James R. Golden v. Holly N. Hood (Black)

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
FILED
January 26, 2000
Cecil Crowson, Jr.
E1999-02443-COA-MR3-CV Appellate Court Clerk
JAMES R. GOLDEN, ) C/A NO. 03A01-
9904-CV-0143
)
Plaintiff-Appellee, ) WASHINGTON LAW
)
vs. ) G. RICHARD JOHNSON,
) CHANCELLOR
HOLL Y N. HO OD (BL ACK), )
) REVERSED AND
Defend ant-App ellant. ) REMANDED
THOMA S H. TORBETT, TO RBETT & T ORBETT, Kingsport, for Plaintiff-
Appellee.
STEVEN G. GOTT, and GUYTON O. TERRY, III, FULLER, VAUGHN & GOTT,
Kingspo rt, for Defe ndant-A ppellant.
O P I N IO N
Franks, J.
The Trial Judge refused to enforce a settlement agreement between the
parties wh ich resulted f rom med iation, and this C ourt granted an appea l pursuant to
Rule 9 , T.R.A .P.
Plaintiffs bro ught an ac tion for dam ages as a re sult of a mo tor vehicle
accident, and the parties agreed to mediate the dispute. Th e mediation was b efore
Tommy Lee Hulse, and resulted in an agreement wh ich was signed by the m ediator,
plaintiff and his attorney and the defendant’s attorney. The agreement provides:
The p arties he reto, J AMES R. G OLDEN, PLAINTIFF AND H OLLY N.
H OOD (B LACK), DEFENDANT, having su bmitted the f acts and issu es to
Tommy Lee Hulse the mutually agreed upon mediator, have fully and
completely resolved the dispute as follows:
H OLLY N. H OOD (B LACK) shall pay to JAMES R. G OLDEN
$9,000.00 Dollars inclusive of all costs, disbursements and
attorney fees for damages, whether compensatory, liquidated
and/or punitive. All payments shall be made no later than June
10, 1998.
That no party to this agreement shall at anytime hereinafter make
any claims against the other, institute any lawsuit against the other or
make any demands for payment from the other for any alleged reason or
causes arising out of the facts and issues of the matter herein. Each
party releases the other from any and all claims and/or liability arising
from this matter.
That this agreement is final and binding upon any and all parties
to this matter and enforceable in any court of law of general jurisdiction.
Subsequently, plaintiff refused to comply with the agreement, and the
defenda nt filed a mo tion before the Trial Jud ge to enfo rce the agre ement. Plain tiff, in
response to the motion, filed his affidavit, and stated that during the mediation he was
told by his attorney, the mediator and the defendant’s attorney, that the maximum
recovery he could expect was three times the amount of medical expenses, or
$9,000.00. He also s tated that the mediator told him a ju ry would probably not aw ard
him the full amount of his medical expenses, and that $9,000.00 was all he was
entitled to by law. Also, that his former attorney had threatened to withdraw from the
case if he did not accept the settlement. He further recounted that he had been
receiving w eekly psychothe rapy for depr ession, and attached letters from his
psychologist. Psychologist opined that plaintiff has been in weekly psychotherapy for
2
the past few months, and that part of the sessions have been spent dealing with the
trauma fro m the car a ccident, also th at part of plain tiff’s depres sion was r elated to
consequences of the accident. He further was of the opinion that a “recurrent pattern”
for plaintiff was that he becomes submissive when being unduly pressured by others,
and that the circumstances of mediation likely caused plaintiff to “compliantly sign the
mediation agreement despite his sense that it was an unfair one.”
The Trial Judge, upon hearing the motion, concluded that plaintiff was
under undue stress and duress, and was suffering from depression and for these
reasons, the motion was denied.
Fundamental principles of contract law are applicable here. Recission
of a contract “is not looked upon lightly” and “is available only under the most
demanding circumstances.” Robinson v. Brooks, 577 S .W.2d 207 (T enn. C t. App.
1978) . Furthe r, the par ty seeking recissio n bears the bur den of proof . Williamson v.
Upchurch, 768 S.W.2d 265 (Tenn. Ct. App. 1988). When a contract is valid and no
injustice will result, courts are “bound to enforce it.” Bush v. Cathey, 598 S.W.2d 777
(Tenn . Ct. Ap p. 1979 ).
Plaintiff con tends that he executed the contrac t under du ress. Dures s is
often defined in our case law as:
an unlaw ful restraint, intim idation, or co mpulsion of anothe r to
such an extent and degree as to induce such other person to do or
perform some act w hich he is no t legally bound to do, contra ry to
his will and inclination. The alleged coercive event must be of
such severity, either threatened, impending or actually inflicted,
so as to overcome the mind and w ill of a person of ordinary
firmness.
McClellan v. McClellan, 873 S .W.2d 350 (T enn. C t. App. 1 993). See also Federal
3
Deposit Insurance Corp. v. Ramsey, 612 F. Supp. 326 (E.D. Tenn. 198 5).
In this case, plaintiff asserts that his attorney threatened to withdraw
from the case if he did not accept the settlement. Plaintiff’s statements do not
establish prima facie duress of such nature as to vitiate the contract. Nor do the
psychologists’ s tatements rise to the level req uired to find a lack of ca pacity. In this
jurisdiction, a lack of capacity is defined as a lack of “sufficient mind to understand,
in a reasonable manner, the nature, extent, character, and effect of an act or
transaction in which he is engaged.” Knight v. Lancaster, 988 S.W.2d 172, 178
(Tenn. Ct. App. 1998). Plaintiff also avowed that “false assertions” were made by the
mediator and attorneys as to what he could hope to recover . Plaintiff’s allegations of
“false assertions” fall within the na ture of a claim of fraud or misrepresentation. "In
order to constitute fraud or be ground of rescission, there must not only be a
representation as to an existing fact but the representation must have been relied upon,
and must have been so material that it determined the conduct of the party seeking
relief." Shores v. Spann, 557 S.W.2d 67 , 72 (Tenn. Ct. Ap p. 1977). The record
before us does n ot establish that plaintiff would ha ve likely received more
compensation than $9,000.00 had he proceeded to trial. The record does not establish
that such opinions, if made, were fraudulent, or that there was a material
misreprese ntation as to h is likely recovery. Plain tiff freely signed the agreem ent with
the adv ice of c ounse l.
The Suprem e Court has recog nized that mediation and arbitration are
valuable tools which c an “make the p rocess of dispute resolution m ore efficient, more
economical, and equally fair.” See Preamble to Tenn. R. S. Ct. 31. While fraud is a
4
basis to set aside such agreements, the record does not support setting aside the
agreement signed by the plaintiff. In the absence of fraud or mistake, an agreement
reache d in me diation t o settle litig ation is c onclus ive aga inst a pa rty seekin g to voi d it.
See Vela v. Hope Lumber & Supply Co., 966 P .2d 119 6, 1198 (Okla. C t. App. 1 998).
In this case, the agreement was clear and unambiguous and establishes a
binding and enforceable settlement of plaintiff’s claim. Accordingly, we reverse the
judgmen t of the Trial C ourt and rem and for the entry of a judg ment con sistent with
this Opinion. The cost of the appeal is assessed to plaintiff.
__________________________
Herschel P. Franks, J.
CONCUR:
___________________________
Houston M. Godd ard, P.J.
___________________________
Charles D. Susano, Jr., J.
5