Judy Seals v. Tri-State ( 1999 )

IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT JACKSON
______________________________________________
JUDY F. SEALS,
Plaintiff-Appellant,
Shelby Chancery No. 107715-1
Vs. C.A. No. 02A01-9806-CH-00172
TRI-STATE DEFENDER, INC.;
SENGSTACKE ENTERPRISES,
INC., FREDERICK SENGSTACKE,
AUDREY P. MCGHEE, and
FILED
CHICAGO DAILY DEFENDER, August 16, 1999
a division of Sengstacke Enterprises,
Inc., Cecil Crowson, Jr.
Appellate Court Clerk
Defendants-Appellees.
____________________________________________________________________________
FROM THE SHELBY COUNTY CHANCERY COURT
THE HONORABLE C. NEAL SMALL, CHANCELLOR
Gregory D. Cotton of Memphis
For Plaintiff-Appellant
Bruce C. Harris of Memphis
For Appellees
VACATED AND REMANDED
Opinion filed:
W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.
CONCUR:
ALAN E. HIGHERS, JUDGE
DAVID R. FARMER, JUDGES
Plaintiff-Appellant, Judy F. Seals, appeals the order of the trial court granting summary
judgment to Defendants-Appellees, Tri-State Defender, Inc., et al.
Seals’s complaint filed in June 1996 alleges that she is employed by Tri-State Defender,
Inc., a weekly newspaper publication, and has been employed by the newspaper for
approximately twenty years. As part of her employment compensation, the newspaper provided
her with health insurance through its parent company, Sengstacke Enterprises, Inc. Seals was
covered under the health insurance plan until the parent company failed to make payments
thereby allowing the policy to lapse in or around June 1994.
After the policy lapsed, Seals, unaware that she was not covered by health insurance,
incurred several medical bills. After she became aware that she was not covered, Seals notified
her employer of the problem and was told that they would take care of her medical bills. Seals’s
employer subsequently contacted Seals’s medical providers requesting monthly payment
schedules in order to pay her outstanding medical bills. However, before all of her outstanding
medical bills were paid by her employer, suit was brought against Seals by some of her medical
providers.
The complaint names as defendants Tri-State Defender, Inc. and its parent company,
Sengstacke Enterprises, Inc., Frederick Sengstacke, president of Sengstacke Enterprises, Inc.,
Audrey P. McGhee, general manager of Tri-State Defender, Inc., and Chicago Daily Defender,
a division of Sengstacke Enterprises, Inc. The complaint avers that the defendants had paid a
portion of her outstanding medical bills, but approximately $32,000.00 of medical bills remain
unpaid. The complaint alleges that the defendants were guilty of breach of contract, negligent
misrepresentation, and fraudulent misrepresentation1 and seeks compensatory and punitive
damages.
Defendants’ answers admit that plaintiff should have had medical insurance and admit
the allegation that she was told her bills would be paid. The complaint denies the allegations of
wrong-doing and joins issue thereon. The answers make no separate defenses for various named
defendants, although the answer of Frederick Sengstacke, Sengstacke Enterprises, Inc., and
Chicago Daily Defender avers that the complaint fails to state a claim against them upon which
relief can be granted.
After the complaint was filed, the parent company paid all of Seals’s outstanding medical
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Seals filed a motion for leave to file an amended complaint in which she further alleged
that the defendants violated the Tennessee Consumer Protection Act, T.C.A. § 47-18-101 et seq.
The trial court denied the motion, and Seals does not present an issue concerning this denial.
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bills and also provided insurance coverage for her. The defendants then filed a motion for
summary judgment wherein they averred, inter alia, that Seals is only entitled to damages
available for breach of contract since her damages arose out of the defendants’ failure to perform
their contractual obligations, that Seals failed to state a claim for which relief can be granted as
it relates to extra-contractual damages including punitive damages, and that the claim of
misrepresentation or promise without intent to perform is not legally sufficient to support a claim
of damages. Seals’s response to the defendants’ motion for summary judgment avers that “there
does exist a genuine issue of material fact.”
After a hearing, the trial court, on May 27, 1998, entered an order granting the
defendants’ motion for summary judgment. The trial court found that in order for Seals to
recover, she had to meet the following three-tiered test: (1) defendants must have a duty to
plaintiff; (2) defendants must have breached their duty to plaintiff; and (3) plaintiff must have
suffered damages. While determining that the plaintiff had met the first two tiers of the test, the
trial court found that the plaintiff had not suffered any damages since the defendants had paid
her medical bills and provided her with health insurance coverage. The court granted
defendants’ motion for summary judgment.
Seals has appealed and presents the following issues for review as stated in her brief:
I. Whether the Chancery Court erred in granting the Appellees’
motion for summary judgment on the basis that the Appellant had
suffered no damages, when the Chancery Court considered solely
the Appellant’s contract claims and did not consider the evidence
of damages under the Appellant’s claims for fraud and negligent
misrepresentation.
II. Whether the Chancery Court erred in granting the Appellees’
motion for summary judgment on the basis that the Appellant had
suffered no damages, when the Appellant made a claim for
punitive damages with respect to her counts for fraud and
negligent misrepresentation and the record contained evidence
supporting an award of punitive damages.
After reviewing the record in this case, we perceive that the only real issue for review is
whether this case should be remanded to the trial court for further proceedings. Admittedly,
defendants filed the affidavit of Audrey McGhee stating that all medical bills have been paid,
but the affidavit further stated that there are no outstanding medical bills “to my best knowledge
and ability.” Thus, it appears that the affdavit is not made on personal knowledge. Plaintiff filed
no counter-affidavit to this affidavit.
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In her complaint, plaintiff attempted to include claims for fraudulent misrepresentation
and negligent misrepresentation. Defendants included in the motion for summary judgment a
prayer for dismissal of these claims on the ground that they failed to state a claim upon which
relief can be granted. Apparently, defendants made no other attempt to argue or obtain a ruling
from the court on this ground. Until such a ruling is obtained, we have a complaint alleging
more than one cause of action against defendant, and obviously the court has ruled only on one
claim. This is not a final judgment appealable as of right.
This case illustrates the necessity for following the rules of procedure. Tenn. R. Civ. P.
56.03 provides:
56.03. Specifying Material Facts. - In order to assist the Court
in ascertaining whether there are any material
facts in dispute, any motion for summary judgment made
pursuant to Rule 56 of the Tennessee Rules of Civil Procedure
shall be accompanied by a separate concise statement of the
material facts as to which the moving party contends there is no
genuine issue for trial. Each fact shall be supported by a specific
citation to the record.
Any party opposing the motion for summary judgment
must respond to each fact set forth by the movant either (i)
agreeing that the fact is undisputed; (ii) agreeing that the fact is
undisputed for purposes of ruling on the motion for summary
judgment only; or (iii) demonstrating that the fact is disputed.
Each disputed fact must be supported by specific citation to the
record. Such response shall be filed with the papers in opposition
to the motion for summary judgment.
In addition, the non-movant’s response may contain a
concise statement of any additional facts that the non-movant
contends are material and as to which the non-movant contends
there exists a genuine issue to be tried. Each such disputed fact
shall be set forth in a separate, numbered paragraph with specific
citations to the record supporting the contention that such fact is
in dispute.
If the non-moving party has asserted additional facts, the
moving party shall be allowed to respond to these additional facts
by filing a reply statement in the same manner and form as
specified above.
There has been no compliance by defendants with this rule.
Tenn. R. Civ. P. 56.04 specifically provides: “Subject to the moving party’s compliance
with Rule 56.03, judgment sought shall be rendered forthwith if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that
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there is no genuine issue as to any material fact, and that the moving party is entitled to a
judgment as a matter of law.” (Emphasis added). The moving party (defendants herein) failed
to comply with Rule 56.03, and therefore, the trial court erred in granting summary judgment.
The order of the trial court granting summary judgment is vacated, and this case is
remanded to the trial court for such further proceedings in compliance with the rules of
procedure as necessary. Costs of appeal are assessed one-half to plaintiff
and one-half to defendant.
_________________________________
W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.
CONCUR:
____________________________________
ALAN E. HIGHERS, JUDGE
____________________________________
DAVID R. FARMER, JUDGE
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