News

Collateral Source Rule Examined in New TBJ

In the December Tennessee Bar Journal, Nashville lawyer Bill Walton writes why he believes the Collateral Source Rule should probably be reexamined. President Jackie Dixon talks with some former lawyer-legislators and studies the sacrifice a person makes to run for office, but also the need for more lawyers to serve. There is a lot more in this issue, including civil jury trials, banking and estate planning. Read it online or look in the stack of your weekend mail for the printed copy.

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No Bad Faith by TFMIC in Denying Bank's Fire Claim for Failure to Notify of Foreclosure

U.S. BANK, N.A., AS SERVICER FOR THE TENNESSEE HOUSING DEVELOPMENT AGENCY v. TENNESSEE FARMERS MUTUAL INSURANCE COMPANY
Court: TN Court of Appeals

Attorneys:

Charles L. Trotter, Jr., Huntingdon, Tennessee, for the appellant, Tennessee Farmers Mutual Insurance Company.

Michael F. Rafferty, Memphis, Tennessee, for the appellee, U.S. Bank, N.A., as Servicer for Tennessee Housing Development Agency.

Judge: FARMER

U.S. Bank, N.A. (“Bank”) had a mortgage on a residence which was insured against fire loss by Tennessee Farmers Mutual Insurance Company (“Tennessee Farmers”). When the owner of the residence failed to pay the mortgage, the Bank commenced foreclosure proceedings. Thereafter, the owner filed for bankruptcy which stayed the foreclosure proceedings. After the residence was destroyed in a fire, the Bank filed a claim to recover the insurance proceeds. Tennessee Farmers refused to pay the claim. As a result, the Bank filed suit against Tennessee Farmers alleging breach of contract, bad faith refusal to pay an insurance claim, and unfair or deceptive practices under the Tennessee Consumer Protection Act (“TCPA”). The trial court granted partial summary judgment to the Bank, concluding that the Bank's failure to give Tennessee Farmers notice of the foreclosure proceedings did not invalidate the insurance coverage. On appeal to this Court, we reversed, finding that the Bank’s commencement of foreclosure proceedings amounted to an increase in hazard under the policy and the Bank’s failure to provide notice precluded coverage. After granting the Bank’s application for permission to appeal, the Supreme Court reversed the judgment of this Court, and held that commencement of foreclosure proceedings did not constitute an increase in hazard under the terms of the insurance policy or the applicable statutory provisions, and therefore, the Bank was not required to give notice to Tennessee Farmers. U.S. Bank, N.A. v. Tenn. Farmers Mut. Ins. Co., 277 S.W.3d 381 (Tenn. 2009). Subsequently, on remand from the Supreme Court, the trial court entered a judgment in favor of the Bank for the amount due on the mortgage plus accrued interest. The trial court further awarded the Bank attorney’s fees and costs based on its finding that Tennessee Farmers’ interpretation of the policy, that the Bank was required to provide them with notice of the commencement of foreclosure proceedings, amounted to bad faith and an unfair act or practice under the TCPA. After thoroughly reviewing the record, we reverse and remand.

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Excessive Delay in Prisoner Release Subjects County to Liability for Jail Assault

KENNETH E. KING v. ANDERSON COUNTY, TENNESSEE
Court: TN Court of Appeals

Attorneys:

Jonathan Swann Taylor, Knoxville, Tennessee, for the appellant, Anderson County, Tennessee.

Bruce D. Fox and John A. Willis, Clinton, Tennessee, and Ronald C. Koksal, Knoxville, Tennessee, for the appellee, Kenneth E. King.

Judge: SUSANO

Kenneth E. King was arrested for driving on a revoked license. He was put in a cell with several violent criminals. At his arraignment, the court ordered him released. The person charged with processing the release delayed his release by simply doing nothing. While awaiting his release, Mr. King was assaulted by one of his cellmates. He sustained serious injuries, including partial loss of vision in one eye. He filed this action against Anderson County (“the County”). After a bench trial, the court found the County 55% at fault and King 45% at fault for provoking the assault. It determined that the total damages were $170,000 reduced to $93,500 to account for King’s comparative fault. The County appeals. We affirm.

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Western Section Clarifies that Settlement Conference Agreements are Binding

PNC MULTIFAMILY CAPITAL INSTITUTIONAL FUND XXVI LIMITED PARTNERSHIP, ET AL. v. CARL MABRY
Court: TN Court of Appeals

Attorneys:

Venita Marie Martin, Memphis, Tennessee, for the appellant, Carl Mabry.

Robert L. Crawford and Joseph B. Reafsnyder, Memphis, Tennessee, and Charles L. Perry, Dallas, Texas, for the appellees, PNC Multifamily Capital Institutional Fund XXVI, Limited Partnership; PNC Multifamily Capital Institutional Fund XXX, Limited Partnership; PNC Multifamily Capital Institutional Fund XXI, Limited Partnership; Columbia Housing SLP Corporation; Eagles Landing Apartments, L.P.; April Woods Apartments, L.P.; and Harmony Woods Apartments, L.P.

Judge: STAFFORD

Appellant takes exception to the trial court’s order, enforcing a settlement agreement. Following a judicial settlement conference, the parties signed a written agreement, which contemplated the execution of more formal settlement documents. When the formal documents were presented to Appellant, he refused to sign. Upon Appellees’ motion, the trial court enforced the settlement and Appellant appeals. Discerning no error, we affirm.

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Summary Judgment is Reversed Due to Misapplication of Both TRE 702 and Locality Rule

HIRLEEN NEVELS v. JOSEPH CONTARINO, M.D. ET AL.
Court: TN Court of Appeals

Attorneys:

Eileen M. Parrish, Nashville, Tennessee, for the appellant, Shirleen Nevels.

Robert M. Burns and C. Mark Harrod, Nashville, Tennessee, for the appellee, Joseph Contarino, M.D.

Brian Essary, Darrell Gene Townsend, and Alan Stuart Bean, Nashville, Tennessee, for the appellee, Hillside Hospital, LLC.

Judge: BENNETT

The trial court dismissed this medical malpractice claim on the defendants’ motion for summary judgment and motion to dismiss, after excluding the testimony of the plaintiff’s expert witness. Because the trial court erred in its application of the locality rule and Rule 702 of the Rules of Evidence, we reverse.

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Reside There?? Not if That Means This Loss Would Be Excluded ...

COTTON STATES MUTUAL INSURANCE COMPANY v. JAMI McNAIR TUCK, ET AL.
Court: TN Court of Appeals

Attorneys:

David L. Franklin, Chattanooga, Tennessee, for the appellant, Cotton States Mutual Insurance Company

J. Allen Brinkley, Derek W. Simpson, Huntsville, Alabama, for the appellees, Jamie McNair Tuck, et al.

Judge: HIGHERS

An insurance company filed a declaratory judgment action seeking a declaration that mother and child were residents of the insured’s household, and therefore, that coverage for the death of the child was excluded by the relevant homeowner’s insurance policy. The chancery court found that mother and child were not residents of the insured’s household at the time of the child’s death, and we affirm.

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Lawmakers Issue Subpoena for Meningitis-linked Pharmacy Director

Congressional lawmakers have issued a subpoena for the director of the Massachusetts pharmacy linked to the deadly meningitis outbreak, the Elizabethton Star reports. The subpoena came after a lawyer for Barry Cadden, co-founder of New England Compounding Center --  where the contaminated steroid shots were distributed from -- told lawmakers he would not voluntarily attend a congressional hearing.

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Summary Judgment for Wal-Mart is Reversed Where Impaired Customer Hurts Another Parking Lot Patron

JOLYN CULLUM, ET. AL. v. JAN McCOOL, ET. AL.
Court: TN Court of Appeals

Attorneys:

Amelia C. Roberts, Chattanooga, Tennessee, for the appellants, Jolyn Cullum and Andrew Cullum.

G. Andrew Rowlett and Behnaz Sulkowski, Nashville, Tennessee, for the appellee, Wal-Mart Stores East, LP.

Judge: MCCLARTY

This is a negligence case in which Jolyn Cullum and Andrew Cullum sued Jan McCool, William H. McCool, and Wal-Mart for injuries arising in a Wal-Mart parking lot. Wal-Mart filed a motion to dismiss, alleging that the Cullums had failed to state a claim upon which relief could be granted. The trial court dismissed the suit against Wal-Mart. The Cullums appeal. We reverse the decision of the trial court and remand the case.

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Supreme Court Considers Limitations on Class-Action Suits

The Supreme Court appears divided on two cases limiting class-action lawsuits against biotech company Amgen Inc. and cable provider Comcast Corp. Class actions increase pressure on businesses to settle suits because of the cost of defending them and the potential for very large judgments. Amgen and Comcast are seeking requirements for plaintiffs to prove more of their case earlier in the process in order to reduce the number of class-action suits. The court should decide both cases by June. The Memphis Daily News has the story. 

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UM Carrier's Right to Defend in its Own Name Affirmed by East Section--Along with Finding of No Physical Contact

SHERRY HUTSON v. SAFE STAR TRUCKING ET AL.
Court: TN Court of Appeals

Attorneys:

Thomas D. Dossett, Kingsport, Tennessee, for the appellant, Sherry Hutson.

S. Curtis Rose, Kingsport, Tennessee, for the appellee, Tennessee Farmers Mutual Insurance Company.

Judge: SUSANO

In this case, Sherry Hutson filed a complaint in which she alleged her vehicle was struck by a tractor-trailer (“the tractor”) that left the scene of the accident. She seeks to recover under the uninsured motorist (“UM”) provisions of a policy providing coverage to the vehicle she was driving. The jury found that no “actual physical contact ha[d] occurred between” the plaintiff’s vehicle and the vehicle that left the scene. She appeals. We affirm.

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Rape by Private Probation Officer Not Foreseeable by County That Failed to Insure Proper Licensure, Per Easter Section

CANDACE YOUNG v. WASHINGTON COUNTY, TENNESSEE
Court: TN Court of Appeals

Attorneys:

Tony Seaton and Robert Bales, Johnson City, Tennessee, for the appellant, Candace Young.

John Rambo, Jonesborough, Tennessee, for the appellee, Washington County, Tennessee.

Judge: MCCLARTY

The plaintiff, a probationer, charged Washington County with negligent oversight and supervision, after she was sexually assaulted and raped by a private entity’s probation officer. The trial court ruled in favor of the county, and the plaintiff appeals. We affirm the judgment of the trial court.

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"The King Can (Still) Do No Wrong..." the Western Section Rules in GTLA Case

LORI GREGORY, IN HER CAPACITY AS PERSONAL REPRESENTATIVE OF THE ESTATE OF JAMES BALLENTINE v. METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY
Court: TN Court of Appeals

Attorneys:

John E. Herbison, Clarksville, Tennessee, for the Plaintiff/Appellant Lori Gregory, in her capacity as personal representative of the Estate of James Ballentine

Saul A. Solomon, Director of Law, and Andrew D. McClanahan, James E. Robinson, and R. Alex Dickerson, Assistant Metropolitan Attorneys, for the Defendant/Appellee Metropolitan Government of Nashville and Davidson County

Judge: KIRBY

This is a negligence claim under Tennessee’s Governmental Tort Liability Act. The decedent was involved in a serious vehicular accident. A witness called the defendant municipality’s 911 emergency communications center for help. The 911 responders went to the accident scene and transported the decedent to a local hospital, where he died. The decedent’s mother filed this lawsuit against the municipality, alleging that the 911 operator was negligent in failing to summon emergency personnel from a neighboring county, because those responders were closer to the scene of the accident and could have provided aid to the decedent sooner. The municipality filed a motion for judgment on the pleadings, arguing inter alia that it owed no duty to summon aid outside of its jurisdiction. The trial court granted the motion, and the plaintiff now appeals. We affirm.

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Four Policies, Two Drunken Wrecks and a Busted Up Consignment Store Make for an Interesting Coverage Read

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY ET AL. v. SOUTHERN TRUST INSURANCE COMPANY
Court: TN Court of Appeals

Attorneys:

Cynthia D. Hall and H. Richard Marcus, Chattanooga, Tennessee, for the appellant, Southern Trust Insurance Company

Joseph Bernard Klockenkemper, II, Nashville, Tennessee, for the appellees, State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company

Judge: BENNETT

This is a dispute between insurance companies over coverage related to a car accident. We conclude that the trial court erred in finding that the driver’s auto policy covered damages resulting from the independent acts of negligence of the car owner.

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McMinnville Widow Sues after Wife's Meningitis Death

A McMinnville widower has filed a lawsuit against Massachusetts-based New England Compounding Center after his wife died of meningitis from an infected steroid shot produced by the company, WSMV.com reports. His lawyer is requesting $50 million in damages. According to recent updates, the Center for Disease Control has confirmed 297 cases of fungal meningitis in 16 states with 23 deaths. The Nashville City Paper reports on other meningitis suits.

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Meningitis-Related Suit Filed in Columbia

A Maury County couple is seeking $12.5 million in a meningitis-related lawsuit filed Friday in Columbia. Basil McElwee received steroid injections at St. Thomas Outpatient Neurosurgical Center in Nashville on Aug. 20 and Sept. 4, became seriously ill and is currently hospitalized there, the lawsuit says. Columbia attorney Patrick Carter is representing the McElwees in their suit against New England Compounding Pharmacy, manufacturer of the injectable steroid.

Flood Lawsuits Likely Hard to Win

Several Middle Tennessee companies are suing for more than $350 million in damages from the May 2010 flood, but they have “a tough road ahead of them,” according to Paul Figley, a law professor who previously was a top Department of Justice official. Gaylord Entertainment Corp., Gibson Guitar, Nissan North America and several other companies sued the government earlier this year accusing the U.S. Army Corps of Engineers and National Weather Service of acting negligently before and during the flood. The government has asked the judge to dismiss the suits, claiming immunity under a 1928 law and the “discretionary function exception,” a provision in tort law that gives agencies legal protection when they make discretionary decisions based on policy considerations. The Tennessean has more.

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Meningitis Suit Filed in Nashville

The Nashville law firm of Kinnard, Clayton and Beveridge yesterday filed what it says is the first meningitis-related suit in the state stemming from contaminated steroid injections at area hospitals. The plaintiff is a 71 year-old Hendersonville woman who says she was infected with fungal meningitis in August after receiving a steroid injection at Saint Thomas Hospital. The suit seeks $15 million for medical expenses and pain and suffering. Randall Kinnard, a principal at the firm, said the lawsuit is the first of at least a dozen more he plans to file on behalf of area victims. The Tennessean reports on the case

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Legal Battle May be Brewing Over Malpractice Caps

Legal opposition to the Tennessee Civil Justice Act of 2011 has been filed in federal court, arguing that Gov. Bill Haslam’s landmark tort law is unconstitutional The Tennessean reports. Nashville lawyer David Randolph Smith, who led the legal fight against the guns-in-bars law and the English-only ballot measure in the state, filed the suit. Federal Judge Kevin H. Sharp could either rule on the issue or send the question to the state Supreme Court.

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First Federal Suit Filed in Meningitis Outbreak

According to most recent reports, 15 new cases of fungal meningitis were announced today, bringing the nationwide total to 184. As that number continues to grow, a group of plaintiffs have filed the first federal class action suit against the Framingham, Mass., pharmaceutical company alleged to be the source of the contaminated spinal steroids. The suit, filed in a U.S. District Court in Minnesota, charges that the company “had a duty to use reasonable care in designing and manufacturing the methylprednisolone acetate steroid doses such that they are not unreasonably dangerous.” The Tennessean has the story

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Western Section Reverses Suggestion of Death Dismissal, Preserving Minor's Med Mal Cause of Action

ERIC HOLLEY, Individually and on behalf of SUSIE HOLLEY, Deceased v. MELROSE BLACKETT, M.D.
Court: TN Court of Appeals

Attorneys:

Al H. Thomas, Aaron L. Thomas, Memphis, Tennessee, for the appellant, Felicia Corbin Johnson, next friend and/or attorney ad litem of M.H., daughter of Eric Holley, deceased.

Darrell E. Baker, Jr., Deborah Whitt, M. Jason Martin, Memphis, Tennessee, for the appellee, Melrose Blackett, M.D.

Judge: HIGHERS

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Life Insurer Pays Benefits Twice After Relying on 'Woefully Inadequate' Order of Guardianship

ERIK HOOD v. CASEY JENKINS, ET. AL.
Court: TN Court of Appeals

Attorneys:

Michael S. Kelley, Knoxville, Tennessee, for the appellant, Old Line Life Insurance Company of America.

Bruce T. Hill, Sevierville, Tennessee, for the appellee, Erik Hood.

Judge: MCCLARTY

This appeal involves a claim for breach of a life insurance contract issued by Old Line. Father named his son, a minor, as the beneficiary of his life insurance policy. When Father died, the proceeds of the policy were issued to minor’s older sister, who depleted the funds. Beneficiary filed suit against Sister and Old Line, alleging that Sister misappropriated the life insurance proceeds and that Old Line erroneously awarded the proceeds to Sister without proper documentation. A default judgment was entered against Sister. Following a trial on Beneficiary’s claim against Old Line, the court ordered Old Line to re-issue a portion of the proceeds to Beneficiary. Old Line appeals. We affirm the decision of the trial court.

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Haslam: Workers Comp Reform Still Under Discussion

Gov. Haslam said this week that he has not made a final decision about what to include in a workers’ compensation reform package and is weighing all options, but revealed that he is seriously considering removing disputes from the court system. Outside consultants recently submitted a report to the Tennessee Department of Labor and Workforce Development suggesting the same idea. The Nashville Business Journal has the story.

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Report Calls for ‘Structural Change’ to Workers' Comp

Gov. Bill Haslam reportedly is gearing up for workers' compensation reform, saying he plans to propose legislation on the issue while drawing on a new report that makes a range of recommendations. The report, just released by the Tennessee Department of Labor and Workforce Development, recommends a "structural" change to the state's system, largely moving it out of the courts and altering a range of legal definitions. The Nashville Business Journal has more.

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Attorneys Take Issue With Candidate Criticism

Two Nashville attorneys have written a letter to the editor critical of a Tennessean article on Tennessee senatorial candidate Phillip North and his law practice. Greg Ramos and Mike Jameson take issue with a statement from Tennessee GOP Executive Director Adam Nickas, who referred to North as “a trial lawyer who is in the business of killing business with frivolous lawsuits.” Ramos and Jameson note that North’s legal practice is involved in the “defense” of lawsuits against individuals and businesses, the opposite of Nickas’ statement. “Phillip protects the reputations of individuals and businesses, including hundreds of physicians and health care providers across Middle Tennessee,” the pair write.

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Instructions for TIPS Case Opinions

Dear TBA Tort & Insurance Law Section Member:

The TBA Tort & Insurance Law Section is excited to announce new additions to the TIPS Case Opinions that are sent out by the section.  In addition to having access to the .PDF version of the case, you will now have the opportunity to comment on the cases. 

To comment on a case, please review the following steps:

1.     You must be a TBA Tort & Insurance Law Section Member to comment.  If you are not a member, please contact the TBA about joining the section or go to https://www.tba.org/user/

2.     You must be logged-in to your TBA Account to comment: http://www.tba.org/sections-non-logged-in.  If you have difficulty logging-in to your account, please contact the TBA.

3.     In the TIPS Opinions Email locate the link at the bottom of the case titled “Comment on Article” and click on the link.  You will be taken directly to the case to comment. 

4.     Enter a “Subject” for your comment.  This is not a required field but could be helpful to others when reviewing the comments.

5.     Enter your “Comment”.  This field is required.   

6.     You will automatically be subscribed to receive notifications when others comment on the case.  If you do not wish to receive notifications, please click on “Notifications” and check the box “Do not send notifications for this update”.

7.     Click “Preview” to review your post before saving.  If you do not like your post, please make changes and click “Preview” again until you are satisfied. 

8.     If you are satisfied with your post, please click “Save” to submit your post. 

You will also have the opportunity to read comments posted by other section members as well as comment on their posts.

We hope you enjoy this new feature offered with the TIPS Opinion.  Please send all questions and comments to Christy Gibson at cgibson@tnbar.org.     

Thanks,

Jim Wright

TBA Tort & Insurance Chair

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