Shelter Insurance Companies v. Sherrie Marie Hann , 1995 Tenn. App. LEXIS 814 ( 1995 )

FILED
Dec. 15, 1995
Cecil Crowson, Jr.
Appellate Court Clerk
SHELTER INSURANCE COMPANIES, )
)
Plaintiff/Appellee, )
) Maury Chancery
) No. 91-037/3487
VS. )
) Appeal No.
) 01-A-01-9507-CH-00280
SHERRIE MARIE HANN, )
)
Defendant/Appellant. )
IN THE COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEAL FROM THE CHANCERY COURT OF MAURY COUNTY
AT COLUMBIA, TENNESSEE
HONORABLE WILLIAM B. CAIN, JUDGE
J. Russell Parkes
HARDIN & PARKES
102 West Seventh Street
Post Office Box 692
Columbia, Tennessee 38402-0692
ATTORNEY FOR PLAINTIFF/APPELLEE
JOE BEDNARZ
Suite 1400, Parkway Towers
404 James Robertson Parkway
Nashville, Tennessee 37219
ATTORNEY FOR DEFENDANT/APPELLANT
AFFIRMED AND REMANDED
HENRY F. TODD
PRESIDING JUDGE, MIDDLE SECTION
CONCUR:
SAMUEL L. LEWIS, JUDGE
WILLIAM C. KOCH, JR., JUDGE
SHELTER INSURANCE COMPANIES, )
)
Plaintiff/Appellee, )
) Maury Chancery
) No. 91-037/3487
VS. )
) Appeal No.
) 01-A-01-9507-CH-00280
SHERRIE MARIE HANN, )
)
Defendant/Appellant. )
OPINION
The defendant, Sherrie Marie Hann, has appealed from a non-jury judgment in favor
of the plaintiff, Shelter Insurance Companies for $5,000 paid to defendant by mistake. As
indicated in the caption, this was a proceeding in Chancery Court.
There is no transcript of evidence. However, the record contains a brief statement of
the evidence, letters and affidavits of counsel and a record of another related case in Circuit
Court from which the following facts appear:
On or about November 2, 1987, Mrs. Hann and her children were in her vehicle
which was struck by a vehicle operated by an uninsured motorist. Shelter Insurance
Companies, Mrs. Hann's uninsured motorist insurer, paid to Mrs. Hann and her health care
providers the total amount of $9,211.74 without the execution of any release by Mrs. Hann.
On September 12, 1988, Shelter sent to Mr. and Mrs. Hann a check for $5,000.00, requesting
that an enclosed release be executed. The check was retained and later cashed, but the release
was not executed or returned to Shelter. Thereafter, Mrs. Hann retained counsel; and, on
November 1, 1988, suit was filed in Circuit Court naming Mrs. Hann and children as
plaintiffs and the uninsured motorist as defendant. Shelter was served with process and filed
an answer. Counsel for Mrs. Hann and Shelter undertook to negotiate a settlement.
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During the negotiations, the following correspondence took place:
On November 21, 1988, Shelter's counsel wrote Ms. Hann's counsel as follows:
I represent Shelter Insurance Companies and have been
forwarded suit papers in connection with the above-referenced
matter. I have entered an appearance with the Court on behalf
of Shelter and tentatively, also on behalf of the named
Defendant, Bobby Roy Johnson, at least until we have an
opportunity to investigate his situation somewhat further.
My file does indicate that a tentative settlement was reached
with your client and that several weeks ago a draft in the
amount of $5,000 was forwarded to her, along with a trust
receipt and subrogation agreement. I would appreciate your
advice regarding same so we can proceed to attempt to define
what issues might be involved in this case.
I look forward to hearing from you further concerning the
foregoing.
On January 12, 1989, Ms. Hann's counsel responded as follows:
I'm sorry that it has taken me so long to respond to your letter
of November 21, 1988. My client was confused as to what the
$5,000.00 represented and did not know that the insurance
company was expecting a full and final release. I am certainly
interested in resolving this matter and have been authorized to
settle this matter for $10,000.00. If there is any possibility of
settlement, please advise.
On May 15, 1989, Shelter's counsel wrote Ms. Hann's counsel as follows:
I have authority to settle this case for $8,000 in addition to the
substantial advances heretofore made to or on behalf of your
client, Mrs. Hann. If we can settle on this basis, I would like to
go ahead and have a judgment entered in order to protect our
subrogation interest against the defendant, although I anticipate
it is essentially uncollectible. I would appreciate it if you
would touch base with your client on this and give me a call to
see if we can go ahead and conclude the matter.
In connection with the foregoing and assuming we can reach
settlement, I do need for you to return to me the check my
client has previously tendered in settlement to your client in the
amount of $5,000. In turn, we would provide the revised
settlement draft, a final release, and Trust and Subrogation
Agreement.
I look forward to hearing from you.
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On May 24, 1989, Ms. Hann's counsel responded as follows:
My client has instructed me to reject your offer of $8,000.00
stated in your letter of May 15, 1989. In light of some recent
problems she is having and other changes in her personal life,
she is completely reevaluating her position in this case.
In attempting to advise her properly, please send me a copy of
all the medical records and letters which you have received
concerning her condition, pursuant to our previous
authorization.
As soon as I have had the opportunity to review all of the
medical records, I will once again make an effort to resolve this
matter.
On March 13, 1990, Shelter's counsel wrote Ms. Hann's counsel as follows:
My apologies for not contacting you earlier concerning the
above-referenced matter. As you are aware, Ms. Hann has
essentially minimum limits for uninsured motorist coverage,
i.e., $25,000/$50,000. We have heretofore advanced payments
against this coverage for medical expenses in the amount of
$9,211.74 and I have otherwise extended an offer of $10,000 in
order to settle the case. With this in mind, and in view of the
fact that I think there is little likelihood that our subrogation
claim against the uninsured defendant is of significant value,
there is little incentive for us to materially increase our offer.
Another problem that I have with this case involves the
inconsistency between Dr. Hunter's testimony and Ms. Hann's
testimony with respect to residual problems. Be that as it may,
I would like to go ahead and try to conclude the case and for
this purpose I have been authorized to increase this offer to
$11,500. This is, of course, in addition to the medical
payments previously advanced and would in effect be the
equivalent of a settlement of $20,711.74. I would appreciate
your advice as to whether this is acceptable so we can go ahead
and conclude the matter.
On August 21, 1990, Shelter's counsel wrote Ms. Hann's counsel as follows:
This will confirm your conversations with myself, as well as Ed
Ewing of this office, regarding settlement of the above matter.
To simply confirm same, I have requested settlement drafts
payable to Ms. Hann and yourself in the amount of $14,000,
$1,000 and $1,000, respectively, for Ms. Hann's claim and that
of the two minor children. Of course, as relates to Ms. Hann,
this would be in addition to the amount of $9,211.74 heretofore
advanced by my client on her behalf, thus generating a total
settlement in her case of $23,911.74.
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On September 21, 1990, the Circuit Court entered a judgment reading as follows:
This cause came on to be heard on the 21st day of September,
before the Honorable William B. Cain, Judge, holding the
Circuit Court for Maury County, Tennessee, at Columbia, upon
the Motion for Default Judgment of the plaintiffs against the
defendant, Bobby Roy Johnson, and it appearing to the Court
that this defendant has been duly served with a copy of the
summons and complaint on November 17, 1988; that the
defendant has failed to plead or otherwise defend within the
time prescribed by law, and it further appearing that there is no
just reason to delay entry of judgment against this defendant, in
accordance with Rule 54.02, Tennessee Rules of Civil
Procedure, and Rule 55, Tennessee Rules of Civil Procedure.
It is, accordingly, ordered, that judgment by default be entered
for the plaintiffs against the defendant, Bobby Roy Johnson,
and upon the proof introduced in the cause, the plaintiffs are
awarded judgment against the defendant, Bobby Roy Johnson,
as follows:
(1) On behalf of Sherrie Marie Hann, judgment is entered in
the amount of $23,911.74 for her personal injury and $3,300.00
for property damage.
(2) On behalf of Angela Wood, by next friend and natural
guardian, Sherrie Marie Hann, judgment is entered in the
amount of $1,000.00.
(3) On behalf of Jeremy Wood, by next friend and natural
guardian, Sherrie Marie Hann, judgment is entered in the
amount of $1,000.00.
It is further ordered that the defendant, Bobby Roy Johnson,
shall pay all costs of this cause, and for all of the foregoing
execution may issue, if necessary.
The judgment was approved for entry by counsel for Shelter.
On October 17, 1990, the Circuit Court entered the following order:
This cause came on to be heard upon the motion of the served
but unnamed defendant, Shelter Insurance Companies,
uninsured motorist carrier for the plaintiff, Sherrie Marie Hann,
the Court's examination of said motion, statements of counsel,
and it appearing that said motion should be granted, it is
accordingly
Ordered that the judgment heretofore entered in this cause on
September 21, 1990, be and the same is hereby set aside and
vacated pending further orders of the Court in this cause.
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The order was approved for entry by counsel for Shelter. The motion mentioned in
the order is not included in the record.
On October 17, 1990, Shelter filed in the same Circuit Court case a "Motion to Set
Aside Settlement for Leave to File an Amended Answer and Counterclaim." The motion
alleged that in late August or early September, "a settlement was reached" as to Ms. Hann's
personal injuries providing for payment to her of $23,211.74 for Hann consisting of the
$9,211.74 previously paid plus additional cash of $14,000. The motion then alleged the
cashing of the $5,000 check and that the ignorance of counsel for both parties of the cashing
of the check constituted a mistake of fact justifying a rescission of the settlement agreement
and refund of the $14,000 consideration paid. A copy of the $5,000 check is exhibited to the
motion and it appears to have been cashed or cleared on September 13, 1988.
The motion concludes:
Wherefore, movant prays this motion be granted, that the
settlement herein be set aside, that movant be allowed to amend
its answer to assert the defense of release and accord and
satisfaction, and that movant be allowed to file a counter-claim
against plaintiff for the sum of $14,000.00, plus interest, and
such other relief as to which it might be entitled.
On December 18, 1990, the Circuit Court entered the following order:
This cause came on to be heard on the 7th day of November,
1990, before the Honorable James L. Weatherford, Judge of the
Circuit Court for Maury County, Tennessee, whereupon carrier
for defendant, Bobby Roy Johnson, Shelter Insurance
Company, moved this Court to set aside settlement and for
leave of Court to file an amended answer and counter-claim in
this action. After considering the arguments of the attorneys
for the respective parties and the briefs submitted in this case, it
was determined that defendant's motion was not well-taken
and, therefore, denied.
There is no record of any further proceedings in the Circuit Court case which appears
to remain undisposed of.
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On January 22, 1991, Shelter filed the present suit in Chancery Court naming Ms.
Hann as defendant, alleging the facts related above and praying:
2. That the Court find that a mutual mistake of fact exists
concerning plaintiff's payment of $5,000.00 to defendant and
order that defendant reimburse plaintiff in said amount.
3. That plaintiff recover of defendant all interest on said sum
from such time as such mutual mistake of fact was discovered
by counsel for the respective parties in the underlying litigation.
4. That plaintiff be awarded its attorney's fees in connection
with this action, plus its costs and litigation taxes occasioned
hereby.
5. That plaintiff be awarded such other, further and general
relief to which it might be entitled.
Ms. Hann answered denying liability for a refund and presenting the following
affirmative defense:
15. Defendant would pursuant to T.R.C.P. 8.03, set forth the
affirmative defense of res judicata, relying on the order issuing
from the Circuit Court of Maury County, Tennessee, upon
Shelter Insurance Companies' motion to set aside settlement,
said motion being denied, with such order being in full force
and effect, thus preventing plaintiff from bringing this claim.
On September 18, 1992, the Chancery Court entered the following order:
In appearing to the Court from the record in this civil action
that the plaintiff has not with due diligence prosecuted this civil
action;
It is, therefore, ordered that this civil action be, and is hereby,
dismissed, without prejudice.
All cost and litigation taxes are adjudged against the plaintiff,
and if not paid within thirty (30) days from the entry of this
order, execution may issue therefore. If all of said costs and
litigation taxes have not been paid within sixty (60) days after
the first issuance of execution against the plaintiff the clerk
may issue an execution against the surety or sureties on the
plaintiff's cost bond.
On June 23, 1993, Shelter filed in Chancery Court the following motion:
Comes now the plaintiff, Shelter Insurance Companies, by
and through counsel, pursuant to Rule 60 T.R.C.P., and
requests this Honorable Court to reinstate this case and allow
plaintiff a trial on the merits. Plaintiff informs the Court that
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this case was earlier dismissed for lack of prosecution as a
result of excusable neglect which Rule 60.02 is aimed at
remedying.
On November 24, 1993, the Chancery Court entered the following order:
This cause came on to be heard before the Honorable Jim T.
Hamilton, Judge, holding the Chancery Court for Maury
County, Tennessee, on the 12th day of November, 1993, upon
the plaintiff's motion for reinstatement, defendant's response,
the respective memorandums of the parties, argument of
counsel, from all of which the Court finds that plaintiff's
motion is well taken and should be granted, and it is
accordingly,
Ordered that plaintiff's motion to reinstate be, and the same is
hereby granted, and this cause shall be placed on the Court's
active trial docket.
All other issues are reserved.
The record on appeal does not contain "Defendant's Response, the Respective Memorandums
of the Parties (or) Argument of Counsel."
On August 26, 1994, the Chancery Court entered the following judgment:
This cause came on to be heard before the Honorable William
B. Cain, Judge, on the 22nd day of June, 1994, upon the
complaint, the answer, exhibits thereto, the stipulations of the
parties, statements and argument of counsel in open Court, and
the entire record in the cause from all of which the Court finds
that the allegations of the plaintiff are sustained by the record
on the grounds of both mutual mistake and unjust enrichment,
that plaintiff is thus entitled to recover judgment against the
defendant, Sherry Marie Hann, in the amount of Five Thousand
Dollars ($5,000.00), and in accordance with the foregoing, it is
accordingly;
Ordered, adjudged and decreed that the plaintiff, Shelter
Insurance Companies shall have and recover of the defendant,
Sherrie Marie Hann, judgment in the amount of Five Thousand
Dollars ($5,000.00) and judgment plus all costs in the cause is
hereby entered against the defendant, Sherrie Marie Hann, for
which execution may issue if necessary.
Mrs. Hann has appealed from the foregoing judgment and has presented four issues
for review, of which the fourth is as follows:
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IV. Whether the trial court erred in setting aside an order of
dismissal based upon the ground of excusable neglect.
Defendant's argument to this Court asserts that plaintiff offered no justifiable reason
for relief under Rule 60.02, T.R.C.P., citing Banks v. Dement Construction Co., Inc., Tenn.
1991, 817 S.W.2d 16; Toney v. Mueller Co., Tenn. 1991, 810 S.W.2d 145; and Travis v. City
of Murfreesboro, Tenn. 1985, 686 S.W.2d 68. Each of the cited opinions states the facts
relied upon for relief. Two denied relief, and one affirmed the granting of relief. Without a
record of the facts and circumstances appearing to the Trial Court from the defendant's
response, the memoranda of the parties and the statements of counsel which, according to the
order, were presented to the Trial Court, this Court is not in position to review or reverse the
discretionary judgment of the Trial Judge.
On appeal, the appellant has the burden of showing that the order was not supported
by sufficient facts. Such a showing can be made only by a complete record of what was
shown to the Trial Court. Such complete record is not before this Court.
Defendant next argues that plaintiff's motion was not made "within a reasonable time"
as required by Rule 60.02. There was a nine month delay from September, 1992, to June,
1993, in filing the motion for relief. Without a record of the facts and circumstances shown
to the Trial Court, this Court has no means of adjudging what was reasonable in the present
case.
This Court is unable to find the Trial Court in error for setting aside its order of
dismissal.
Defendant's third issue is:
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III. Whether the trial court erred in considering as a cause
of action an issue that had been previously determined by the
Circuit Court for Maury County.
The order of the Circuit Court overruling Shelter's motion to set aside settlement is
quoted above.
Shelter responds that the order was not intended by the Trial Judge to be an
adjudication on the merits and exhibits to its brief a letter from the Circuit Judge to the
Circuit Clerk.
Shelter's brief cites no part of the record evidencing such a letter. It is inconceivable
that an attorney admitted to practice in the Courts of this State would expect an appellate
court to accord any cognizance to any fact not evidenced by the record certified to this Court
by the Trial Court. Such misconception of appellate practice calls for a thorough restudy of
the Rules of Appellate Procedure and careful guidance by more knowledgeable co-counsel.
In consideration of the justice of the case, this Court has sua sponte ordered and the
Trial Clerk has certified a copy of said letter from the records of this case in the Trial Court.
Said letter states:
Re: Angela and Jeremy Wood b/n/f
Sherrie Marie Hann, et al
v.
Bobby Roy Johnson
Civil Action No. 3487
Dear Mr. Scott:
After considering the arguments of the attorneys, the briefs
submitted, and the entire file in this case, I have concluded that
the "Motion to Set Aside Judgment" filed by Shelter Insurance
Companies should be overruled.
I do not intend to imply that Shelter Insurance Companies
would not have a cause of action against Ms. Sherrie Marie
Hann to recover the $5,000 that was paid through mistake or
inadvertence, but I do not feel that the "Motion to Set Aside"
would be the proper procedure to accomplish this.
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I am mailing a copy of this letter to Mr. Hardin and Mr.
Davidson with the request that Mr. Davidson prepare an order
in accordance with this letter.
The letter is marked filed by the Trial Clerk on December 8, 1990, ten days before the entry
of the order overruling Shelter's motion for relief in the Circuit Court case.
This Court has repeatedly warned Trial Judges of the perils of conducting judicial
business by letter rather than by formal memorandum filed with the Clerk or order placed on
the minutes. Nevertheless, in the present case, the letter of the Circuit Judge filed with the
Circuit Clerk will be considered as a formal memorandum. It is unfortunate that counsel did
not prepare an order "in accordance with this letter," and it is equally unfortunate that the
Circuit Judge saw fit to sign an order that was not "in conformity with this letter."
The motion of Shelter "To Set Aside Settlement" presented to the Circuit Court a
matter of equitable cognizance.
Rectifying a mistake is the peculiar province of a court of equity. Henshaw v. Gunter,
169 Tenn. 305, 87 S.W.2d 561 (1935); Reid v. House, 21 Tenn. (6 Humph.) 576 (1841);
Helm v. Wright, 21 Tenn. (2 Humph) 72 (1840). In the absence of objection, the Circuit
Court might have ruled upon the application for relief or transferred the cause to the
Chancery Court (TCA §16-10-111). No reason occurs to this Court why a Circuit Judge
would not have the authority to sua sponte decline to exercise permissive equity jurisdiction
and dismiss an equity suit brought before him. Such a dismissal would not be a dismissal on
the merits and would permit an application to the Chancery Court for the same relief.
In the present instance, the Circuit Judge did not dismiss an equity suit; he overruled a
motion seeking to add an equity issue to an existing tort lawsuit. In so doing, he rejected an
application to amend which addresses itself to his sound discretion. Wilson v. Ricciardi,
Tenn. App. 1989, 778 S.W.2d 450.
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In the light of the letter/memorandum of the Circuit Judge, this Court has determined
that his unfavorable ruling upon the motion of Shelter for relief did not preclude the grant of
relief by the Chancery Court in the present case.
No reversible error is found in Ms. Hann's third issue.
Ms. Hann's first issue challenges the finding of mutual mistake of fact in respect to
the cashing of the $5,000 check. Unquestionably, Ms. Hann knew the check had been
cashed, because she cashed it on September 13, 1988, long before the September 21, 1990,
entry of the Circuit Court judgment pursuant to the settlement. The check was cleared and
charged to Shelter's bank account long before the entry of said order, hence Shelter had
knowledge of the cashing through its records prior to the entry of the judgment.
Thus, it is obvious that the real parties at interest had timely notice of the cashing of
the check.
The affidavit of Mrs. Hann's counsel, states:
. . . 2. As I recall, the settlement discussions during the
last week were primarily between myself and Ed Ewing. The
$5,000.00 check was never mentioned.
3. Early on in this case, I was aware that the $5,000.00
check had, in fact, been negotiated and I so notified the
insurance adjuster in a letter dated October 10, 1988. (See
attached Exhibit "A"). I also notified Thomas W. Hardin by
letter dated January 12, 1989, that my client had negotiated the
check. (See Exhibit "B" letters dated November 21, 1988, and
January 12, 1989.)
4. During the settlement discussions I was relying on
the figures being provided to me by the attorney for Shelter
Insurance Companies. I was told that they had paid
approximately $9,211.74.
5. I did not take the time to review my file and make an
accounting. I relied on the figures I was being provided with
and in all my discussions with my client I was relaying
settlement information above and beyond amounts already
paid. ....
7. It was my position as attorney for the plaintiffs that
Sherrie Hann was entitled to recover $25,000.00 for bodily
injuries and medical bills under the med-pay provision of her
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policy. It was never agreed that the maximum amount she
could recover for her injuries alone was $25,000.00. I am still
of the opinion that the contract allows for bodily injury
payments and med-pay both. There was a difference of opinion
on both sides as to that issue.
8. It was never my intention to settle the three (3)
plaintiffs' cases piecemeal. My position was that it was a
package deal for $16,000.00 with $1,000.00 each being
allocated for the children.
9. In fairness to Thomas W. Hardin, I am convinced
that he was operating under the assumption that the $5,000.00
check had never been cashed.
The affidavit of Shelter's counsel states:
. . . [T]hroughout the entire proceedings involved in this case
and in multiple discussions between myself, Shelter Insurance
Companies, and the plaintiff's attorney, it was never
contemplated or known that the plaintiff had negotiated the
$5,000.00 settlement draft dated September 12, 1988. To the
contrary, the undersigned as well as counsel for Ms. Hann,
were under the impression that said check had not been
negotiated since a substantial part of the settlement discussions
in this case centered around the applicable amount of Ms.
Hann's policy limits, whether stacking of medical payments
over and above liability payments was permissible, and at no
time was it anticipated that the settlement to be received by Ms.
Hann was to exceed the amount of her policy limits, and in fact
it was the contemplation of counsel without dispute that the
settlement on her behalf totaled $23,211.74, plus an additional
$1,000.00 each for the two minor children of the plaintiff
which is not in dispute.
It is seen that Mrs. Hann's counsel had knowledge of the cashing of the check "early
on in this case" (whenever that was) and that her counsel claims to have notified an adjuster
of the cashing on October 10, 1988. However, Ms. Hann's counsel admits that he negotiated
the settlement under the mistaken information and belief that Shelter had paid Ms. Hann only
$9,211.74. (The amount paid by Shelter was increased to $14,211.74 by the $5,000 check.)
Thus, Ms. Hann's counsel negotiated the settlement on her behalf under a mistake of fact as
to the total amount Ms. Hann had previously received from Shelter.
It is also seen that the affidavit of Ms. Hann's counsel states that on January 12, 1989,
he notified Shelter's counsel that the $5,000 check had been cashed; whereas the affidavit of
Shelter's counsel states that during the negotiations between counsel, "it was never
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contemplated or known" that the $5,000 check had been cashed, and that both counsel "were
under the impression that said check had not been negotiated."
This narrow difference in the affidavits of counsel represents the only issue of fact
appearing in this record. However, this issue need not be determinative of this appeal, for it
is undisputed that both counsel negotiated under the impression that Ms. Hann had received
only $9,211.74 from Shelter, when she had in fact received $14,211.74.
Under its policy, Shelter had a possible maximum personal injury liability to Ms.
Hann of $25,000.00. Under the mistaken impression that Shelter had paid Ms. Hann only
$9,211.74, both counsel agreed to settle for an additional $14,000, making a total of
$23,211.74, slightly under the $25,000 maximum. The inclusion of the cashed $5,000 check
raised the amount received by Ms. Hann to $28,211.74, $3,211.74 more than the maximum
policy liability. It is thus obvious that both counsel negotiated and agreed to settlement under
a mistake of fact as to the amount Ms. Hann had received, i.e., $9,211.74 instead of
$14,211.74.
It is arguable that a mutual mistake of fact of counsel is not ground for relief where
the real parties at interest had knowledge of the true fact. However, under the circumstances
of this case, this Court is of the opinion and holds that the mutual mistake of counsel was and
is good grounds for reform of the settlement agreement.
Ms. Hann's first issue presents no grounds for reversal of the judgment of the
Chancery Court.
Ms. Hann's second issue is:
II. Whether the doctrine of unjust enrichment is applicable
where there was a clear, unambiguous, written agreement
between the parties.
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Ms. Hann argues that the doctrine of unjust enrichment does not apply when there is a
valid, express agreement between the parties. The argument contains no citation to the part
of the record evidencing the "valid, express agreement of the parties." No such written
agreement is found in the record. The affidavits of counsel indicate that counsel reached an
oral agreement to settle Ms. Hann's personal injuries claim for $23,211.74. The affidavits
further show that both counsel were of the impression that Ms. Hann had received only
$9,211.74, whereas she had in fact received $14,211.74. In their mistaken belief as to the
amount previously paid, counsel agreed that the unpaid balance of the agreed settlement was
$14,000.00, and this amount was paid.
The agreement to pay $14,000 and the payment of $14,000 were made under a mutual
mistake of fact on the part of both counsel.
Although not expressly so delineated in Shelter's complaint, it's chancery suit against
Ms. Hann was a suit to reform the settlement agreement to conform to the intent of the
parties, i.e. that Ms. Hann receive $23,211.74 for her personal injuries.
Although not specified in the chancery judgment, its effect was to reform the
agreement to provide a supplemental payment of $9,000.00 in order to provide the agreed
total of $23,211.74.
Equity will correct a mistake of fact in an agreement. Cromwell v. Winchester, 39
Tenn. (2 Head) 389 (1859); Cahal v. Frierson, 22 Tenn. (3 Humph.) 411; Town of
McMinnville v. Rhea, 44 Tenn. App. 612, 316 S.W.2d 46 (1958).
Having reformed the settlement agreement to conform to the intention of the parties,
the Trial Court then found a $5,000 overpayment and ordered refund of the same.
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Where one of the parties to a settlement mistakenly pays more than the amount agreed
on, he may recover the amount of the overpayment. 15A C.J.S. Compromise and Settlement
§44, p.273; Snyder v. Johnson, Tex. Civ. App. 1953, 256 S.W.2d 898.
Such a recovery is for "money had and received" rather than "unjust enrichment."
The cause is before this Court for review de novo, T.R.A.P. Rule 13(d). When
reviewing a record de novo, this Court is called upon to pass upon the correctness of the
result reached in the Trial Court, not necessarily the reasoning employed to reach the result.
Kelly v. Kelly, Tenn. App. 1972, 494 S.W.2d 130.
The judgment of the Trial Court is affirmed. As a matter of discretion, the costs of
this appeal are taxed against the plaintiff-appellee. The cause is remanded to the Trial Court
for necessary further proceedings.
Affirmed and Remanded.
_______________________________________
HENRY F. TODD
PRESIDING JUDGE, MIDDLE SECTION
CONCUR:
_____________________________________
SAMUEL L. LEWIS, JUDGE
_____________________________________
WILLIAM C. KOCH, JR., JUDGE
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