insurancedefense

Tennessee Supreme Court Modifies Spoliation of Evidence Doctrine By Removing Intentional Misconduct Requirement

Tennessee has long had a doctrine of spoliation of evidence which allows the trial court to draw negative inferences or even provide dismissal against a party who destroys evidence.  Historically, Tennessee courts have required the presence of actual intentional misconduct to invoke the doctrine of spoliation of evidence particularly when providing the remedy of a negative inference or dismissal.  The Tennessee Supreme Court in Lea Ann Tatham v. Bridgestone Americas Holding, Inc., No. W2013-02604-SC-R11-CV, 2015 WL 6688035 (Tenn. 2015) dealt with an apparent conflict between the case law and Rule 34A.02 of the Tennessee Rules of Civil Procedure that was adopted on July 1, 2006.  The full text of Rule 34A.02 provides as follows:

Rule 37 sanctions may be imposed upon a party or an agent of a party who discards, destroys, mutilates, alters, or conceals evidence.

The question before the Tennessee Supreme Court in Lea Ann Tatham was whether Tennessee Courts should continue to require an intentional misconduct prerequisite for a trial court to impose sanctions for spoliation of evidence.  The Tennessee Supreme Court decided this issue and expressed the desire to provide a uniform standard on this issue.

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workerscompensation

Reconsideration of Tennessee Workers’ Compensation Benefits After Termination for Cause

In Stacey v. Nissan North America, Inc., No. M2014-00796-SC-R3-WC, 2015 WL 6119501 (Tenn. Workers Comp. Panel October 15, 2015) the Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel assessed an Employee’s right to reconsideration of prior workers’ compensation awards following the Employee’s termination.

A claimant’s request for reconsideration of a prior award or settlement is governed by Section 50–6–241(d)(1)(B), Tennessee Code Annotated, which provides (in pertinent part):

(i) If an injured employee receives benefits for body as a whole injuries pursuant to subdivision (d)(1)(A) and the employee is subsequently no longer employed by the pre-injury employer at the wage specified in subdivision (d)(1)(A) within four hundred (400) weeks of the day the employee returned to work for the pre-injury employer, the employee may seek reconsideration of the permanent partial disability benefits….

(iii) Notwithstanding this subdivision (d)(1)(B), under no circumstances shall an employee be entitled to reconsideration when the loss of employment is due to…

(b) The employee’s misconduct connected with the employee’s employment.

Tenn.Code Ann. § 50–6–241(d)(1)(B).

Courts in Tennessee have consistently held that “even though an employee might have a statutory right to reconsideration, there is no entitlement to an enlargement of the previous award.” Pigg v. Liberty Mutual Insurance Co., No. M2007–01940–WC–R3–WC, 2009 WL 585962 at *4 (Tenn. Workers Comp. Panel March 9, 2009). Stacey, along with other recent decisions by the Panel, point to the boundaries of the exception to the right to reconsideration.

In Marvin Windows of Tennessee, Inc. v. Gardner, No. W2011–01479–WC–R3–WC, 2012 WL 2674519 (Tenn. Workers Comp. Panel June 8, 2012) an employee settled a workers’ compensation claim and returned to work for his pre-injury employer. Employee was later diagnosed with cancer and took a medical leave of absence for over one year. The employer’s written policy permitted one year of medical leave. When the employee was unable to return to work after one year of medical leave, the employer terminated his employment. The employee then sought reconsideration of his earlier award, but the trial court ruled that he was not eligible for reconsideration.

On appeal, the Panel considered whether the employee’s failure to comply with the employer’s medical-leave policy constituted “misconduct” for purposes of the reconsideration statute. The Panel noted that “[t]he employee behavior need not rise to the level of gross or willful misconduct to satisfy this misconduct standard. Misconduct refers to an employee’s inability to perform his or her job due to reasons unrelated to a workplace injury. The standards for behavior and productivity are governed by reasonable policies established by the employer.” Marvin Windows, 2012 WL 2674519, at *3–4 (Tenn. Workers Comp. Panel June 8, 2012) (internal citations omitted).

Further, “The court must also consider the employer’s need to enforce workplace rules and the reasonableness of the contested rules. Employers should be permitted to enforce workplace rules without being penalized in a workers’ compensation case. Therefore, an employer will not be penalized for enforcement of a policy if the court determines (1) that the actions allegedly precipitating the employee’s dismissal qualified as misconduct under established or ordinary workplace rules and/or expectations; and (2) that those actions were, as a factual matter, the true motivation for the dismissal.” Id., (citations omitted). The Panel in Marvin Windows found that the employer’s medical-leave policy was reasonable and the employee’s inability to comply with that policy constituted “misconduct” that barred reconsideration of the employee’s earlier settlement award. Id.

In Dia v. Imports Collision Center, Inc., No. M2013-01496-WC-R3-WC, 2014 WL 4104591, (Tenn.Workers Comp.Panel Feb. 24, 2014), an employee sought reconsideration of his previous settlement after his employment was terminated. Employee and employer disputed many of the events regarding the circumstances of termination, but it was undisputed that employee had sought to have employee sign a disciplinary form to return to work and that employee failed to do so. The employer claimed that the employee, among other things, was terminated for misconduct, and thus was not entitled to reconsideration of his previous settlement. The Appeals Panel found that the employee’s actions in failing to sign the disciplinary notice constituted misconduct for purposes of the reconsideration statute.

In Stacey, the Employee attempted to receive reconsideration of three previous workers’ compensation claims following his termination. The Employee was terminated after a verbal altercation with an employee of a workout facility provided by the Employer for its employees. Prior to this argument, Employee had completed his workday, left the premises, and returned on his own time to the workout facility. The workout facility was staffed by a contractor, and therefore the employee on the receiving end of the altercation was not an employee of the Employer. Employer had never before disciplined employees for actions occurring at the workout facility.

Based on this fact pattern, the appellate court held that Employee’s termination was not sufficiently connected to his employment in order to meet the “connected with” language under 50–6–241(d)(1)(B) since it occurred offsite, outside of the context of the Employee’s employment and to not involve a clear violation of a policy of the Employer. The Employee was thus entitled to reconsideration of his previous awards and settlements.

As shown in Stacey, Dia, and Marvin Windows, the determination by Tennessee courts as to whether or not a termination meets the standard of misconduct “connected with an employee’s employment” under § 50–6–241(d)(1)(B) is fact-intensive. The closer the employee’s “misconduct” can be found to have violated a clear policy of the employer, the more likely they are to be found to meet the standard for an exception to the employee’s right to reconsideration.

medicalmalpractice

Tennessee Supreme Court Clarifies Which Cases Are Subject to Tennessee Health Care Liability Act Requirements

The Tennessee Supreme Court recently handed down a very important medical malpractice decision in Adam Ellithorpe v. Janet Weismark, 2015 WL 5853873 (Tenn. 2015).  In this new decision, the Tennessee Supreme Court considered whether its prior opinion of Estate of French v. Stratford House, 333 S.W.3d 546 (Tenn. 2011) was overruled by legislation found in the Tennessee Civil Justice Act in 2011.  In the Estate of French decision, the Tennessee Supreme Court previously ruled that claims could be characterized as ordinary negligence as opposed to medical malpractice when the conduct alleged is not substantially related to the rendition of medical treatment by a medical professional.  Following that decision, the Tennessee Legislature passed the Tennessee Civil Justice Act of 2011 which amended the definition of a “healthcare liability action” to the following:

(1) “Health care liability action” means any civil action, including claims against the state or a political subdivision thereof, alleging that a health care provider or providers have caused an injury related to the provision of, or failure to provide, health care services to a person, regardless of the theory of liability on which the action is based;

T.C.A. § 29-26-101(a)(1).

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Law

Tennessee Court of Appeals Confirms Forum Selection Clauses are Enforceable in Tennessee Contracts

The Tennessee Court of Appeals recently discussed forum selection clauses found in contracts.  These are clauses that select the jurisdiction and court that will handle any disputes involving the contract.  The case of The Cohn Law Firm v. YP Southeast Advertising & Publishing, LLC, 2015 WL 3883242 (Tenn. Ct. App. 2015) involved a dispute between a plaintiff attorney law firm and an advertising company.  The plaintiff’s attorney sued the advertising company in Shelby County Chancery Court over the dispute.  The defendant advertising company filed a Motion to Dismiss alleging that this jurisdiction was inappropriate due to a forum selection clause in the contract.  The contract between the plaintiff’s attorney law firm and the defendant provided that any lawsuit pertaining to the agreement should only be filed in the United States District Court for the Northern District of Georgia or the Superior Court of Dekalb County, Georgia. (The Cohn Law Firm at 2).  This contract was signed by the plaintiff attorney.

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employmentlaw

What Kinds of Social Media Posts Provide a Legitimate Basis for Termination?

The National Labor Relations Board (NLRB) gives employees the right to engage in protected, concerted activity and discuss the terms and conditions of their employment. This, however, is not a free pass for all types of communication. In Richmond District Neighborhood Center, Case No. 20-CA-091748 the NLRB determined there were some postings in social media that were so egregious as to lose the protection afforded above-referenced.

In Richmond District Neighborhood Center the employer runs afterschool programs at a high school. Two workers had discussions which were perceived to be insubordinate. In essence, these employees discussed on Facebook how they would ignore the employer’s rules. The NLRB determined these threats justified termination and were not protected types of communication in social media.

Conversely, the NLRB found that “likes” can be protected under the theory of a “concerted activity.” In 2014, the NLRB ruled that Triple Play Sports Bar and Grill fired individuals inappropriately. In this matter a former Triple Play employees posted negative comments about the employer on a Facebook page and a current employee “liked” the post. When that employee returned to work the employee was terminated immediately based upon the “like” of the comment. The NLRB found this was not appropriate. The NLRB found the company’s anti-blogging policy was aimed at stopping employees from saying anything negative about the company online and, therefore, was an effort to chill protected, “concerted activity.”

Further, in a NLRB advice memorandum pertaining to Skin Smart Dermatology a question arose as to whether or not the employer violated Section 8(a)(1) of the Act when the employer discharged the charging party for comments made in a private Facebook group message. In this matter the NLRB concluded the charging party was not engaged in a protected concerted activity when she posted comments to the Facebook group message. In this matter the communication was not considered a concerted activity but, instead, was not a concerted activity as it did not involve shared employee concerns over terms and conditions of employment. Rather, the post was associated with personal issues the particular employee had with the employer.

will

How Do You Contest an Individual’s “Lack of Testamentary Capacity” to Execute a Will in Tennessee?

One way to contest a will in Tennessee is to assert that the decedent had a “lack of testamentary capacity”.  Basically, this is an assertion that the individual who executed the will was not actually competent to execute the will.  Tennessee has many cases that discuss this claim in the context, most often, of a will contest situation.

The Tennessee Court of Appeals has said the following about what is required to establish “lack of testamentary capacity” contest to a will:

The law requires that the testator’s mind, at the time the will is executed, must be sufficiently sound to enable him or her to know and understand the force and consequence of the act of making the will.  American Trust & Banking Co. v. Williams, 225 S.W.2d 79, 83 (1948). The testator must have an intelligent consciousness of the nature and effect of the act, a knowledge of the property possessed and an understanding of the disposition to be made. Goodall v. Crawford, 611 S.W.2d 602, 604 (Tenn. App. 1981). While evidence regarding factors such as physical weakness or disease, old age, blunt perception or failing mind and memory is admissible on the issue of testamentary capacity, it is not conclusive and the testator is not thereby rendered incompetent if her mind is sufficiently sound to enable her to know and understand what she is doing. American Trust, supra; 79 Am.Jur.2d Wills § 77 (1975).

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insurancedefense

Tennessee Supreme Court Assesses when Tennessee can Apply Retaliatory Taxes on Insurance Companies from Other States

The Tennessee Supreme Court recently interpreted the laws of a foreign state in order to determine whether or not the State of Tennessee could impose a “retaliatory tax” on insurance companies based in the foreign state who operated in Tennessee as authorized workers’ compensation coverage providers. See Chartis Casualty Company et al. v. State of Tennessee, No. M2013-00885-SC-R11-CV, 2015 WL 5766279 (Tenn. October 2, 2015).

The State of Tennessee had audited a number of insurance companies based in Pennsylvania and required them to pay “retaliatory taxes” under Tenn. Code Ann. § 56-4-218. This statute allows the State of Tennessee to impose additional taxes on insurance companies from other jurisdictions when insurance companies based in Tennessee are taxed to a greater degree in those jurisdictions than the insurance companies from other jurisdictions are taxed in Tennessee. The calculation takes into account “taxes, fees, fines, penalties, licenses, deposit requirements or other obligations…” § 56-4-218(a).

In the case of the Pennsylvania companies, the State of Tennessee determined that the State of Pennsylvania’s taxes and fees on Tennessee insurance companies were higher than the State of Tennessee’s taxes and fees on Pennsylvania insurance companies. Therefore, the State of Tennessee applied “retaliatory” taxes on these Pennsylvania companies. Five of these Pennsylvania insurance companies paid the taxes under dispute to the State before filing a complaint with the Tennessee Claims Commission. The Tennessee Claims Commission granted the summary judgment motions of the State of Tennessee as to all five cases involving the five Pennsylvania insurance companies, and the Court of Appeals affirmed the rulings. The Tennessee Supreme Court granted permission to appeal.

In its opinion, the Supreme Court did not question the constitutionality of Tennessee’s retaliatory laws. Rather, the Supreme Court analyzed Pennsylvania statutes to determine whether or not Pennsylvania actually did impose a financial burden on Tennessee insurance companies doing business in Pennsylvania greater than the financial burden applied by the State of Tennessee. If they did, the Court held that Tennessee’s retaliatory taxes should have applied.

The lower courts had based their opinions on three Pennsylvania statutes which applied higher financial burdens on Tennessee insurance companies than Tennessee applied on Pennsylvania insurance companies. However, a more recent statute had been passed by the Pennsylvania legislature which stated that taxes imposed under the previous statutes were no longer to be directly imposed on insurance companies but instead were to be “imposed, collected and remitted through insurers in accordance with regulations promulgated by the Department of Labor and Industry.” 71 Pa. Cons. Stat. Ann. § 578. This statute was interpreted by the Supreme Court as not requiring the workers’ compensation assessments to be paid by insurance companies but instead to be merely collected by insurance companies from their policyholders and then paid to the State of Pennsylvania. The Court found that the newer statute repealed the three older Pennsylvania statutes imposing fees directly on insurance companies, since, because “the statutory schemes are inconsistent,” the older statutes would be repealed by implication. Chartis Casualty Company, 2015 WL 5766279 at *8.

The next question the Court analyzed was whether or not the newer Pennsylvania statute continued to place a direct financial burden upon Tennessee insurance companies doing business in Pennsylvania which exceeded the reciprocal financial burden upon Pennsylvania insurance companies doing business in Tennessee. The Court found that the fact that the policyholders of the insurance, instead of the insurance companies themselves, paid directly for these fees and taxes meant that the financial burden from the three older statutes could not be factored into a determination by Tennessee of retaliatory taxes for insurance companies. The State argued that the insurance companies’ administrative role of collecting and sending payments made by its policyholders to the State of Pennsylvania was an indirect financial burden which would be considered a fee, fine, penalty, license, deposit requirement or other obligation under the TN retaliatory tax statute. The Court, however, declined to consider this argument.

While the Court noted that the newer statute was an attempt by Pennsylvania to actively avoid retaliatory taxes for insurance companies domiciled in the state which operated in other jurisdictions, this active avoidance was successful since the financial burden of the policyholders would not factor into a determination of the financial burden for insurance companies. The Court thus found that there was no financial burden on Tennessee insurance companies operating in Pennsylvania greater than the financial burden of Pennsylvania insurance companies operating in Tennessee. Therefore, the State of Tennessee had no authority to impose retaliatory taxes upon the Pennsylvania insurance companies.

businesslitigation

Tennessee Whistleblower Claim Requires Reporting Illegal Conduct to Other Than Wrongdoer

Recently in Haynes v. Formac Stables, Inc., Judge Wade authored a Tennessee Supreme Court opinion which dismissed a retaliatory discharge case brought pursuant to both common law and the Tennessee Public Protection Act. The Complaint alleged the owner of the business had engaged in illegal conduct and had terminated the employee when he acted as a whistleblower by complaining of conduct to the owner. The Trial Court dismissed the plaintiff’s claim, because according to the employee’s own allegations, he had not reported the illegal activity to anyone other than the person responsible for the activity.

 It was determined on appeal that an employee must report an employer’s wrongdoing to someone other than the wrongdoer to qualify as a whistleblower claim. There is a requirement of reporting to an outside entity or individual when the wrongdoer is the manager, owner or highest ranking officer within the company. The decision of the Appellate Court was affirmed.

insurancedefense

Tennessee’s One Year Personal Injury Statute of Limitations Extended to Two Years when Criminal Charges are Brought

The 2015 Tennessee legislature passed Public Chapter No. 388 that extends the typical one year statute of limitation for personal injury causes of action (as well as other cause of actions) in certain situations.  This new law went into effect for all causes of action that accrue on or after July 1, 2015.   This statute basically extends the typical one year statute of limitations for cases involving personal injury, libel, false imprisonment, malicious prosecution and compensatory or punitive damage claims under Federal Civil Rights statutes.  In order to take advantage of the two year statute of limitations extension, a criminal charge must be brought pertaining to the incident in question within one year of the incident by (1) a law enforcement officer; (2) a District Attorney General; or (3) a grand jury.

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will

Who Has Standing to Contest a Will in Tennessee?

In Tennessee, a party who is going to contest a will must have proper “standing” to actually contest the will.  This basically means that the individual must have the authority under Tennessee Law to contest the will before they can do so.  If they do not have proper standing, then the Court will simply dismiss the case.  Tennessee Courts have provided guidance on who has standing to contest a will.

The Tennessee Court of Appeals in Keasler v. Estate of Keasler, 973 S.W.2d 213 (Tenn. Ct. App. 1997) found that “in order to have standing to contest a will, the contestant must show that he would take a share of the decedent’s estate if the probated will were set aside.”

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