Geneva Jessica Day v. Beaver Hollow L.P. ( 2020 )

06/22/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
May 1, 2020 Session
GENEVA JESSICA DAY v. BEAVER HOLLOW L.P., ET AL.
Appeal from the Circuit Court for Washington County
No. 34728 Jean A. Stanley, Judge
No. E2019-01266-COA-R3-CV
This appeal concerns a jury verdict in a slip and fall case. Geneva Jessica Day
(“Plaintiff”), a resident of Beaver Hollow Apartments (“the Apartments”), sued Beaver
Hollow L.P. (“BHLP”), which owned the Apartments, as well as Olympia Management,
Inc. (“Olympia”) (“Defendants,” collectively), the entity BHLP contracted with to
manage the Apartments, in the Circuit Court for Washington County (“the Trial Court”).
Plaintiff was injured when she slipped on ice and snow in the Apartments’ parking lot.
The jury allocated 49% of the fault to Plaintiff, 50% to Olympia, and 1% to BHLP.
Defendants appeal. Defendants argue, among other things, that no material evidence
supports the jury’s allocation of fault to BHLP. After a careful review of the record, we
find no material evidence to support the jury’s verdict regarding BHLP, which exercised
no actual control of the premises whatsoever. The Trial Court erred in denying
Defendants’ motion for a directed verdict with respect to BHLP. As we may not
reallocate fault, we vacate the judgment of the Trial Court, and remand for a new trial.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Vacated;
Case Remanded
D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which FRANK G.
CLEMENT, JR., P.J., M.S., and J. STEVEN STAFFORD, P.J., W.S., joined.
Kenneth W. Ward and Hannah S. Lowe, Knoxville, Tennessee, for the appellants, Beaver
Hollow L.P. and Olympia Management, Inc.
Tony Seaton, Johnson City, Tennessee, and Brian G. Brooks, Greenbrier, Arkansas, for
the appellee, Geneva Jessica Day.
OPINION
Background
BHLP is a limited partnership that owns the Apartments, which serve as low
income housing. BHLP contracted with Olympia to handle the day-to-day management
of the Apartments. Olympia succeeded Sunbelt Management in that role in 2014.
In February 2015, Plaintiff was living at the Apartments. She managed a store at a
mall in Johnson City, Tennessee. On February 20, 2015, Plaintiff went to work around
9:00 a.m. She returned home around 6:00 p.m. The area had been experiencing severe
winter weather, and ice and snow had accumulated on the ground. The sidewalks,
breezeways and steps at the Apartments had been cleared. The parking lot, however, had
not been cleared. Plaintiff parked close to her residence. She got out of her van and then
got her young son out, as well. Plaintiff placed him in a clear spot and went to the rear of
the van to retrieve some items. When Plaintiff closed the hatch and took an initial step
toward her son she slipped and fell, sustaining major injuries to her leg.
In August 2015, Plaintiff filed a complaint for negligence in the Trial Court.
Plaintiff later filed an amended complaint seeking punitive damages. Defendants filed a
motion for summary judgment. The Trial Court denied Defendants’ motion, and the
matter proceeded to trial.
The case was tried over the course of several days in November 2018. As we will
discuss, there is but one dispositive issue on appeal, and it concerns whether there is any
material evidence to support the jury’s verdict as it relates to BHLP. Thus, we limit our
exposition of the evidence from trial to that concerning BHLP’s involvement, or lack
thereof.
Lindsey Turner, manager of accounting for Olympia Construction,1 had reviewed
Olympia’s annual financial statements. Ms. Turner testified to the relationship between
BHLP and Olympia. Ms. Turner stated, as relevant:
Q. So while Olympia Management may manage 87 properties, this
owner/developer [BHLP] only owns this one?
A. Correct.
Q. The other properties that Olympia Management manages, would it be
owned by other owner/developers?
1
Olympia Construction is a non-party company separate from Olympia. The former company builds and
the latter company manages apartments.
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A. Yes.
Q. We’ve heard some discussion about how this particular owner/developer
is set up as Beaver Hollow, LP, and we know that Regions Bank is a 99.9
percent equity owner in, or limited partner in Beaver Hollow, LP, correct?
A. Correct.
Q. The other side of the coin are the general partners.
A. (NO AUDIBLE RESPONSE).
Q. That would be a yes?
A. Yes.
Q. Okay. So what is Paladin?
A. Paladin, Inc. is a nonprofit out of Atlanta and they invest in low income
housing projects. They also are involved in housing. They help, they help
homeless people found housing and do other types of housing related
projects.
Q. Are they a general partner in other apartment complexes that Olympia
Management manages?
A. Yes.
Q. Okay. Does Paladin, Inc. also partner with other entities and individuals
totally unrelated to Olympia Construction or Olympia Management or
Beaver Hollow, LP or anything like that?
A. Absolutely.
Q. So they’re not just a captive investor for you all?
A. No. No.
Q. So other than Paladin, who are the other general partners on the other
side of Regions Bank?
A. Pat Dobbins, Patricia Dobbins.
Q. Okay.
A. And Donnie Richardson.
***
Q. Okay. So let’s take a look at how it works on the practical basis. So
Olympia Management, Inc. is the company that actually has employees on
the ground at Beaver Hollow Apartments, correct?
A. Correct.
Q. Beaver Hollow, LP doesn’t have a single employee out there, do they?
A. Absolutely not.
Q. In fact, I don’t think Beaver Hollow, LP has an employee at all, do they?
A. No.
Q. Okay. So as we’ve already established, they don’t have, Beaver Hollow,
LP doesn’t have an employee manual, does it?
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A. No.
Q. It doesn’t have safety meetings where they talk about this is what we’re
going to do at this apartment or this apartment, do they?
A. No.
Q. Okay. Olympia Management being there with people on the ground, are
they an equity member or partner of any part of this?
A. Absolutely not. Olympia Management does not receive a dime out of
the project other than an annual management fee which is a percentage of
the effective gross income.
Q. Sure.
A. So they receive income from the year of just, for to make it simple, if
they receive a hundred dollars income for the year, the only fee Olympia
Management would receive is 4 percent of the hundred dollars. That’s how
-- it’s a, it’s a percentage based fee.
Q. Sure. Now we’ve had a lot of testimony about tax credits, selling them
on the market and where the money goes, but I just want to make sure, as
the person who was involved in the project if we understand it right. So
Beaver Hollow, LP found a piece of property in Johnson City that would
sustain Beaver Hollow Apartments, correct?
A. Correct.
Q. And then they found Regions Bank as the syndicator that could provide
equity capital, correct?
A. Correct.
Q. Okay. They fill out an application and send it to the State of Tennessee
for approval to be able to build this apartment complex as a low income
housing complex, correct?
A. Correct.
Jason White performed property maintenance services at the Apartments. Mr.
White testified that he worked for Sunbelt Management and later Olympia, but not
BHLP. Mr. White testified:
Q. When did you start working for Olympia Management?
A. Beaver Hollow, it was sometime in 2010.
Q. Okay. Well, let’s be clear, in 2010 did you get a paycheck that said
Sunbelt?
A. It said Sunbelt; I apologize. Yeah.
Likewise, property manager Elizabeth Ann White—formerly Lowe—testified that
she, too, was hired by Sunbelt Management and Olympia rather than BHLP:
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Q. All right. And when -- who were you hired by?
A. Stacy Matthews.
Q. Okay. And who was she with?
A. Sunbelt Management.
Q. Okay. And then Sunbelt Management, my understanding, eventually
became Olympia Management?
A. Correct, yes.
Q. All right. And so they hired you to be this property manager?
A. Yes.
Defendants moved for a directed verdict both at the close of Plaintiff’s proof and
at the close of their own proof. The Trial Court denied these motions. At the end of the
first phase of trial, the jury found for Plaintiff and allocated fault as follows: Plaintiff
49%, Olympia 50%, and BHLP 1%. Compensatory damages were found to be
$1,251,396.41, which was reduced to $638,212.17 to account for Plaintiff’s 49% share of
the fault. The second phase of trial dealt with punitive damages against Olympia.
Ultimately, the jury awarded Plaintiff $1,400,000 in punitive damages. In January 2019,
the Trial Court entered its order of judgment and an order containing its findings of fact
and conclusions of law on Plaintiff’s punitive damages and setting forth the jury verdict.
Defendants filed multiple post-trial motions. In June 2019, the Trial Court entered
an order denying Defendants’ motions. The Trial Court stated, in relevant part:
1. Defendants’ argument that “The Court should grant a new trial
because the verdict is contrary to the weight of the evidence as there was
insufficient proof of any negligence on the part of Beaver Hollow, LP, and
under the jury’s apportionment of fault 49% to the plaintiff and 50% to
Olympia Management Inc., the only way to determine how to reapportion
the 1% assigned to Beaver Hollow LP is through a new trial” is DENIED.
The Court finds that Elizabeth Lowe and Jason White testified that
they were employees of Beaver Hollow. “Beaver Hollow” is used
interchangeably by the Court with “Beaver Hollow, L.P.” Additionally,
Beaver Hollow, L.P. was the owner of record. The jury instructions were
clear as to the duty of both owners and landlords. This included Beaver
Hollow, L.P.
Defendants timely appealed.
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Discussion
Although Defendants raise eight issues on appeal, their first issue is dispositive.
We restate the dispositive issue slightly, as follows: whether the Trial Court erred in
denying Defendants’ motion for a directed verdict with respect to BHLP.
Regarding our limited standard of review for cases decided by a jury, our Supreme
Court has instructed:
An appellate court shall only set aside findings of fact by a jury in a
civil matter if there is no material evidence to support the jury’s verdict.
Tenn. R. App. P. 13(d); Whaley v. Perkins, 197 S.W.3d 665, 671 (Tenn.
2006). In determining whether there is material evidence to support a
verdict, we shall: “(1) take the strongest legitimate view of all the evidence
in favor of the verdict; (2) assume the truth of all evidence that supports the
verdict; (3) allow all reasonable inferences to sustain the verdict; and (4)
discard all [countervailing] evidence.” Barnes v. Goodyear Tire & Rubber
Co., 48 S.W.3d 698, 704 (Tenn. 2000) (citing Crabtree Masonry Co. v. C
& R Constr., Inc., 575 S.W.2d 4, 5 (Tenn. 1978)). “Appellate courts shall
neither reweigh the evidence nor decide where the preponderance of the
evidence lies.” Barnes, 48 S.W.3d at 704. If there is any material evidence
to support the verdict, we must affirm it; otherwise, the parties would be
deprived of their constitutional right to trial by jury. Crabtree Masonry
Co., 575 S.W.2d at 5.
Creech v. Addington, 281 S.W.3d 363, 372 (Tenn. 2009). In Johnson v. Tennessee
Farmers Mut. Ins. Co., our Supreme Court discussed the standard under which an
appellate court must review a motion for a directed verdict, stating:
In reviewing the trial court’s decision to deny a motion for a directed
verdict, an appellate court must take the strongest legitimate view of the
evidence in favor of the non-moving party, construing all evidence in that
party’s favor and disregarding all countervailing evidence. Gaston v. Tenn.
Farmers Mut. Ins. Co., 120 S.W.3d 815, 819 (Tenn. 2003). A motion for a
directed verdict should not be granted unless reasonable minds could reach
only one conclusion from the evidence. Id. The standard of review
applicable to a motion for a directed verdict does not permit an appellate
court to weigh the evidence. Cecil v. Hardin, 575 S.W.2d 268, 270 (Tenn.
1978). Moreover, in reviewing the trial court’s denial of a motion for a
directed verdict, an appellate court must not evaluate the credibility of
witnesses. Benson v. Tenn. Valley Elec. Coop., 868 S.W.2d 630, 638-39
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(Tenn. Ct. App. 1993). Accordingly, if material evidence is in dispute or
doubt exists as to the conclusions to be drawn from that evidence, the
motion must be denied. Hurley v. Tenn. Farmers Mut. Ins. Co., 922
S.W.2d 887, 891 (Tenn. Ct. App. 1995).
Johnson v. Tennessee Farmers Mut. Ins. Co., 205 S.W.3d 365, 370 (Tenn. 2006).
“Material evidence is evidence material to the question in controversy, which must
necessarily enter into the consideration of the controversy and by itself, or in connection
with the other evidence, be determinative of the case.” Meals ex rel. Meals v. Ford
Motor Co., 417 S.W.3d 414, 422 (Tenn. 2013) (citation and internal quotation marks
omitted).
Plaintiff sued Defendants for negligence arising out of her fall in snow and ice in
the parking lot at the Apartments. A number of Tennessee cases have addressed similar
scenarios. In one such case, this Court explained a property owner’s duties with regard to
snow and ice accumulation as follows:
[P]roperty owners are not required to keep their premises free of natural
accumulations of snow and ice at all times. Howard v. FMS, Inc., No.
01A01-9709-CV-00479, 1998 WL 195960, at *4 (Tenn. Ct. App. Apr. 24,
1998) (No Tenn. R. App. P. 11 application filed); Grizzell v. Foxx, 48 Tenn.
App. at 467, 348 S.W.2d at 817. Instead, they are expected to take
reasonable steps to remove snow and ice within a reasonable time after it
has formed or accumulated. Grizzell v. Foxx, 48 Tenn. App. at 468, 348
S.W.2d at 817. When called upon to consider whether a property owner’s
efforts to remove snow and ice were reasonable, the court should consider,
among other things, (1) the length of time the accumulation has been
present, (2) the amount of the accumulation, (3) whether the accumulation
could be, as a practical matter, removed, (4) the cost of removal, and (5) the
foreseeability of injury. Simmons v. Russell, No. 01A01-9709-CV-00467,
1998 WL 251751, at * 3 (Tenn. Ct. App. May 20, 1998) (No Tenn. R. App.
P. 11 application filed); Mumford v. Thomas, 603 S.W.2d 154, 156 (Tenn.
Ct. App. 1980).
Bowman v. State, 206 S.W.3d 467, 473-74 (Tenn. Ct. App. 2006).
Defendants argue that Plaintiff failed to present any proof that could support the
jury’s allocation of 1% of the fault to BHLP. Defendants state that the evidence reveals
no actions or inactions, negligent or otherwise, on the part of BHLP. Indeed, the
uncontroverted testimony from trial was that BHLP has no employees. BHLP contracted
with Olympia to manage the Apartments. According to Defendants, the Trial Court erred
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in denying their motion for a directed verdict with respect to BHLP. Plaintiff argues, on
the other hand, that BHLP could not escape its duty of care as property owner by hiring
Olympia to manage the Apartments. According to Plaintiff, it was within the jury’s
prerogative to allocate 1% of the fault to BHLP.
This Court previously has addressed whether a property owner, by mere virtue of
ownership, may be found liable in a premises liability case. In Concklin v. Holland, 138
S.W.3d 215, 218 (Tenn. Ct. App. 2003), a twenty-year old woman, Amanda Concklin,
went to a house owned by Lewis Holland and William L. Holland. Although the
property was co-owned, William L. Holland occupied the property whereas Lewis
Holland did not. Id. After taking drugs and drinking alcohol, Amanda Concklin died.
Id. Amanda’s parents sued both co-owners. Id. at 218-19. Lewis Holland, the non-
occupying co-owner, filed a motion to dismiss, which the trial court granted. Id. at 219.
The Concklins appealed and this Court affirmed. Id. at 223. Determining that a property
owner’s exposure under premises liability hinged on the owner’s exercise of actual
control, this Court stated, in pertinent part:
A cause of action for premises liability is analyzed under common law
principles of negligence. See Ruth v. Ruth, 213 Tenn. 82, 372 S.W.2d 285,
287 (1963). To establish a prima facie claim of negligence, the plaintiff
must prove “1. [a] duty of care owed by the defendant to the plaintiff[,]
2.[a] failure on the part of the defendant to perform that duty[, and] 3.[a]n
injury to the plaintiff resulting proximately from the defendant’s breach of
that duty of care.” Id. (citing Mullen v. Russworm, 169 Tenn. 650, 90
S.W.2d 530 (1935); De Glopper v. Nashville Ry. & Light Co., 123 Tenn.
633, 134 S.W. 609 (1910); Nichols v. Smith, 21 Tenn. App. 478, 111
S.W.2d 911 (Tenn. Ct. App. 1937)).
Mr. and Mrs. Concklin must first prove the existence of a duty that
Lewis owes to a visitor to the Fenwick property. In regard to an owner’s
premises liability, Tennessee courts have stated that “[t]he law places the
duty upon the person in control of [the] premises to exercise reasonable and
ordinary care under the circumstances not to cause injury to an invitee.” Id.
(emphasis added); see also Johnson v. EMPE, Inc., 837 S.W.2d 62, 65
(Tenn. Ct. App. 1992). . . .
***
In their complaint, Mr. and Mrs. Concklin only allege that “Lewis Holland
had a right to manage, regulate or control the property and its use.” There
is no further assertion of actual control. As a result, the Concklins’
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complaint did not prove the prima facie element of duty as is required for
any negligence action. Accordingly, we affirm the trial court’s grant of the
12.02(6) motion as to the premises liability claim against Lewis.
Id. at 220-21.
While the facts of Concklin differ from those of the present case, we find the
analysis on point. Here, there is absolutely no hint in the evidence presented to the jury
that BHLP exercised any actual control of the Apartments. Although the contract
between BHLP and Olympia is not in evidence, Plaintiff acknowledges and the
uncontroverted evidence shows that Olympia handled day-to-day management at the
Apartments. BHLP was a completely passive owner with no employee on site. Based on
this record, Olympia exercised all of the functions of landlord. In its June 2019 order
disposing of post-trial motions, the Trial Court upheld the jury’s allocation of 1% fault to
BHLP, stating that “Elizabeth Lowe and Jason White testified that they were employees
of Beaver Hollow,” and that “‘Beaver Hollow’ is used interchangeably by the Court with
‘Beaver Hollow, L.P.’” Regarding the former point, the testimony of Elizabeth Lowe
and Jason White, set forth above, is clear that they were hired by Olympia’s predecessor,
Sunbelt Management. They did not work for BHLP, and there is no evidence, material or
otherwise, to the contrary. As to the Trial Court’s other point, the interchangeable use of
the name Beaver Hollow “by the Court” for both BHLP and the Apartments serves only
to underscore the lack of any material evidence concerning BHLP. Just because the
Apartments happen to be called Beaver Hollow does not mean that they are synonymous
with the entity BHLP. There is no material evidence even hinting they are one and the
same. On the contrary, they are distinct, and the distinction is a vital one when it comes
to assessing fault in premises liability.
At oral arguments, Plaintiff appeared to contend that BHLP’s very hiring of
Olympia in the first place could constitute material evidence supporting the jury’s
verdict. Based on this record, we disagree. If the jury heard evidence that Olympia had,
for instance, a history of neglecting tenant safety, and BHLP knew about it but hired
them anyway, perhaps to save money, or some other comparable evidence, the jury might
have had a shard of material evidence upon which to allocate fault to BHLP, which
otherwise did nothing relevant as far as we can see besides hire Olympia. However,
while there is considerable testimony and argument regarding how profitable the
Apartments were to BHLP and the role of tax credits, the record contains no evidence
even purporting to show that BHLP was negligent in hiring Olympia. Absent such
evidence, BHLP’s choice to delegate day-to-day management of the Apartments to
Olympia is, in itself, no more a basis for finding it negligent than Lewis Holland’s status
as non-occupying co-owner was for him in Concklin.
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Our standard of review in jury trials is extremely limited. If the evidence from
trial showed that BHLP had done practically anything to retain or exercise actual control
of the Apartments, we would be obliged to leave the jury’s verdict regarding BHLP
undisturbed. It is not our role to second-guess the jury. It is our role, however, to review
whether there was any material evidence to support the jury’s verdict. Even under that
highly deferential standard, taking the strongest legitimate view of the evidence in favor
of Plaintiff, construing all evidence in Plaintiff’s favor and disregarding all countervailing
evidence, we find no material evidence whatsoever in this record to support the jury’s
allocation of 1% of the fault to BHLP. As we have discussed, BHLP is not liable under
premises liability for Plaintiff’s injuries simply because it owned the Apartments when
the uncontroverted evidence shows that, at the time of Plaintiff’s fall, BHLP had
delegated complete actual control of the Apartments to Olympia. Liability for Plaintiff’s
injuries, if it is to be found at all, would be so found against Olympia, not BHLP. This
being so, we hold that the Trial Court erred in denying Defendants’ motion for a directed
verdict with respect to BHLP. All other issues are pretermitted.
As a result of our holding, fault must be reallocated. It is especially significant in
this case given the percentages. Had the jury allocated the 1% of fault it allocated to
BHLP to the 49% it allocated to Plaintiff, Defendants would have prevailed, as “the issue
under the Tennessee modified comparative fault system is whether there is material
evidence to support a finding that the plaintiff was guilty of at least 50% of the fault.”
Ballard v. Serodino, Inc., No. E2004-02656-COA-R3-CV, 2005 WL 2860279, at *2
(Tenn. Ct. App. Oct. 31, 2005), no appl. perm. appeal filed. However, in this jury case,
“[w]e do not have the authority to reallocate fault.” Martin v. Drinnon, No. E2003-
02106-COA-R3-CV, 2004 WL 1857098, at *3 n. 4 (Tenn. Ct. App. Aug. 18, 2004), Rule
11 perm. app. denied Jan. 24, 2005 (citing Turner v. Jordan, 957 S.W.2d 815, 823-24
(Tenn. 1997); Winstead v. Goodlark Reg’l Med. Ctr., Inc., No. M1997-00209-COA-R3-
CV, 2000 WL 343789, at *6 (Tenn. Ct. App. Apr. 4, 2000), no. appl. perm. appeal filed).
We, therefore, vacate the Trial Court’s judgment, and remand this case for the Trial Court
to enter a directed verdict as to BHLP and for a new trial with Olympia as the sole
remaining defendant.
Conclusion
The judgment of the Trial Court is vacated, and this cause is remanded to the Trial
Court for collection of the costs below and further proceedings consistent with this
Opinion. The costs on appeal are assessed against the Appellee, Geneva Jessica Day.
_____________________________________
D. MICHAEL SWINEY, CHIEF JUDGE
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