Natalie Sharp v. Tennessee Department of Commerce And Insurance

11/09/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
April 11, 2017 Session
NATALIE SHARP v. TENNESSEE DEPARTMENT OF
COMMERCE AND INSURANCE
Appeal from the Circuit Court for Davidson County
No. 15C3610 Thomas W. Brothers, Judge
No. M2016-01207-COA-R3-CV
This appeal involves the trial court’s order of disclosure of certain public records over the
objection of the Tennessee Department of Commerce and Insurance and the
corresponding denial of attorney fees for failure to disclose the said records. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Affirmed; Case Remanded
JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which FRANK G.
CLEMENT, JR., P.J., M.S and ANDY D. BENNETT, J., joined.
Herbert H. Slatery, III, Attorney General & Reporter; Andrée S. Blumstein, Solicitor
General; and Janet M. Kleinfelter, Deputy Attorney General, Nashville, Tennessee, for
the appellant, State of Tennessee, Department of Commerce and Insurance.
Jackie Sharp, Jr., Nashville, Tennessee, for the appellee, Natalie Sharp.
OPINION
I. BACKGROUND
In December 2011, the Executive Director of the Board of Cosmetology
discovered that a license technician, Latrisha Johnson (“Johnson”), had destroyed a
number of cosmetology licensee files and had likely been collecting bribes and
fraudulently issuing cosmetology licenses. Maliaka Bass, Deputy General Counsel for
the General Civil Division of the Tennessee Department of Commerce and Insurance
(“the Department”), began an investigation. As part of her investigation, General Bass
requested an internal audit of reciprocal license applications issued from July 1, 2011,
through February 14, 2012. On March 13, 2012, the Department notified Johnson of its
intent to dismiss her from employment based upon the allegations. Johnson resigned two
days later. On May 24, 2012, the Office of Internal Audit issued a final audit
investigation report related to the missing applications.
As a result of the final audit, the Department revoked the licenses of those it
believed fraudulently obtained a license. The Department also brought an administrative
action to revoke the license of Lee Phan, an owner of a nail salon, upon discovery of his
alleged involvement in the scheme. Natalie Sharp (“Petitioner”) represents Mr. Phan.
On January 20, 2015, Petitioner submitted a public records request to the
Department pursuant to the Tennessee Public Records Act, codified at Tennessee Code
Annotated section 10-7-101, et seq., in which she sought to inspect the final audit
investigation report, as well as supporting documentation. The Department denied the
request, citing the attorney work product and attorney-client doctrines.
On January 31, 2015, Petitioner submitted a second public records request in
which she sought the following:
(1) All correspondence regarding cosmetology licensing between [the
Department] and media outlets and their representatives, including, but not
limited to, Jennifer Kraus of News Channel 5[;]
(2) A list of the [employee numbers for] Mark Green, Shilina Brown,
and Roxana Gumucio[; and]
(3) All correspondence between [the Department] and witnesses
subpoenaed for APD Case No. 12.09-12456A.
While not indicated in her request, Petitioner sought the information for purposes of
drafting a brief in support of her request for judicial review of the administrative decision
to revoke Mr. Phan’s license. The brief was due on March 13, 2015.
The Department, through Anthony Glandorf, replied to the request by email,
advising Petitioner that the request could not be completed until February 20, 2015. The
employee numbers were provided on February 19; however, Mr. Glandorf sent additional
emails in which he extended his estimation of the time necessary to compile the requested
documents. Petitioner did not respond to the emails.
On March 6, Mr. Glandorf informed Petitioner that he had compiled the witness
correspondence, and on March 26, he informed her that the remaining records were
available. Petitioner asked to inspect the records on March 27. Her request was denied
-2-
because Mr. Glandorf was out of the office on that date. Petitioner did not inspect the
records until August 18.
On September 30, 2015, Petitioner filed suit against the Department, requesting
access to the final audit report and supporting documentation. She further asserted that
the Department failed to furnish a completed records request form in response to her
January 31 request. Further, she claimed that there was an unreasonable delay in
providing the records and that the Department improperly redacted information and
improperly refused inspection of non-responsive records. Plaintiff sought attorney fees
based upon the Department’s willful violations of the TPRA.
The Department denied wrongdoing, citing the attorney work product doctrine as
pertinent to the January 20 request. Relative to the January 31 request, the Department
claimed that it redacted information that was privileged or non-responsive to the request.
The case proceeded to a hearing, after which the court held that the Department
had improperly denied the January 20 request. In so holding, the court found that the
final audit report, while produced in anticipation of litigation, was “ordinary work
product,” that Petitioner demonstrated a substantial need for the report, that the attorney
work product protection had been waived because details of the report had been disclosed
in the notice of intent to dismiss Johnson, and that the report was no longer protected
because there was no possibility of litigation concerning Johnson’s dismissal. Relative to
the January 31 request, the court found that Petitioner failed to establish that the
Department acted in bad faith in failing to use the correct form and in failing to produce
the records within the original time estimation. However, the court reserved ruling on
whether the records had been improperly redacted, finding that an in camera inspection of
the documents was necessary to determine if the redactions were overbroad as alleged.
Following an in camera inspection of the redacted documents, the court found that
additional pieces of correspondence should have been provided but that the remaining
correspondence did not merit disclosure because the correspondence consisted of
communications between state employees or involved attorney-client communications.
The court noted that any correspondence beyond the date of the request was also not
subject to disclosure. The court denied attorney fees. This timely appeal followed the
denial of post-trial motions.
II. ISSUES
We consolidate and restate the issues on appeal as follows:
-3-
A. Whether the court erred in finding that the Department erroneously
denied the January 20 request for the final audit report.
B. Whether the court erred in finding that the Department was not
required to disclose the entirety of the media correspondence in response to
the January 31 request.
C. Whether the court erred in denying Petitioner’s request for attorney
fees and costs.
III. STANDARD OF REVIEW
On appeal, the factual findings of the trial court are accorded a presumption of
correctness and will not be overturned unless the evidence preponderates against them.
See Tenn. R. App. P. 13(d). The trial court’s conclusions of law are subject to a de novo
review with no presumption of correctness. Blackburn v. Blackburn, 270 S.W.3d 42, 47
(Tenn. 2008); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993).
Decisions pertaining to whether to award attorney fees should not be overturned
absent an abuse of discretion. Under the abuse of discretion standard, this court is bound
by the principle that the trial court “will be upheld so long as reasonable minds can
disagree as to propriety of the decision made.” Deakins v. Deakins, E2008-00074-COA-
R3-CV, 2009 WL 3126245, at *7 (Tenn. Ct. App. Sept. 30, 2009) (quoting Eldridge v.
Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)). A trial court abuses its discretion when it
“applie[s] an incorrect legal standard, or reache[s] a decision which is against logic or
reasoning that cause[s] an injustice to the party complaining.” State v. Shirley, 6 S.W.3d
243, 247 (Tenn. 1999) (citation omitted).
IV. DISCUSSION
A.
The TPRA provides, in pertinent part, as follows:
All state, county and municipal records shall, at all times during business
hours, which for public hospitals shall be during the business hours of their
administrative offices, be open for personal inspection by any citizen of this
state, and those in charge of the records shall not refuse such right of
inspection to any citizen, unless otherwise provided by state law.
-4-
Tenn. Code Ann. § 10-7-503(a)(2)(A). Disclosure of documents and papers prepared in
anticipation of litigation or in preparation for trial are generally protected from discovery
under the TPRA based upon the work product doctrine. Arnold v. City of Chattanooga,
19 S.W.3d 779, 786 (Tenn. Ct. App. 1999); see generally Hickman v. Taylor, 329 U.S.
495, 509-12 (1947) (setting forth the work product doctrine).
Rule 26.02(3) of the Tennessee Rules of Civil Procedure codified the work
product doctrine as follows:
[A] party may obtain discovery of documents and tangible things otherwise
discoverable under subdivision (1) of this rule and prepared in anticipation
of litigation or for trial by or for another party or by or for that other party’s
representative (including an attorney, consultant, surety, indemnitor,
insurer, or agent) only upon a showing that the party seeking discovery has
substantial need of the materials in the preparation of the case and is unable
without undue hardship to obtain the substantial equivalent of the materials
by other means. In ordering discovery of such materials when the required
showing has been made, the court shall protect against disclosure of the
mental impressions, conclusions, opinions, or legal theories of an attorney
or other representative of a party concerning the litigation.
(Emphasis added.). The work product doctrine may be waived under very specific and
narrow circumstances, namely when the use of the document is unfair and inconsistent
with the claim of privilege or when the claim of privilege has been waived or has expired.
As a threshold issue, Petitioner claims that the final report was not protected
because it was not prepared in anticipation of litigation. The trial court swiftly rejected
this argument, noting that the final audit was initiated by General Bass in anticipation of
litigation. The record supports this finding.
The Department first claims that the court erred in finding that the report was
subject to disclosure because it was “ordinary work product”, not “opinion work
product.” In determining whether the report was subject to disclosure, the court
considered whether the report contained “mental impressions, conclusions, opinions, or
legal theories,” thereby entitling it to a broader protection. See Boyd v. Comdata
Network, Inc., 88 S.W.3d 203, 221 (Tenn. Ct. App. 2002) (holding that a “far stronger
showing of necessity” is required to obtain attorney work product that contains the
attorney’s opinions or mental impressions). The court found that the report did not
contain such material, thereby requiring disclosure upon a proper showing. The record
supports this finding.
-5-
Next, the Department argues that the court erred in finding that the attorney work
product protection no longer applied based upon a finding of waiver or expiration. This
was an alternative ruling issued by the trial court. First, the trial court found that
Petitioner made a proper showing of necessity, namely that she had a substantial need for
the report to aid in her defense of Mr. Phan and that she was unable to obtain the report
without undue hardship. The record supports this finding as well, thereby requiring
disclosure without need for further justification. In the event of further appellate review,
we will address the alternative grounds relied upon by the trial court.
Relative to waiver, some of the information contained in the report was relied
upon as justification for the Department’s intent to dismiss Johnson. The report was also
relied upon to revoke the licenses of those it believed fraudulently obtained a license,
including Mr. Phan. The use of the report in this manner is inconsistent with a claim of
privilege. Arnold, 19 S.W.3d at 787 (“Courts have universally held that a party is
prevented from invoking the work product doctrine immunity as both sword and
shield.”). With these considerations in mind, we conclude that the record supports the
court’s finding of waiver.
Relative to expiration, the court found that any protection of the report provided
by the work product doctrine expired because there was no longer any possibility of civil
litigation relative to Johnson given that any potential claim would be barred by the one-
year statute of limitations under the Governmental Tort Liability Act. The Department
claimed at trial and now on appeal that the protection of attorney work product extends
beyond the termination of litigation for which the documents were generated and can be
claimed in subsequent litigation. We agree. “The work product doctrine is not case
specific,” meaning that “work product that was privileged in prior litigation remains
privileged in subsequent litigation.” Swift v. Campbell, 159 S.W.3d 565, 573 (Tenn. Ct.
App. 2004) (citations and footnotes omitted). “This is especially true when the
subsequent litigation is closely related to the prior litigation.” Id. (citation omitted).
While Johnson may no longer file a claim related to her termination, Mr. Phan’s litigation
was ongoing, at least at the time the public record request was made. However, this
conclusion does not require reversal given Petitioner’s proper showing of substantial
need and the Department’s waiver of the protection.
B.
Petitioner argues that the court erred in ruling that she was not entitled to inspect
all media correspondence in response to her January 31 request. She claims that all
information should have been released regardless of its responsiveness to her request and
that the Department failed to meet its burden to demonstrate that disclosure was
unwarranted. The Department responds that the court properly ruled that Petitioner was
-6-
not entitled to access records that were either unresponsive or privileged
communications. We agree with the Department.
“Any request for inspection or copying of a public record shall be sufficiently
detailed to enable the governmental entity to identify the specific records for inspection
and copying.” Tenn. Code Ann. § 10-7-503(a)(4) (emphasis added).1 Here, Petitioner
requested
(4) All correspondence regarding cosmetology licensing between [the
Department] and media outlets and their representatives, including, but not
limited to, Jennifer Kraus of News Channel 5[;]
(5) A list of the [employee numbers for] Mark Green, Shilina Brown,
and Roxana Gumucio[; and]
(6) All correspondence between [the Department] and witnesses
subpoenaed for APD Case No. 12.09-12456A.
The Department produced documents that were responsive to the request but redacted
communications that were either non-responsive or privileged. With the exception of the
records the court found were unlawfully withheld, the Department complied with the
request and was not required to produce non-responsive or privileged communications
pursuant to the TPRA.
Next, Petitioner claims that the Department’s failure to specifically identify each
privileged communication was in violation of Rule 26.02(5) of the Tennessee Rules of
Civil Procedure.2 These records were not submitted in response to a discovery request
1
Petitioner claims that a prior version of the TPRA permitted the inspection of nonexempt records. Prior
to a 2016 amendment to the TPRA, Section 10-7-503(a)(4) provided,
This section shall not be construed as requiring a governmental entity or public official to
sort through files to compile information; however, a person requesting the information
shall be allowed to inspect the nonexempt records.
The TPRA still required a “sufficiently detailed” request to enable the production of the “specific
records” sought. Tenn. Code Ann. § 10-7-503(a)(7)(B) (2015). The TPRA also does not prohibit the
redaction of non-responsive or confidential information, prior to or following the 2016 amendment.
2
“When a party withholds information otherwise discoverable under the rules by claiming that it is
privileged or subject to protection as trial preparation material, the party shall make the claim expressly
and shall describe the nature of the documents, communications, or things not produced or disclosed in a
manner that, without revealing information itself privileged or protected, will enable other parties to
assess the applicability of the privilege protection.” Tenn. R. Civ. P. 26.02(5).
-7-
but were produced pursuant to the TPRA, which only requires a written denial that
includes the basis for such denial. With the above considerations in mind, we hold that
the record supports the court’s denial of access to the non-responsive and privileged
communications.
C.
Petitioner claims that the court abused its discretion by refusing to award attorney
fees. Tennessee follows the American Rule which provides that “litigants pay their own
attorney’s fees absent a statute or an agreement providing otherwise.” State v. Brown &
Williamson Tobacco Corp., 18 S.W.3d 186, 194 (Tenn. 2000); accord Taylor v. Fezell,
158 S.W.3d 352, 359 (Tenn. 2005). “Under the American [R]ule, a party in a civil action
may recover attorney fees only if: (1) a contractual or statutory provision creates a right
to recover attorney fees; or (2) some other recognized exception to the American [R]ule
applies, allowing for recovery of such fees in a particular case.” Cracker Barrel Old
Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009). A right to recover
attorney fees in cases filed pursuant to the TPRA was created by Tennessee Code
Annotated section 10-7-505(g), which provides,
If the court finds that the governmental entity, or agent thereof, refusing to
disclose a record, knew that such record was public and willfully refused to
disclose it, such court may, in its discretion, assess all reasonable costs
involved in obtaining the record, including reasonable attorneys’ fees,
against the nondisclosing governmental entity. In determining whether the
action was willful, the court may consider any guidance provided to the
records custodian by the office of open records counsel as created in title 8,
chapter 4.
(Emphasis added.). Here, the Department relied upon exceptions provided by state law in
withholding the requested information. The denial of attorney fees is also a discretionary
matter. With these considerations in mind, we affirm the denial of attorney fees.
V. CONCLUSION
The judgment of the trial court is affirmed, and the case is remanded for such
further proceedings as may be necessary. Costs of the appeal are taxed one-half to the
appellant, State of Tennessee, Department of Commerce and Insurance and one-half to
the Appellee, Natalie Sharp.
_________________________________
JOHN W. McCLARTY, JUDGE
-8-