Articles Posted in Civil Procedure

             In Potter’s Shopping Center, Inc. v. Szekely, No. M2014-00588-COA-R3-CV (Tenn. Ct. App. Oct. 8, 2014), the Court of Appeals relied on the recent Tennessee Supreme Court decision of Smith v. UHS of Lakeside, Inc., 2014 WL 3429204 (Tenn. 2014) to hold the trial court to a higher standard when entering an order granting partial summary judgment.

            The Potter’s Shopping case involved the building of a house and a claim for unjust enrichment by the supplier of materials against the owners of the home. The trial court granted partial summary judgment to plaintiff as to liability, but in its order, the court failed to state any legal grounds for its decision. Citing the Supreme Court’s Smith opinion, the Court of Appeals found that the trial court had failed to comply with Tenn. R. Civ. P. 56.04 when it failed to cite any evidence or argument it had considered in granting summary judgment. The Court noted that appellate courts were sometimes more lenient on this issue when the reasoning for the summary judgment could be gleaned from the record. In the present case, however, the record contained no transcript of the hearing and no other indication of the legal basis for the summary judgment decision.

            Finding that the summary judgment issue “involve[d] questions of law that require analysis and explanation,” the Court vacated the order granting partial summary judgment and remanded the case.

            This summer the Tennessee Supreme Court offered guidance on what a trial court must do when granting or denying a motion for summary judgment under Tenn. R. Civ. P. 56.04. Despite the longstanding practice of many courts to have a prevailing party draft and submit a proposed order, the Court emphatically expressed that the record must show that an order granting or denying summary judgment was the product of the trial court’s “independent judgment.”

               In Smith v. UHS of Lakeside, Inc., No. W2011-02405-SC-R11-CV (Tenn. July 15, 2014), plaintiff’s complaint listed multiple causes of action related to the alleged improper assessment and resulting delayed treatment of decedent. During lengthy pre-trial litigation, defendant moved for summary judgment as to all of plaintiff’s claims. After a hearing, the trial court ruled in favor of plaintiff on some claims and defendant on two claims. After orally announcing the direction of the ruling, the trial court stated: “As far as a basis for the ruling, I’m going to let [defendant’s counsel] make those…the motions in which you were successful, you’ll prepare the order and the rationale for the Court’s ruling.”

               Plaintiff later filed an amended complaint, and defendant again filed a motion for summary judgment as to all claims. This time the trial court granted defendant’s motion in total and stated, “I’m directing the defendant to prepare the order and to establish the rationale for the court’s ruling in quite specific detail[.]” Both orders submitted by defendant and signed and entered by the trial court were highly detailed, essentially adopting all of defendant’s arguments from its brief. After the entry of each order, plaintiff objected to the orders arguing that the orders contained rulings and findings that the trial court did not actually make.

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.

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:

Rule 60.02(1) of the Tennessee Rules of Civil Procedure allows the court to relieve a party from a final judgment or order on grounds of “mistake, inadvertence, surprise or excusable neglect.”  This is the rule that the plaintiffs attempted to rely on to set aside an order dismissing their case in Brown v. Juarez, No. E2013-00979-COA-R3-CV (Tenn. Ct. App. Apr. 10, 2014).

In Brown, after about three years of inactivity in the case, the defendants filed a motion to dismiss the case for failure to prosecute.  The motion included a notice of hearing and a statement that the motion would be granted if there was no response.  Plaintiffs’ counsel received the motion but failed to file a response and did not appear at the hearing.  Plaintiffs’ counsel argued that the notice was crafted to conceal the hearing date.  The court was not persuaded by that argument.  Nor was the court persuaded by the argument that the plaintiffs’ failure to appear and to respond was due to “mistake, inadvertence, surprise or excusable neglect.” 

The court noted that an absence of willfulness does not equate to neglect that is excusable.  So, while the court found that plaintiffs’ counsel did not willfully fail to appear or respond to the motion, the court found that the neglect was not excusable because had plaintiffs’ counsel read the entire motion, he would have noticed the hearing date.  Thus, the court concluded that the plaintiffs failed to prove entitlement to relief under Rule 60.02 and upheld the dismissal.  

 In Wright v. Dunlap, No. M2014-00238-COA-R3-CV (Tenn. Ct. App. April 30, 2014), a jury rendered a defense verdict in plaintiff’s car crash case. The trial court entered a judgment dismissing the case, and then Plaintiff’s case was dismissed on appeal because of her failure to take appropriate action within 30 days following entry of the trial court’s judgment.

After the entry of an adverse final judgment, Tennessee law requires that a notice of appeal be filed within 30 days from the entry of the judgment. However, there are various motions a party can file with the trial court that will extend the deadline to file the notice of appeal as long as the motions are filed within 30 days of the judgment. These motions are listed in Tenn. R. App. P. 4(b) and Tenn. R. Civ. P. 59.01. Once the trial court rules on the motion, the party then has 30 days from the entry of the order on the motion to file the notice of appeal.

The trial court’s judgment was entered on October 11, 2013. Plaintiff’s Rule 59 motion to alter or amend was filed more than thirty days later on November 15, 2013. Plaintiff argued on appeal that the Rule 59 motion was timely because a duplicate judgment virtually identical to the October 11, 2013 judgment was entered on October 22, 2013. However, the appellate court disagreed. Tennessee case law holds that where two substantially identical judgments are entered, the time for filing a notice of appeal or Rule 59 motion begins to run upon entry of the first judgment. Ball v. McDowell, 288 S.W.3d 833, 838 (Tenn. 2009). The later entry of a virtually identical judgment that doesn’t affect the parties’ substantive rights or obligations resolved by the first judgment does not extend the time for filing a Rule 59 motion or notice of appeal.

Although Rule 4.03 of the Tennessee Rules of Civil Procedure requires return of process within ninety days of its issuance, a plaintiff failing to comply with this standard may still keep his or her case alive under Rule 3. In the recent case of Monday v. Thomas,  the Tennessee Court of Appeals explored the interplay between Rules 3 and 4.03. A plaintiff in Monday had been hit by a truck driven by an individual, and plaintiffs alleged the truck was owned by three other individuals and/or two businesses. In total, the plaintiffs named and alleged fault against 6 defendants (the driver, three individual owners, and two business owners).

Plaintiffs filed suit within the appropriate one-year statute of limitations, and initially had six summonses issued in September 2010. In May 2011, the plaintiffs had four alias summons issued against the driver, two of the individual owners, and one of the business owners. In January 2012, another set of alias summonses was issued, this time to the driver, one of the individual owners and the business owner included in the 2011 summonses, and one of the individual owners who was not included in the 2011 summonses. Finally, in November 2012, process was issued to the individual owner who was included in the May 2011 summonses but excluded from those issued in January 2012.

Rule 4.03(1) of the Tennessee Rules of Civil Procedure requires that a summons, even if not served, be returned to the court within ninety days of issuance. Rule 3 provides that if process is not served within ninety days of being issued, plaintiffs cannot rely on their original filing to toll any statutes of limitation “unless the plaintiff continues the action by obtaining issuance of new process within one year from issuance of the previous process.”

The Tennessee General Assembly has passed, and the Governor has signed, legislation adding nurse practitioners to the list of people who are ordinarily exempt from subpoena to trial.   Nurse practitioners are still subject to being subpoenaed to give a deposition.

Here are the other people who are exempt from subpoena to trial under T.C.A. Section 24-9-101(a):

•  An officer of the United States;
• An officer of Tennessee;
• An officer of any Tennessee court or municipality;
• The clerk of any court of record other than that in which the suit is pending;
• A member of the Tennessee general assembly while in session, or clerk or officer thereof;
• A practicing physician, physician assistant, advanced practice nurse, psychologist, senior psychological examiner, chiropractor, dentist or attorney;
• A jailer or keeper of a public prison in any county other than that in which the suit is pending; and
•  A custodian of medical records, if such custodian files a copy of the applicable records and an affidavit with the court and follows the procedures provided for producing records as required by law.

The Tennessee Court of Appeals recently held that a General Sessions plaintiff cannot skip the procedure for filing unserved process to avoid letting the statute of limitations run.

Tenn. Code Ann. § 16-15-902 requires a plaintiff in General Sessions court to return process within 60 days of issuance. § 16-15-902 does not explicitly state that a plaintiff must return the process if it is unserved. Under Tenn. Code Ann. § 16-15-710, however, a plaintiff who does return process as unserved must take action to rely on the original filing date for the statute of limitations. Once the plaintiff returns the process as unserved, the plaintiff has to either have process reissued within 9 months or refile the case within one year.

In Gates v. Perry, No. 2013-01992-COA – R9-CV (Tenn. Ct. App. March 26, 2014) the plaintiff never filed the unserved process with the court, and instead had a new warrant issued eighteen months later. The plaintiff argued that, since he never filed the unserved process, Tenn. Code Ann. § 16-15-710 was never triggered. The trial court agreed, and denied a motion to dismiss by the defendant.

The Tennessee Court of Appeals recently had the opportunity to discuss the doctrine of prior suit pending in a car wreck case, Farmers Insurance Exchange v. Shempert. The Shemperts filed suit for a wreck in which Mr. Shempert was injured and included his own uninsured motorist carrier, Farmers Insurance Exchange, as a defendant. After discovery in the first lawsuit, Farmers filed a separate declaratory judgment action seeking a ruling that the Shempert’s policy with Farmers provided no coverage for the wreck. The Shemperts filed a motion to dismiss the second case on the basis of the doctrine of prior suit pending.

The Court of Appeals explained that the doctrine of prior suit pending provides that an action is subject to being dismissed if a prior lawsuit involving the same parties and the same subject matter is pending. The first lawsuit must be pending in a court that has jurisdiction over the subject matter and the parties. 

The Court of Appeals found that the first lawsuit did include the issue of whether the Farmers policy provided coverage for the wreck, and that Farmers had raised coverage as a defense in the first lawsuit. Also, the court noted that the court in the first lawsuit had jurisdiction over the parties and the subject matter. Therefore, the court reversed the  entry of summary judgment for the insurer in the declaratory judgment  case and remanded it to the trial court to be dismissed.