Tennessee Business Litigation Law Blog

From our Tennessee Medical Malpractice law blog, here's a 2003 Court of Appeals ruling that the testimony of an opposing party's expert witness testimony - including an expert who testified and was subsequently withdrawn - is admissible at the summary judgment stage. At least on summary judgment, then, you can't ignore the testimony of an expert who falls apart in his or her deposition.

In an opinion released last week, the Court of Appeals took the opportunity to dissect this curious cause of action. In Kincaid v. SouthTrust Bank, a company in default deeded all of its assets to the bank in lieu of having the bank foreclose on the company. As part of this arrangement, the bank agreed to release the owner of the company from his personal guarantee on the obligation.   The principal plaintiff in the case, a major stakeholder in the company, alleged that he could have salvaged the company and its assets through a bankruptcy reorganization had the owner and the bank not “conspired” as described above.

The Plaintiff articulated numerous causes of action, but the most interesting one by far was “Conspiracy to Commit Constructive Fraud.” The odd part about this cause of action is that “constructive fraud” (as opposed to fraud) is characterized by the lack of an intent requirement. By contrast “conspiracy,” by definition, is characterized by the intent to form a common design to do the act in question. Accordingly, as recognized by the Court in Kincaid, a number of states have concluded that conspiracy to commit constructive fraud is simply a legal impossibility. 

Ultimately, the Court in Kincaid took the position that because the Plaintiff’s claim was deficient in other ways, it was declining to address the issue of whether “conspiracy to commit constructive fraud” was a legally cognizable claim in Tennessee. However, in affirming the dismissal of this claim, the Court went on to observe that because intent was a necessary element of any conspiracy, the Plaintiff had an obligation to prove intent as part of its "conspiracy to commit constructive fraud" claim.   Accordingly, even assuming it remains a viable cause of action, there may be little practical difference left between, “conspiracy to commit constructive fraud” and a conspiracy claim involving actual fraud. Something to keep in mind…

Read the full opinion here.

Evan Shaeffer passes along a tip for litigators: start a memo early in a lawsuit and keep track of evidentiary issues as they arise. Although you will still end up poring over the entire file during final trial preparation, at least you can focus on presenting evidence. Evan specifically mentions a list of motions in limine to exclude evidence, but I'd take it a step further and keep a running tally of briefs you will need to draft in favor of evidence as well. If you've got evidence of post-incident changes, for example, you might as well plan on a bench brief to explain why it is not a subsequent remedial measure or why it is admissible notwithstanding Rule 407.

Rebecca Blair has a post up on the Tennessee Medical Malpractice Law Blog about amending a complaint to add new defendants under Tenn. Code Ann. sec. 20-1-119. The Tennessee Supreme Court's recent decision clarifies that a plaintiff must still jump through the procedural hurdles for amending a complaint (i.e., by motion or agreed order).

Venue questions often arise in complex commercial litigation. What happens when a local defendant is dismissed from a Federal case, and the remaining defendants are all from other venues? Standing on its own, that does not require transfer to the venue where the remaining defendants are located. Venue is to be determined as of the time the complaint was filed and is not affected by a subsequent change of parties. Horihan v. Hartford Ins. Co. of the Midwest, 979 F.Supp. 1073, 1076 (E.D.Tex., 1997) (citations omitted) (finding venue must be determined as of status at time of filing rather than after dismissal of two defendants). It may be that dismissing a local defendant suddenly warrants a transfer for forum non conveniens, though. Still, there is a strong presumption in favor of the plaintiff’s forum choice which may be overcome only when private and public factors clearly point towards trial in the alternative forum. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981).

When a judicial opinion cites "Billy Madison" as authority for denying your motion, it may be time to reevaluate your case. Here is one such opinion from the United States Bankruptcy Court for the Western District of Texas.

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Read this post over at the Illinois Trial Practice blog about counterproductive motions to dismiss. The idea is that the vast majority of defects at the pleading stage can be addressed through an amended pleading. If the end result is going to be an amended complaint anyway, then drafting and arguing a motion to dismiss makes little practical sense. That does not mean to waive the right to dismiss a bad lawsuit early on. Instead, it means to think about whether you are moving to dismiss because of a fundamental problem with the lawsuit or because of an error in the complaint that can be readily corrected.

Today the Court of Appeals filed it opinion in Southern Security Credit Union v. Cumis Insurance Society, Inc. One of the interesting aspects of this case was that the Court allowed the defendant to make two directly contradictory statements of fact in opposing two separate motions for summary judgment. The substance of the case involved whether Cumis, the insurer, was obligated to provide coverage to Southern Security under a bond. The claim related to a counterfeit check deposited by one of Southern Security's Customers.

Southern Security filed what the Court construed as two separate motions for summary judgment, each brought under a separate section of the bond. As to the first, Cumis stated that, for purposes of responding to the motion, it was admitted that the check was counterfeit and that the customer engaged in a scheme to defraud Southern Security. As to the second motion, Cumis stated that the customer "did not intend to commit a fraud by depositing...the subject cashiers check."

The Court of Appeals held that the doctrine of judicial estoppel did not bar Cumis's contradictory statements as they did not constitute "willful misstatements of fact." The Court reached this conclusion by noting that Rule 56.03 specifically allows parties to state that a fact is undisputed only for purposes of ruling on a motion for summary judgment. Given that Cumis did just this, the Court was unwilling to say that its representations were willful misstatements.

Nothing in Tennessee civil procedure requires a plaintiff to sue for a specific dollar amount in the original complaint. In cases where you don't know the full extent of your losses at the outset, you can use this to your advantage. Simply ask for an amount in excess of the court's jurisdictional limit (i.e., "compensatory damages in an amount to be determined at trial but in excess of Fifteen Thousand Dollars ($15,000)").

However, a long history of Tennessee case law says that a plaintiff cannot recover a penny more than the amount specified in her complaint. See generally, Gaylor v. Miller, 166 Tenn. 45, 59 S.W.2d 502, 504 (Tenn.1933). You must amend the complaint to state a specific ad damnum amount before trial or moving for default judgment. Also, be wary of waiting until the last minute to declare an ad damnum – a trial court does not abuse its discretion by denying a motion to amend to substantially increase the ad damnum amount on the eve of trial. See Benson v. Tennessee Valley Electric Co-op., 868 S.W.2d 630 (Tenn. App. 1993).

Motions to reconsider are a strange lot. They should be used when there is some changed circumstance from the original court filings - for example, the court concentrated on issues not addressed by the parties, or the facts or law have changed since the party's original filing. They're often filed when they should not be, essentially looking for a "do over" in hopes of getting a different result without any changed circumstance. Over at the Illinois Trial Practice Weblog, they have a good snippet from a brief on when motions to reconsider are appropriate. Although the citations are to Illinois Federal law, the same ideas should apply here in Tennessee.