Chattanooga, Tennessee, Personal Injury Trial Lawyers
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Court of Appeals of Tennessee. STOPHEL & STOPHEL, P.C., Plaintiff/Appellant, v. Morton J. KENT, Defendant/Appellee. No. 03A01-9710-CH-00452. March 17, 1998. Robert P. Rayburn, Chattanooga, for Appellant. Marvin Berke, Chattanooga, for Appellee. OPINION INMAN *1 This is an action in Chancery to recover attorney fees for the representation of the debtor in a Chapter 11 reorganization. Canton 67, LTD., a partnership ["debtor"], owned a television station in Ohio. It filed a petition for reorganization in July, 1987, [FN1] acting through one of its general partners, the defendant. FN1. The partnership, or variations of it, owned nine television stations around the country, all of which filed separate petitions simultaneously. The plaintiff law firm was employed by the debtor with the approval of the bankruptcy court. Five years and eight proposed reorganization plans later, the debtor and its creditors filed a "Joint Motion for Approval of Comprehensive Compromise and Settlement" in the United States Bankruptcy Court. This prolix motion recites that all of the significant issues are resolved "if the Court approves." It painstakingly describes the settlement of each of the nine (9) cases, and with respect to the settlement of the Canton 67 LTD. case it provides: "The assets of the Canton Station shall be transferred to ... Morton J. Kent ... and all claims against the Canton Station [FN2] shall be settled, dismissed and released in accord with the terms of this settlement. FN2. No plan of reorganization was ever approved for the Canton Station. The cash on hand at the Canton Station shall be used to satisfy the administrative expense claims in the Canton case. The $25,000.00 payment ... shall be distributed on a pro rata basis as payment in full for all holders of unsecured claims ... all assets of the Canton Station including all cash in excess of the amount necessary to pay administrative expenses [FN3] shall be transferred to Morton J. Kent, free and clear of all liabilities and claims of creditors ..." FN3. Which includes attorney fees. 11 U.S.C.S. § 503. By order dated December 16, 1991, the Bankruptcy court "authorized and directed the debtor to immediately pay to [Stophel & Stophel] ... $21,868.69 as final compensation ... in this case." The debtor's cash on hand, and presumably the $25,000.00 purchase price, were distributed on an approved pro rata basis to the unsecured creditors. The debtor's attorney's fees inexplicably were not paid, and the attorneys then looked to the purchaser to pay the fees, in aid of which the bankruptcy court issued an order directing Mr. Kent to show cause why he should not be liable for the fees. After notice and hearing, this order was dismissed, without prejudice. The record does not reveal why the debtor did not pay the fees. Neither does the record reveal why the bankruptcy court declined to order Mr. Kent to do so. According to the briefs, the bankruptcy court invited the plaintiff to seek relief in the Chancery Court, since Mr. Kent "in good conscience should pay the debtors fees" in view of his alleged great good fortune in acquiring an asset for about five (5) percent of its value. This invitation was accepted, but the Chancellor did not oblige, holding that he could not "give effect to the rulings of the bankruptcy court." The plaintiff argues that, as purchaser of the assets of the debtor, Mr. Kent thereby agreed to pay the fees, or alternatively, that as a general partner in the Canton 67 LTD., he was personally liable for the fees. *2 We do not agree with either theory. The record does not support the contention that Mr. Kent agreed to pay the debtor's attorney fees, and no order in the bankruptcy proceeding required him to do so. That he allegedly received a windfall is irrelevant, aside from the fact that this singular argument is likely inconclusive for any purpose. It would be a stretch to conclude that the host of creditors, including a network, would approve the sale of the debtor's asset for five percent of its value. The alternative theory of recovery is based on a generalized reference to the Uniform Partnership Law. The appellant cites us to no authority for its argument that a general partner will be held liable for the debts and obligations of a partnership under the circumstances of this case. But even so, the appellee argues, the partnership was dissolved by the bankruptcy in 1987, four years before the adjudication of the fees. Moreover, according to the appellee, the settlement and agreement released the defendant from all claims. The record does not reveal why the bankruptcy court declined to assess the fees against Mr. Kent, or, as it were, declined to consider doing so. The court admittedly had jurisdiction to do so. Perhaps it was because Mr. Kent was not the debtor, or because the plaintiffs did not represent him, or because the fees had already been assessed against the debtor, or because the orders were inadequately drawn, or because the facts did not justify the imposition on Mr. Kent of the fees, or because the "Comprehensive" Settlement released him, or posed an insurmountable barrier. The Chancellor appeared to be sympathetic, but concluded that "he could not give effect to the rulings of the bankruptcy court." Our review of the findings of fact made by the trial Court is de novo upon the record of the trial Court, accompanied by a presumption of the correctness of the finding, unless the preponderance of the evidence is otherwise. Tenn.R.App.P., Rule 13(d). There is no presumption of the correctness of the decision of the trial Court on a question of law. NCNB Nat'l. Bank v. Thrailkill, 856 S.W.2d 150 (Tenn.Ct.App.1993). We cannot find that the evidence preponderates against the judgment, which is affirmed at the costs of the appellant. GODDARD, P.J., and FRANKS, J., concur. DISSENTING OPINION Plaintiff is a law firm who sued in Chancery Court to recover fees for legal services performed in the Bankruptcy Court at Chattanooga. The Chancellor, at the conclusion of the plaintiff's proof, dismissed plaintiff's action pursuant to Rule 41.02(2). I believe that plaintiff has shown a "right to relief" under the Rule and the cause should be reinstated and remanded to the Trial Court where the defendant may offer evidence on the issues before the Court. At trial, plaintiff advanced two theories for recovery, 1. that defendant was liable for the attorney's fees as a general partner of his partnership under the Tennessee Partnership law, and 2. that as purchaser of the assets of Canton 67, LTD., he agreed to pay all the administrative defense claims in the case. *3 I agree with the majority that defendant would not be liable under plaintiff's partnership theory, but the evidence on the remaining issue requires the Trial Court to render judgment following any evidence offered up on remand. The record shows that the bankruptcy Judge approved an adjudicated plaintiff's fee sued for in this action as proper in amount and due to be paid as an administrative expense in the bankruptcy proceeding. When the fees were not paid plaintiff sought to hold defendant in contempt in the Bankruptcy Court for non-payment. The bankruptcy Judge refused to conduct a contempt hearing, and dismissed the action without prejudice, indicating that plaintiffs should pursue their remedy against defendant in an independent action. Under all of the circumstances, the bankruptcy Judge had broad discretion as to whether to allow a contempt application to be used as a vehicle to collect attorney's fees. The Chancellor clearly had subject matter jurisdiction of this dispute, and with due deference to the Chancellor, he should rule on the issues presented after all the evidence is heard. [FN1] FN1. The Chancellor in his final ruling said: The matter is sufficiently complex that this Court cannot contemplate all the ramifications, of all the fees and all of the matters that must have gone on with eight different entities such as this. Consequently, the Court is going to dismiss this matter and I am going to tax the costs against the defendant. In the bankruptcy proceeding, a Joint Motion for Approval of Comprehensive Compromise and Settlement was filed in which defendant joined. As to the Canton Station asset ultimately transferred to defendant's interest, the proposal provided: The assets of the Canton Station shall be transferred to new media or Morton J. Kent, as New Media and Morton J. Kent shall designate, and all claims against the Canton Station and Morton J. Kent shall be settled, dismissed, and released in accordance with the terms of this settlement. The cash on hand at the Canton Station shall be used to satisfy the administrative expense claims in the Canton case, the $25,000.00 payment made by New Media shall be distributed on a pro rata basis as payment in full to all holders of unsecured claims ... all assets of the Canton Station, including all cash in excess of the amount necessary to pay administrative expenses, shall be transferred to New Media or Morton J. Kent, or both, as provided above, free and clear of all liabilities and claims of the creditors, except and only in the obligations to pay for ongoing programs as specified above. (Emphasis added). Defendant also signed another document filed in the Bankruptcy Court entitled "Debtor's 8th Amended and Restated Plan of Reorganization" which provided in pertinent part: All administrative expense claims shall be paid out of the cash accumulated by the debtor prior to the transfer to Mr. Kent. All cash of the debtor in excess of the amount necessary to pay administrative expense claims shall become the property of Mr. Kent, in accordance with the terms of the joint motion. The Bankruptcy Court entered an order approving the Comprehensive Compromise and Settlement on August 31, 1900, prior to the entry of the Order approving final compensation to plaintiffs on December 16, 1991. *4 Defendant's affidavit in the record states that at the time of purchase of the Canton assets, that the cash on hand was $77,422.63. Since the actual transfer of the assets was prior to plaintiff's fees having been finally established in the Bankruptcy Court, the defendant takes the position that he had no obligation to subsequently pay these fees. I do not agree. 11 U.S.C.A. § 503 states in pertinent part: Allowance of Administrative Expenses. (a) An entity may timely file a request for payment of administrative expenses, or may tardily file such a request if permitted by the Court for cause. (b) After notice and a hearing, there shall be allowed administrative expenses other than claims allowed under § 502(f) of this title, including-- ... (4) reasonable compensation for professional services rendered by an attorney or an accountant of an entity whose expenses is allowable under paragraph (3) of this subdivision, based on the time, the nature, the extent, and the value of such services, and the cost of comparable services other than in a case under this title and reimbursement for actual necessary expenses incurred by such attorney or an accountant. Plaintiff's attorney fees are administrative expenses, payment of which are required under the Bankruptcy Code and were found reasonable and owing by the bankruptcy Judge. When the bankruptcy Judge approved the settlement, he effectively ordered all administrative expenses be paid from "the cash accumulated by the debtor". The defendant conceded there was ample cash on hand to pay all administrative expenses at the time of transfer. He did not take this cash free of administrative expenses, only free of the claims of creditors. The evidence shows that defendant and his interest received the "cash accumulated" with plaintiff's claim for administrative expenses pending. I would enter judgment for plaintiff for its fees unless upon remand defendant establishes an affirmative defense to payment of these fees. 1998 WL 156905 (Tenn.Ct.App.)
Court of Appeals of Tennessee. Janet PHILLIPS, Individually and in behalf of the Estate of James Phillips, Plaintiff-Appellee, WATKINS MOTOR LINES, INC., and Michael J. Bartholomew, Defendants-Appellants. No. 03A01-9709-CV-00428. July 30, 1998. Hamilton County, Hon. Robert M. Summitt, Judge. David L. Franklin of Chattanooga for Appellants. Marvin Berke of Chattanooga for Appellee. OPINION HOUSTON M. GODDARD, P.J. *1 Janet Phillips, individually and on behalf of the estate of her husband, James Phillips, sues Watkins Motor Lines, Inc., and its employee, Michael J. Bartholomew, for injuries received by her and the death of herhusband as a result of being struck by an automobile being operated by Michael J. Bartholomew while crossing Ringgold Road in Chattanooga. As to Mrs. Phillips' claim the jury found both she and Mr. Bartholomew were 50 percent at fault. As to Mr. Phillips' claim the jury found Mr. Phillips was 49 percent at fault and Mr. Bartholomew 51 percent. It further awarded damages in the amount of $300,000 for Mr. Phillips' death. The Trial Judge, in accordance with the Tennessee Rule of Comparative Negligence, dismissed Mrs. Phillips' claim, a determination which she has not appealed, and reduced the jury verdict as to the estate to $153,000. On post-trial motion he also ordered discretionary costs of $1523 incident to the taking of a doctor's deposition relative to the reasonableness of a hospital bill, and $1007.90 incident to a video tape deposition of a police officer relative to his accident report. The Defendants' appeal raises two issues: ISSUE I Did the trial court err in overruling Defendant's Motion to Enter Judgment in Accordance With Motion For Directed Verdict and/or For A New Trial? ISSUE II Did the trial court err in ordering defendants to pay for the costs incurred by plaintiffs in proving the bill of Erlanger Hospital, and in proving certain measurements that were contained on the police report? Upon viewing the evidence in a light most favorable to the Plaintiffs, which we must do when considering a jury verdict approved by the Trial Court, we find the facts necessary to disposition of this appeal to be as follows. On the date of the accident, October 13, 1992, Mr. Phillips was 68 years of age and Mrs. Phillips 59. Mr. Phillips was totally deaf in his right ear and Mrs. Phillips' ability to walk was impaired because of recent surgery to her left knee. She normally walked with a cane. However, on the occasion of the accident she opted not to use the cane because she would be able to hold onto her husband for support. They left their home in Chippewa Lake, Michigan, and were on their way to their winter home in Florida. After driving some 13 hours--approximately half way--they stopped for the night in Chattanooga, and after watching the Vice- Presidential debate between Vice-President Quayle and Senator Gore, while consuming a quantity of alcohol, [FN1] decided about 8:30 p.m. to go to a Shoney's Restaurant for their evening meal. FN1. Mr. Phillips' blood alcohol level was estimated to be .07 at the time of the accident which, of course, would raise no presumption of impairment under T.C.A. 55-10-408 had he been driving an automobile. The restaurant was located on the north side of Ringgold Road and the motel where the Phillipses were staying on the south side. Ringgold Road is a heavily traveled four-lane thoroughfare and also has a turning lane between the east and west bound lanes, as well as what is known as a storage lane adjoining the west two lanes on the north and the east two lanes on the south. From curb to curb the roadway is 76 feet in width. *2 Notwithstanding the fact that a cross walk controlled by a traffic light was available for crossing Ringgold Road, some 260 feet to the west, the Phillipses chose to cross Ringgold Road between intersections. After almost, if not entirely, crossing the four lanes of Ringgold Road they were struck by the right front corner of the vehicle being driven by Mr. Bartholomew, who was in the outside west-bound lane and traveling at approximately 30 to 35 miles per hour, which was within the 40 mile posted speed limit. The point of impact was at the south edge of the storage lane or within that lane. Mrs. Phillips never saw the Bartholomew vehicle and, apparently, neither did Mr. Phillips, although there was nothing to obstruct his vision and nothing to obstruct her vision except, perhaps, Mr. Phillips, who was walking beside her to her right and was nearest the west-bound traffic. Although Mr. Bartholomew's vision was likewise unobstructed, he never saw the Phillipses before impact. Clearly, all those involved were guilty of some negligence, and given Mr. Phillips' hearing impairment we cannot say that the evidence does not support the allocation of fault made by the jury. We recognize that Mrs. Phillips, who was to Mr. Phillips' left, was not in as good a position to see the oncoming vehicle as was he, and an argument may be made that his fault should equal or exceed that of hers. However, we question whether the allocation of fault as to Mrs. Phillips is properly before us as no appeal was prosecuted as to her, but even if she had perfected an appeal the jury might well find that Mrs. Phillips' negligence exceeded that of her husband because her hearing was not impaired. In summary, we are disinclined to second guess a jury when dealing with a two percent difference as to allocation of fault. As to issue two, the Plaintiff asked the Defendants to admit the reasonableness and the necessity of an Erlanger Hospital bill in the amount of $20,117.98, which was charged by the hospital for the three hours and 49 minutes that he was treated there before his death. They also asked the Defendants to admit the accuracy of certain information on a police report made by an officer who investigated the accident. The authority and propriety for adjudging discretionary costs upon a parties failure to admit is controlled by Rule 37.03 of the Tennessee Rules of Civil Procedure: 37.03. Expenses on Failure to Admit.--If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 36, and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, the requesting party may apply to the court for an order requiring the other party to pay the requesting party the reasonable expenses incurred in making that proof, including reasonable attorney's fees. The court shall make the order unless it finds that (1) the request was held objectionable pursuant to Rule 36.01, or (2) the admission sought was of no substantial importance, or (3) the party failing to admit had reasonable ground to believe that he might prevail on the matter, or (4) there was other good reason for the failure to admit. *3 In the present case, the Erlanger Hospital bill, as already noted, totaled $20,117.98 for services rendered Mr. Phillips during the three hours and 49 minutes he was a patient in the hospital before his demise. We believe that, although the hospital bill was admitted into evidence, the amount charged for the period involved was sufficient to justify the Defendants' denial, and that they come within the Subsection 4 exception to the Rule. Moreover, it appears from the testimony of the doctor who attempted to justify the bill that he, as set out in the brief of the Defendants, "did not know whether or not the charges for the trauma unit and the operating room were for the entire day or just the period of time that Mr. Phillips was treated, nor was he able to testify concerning the 'supplies' that were charged for." As to the denial of the accuracy of the police report, it is evident and was confirmed by the officer preparing it that he mistakenly designated north as south and south as north. This alone, we believe, was sufficient to raise a question in counsel's mind as to the accuracy of the other matters shown on the report. We conclude that as to the police report, subsection 4 likewise applies and counsel was justified in their denying its accuracy. For the foregoing reasons the judgment of the jury approved by the Trial Court is affirmed and that of the Trial Judge awarding discretionary costs is reversed. The cause is remanded for collection of the judgment and costs below. Costs of appeal are adjudged against the Defendants and their surety. CONCUR: Herschel P. FRANKS, J., and William H. INMAN, Sr.J. 1998 WL 429644 (Tenn.Ct.App.)
Court of Appeals of Tennessee. Chip HARBOUR, Plaintiff-Appellee, v. KELSAY PLUMBING COMPANY, Defendant-Appellant. No. 03A01-9812-CV-00394. Nov. 23, 1999. Appeal as of right from the Hamilton County Circuit Court, No. 03A01-9812- CV-00394; W. Neil Thomas, Judge. Daniel J. Ripper, Chattanooga, TN, for appellant. Ronald J. Berke, Chattanooga, TN, for appellee. OPINION SUSANO, J. *1 This litigation arose out of work performed by the defendant Kelsay Plumbing Company ("Kelsay Plumbing") in connection with the plumbing contract on a new house built by the plaintiff Chip Harbour ("Harbour"). In response to a question posed to it, the jury determined that "there [was] negligence on the part of [Kelsay Plumbing], which caused loss or damage to [Harbour]." It awarded damages of $100,000. Kelsay Plumbing appeals, raising one issue that poses the following question for our resolution: Did the trial court err in refusing to allow Kelsay Plumbing to assert as a defense that it did not cause the damages complained of by Harbour and by refusing to allow the testimony of Herbert Stewart ("Stewart") to the effect that the water flowing through Harbour's plumbing system caused the damage complained of by Harbour and not the acts of Kelsay Plumbing? We find and hold that, because Kelsay Plumbing failed to raise the affirmative defense of the comparative fault of Savannah Utility District ("Savannah") as required by Rule 8.03, Tenn.R.Civ.P., [FN1] the trial court was correct in refusing to allow Kelsay Plumbing to pursue at trial its claim that leaks in Harbour's plumbing system were caused by the corrosive nature of the water supply. FN1. Rule 8.03, Tenn.R.Civ.P., provides, in pertinent part, as follows: In pleading to a preceding pleading, a party shall set forth affirmatively facts in short and plain terms relied upon to constitute ... comparative fault (including the identity or description of any other alleged tortfeasors),.... In 1988, Harbour entered into a contract with Kelsay Plumbing for the installation of a plumbing system in connection with the construction of Harbour's new residence in Ooltewah. The system was to include a re-circulating hot water system. The water for the residence was supplied by Savannah. Shortly after the installation of the plumbing system, a series of leaks occurred in the pipes. Kelsay Plumbing hired Stewart of VCE Investigative Engineers to investigate the leaks. In 1991, Stewart summarized his initial findings in a report ("1991 report"), in which he concluded that the most probable cause of the leaks was chemical corrosion, and that such corrosion was possibly caused by an excessive amount of soldering paste being used in the joints of the pipes. In 1994, two years after this litigation was commenced, Stewart prepared another report ("1994 report") further addressing the problems in the plumbing system. In the 1994 report, Stewart surmised that the corrosive nature of the water flowing through the pipes contributed to the failure of the plumbing system. Stewart noted that Savannah had discovered the water supply's "corrosion problem" four or five years earlier and that, in 1992, it had initiated a corrosion inhibitor program that reduced the corrosive state of the water by 50%. Harbour filed this action in 1992. [FN2] In his complaint, he alleged inter alia that Kelsay Plumbing performed "slipshod and shoddy work which [had] caused leaks throughout the [plumbing] system" and that the work was done in a negligent manner. In its answer, Kelsay Plumbing denied these allegations and asserted several defenses: failure to state a claim upon which relief could be granted; the statute of limitations; lack of personal jurisdiction; failure to join the pipe manufacturer and contracting electrician as indispensable parties; all defenses contained in the Tennessee Products Liability Act; and all defenses contained in the Uniform Commercial Code. Finally, Kelsay Plumbing, in its answer, took the position that the problems in the plumbing system were caused by Harbour in the negligent construction of his residence. [FN3] Thereafter, in 1995, Harbour amended the complaint to include allegations that Kelsay Plumbing had committed several building and plumbing code violations; that it had used improper sizing for the pump in the re- circulating system; and that it had been negligent in its selection and installation of equipment and materials. FN2. An earlier trial of the complaint in this case resulted in a mistrial. FN3. Kelsay Plumbing coupled its answer with a counterclaim for payment of services rendered. At the conclusion of the proof, the trial court granted Harbour a directed verdict on the counterclaim. That ruling is not an issue on this appeal. *2 Trial of this matter commenced on June 30, 1998. At the conclusion of the first day of proof, the trial court orally observed that Kelsay Plumbing's attorney had made references to the water being the cause of the leaks. The trial court asked the attorney if he planned to raise the issue of comparative fault on the part of Savannah. In response, the defendant's attorney stated that, in order to refute Harbour's allegation that the pump in the re- circulating system was the source of the problem, he intended to present the expert testimony of Stewart to show that the water had corrosive properties that caused the leaks. Harbour's attorney objected to such proof, arguing that such proof obviously would be offered in an attempt to blame Savannah for the leaks, and that such blame-shifting was impermissible because Kelsay Plumbing had failed to allege the comparative fault of Savannah in its answer. The trial court held that Kelsay Plumbing could not introduce the testimony of its expert to show that the corrosive nature of the water was the cause in fact of the leaks. It also ruled that Kelsay Plumbing could not otherwise attempt to prove this theory of defense. The trial court predicated its ruling on the failure of Kelsay Plumbing to allege the comparative fault of Savannah in its answer, as required by Rule 8.03, Tenn.R.Civ.P. Upon the trial court's ruling, Kelsay Plumbing moved to amend its pleadings to allege that the water was the cause in fact of the leaks. When the trial court denied this motion, Kelsay Plumbing moved for a continuance, which was also denied. After the above rulings, the trial resumed. As previously indicated, the jury returned a verdict for Harbour, finding that Kelsay Plumbing was liable for damages of $100,000. After the trial court denied the defendant's motion for a new trial, Kelsay Plumbing filed this appeal. II. Kelsay Plumbing's sole issue raises a question of law; hence, the scope of our review is de novo with no presumption of correctness. Rule 13(d), T.R.A.P.; Ridings v. Ralph M. Parsons Co., 914 S.W.2d 79, 80 (Tenn.1996). III. On this appeal, Kelsay Plumbing argues that the trial court erred in refusing to allow it to prove that the corrosive nature of the water was the cause in fact of the leaks. It sought to establish that the corrosive properties of the water--and not Kelsay Plumbing's negligence--wasthe cause of the leaks. It planned to present this theory of defense primarily through the testimony of its expert, Stewart. Kelsay Plumbing contends that the trial court erroneously relied on Rule 8.03, Tenn.R.Civ.P., and the Supreme Court's decision in George v. Alexander, 931 S.W.2d 517 (Tenn.1996), in concluding that Kelsay Plumbing was required to identify Savannah in its answer as the entity legally responsible for Harbour's problems in order to pursue the defense under discussion. Kelsay Plumbing's position is best illustrated by the following quotes from its brief: *3 In the present case, however, Kelsay is clearly not relying upon the defense of comparative fault. Rather, Kelsay was acting in accordance with its original answer in this case in which it denied its responsibility and negligence for the damages being claimed by the appellee. That is to say, the problems which the appellee was having and for which he brought suit, were the result of a combination of factors including the water flowing through the pipes, none of which are the result of any negligent act of Kelsay. The water and factors related to the water were the "cause in fact" of Harbour's problems, not any act of Kelsay or any other party against whom fault could be apportioned. The water was the "cause in fact" of the problems complained of, not a party or person against whom comparative fault could be alleged. * * * [i]t is alleged that the water corrosion to the inside of the pipe which is the cause in fact of the leaks in the hot water recirculating system of the appellant is not the proximate result of any actions taken by any individual or entity. Rather, it is the result of factors inherent in the composition of the water itself when combined with heat. We understand the point being made by Kelsay Plumbing in arguing that Rule 8.03, Tenn.R.Civ.P., does not preclude it from attempting to show that the corrosive nature of the water was the cause in fact of Harbour's problems; however, we disagree with its conclusion that Rule 8.03 is not applicable to this defense. IV. Rule 8.03, Tenn.R.Civ.P., requires a party to affirmatively plead comparative fault, including the identity or description of any other alleged tortfeasor. Thus, a defendant in a negligence case must plead comparative fault as an affirmative defense if the defendant wishes to show that another person caused the plaintiff's injury. George, 931 S.W.2d at 518. A defendant's failure to identify another potential tortfeasor precludes a trier of fact from attributing any percentage of fault to that individual or entity. Ridings, 914 S.W.2d at 84. In the instant case, the trial court found the Supreme Court's decision in George v. Alexander to be controlling. In George, the plaintiff sued two physicians, alleging that they were negligent in administering spinal anesthesia prior to the plaintiff's surgery. George, 931 S.W.2d at 519. At trial, the physicians sought to introduce evidence to establish that the positioning of the plaintiff's body by another physician prior to surgery was the cause in fact of the plaintiff's injury. Id. at 520. The plaintiff argued that Rule 8.03 required the defendant physicians to plead comparative fault as a defense if they wanted to show that another physician caused the injury. Id. The physicians responded that Rule 8.03 is triggered only when a defendant intends to show that another person was the proximate cause of the injury. Id. As they intended to show only that another physician was the cause in fact, the physicians argued that they were not attempting to show that the non-party physician was negligent. Id. at 521. Thus, they reasoned that Rule 8.03 is inapplicable, and they were not required to plead comparative fault in order to assert this defense. Id. *4 The Supreme Court rejected the physicians' argument, finding that if a defendant introduces evidence that another person was the cause in fact of the plaintiff's injuries, the defendant effectively shifts the blame to that person. Id. The Court went on to note: if the defendants' position were to be accepted, any defendant wishing to transfer blame to another person at trial could always maintain that it is not trying to show that the other's conduct satisfies the legal definition of negligence, but that it is merely trying to establish that the other person's conduct actually caused the injury. In the latter situation, however, the defendant has fully accomplished what Rule 8.03 was intended to prevent: it has effectively shifted the blame to another person without giving the plaintiff notice of its intent to do so. Therefore, the purpose of Rule 8.03 would be undermined to a substantial degree if the defendants' overly technical argument were to prevail. Id. We hold that the trial court correctly excluded the proffered evidence. Under Rule 8.03, Kelsay Plumbing's theory that the corrosiveness of the water caused the damage should have been pled. Its answer is devoid of any allegation that the water, much less Savannah, was at fault for the leaks in the pipes. The relevant portion of Rule 8.03 is designed to require a defendant to clearly state its position that someone other than itself is legally at fault for the matters about which the plaintiff complains. A defense properly asserted pursuant to the "comparative fault" part of Rule 8.03 can have very significant ramifications not only with respect to putting the plaintiff on notice as to another alleged fault-target but also with respect to extending the statute of limitations as to the individual or entity identified in the answer. See T.C.A. § 20-1-119 (1994). Kelsay Plumbing argues that it could not name a tortfeasor in its answer because it is asserting that the water, not another person, was the cause of Harbour's damages. We do not find this argument persuasive. Kelsay Plumbing states in its brief that the composition of the water was created by Savannah. Furthermore, and significantly, the 1994 report prepared by Stewart, upon whom Kelsay Plumbing intended to rely, describes in detail Savannah's efforts to control the corrosiveness of the water supply. If, as Kelsay Plumbing alleges, the particular composition of the water resulted in a level of corrosiveness so high as to create holes in Harbour's pipes, it seems to us an unavoidable conclusion that Savannah would be a potential tortfeasor as contemplated by Rule 8.03. Kelsay Plumbing argues that the Supreme Court's decision in Snyder v. LTG Lufttechnische GmbH, 955 S.W.2d 252 (Tenn.1997), controls this case. In Snyder, the plaintiff sued the manufacturer and seller of a cotton baler, alleging negligence and products liability. Id. at 254. The defendants wanted to introduce evidence at trial that equipment alterations made by the plaintiff's employer were the proximate cause of the plaintiff's injuries. Id. at 254. The Supreme Court noted the trier of fact was precluded from finding that the employer was the proximate cause of the plaintiff's injuries because the employer was immune from tort liability by virtue of the workers' compensation law. Id. at 256. The Court held, however, that this rule does not preclude a trier of fact from finding that the alteration or improper use of a product by an immune employer was the cause in fact of the plaintiff's injuries: *5 If the rule were otherwise, the defendants would effectively be precluded from presenting a defense. A defense that the product was not defective or unreasonably dangerous when it left the defendants' control would not be credible unless the defendants were permitted to introduce evidence as to what actually happened to the product leading up to the incident that injured the plaintiff. Excising the employer from that discussion would be tantamount to drawing a line which would make discussion of the case to be tried difficult, if not impossible. Id. Kelsay Plumbing argues that this rationale should apply to the instant case. We disagree. In Snyder, the Supreme Court was required to separate the fact of causation from the legal consequences that would usually flow from such causation, not because they were not logically associated concepts, but rather because the immunity of the employer would not allow the coupling of these related concepts. The proof problems caused by the employer's immunity in Snyder are not present in this case. To argue that the corrosive nature of the water produced by Savannah was the cause in fact of the leaky pipes, is to point the finger of blame at another-one who is not immune, and one against whom a jury could legally assign fault. This case is not controlled by Snyder; it is subject to the holding in George. The defendant could not assert its theory as to the corrosive nature of the water without identifying Savannah in its answer as required by Rule 8.03. The trial court did not err in refusing to allow Kelsay Plumbing to pursue its theory of defense that the corrosive nature of the water was the cause in fact of the leaky pipes and Harbour's damages. V. In view of our decision with respect to Kelsay Plumbing's sole issue, we do not find it necessary to address in any detail Harbour's argument that the trial court had another basis for refusing to receive Stewart's testimony-a ground not attacked by Kelsay Plumbing on this appeal. It is true that the trial court also alluded to the fact that Kelsay Plumbing had not timely furnished counsel for Harbour with a copy of Stewart's 1994 report. While this failure may have played some role in the trial court's decision not to allow Kelsay Plumbing to put Stewart's testimony before the jury, it is obvious that the main basis for the court's more general ruling that the defense based on the corrosive nature of the water would not be permitted was the defendant's failure to comply with Rule 8.03. V. The judgment of the trial court is affirmed. Costs on appeal are taxed to the appellant. This case is remanded to the trial court for enforcement of that court's judgment and for collection of costs assessed below, all pursuant to applicable law. GODDARD, P.J., and FRANKS, J., concur. 1999 WL 1059967 (Tenn.Ct.App.)
Supreme Court of Tennessee, Special Workers' Compensation Appeals Panel. Charles BLACK, Plaintiff/Appellee v. RAYTHEON ENGINEERS AND CONSTRUCTORS, Defendant/Appellant. No. E1998211WCR3CV. Jan. 14, 2000. Affirmed. Ronald Berke, Chattanooga, for Appellee. David Hensley, Milligan, Barry, Hensley & Evans, Chattanooga, for Appellant. Members of Panel: Justice WILLIAM M. BARKER, Associate Justice, Supreme Court, ROBERT E. CORLEW, III, Chancellor, R. VANN OWENS, Retired Judge. MEMORANDUM OPINION OWENS, Retired J. NATURE OF CASE *1 This is an appeal of a workers' compensation case in which the trial court awarded a 50 percent permanent partial disability to the left lower extremity of the plaintiff. The plaintiff had allegedly torn the meniscus in his left knee as a result of his work or work activities. The defendant/appellant raised the following issues on appeal: (1) Whether the suit should have been dismissed for the plaintiff/appellee's failure to give proper notice of his alleged injury; (2) Whether the medical proof was sufficient to show that the plaintiff's work advanced the severity of a pre-existing condition or cause of disabling injury; (3) Whether the Court's award of a 50 percent permanent partial disability of the leg was excessive. For the reasons hereinafter stated, this Court affirms the holding of the trial court. SCOPE OF REVIEW This workers' compensation appeal has been referred to the Special Workers' Compensation Appeals Panel in accordance with the Tenn.Code Ann. § 50-6- 225(e)(3) for hearing and reporting of findings of fact and conclusions of law. Our review of findings of fact by the trial court is de novo upon the record of the trial court, accompanied by a presumption of the correctness of the findings, unless the preponderance of the evidence is otherwise. Lollar v. Wal-Mart Stores, Inc., 767 S.W.2d 143 (Tenn.1989). FACTUAL HISTORY The employee, Charles Black, was sixty years of age at the time of trial. He was retired from the Plumbers and Steam Fitters Local with whom he had been associated for some time. The plaintiff, a high school graduate, completed some college work, and underwent some training in the Air Force, where he was a radar technician. He had worked in the past as an investment banker, but he tried air conditioning work and then ended up doing, primarily, steam fitting work. He became employed with the Tennessee Valley Authority Steam Fitters in 1985, and he continued this type of work either with TVA, its contractors, or subcontractors at several different TVA sites until his injury and layoff. According to the uncontradicted proof, the plaintiff was required to lift heavy weights, climb, and be physically active in his work. The proof was to the effect that the facilities at TVA and its associated work sites were somewhat "tight", confined, or restricted, and he often had to climb to get to the instruments he had to check or work on. He also had to crawl over the pipes or climb on ladders to perform necessary work on pipes or associated fittings. The work entailed stooping, climbing, and crawling to get to the instruments as well as carrying equipment for test purposes. He often had to carry fire hoses which were an inch and a half or two inches diameter and he sometimes also carried heavier high pressure hoses which were two inches in diameter. In the fall of 1994, the plaintiff was carrying heavy equipment, specifically air hoses, and he noticed that his left knee had sharp pains. He claims that he did not know or comprehend the cause of the problem, and he sought medical attention from Dr. Huffsetter, an arthritic specialist. He related to Dr. Huffsetter that the first time he noticed the sharp pain was at work carrying hoses and moving over pipes and other equipment. He also, however, informed the doctor of other joint pains and tightness. His left knee was swollen and fluid was drained by Dr. Huffsetter. He returned in a month and Dr. Huffsetter recommended a MRI, which revealed a fragmented tear of the meniscus in his left knee. He was then referred to an orthopedic surgeon, Dr. Marvin Reddish. Dr. Reddish advised an arthroscopic procedure to the plaintiff's knee when he saw the plaintiff on November 11, 1994. It was only after he saw Dr. Reddish that the plaintiff gave notice of this alleged workers' compensation injury and claim. The plaintiff's testimony was to the effect that he had not associated his prior problems of six weeks to six months with anything at work. He thought he might have arthritis. It was only after he talked with Dr. Reddish that he thought he might have an on-the-job injury. Mr. Black reported the injury to his employer a short time after seeing Dr. Reddish and he was terminated shortly thereafter. The employer denied any responsibility for the required surgery and has refused to pay any medical bills, temporary total disability, or permanent partial disability. *2 The plaintiff testified that in addition to the instance where he had a sharp, excruciating pain, there were several other instances of minor trauma. Allegedly,these took place over a period of six months. The plaintiff's contentions leave doubt as to whether he was contending a single primary accidental injury, a gradual injury, or an aggravation of a pre- existing condition. The history given to the physicians, the testimony of the plaintiff, and the opinions of the operating surgeon failed to provide much clarification as to the exact nature and cause of the plaintiff's injury. The trial court found that the required surgery was in some way related to the work that he performed for his employer, Raytheon. CAUSATION As stated in the Supreme Court opinion, Orman v. Williams Sonoma, Inc., 803 S.W.2d 672, 676 (Tenn.1991): It is well-established that an injury must both "arise out of" as well as be "in the course" of employment in order to be compensable under workers' compensation. Thornton v. RCA Service Company, 188 Tenn. 644, 221, S.W.2d 954, 955 (1949). The phrase "in the course of" refers to time, place, and circumstances, and "arising out of" refers to cause or origin. Brimhall v. Home Ins. Co., 694 S.W.2d 931, 932 (Tenn.1985). "[A]n injury by accident to an employee is in the course of employment if it occurred while he was performing a duty he was employed to do; and it is an injury arising out of employment if caused by a hazard incident to such employment." Hudson v. Thurston Motor Lines, Inc., 583 S.W.2d 597, 599 (Tenn.1979). Generally, an injury arises out of and is in the course and scope of employment if it has a rational connection to the work and occurs while the employee is engaged in the duties of his employment. Hall v. Auburntown Industries, Inc., 684 S.W.2d 614, 617 (Tenn.1985). Compensation can be awarded for conditions which do not occur instantaneously as a result of a single accident, but which develop gradually from repeated work-related instances, and the date of such accidental injury occurs when the plaintiff's condition reaches a point that he can no longer work at his job. Barker v. Home-Crest Corp., 805 S.W.2d 373 (Tenn.1991). When a condition gradually develops over a period of time, resulting in a definite, work- connected, unexpected fortuitous injury, it is compensable as an injury by accident. Brown Shoe Company v. Reid, 209 Tenn. 106, 350 S.W.2d 65 (1961). Mr. Black already had some arthritic changes in his joints prior to the time he needed surgery. Thus, a question arises as to whether or not the pain and difficulty he suffered on the job was a mere consequence of a progressive degenerative condition, and, if not, did the job activities cause an advancement of the process or otherwise increase or enhance the anatomical impairment to the knee. In Tennessee, "aggravation of a pre-existing condition may be compensable under the workers' compensation laws of Tennessee, but it is not compensable if it results only in increased pain or other symptoms caused by the underlying condition." See Cunningham v. Goodyear, 811 S.W.2d 888 (Tenn.1991); Smith v. Smith's Tranfer Corp., 735 S.W.2d 221 (Tenn.1987). It has been otherwise stated that, to be compensable, the pre-existing condition must be "advanced" or there must be "anatomical change" in the pre-existing condition, (Talley v. Virginia Ins. Reciprocal, 775 S.W.2d 587 (Tenn.1989), or the employment must cause "an actual progression ... of the underlying disease." Cunningham, supra at 890. *3 The deposition testimony of Dr. Reddish does not establish with certainty the exact nature or cause of the injury/condition and the necessity of surgery on Mr. Black's knee. He opined that: Mr. Black's activities at work could certainly make worse any degenerative process, but it was not possible to tell whether the tear was from a degenerative condition, a particular injury, or just repetitive trauma. The plaintiff's testimony was to the effect that his work was rather strenuous and the activities placed considerable strain upon his knees. He was required to work many times with his knees on a concrete floor. The work required considerable climbing over pipes and obstacles with loads. The trial judge had the opportunity to observe the demeanor of the plaintiff while testifying during trial. He obviously gave considerable weight to the history given by plaintiff not only as to the cause of the accident, but to the extent of disability as well. Dr. Reddish's testimony was to the effect that the work activities could make worse any degeneration that might have already been occurring, and further, if the tear was acute, the meniscus was "getting torn up" by the strenuous activities at work. Thus, there is medical proof in this case that the pre-existing condition (or gradual injury) has been advanced by work-related accidents and/or caused an actual progression of the underlying condition. In a workers' compensation case, a trial judge may properly predicate an award upon medical testimony to the effect that a given incidence could be the cause of the claimant's injury, when, from other evidence, it may reasonably be inferred that the incidence was in fact the cause of injury. Reeser v. Yellow Freight Systems, Inc., 938 S.W.2d 690 (Tenn.1997). This Court cannot find that the evidence preponderates against the finding of the trial judge. NOTICE An injured employee must generally provide the employer with written notice of the injury within 30 days of the injury. Tenn.Code Ann. § 50-6-201. Once an employee is aware that a compensable injury has been sustained these notice provisions must be complied with. Pentecost v. Anchor Wire Corp., 695 S.W.2d 183 (Tenn.1985). This requirement is applicable even when the employee sustains a gradual injury. Lyle v. Exxon Corp., 46 S.W.2d 694 (Tenn.1988). An employee's failure to provide notice is excused until by reasonable care and diligence it is discoverable and apparent that an injury compensable under the workers' compensation laws has been sustained. Pentecost, supra. Under the facts of this case, it is apparent that the employee gave notice within 30 days after he reasonably anticipated that he had a workers' compensation claim against his employer. EXTENT OF DISABILITY The trial court awarded 50 percent permanent partial disability to the leg whereas the treating physician had given a 5 percent medical impairment to the lower extremity. Plaintiff was a high school graduate, he took some college courses, and he had a reasonably high IQ. However, the employer must have doubted his ability to contribute as it terminated plaintiff when it became known that he would be required to have surgery on his knee. Plaintiff tried to return to work after the surgery, but he was released after ten days. Although Defendant contended that this work was temporary, others hired at the same time as the plaintiff continued to work for several months after the plaintiff was released. This Court cannot say the evidence preponderates against the finding of the trial court as to the amount of permanent partial disability. *4 For the above reasons the evidence fails to preponderate against the findings of the trial court. This judgment is affirmed in all respects. Cost on appeal are taxed to the defendant. WILLIAM M. BARKER, Associate Justice and ROBERT E. CORLEW, Retired Judge, concur. CONCURRING OPINION While I fully concur in the opinion and reasoning of the majority in this case, finding that the Plaintiff has carried the burden of proof with regard to causation and notice, I would modify the decision of the Trial Court and would find that thirty (30) percent vocational disability apportioned to the leg is proper. Despite the Plaintiff's age of sixty (60) years, he has an extensive work record, including prior white collar employment, he attended college, and has a limited anatomical impairment. JUDGMENT ORDER This case is before the Court upon the entire record, including the order of referral to the Special Workers' Compensation Appeals Panel, and the Panel's memorandum Opinion setting forth its findings of fact and conclusions of law, which are incorporated herein by reference; Whereupon, it appears to the Court that the memorandum Opinion of the Panel should be accepted and approved; and It is, therefore, ordered that the Panel's findings of facts and conclusions of law are adopted and affirmed and the decision of the Panel is made the Judgment of the Court. Costs on appeal are taxed to the defendant/appellant, Raytheon Engineers and Constructors and David Hensley, surety, for which execution may issue if necessary. 2000 WL 31851 (Tenn.Workers Comp.Panel)
Court of Appeals of Tennessee. Lawrence O. WESTFALL, v. BRENTWOOD SERVICE GROUP, INC. No. E2000-01086-COA-R3-CV. Nov. 17, 2000. Appeal from the Chancery Court for Bradley County, No. 97-181; Jerri Bryant, Chancellor. J. Christopher Hall and Jane M. Stahl, Chattanooga, TN, for appellant, Brentwood Service Group, Inc. Marvin Berke, Chattanooga, TN, for appellee, Lawrence O. Westfall. SUSANO, J., delivered the opinion of the court, in which GODDARD, P.J., and SWINEY, J., joined. OPINION SUSANO. *1 Lawrence O. Westfall filed suit against his former employer, Brentwood Service Group, Inc., seeking payment of post-employment commissions allegedly due him. The defendant counterclaimed for breach of a non-competition/non- disclosure agreement. Following a bench trial, the court below awarded post- employment commissions to the plaintiff and dismissed the defendant's counterclaim, finding that the parties had not agreed to the non-compe tition/non-disclosure agreement. The employer now appeals, claiming that the plaintiff is not entitled to post-employment commissions and that the trial court erred in failing to enforce the parties' alleged non-competition/non- disclosure agreement. We affirm. I. The defendant, Brentwood Service Group, Inc. ("BSG"), provides payroll funding and administrative services to the temporary help industry. The plaintiff, Lawrence O. Westfall, went to work as a salesman for BSG in mid 1992. Westfall's sole employment responsibility was to procure customers for BSG. After a customer signed a contract with BSG, Westfall had no more duties with respect to that client. On November 30, 1992, Westfall authored a letter detailing his understanding of his compensation arrangement. The letter states, in pertinent part, as follows: I am confirming acceptance of the salary/commission structure that we discussed today. I will receive a $30,000 annual base/draw with a commission 3/4 of one percent or .75% of gross billings production the first year for a new company and 1/4 of one percent or .25% of gross billings production for the second year for that same company. We will review each quarter against my $30,000 base/draw and at anytime during any quarter that commision [sic] is earned in excess of $30,000 annualized or $7500 a quarter, commission will be paid. The letter, acknowledged and signed by BSG's president, does not explicitly address what is to occur in the event Westfall ceases to be employed by BSG. Westfall's base pay was subsequently increased from $30,000 to $36,000. It is undisputed that he remained on the same commission structure, except the parties agree that the $36,000 figure replaced the lesser figure in all phases of his employment compensation scheme. Each week, Westfall would receive a check for his base pay, regardless of the commissions that he had generated. In addition, if his commissions exceeded his base pay, he would receive an additional check for the commissions. If, on the other hand, the commissions generated by him fell below the amount of his base check, the difference would be recorded. Westfall would then be required to make up, by way of new commissions, any accumulated deficit plus the amount of the current base amount due him before he would be entitled to another commission check. He would receive his base pay regardless of the amount of his commissions. Approximately six months after Westfall went to work for the company, BSG asked Westfall to sign a non-competition/non-disclosure agreement. Westfall made several changes to the document proffered to him by the company and returned it to BSG. Westfall testified at trial that John Fanning, then the chairman of Uniforce, the owner of BSG, informed Westfall that the modifications were not acceptable. The agreement, signed only by Westfall, was apparently placed in Westfall's employment file. When Westfall submitted it to BSG, he affixed the words "with notations as amended" adjacent to his signature. *2 In January, 1996, BSG informed Westfall that all sales personnel would be responsible for "one quarter of the loss" in the event a customer's account resulted in a "write-off." In response, Westfall tendered his resignation, but advised that he would work out a 30-day notice. A day or two after Westfall tendered his resignation, he returned to work to serve out his notice. He began what he referred to as "weekly maintenance" in BSG's constantly-changing customer databases. When Westfall returned from lunch that day, his office was locked and the computer keyboard was missing. His supervisor suggested that he not serve out his notice and then helped him carry his belongings to his car. At the car, Westfall gave a backup tape and a disk containing customer information to his supervisor. When he returned a few weeks later to pick up his check, he was asked several questions relating to the customer databases. Westfall initially agreed to allow representatives of BSG to accompany him to his house to check his personal home computer for BSG customer information, but refused when BSG declined Westfall's request to run an errand first. Apparently, Westfall's supervisor sent a memo to Fanning detailing why Westfall was told not to finish serving out his notice. The supervisor was deposed, and portions of his deposition were read into evidence at trial, but the memo was never made an exhibit to the deposition, and the trial court refused to accept it into evidence when it was offered by the defendant in connection with its counterclaim. Subsequent to his resignation, Westfall went to work for a company that is arguably in competition with BSG. Westfall brought suit against BSG seeking payment of his commissions for the two years following his resignation. BSG counterclaimed for breach of the non- competition/non-disclosure agreement. The evidence at trial showed that had Westfall remained in the employment of BSG, his pre-termination efforts would have resulted in commissions of $33,692.60 for the first year following his resignation and commissions of $18,633.18 for the second year. At a bench trial, the court below (1) found Westfall's base pay to be a "draw against commissions" which "were earned when the client was signed up;" (2) awarded Westfall a judgment in the amount of $52,325.78; (3) dismissed BSG's counterclaim, finding that the non-competition/non-disclosure agreement "was an offer that was rejected and a counteroffer" which BSG did not accept; and (4) that there was "no proofthat there is any information missing from the database or that [Westfall] was the one who wrongfully deleted any information." BSG appeals, arguing that the trial court (1) erred in awarding Westfall post- resignation commissions; (2) erred in finding that the non-competition/non- disclosure agreement was never agreed to; and (3) erred in excluding BSG's memo relating to its reason for not allowing Westfall to work out a 30-day notice. II. *3 In this non-jury case, our review is de novo upon the record, with a presumption of correctness as to the trial court's factual determinations, unless the evidence preponderates against them. Tenn.R.App.P. 13(d); Wright v. City of Knoxville, 898 S.W.2d 177, 181 (Tenn.1995); Union Carbide Corp. v. Huddleston, 854 S.W .2d 87, 91 (Tenn.1993). The trial court's conclusions of law, however, are reviewed de novo with no presumption of correctness. Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn.1996); Presley v. Bennett, 860 S.W.2d 857, 859 (Tenn.1993). III. A. BSG first argues that the trial court erred in awarding Westfall post- resignation commissions. We believe applicable contract law supports the trial court's judgment. The goal of contract interpretation is to ascertain the intent of the parties according to the usual, natural, and ordinary meaning of the words used by the parties. Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn.1999). "The interpretation placed upon a contract by the parties thereto, as shown by their acts, will be adopted by the court." Hamblen County v. City of Morristown, 656 S.W.2d 331, 335 (Tenn.1983). Interpretation of a contract, being a matter of law, is subject to a de novo review on appeal with no presumption of correctness. Guiliano, 995 S.W.2d at 95. The parties' arguments concerning the payment of post-employment commissions rest on their respective and competing characterizations of Westfall's base pay. BSG asserts that Westfall's base pay of $36,000 was "salary," while Westfall contends that his base pay was an "advance," or "draw," against commissions. Because of the way the parties operated under their agreement, we find that his base pay was a draw against commissions. The agreement refers to Westfall's base pay at one place in the document as "salary/commission" and at two other places as a "base/draw." That being said, we find and hold that the parties treated Westfall's base pay not as salary, but as a draw or advance against commissions. Under clear precedent, see Hamblen County, 656 S.W.2d at 335, we adopt the parties' interpretation of the nature of Westfall's base pay as evidenced "by their acts." Id. Westfall testified that he received a check for his base pay each week. If his commissions exceeded the amount of his base pay, he would receive an additional check for his commissions. If, however, his commissions fell below his base pay, a deficit would be recorded and carried forward to the next pay period. Though Westfall would receive another check for his base pay the next pay period, he would not qualify for a commission check unless and until he made up the cumulative deficit. Significantly, BSG's controller testified to the same compensation scheme. We therefore find that Westfall's base pay was not a salary, but rather an advance against commissions. With respect to the more specific question of whether the trial court erred in awarding Westfall post-employment commissions, we find that this question is controlled by the language of the agreement and our decision in Winkler v. Fleetline Products, Inc., 859 S.W.2d 340 (Tenn.Ct.App.1993). In Winkler, the plaintiff sued his former employer to recover post-termination commissions. Id. at 340-41. The parties had orally agreed that the plaintiff would procure customers for the defendant and that the defendant would pay, after the customers paid the defendant, a 10% commission to the plaintiff on work the defendant performed for these customers. Id. at 341. The parties operated under this arrangement for approximately a year and a half, until the defendant terminated the plaintiff. Id. The record reflected that the defendant's motivation for terminating the agreement was that it was satisfied with the amount of business it had and with its ability to service the existing accounts, and therefore, "saw no reason to continue to pay out 10% commission on a regular basis to plaintiff." Id. at 343. We awarded the plaintiff commissions on orders placed after his termination by customers he procured for the defendant prior to his termination. Id. *4 Westfall, like the plaintiff in Winkler, was to receive his commissions after the customers he procured for BSG paid his employer. Nowhere does the agreement relieve BSG of its obligation to pay Westfall these commissions upon Westfall's resignation. We find and hold that, because there was no explicit or implicit agreement to the contrary, BSG is obligated to pay Westfall his post-employment commissions pursuant to the unconditionally-stated language of the contract. Winkler supports this result. BSG attempts to distinguish Winkler, asserting that its rationale--that an employer should not be allowed, in bad faith, to obtain for itself the full benefits of a salesperson's labor without paying the latter's commissions--is not applicable to a case where, as here, an employee voluntarily resigns. In support of this argument, BSG cites us to Pacesetter Properties, Inc. v. Hardaway, 635 S.W.2d 382 (Tenn.Ct.App.1981), a case in which, according to BSG's argument, the plaintiff's resignation operated to deny him entitlement to post-employment commissions. Pacesetter, however, did not involve the question of whether the parties had an agreement as to the payment of post- employment commissions. Rather, the question at issue in that case was whether the plaintiff was the procuring cause of the transaction which was consummated after his resignation. Id. at 385. We found for the defendant, not because the plaintiff's employment ended due to resignation rather than termination, but because the transaction for which the plaintiff claimed entitlement to a commission was due to new, independent negotiations rather than the result of the plaintiff's efforts. See id. at 389. Nowhere in the parties' agreement is there any indication that resignation invalidates the defendant's obligation to pay commissions, an obligation which, as we have previously pointed out, is stated in unconditional terms in the writing before us. The agreement says simply that Westfall is to be paid commissions for two years on customers he procured for BSG. It does not provide that BSG's obligation to pay these commissions to Westfall ceases to exist upon Westfall's termination, voluntary or otherwise. Westfall's job was to "sign-up" customers, i.e., persuade them to enter into a contractual relationship with BSG. That he received his commissions over time does not change the fact that they were earned at the time of the execution of the customer-BSG contract. Because they were already earned, it is immaterial under the agreement whether Westfall's employment was terminated at his initiation or at BSG's. BSG next argues that the trial court erred in awarding post-employment commissions to Westfall because Westfall "was paid a base salary regardless of what he generated in sales, and because commissions which he might have earned in each of the two years he claims [BSG] owes him fell below his base salary threshold of [$36,000] a year." *5 This argument, again, improperly characterizes Westfall's base pay as salary. Because we have found that it is properly characterized as an advance against commissions, the argument must fail. Upon resigning, Westfall gave up his entitlement to a weekly pay check. Expanding on this thought, the proof is clear that he was no longer entitled to a regular paycheck of a guaranteed amount with the risk of his commissions falling below his base pay being on BSG. His resignation did not, however, deprive him of that which he had already earned, i.e., his actual commissions. For the foregoing reasons, we find and hold that the trial court did not err in awarding post-employment commissions to Westfall. B. BSG next argues that the trial court erred in finding that the non- competition/non-disclosure agreement was not the agreement of the parties. More specifically, it argues that its placement of the modified agreement into Westfall's employment file, coupled with its retention of Westfall as an employee, constituted an acceptance of Westfall's counteroffer. "Under general principles of contract law, a contract must result from a meeting of the minds of the parties in mutual assent to the terms." Sweeten v. Trade Envelopes, Inc., 938 S.W.2d 383, 386 (Tenn.1996) (internal quotations omitted). Acceptance of an offer must be exactly and precisely in accord with the terms of the offer. Ray v. Thomas, 232 S.W.2d 32, 35 (Tenn.1950). If an offeree assents to an offer, but only with conditions or with varied terms, there is no acceptance, but rather the expression constitutes a rejection of the original offer and initiation of a new offer. See Tullahoma Concrete Pipe Co. v. T.E. Gillespie Constr. Co., 405 S.W.2d 657, 665 (Tenn.Ct.App.1966) ("Where a person offers to do a definite thing, and another accepts conditionally or introduces a new term into the acceptance, his answer is either a mere expression of willingness to treat, or it is a counter proposal, and in neither case is there an agreement.") (quoting Canton Cotton Nills v. Bowman Overall Co., 149 Tenn. 18, 31, 257 S.W. 398,402 (1924)). Moreover, silence or inaction generally does not constitute acceptance of an offer, unless the circumstances indicate that such an inference of assent is warranted. Smith v. Murray, 311 S.W.2d 591, 595 (Tenn.1958). We find that the trial court did not err in finding the non-competition/non- disclosure agreement to be unenforceable. BSG's tender of the typewritten agreement to Westfall constituted an offer. Westfall, by modifying the agreement, rejected the initial offer and made a counteroffer. Westfall testified at trial that he was told that the modifications were unacceptable. We are of the opinion that the circumstances were not such that BSG's silence and inaction creates a reasonable inference of assent, and we therefore hold that the trial court did not err in finding the "agreement" unenforceable. C. *6 Finally, BSG argues that the trial court erred in excluding from evidence the memo relating to events allegedly occurring immediately after Westfall's resignation. This issue relates to BSG's counterclaim alleging that Westfall breached the non-competition/non-disclosure agreement. Because we have found that there is no such agreement, there can be no breach, and this issue is therefore rendered moot. IV. The judgment of the trial court is affirmed. This case is remanded for enforcement of the trial court's judgment and for collection of costs assessed below, all pursuant to applicable law. Costs on appeal are taxed to the appellant. 2000 WL 1721659 (Tenn.Ct.App.), 16 IER Cases 1734
Supreme Court of Tennessee, at Nashville. Donald MARTIN, v. NORRIS & SON, INC. No. M2002-00711-WC-R3-CV. Feb.2003 Session. May 23, 2003. Claimant appealed from decision of the Chancery Court, Marion County, No. 6400, Jeffrey F. Stewart, Chancellor, denying his motion for summary judgment and granting summary judgment in favor of the employer. The Special Workers' Compensation Appeals Panel of the Supreme Court, Joe C. Loser, Jr., J., held that material issue of fact as to whether injuries claimant sustained when he was stabbed by a co-worker in a motel room arose out of and in course of his employment precluded grant of summary judgment to employer. Affirmed in part; reversed in part and remanded. West Headnotes Workers' Compensation  1688 413k1688 Most Cited Cases Material issue of fact as to whether injuries claimant sustained when he was stabbed by a co-worker in a motel room arose out of and in course of his employment as journeyman brick mason precluded grant of summary judgment to employer on claimant's workers' compensation claim. Direct Appeal from the Chancery Court for Marion County, No. 6400; Jeffrey F. Stewart, Chancellor. Andrew J. Berke, Berke, Berke & Berke, Chattanooga, Tennessee, for the appellant, Donald Martin. Bruce C. Bailey, Chambliss, Bahner & Stophel, Chattanooga, Tennessee, for the appellee, Norris & Son, Inc. JOE C. LOSER, Jr., delivered the opinion of the court, in which FRANK F. DROWOTA, III, C.J., and JAMES L. WEATHERFORD, Sr.J., joined. JUDGMENT PER CURIAM. *1 This case is before the Court upon the entire record, including the order of referral to the Special Workers' Compensation Appeals Panel, and the Panel's Memorandum Opinion setting forth its findings of fact and conclusions of law, which are incorporated herein by reference. Whereupon, it appears to the Court that the Memorandum Opinion of the Panel should be accepted and approved; and It is, therefore, ordered that the Panel's findings of fact and conclusions of law are adopted and affirmed, and the decision of the Panel is made the judgment of the Court. Costs will be taxed to the parties equally, for which execution may issue if necessary. IT IS SO ORDERED. MEMORANDUM OPINION JOE C. LOSER, JR. This workers' compensation appeal has been referred to the Special Workers' Compensation Appeals Panel of the Supreme Court in accordance with Tenn.Code Ann. § 50-6-225(e)(3) for hearing and reporting to the Supreme Court of findings of fact and conclusions of law. In this appeal, the employee insists the trial court erred in denying his motion for summary judgment and in granting summary judgment in favor of the employer. As discussed below, the panel has concluded the trial court erred in summarily dismissing the complaint. The employee or claimant, Mr. Martin, initiated this civil action to recover workers' compensation benefits for injuries he suffered when he was stabbed by a co-worker in a motel room in South Pittsburg. Both the employee and the employer, Norris & Son, Inc., moved for summary judgment. Following oral arguments, the trial court denied the employee's motion and entered summary judgment of dismissal for insufficient proof that the injury arose out of the employment relationship. The claimant has appealed. Ordinarily, the standard of review in a workers' compensation case is de novo upon the record of the trial court, accompanied by a presumption of correctness of findings of fact, unless the preponderance of the evidence is otherwise. Tenn.Code Ann. § 50-6-225(e)(2). However; when summary judgment has been granted in workers' compensation cases, review is governed by Tenn. R. Civ. P. 56, which requires the court to review the record without a presumption of correctness to determine whether the absence of genuine issues of material fact entitles the movant to judgment as a matter of law. The standard governing the assessment of evidence in the summary judgment context is well established. Courts must view the evidence in the light most favorable to the non-moving party and must also draw all reasonable inferences in favor of the non-moving party. Summary judgment should be granted only when both the facts and the inferences to be drawn from the facts permit a reasonable person to reach only one conclusion. Goodloe v. State, 36 S.W.3d 62, 65 (Tenn.2001) (citations omitted). Summary judgment is almost never an option in workers' compensation cases. Berry v. Consolidated Systems, Inc., 804 S.W.2d 445 (Tenn.1991). *2 The claimant is a journeyman brick mason who lives in Alabama. In 1998, he and two companions, Alton Jones and Gary Adkins, also journeyman brick masons, traveled to Bridgeport, Alabama to work for the employer. They were required to work twelve hours a day, seven days per week. Accordingly, the employer paid them per diem and paid for lodging at a motel in South Pittsburg, near the Alabama border, in addition to wages. They worked from 7:00 p.m. to 7:00 a.m. On October 31, 1998, the three men reported to work, but the foreman sent them home around 11:00 p.m. with full pay because continuation of the project required technical personnel who would not arrive until the next morning. They left the work site in the claimant's truck. On the way to the motel, they stopped at a convenience market and purchased beer. They then returned to the motel room shared by the claimant and Adkins, where they drank beer and talked. Their conversation turned to welfare and its correlation to various ethnic groups, including native Americans. Adkins, a native American, pulled a knife from his pocket and threatened Jones. When the claimant attempted to intervene, Adkins stabbed him in his left side, injuring him. There had never before been any kind of confrontation or altercation between the claimant and Adkins. The claimant contends the case is controlled by rules applicable to traveling employees. The employer contends it is simply an assault case. Under the Tennessee Workers' Compensation Act, the right of an employee who suffers a work-related injury to recover compensation benefits from his employer is governed by the statutes in effect at the time of the injury. Nutt v. Champion Intern. Corp., 980 S.W.2d 365, 368 (Tenn.1998). Such statutes are part of the contract of employment and the rights and responsibilities of such injured employee and his employer can only be ascertained from a consideration of those statutes as construed by the courts. Hudnall v. S. & W. Constr. Co. of Tenn., Inc., 60 Tenn.App. 743, 451 S.W.2d 858 (1969). The Act is in the nature of an insurance policy, Hughes v. Elliott, 162 Tenn. 188, 35 S.W.2d 387 (1931), and an action to recover the benefits provided therein is an action on a contract. Woods v. City of LaFollette, 185 Tenn. 655, 207 S.W.2d 572 (1948). The Act expressly requires that it be given "equitable construction" and declares itself to be a remedial Act. Tenn.Code Ann. § 50-6-116. It must be interpreted in a manner designed to protect workers and their families from the economic devastation that can follow on-the-job injuries. Nance v. State Ind., Inc., 33 S.W.3d 222, 227 (Tenn.2000). Under the Act, injuries by accident arising out of and in the course of employment which cause either disablement or death of the employee, are compensable. Tenn.Code Ann. § 50-6-103(a); McCurry v. Container Corp. of America, 982 S.W.2d 841, 843 (Tenn.1998). "Arising out of" refers to the origin of the injury in terms of causation and "in the course of" relates to time, place and circumstance. Id. Not every injury that occurs in the course of employment also arises out of the employment, but any reasonable doubt as to whether an injury arises out of the employment should be resolved in favor of the employee. Reeser v. Yellow Freight System, Inc., 938 S.W.2d 690, 692 (Tenn.1997). *3 For injuries resulting from a willful assault upon an employee, there is no formula from which one can clearly define the line between accidents which arise out of and in the course of employment and those which do not. Bell v. Kelso Oil Co., 597 S.W.2d 731, 734 (Tenn.1980). Generally, an injury arises out of and in the course of employment if it has a rational causal connection to the work and occurs while the employee is engaged in the duties of his employment; and any reasonable doubt as to whether an injury arose out of the employment should be resolved in favor of the employee. Braden v. Sears, Roebuck & Co., 833 S.W.2d 496, 498 (Tenn.1992). Traveling employees are generally considered to be in the course of their employment, for purposes of workers' compensation, continuously during the entire trip, except when there is a distinct departure on a personal errand, and injury to or death of such employee while reasonably engaged in a reasonable recreational or social activity arises out of and in the course of the employment. McCann v. Hatchett, 19 S.W.3d 218, 221-22 (Tenn.2000) (emphasis added). In McCann, a traveling worker drowned in the pool of the hotel in which he had lodged while working at an out-of-state job site. Under such circumstances, this court reversed a trial court's summary dismissal. We hold the McCann rule to be applicable to the facts of the present case. Hence, we cannot say that the facts and inferences to be drawn from those facts would permit a reasonable person to reach only one conclusion. For the above reasons, the denial of the plaintiff's motion for summary judgment is affirmed, but the granting of the defendant's motion for summary judgment is reversed and the case remanded to the Chancery Court for Marion County for proceedings consistent with this opinion. We express no opinion as to the ultimate result to be reached after remand. Costs are taxed to the parties equally. 2003 WL 21203416 (Tenn.Workers Comp.Panel)
Court of Appeals of Tennessee. Richard WILSON, v. THE UNIVERSITY OF TENNESSEE AT CHATTANOOGA. No. M2000-02573-COA-R3-CV. Dec. 28, 2001. Application for Permission to Appeal Denied by Supreme Court, Sept. 9, 2002. Appeal from the Chancery Court for Davidson County, No. 99-3395-1; Irvin H. Kilcrease, Jr., Chancellor. Rebecca Wells Demaree and Andrew Lawrence Berke, Nashville, Tennessee, for the Plaintiff/Appellant, Richard Wilson. Ronald Courtney Leadbetter, Knoxville, Tennessee, for the Defendant/Appellee, The University of Tennessee at Chattanooga. OPINION HOUSTON M. GODDARD, P.J., delivered the opinion of the court, in which CHARLES D. SUSANO, JR., joined. HERSCHEL P. FRANKS, J., not participating. HOUSTON M. GODDARD, P.J. *1 In this appeal from the Chancery Court for Davidson County Dr. Richard Wilson, the Plaintiff/Appellant, contends that the Chancellor erred in affirming an Administrative Judge's decision that Dr. Wilson engaged in conduct warranting his dismissal as a tenured faculty member at the University of Tennessee at Chattanooga, the Defendant/Appellee, for violation of the University's policy against sexual harassment. We reverse the judgment of the Chancery Court and remand for further proceedings consistent with this opinion. We adjudge costs against the University of Tennessee at Chattanooga. This is an appeal from the judgment of the Chancery Court for Davidson County affirming the decision of an Administrative Judge to terminate the employment of the Plaintiff/Appellant, Dr. Richard Wilson as a member of the faculty of the Defendant/Appellee, The University of Tennessee at Chattanooga (hereinafter UTC). Although Dr. Wilson has raised several issues in this appeal, our determination with respect to but one of these issues makes it unnecessary that we address the other issues presented which are, therefore, pretermitted. The issue addressed in this opinion is restated as follows: Did the Chancery Court err in affirming the finding of the Administrative Judge that Dr. Wilson engaged in conduct warranting his dismissal as a tenured faculty member for violation of UTC's policy against sexual harassment? On April 9, 1998, Dr. Wilson, a tenured professor of political science employed by UTC, was conducting his class entitled Comparative Government Asia. During the course of this class Dr. Wilson announced that he was in need of typing assistance because the person who ordinarily did his typing was unavailable. Diana Oo, a student in the class, volunteered to help Dr.Wilson with his typing and he advised her that she would be compensated for doing so. At Dr. Wilson's instruction, Ms. Oo called him the next morning and made arrangements to meet him that afternoon at a rental house owned by him. The record shows that, at the time, Dr. Wilson rented apartments in this house to UTC students and that his own living quarters were also located there. Upon her arrival at the rental house, Dr. Wilson conducted Ms. Oono to an apartment in the house which was between tenants and in which he had placed a chair and a desk-type table upon which was set up a laptop computer and a dictaphone. Dr. Wilson showed Ms. Oo how to operate the dictaphone and requested that she type some material which he had previously recorded onto a micro-cassette. Dr. Wilson then left the room and did not return until approximately one hour later by which time Ms. Oo had completed the requested typing. The apartment door was wide open during the time Ms. Oo was inside and the doors to other apartments in the house were visible from the spot where Ms. Oo was typing. After his return, Dr. Wilson stood behind Ms. Oo, who was still seated, and reviewed her work. Ms. Oo testifies that Dr. Wilson then complimented her typing and touched or massaged her shoulders "a little longer than I thought was the norm." Ms. Oo further testifies that this made her feel "slightly uncomfortable, but I think that ... I thought it was just me. I thought everything was fine." *2 Dr. Wilson then sat down on a waterbed frame located next to the desk and he and Ms. Oo engaged in conversation for a few minutes until she told him that she would need to leave to meet a friend for lunch. As she and Dr. Wilson were saying good-bye, Ms. Oo attempted to put her shoe back on, having previously removed it to operate the dictaphone. Before she could do so, however, Dr Wilson put it on for her and touched her ankle which Ms. Oo testifies she decided was inappropriate. Ms. Oo states that Dr. Wilson then requested that after lunch she return to type additional material and she agreed to do so because "I was still unsure if what he had done was actually inappropriate and I didn't want to offend him in any way. So I just acquiesced." At lunch Ms. Oo told her friend, Jyoti Maurya, about being touched by Dr. Wilson. When asked by her attorney how she felt at the time she was talking to Ms. Maurya, Ms. Oo testifies as follows: Q: How did you feel at the time you were talking to Jyoti? A: I felt confused. Q: Did you tell her that? A: Yes. I told her that I thought it was strange but that I wasn't sure if he intended to be inappropriate. Ms. Maurya accompanied Ms. Oo upon her return to Dr. Wilson's house when they finished lunch. Ms. Oo attests that Dr. Wilson "seemed less warm and friendly" than he had at their earlier meeting and that he told her that he would no longer need her and would pay her at a later date. Ms. Maurya testified that she heard Dr. Wilson tell Ms. Oo that she could finish the work on some other day. Ms. Oo and Ms. Maurya then left. The next day Ms. Oo told another friend, Jamie Allison, of her encounter with Dr. Wilson. Ms. Oo testifies that she wasn't sure whether what happened was inappropriate and she wanted to use Ms. Allison as a sounding board. A few days later Ms. Oo also described Dr. Wilson's conduct to Dr. Foud Moughrabi, acting head of the Political Science Department at UTC. Following a second meeting with Dr. Moughrabi, Ms. Oo encountered Dr. Wilson in a campus parking lot. Ms. Oo attests that Dr. Wilson was very angry that there had been a complaint filed against him and demanded to know what the problem was and what he could do to reconcile the problem. Ms. Oo further testifies that after this confrontation she was very worried about what her grade would be in Dr. Wilson's class. After her conversation with Dr. Wilson in the parking lot, Ms. Oo contacted Barbara Wofford, an affirmative action officer with UTC., and told her of Dr. Wilson's conduct. Ms. Oo states that, although she did not want to continue attending Dr. Wilson's class after encountering him in the parking lot, she agreed to do so at Dr. Moughrabi's insistence. Richard Kernea, another student in the class, testifies that prior to the next class meeting he advised Dr. Wilson that he and the other class members, Jeanine Griffey and Kaylene Brooks [FN1], were aware of Ms. Oo's complaint and that they were all discussing it. When class began Ms. Oo testifies that Dr. Wilson asked her if she had anything to say to which she responded that she did not. Dr. Wilson then announced that he desperately needed a typist. Ms. Oo testifies that she had the impression that Dr. Wilson was trying to make her feel guilty so she volunteered once again to assist him if he would provide her with the necessary equipment and if he would allow her to do the typing at her home. Ms. Oo attests that Dr. Wilson then gave her the dictaphone telling her to be sure not to get her foot caught up in the wire again. FN1. There were only four students in Dr. Wilson's Comparative Asia class-Diana Oo, Richard Kernea, Jeanine Griffey, and Kaylene Brooks. *3 Ms. Oo completed the semester in Dr. Wilson's class and received a grade of A which she attests is the grade she deserved. She further attests that Dr. Wilson never acted inappropriately toward her during the remainder of the semester and treated her just as he treated the other students in the class. Based upon Ms. Oo's allegations, UTC subsequently filed disciplinary charges against Dr. Wilson. Dr. Wilson requested that the charges be heard in accordance with the contested case provisions of the Tennessee Uniform Administrative Procedures Act as set forth at T.C.A. 4-5-301, et seq. By a letter to Dr. Wilson from UTC Chancellor Bill Stacy, Dr. Wilson was charged with: 1. Persistent refusal to comply with University policies. 2. Serious violation of the University's standard of professional responsibility in personal relations with students. Specifically, the letter from Chancellor Stacy recites Ms. Oo's allegations with respect to the typing incident and the subsequent parking lot confrontation. The letter also makes reference to a charge of sexual harassment brought against Dr. Wilson in 1995 by another student, Rebecca Thompson, and directives prompted by those charges which were addressed to Dr. Wilson in a letter dated July 24, 1996, from Dr.Charles Summerlin who was Acting Provost and Vice Chancellor for Academic Affairs at the time. In that letter, Dr. Wilson was specifically instructed to, among other things, "stop inviting students to his home." and, as stated by Chancellor Stacy, "In general, Dr. Wilson was clearly placed on notice that he must not engage in any action constituting sexual harassment of a student ." On May 16, 1999, a hearing on the charges against Dr. Wilson was conducted before the UTC Administrative Judge who entered an order on September 16, 1999, finding Dr. Wilson guilty of persistent refusal to comply with UTC policies and of violating UTC's standard of professional responsibility in his personal relations with students. As a result of her findings, the Administrative Judge terminated Dr. Wilson's employment as a tenured member of the UTC faculty. On November 30, 1999, Dr. Wilson appealed to the UTC Chancellor; however, that appeal was denied on December 15, 1999. In addition, on November 24, 1999, Dr. Wilson filed a petition for review in the Chancery Court for Davidson County. The Chancery Court heard oral argument in the case on August 4, 2000, and on September 13, 2000, it issued its memorandum opinion affirming the order of the UTC Administrative Judge. Thereafter, on October 12, 2000, Dr. Wilson filed his notice of appeal to this Court. Judicial review of the decision of an administrative agency such as UTC is not a de novo review and review is limited to the record before the agency. See Metropolitan Government v. Shacklett, 554 S.W.2d 601 (Tenn.1977). T.C.A. 4-5-322(h), which governs the courts' review of agency decisions, states as follows: (h) The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if the rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions or decisions are: *4 (1) In violation of constitutional or statutory provisions; (2) In excess of the statutory authority of the agency; (3) Made upon unlawful procedure; (4) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or (5) Unsupported by evidence which is both substantial and material in the light of the entire record. In determining the substantiality of evidence, the court shall take into account whatever in the record fairly detracts from its weight, but the court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. Our review of a trial court's decision with respect to agency findings is essentially a determination of whether the trial court correctly applied the standard of review set forth at T.C.A. 4-5-322(h). See Papachristou v. University of Tennessee, 29 SW3d 487 (Tenn.Ct.App.2000). The specific charges of which Dr. Wilson was found guilty in this case are, as previously stated, "persistent refusal to comply with University policies" and "serious violation of the University's standard of professional responsibility in personal relations with students" both of which are set forth as adequate causes for termination of a tenured faculty member at Section 3.8.5 of the UTC Faculty Handbook. The record shows that both of these charges derive from Dr. Wilson's alleged violation of UTC's policy against sexual harassment. The Administrative Judge's finding, and UTC's contention, that Dr. Wilson persistently refused to comply with UTC policy appear to be based upon a determination that Dr. Wilson has once again violated UTC's policy against sexual harassment after being found guilty of violating the same policy based upon the charges brought against him in 1995. The Administrative Judge also notes that Dr. Wilson failed to abide by Dr. Summerlin's directive that he not invite students into his home as set forth in the July 24, 1996, letter he wrote to Dr. Wilson in consequence of the 1995 charges. In her order the UTC Administrative Judge notes that the 1995 charges were based upon an incident that occurred when a student went to Dr. Wilson's home to study for a make-up exam. Although the record does not show that Ms. Oo ever entered Dr. Wilson's actual living quarters or that she was invited to do so, the Administrative Judge determined that a reasonable interpretation of Dr. Summerlin's directive is that Dr.Wilson not invite students to any area of the house which he owned and controlled and in which his own apartment was located. The Administrative Judge states in her order that the directives in the Summerlin letter "were an appropriate response under the circumstances, and were designed to prevent further sexual harassment. Wilson ignored Summerlin's directives and engaged in behavior which led to the current charges. Wilson has, therefore, exhibited a persistent refusal to comply with University policies." *5 While we do not dispute that the directives set forth in the letter from Dr. Summerlin were, as the Administrative Judge states,"an appropriate response under the circumstances and were designed to prevent further sexual harassment", we do not agree that these directives reflect UTC policy or that Dr. Wilson's failure to abide by any of these directives in itself constitutes a refusal to comply with UTC policy. Recognition of Dr. Summerlin's directives as UTC policy would serve to subvert the powers of the University of Tennessee's Board of Trustees which is vested with "full and complete control" of the organization and administration of UTC and is designated as the body which shall establish policies concerning the general operation of UTC. See UTC Faculty Handbook Section 1.2.3.2. which sets forth Article 1 Section 1 of the bylaws of the University of Tennessee. We also note the statement of counsel for UTC at the hearing before the Administrative Judge that the letter from Dr. Summerlin "is not a policy; it is a warning letter." Therefore, a determination of whether Dr. Wilson failed to abide by the directive that he not invite students into his home is not relevant to the question of whether he persistently refused to comply with UTC policy. The UTC policy at issue in this case is the policy against sexual harassment and, accordingly, the question which must be addressed in this case is whether Dr. Wilson's conduct toward Ms. Oo constituted a violation of that policy. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of sex. See 42 U.S.C.2000e-2(a)(1). Furthermore, the United States Supreme Court has recognized that the sexual harassment of a subordinate by a supervisor in an employment situation constitutes unlawful discrimination under Title VII. See Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). Federal regulations set forth at 29 C.F.R. 1604.11(a) provide the following guidelines defining hostile environment sexual harassment, as appears to be alleged in the present case, in an employment setting: Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when ... (3) such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment. Title IX of the Educational Amendments of 1972, 20 U.S.C. 1681 provides that "[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance ..." The Sixth Circuit Court of Appeals has acknowledged that the elements required to state a hostile environment sexual harassment claim under Title VII apply equally under Title IX. See Doe v. Claiborne County, Tenn., 103 F.3d 495 (6th Cir.1996). *6 In her order, the Administrative Judge acknowledges that under Title VII sexual harassment case law "for there to be liability for hostile environment sexual harassment, 'conduct must be severe or pervasive enough to create an environment that a reasonable person would find hostile or abusive, and the victim must subjectively regard that environment as abusive.' " Citing Black v. Zaring Homes, Inc., 104 F.3d 822, 826 (6th Cir.1997). Under the facts presented in the case before us we do not deem that the conduct attributed to Dr. Wilson by Ms. Oo was sufficiently pervasive or severe to sustain a cause of action for sexual harassment under this standard. The encounter between Dr. Wilson and Ms. Oo out of which this case arose occurred in 1998 and is, therefore, too remote, in our view, from the 1995 incident of sexual harassment to be considered pervasive on that basis. Also, other than the1995 incident and the current charge, the record reveals no other allegations that Dr. Wilson engaged in sexual harassment while employed at UTC. Although in McClellan v. Board of Regents of the State University, 921 S.W.2d 684 (Tenn.1996), the Tennessee Supreme Court recognized that a single incident of sufficient severity may be actionable as sexual harassment, we do not find that Dr. Wilson's actions towards Ms. Oo were of such severity. In this regard we are guided by the Sixth Circuit Court of Appeals case of Burnett v. Tyco Corporation, 203 F.3d 980 (6th Cir.2000) where the Court found that allegations by a female employee that the defendant employer's personnel manager had placed a pack of cigarettes containing a lighter inside her tank top and brassiere and had, on two separate occasions, made sexually offensive remarks to her were insufficient to create a genuine issue of material fact as to whether the conduct was sufficiently severe to support a finding of hostile working environment under Title VII. UTC and the Administrative Judge assert that, even if Dr. Wilson's conduct is not such as would impose liability on UTC under Title VII's sufficiently 'severe or pervasive' standard, the law permits an employer to take prompt effective action before an employee's conduct persists to the point where the employer is subject to liability. UTC cites the following cases in support of this proposition: Chalmers v. Quaker Oats Co., 61 F.3d 1340 (7th Cir.1995); Howard v. Department of Air Force, 877 F.2d 952 (Fed.Cir.1989) and Carosella v. United States Postal Service, 816 F.2d 638 (Fed.Cir.1987). [FN2] Additionally, UTC cites Gebser v. Lago Vista Independent School Dist., 524 U.S. 274, 118 S.Ct. 1989, 141 L Ed.2d 277 (1998) for the proposition that it is not only permitted to take such action, but is obligated to do so if it has received actual notice of sexual harassment by a teacher and it intends to establish a defense to liability under Title IX. FN2. In her order of September 16, 1999, the Administrative Judge also cites Hubrig v. Lockheed Martin Energy Sys., Inc., an unreported opinion of this Court filed in Knoxville, on May 4, 1998. The Hubrig case is designated " Permission to Appeal Denied, Concurring in Results Only." Amendment to Rule 4 of the Rules of the Tennessee Supreme Court, which became effective November 1, 1999, and which is applicable to intermediate appellate court decisions rendered prior to that date, provides that cases so designated have no precedential value. UTC's policy on sexual harassment is set forth at Section 4.2.2. of the UTC Faculty Handbook as follows: 4.2.2. Sexual Harassment Policy *7 The University of Tennessee at Chattanooga recognizes that harassment in the University on the basis of sex is a violation of Section 703 of Title VII. For this reason, the University is adding this statement and the following guidelines to the Faculty Handbook, the University Personnel Policy Manual and the Student Handbook. Sexual advances by any UTC employee (faculty or staff member) toward another employee or student which become a condition of employment or affect the academic relationship constitute an unlawful practice. Unsolicited or unwelcome physical or verbal behavior of a sexual nature which has the purpose of creating an atmosphere of intimidation is a violation of TitleVII. In the case of such harassment, an employee or student has the right to pursue the EEO grievance procedure for redress. The affirmative action officer should be contacted for this procedure. Guidelines: Sexual harassment in the workplace has long been recognized by the EEOC as violation of Section 703 of Title VII of the Civil Rights Act of 1964, as amended. Sexual harassment in the workplace is gender-based discrimination which violates Title VII and constitutes an unlawful employment practice. Additional cases involving issues of sexual harassment are being litigated now both by EEOC and private parties. The question of whether a particular action or incident establishes a purely personal, non-employment related relationship requires a factual determination. In making such a determination, the case record as a whole, as well as the totality of the circumstances, such as the nature of the sexual advances and the context in which the alleged incidents occurred, will be examined. The determination of the legality of a particular action will be made from the facts, on a case by case basis, because the same behavior may constitute sexual harassment in one context but not in another. Sexual harassment, like racial harassment, generates a psychologically harmful atmosphere. Employees and students are guaranteed a working and learning environment free of discriminatory intimidation, whether racial or sexual. Therefore, UTC has an affirmative duty to maintain an atmosphere free of sexual harassment and intimidation. The best way to achieve such an environment is to prevent sexual harassment from occurring at all, by utilizing all possible methods to alert the employees and students to the problem and to stress that sexual harassment, in any form, will not be tolerated. We do not dispute UTC's right to take remedial action before an employee's conduct continues to the point where UTC is subject to liability and we agree that, for the purpose of taking such action, UTC is not bound by case law defining what constitutes sexual harassment under Title VII. However, we are compelled to note that throughout it's stated policy on sexual harassment as set forth above, UTC refers to sexual harassment as being a violation of Title VII. If, for the purposes of remedial action, UTC decides to adopt a more stringent policy than is required to establish liability under Title VII case law, an employee, like Dr. Wilson, who is charged with violation of such policy must be sufficiently apprised of the stringency of UTC's stance and must be alerted to the perimeter of the policy to which he is subject. See Chalmers, ibid. Our review of the record in this case does not convince us that Dr. Wilson was provided with adequate information from which he could have inferred that his behavior toward Ms. Oo would violate UTC's policy against sexual harassment. Although we recognize the previous charge of sexual harassment brought against Dr. Wilson in 1995 as well the letter written to him by Dr. Summerlin in consequence of those charges, we do not find that either the circumstances of the prior incident or the contents of Dr. Summerlin's letter would have served to place Dr. Wilson on notice that UTC would consider the conduct of which he is currently accused to be a violation of its policy against sexual harassment. *8 With respect to the charge of sexual harassment brought against Dr. Wilson in 1995, the record shows that this charge was based on allegations that Dr. Wilson kissed and hugged a female student and that he refused to give her an A in his course after she resisted his advances. The fact that UTC deemed such overtly sexual behavior coupled with the element of quid pro quo to constitute sexual harassment would not have been sufficient to alert Dr. Wilson that UTC's definition of sexual harassment might encompass the conduct of which he is accused in the present case. In contrast with the 1995 incident, Ms. Oo's own testimony makes evident the ambiguous nature of Dr. Wilson's actions in the present matter. Although, as set forth above, Ms. Oo attests that when Dr. Wilson touched her ankle she decided this was inappropriate, she also testifies that, thereafter, she agreed to return to do more typing because she "was still unsure if what he had done was actually inappropriate" and that she told her friend, Ms. Maurya, that she thought Dr. Wilson's conduct was "strange" but that she "wasn't sure if he intended it to be inappropriate." The letter written to Dr. Wilson from Dr. Summerlin as a result of the 1995 charge instructs him to discontinue certain practices "because they have the potential for compromising professional relationships between faculty and students." The letter does not state that UTC considers any of the designated practices to be conduct amounting to sexual harassment but only that such practices are "ill advised and contribute substantially to concerns about the environment you are fostering with respect to students." We find nothing in this letter which would have placed Dr. Wilson on notice that UTC would consider his behavior toward Ms. Oo in the present case to be sexual harassment. Finally, a review of the behavior complained of in each of the four cases cited by UTC in support of its right to take prompt remedial action accentuates the relatively innocuous nature of Dr. Wilson's conduct toward Ms. Oo in the present case. In Chalmers v.. Quaker Oats Co., 61 F.3d 1340 (7th Cir.1995) a company officer was discharged for kissing a female employee without invitation. In Howard v. Department of the Air Force, 877 F.2d 952 (Fed.Cir.1989) an employee was discharged for, among other things, suggesting to a female co-worker that they "make wild love all afternoon" and for grabbing and kissing another female employee and asking her about her breast size and sex drive. Carosella v. United States Postal Service, 816 F.2d 638 (Fed.Cir.1989) involved a supervisor who was discharged for, among other things, putting his arm around a female employee and asking her out for a date and for kissing another female employee on several occasions and offering to have her clocked in so that she could be paid to go out with him. And Gebser v. Lago Vista Independent School Dist., 524 U.S. 274, 118 S.Ct. 1989, 141 L.Ed.2d 277 (1998) involved a high school teacher whose employment was terminated when it was discovered that he was engaging in sexual intercourse with one of his female students. *9 It is our conclusion that the sexual harassment policy of UTC as set forth in its Faculty Handbook did not sufficiently apprise Dr. Wilson that UTC might consider the conduct attributed to him in this matter to be sexual harassment. Nor do we find that UTC supplemented such policy as set forth in the Handbook or that Dr. Wilson's conduct was of such gravity that he should have otherwise known that it would violate UTC's policy against sexual harassment. Accordingly, we find that the Administrative Judge's decision to terminate Dr. Wilson's employment based on findings that he persistently refused to comply with UTC policy and seriously violated UTC's standard of professional responsibility in personal relations with students was arbitrary and, therefore, we conclude that the Chancery Court erred in affirming the opinion of the Administrative Judge. For the foregoing reasons we reverse the judgment of the Chancery Court and remand for such further proceedings, if any as may be necessary, and collection of costs below which are, as are costs of appeal, adjudged against the University of Tennessee at Chattanooga. 2001 WL 1660832 (Tenn.Ct.App.)
CHARLES BLACK, Plaintiff/Appellee v. RAYTHEON ENGINEERS AND CONSTRUCTORS, Defendant/Appellant.
No. E 1998-211-WC-R3-CV
SUPREME COURT OF TENNESSEE, SPECIAL WORKERS' COMPENSATION
APPEALS PANEL, AT KNOXVILLE
2000 Tenn. LEXIS 38
January 14, 2000, Filed
NOTICE:
DECISION WITHOUT PUBLISHED OPINION. CONSULT THE TENNESSEE SUPREME COURT RULES FOR CITATION OF UNPUBLISHED OPINIONS.
SUBSEQUENT HISTORY:
[*1] Judgment Order of January 14, 2000, Reported at: 2000 Tenn. LEXIS 32.
PRIOR HISTORY:
Chancery Court. Rhea County. Hon. Jeffrey Stewart, Chancellor.
DISPOSITION:
AFFIRMED.
COUNSEL:
For Appellee: Ronald Berke, Chattanooga, TN.
For Appellant: David Hensley, Milligan, Barry, Hensley & Evans, Chattanooga, TN.
JUDGES:
Members of Panel: Justice William M. Barker, Associate Justice, Supreme Court, Robert E. Corlew, III, Chancellor, R. Vann Owens, Retired Judge. Concur: William M. Barker, Associate Justice, Robert E. Corlew, Retired Judge.
OPINIONBY:
R. Vann Owens
OPINION:
MEMORANDUM OPINION
Owens, Retired Judge
NATURE OF CASE
This is an appeal of a workers' compensation case in which the trial court awarded a 50 percent permanent partial disability to the left lower extremity of the plaintiff. The plaintiff had allegedly torn the meniscus in his left knee as a result of his work or work activities. The defendant/appellant raised the following issues on appeal: (1) Whether the suit should have been dismissed for the plaintiff/appellee's failure to give proper notice of his alleged injury;
(2) Whether the medical proof was sufficient to show that the plaintiff's work advanced the severity of a pre-existing condition or cause of disabling injury; (3) Whether the Court's [*2] award of a 50 percent permanent partial disability of the leg was excessive. For the reasons hereinafter stated, this Court affirms the holding of the trial court.
SCOPE OF REVIEW
This workers' compensation appeal has been referred to the Special Workers'
Compensation Appeals Panel in accordance with the Tenn. Code Ann. § 50-6-225(e)(3) for hearing and reporting of findings of fact and conclusions of law. Our review of findings of fact by the trial court is de novo upon the record of the trial court, accompanied by a presumption of the correctness of the findings, unless the preponderance of the evidence is otherwise. Lollar v. Wal-Mart Stores, Inc., 767 S.W.2d 143 (Tenn. 1989).
FACTUAL HISTORY
The employee, Charles Black, was sixty years of age at the time of trial. He was retired from the Plumbers and Steam Fitters Local with whom he had been associated for some time. The plaintiff, a high school graduate, completed some college work, and underwent some training in the Air Force, where he was a radar technician. He had worked in the past as an investment banker, but he tried air conditioning work and then ended up doing, primarily, [*3] steam fitting work.
He became employed with the Tennessee Valley Authority Steam Fitters in 1985, and he continued this type of work either with TVA, its contractors, or subcontractors at several different TVA sites until his injury and layoff.
According to the uncontradicted proof, the plaintiff was required to lift heavy weights, climb, and be physically active
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