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Strike One. You're Out!
Judges on the federal appellate courts have a tough job. They routinely face a wide range of legal issues where federal law is applicable. Those federal issues may have been addressed by any one of the other appellate courts or the hundreds of federal district judges and therefore the author of an opinion must wade through lots of law before reaching a decision in each case.
Federal judges also face a significant number of cases where state law applies, including the law of the various states in their circuits and conceivably from around the nation. Throw in an increasing caseload because of court vacancies and the risk of calling a ball a strike greatly increases.
That is exactly what happened to the Court of Appeals for the Sixth Circuit in Schultz v. Davis. On August 7, 2002 the Schultzes were visiting a home that was under construction and for sale when Mrs. Schultz was injured after sheetrock, which had been leaning against a wall, fell on her leg and ankle. Suit was filed against several parties and an answer filed by one of them named a nonparty, Smokey Mountain Material Inc. (Smokey), as an at-fault party. This answer was filed on July 10, 2003. The Schultzes promptly filed a motion to amend their complaint to sue Smokey. The motion was granted and the Schultzes sued Smokey on August 8, 2007, one year and one day after the original incident.
Smokey filed a motion to dismiss, saying that it was not sued within the applicable statute of limitations. The Schultzes responded and invoked the provisions of Tenn. Code Ann. Sec. 20-1-119, which, subject to certain limited exceptions, permits a plaintiff to add as a party defendant a nonparty identified to be at fault in an answer filed by an existing defendant. Smokey argued that the statute was inapplicable because the Schultzes knew of the existence of Smokey as a potential defendant within one year of the date of their loss. The Sixth Circuit Court of Appeals agreed, and affirmed a dismissal of the case against Smokey.
Respectfully, the Sixth Circuit Court of Appeals blew the call. The decision in this case was clearly controlled by Judge (now Justice) Koch's opinion in Townes v. Sunbeam Oster Co. Inc., which says that only two conditions need be satisfied for Tenn. Code Ann. Sec. 20-1-119 to apply: "[t]he first condition is that one of the defendants must name the comparative tort-feasor as one who caused or contributed to the injury or damage for which the plaintiff seeks recovery. The second condition is that the named comparative tort-feasor is not a party to the suit." Townes rejected any notion that even actual knowledge of the plaintiff or plaintiff's counsel of the conduct or identity of the potential party within the statute of limitations bars the application of Tenn. Code Ann. Sec. 20-1-119.
The Sixth Circuit suggested that Townes was incorrect, citing opinions in Doyle v. Frost and McNabb v. Highways Inc. Even a quick reading of Doyle reveals that (a) the statement of the Court concerning Tenn. Code Ann. Sec. 20-1-119 was mere dicta and (b) the Doyle opinion was issued before the Tennessee Supreme Court denied a Rule 11 application in Townes and ordered publication of the Townes opinion. It would be odd indeed that the Tennessee Supreme Court would order publication of Townes if it believed the opinion was (a) wrong or (b) inconsistent with an opinion it released just four days before it denied the Rule 11 application in Townes.
Similarly, the statement in McNabb used by the Sixth Circuit Court of Appeals in support of its holding is also dicta. In fact, McNabb actually cites Townes.
There is more. In McClendon v. Bunick, the Tennessee Court of Appeals for the Western Section considered the exact issue presented in Townes and reached the opposite result. The McClendon plaintiff filed a Rule 11 application and the Tennessee Supreme Court remanded the case for reconsideration in light of " you guessed it " Townes. (The Supreme Court remand was on September 24, 2001, ten weeks after the Doyle opinion.) The Western Section Court of Appeals got the message loud and clear and reversed itself, thus making it crystal clear that Townes was the law of the land. The Sixth Circuit opinion did not cite McClendon.
Finally, the Sixth Circuit did not cite, much less distinguish, the most recent case on Tenn. Code Ann. Sec. 20-1-119, State v. Austin, a Tennessee Supreme Court opinion decided eighty-four days before the release of Schultz. Austin also cited Townes and said that the statute "applies whenever a defendant's answer gives a plaintiff notice of the identity of a potential nonparty tortfeasor and alleges facts that reasonably support a conclusion that the nonparty caused or contributed to the plaintiff's injury." Although the express issue in Schultz was not discussed, the language used by the Tennessee Supreme Court and its citation to Townes speak volumes. Nothing in Austin implies that Sec. 20-1-119, intended to be a remedial statute, should be limited as suggested by Schultz.
Until the Tennessee Supreme Court says again what it has already said (by publishing Townes, remanding McClendon, and issuing Austin) and expressly rejects Schultz, those of us who represent tort plaintiffs in federal court will be haunted by the Schultz decision. When in state court, however, we can take some degree of comfort in yet another holding in Townes: "while we have utmost respect for the United States Court of Appeals for the Sixth Circuit, its interpretation and application of state law is not binding" in Tennessee state courts.
1. 495 F.3d 289 (6th Cir. 2007).
2. It is also respectfully submitted that the dismissal of another defendant was also in error. Space limitations prevent that issued from being addressed.
3. 50 S.W.3d 446, 452-53 (Tenn. Ct. App. 2001).
4. 49 S.W.3d 853 (Tenn. 2001).
5. 98 S.W.3d 649 (Tenn. 2003).
6. Doyle was released on July 9, 2001. The Rule 11 application in Townes was denied on July 13, 2001.
7. 98 S.W.3d at 654.
8. 2001 WL 536614 (Tenn. Ct. App. May 21, 2001).
9. McClendon v. Bunick, 2001 WL 1660845 (Tenn. Ct. App. Dec. 28, 2001).
11. 222 S.W.3d 354 (Tenn. 2007).
12. Id. at 358 (emphasis added).
JOHN A. DAY, of Day & Blair PC in Brentwood, practices tort law and commercial litigation. His newest book, Day on Torts: A Handbook for Tennessee Tort Lawyers 2008 is available for purchase at www.dayontorts.com.