restored, 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 restoration of legal rights.

Recently, the Tennessee Court of Appeals analyzed the meaning of this language change, marking the first time a state court has interpreted the new terms.

In Johnson v. UHS of Lakeside, LLC, No. W2015-01022-COA-R3-CV (Tenn. Ct. App. Dec. 23, 2015), plaintiff filed an HCLA claim related to her late husband’s fall at defendant’s facility. It was uncontested that she gave pre-suit notice more than one year after the cause of action accrued, and that she filed the complaint more than one year and 120 days after the same. Defendant moved to dismiss the claim based on the statute of limitations. Plaintiff opposed the motion on the basis that her husband met the criteria of § 28-1-106 and that the statute of limitations was thus tolled. The trial court dismissed the action, and the Court of Appeals affirmed.

October 6, 2015

Tennessee Effectively Reduces Statute of Limitations in Claims Filed Against the State

by The Law Offices of John Day, P.C.

In Moreno v. City of Clarksville, No. M2013-01465-SC-R11-CV (Tenn. Sept. 18, 2015), the central issue surrounded the interplay of the 90-day window provided by Tenn. Code Ann. § 20-1-119 to add a non-party named by a defendant as a comparative tortfeasor and the process for filing a claim under the Tennessee Claims Commission Act.

Plaintiff was injured when a tree fell on his car as he was driving across a bridge on December 24, 2009. Within one year of the accident, plaintiff followed the procedure outlined by the Claims Commission and filed written notice of his claim against the State of Tennessee with the appropriate authority, the Division of Claims. The Division of Claims neither honored nor denied plaintiff’s claim within the 90-day period set out in the Claims Commission Act, and the claim was accordingly transferred to the administrative clerk of the Claims Commission. Plaintiff received an order from the Claims Commissioner on March 30, 2011, stating that he needed to file a complaint, which he did on April 14, 2011. The State filed an answer to the complaint on May 18, 2011, but did not mention comparative tortfeasors. On September 18, 2012, sixteen months after the initial answer, however, the State moved to amend its answer to name the City of Clarksville as being comparatively at fault. Pursuant to this new answer, plaintiff initially filed a motion to amend his complaint in the Claims Commission to add the City of Clarksville. He later, however, withdrew this amendment and instead filed suit against the City of Clarksville in Circuit Court.

May 2, 2015

Real Estate Statute of Repose Wipes Out Fire Loss Case

by The Law Offices of John Day, P.C.

In Hayes v. Coopertown’s Mastersweep, Inc., No. W2014-00783-COA-R3-CV (Tenn. Ct. App. April 17, 2015), plaintiffs brought a negligence claim based on the alleged negligent inspection of their fireplace. Two issues were addressed on appeal—whether defendant owed a duty of care to plaintiffs and whether this case fell under the four-year statute of repose applicable to injuries to real property related to deficient design and construction.

In 2000, plaintiffs purchased a house built in 1964 that had a fireplace, which plaintiffs had remodeled by a third party. Part of this remodel included lowering the firebox to be flush with the floor. The remodeled fireplace did not work well, allowing smoke to escape into the den, the upper floors and the attic. Plaintiffs thus hired defendant to inspect the fireplace and determine what was causing the smoke issues. Plaintiffs did not tell defendant about the previous fireplace renovations or that the firebox had been lowered. Defendant performed the inspection requested, and part of the defendant’s work “went beyond the inspection that [plaintiffs] contracted for,” including inspecting beneath the fireplace from the crawlspace and drilling into the fireplace to determine whether any combustible material was coming into contact with the fireplace. Because of the design and construction of the fireplace, however, “there were areas underneath the fireplace that could not be seen or inspected” by defendant. Defendant made certain redesign recommendations based on his inspection, and plaintiffs hired defendant to perform the recommended work. Defendant completed this work on October 8, 2003. Subsequently, on January 17, 2005, plaintiffs’ home was damaged by fire when “wooden floor joists that had been in contact with the firebox ignited from exposure to heat generated by the fireplace,” a problem related to the first remodel done by the unnamed third party.

April 1, 2015

Adding Employer As Defendant More Than One Year After Incident

by The Law Offices of John Day, P.C.

When a plaintiff files a auto or other personal injury lawsuit, he may not be aware of all the potential defendants that should be named. Fairly often, a plaintiff may seek leave to amend his complaint and add a defendant even after the statute of limitations on the underlying claim has passed, usually citing the discovery rule as justification for this allowance. In a recent negligence case, the Tennessee Court of Appeals explored some of the limits on such allowances.

In Smith v. Hauck, No. M2014-01383-COA-R3-CV (Tenn. Ct. App. March 25, 2015), plaintiffs were in a car struck from behind by a vehicle driven by defendant on an interstate exit ramp. The accident occurred on June 25, 2012, and at the time there was no indication that defendant was driving in the course of his employment—i.e., neither defendant nor the police report mentioned this fact, and he was driving his personal car with no employer insignia. Plaintiffs filed a negligence suit on June 7, 2013, within the one-year statute of limitations, which defendant answered on August 26, 2013. Defendant’s answer did not state or allude to the fact that he was driving on employer business at the time of the accident. Four days later, plaintiffs served interrogatories and requests for production of documents on defendant. These discovery requests included items seeking information related to defendant’s employer and his purpose for driving at the time of the accident. When defendant’s responses were six weeks past due, plaintiffs filed a motion to compel on November 8, 2013. Defendant responded to the interrogatories on December 4, 2013, and for the first time in those responses stated that “he was traveling to St. Thomas Hospital to participate in surgery as part of his employment with St. Jude Medical.” On the same day they received these responses, plaintiffs filed a motion to add St. Jude Medical as a defendant. The motion was granted and plaintiffs filed their amended complaint on December 20, 2013. St. Jude then filed a motion to dismiss based on the one-year statute of limitations, which the trial court granted, but the Court of Appeals overturned.

January 2, 2015

Statute of Limitations – One Day Late Too Late

by The Law Offices of John Day, P.C.

In Redmond v. Walmart Stores, Inc., No. M2014-00871-COA-R3-CV (Tenn. Ct. App. Dec. 22, 2014), plaintiff filed a premises liability claim after she slipped and fell on a puddle of water in a Nashville Wal-Mart. The incident occurred on August 12, 2012, but during plaintiff’s first conversation with her attorney he recorded that it had occurred on August 13^th. On August 13, 2013, plaintiff’s attorney filed the complaint in this action.

Defendant moved for summary judgment on the basis that the action was time-barred by the one-year statute of limitations. The trial court granted the motion. Plaintiff appealed, asserting that the discovery rule tolled the statute of limitations and that “the trial court should have granted an enlargement of the statute of limitations under Tennessee Rule of Civil Procedure 6.02.” The Court of Appeals, however, rejected both of these arguments and affirmed the trial court’s decision.

Plaintiff’s first argument was that even though she was injured in the initial fall, she had additional injuries that she could not have discovered on the day of the incident, and thus the statute of limitations should have been tolled by the discovery rule as to at least those injuries. The Court explained, though, that “a plaintiff’s cause of action accrues when he or she knows or, in the exercise of reasonable care and diligence should know, that he or she has sustained an injury as a result of the defendant’s wrongful conduct.” Here, plaintiff was aware on the day of the fall that she had sustained an injury; she filed a report with the store on the day she fell and suffered from pain and bruising. Accordingly, she knew that her fall “would support an action for tort against the tortfeasor” and the discovery rule did not apply. The fact that her injuries got worse following the day of her fall did not entitle her to invoke the discovery rule to escape the one-year statute of limitations.

September 17, 2014

Tolling Agreements, The Savings Statute and Tennessee Law

by The Law Offices of John Day, P.C.

The Tennessee Court of Appeals recently issued an important decision regarding the interplay between the savings statute and tolling agreements. The facts of Circle C Const., LLC v. Hilson, M2013-02330-COA-R3-CV (Tenn. App. Jul. 29, 2014), are a bit convoluted but critical to understanding the case.

Plaintiff had a judgment entered against it by a trial court. While appealing the judgment, Plaintiff entered a tolling agreement on a potential legal malpractice claim against Defendant, who was Plaintiff’s attorney in the underlying case. The tolling agreement specified the date that the statute of limitations would run – one year from the trial court’s judgment – but gave Plaintiff until 120 days after an appellate ruling in order to file any legal malpractice claim. In pertinent part, the tolling agreement stated, “[i]f Plaintiff desires to assert claims for professional negligence, it must do so on or before” 120 days after the appellate court issued its opinion.

After the tolling agreement was entered, things get strange:

July 2, 2013

An Important Change to the Tennessee Statute of Limitations That Affects the Rights of the Mentally Disabled

by The Law Offices of John Day, P.C.

For many years, the Tennessee statute of limitations was tolled for those of "unsound mind." That law has now changed, and the statue of limitations is tolled only for those who are "adjudicated incompetent." Tenn. Code Ann. Section 28-1-106. Here is the text of the newly worded statute:

If the person entitled to commence an action is, at the time the cause of action accrued, either under eighteen (18) years of age, or adjudicated incompetent, such person, or such person’s representatives and privies, as the case may be, may commence the action, after legal rights are restored, 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 restoration of legal rights.

Here is how the bill was changed in Public Chapter 47 of the 2011 legislation: