I N THE COURT OF APPEALS OF TENNESSEE EASTERN SECTI ON. ) v. ) HON. J OHN A. TURNBULL, ) J UDGE J. ARNOLD FI TZGERALD, ) ) VACATED AND

Size: px

Start display at page:

Download "I N THE COURT OF APPEALS OF TENNESSEE EASTERN SECTI ON. ) v. ) HON. J OHN A. TURNBULL, ) J UDGE J. ARNOLD FI TZGERALD, ) ) VACATED AND"

Hugo Harmon
8 years ago
Views:

1 I N THE COURT OF APPEALS OF TENNESSEE EASTERN SECTI ON FILED August 16, 1996 LESA HAGER a n d BONNI E LENTS, Cecil Crowson, Jr. ) C/ A N0. 03A CV Appellate Court Clerk ) Appellants, ) RHEA LAW ) v. ) HON. J OHN A. TURNBULL, ) J UDGE J. ARNOLD FI TZGERALD, ) ) VACATED AND Appel l ee. ) REMANDED NATHAN E. BROOKS, Ch a t t a n o o g a, f o r Ap p e l l a n t s. W. B. LUTHER, and SHANE USARY, Chat t anooga, f or Appel l ee. O P I N I O N Fr anks. J. Plaintiffs brought this action against their at t or ney, al l egi ng t hat he was gui l t y of?f r aud, out r ageous conduct, l egal mal pr act i ce, and br each of f i duci ar y dut y? in pur chasi ng t he pr oceeds of t he st r uct ur ed set t l ement s ent er ed by t he pl ai nt i f f s. The Tr i al Cour t gr ant ed summar y j udgment on behal f of t he def endant, af t er t he di scover y deposi t i ons of t he pl ai nt i f f s wer e t aken and def endant f i l ed an af f i davi t of an?investment specialist?. We begi n our anal ysi s by obser vi ng t hat no

BROOKS, Ch a t t a n o o g a, f o r Ap p e l l a n t s. W. B. LUTHER, and SHANE USARY, Chat t anooga, f or Appel l ee. O P I N I O N Fr anks. J.

2 pr esumpt i on of cor r ect ness at t aches t o deci si ons gr ant i ng summar y j udgment, Robert s v. Robert s, 845 S. W. 2d 225 ( Tenn. App. 1992), and t he Cour t must vi ew al l af f i davi t s and deposi t i ons i n t he l i ght most f avor abl e t o t he opponent of t he mot i on and dr aw l egi t i mat e concl usi ons of f act t her ef r om i n t he opponent s f avor. Berry v. Whitworth, 576 S. W. 2d 351 ( Tenn. App. 1978). Plaintiffs depositions reveal that both plaintiffs wer e addi ct ed t o dr ugs and al cohol, and t hat def endant had r epr esent ed t hem i n var i ous and sundr y mat t er s, i ncl udi ng cr i mi nal char ges. Pl ai nt i f f s empl oyed def endant t o r epr esent t hem i n an act i on f or damages f or per sonal i nj ur i es ar i si ng from an aut omobi l e acci dent, whi ch cases were set t l ed, wi t h a part of the settlement paid to plaintiffs at the time of si gni ng r el eases, and t he r emai ni ng consi der at i on was t o be pai d i n t he f or m of a st r uct ur ed set t l ement, whi ch t he pl ai nt i ffs ent ered wi t h t he i nsurance carri er for t he t ort feasor. The st ruct ured set t l ement agreement s were ent ered wi t h Tennessee Far mer s Li f e I nsur ance Company whi ch pr ovi ded annui t y payment s, and t he agr eement by i t s t er ms pr ohi bi t ed assi gnment of t he owner shi p of t he pol i cy. The agr eement pr ovi ded f or si xt y mont hl y equal payment s t o each pl ai nt i f f and t hei r at t or ney. The def endant had engaged i n t he pr act i ce of advanci ng money t o t hese pl ai nt i f f s, and af t er t hr ee of t he mont hl y payment s had been made and di sbur sed t o pl ai nt i f f s by def endant, one of t he pl ai nt i f f s appr oached def endant about bor r owi ng money, and he advi sed t hat t hey had passed t hei r 2

ef r om i n t he opponent s f avor. Berry v. Whitworth, 576 S. W. 2d 351 ( Tenn. App. 1978).

3 ?l imit? t hat mont h. Thi s pl ai nt i f f t hen appr oached a l oan company about bor r owi ng money, advi si ng of her mont hl y payment s. She candi dl y admi t s t hat t he r eason f or want i ng t he l oan was?pr obabl y want i ng t o get hi gh?. The l oan company i nsi st ed upon some document at i on of pl ai nt i f f s mont hl y payment s, and t he pl ai nt i f f went t o def endant s of f i ce seeki ng copi es of t he st r uct ur ed set t l ement agr eement, wher eupon t he l awyer i nf or med her t hat she di dn t want t o do t hat, and asked her t o r et ur n t o hi s of f i ce t hat ni ght. Bot h pl ai nt i f f s went t o def endant s of f i ce t hat eveni ng i n a st at e of i nt oxi cat i on and si gned agr eement s wi t h t he def endant wher ei n he pur chased t he proceeds from t he st ruct ured set t l ement agreement. One of t he pl ai nt i f f s over t he r emai ni ng f i f t y- seven mont hs woul d have r ecei ved $32, The def endant pai d t hi s pl ai nt i f f $18, The ot her pl ai nt i f f woul d have r ecei ved over t he same per i od $25, The def endant pai d $15, as consi der at i on. One of t he pl ai nt i f f s expl ai ned t hei r posi t i on t hus, i n t he cour se of t he deposi t i on: Q. Let me ask you, gener al l y, what i s your compl ai nt agai nst Ar nol d? How do you t hi nk Ar nol d di d you wr ong i n t hi s case, t hi s aut omobi l e acci dent case? A. By buyi ng my set t l ement when - - I t r ust ed Ar nol d. Q. Yeah. A. He -- as far as I was concerned, he had not l et me down. That s why I di dn t bot her t o keep t r ack of t hi s amount of money, or t hat amount of money. I t r ust ed Ar nol d. Q. You say he di d you wr ong by buyi ng your settlement? A. Knowi ng t he shape t hat I was i n, he knew t hat I 3

. The l oan company i nsi st ed upon some document at i on of pl ai nt i f f s mont hl y payment s, and t he pl ai nt i f f went t o def endant s of f i ce seeki ng copi es of t he st r uct ur ed set

4 needed t hat mont hl y check each mont h. Q. Uh- huh. A. Over that time period, not all at once. Q. Uh- huh. A. Not wi t h my pr obl em. Not wi t h my f r ame of mi nd. Q. So you want ed hi m t o dol e t hi s money out t o you. I s t hat what you want ed? A. I want ed hi m t o keep i t l i ke i t was supposed t o be. The af f i davi t of t he?investment specialist? opi nes t hat t he af f i ant had di scussed t he t er ms of t he annui t y pol i ci es wi t h an empl oyee of Tennessee Farmers Mut ual I nsur ance Company, and det er mi ned f r om t hat conver sat i on t hat t he pol i cy had no sur r ender val ue and no cash val ue as of Oct ober 6, 1993, and based upon t hese di scussi ons and mar ket exper i ence, she concl uded t hat def endant had?over pai d? to the plaintiffs for their annuities. The t i me- honor ed r ul e i n t hi s j ur i sdi ct i on i n r esol vi ng di sput es bet ween at t or neys and t hei r cl i ent s i s stated in Wal l er, Lansdon, Dort ch, Davi s v. Haney, 851 S. W. 2d 131 ( Tenn. 1992) :?Owi ng t o t he conf i dent i al and f i duci ar y r el at i on bet ween an at t or ney and hi s cl i ent, and t o t he i nf l uence of t he at t or ney over hi s cl i ent, gr owi ng out of that relation, courts of law, and especially of equity, scrutinize most closely all transactions bet ween an at t or ney and hi s cl i ent. To sust ai n a t r ansact i on of advant age t o hi msel f wi t h hi s cl i ent, t he at t or ney has t he bur den of showi ng, not onl y t hat he used no undue i nf l uence, but t hat he gave hi s cl i ent al l t he i nf or mat i on and advi ce whi ch i s ( si c) woul d have been hi s dut y t o gi ve i f he hi msel f had not been i nt er est ed and t hat t he t r ansact i on was as benefi ci al t o t he cl i ent as i t woul d have been had the client dealt with stranger.? Id. 131 ( Quot i ng Hut chi nson v. Crowder, 8 4

opi nes t hat t he af f i ant had di scussed t he t er ms of t he annui t y pol i ci es wi t h an empl oyee of Tennessee Farmers Mut ual I nsur ance Company, and det er mi ned f r om t hat conver sat

5 Tenn. Ci v. App. 114 ( 1917). ) Thi s Cour t obser ved i n Cul t ra v. Dougl as, 44 S. W. 2d 575 ( 1969) that: The r el at i onshi p of at t or ney and cl i ent i s an ext remel y del i cat e and fi duci ary one so far as t he dut y of t he at t or ney t owar d hi s cl i ent i s concer ned, and t he cour t s j eal ousl y hol d t he at t or ney t o t he ut most good f ai t h i n t he di schar ge of hi s dut i es. The Cour t t hen quot ed wi t h appr oval f r om 7 C. J. S. At t orney and Client sec. 127, at pp , t he gener al r ul e gover ni ng deal i ngs bet ween at t or neys and cl i ent s:?rat her, al l such t r ansact i ons or deal i ngs ar e r egar ded wi t h suspi ci on and di sf avor, ar e di scour aged by t he pol i cy of t he l aw, and wi l l be closely scrutinized by the courts, which will lean against the attorney; and if it appears that the transaction is unfair that the client has been over r eached or undul y i nf l uenced, i t may be avoi ded at his election, either in courts of law, or in cour t s of equi t y on t he pr i nci pl es t hat gover n t he conduct and deal i ngs of t r ust ees or f i duci ar i es general l y.? And t he Supr eme Cour t most r ecent l y sai d i n Mat l ock v. Si mpson, 902 S. W. 2d 384 ( Tenn. 1995) t hat t he r ul e i s t hat t he exi st ence of a conf i dent i al r el at i onshi p f ol l owed by a t r ansact i on wher ei n t he domi nant par t y r ecei ves a benef i t f r om t he ot her par t y, a pr esumpt i on of undue i nf l uence ar i ses t hat may be r ebut t ed onl y by cl ear and convi nci ng evi dence of fai rness of t he t ransact i on. The gener al r ul e f ol l owed i n most, i f not al l, j ur i sdi ct i ons pr esumes t hat undue i nf l uence or f r aud at t aches t o any assi gnment or conveyance t hat an at t or ney t akes f r om his client, while the relationship of attorney/client exists, and t hat no pr esumpt i on of i nnocence or i mpr obabi l i t y of wr ongdoi ng exi st s i n f avor of t he at t or ney. 7 Am. Jur. 2d At t orneys at Law, 122 and 7A C. J. S. At t orney and Cl i ent, 5

ned, and t he cour t s j eal ousl y hol d t he at t or ney t o t he ut most good f ai t h i n t he di schar ge of hi s dut i es. The Cour t t hen quot ed wi t h appr oval f r om 7 C. J. S.

6 241. The af f i davi t of t he exper t does not sat i sf y t he cr i t er i a of T. R. C. P. Rul e and Rul e 703, Tennessee Rul es of Evi dence. Mor eover, t hi s i s t he t ype of case wher e onl y upon a f ul l t r i al can t he i ssues be pr oper l y devel oped, and we concl ude t hat summar y j udgment i s not an appr opr i at e pr ocedur e f or t he di sposi t i on of t he i ssues i n t hi s case. See Fowl er v. Happy Goodman Fami l y, 575 S. W. 2d 496 ( Tenn. 1978). Accor di ngl y, we vacat e t he summar y j udgment and r emand f or f ur t her pr oceedi ngs consi st ent wi t h t hi s opi ni on, wi t h cost s assessed t o defendant. Herschel P. Franks, J. CONCUR: Houst on M. Goddar d, P. J. Charles D. Susano, Jr., J. 6

at e pr ocedur e f or t he di sposi t i on of t he i ssues i n t hi s case. See Fowl er v. Happy Goodman Fami l y, 575 S. W. 2d 496 ( Tenn. 1978).

I N THE COURT OF APPEALS OF TENNESSEE EASTERN SECTI ON

I N THE COURT OF APPEALS OF TENNESSEE EASTERN SECTI ON FILED April 28, 1997 TERRY NORRI S a n d wi f e, ) C/ A NO. 03A01-9611- CV- 00373 Cecil Crowson, Jr. MELI SA NORRI S, ) Appellate Court Clerk ) HAMI