Day on Torts

September 17, 2014

Tolling Agreements, The Savings Statute and Tennessee Law

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:

September 15, 2014

Claim Washed Down the Drain By Tennessee Statute of Repose and Lack of Constructive Notice

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

Tthis is a premise liability case arising from the collapse of a bench in a handicap shower at the defendant’s hotel. Upon checking into their handicap room at the Holiday Inn Express, the Parkers noticed the bench in the handicap shower appeared to be loose. The brackets were pulled away from the wall a bit and the bench itself was shaky when pressed on. The Parkers reported the problem, and the hotel’s maintenance man tightened the bolts. Both the maintenance man and the Parkers testified the tightening of the bolts on the bracket appeared to fix the problem as the bench was no longer wobbly and the brackets were flush with the wall.

The next morning, Mr. Parker transferred himself from his wheelchair on to the shower bench. Approximately 10 minutes into his shower, the bench collapsed and Mr. Parker struck the floor. Ultimately, Mr. Parker was diagnosed with compression fractures at T-7, T-8 and T-9. Mr. Parker also alleged that as a result of the fall and his spinal injuries that he suffered more frequent and more severe pressure sores, urinary tract infections and bladder pain.

The Parkers filed suit against Holiday Inn Express. The hotel answered and alleged the comparative fault of D & S Builders. D & S Builders had constructed the hotel and had installed the shower benches in the handicap rooms of the hotel. D & S Builders was dismissed due to the four year statute of repose for negligent construction claims. In this case, the certificate of occupancy had been issued on July 31, 2006 and suit was not filed until May of 2011.

September 11, 2014

When is a Summons and Complaint “Unclaimed” Under Tennessee Law?

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

The Tennessee Court of Appeals recently issued an opinion dealing with a circumstance when service of process was designed “unclaimed” by the U.S. Postal Service. In Goodman v. Ocunmola, No. E2014-00045-COA-R3-CV (Tenn. Ct. App. Sept. 4, 2014), wife sued husband for divorce and served husband with a summons and complaint through the Tennessee Secretary of State because husband lived in Kentucky. The Postal Service attempted to deliver the summons and complaint, sent via certified mail, on three separate occasions before returning the certified mail as “unclaimed.” Wife moved for and was granted a default judgment when husband failed to appear and respond to the complaint.

About a month later, husband moved to set aside the default judgment entered against him, arguing that wife intentionally failed to include husband’s apartment number on the address label for the process server (i.e., the Postal Service), with the goal of obtaining a default judgment due to husband’s failure to respond to the complaint. Husband claimed he found out about the default judgment when he discovered a letter from wife’s attorney in the trash bin by his mailbox, which he assumed was thrown away because its address label also did not include husband’s apartment number. The trial court denied husband’s request to set aside the default judgment, and husband appealed.

The appellate record didn’t include a transcript or statement of the evidence, which the court initially noted had “frustrated” its review of husband’s appeal. As for the merits of the appeal, the court observed that Tenn. R. Civ. P. 4.05 states “the United States Postal Service notation that a properly addressed registered or certified letter is “unclaimed,” or other similar notation, is sufficient evidence of the defendant’s refusal to accept delivery.” Unfortunately for husband’s appeal, the limited record was basically reduced to the fact that after making three attempts to serve the summons and complaint, the Postal Service declared the certified mail as “unclaimed.” Contrary to husband’s suggestion that the lack of an apartment number inhibited service of process, the certified mail containing the summons and complaint was not found in a trash can near the mailbox (like the letter from wife’s attorney) or returned as undeliverable because the address was insufficient. Instead the notice contained the husband’s correct name and correct apartment complex address, and the “unclaimed” designation by the Postal Service was sufficient to effectuate proper service. Accordingly, the court of appeals held that the trial court did not abuse its discretion in denying husband’s motion to set aside the default judgment.

September 10, 2014

Tennessee Tort Buffet

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

The recent Tennessee Court of Appeals opinion n Davis v. Covenant Presbyterian Church discussed a host of issues.

What is Required to Properly Allege Vicarious Liability?

The Court of Appeals affirmed dismissal of vicarious liability claims against two religious organizations (one unincorporated and one a nonprofit corporation). The plaintiffs’ allegations against both organizations were essentially that each defendant existed under the laws of a state and had a principal place of business there, and had “actual and/or apparent authority” over another corporation, Covenant. The plaintiffs’ complaint did not explain how either defendant had authority over Covenant or anything else factual to create a principal/agent relationship with Covenant. Nonetheless, the plaintiffs alleged that both of the religious organization defendants were vicariously liable for Covenant and all of Covenant’s employees and agents. Because the plaintiffs’ complaint lacked any factual basis for asserting vicarious liability, the Court of Appeals affirmed dismissal of both religious organizations.

September 8, 2014

What Happens After A Default Judgment is Entered in Tennessee?

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

When a party pleads a prima facie cause of action and obtains a default judgment on liability, a damages inquiry should necessarily follow, and during the damages determination the trial court should not reconsider liability issues.

In Tennison Brothers, Inc. v. Thomas, No. W2013-01835-COA-R3-CV (Tenn. Ct. App. Aug. 6, 2014), the Tennessee Court of Appeals held that a trial court erred when it refused to award damages to two parties who had already been granted default judgments on liability against a third party. The case involved a decade-old business dispute over rights to a state permit to construct a billboard on two adjacent properties fronting Interstates 40 and 240 in Shelby County, Tennessee.

In July 2008, Tennison Brothers, Inc. sued Clear Channel Outdoor (CCO) and William Thomas for breach of contract, intentional interference with business relationships, and inducement to breach a contract and intentional interference with a contract. In September 2008, CCO asserted a cross-complaint against Thomas alleging similar causes of action as Tennison. Highlights from the ensuing four years of litigation according to the appellate opinion include:

September 4, 2014

Injury and Wrongful Death Liability of Franchisors

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

Under what circumstances can a franchisor be held vicariously liable for torts that occur on the premises of a franchisee?

A relatively recent court opinion has an excellent discussion of the law in this area, addressing not only the law of the state where the cause of action arose (New Mexico) but also the law from around the nation. In Estate of Anderson v. Denny’s, 2013 WL 6506319 (D.N.M. Nov. 13, 2013) the court held that a genuine issue of material fact existed on the issue of whether the franchisor was vicariously liable for the franchisee’s alleged negligence, turning on the issue of right of control.

September 3, 2014

Tennessee Court Rules on Discovery of Income from Testifying Expert

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

This appeal arises from a medical malpractice case that went off the rails when the defense sought to discover financial information from plaintiff’s liability expert. On further consideration, since the procedural history involves four motions for sanctions, two trial continuances, a denied interlocutory appeal, a dismissal and this appeal, perhaps I should say the case went off the rails, down an embankment into a sewage-filled ditch replete with rats the size of small dogs.

It all started simply enough. Defense counel served a notice of deposition for plaintiff’s liability expert, Dr. Evans, and requested financial information. Specifically, the notice requested documents reflecting the income the good doctor had earned serving as an expert witness including his schedule of charges, all income received from reviewing cases, consulting or testifying for a 10 year period and 1099s and related documents showing his income for the same 10 year period. No objection was filed to the notice but Dr. Evans failed to bring them to his deposition. The deposition proceeded nonetheless and Dr. Evans was asked questions related to his income. Dr. Evans testified he did not know how much he earned annually from his work as an expert witness and could not even give an estimate. While he estimated 15 to 20% of his income was derived from his work as an expert witness, he could not provide any information as to the actual dollar amount.

Thereafter, a trial date was scheduled and the defense moved to compel production of the documents previously requested as part of Dr. Evans deposition. Plaintiff urged the trial court to deny the motion as the documents were not in her possession. Defense counsel insisted plaintiff could obtain the documents from her expert but asked the trial court to grant a motion for out-of-state subpoena if the trial court was inclined to deny the motion to compel. While plaintiff conceded the financial information was relevant on the issue of bias, plaintiff asked the court to balance the privacy interests of the expert. Ultimately, the trial court denied the motion to compel since the requested documents were not in the possession of the plaintiff but instructed defense counsel to file a petition for an out-of-state subpoena. The trial court suggested the scope of the subpoena should be reduced to a five year period instead of ten and also suggested the parties agree to the production of an affidavit from Dr. Evans’ accountant giving the information as opposed to the production of the underlying documents which contained other personal, financial information.

August 28, 2014

Tennessee Law of Civil Trial – Free Sample Chapter

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

My newest book, Tennessee Law of Civil Trial, examines the law of trying civil cases in Tennessee state courts. Here is the Table of Contents:

Chapter 1: Scheduling Orders
Chapter 2: Final Pretrial Conferences
Chapter 3: Motions in Limine
Chapter 4: Jury Selection
Chapter 5: The Rule
Chapter 6: Opening Statements and Closing Arguments
Chapter 7: Examination of Witnesses
Chapter 8: Use of Depositions at Trial
Chapter 9: Opinion and Expert Testimony
Chapter 10: Mistrials
Chapter 11: Motions for Directed Verdict
Chapter 12: Findings of Fact
Chapter 13: Jury Instructions
Chapter 14: Juror Questions
Chapter 15: Verdict Forms
Chapter 16: Discretionary Costs
Chapter 17: Motions for a New Trial and to Alter or Amend Judgment
Chapter 18: Remittitur
Chapter 19: Additur
Chapter 20: Motions for Judgment Notwithstanding the Verdict
Chapter 21: Preparing to Win at Trial

If you want to get a good feel for the book, clicking on the link and enjoy a free preview of the chapter on scheduling orders. You can purchase the 500-page book for only $49.95 by clicking on the link.

August 27, 2014

Tennessee Appellate Court Reviews Business Tort Case

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

This case arises from the housing market crash. First Community Bank had purchased asset-backed securities primarily in the form of collateralized debt obligations (CDOs) and residential mortgage-backed securities (RMBSs) from a number of entities including First Tennessee Bank, Morgan Keegan & Company, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bear Stearns & Company and Sun Trust Robinson Humphrey, Inc. and Keefe, Bruyette & Woods, Inc. The sale of each security was conditioned upon the receipt of a minimum rating, and all sales received the rating. While initially First Community Bank profited from these transactions, in August of 2008, after Moody’s downgraded the rating on a number of the investments, the bottom fell out. First Community Bank lost nearly 100 million dollars.

Trying to recoup some of its massive losses, First Community sued everyone involved: the rating agencies, the placement agents and the issuing entities. In its 207 page complaint, which was later amended and expanded to 260 pages, First Community Bank alleged fraud, constructive fraud, negligent misrepresentation, civil conspiracy, unjust enrichment and a violation of the Tennessee Securities Act. Procedurally, the case took some twists and turns. The defendants initially moved to dismiss on multiple grounds: statute of limitations, statute of repose, failure to plead with specificity, the losses were caused by general market conditions and, for some defendants, lack of personal jurisdiction. The trial court granted the motions to dismiss and First Community Bank appealed. The Court of Appeals upheld the dismissal of some of the defendants based on lack of personal jurisdiction. As to the other defendants, the Court of Appeals found the trial court had considered matters outside the pleadings thereby converting the motions to dismiss into motions for summary judgment. As such, First Community Bank was entitled to discovery. The remaining defendants appealed to the Tennessee Supreme Court who found the Court of Appeals had failed to consider the trial court’s alternative basis for dismissal i.e., the failure to state a claim upon which relief may be granted (other than statute of limitations or statute of repose). Accordingly, the case was remanded to the Court of Appeals for consideration of that lone issue. The Court of Appeals ultimately reversed the trial court’s decision on that issue and remanded for further proceedings.

Given the issue on appeal, the Court of Appeals’ analysis was limited to whether the complaint was legally sufficient as opposed to the strength of the plaintiff’s proof. Ultimately, after construing the complaint “liberally and presuming all factual allegations to be true and giving the plaintiff the benefit of all reasonable inferences”, the Court of Appeals concluded the amended complaint was sufficient to survive the motions to dismiss.

August 6, 2014

Yet Another Tennessee Medical Malpractice Notice Case

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

This appeal arises from a healthcare liability action. At issue is the adequacy of the pre-suit notice, whether the partial summary judgment on the non-healthcare liability claims should have been set aside due to alleged concealment by the defendant, whether the plaintiff should have been permitted to amend the complaint and a motion for sanctions.

Plaintiff’s decedent, 46-year old Jana Johnson, awoke in the early morning hours of April 4, 2008 with severe chest, groin and leg pain. Her husband called an ambulance, and Ms. Johnson arrived via ambulance at Parkwest Hospital at 6:00 a.m. She was first examined by Dr. Daigle at 6:15 a.m. and a chest x-ray and blood work were ordered. The test results were conveyed to Dr. Daigle at approximately 6:30 a.m. and he then examined the decedent a second time. Concerned the decedent was suffering from a pulmonary embolism, Dr. Daigle ordered an immediate CT scan with IV contrast. The doctor gave the order to the unit clerk between 6:40 and 6:45 a.m. so that it could be transmitted to the imaging department.

Because of a shift change, the order did not get entered until 7:16 a.m. The decedent was taken to the imaging department at approximately 7:20 a.m., but for unexplained reasons the order was cancelled. At some point thereafter, Dr. Daigle inquired about the CT scan and was told by Nurse Wolfe that the decedent’s IV had “blown” and the decedent was insisting Nurse Irons be called to replace it. At 7:56 a.m., Nurse Wolfe paged Nurse Irons without a response. At 8:28, the decedent fell into severe distress and she died at 8:44, or nearly three hours after her initial arrival to the hospital.