Dan Berexa's Tennessee Law Blog

Part 4 - Review of Two Years of Tort Reform - Limitations on Venue

The Tennessee Civil Justice Act incorporated significant limitations on the venue in which a defendant can be sued in transitory actions, which includes tort cases. The changes are incorporated in Tenn. Code Ann. §20-4-101 & 104 (see text below). Now, unless venue is otherwise provided for, an individual can only be sued in the county where “all or a substantial part of the events giving rise to the cause of action accrued” or the county where the individual defendant resides.  

If an defendant entity is organized under the laws of Tennessee, it can be sued in the county where the cause of action accrued, or where the business maintains its principal office. If the entity is not organized under the laws of Tennessee, it can only be sued in the county where the cause of action arose or where its registered agent for service of process is located. If the entity does not have a registered agent, it can be sued in the county in which the cause of action accrued or the county of any statutorily designated agent for process. 

20-4-101.  Transitory actions. 

 (a) In all civil actions of a transitory nature, unless venue is otherwise expressly
provided for, the action may be brought in the county where the cause of action
arose or in the county where the individual defendant resides.

(b) If, however, the plaintiff and defendant both reside in the
same county in this state, then the action shall be brought either in the county
where the cause of action arose or in the county of their residence.

(c) Where the action is brought either in the county where the cause of action arose or in the county where the defendant resides, process may be sent to another county as in local action, and it shall not be necessary nor required that the defendant be in the county of action either when the action is commenced or during the time between the commencement of the action and service of process.

20-4-104.  Business office of party. 

For all civil actions, if the defendant is not a natural person, the action shall be
brought in:

   (1) The county where all or a substantial part of the events or omissions giving rise to the cause of action accrued;

   (2) The county where any defendant organized under the laws of this state maintains its principal office; or

   (3)  (A) If the defendant is not organized under the laws of this state, the county where the defendant's registered agent for service of process is located; or

      (B) If the defendant does not maintain a registered agent within this state, the county where the person designated by statute as the defendant's agent for service of process is located.

Part 3 - Review of Two Years of Tort Reform - Limitations on Tennessee Consumer Protection Act Claims

The Tennessee Consumer Protection Act was enacted in 1977. One of the most significant aspects of the act is the potential to recovery attorneys fees and up to treble damages in the event a party is found guilty of an "unfair or deceptive act or practice." The 2011 tort reform legislation implemented several changes to the TCPA, such as eliminating a private right of action for unfair acts or deceptive practices involving the marketing or sale of securities. The TCPA was also amended to specifically prohibit class action lawsuits for alleged TCPA violations and to exempt the insurance industry from TCPA coverage. The Tennessee Supreme Court had previously interpreted the act to apply to the insurance industry.

The most significant change in 2011 was the elimination of the right to bring a private action for a violation of the "catch-all" provision found at Tenn. Code Ann.  § 47-18-104(b)(27). This provision makes it a violation of the TCPA to engage "in any other act or practice which is deceptive to the consumer or to any other person." Prior to the effective date of the amendment, this "catch-all" was often used as the basis to allege a TCPA violation where the actions of the defendant did not violate one of the specifically proscribed unfair or deceptive acts listed in the TCPA. The 2011 amendment provides that the "catch-all" provision is now only enforcable by the Tennessee Attorney General.

While the 2011 amendments to the TCPA generated little media attention, they are significant and any party litigating a TCPA claim should take a close look at the amended act and keep in mind that pre-amendment caselaw interpreting the amended provisions may no longer control.

Dan Berexa
Nashville, Tennessee

Part 2 - Review of Two Years of Tennessee Tort Reform - Cap on Punitive Damages

Part 2 in this series, reviewing the significant developments in Tennessee tort reform over the last two years, addresses the punitive damages cap enacted as Tenn. Code Ann. § 29-39-104. The statute codifies many aspects of Tennessee Supreme Court’s 1992 decision in Hodges v. S.C. Toof & Co., which limited the availability of punitive damages to instances where the defendant is found, by clear and convincing evidence, to have engaged in intentional, reckless, malicious or fraudulent conduct which caused injury to the plaintiff. 

The cap generally limits punitive damages awards to two times the compensatory damages awarded to the plaintiff, or $500,000, whichever is greater. Like the cap on non-economic damages, there are exceptions were the cap does not apply, such as where the defendant intended serious physical injury; the defendant’s conduct resulted in a felony conviction; the defendant intentionally concealed or destroyed evidence; or the defendant was under the influence of alcohol, drugs or other intoxicant or stimulate. The statute also contains provisions limiting the availability of punitive damages against product manufacturers and requires that the culpability of a defendant, whose liability for punitive damages alleged to be vicarious, be determined separately from that of any agent or employee.

The punitive damages cap was enacted as part of the Tennessee Civil Justice Act of 2011 and applies to causes of action accruing on or after October 1, 2011, meaning that the provisions apply if the incident which is the subject of the lawsuit occurred on or after the effective date. 

Dan Berexa
Nashville, Tennessee

 

Related articles

Recap of Two Years of Tennessee Tort Reform - Part 1- Caps on Non-Economic Damages

Recap of Two Years of Tennessee Tort Reform - Part 1- Caps on Non-Economic Damages

The last two sessions of the Tennessee General Assembly have brought about significant tort reform, beginning with the "Tennessee Civil Justice Act of 2011" which was a legislative priority during Governor Bill Haslam’s first year in office. The next several posts provide an overview of the significant tort reforms enacted over the last two years. This summary is not meant to be exhaustive and the text of the statutes must be consulted in connection with analyzing a particular claim.

Non-Economic Damages in Most Civil Actions Capped at $750,000 Per Injured Plaintiff

Pursuant to Tenn. Code Ann. § 29-39-102, non-economic damages are broadly defined to include pain and suffering, physical impairment, mental anguish, emotional distress, loss of enjoyment of life and loss of consortium. The $750,000 cap applies per claimant, and is not increased if a claim is brought against multiple defendants. Nor is the cap increased for derivative claims brought by a spouse, or child, for loss of consortium or other noneconomic damages. There are exceptions, which increase the cap to $1,000,000 per plaintiff, in cases where the injured party sustains a catastrophic injury such as paraplegia, multiple amputations, severe burns, or the claim involves the wrongful death of a parent of one or more minor children.

 Note that the cap does not apply to economic damages such as medical expenses, lost earnings or earning capacity, property damage, loss of business or employment opportunities or other objectively verifiable monetary losses. The cap is also removed when the injury is intentional; where the defendant intentionally conceals or destroys evidence; or for injuries resulting from the defendant’s intoxication. Effective June 12, 2012, the cap is also removed if the defendant is convicted of a felony for the actions which caused the injury or damage to the plaintiff.

Part 2 of this series will discuss the cap on punitive damages.

Dan Berexa
Nashville, Tennessee

 

How Are the Net Proceeds of a Wrongful Death Claim Distributed?

You are pursuing, or defending, a wrongful death suit. To whom are the proceeds of the claim payable? The short answer is the net proceeds of a wrongful death claim are distributed in accordance with the law of intestate sucession. In a recent article published in the Tennessee Bar Journal, Distribution of Net Proceeds in Tennessee Wrongful Death Cases, attorney John Day provides a concise and well written overview of the application of the rules for distribution, with several examples of common scenarios and exceptions.

Dan Berexa
Nashville, Tennessee

Overhaul of Tennessee Post Judgment Interest Statute

Prior to the enactment of Public Chapter No. 1043, the "default" interest rate on judgments was 10% per annum, pursuant to Tenn. Code Ann. § 47-14-121. Effective July 1, 2012, the interest rate applicable to judgments will be based on the prime rate, minus 2%, unless there is a statute, note or contract that fixes the rate of interest at a specific rate. Of course, the rate set by a note or contract cannot exceed the maximum rates permitted by Tenn. Code Ann. § 47-14-103 and the maximum "default" rate is 10%.

As long as low interest rates prevail, accruing post judgment interest will not be a significant concern for judgment debtors who are considering appeal. The Tennessee Administrative Office of the Courts will post rates on its website and the applicable rate will be based on the date of the judgment.

Given current prime rates, the post judgment rate announced in July should be approximately 1.5%.   

Dan Berexa
Nashville, Tennessee

 

Contractors have a non-delegable duty to ensure work of subcontractors is performed in a careful, skillful, diligent and workmanlike manner

The liability of a general contractor for the work of its subcontractors is addressed in J. Scott Griswold's recent article in the Tennessee Bar Journal Who's to Blame. The article discusses the Tennessee Supreme Court's opinion in Federal Insurance Co. v. Winters Roofing in which the court held that a contractor has a non-delegable contractual duty to ensure work is performed in a careful, skillful, and workmanlike manner and that the general subcontractor is liable for its subcontractor's substandard work.

Dan Berexa
Nashville, Tennessee

Tennessee Local Counsel and Practicing Pro Hac Vice in Tennessee

In Tennessee, out of state lawyers who do not have a Tennessee law license are required to associate local counsel in order to qualify for admission Pro Hac Vice in our state courts. The terms and conditions for Pro Hac Vice attorneys are defined in Rule 19 of the Rules of the Supreme Court of Tennessee. Lawyers seeking admission must make filings with the Board of Professional Responsibility (BPR) in addition to seeking formal admission, on a case by case basis, from the court in which they wish to practice. Currently the BPR also requires a registration fee of $170 per calendar year.

The lawyers in my firm are often called upon to serve as local counsel. We are retained by national and regional counsel to assist in Tennessee litigation. Frequently we are associated in personal injury, product liability, health care, commercial matters and employment cases. I am often asked to assist in plaintiff's personal injury cases. The role of local counsel can be as expansive as handling alll the day to day aspects of the case or limited to offering assistance to insure compliance with local rules and practices.

Effective use of local counsel can enhance the quality of the representation, make lead counsel's job easier and acheive cost savings for the client. Some of the benefits of good local counsel are:

-Efficient handling of Pro Hac Vice admission process
-Ready knowledge of Tennessee law, procedure and local rules/practices
-Prior experience with and insight regarding judges
-Access to local experts
-Ability to conduct local investigations and call upon local resources
-Cost effective handling of motion practice, depositions and document production
-Awareness of local perceptions of parties and issues
-Knowledge of jury verdict data
-Assistance with jury panel research and jury selection
-Knowledge of local vendors (good court reporters, videographers, restaurants and lodging)

When you have the occasion to use local counsel take full advantage of all they can do for you and your client.

Dan Berexa
Nashville, Tennessee

Tennessee Supreme Court Liberalizes Application of Family Purpose Doctrine in Motor Vehicle Cases

The Family Purpose Doctrine imposes liability on the head of a household for the negligent operation of a motor vehicle by another family member. The doctrine is often used to hold a parent liable for an accident caused by a driving age child. However, it can be applied to other family relationships such as grandparent-grandchild, aunt-nephew etc. The doctrine imposes liability provided: 1) the head of the household owns and maintains the vehicle “for the purpose of providing pleasure or comfort for his or her family;” and, 2) if the vehicle was being used in the furtherance of a family purpose with either the express or implied permission of the head of the household at the time of the incident.

In the recent opinion in Starr v. Hill, the Tennessee Supreme Court liberalized the application of the Family Purpose Doctrine to meet the realities of modern domestic life, and more specifically the high divorce rate. The court held that the application of the doctrine is no longer dependent on the at-fault driver and the head of the household sharing the same residence. The court also held that there can be more than one “head of the household” for the purpose of application of the doctrine. Although not expressly stating it, the Starr opinion overrules a number of prior decisions from the Tennessee Court of Appeals, which narrowly limited the application of the doctrine.

Dan Berexa
Nashville, Tennessee

Tennessee Supreme Court Cites Study Showing that 21% of Tennessee Drivers are Uninsured

A study cited in the recent Tennessee Supreme Court decision in Starr v. Hill underscores the importance of obtaining uninsured motorist coverage. The court noted that "many drivers in our state simply disregard the requirements of the Financial Responsibility Law and fail to obtain car liability insurance."  The court noted that one study showed that 21.2 percent of drivers in Tennessee are uninsured, compared to the national average of 14.6 percent. Uninsured motorist coverage can provide a means of recovery if the at-fault driver is uninsured or does not have adequate insurance coverage.  For more information on uninsured and underinsured motorist coverage see the article Uninsured Motorist Coverage - Basics

Dan Berexa
Nashville, Tennessee