Coffee County, Tennessee v. Carl Spining

01/19/2022
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
November 2, 2021 Session
COFFEE COUNTY, TENNESSEE v. CARL SPINING ET AL.
Appeal from the Circuit Court for Coffee County
No. 2019-CV-46293 Robert E. Lee Davies, Senior Judge
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No. M2020-01438-COA-R3-CV
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This appeal arises from a Rule 12.02(6) dismissal of a legal malpractice action as time-
barred under the one-year statute of limitations in Tennessee Code Annotated § 28-3-
104(c)(1). In its September 17, 2019 Complaint, the plaintiff county alleged that its trial
counsel in an underlying Public Employee Political Freedom Act (“PEPFA”) action
committed malpractice by failing to object to the jury verdict form in conjunction with
agreeing to bifurcate the issue of damage. The defendant attorney and his law firm moved
to dismiss the complaint as time-barred under § 28-3-104(c)(1), asserting that the county’s
claim accrued no later than July 7, 2017—the date on which the court entered the final
judgment against the county in the underlying PEPFA case. The county opposed the
Motion, asserting that its claim did not accrue until September 18, 2018—the date on which
the Court of Appeals issued its opinion in the PEPFA case—because it was on that date the
county first reasonably became aware of the alleged malpractice. The trial court granted
the Motion to Dismiss on the ground the county knew it had been injured and had sufficient
constructive knowledge to trigger accrual of the action more than one year prior to its
commencement. This appeal followed. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the court, in which ANDY D.
BENNETT and W. NEAL MCBRAYER, JJ., joined.
Robert L. Huskey, Manchester, Tennessee, for the appellant, Coffee County, Tennessee.
Gregory Brown, Knoxville, Tennessee, for the appellees, W. Carl Spining and Ortale,
Kelley, Herbert & Crawford LLP.
OPINION
FACTS AND PROCEDURAL HISTORY
THE UNDERLYING CASE
In September 2013, Melinda Keeling, a former Coffee County employee,
commenced a PEPFA action against the County, seeking both equitable and emotional
damages. See Keeling v. Coffee Cty., No. M2017-01809-COA-R3-CV, 2018 WL 4468401(Tenn. Ct. App. Sept. 18, 2018). Ms. Keeling alleged that she had verbal and written
communications with the County mayor about complaints she received from the public
concerning her supervisor’s lack of availability. Id. at *1. When Ms. Keeling’s supervisor
learned of her statement, he allegedly retaliated by, inter alia, eliminating some of the
duties that provided Ms. Keeling with compensatory time off and placing an adverse
employment report in her personnel folder. Id. In May 2010, the supervisor eliminated Ms.
Keeling’s position, ostensibly due to a lack of funds. Id. In her Complaint, Ms. Keeling
sought front pay and back pay associated with her termination. Shortly thereafter, the
County retained attorney Carl Spining and his law firm, Ortale, Kelley, Herbert &
Crawford (collectively, “Ortale Kelley”), to defend the action.
During a bench conference in the PEPFA action on January 11, 2017, Mr. Spining
and Ms. Keeling’s counsel, Jerry Gonzalez, discussed how damages would be determined
if the jury returned a verdict on the issue of the County’s liability. At the conference, Mr.
Gonzalez informed the court of his intent to seek only emotional damages during the jury
trial and to pursue equitable damages with the court at a later date. Mr. Spining agreed that
Ms. Keeling would be permitted to seek equitable damages upon the jury “finding a PEPFA
violation.” Based on the agreement of the parties, the trial court reserved the issue of
equitable damages for a potential bench trial, depending on the jury’s verdict. More
specifically, the parties agreed to reserve the issues of back pay and benefits to be decided
by the trial court after the liability phase. For this reason, and upon the agreement of the
parties, the jury form posed only two questions:
1. Has the Plaintiff proven by a preponderance of the evidence all of the
elements of the claim for Public Employee Political Freedom Act?
Yes ___ No ___
If your answer is “No,” go to the end, sign and return the jury verdict form
to the Court. If your answer is “Yes,” go to the next question.
2. Decide the amount of any damages sustained by Ms. Keeling for pain and
suffering, humiliation and/or embarrassment. $ _______________
The case proceeded to trial, and after finding that the County committed a PEPFA
violation, the jury awarded Ms. Keeling $10,000 in emotional damages. Acting pursuant
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to Tennessee Code Annotated § 8-50-603, the trial court increased the award of damages
to $30,000. See Tenn. Code Ann. § 8-50-603(b) (“If the court of competent jurisdiction
determines that a public employer has disciplined, threatened to discipline or otherwise
discriminated against an employee because such employee exercised the rights provided
by this part, such employee shall be entitled to treble damages plus reasonable attorney
fees.”).
Following the jury trial, Ms. Keeling moved for various equitable remedies resulting
from her termination, including back pay, front pay, and loss of benefits. The County
opposed the motion arguing that, because the jury form permitted the jury to award
emotional damages without requiring it to determine that Ms. Keeling’s termination
actually resulted from the County’s PEPFA violation, awarding equitable damages based
on the jury’s determination was inappropriate. For this reason, the County moved for a new
trial, contending that the jury verdict, finding only that some PEPFA violation occurred,
could not support an award of equitable damages by the court. On May 1, 2017, the court
entered an order noting that Ms. Keeling’s termination was “a continued act of
discrimination” and that, as such, equitable remedies were appropriate. On July 7, 2017,
the court awarded Ms. Keeling over $150,000. Later, the court denied the County’s Motion
for New Trial.
At this point, Robert Huskey, the County Attorney, began reviewing the court file
and investigating the decisions made by Mr. Spining during the trial. Specifically, Mr.
Huskey went to the clerk’s office and obtained a copy of the jury verdict form. After
reviewing the jury verdict form, Mr. Huskey concluded that the form reflected exactly what
Mr. Spining had represented to him. Shortly thereafter, Mr. Huskey, acting in his capacity
as the County Attorney, authorized Mr. Spining to appeal the PEPFA case. Acting on
behalf of the County, Mr. Spining filed a timely notice of appeal. The record on appeal was
filed with the Court of Appeals on December 5, 2017, and the County filed its brief on
February 5, 2018. Ms. Keeling filed her brief on April 6, 2018, in which she cross-appealed
the amount of damages awarded. Significantly, the transcript of the bench conference in
which Mr. Spining agreed to the stipulation at issue was filed as part of the trial court record
on appeal.
On September 18, 2018, this court issued an opinion in which we held that the
County waived any objection it may have had to the jury verdict form by agreeing at the
January 2017 bench conference to allow for a determination of equitable damages at a later
bench trial. See Keeling, 2018 WL 4468401, at *15. For this and other reasons, we
determined that the trial court did not err in awarding the employee equitable damages. Id.We also modified and increased the monetary judgment against the County to $994,000.
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THE LEGAL MALPRACTICE ACTION
On September 17, 2019, the County filed the present malpractice action against Mr.
Spining and his firm. In its Complaint, the County contended in pertinent part:
Mr. Spining and his firm had represented Coffee County a number of times
prior to the Keeling case and the County had no reason to question his
effective professional handling of their litigations. The circumstances of his
representation in this case which prompts the County to bring this action are
based on their sound belief that his representation of the County in the trial
court breached an appropriate Standard of Care resulting in a very bad trial
court verdict and that further his failure to apprise the County of pertinent
information when [deciding] whether or not to appeal the case compounded
the County’s damage. His failure to meet the Standard of Care in not
objecting to a jury verdict form combined with a stipulation or agreement
that Mr. Spining made with the plaintiff’s counsel that the County was not
aware of, ended up resulting in a huge verdict of nearly half a million dollars
($500,000.00) in the trial court; and further when the County then had to
decide whether or not to appeal, Mr. Spining still did not apprise the County
of a stipulation he had made with opposing counsel which, in turn, prompted
the County to appeal and in turn resulted in the appellate court denying our
relief sought and sending the case back for awarding additional damage and
ultimately resulting in a payout to Ms. Keeling of nearly a million dollars
($1,000,000.00).
In sum, the County alleged that, when deciding to appeal the July 2017 judgment,
it believed that Mr. Spining chose not to object to the jury form as a trial tactic. After this
court issued its September 2018 opinion, however, the County contends that it learned, for
the first time, about the January 2017 conference in which Mr. Spining agreed to reserve
equitable remedies for after the jury verdict. Coffee County did not allege that failure to
object to the jury verdict form, by itself, breached the standard of care. Instead, it claimed
that it was malpractice for Mr. Spining to fail to object to the form in conjunction with
agreeing to bifurcate the issue of damages without first requiring the jury to determine
whether the employee’s termination was an actual result of the PEPFA violation.
According to the County, it would not have appealed had it known of the January 2017
conference stipulation.
Ortale Kelley responded to the Complaint by filing a Tennessee Rule of Civil
Procedure 12.02(6) motion to dismiss for failure to state a claim, arguing that the one-year
statute of limitations for legal malpractice actions accrued on July 7, 2017, when the trial
court entered its judgment against the County. Specifically, Ortale Kelley explained that,
under the discovery rule, the statute of limitations accrued when (1) the County suffered a
legally cognizable, actual injury as a result of Mr. Spining’s wrongful conduct, and (2) the
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County knew, or in the exercise of reasonable diligence should have known, that the injury
was caused by Mr. Spining’s wrongful conduct. Ortale Kelley argued that, because the
County suffered an actual injury when the judgment was entered in July 2017, and because
Mr. Huskey investigated Mr. Spining upon entry of the July 2017 judgment, the County
should have known, after due diligence, about the January 2017 bench conference. More
specifically, Ortale Kelly contended:
First, the facts alleged in the Complaint show that the claims for legal
malpractice are barred by the one-year statute of limitations because these
claims were filed more than two and a half years after the adverse judgment,
when the cause of action accrued. Second, the agreement to bifurcate
damages was based on both a legal requirement as well as professional
judgment, neither of which can serve as a basis for liability.
Following a hearing on the motion, the trial court agreed with Ortale Kelley,
concluding that the injury occurred no later than the entry of the final judgment on July 7,
2017. More specifically, the trial court ruled: “In the case at bar[,] if the injury occurred, it
accrued no later than the entry of the final judgment on July 7, 2017. Accordingly, the one-
year statute of limitation bars the County’s claims for relief.”
Following the entry of the order granting Ortale Kelley’s Motion to Dismiss, the
County filed a Motion to Alter, Amend, or Vacate, arguing that, while it knew it had
suffered an injury on July 7, 2017, it did not know, nor should it have known, that the injury
was a result of Mr. Spining’s conduct. Instead, the County contended that, though it
exercised reasonable diligence, the County still could not have known that the injury was
caused by Mr. Spining before September 2018 because Mr. Spining had concealed facts.
This was the first time that the County raised a fraudulent concealment argument. The trial
court, however, denied the County’s motion. In its conclusion, the court noted that the facts
regarding Mr. Spining’s agreement to bifurcate damages were referenced in various
motions leading up to the entry of final judgment and that the court file contained “all
arguments back and forth about whether Mr. Spining had agreed to the verdict form such
that he could not object to it after trial.” 1 For these reasons, the trial court concluded:
The Complaint shows that the County had sufficient knowledge to put it on
notice of the potential claim against Spining when the County was deciding
whether to appeal. Therefore, the County’s legal malpractice claim accrued
1
The trial court’s order granting Ortale Kelley’s Motion to Dismiss and the subsequent order
denying the County’s Motion to Alter, Amend, or Vacate address distinct issues regarding the discovery
rule. Specifically, in the order granting the Motion to Dismiss, the trial court concluded that the County’s
injury occurred when the final judgment was entered in the underlying PEPFA case. By contrast, the order
denying the Motion to Alter, Amend, or Vacate, clarifies the trial court’s reasoning regarding when the
County knew, or should have known, of the stipulation. For this reason, we refer to both orders collectively
throughout this opinion as the trial court’s “decision.”
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on or before July 7, 2017. This matter was not filed until September 17, 2019.
Accordingly, the one-year statute of limitations bars the County’s claims for
relief. The Motion to Alter, Amend, and Vacate is denied.
This appeal followed.
STANDARD OF REVIEW
The purpose of a Tennessee Rule of Civil Procedure 12.02(6) motion to dismiss is
to determine whether the pleadings state a claim upon which relief can be granted. As our
Supreme Court explained in Webb v. Nashville Area Habitat for Humanity, Inc., 346
S.W.3d 422 (Tenn. 2011):
A Rule 12.02(6) motion challenges only the legal sufficiency of the
complaint, not the strength of the plaintiff’s proof or evidence. The resolution
of a 12.02(6) motion to dismiss is determined by an examination of the
pleadings alone. A defendant who files a motion to dismiss “‘admits the truth
of all of the relevant and material allegations contained in the complaint,
but . . . asserts that the allegations fail to establish a cause of action.’”
In considering a motion to dismiss, courts “‘must construe the complaint
liberally, presuming all factual allegations to be true and giving the plaintiff
the benefit of all reasonable inferences.’” A trial court should grant a motion
to dismiss “only when it appears that the plaintiff can prove no set of facts in
support of the claim that would entitle the plaintiff to relief.” We review the
trial court’s legal conclusions regarding the adequacy of the complaint de
novo.
Id. at 426 (citations omitted).
“Whether a claim is barred by an applicable statute of limitations is a question of
law.” Brown v. Erachem Comilog, Inc., 231 S.W.3d 918, 921 (Tenn. 2007). “We review
questions of law de novo with no presumption of correctness.” Burns v. State, 601 S.W.3d
601, 606 (Tenn. Ct. App. 2019).
ISSUES
Both parties identify issues on appeal.2 We have determined the dispositive issue is
2
The County presented the following issues:
I. What is the Standard of Review at the trial and appellate level in regard to a Motion to
Dismiss a suit under Rule 12.02 (6) of the Tennessee Rules of Civil Procedure?
II. What is the Tennessee law in regard to the accrual of a cause of action in cases of legal
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whether the trial court erred in granting Ortale Kelley’s Rule 12.02(6) Motion to Dismiss
on the basis of the statute of limitations.
ANALYSIS
An action for legal malpractice must be brought within one year from the date the
cause of action accrues. See Tenn. Code Ann. § 28-4-104(c)(1). “The concept of accrual
relates to the date on which the applicable statute of limitations begins to run.” Redwing v.
Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 457 (Tenn. 2012). In legal
malpractice actions, the date on which a statute of limitations will “begin to run” is
determined by the discovery rule. See Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995).
Pursuant to the discovery rule, a statute of limitations will accrue once two conditions are
met: (1) the plaintiff suffers an “actual injury” as a result of the defendant’s allegedly
wrongful conduct, and (2) the plaintiff knew “or in the exercise of reasonable diligence
should have known that” its injury was caused by the defendant’s alleged wrongful
conduct. John Kohl & Co., P.C. v. Dearborn & Ewing, 977 S.W.2d 528, 532 (Tenn. 1998).
In the context of litigation, the entry of a judgment effectively acts as the default point of
actual injury. Story v. Bunstine, 538 S.W.3d 455, 470–71 (Tenn. 2017).
“The knowledge component of the discovery rule may be established by evidence
of actual or constructive knowledge of the injury.” PNC Multifamily Capital Institutional
Fund XXVI Ltd. P’ship v. Bluff City Cmty. Dev. Corp., 387 S.W.3d 525, 545 (Tenn. Ct.
App. 2012) (citing Carvell, 900 S.W.2d at 29). Thus, our Supreme Court has emphasized
that this component does not require the plaintiff to “actually know the specific type of
legal claim he or she has, or that the injury constituted a breach of the appropriate legal
standard.” Id. (citing Shadrick v. Coker, 963 S.W.2d 726, 733 (Tenn. 1998)). Instead, a
plaintiff is deemed to have constructive knowledge of the conduct when he “reasonably
should have become aware of facts sufficient to put a reasonable person on notice that an
injury has been sustained as a result of the defendant’s negligent or wrongful conduct.”
John Kohl & Co., P.C., 977 S.W.2d at 532. Though the party asserting a statute-of-
limitations defense bears the burden of proving that the statute of limitations has lapsed,
Sherrill v. Souder, 325 S.W.3d 584, 596 (Tenn. 2010), the burden will shift to a plaintiff
asserting lack of constructive knowledge to prove that, despite exercising reasonable
diligence, it could not have discovered facts giving rise to a cause of action, Coffey v.
Coffey, 578 S.W.3d 10, 22 (Tenn. Ct. App. 2018) (citing Vance v. Schulder, 547 S.W.2d
927, 930 (Tenn. 1977)).
Ortale Kelley asserts, and the County does not dispute, that the County suffered an
malpractice?
III. Did the Honorable Trial Judge correctly apply the law in regard to the above legal issues?
IV. Did the Honorable Trial Judge commit reversible error in granting [Defendants’] Motion
to Dismiss under Rule 12.02 (6) on the basis of the Statute of Limitations?
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actual injury on July 7, 2017, when the final judgment was entered in the PEPFA case. The
County, however, argues that it did not have actual or constructive knowledge of facts
regarding Mr. Spining’s alleged wrongful conduct until this court entered its opinion in the
PEPFA case on September 18, 2018. Specifically, the County contends that it exercised
reasonable diligence and that, even so, it had no reason to know of Mr. Spining’s alleged
wrongful conduct.3 We respectfully disagree.
In making its decision to grant Ortale Kelley’s Motion to Dismiss, the trial court
specifically found that “the heart of the issue at both the trial and appellate levels was [Mr.
Spining’s] failure to object to the jury verdict form, which occurred long before entry of
the final judgment on July 7, 2017.” The trial court also found it significant that the
existence of the stipulation regarding the jury verdict form was evident in “several post-
trial motions,” all filed months before the entry of final judgment. Furthermore, the County
contends in its Complaint that it acted with reasonable diligence by obtaining a copy of the
jury verdict form shortly after the entry of final judgment on July 7, 2017, yet, as the trial
court correctly noted, the same court file contained “all the arguments back and forth about
whether Mr. Spining had agreed to the verdict form such that he could not object to it after
trial.”4 For these reasons, the trial court concluded:
The Complaint shows that the County had sufficient knowledge to put it on
notice of the potential claim against Spining when the County was deciding
3
On appeal, the County also alleges that Mr. Spining concealed facts necessary to put the County
on notice of a cause of action for legal malpractice. In the trial court, however, the County did not raise the
issue of concealment until it filed its Tenn. R. Civ. P. 59.04 Motion. For this reason, the County has waived
consideration of the issue on appeal. See Irvin v. Green Wise Homes, LLC, No. M2019-02232-COA-R3-
CV, 2021 WL 709782, at *11 (Tenn. Ct. App. Feb. 24, 2021) (concluding that an issue raised for the first
time in a motion to alter or amend waived the argument when the defendant asserted new legal theories);
see also Cent. Parking Sys. of Tenn., Inc. v. Nashville Downtown Platinum, LLC, No. M2010-01990-COA-
R3-CV, 2011 WL 1344633, at *4 (Tenn. Ct. App. Apr. 7, 2011) (“A Rule 59 motion should not be used to
raise or present new, previously untried or unasserted legal theories or arguments.” (quoting In re M.L.D.,
182 S.W.3d 890, 895 (Tenn. Ct. App. 2005))).
4
In making its decision, the trial court considered facts outside of those contained in the Complaint.
Although a court typically converts a motion to dismiss into a motion for summary judgment when it
considers facts outside of the complaint, that is not necessary here because the trial court impliedly took
judicial notice of such facts from its own court records. See Stephens v. Home Depot U.S.A., Inc., 529
S.W.3d 63, 74 (Tenn. Ct. App. 2016) (explaining that a court “may consider ‘items subject to judicial
notice . . . without converting the motion into one for summary judgment.’” (quoting Haynes v. Bass, No.
W2015-01192-COA-R3-CV, 2016 WL 3351365, at *4 (Tenn. Ct. App. June 9, 2016))). Specifically, the
trial court took notice of two facts from the PEPFA action: (1) the arguments contained in various
prejudgment motions, and (2) the contents of the underlying case record. Tennessee Rule of Evidence 201
“governs . . . judicial notice of adjudicative facts.” In interpreting Rule 201, this court has held that a trial
judge may take judicial notice of those facts capable of “accurate and ready determination by referencing
the court’s files.” Counts v. Bryan, 182 S.W.3d 288, 293 (Tenn. Ct. App. 2005). Significantly, this court
has also recognized that it is appropriate to consider not only the record of the present proceeding, but those
of earlier proceedings and judgments. See id. at 291, 293.
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whether to appeal. Therefore, the County’s legal malpractice claim accrued
on or before July 7, 2017. This matter was not filed until September 17, 2019.
Accordingly, the one-year statute of limitations bars the County’s claims for
relief.
As noted above, a statute of limitations will accrue once two conditions are met: (1)
the plaintiff suffers an “actual injury” as a result of the defendant’s allegedly wrongful
conduct, and (2) the plaintiff knew “or in the exercise of reasonable diligence should have
known that” its injury was caused by the defendant’s alleged wrongful conduct. John Kohl
& Co., P.C., 977 S.W.2d at 532. As for the first factor, the County had actual notice that it
suffered an actual injury when the final judgment was entered on July 7, 2017. See Story,
538 S.W.3d at 471 (explaining that the discovery rule “allows the trial court’s entry of a
final judgment to essentially act as a default point of actual injury”).
Furthermore, shortly after the final judgment was entered, Mr. Huskey initiated an
investigation into Mr. Spining’s actions, which included a review of the court files in the
underlying PEPFA case. As the trial court noted, the same court files contained not only
the jury verdict form but also numerous documents “underscoring” the existence of Mr.
Spining’s stipulation regarding the jury verdict form, including the prejudgment motions.
Thus, its investigation prior to deciding to appeal the PEPFA case provided the County
with constructive notice of the stipulation Mr. Spining agreed to at the bench conference.
Although the County does not provide the specific date on which Mr. Huskey began the
investigation, the Complaint states that the investigation began shortly after the entry of
final judgment on July 7, 2017, but before filing its appeal on September 11, 2017. For this
reason, even applying the most liberal analysis concerning when the County should have
become aware of a potential legal malpractice claim, the statute of limitations accrued, at
the latest, before the County filed its Notice of Appeal in the PEPFA case on September
11, 2017. Accordingly, the County “in the exercise of reasonable diligence should have
known that” its injury was caused by Mr. Spining’s alleged wrongful conduct more than a
year before they commenced this action. See John Kohl & Co., P.C., 977 S.W.2d at 532.
Thus, because the County knew “or in the exercise of reasonable diligence should
have known that” its injury was caused by Mr. Spining’s alleged wrongful conduct more
than a year before it commenced this action, we affirm the trial court’s decision in all
respects.
CONCLUSION
The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed against Coffee County.
_______________________________
FRANK G. CLEMENT JR., P.J., M.S.
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