Miscellaneous

September 25, 2019

Summary Judgment Affirmed on Negligent Misrepresentation Claim

Where an attorney working for a bank gave the bank president advice about his resignation but also recommended that he seek independent counsel, the Court of Appeals affirmed summary judgment on a negligent misrepresentation claim.

In Batten v. Community Trust and Banking Company, No. E2017-00279-COA-R3-CV (Tenn. Ct. App. Aug. 26, 2019), plaintiff was the president and CEO of defendant bank. Plaintiff had an employment contract with the bank that included a provision allowing him to resign and receive 36 months of additional compensation. When the Tennessee Department of Financial Institutions (TDFI) examined the bank, it found serious problems, eventually declaring that the bank was in a troubled condition.

September 24, 2019

No Trespass Claim Where Unmanned Truck Rolled Into House

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

Where defendants’ truck rolled into a duplex owned by plaintiff causing real property damage, a directed verdict for defendants on all but plaintiff’s negligence claim as well as a jury verdict for diminution in value to the property was affirmed.

In Twenty Holdings, LLC v. Land South LLC and Brandon Majors, No. M2018-01903-COA-R3-CV (Tenn. Ct. App. Sept. 5, 2019), plaintiff owned a duplex in Nashville, and defendant Majors lived nearby. Majors drove a tractor trailer truck for defendant Land South, and on the day of the incident, he “parked the truck, with an attached 53 foot trailer…, near his residence at the top of a steep hill with the front of the truck pointing toward the drop off of the hill and toward Plaintiff’s property.” Within hours of the truck being parked, it rolled down the hill. The trailer detached from the truck, but the truck portion struck the duplex and stopped in one of the living rooms, causing significant damage to the building. According to Majors, he had parked the truck on a safe area and “took various precautions in securing the tractor-trailer, including engaging the parking brake, placing garden timbers under the wheels, letting the trailer down, and placing the tractor-trailer in reverse.”

September 18, 2019

Economic Loss Doctrine Bars Plaintiff’s Fraud Claim

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

Where a commercial plaintiff suffered only economic damages due to the purchase of allegedly defective trucks, its fraud claim was barred by the economic loss doctrine. In Milan Supply Chain Solutions Inc. F/K/A Milan Express Inc. v. Navistar Inc., No. W2018-00084-COA-R3-CV (Tenn. Ct. App. Aug. 14, 2019), plaintiff purchased over 200 trucks from defendant to use in its logistics and hauling company. The trucks were covered by a standard “Limited Warranty,” and plaintiff purchased “Optional Service Contracts.” Under these agreements, defendant “agreed to repair or replace parts of the trucks that proved defective,” but the documents also stated that “no warranties were given beyond those described in the warranty documents…”

Plaintiff filed suit against defendants alleging that the trucks were defective and that that defendant had made “a number of misrepresentations concerning the trucks.” The complaint included claims for breach of contract, breach of express and implied warranties, violation of the Tennessee Consumer Protection Act, and fraud. While several claims were dismissed prior to trial, the claims against defendant Navistar proceeded to jury trial, and the jury entered a verdict for plaintiff on the intentional misrepresentation claim. The Court of Appeals, however, reversed, finding that the “asserted fraud claims [were] barred by the economic loss doctrine.”

September 11, 2019

Payments to Professionals Who Were Fact Witnesses For Case and Discovery Preparation

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

The Florida Supreme Court ruled that it is appropriate for a lawyer to pay professionals who were fact witnesses in a commercial litigation controversy for their assistance directly related to case and discovery preparation.

In Trial Practices, Inc. v. Hahn, Loeser & Parks, LLC, the court addressed the issue of whether the disciplinary rules in effect at the time of the events permit a party to pay a fact witness for the witness’s assistance with case and discovery preparation that is not directly related to the witness preparing for, attending, or testifying at proceedings. The answer: no – a party may pay only for assistance directly related to the witness preparing for, attending, or testifying at proceedings.

Thus, it was appropriate to compensation the lawyers and accountants involved (who were fact witnesses) for time invested by them in responding to discovery, deposition preparation, etc. but not time in reviewing motions.

August 30, 2019

Nuisance Can Occur on Property Owned by Neither Plaintiff Nor Defendant

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

A defendant can be liable for nuisance damages even when the nuisance occurred on property that neither plaintiff nor defendant owned.

In Ryan v. Soucie, No. E2018-01121-COA-R3-CV (Tenn. Ct. App. July 18, 2019), plaintiff filed a claim for nuisance and intentional interference with business relationships after defendant blocked a right-of-way plaintiff used to access his business. Plaintiff operated a business on property that had been rezoned from residential to commercial in 1995, and defendant owned a home on property nearby. Plaintiff informed defendant that he operated a heat and air business on his property, and that he used a right-of-way over state-owned property to provide access to his supplier and his waste management company. Believing that the property was all zoned as residential, defendant impeded plaintiff’s use of the right-of-way by planting trees on it and parking a trailer in front of the gate to plaintiff’s property.

The trial court found for plaintiff on both claims and awarded him over $14,000 in damages, and the Court of Appeals affirmed.

August 13, 2019

Suicide and Foreseeability

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

Where a defendant (who happened to by a psychiatrist) knew of decedent’s past suicide attempt, knew he had just ended his relationship with her, and let the decedent stay in his home alone with an unsecured gun, the Tennessee Supreme Court reinstated the trial court’s grant of summary judgment on a negligence case against defendant related to decedent’s suicide, holding that the “suicide constitutes a superseding intervening event that breaks the chain of proximate causation.”

In Cotten v. Wilson, No. M2016-02402-SC-R11-CV (Tenn. June 19, 2019), the personal representative of decedent’s estate brought suit against defendant for negligence, seeking to “hold the defendant liable for negligently facilitating the decedent’s suicide.” Decedent was married and had a son when she met and began an affair with defendant. Decedent was a nurse at Skyline Hospital, and defendant was a psychiatrist there. Decedent divorced her husband in 2012, but she retained equal co-parenting time of her son. Two years after beginning the relationship, in October 2013, decedent moved in with defendant, at which time defendant “noticed that [she] was having frequent crying spells and seemed to be struggling with eviction, job loss, and her new job not working out.” Defendant stated that decedent was “not as energetic and motivated as she once was, and on certain days she did not take care of herself.”

February 7, 2019

Summary Judgment on Negligence Claim Overturned

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

Where a reasonable juror could have found that defendant allowed sewage to flow into a malfunctioning septic tank under plaintiff’s property for at least a short period of time after the issue was discovered, defendant was not entitled to summary judgment on plaintiff’s negligence claim.

In Heatley v. Gaither, No. M2018-00461-COA-R3-CV (Tenn. Ct. App. Dec. 19, 2018), plaintiff and defendant owned neighboring property that had been owned as one large parcel many years ago. Part of plaintiff’s property was “always damp and muddy,” and during an attempt to re-grade the area, plaintiff discovered that a malfunctioning septic tank with pipes leading to defendant’s building was located on his property. Before this discovery, neither plaintiff nor defendant had been aware of this septic tank.

Defendant’s employee “arranged to have the newly discovered tank emptied on November 4,” and he later stated in an affidavit that shortly after that date, the facilities that were connected to the tank were identified and not used anymore. The septic line between the two properties was permanently severed the following February.

October 8, 2018

Are Personal Injury and Wrongful Death Awards Subject to Federal Income Tax?

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

The taxability of Tennessee personal injury and Tennessee wrongful death settlements and judgments is governed by Section 104 of the Internal Revenue Code.

Generally, compensatory damages for personal injury and wrongful death are excludable from federal taxation if they arise from personal injury or sickness. Thus, in most personal injury and wrongful death cases arising from a personal injury or sickness, a settlement which includes only compensatory damages will not be subject to federal taxation.

One exception to that rule is if the taxpayer / plaintiff previously deducted medical expenses from her taxable income and then recovered those expenses in a personal injury or wrongful death case. In such cases, the taxpayer / plaintiff would have tax liability because she had previously gained a tax advantage from the deduction of the medical expenses and then was reimbursed for those expenses in a compensatory damages award.

October 2, 2018

No Response to Statement of Undisputed Material Facts Results in Loss

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

In a case based on an altercation that occurred while a worker was attempting to recover an unreturned cable modem, defendant cable company filed a motion for summary judgment with supporting proof that the worker was an independent contractor of a separate entity. Because plaintiff failed to respond to defendant’s statement of undisputed material facts, summary judgment was granted and affirmed.

In Mack v. Comcast Corporation, No. W2017-02326-COA-R3-CV (Tenn. Ct. App. Aug. 31, 2018), plaintiff had an unreturned Comcast cable modem at his house, and a worker attempted to retrieve it. During this attempted retrieval, there was an altercation, and the worker was injured. Plaintiff was arrested, his mug shot was published and he lost his job, but the criminal charges were eventually dismissed. Plaintiff brought this case alleging various causes of action against several defendants, including Comcast.

September 27, 2018

No Attorney’s Fee Award Permitted in Trespass Case

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

Attorney’s fees are not recoverable in a claim for trespass in Tennessee. In Perlaky v. Chapin, No. E2017-01995-COA-R3-CV (Tenn. Ct. App. July 27, 2018), plaintiff owned land on a mountain with easement rights to access the land by a specific road. When defendants bought property on the same mountain, they blocked the road by “felling 400 or 500 trees across the road, setting up a steel gate, and placing security guards at the gate to monitor access.” Plaintiff filed this trespass action, and the trial court awarded him nominal damages. The trial court initially awarded plaintiff attorney’s fees, but after a motion to alter or amend the judgment by defendant, the trial court vacated the award of attorney’s fees. The Court of Appeals affirmed.

First, the Court affirmed the award of nominal fees. Because plaintiff had presented damages incurred by Raccoon Mountain Campground, LLC, but had filed suit individually, the trial court found that no actual damages to plaintiff were proven. Nonetheless, “even where no actual damages are proven, the plaintiff is still entitled to nominal damages,” and the award of $174.14 as nominal damages was affirmed.