Miscellaneous

October 8, 2018

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

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.

September 25, 2018

County Immune From Liability for Injury on Inmate Work Program

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

Tennessee law “grants counties that allow inmates to work on road details and other projects immunity from liability for injuries,” and that immunity overrides provisions of the GTLA.

In Trojan v. Wayne County, Tennessee, No. M2017-00415-COA-R3-CV (Tenn. Ct. App. July 23, 2018), plaintiff was an inmate in Wayne County jail and was working on a bridge as part of an inmate work program. While working, he spilled concrete onto his boots and feet and suffered chemical burns, which resulted in scarring. He brought suit against the county for negligence, arguing that immunity was removed under the GTLA. The trial court granted defendant county’s motion to dismiss, and the Court of Appeals affirmed.

Tenn. Code Ann. § 41-2-123(d)(2) states that, except in very specific circumstances, government entities shall not “be liable to any prisoner or prisoner’s family for death or injuries received while on a work detail, other than for medical treatment for the injury during the period of the prisoner’s confinement.” Plaintiff argued that this section was limited to prisoners described in another part of the statute, a group into which he did not fall, but the Court of Appeals disagreed.

September 21, 2018

Nuisance and Trespass Claims Dismissed

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

Where a pipe could be altered but the expense to do so would be “considerable” and there were no indications that any alterations were intended, a nuisance claim based on the pipe was considered to be a permanent nuisance, meaning that the statute of limitations was three years “from the time of the creation of the nuisance.” In addition, where a trespass claim involved complicated questions regarding water runoff and flow patterns and plaintiffs did not have a competent expert witness to testify as to causation, summary judgment for the defendant was appropriate.

In Ray v. Neff, No. M2016-02217-COA-R3-CV (Tenn. Ct. App. July 20, 2018), plaintiffs filed a claim for nuisance and trespass related to their adjacent neighbors’ installation of a pipe on their property. Plaintiffs claimed that the pipe was first placed in 2008, and that after extensive flooding in 2010, “changes to the pipe…modified the course of a creek” and caused water to flow directly towards their home, causing property damage.

September 12, 2018

Negligence Claim Preempted by Tennessee UCC

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

Where a claim for negligence against a bank fell within the parameters of the UCC, the common law negligence claim was preempted and summary judgment for defendants was affirmed.

In Mark IV Enterprises, Inc. v. Bank of America, N.A., No. M2017-00965-COA-R3-CV (Tenn. Ct. App. June 26, 2018), plaintiff sued defendant bank for aiding and abetting fraud and conversion, as well as for common law negligence. Plaintiff’s bookkeeper had embezzled money from plaintiff by taking checks written to plaintiff’s vendors and depositing them into her own personal account at defendant bank. Plaintiff alleged that defendant was negligent because the checks were not payable to the bookkeeper, many were not endorsed, and defendant bank had failed to safeguard against such issues when checks were deposited through its ATMs.

The trial court dismissed the conversion and fraud claims on a motion to dismiss, and granted summary judgment to the bank on the negligence claim based on its finding that the bank did not owe plaintiff a duty. The Court of Appeals affirmed, but on different grounds.

July 31, 2018

Police Dog Exception to the Tennessee Dog Bite Statute

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

When a Tenneseee state trooper was injured by a sheriff’s deputy’s police dog, his lawsuit against the owner of the dog was not statutorily precluded.

In Greenlee v. Sevier County, Tennessee, No. E2017-00942-COA-R3-CV (Tenn. Ct. App. April 26, 2018), plaintiff was a Tennessee State Trooper who had attempted to make a traffic stop and called for assistance when the suspect fled on foot. A Sevier County Sheriff’s Deputy was dispatched, along with his police dog. During the pursuit, the deputy and dog went under a house, and when the dog emerged first, he attacked and injured plaintiff.

July 16, 2018

Failure to Warn Claim Against Drug Manufacturer Rejected

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

A claim that a drug manufacturer failed to properly warn under Tennessee law based on its failure to include a medication guide required by FDA regulations is impliedly preempted by federal law.

In McDaniel v. Upsher-Smith Laboratories, Inc., No. 2:16-cv-02604 (6^th Cir. June 29, 2018), plaintiff brought suit after her husband died after taking medication manufactured by defendant. Plaintiff claimed that defendant’s “failure to ensure that a Medication Guide accompanied the prescription led to her husband ingesting—and dying because of—a drug that wasn’t meant for him.” Plaintiff’s husband had been prescribed a generic form of a medication intended as a “last resort for patients suffering from ventricular fibrillation and ventricular tachycardia.” The husband, however, was suffering from non-life threatening atrial fibrillation. Plaintiff asserted that because defendant did not include the required medication guide, her husband “was unaware that only adults with life-threatening heartbeat problems who had unsuccessfully sought alternative treatments should take the drug.” He thus suffered from a serious lung side effect and died.

July 13, 2018

Intentional Infliction of Emotional Distress Claim Barred by Worker’s Compensation Claim

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

A plaintiff cannot bring a separate intentional infliction of emotional distress claim based on a work-related incident for which he has already pursued a workers’ compensation claim.

In Byrd v. Appalachian Electric Cooperative, No. E2017-01345-COA-R3-CV (Tenn. Ct. App. April 25, 2018), plaintiff alleged that an “interrogation” by his supervisors at work caused him chest pain, anxiety, and other symptoms. He averred that when he reported to work one morning, he was called to a meeting with two supervisors, who questioned him about his recent marriage to another employee’s relative. He stated that he was told he would have to either resign or be terminated per company policy, and that the meeting lasted three hours. At the end of the meeting, plaintiff alleged that one of the supervisor’s spoke with an attorney, who reviewed company policy and determined that there had been no policy violation, at which time plaintiff was allowed to return to work.

June 14, 2018

Duty of Care Exists Even in Dangerous Sporting Activities

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

Even when a person chooses to participate in a risky sport, he or she does not “assume the risk of whatever dangerous conduct, however unreasonable, is engaged in by the [other] participants.” Instead, in a negligence case, the reasonableness of the defendant’s conduct will be determined based on the circumstances of the case.

In Crisp v. Nelms, No. E2017-01044-COA-R3-CV (Tenn. Ct. App. March 28, 2018), plaintiff was the surviving spouse of a bicycle rider who died following a cycling accident. At the time of the accident, decedent and four other cyclists were riding in a paceline, which is when the riders proceed in a straight line close together with the front rider setting the pace. Plaintiff alleged that the rider in front suddenly slowed, causing the second rider to bump wheels with the front rider. The second rider then went down, and decedent was unable to avoid the accident, hitting the second rider and being thrown off his bike. Decedent “was rendered quadriplegic by the wreck,” and died a few months thereafter.

Plaintiff filed a negligence suit against the first and second rider, who both filed motions for summary judgment, which the trial court granted. The trial court ruled that “paceline cycling is inherently dangerous and that Decedent was at least 50% at fault for his accident.” In its order, the trial court stated that “the ultimate conclusion is that these types of accidents are foreseeable in bicycle racing, especially this type of close racing,” and that “these parties chose to engage in this activity.” On appeal, summary judgment was reversed.