Articles Posted in Miscellaneous

A new decision of the Tennessee Court of Appeals, Southern Steel & Concrete, Inc. v. Southern Steel & Construction, Inc.,  No. W2020-00475-COA-R3-CV (Tenn. Ct. App. Apr. 14, 2022), summarizes Tennessee’s law on alter ego issues.

Here is some key language from the opinion (all of the language in bold is quoted from the opinion):

           In Oceanics Schools, Inc. v. Barbour, 112 S.W.3d 135, 145 (Tenn. Ct. App. 2003),this Court provided a “blueprint of factors” to be considered when addressing an alter ego issue. Boles v. Nat’l Dev. Co. Inc., 175 S.W.3d 226, 245 (Tenn. Ct. App. 2005). We explained that blueprint as follows:

Where plaintiff gave her husband permission to sign her name to an indemnity agreement in conjunction with obtaining insurance bonds, and plaintiff’s husband had the opportunity to read the indemnity agreement and discover its contents, summary judgment on plaintiff’s negligent misrepresentation claim against the insurance agent who allegedly stated that the indemnity agreement did not include plaintiff’s personal property was affirmed.

In King v. Bradley, No. E2021-00261-COA-R3-CV, 2022 WL 678568 (Tenn. Ct. App. Mar. 8, 2022), plaintiff’s husband and step-son owned a commercial electrical contracting business. In conjunction with a work project, the business was required to obtain performance and payment bonds. Defendant was the insurance agent who assisted in obtaining these bonds, and in conjunction with getting the bonds, plaintiff, plaintiff’s husband, plaintiff’s step-son, and the business were required to sign an indemnity agreement. Plaintiff was not present when the indemnity agreement was to be signed, but she gave her husband verbal permission over the phone to sign her name. According to plaintiff, she told her husband that she did not care what he signed her name to “as long as we’re not putting up our personal stuff.” Plaintiff asserted that defendant was asked whether any personal property, as opposed to business property, was covered by the indemnity agreement, to which he responded that it was not. Plaintiff’s husband signed the indemnity agreement without reading it or having an attorney review it.

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Where a company had properly rejected uninsured motorist coverage for its fleet of vehicles in 2002, and the company submitted standard information for its 2011 policy renewal, the 2002 rejection remained in effect and uninsured motorist coverage was not part of the company’s automobile insurance policy.

In Hughes v. The Liberty Mutual Fire Insurance Company, No. E2020-00225-COA-R3-CV (Tenn. Ct. App. Dec. 30, 2021), plaintiff was the driver of a vehicle owned by a large healthcare company (HMA). Plaintiff was in an accident while driving an HMA vehicle, and he filed a personal injury suit and gave HMA’s insurer, defendant Liberty Mutual, notice of a potential uninsured motorist claim.

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Where plaintiff had no evidence that defendant took any action that contributed to him being knocked off a ladder while nailing a board to a window, summary judgment for defendant was affirmed.

In Malone v. Viele, No. E2021-00637-COA-R3-CV (Tenn. Ct. App. Dec. 27, 2021), plaintiff and defendant were friends who both had construction work experience. Defendant needed help nailing boards across a window on his cabin that was under construction, and plaintiff agreed to assist him. Plaintiff and defendant were both on ladders, and one would hold the lower end of the board while the other nailed the upper end of the board to the cabin. Plaintiff had placed his own ladder and was using his own hammer during the project. Plaintiff was nailing one board while the other end was being held at a lower diagonal by defendant, when after placing a few nails in the board, plaintiff hit the board again with his hammer and the board bounced back and knocked him off his ladder, causing serious injuries.

Plaintiff filed this personal injury suit, asserting that defendant’s negligence caused his injuries. During his deposition, plaintiff was asked what defendant was doing when the injury occurred, and plaintiff stated that defendant was “holding the lower end” of the board. When asked what defendant did “that caused the two-by-four to come out,” plaintiff responded that he did not know. During his own deposition, defendant stated that he was “just holding the board” at the time of the accident.

Where plaintiff’s property was destroyed by a fire caused by a lightning strike, emergency responders could not cross a bridge to access the property and extinguish the fire due to flooding, and plaintiff had recently asked the State to modify the bridge due to concerns about flooding, dismissal of this negligence case was affirmed, as the lightning strike was the sole proximate cause of plaintiff’s damages.

In A.B. Normal, LLC v. State of Tennessee, No. M2020-01390-COA-R3-CV (Tenn. Ct. App. Dec. 3, 2021), plaintiff owned a piece of property containing a home and hay fields. The property was located off a state highway and was only accessible via an easement bridge. In September 2018, plaintiff contacted the State about concerns regarding the easement bridge flooding during heavy rain, thereby making the property inaccessible. Several state employees were involved in inspecting the bridge in question, and they held a phone conference with plaintiff in late 2018, informing plaintiff that “there were no exigent circumstances or concerns for TDOT to address at that time.” During this call, plaintiff stated that it was concerned that emergency responders would not be able to access the property in an emergency.

Just two months later, in February 2019, lightning struck the property, causing a fire in the home. The bridge was flooded due to heavy rainfall. One firetruck was able to cross the bridge but then became immobilized, and later responders were not able to cross. When the fire department first arrived, only the bathroom was destroyed, but after making minimal progress in fighting the fire, the firefighters were instructed to retreat. The fire then destroyed the home and eight acres of farmland.

Although plaintiff labeled his complaint as a tort claim, the gravamen of the complaint was a dispute over “the amount, time and manner of payment of plaintiff’s pension plan benefits.” Plaintiff was therefore required to first present his claims to the pension board pursuant to the City’s Code of Ordinance, and thereafter was required to follow the judicial review provision laid out in the Uniform Administrative Procedures Act, Tenn. Code Ann. § 4-5-322, which grants exclusive jurisdiction of such reviews to the Chancery Court. Dismissal from the circuit court based on a lack of subject matter jurisdiction was thus affirmed.

In Best v. City of Memphis, No. W2021-0020-COA-R3-CV (Tenn. Ct. App. Sept. 15, 2021), plaintiff was a former firefighter who had initially been denied Line of Duty (LOD) disability benefits by the defendant City’s Pension Board. After plaintiff appealed the decision, an Administrative Law Judge determined that plaintiff was in fact entitled to benefits from defendant. The ALJ’s order was entered in May 2019.

In October 2019, plaintiff filed suit in the Circuit Court “alleging that the City delayed the payment of his LOD benefits, miscalculated the date from which back pay should begin, and improperly moved his official retirement date.” Plaintiff asserted claims for breach of contract, negligence, and negligent infliction of emotional distress. The trial court dismissed the breach of contract and emotional distress claim sua sponte, based on the City ordinance stating that participation in the retirement system did not create a contract, and based on Tenn. Code Ann. § 29-20-205(2), which states that “the City’s immunity from suit is not removed in cases of infliction of mental anguish.” The only remaining claim was the claim for negligence.

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Where the jury found the defendant not liable but also added a statement to the verdict that the defendant and others in the industry should look into safer practices, the verdict for defendant was affirmed. In Chase v. Ober Gatlinburg, Inc., No. E2020-00649-COA-R3-CV (Tenn. Ct. App. Aug. 20, 2021), plaintiff filed this negligence suit against defendant ski resort after being injured in a snowboarding accident. According to plaintiff, she attempted to avoid a collision with another skier and fell, sliding into “one of the posts in a fence marking the edge of the ski slope.” While the post furthest uphill was padded, the lower post that plaintiff fell into was a square 4×4 with no padding. Plaintiff asserted that the use of square, unpadded posts constituted negligence on defendant’s part.

At trial, defendant presented testimony from an expert on ski area operations, safety, and risk management. The expert stated that “Defendant’s fencing practices were consistent with, or exceeded, the general practices in the ski resort industry,” and he presented photos of at least three other resorts that used similar fencing.

While the jury was deliberating, it asked if could make a comment in addition to the reading of the verdict, which the trial court allowed after no objections from either sides’ counsel. The jury ultimately returned a verdict finding that defendant was not at fault, but added as a comment: “We, the jury, are in one accord that Ober and the ski industry should look into using materials for posts with rounded corners or more padding.” On appeal, the defense verdict was affirmed.

Where plaintiff only presented proof that his property was damaged during shipment but did not present any proof sufficient to allow the trial court to assess his damages, involuntary dismissal was affirmed. In Matthews v. UPS Store Center 3138, No. E2020-00255-COA-R3-CV (Tenn. Ct. App. June 25, 2021), plaintiff filed suit after his personal property was damaged during shipment. Plaintiff had taken a stereo receiver to defendant store to be shipped, and he purchased the packing materials recommended by the clerk. The store clerk packed the receiver, but plaintiff was later informed by the recipient that the receiver was damaged during the shipment.

Plaintiff filed suit against the UPS store and the clerk in general sessions court, where he won, but he appealed to the circuit court for a new trial. After plaintiff closed his proof, defendants moved for dismissal, which the trial court granted and the Court of Appeals affirmed.

The trial court granted dismissal based on plaintiff’s failure to present sufficient proof of his damages. Plaintiff argued that the trial court erred by excluding two affidavits from the recipient of the damaged package, as well as photographs of the damaged receiver. Without ruling on the admissibility of the excluded evidence, the Court ruled that dismissal was appropriate here. The Court explained:

Where the landlord misrepresented the state of a building’s roof at the time the lease was executed, knowing that it could not be quickly repaired and that previous repair attempts had failed, the trial court’s finding for the tenant on the negligent misrepresentation claim was affirmed.

In Pryority Partnership v. AMT Properties, LLC, No. E2020-00511-COA-R3-CV (Tenn. Ct. App. Mar. 10, 2021), landlord and tenant executed a lease agreement for a commercial warehouse with the understanding that the tenant would operate a factory/machine shop in the building. At the time the lease was executed, the tenant knew that the roof leaked, but the landlord had represented that the roof would be quickly repaired. When the roof was not repaired six months into the lease, tenant did not make the scheduled payment under the lease, and the landlord brought this suit for breach of contract. The tenant filed a counter-complaint for breach of contract and negligent misrepresentation, and the trial court found for the tenant on both claims, which the Court of Appeals affirmed.

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