John R. Fuller v. Allianz Life Insurance Company of North America

02/19/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
October 15, 2019 Session
JOHN R. FULLER v. ALLIANZ LIFE INSURANCE COMPANY OF
NORTH AMERICA
Appeal from the Chancery Court for Hamilton County
No. 17-0629 Pamela A. Fleenor, Chancellor
No. E2018-02267-COA-R3-CV
Plaintiff John R. Fuller initially brought this action, on July 15, 2015, for fraud,
negligence, and violation of the Tennesee Consumer Protection Act (TCPA). After
taking a voluntary nonsuit, he refiled on August 24, 2017. The trial court granted
summary judgment to defendant Allianz Life Insurance Company of North America,
holding that the fraud and negligence claims were time-barred by operation of Tenn. R.
Civ. P. 4.01(3), which provides that “[i]f a plaintiff or counsel for a plaintiff . . .
intentionally causes delay of prompt issuance or prompt service of a summons, the filing
of the complaint . . . will not toll any applicable statutes of limitation or repose.” It is
undisputed that plaintiff’s counsel, despite knowing how to properly serve process on
defendant, delayed service for almost seven months, until after the applicable three-year
statutes of limitations for fraud and negligence had run. The trial court further held that
plaintiff’s TCPA claim was barred by an applicable statute of repose. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which ANDY D.
BENNETT and THOMAS R. FRIERSON, II, JJ., joined.
Whitney Durand, Chattanooga, Tennessee, for the appellant, John R. Fuller.
Rachel M. Lary and Benjamin S. Willson, Birmingham, Alabama, and Douglas M.
Campbell, Chattanooga, Tennessee, for the appellee, Allianz Life Insurance Company of
North America.
1
OPINION
I.
The following factual and procedural history is not disputed. This is established
by defendant’s Tenn. R. Civ. P. 56.03 statement of undisputed material facts and
plaintiff’s response, among other things. Plaintiff’s first action (Fuller I) was filed on
July 15, 2015, against both defendant Allianz and Community National Bank. The Clerk
and Master issued a summons in Fuller I for Allianz, addressed to CT Corporation
System. CT Corporation System advised plaintiff’s counsel that it was not authorized as
an agent to accept service of process for Allianz. A second summons, addressed to
Allianz’s general counsel, was issued and delivered. Receipt for this summons was
properly returned and filed, and, thus plaintiff effectively served process on Allianz in
early August of 2015. Plaintiff voluntarily nonsuited Fuller I on September 8, 2016.
Plaintiff later filed new separate actions against Allianz and Community National
Bank. This action against Allianz was filed on August 24, 2017. A summons for
defendant that was again erroneously addressed to CT Corporation was issued. This
summons was mailed by plaintiff, prompting a similar second notification by CT
Corporation on November 15, 2017, that it was not defendant’s agent for acceptance of
service of process. Plaintiff’s counsel did not attempt to properly serve defendant until
March 20, 2018, when he returned the unserved summons, and obtained and mailed a
second summons to defendant’s general counsel.
Defendant filed a motion to dismiss. Attached to defendant’s memorandum in
support of the motion were some eight exhibits, including copies of pleadings filed in
Fuller I, the order dismissing Fuller I, four summonses issued to defendant over the
entire course of litigation, a signature page of a contract between plaintiff and defendant,
and several articles of correspondence from plaintiff’s counsel to defendant. Defendant
argued for dismissal on the following grounds:
All three of Plaintiff’s claims (for negligence, fraud and
violation of the Tennessee Consumer Protection Act
(“TCPA”)) are barred by the statutes of limitations based on
the face of the [a]mended [c]omplaint. The [a]mended
[c]omplaint was filed on March 19, 2018, more than three
years after Plaintiff alleges he first discovered the allegedly
tortious conduct in February 2015. The [a]mended
[c]omplaint does not relate back to the date of filing of the
original [c]omplaint because Plaintiff intentionally waited
more than seven months to serve Allianz with the original
2
[c]omplaint while he pursued parallel claims against
Community National Bank in this Court.
Plaintiff responded by arguing that the motion to dismiss improperly requested the trial
court to consider matters outside the pleadings, stating, “[t]his is a motion to dismiss, not
one for summary judgment, and Fuller will not agree to convert it to the latter.”
The trial court carefully considered the issue of whether it should treat the motion
to dismiss as a summary judgment motion pursuant to Tenn. R. Civ. P. 12.02.1 At a
hearing on the motion, the court asked the parties to submit briefs on this question. After
they did so, the trial court entered an order stating as follows:
[I]n Jones v. Vasu, 326 S.W.3d 577 (Tenn. Ct. App. 2010),
[the Court] stated that the issue on appeal was whether
[plaintiff’s] intentional delay in issuance and service of
process rendered the filing of the complaint ineffective under
T.R.C.P. 4.01(3). The trial court had denied defendants’
motions to dismiss, or in the alternative, for summary
judgment. . . .
[The Court] noted that defendants’ motions were predicated
on the date of service of process [and] determined that the
date of service was a matter outside of the complaint. . . .
Thus even though there is much precedent for the proposition
that this Court can consider certain matters outside of the
complaint in ruling on a motion to dismiss, the Jones v. Vasu
case states that consideration of the date of service of process
is consideration of a matter outside of the complaint.
From all of which this Court concludes that to determine this
motion, the Court will be required to review the record in the
prior case [Fuller I], and the summonses, which are all
1
Tenn. R. Civ. P. 12.02 provides in pertinent part as follows:
If, on a motion asserting the defense numbered (6) to dismiss for failure
to state a claim upon which relief can be granted, matters outside the
pleading are presented to and not excluded by the court, the motion shall
be treated as one for summary judgment and disposed of as provided in
Rule 56, and all parties shall be given reasonable opportunity to present
all material made pertinent to such a motion by Rule 56.
3
matters outside of the complaint. Therefore this Court, out of
abundance of caution, will treat Defendant’s motion to
dismiss as one for summary judgment and dispose of it as
provided in Rule 56.
Defendant filed a statement of undisputed material facts, to which plaintiff filed a
response, which stated in pertinent part as follows:
Despite having been twice put on notice that CT Corporation
System was not Allianz’s agent for service of process in
Tennessee, Fuller’s attorney waited until March 2018 to
attempt proper service of the August 2017 Complaint on
Allianz. RESPONSE. The fact is undisputed only for
purposes of the ruling on the motion for summary
judgment.
* * *
Fuller’s attorney has admitted, both in Plaintiff[’]s Response
to Defendant’s Motion to Dismiss (filed May 24, 2018), as
well as in oral argument on June 4, 2018, that there are
“reasons other than tactics for delay of service of process in
this case.” Fuller’s attorney has failed, however, to provide
this Court with any other reason for delay of service.
RESPONSE. These facts are undisputed.
(Bold font in original; paragraph numbering and citations to record in original omitted).
By agreement of the parties, the motion for summary judgment was submitted and
considered without a hearing or oral argument before the trial court. In its order granting
defendant summary judgment, the trial court reasoned and ruled as follows in its order:
The Court determines that [defendant] has properly supported
its motion for summary judgment that Plaintiff’s claims for
fraud and negligence are time barred. . . . [Defendant] has
shifted the burden of production to Plaintiff to show that a
genuine issue of material fact exists for trial.
4
Plaintiff may not now simply rest upon mere allegations in
his complaint, but must offer proof, by way of affidavits or
otherwise, setting forth specific facts showing that there is a
genuine issue for trial. In the instant case, Plaintiff did not
file any affidavit in response to the motion. Nor did Plaintiff
dispute any of the pertinent [statements of undisputed
material fact]. . . .
Rather than file an affidavit evidencing efforts to serve
[defendant], Plaintiff merely argues that Defendant’s motion
fails because of “the absence of proof of the essential element
of intent on the part of Fuller or his counsel to delay service
of process for reasons of strategy.”
* * *
As to Plaintiff’s intentional conduct, Defendant established
that Plaintiff had discovered in Fuller I that CT Corporation
was not the registered agent for [defendant]. . . . When CT
Corporation again advised Plaintiff in November of 2017 that
it could not accept service for [defendant], Plaintiff did not
return this unserved summons within 90 days.
Tenn. R. Civ. P. 4.03(1) provides in pertinent part that, “if a
summons is not served within 90 days after its issuance, it
shall be returned stating the reasons for failure to serve.” The
failure to return a “served” summons within 90 days does not
in and of itself bar a plaintiff’s action. Fair v. Cochran, 418
S.W.3d 542 (Tenn. 2013). However, this Court determines
that the failure to return an “unserved” summons within 90
days can be, along with other external factors, evidence of
intent to delay prompt service of summons.
Here the other external factors include that although Plaintiff
had successfully served general counsel for [defendant]
previously in Fuller I, and thus knew how to serve
[defendant], yet Plaintiff did not even attempt to serve
[defendant’s] general counsel until seven months after he
filed Fuller II. Further[,] in Fuller I, Plaintiff had sued both
5
[defendant] and Community National Bank (CNB), whereas
in Fuller II, Plaintiff only sued [defendant]. . . . Defendant
asserts Plaintiff delayed in serving [defendant] with the
summons and complaint in Fuller II in order to enjoy the
tactical advantages of leveraging the discovery and motion
practice in the litigation against CNB2 without [defendant]
being able to participate and to prevent the claims against
[defendant] and CNB from being consolidated again. Thus
[defendant] has demonstrated reasons why Plaintiff would
want to “slow walk” this case. Dismissal is proper where
there is a conscious decision not to promptly serve process
because of some perceived advantage to the plaintiff in
delaying service. Plaintiff failed to respond to Defendant’s
demonstrated reasons for slow walking the case.
(Footnote added; internal citations omitted). The trial court concluded that defendant
“established that the filing of Fuller II was ineffective to commence the action and to toll
the statute of limitations under Rule 4.01(3), because Plaintiff intentionally delayed
service until after the statute of limitations had run.”
The trial court further examined plaintiff’s fraud claim in light of the established
undisputed material facts, and concluded, in the alternative, that plaintiff “failed to set
forth facts of any fraudulent act of [defendant] and failed to demonstrate any duty
[defendant] owed to Plaintiff.” Plaintiff alleged that he was the victim of a Ponzi scheme
perpetrated by Jack Brown, who persuaded plaintiff to purchase two annuities from
defendant worth a total of $660,055. Brown thereafter persuaded plaintiff to withdraw
money from the annuities. Defendant processed the withdrawal applications and mailed
checks to plaintiff, addressed to plaintiff’s post office box address of record. Brown
intercepted these mailings, fraudulently forged plaintiff’s endorsements on them, cashed
them, and appropriated plaintiff’s money. Brown had been licensed to sell annuities for
defendant, but defendant terminated him “without cause” in September of 2009, more
than five months after defendant mailed the last check to plaintiff’s address.
The amended complaint alleges that Brown’s “termination was changed to ‘for
cause’ as of November 19, 2012, a week after involuntary bankruptcy proceedings
against him were commenced.” Plaintiff further alleged that he
2
It is not disputed that plaintiff timely and properly served process upon CNB, the other
defendant in Fuller I, in his second lawsuit against CNB, and continued to actively prosecute that
litigation during the period of delay at issue in this action. The trial court’s order in this regard so finding
is not challenged by defendant on appeal.
6
did not know that he had become a victim of the Ponzi
scheme until the bankruptcy proceedings. He did not know
about Brown’s forged endorsements on checks totaling
$556,938 withdrawn from the Allianz annuities until
February 2015 during discovery proceedings in a lawsuit.
Consequently, he filed no bankruptcy claim regarding the
Allianz annuities.
Brown died on August 31, 2013, and plaintiff was apparently unable to recover anything
from him or his estate.
The trial court held that the undisputed facts establish that plaintiff willingly
signed the applications to withdraw money from the annuities he purchased from
defendant. The court further stated:
[Defendant] processed the withdrawal applications signed by
[plaintiff], made the checks out for the proper amounts to
[plaintiff], and mailed the checks to the proper address of
record for [plaintiff], which was his post office box in his
name. Plaintiff only disputed that the checks were not mailed
to [plaintiff] but instead to Brown though addressed to
[plaintiff].
The trial court concluded that plaintiff did not provide any evidence from which a trier of
fact could reasonably conclude that defendant committed any act of fraud, nor that it was
aware of Brown’s fraudulent activities. The court said that plaintiff’s only claim against
defendant directly was that it failed to notify plaintiff of Brown’s termination in 2009,
which it characterized as a potential fraudulent concealment claim, but held that
“Plaintiff’s evidence is insufficient to establish an essential element of Plaintiff’s claim,
i.e., a duty to disclose.”
Regarding plaintiff’s TCPA claim, the trial court held that it suffered from a
trifecta of fatal deficiencies: (1) “the TCPA does not provide a cause of action for an
aiding and abetting a TCPA violation” as alleged by plaintiff; (2) the TCPA’s five-year
statute of repose barred his claims; and (3) at the time plaintiff’s claim accrued, the
TCPA had been amended to provide that only the State Attorney General can bring a
TCPA claim under Tenn. Code Ann. § 47-18-104(B)(27) (2013 & Supp. 2019).
Plaintiff filed a Tenn. R. Civ. P. 59.04 motion to alter or amend summary
judgment. In support of the motion, plaintiff argued that he was submitting “new
evidence that is critically important to him” in the form of three affidavits. These
7
affidavits are not in the technical record. They are said by plaintiff to have been those of
Stuart James, an attorney who worked for plaintiff on this case for some time but
apparently eventually withdrew; Mr. James’ legal assistant; and the legal assistant for
plaintiff’s other counsel at that time and on appeal. Following a hearing, the trial court
denied the motion to alter or amend, holding, in pertinent part, as follows:
the [m]otion improperly seeks to re-litigate matters already
adjudicated, to introduce evidence that could have been
adduced and presented while the [m]otion for [s]ummary
[j]udgment was pending, and Plaintiff’s counsel admitted at
the hearing that Plaintiff did not submit the affidavits in
opposition to the motion for summary judgment because
Plaintiff did not deem them “necessary,” that the controlling
law has not changed, and that said [m]otion is not well taken
or proper[.]
Plaintiff timely filed a notice of appeal.
II.
Plaintiff raises the following issues:
1. Did the trial court err in granting summary judgment to defendant?
2. Did the trial court err in denying plaintiff’s motion to alter or amend its
summary judgment ruling?
III.
In the recent case of TWB Architects, Inc. v. Braxton, LLC, 578 S.W.3d 879
(Tenn. 2019), the Supreme Court set forth the following guidance on our standard of
review of summary judgment:
A trial court should grant summary judgment when “the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”
Tenn. R. Civ. P. 56.04. In reviewing a trial court’s ruling on
a motion for summary judgment, we make a fresh
determination about whether the requirements of Rule 56
8
have been met. Rye v. Women’s Care Ctr. of Memphis, 477
S.W.3d 235, 250 (Tenn. 2015). Our review of the trial
court’s ruling is de novo, with no presumption of correctness.
On review, we accept the evidence presented by . . . the
nonmoving party as true; allow all reasonable inferences in its
favor; and resolve any doubts about the existence of a
genuine issue of material fact in favor of [the nonmoving
party].
In Rye, we stated our holding as follows:
[W]hen the moving party does not bear the
burden of proof at trial, the moving party may
satisfy its burden of production either (1) by
affirmatively negating an essential element of
the nonmoving party’s claim or (2) by
demonstrating that the nonmoving party’s
evidence at the summary judgment stage is
insufficient to establish the nonmoving party’s
claim or defense.
Rye, 477 S.W.3d at 264.
In Rye, we intended to “correct course, overrule Hannan [v.
Alltel Publ’g Co., 270 S.W.3d 1 (Tenn. 2008)], and fully
embrace the standards articulated in the Celotex trilogy.” Id.
Hannan’s summary judgment standard that “a moving party
who [does not bear the burden of proof at trial] must either
(1) affirmatively negate an essential element of the
nonmoving party’s claim; or (2) show that the nonmoving
party cannot prove an essential element of the claim at trial”
had proven to be unworkable. Hannan, 270 S.W.3d at 8–9
(emphasis added).
We intended for the summary judgment standard adopted in
Rye to apply to all parties, no matter which party filed the
motion for summary judgment.
* * *
9
[I]f the moving party bears the burden of proof on the
challenged claim at trial, that party must produce at the
summary judgment stage evidence that, if uncontroverted at
trial, would entitle it to a directed verdict. Celotex Corp. v.
Catrett, 477 U.S. 317, 331, 106 S. Ct. 2548, 91 L. Ed. 2d 265
(1986) (Brennan, J., dissenting) (citations omitted). The
burden then shifts to the nonmoving party to produce
evidence showing that there is a genuine issue of fact for trial.
Id. On the other hand, when the nonmoving party has the
burden of proof at trial, the burden shifting is the same as that
set forth by this Court in Rye—the moving party may either
negate an essential element of the nonmoving party’s claim or
show that the nonmoving party does not have sufficient
evidence to prove an essential element of its claim. Id.
(citations omitted).
* * *
The emphasis under the Rye standard is the evidence at the
summary judgment stage. Whether the nonmoving party is a
plaintiff or a defendant—and whether or not the nonmoving
party bears the burden of proof at trial on the challenged
claim or defense—at the summary judgment stage, “[t]he
nonmoving party must demonstrate the existence of specific
facts in the record which could lead a rational trier of fact to
find in favor of the nonmoving party.” Rye at 265. This is
the standard Tennessee courts must apply when ruling on
summary judgment motions regardless of which party bears
the burden of proof at trial.
TWB Architects, 578 S.W.3d at 887-89 (emphasis and brackets in original; internal
citations omitted).
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IV.
A.
We initially briefly discuss plaintiff’s contention on appeal that the trial court
“mistakenly converted [defendant’s] motion to dismiss to a motion for summary
judgment.” As defendant asserts, plaintiff abandoned this argument in the trial court
below, and thus he has waived it on appeal. Plaintiff argued in his initial motion to alter
or amend that “the [trial c]ourt had no authority to convert the motion to dismiss to one
for summary judgment, but if it did, the conversion was an abuse of its discretion.”
Shortly thereafter, plaintiff filed a document captioned “amendment of plaintiff’s motion
to alter or amend summary judgment with supporting memorandum of law,” in which he
stated:
Pursuant to T. R. Civ. P. 59.04, John R. Fuller has moved the
Court to reconsider and revise its order of October 10, 2018
on the Defendant’s motion to dismiss. He now eliminates his
request dealing with the conversion of the Defendant’s
[m]otion to [d]ismiss to a [m]otion for [s]ummary [j]udgment.
His original motion dated November 9, 2018 has thus been
modified and reduced . . .
(Emphasis added). Plaintiff, in “eliminat[ing] his request” to the trial court to consider
his argument and correct the asserted error below, thereby waived it and cannot now ask
this Court on appeal to rule on it. Moreover, under these circumstances, we do not
believe the trial court committed error, let alone reversible error, in taking the more
expansive approach of treating the motion to dismiss as one for summary judgment
pursuant to Rule 12.02. Such an approach allowed both parties a full and fair opportunity
to conduct discovery, make arguments, and present what evidence they desired to support
their cases. See, e.g., Indiana State Dist. Council of Laborers v. Brukardt, No. M2007-
02271-COA-R3-CV, 2009 WL 426237, at *7 (Tenn. Ct. App., filed Feb. 19, 2009)
(stating “[i]f converted, then the nonmoving party is ‘entitled to submit affidavits in
opposition to the [m]otion and to make further discovery if such is necessary.’ ”) (quoting
Brick Church Transmission v. Southern Pilot, 140 S.W.3d 324, 328 (Tenn. Ct. App.
2003)).
B.
The trial court held that defendant established plaintiff’s intentional delay in
service of process until after the statute of limitations had run on his fraud and negligence
11
claims, finding them time-barred by operation of Tenn. R. Civ. P. 4.01(3), which
provides:
If a plaintiff or counsel for a plaintiff (including a third-party
plaintiff) intentionally causes delay of prompt issuance or
prompt service of a summons, the filing of the complaint (or
third-party complaint) will not toll any applicable statutes of
limitation or repose.
The trial court found that the conclusion of intentional delay was supported by numerous
factors, including (1) the fact, undisputed by plaintiff, that despite having actual
knowledge of precisely how to properly serve defendant, plaintiff waited until March
2018 to attempt proper service of the August 2017 lawsuit; (2) a perceived tactical
advantage to plaintiff in delaying service of process against defendant while proceeding
in the litigation against the second Fuller I defendant (i.e., CNB); and (3) plaintiff’s
complete silence and declination to provide any evidence on the matter of intentional
delay until after the court granted summary judgment.
As this Court observed in Wright v. Shoney’s Tenn1 LLC, No. M2014-00731-
COA-R3-CV, 2015 WL 4557169, at *2 (Tenn. Ct. App., filed July 28, 2015),
A finding of “an intentional delay under Tenn. R. Civ. P.
4.01(3) mandates a conclusion that the original complaint was
not effectively filed.” Jones v. Cox, 316 S.W.3d 616, 621
(Tenn. Ct. App. 2008). The burden is on the moving party
“to prove that the plaintiffs’ failure to serve [the Defendant]
was ‘intentional’ as that word is used in Rule 4.01(3).”
Crabtree v. Lund, No. E2009–01561–COA–R3–CV, 2010
WL 4272738, at *6 (Tenn. Ct. App. Oct. 28, 2010).
In Carnell v. TMNO Healthcare, LLC, No. 13-1201, 2013 WL 5516460, at *2 (W.D.
Tenn., filed Oct. 3, 2013), the Court correctly stated:
Tennessee courts have made clear that “it is the intent to
withhold service of process that is the test.” [Jones v. Vasu,
326 S.W.3d 577,] at 581 [Tenn. Ct. App. 2010] (emphasis
added). The courts have also consistently rejected any
excuses for delay, holding that “an intentional delay under
[4.01(3)] mandates a conclusion that the original complaint
was not effectively filed.” Jones v. Cox, 316 S.W.3d 616,
621 (Tenn. Ct. App. 2008) (service delayed awaiting
12
resolution of underlying case for legal malpractice claim); see
also Vasu, 326 S.W.3d at 581 (service of process delayed “in
order to obtain an expert opinion to support the medical
malpractice claim”); Estate of Butler v. Lamplighter
Apartments, 278 S.W.3d 321, 323 (Tenn. Ct. App. 2008)
(delaying service of process in hopes of settling case).
In both Wright and Crabtree, we reversed the trial court’s dismissal of a plaintiff’s
lawsuit for intentional delay in service of process. These cases are distinguishable from
the current action, however, because in each of them, the plaintiffs presented evidence, in
the form of counsel’s affidavits, establishing their efforts to effect service and denying
intent to delay. The Wright Court stated and held as follows:
The evidence in the record germane to the issue of whether
the delay of service was intentional is contained in Plaintiffs’
counsel’s affidavits, in which the following statements were
made:
* * *
I can and do affirmatively state that there was
no decision by Plaintiffs or their counsel to
intentionally delay service of this matter.
Efforts were made to effect service by certified
mail and later by personal service. Plaintiffs
had no reason to delay service and gained no
advantage particularly since this was a refiling
after non suit and Plaintiffs had both been
deposed and had identified medical providers at
the time of the injury in the originally filed case
prior to the Voluntary Non–Suit.
* * *
Without question, Plaintiffs should have been much more
diligent in their efforts, and we do not endorse Plaintiffs’
approach to obtaining service of process. However,
13
Defendant failed [to] introduce any evidence contrary to the
matters stated in counsel’s affidavit or to show in any other
fashion that Plaintiffs intentionally delayed service of
process. The evidence produced by Plaintiff is
uncontradicted in the record and preponderates against the
court’s finding that Plaintiffs intentionally delayed service of
process.
Wright, 2015 WL 4557169, at *3-4 (emphasis added).
Similarly, in Crabtree, “plaintiffs’ trial counsel countered with his own affidavit,”
which explained the efforts made to serve process,3 and stated that the plaintiffs “had
every reason to advance their claim for damages and absolutely no reason to intentionally
delay this cause,” and “[f]rom the date of filing of this action to the date process was
served upon Defendant, Plaintiff[s] and affiant never had any reason or intent to withhold
service of process.” 2010 WL 4272738, at *3 (emphasis in original). We also discussed
at some length the concept of tactical advantage as relating to an inference of intentional
conduct, stating, in pertinent part, as follows:
The defendant does not identify any advantage, perceived or
otherwise, that the plaintiffs gained as a result of process not
being promptly service. By the same token, there is nothing
about the plaintiffs’ alleged cause of action that might prompt
them or their counsel to want to delay service of process;
quite to the contrary, if the allegations of the complaint are
true, they appear to have a good case. Furthermore, there are
no external factors appearing in the record that arguably
might suggest that it was in the plaintiffs’ best interest to
“slow walk” their case. Simply stated, the record contains no
evidence that the plaintiffs intentionally delayed service of
process.
Crabtree, 2010 WL 4272738, at *6 (emphasis in original). In his separate concurrence,
Chief Judge Swiney clarified that a perceived tactical advantage is not required to be
shown as a condition of applying Rule 4.01(3), but that it could be considered as a factor
supporting a demonstration of intentional conduct, stating:
I do not think Rule 4.01(3) concerns itself with why a
plaintiff intentionally delayed the issuance or service of a
3
The Crabtree Court “note[d] in passing that we are not convinced that this case involves even
negligent lawyering. Efforts were clearly made to effect service.” 2010 WL 4272738, at *5 n.6.
14
summons, only with whether the delay was intentional. Proof
that there was some actual or “perceived advantage to the
plaintiff in delaying service” might well be evidence that the
delay was intentional, but the existence of such an actual or
“perceived advantage to the plaintiff” is not, I believe, a
requirement of Rule 4.01(3). The only question under Rule
4.01(3) is whether the delay was intentionally caused by
plaintiff or plaintiff’s counsel.
Id. at *7 (Swiney, J., concurring) (emphasis added). Contrary to the situations in Wright
and Crabtree, the trial court in the present case found that defendant had shown a
perceived tactical advantage in delay, finding that defendant “demonstrated reasons why
Plaintiff would want to ‘slow walk’ this case” and that “Plaintiff failed to respond to
Defendant’s demonstrated reasons for slow walking the case.”
More significantly, unlike in Wright and Crabtree, in this case plaintiff elected to
provide absolutely no evidence pertaining to the allegation of his intentional delay.
Neither did plaintiff offer any argument or explanation for waiting seven months to
properly serve defendant. Plaintiff knew that his second attempt to serve defendant by
mailing to CT Corporation was as unsuccessful as his first attempt in Fuller I, yet he
waited, without explanation, despite having actual knowledge of how to properly serve
defendant from having done so in Fuller I. The trial court stated that plaintiff’s “attorney
has failed to provide this Court with any other reason for delay of service,” and further
stated:
Rather than file an affidavit evidencing efforts to serve
[defendant], Plaintiff merely argues that Defendant’s motion
fails because of “the absence of proof of the essential element
of intent on the part of Fuller or his counsel to delay service
of process for reasons of strategy.”
Plaintiff relies upon the TWB Architects decision, wherein the Supreme Court
observed that “summary judgment is seldom appropriate in cases wherein particular
states of mind are decisive as elements of [a] claim or defense because determining a
state of mind depends entirely upon the conflicting inferences to be drawn from evidence
so likely to be circumstantial or, if direct, self-serving.” 578 S.W.3d at 892 (quoting
HCA, Inc. v. American Protection Ins. Co, 174 S.W.3d 184, 193 (Tenn. Ct. App. 2005)
(internal quotation marks omitted)). In TWB Architects, the issue was whether the
parties intended to create a novation to a contract. The Court emphasized that “[t]his case
is rife with conflicting evidence” and that the credibility of the two key witnesses was
questionable and subject to challenge because of the inconsistent and contradictory
15
evidence presented on both sides. Id. at 895. The Supreme Court described at length the
conflicting evidence presented by both parties, and the potentially divergent inferences
that could reasonably be drawn therefrom, and reversed summary judgment. Id. at 895-
96. By contrast, in the present case there is no conflicting evidence on the dispositive
issue, because as already discussed, plaintiff elected not to present any to the trial court.
Consequently, we affirm the trial court’s grant of summary judgment to defendant.
C.
Plaintiff argues that the trial court erred in refusing to grant his Rule 59.04 motion
to alter or amend its judgment. “It is well-settled that a trial court’s ruling on a motion to
alter or amend may be reversed only for an abuse of discretion.” Harmon v. Hickman
Community Healthcare Servs., Inc., No. M2016-02374-SC-R11-CV, 2020 WL 428431,
at *7 (Tenn., filed Jan. 28, 2020) (again emphasizing “the limitations inherent in the
abuse of discretion standard”). The Supreme Court set forth the factors to be considered
in deciding a motion to alter or amend when additional evidence is provided in support of
such a motion, as follows:
(1) the movant’s efforts to procure the newly offered evidence
when responding to the motion for summary judgment; (2)
the importance of the newly offered evidence to the movant’s
case; (3) the movant’s explanation as to why the newly
offered evidence was not offered in response to the motion
for summary judgment; (4) any unfair prejudice to the
respondent; and (5) any other relevant considerations.
Id. at *4 (citing Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003)). Plaintiff does not
dispute that he had the newly offered evidence within his knowledge and possession prior
to the motion for summary judgment. The three proffered affidavits appear to consist
largely of records and correspondence from his own attorneys and their staff. The trial
court held that the evidence “could have been adduced and presented while the [m]otion
for [s]ummary [j]udgment was still pending,” referencing counsel’s admission that they
were not because they were deemed “unnecessary.” Plaintiff offered no other
explanation for “why the newly offered evidence was not offered in response to the
motion for summary judgment.” Stovall, 113 S.W.3d at 721.
This Court has on several occasions stated that
[i]n order to sustain a motion to alter or amend under Rule
59.04 based on newly discovered evidence, it must be shown
that the new evidence was not known to the moving party
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prior to or during trial and that it could not have been known
to him through exercise of reasonable diligence.
Bough v. Tenn. Dep’t of Corr., No. E2017-02350-COA-R3-CV, 2018 WL 4181877, at
*3 (Tenn. Ct. App., filed Aug. 30, 2018) (quoting Kirk v. Kirk, 447 S.W.3d 861, 869
(Tenn. Ct. App. 2013) (emphasis in original; internal quotation marks omitted); accord
Seay v. City of Knoxville, 654 S.W.2d 397, 399 (Tenn. Ct. App. 1983); Wilson Sporting
Goods Co. v. U.S. Golf & Tennis Centers, Inc., No. E2010-02651-COA-R3-CV, 2012
WL 601804, at *5 (Tenn. Ct. App., filed Feb. 24, 2012). The present case does not
involve “newly discovered evidence,” but the governing principle applies here: when it is
shown that the movant to alter or amend has knowledge and possession of the newly
presented evidence before a motion for summary judgment is decided, and fails to present
it the first time around without a compelling reason, the Rule 59.04 motion should be
denied. As we aptly observed in Robinson v. Currey,
[t]he non-moving party must fully oppose a motion for
summary judgment before it is granted rather than rely on
Rule 59.04 to overturn a summary judgment after only
weakly opposing the motion.
153 S.W.3d 32, 39 (Tenn. Ct. App. 2004) (affirming denial of Rule 59.04 motion where
“Plaintiffs made no showing of due diligence and offered no explanation as to why the
newly submitted evidence could not have been submitted earlier”).
Furthermore, even if we held that the plaintiff’s newly presented evidence should
have been considered, which we do not, this Court could not review it, because the
affidavits are not included in the technical record on appeal. “A party raising issues on
appeal is responsible for furnishing the appellate court with a record that will enable that
court to reach the issues raised.” Word v. Word, 937 S.W.2d 931, 933 (Tenn. Ct. App.
1996); Kramer v. Kramer, No. E2018-00736-COA-R3-CV, 2019 WL 1239867, at *4
(Tenn. Ct. App., filed Mar. 18, 2019). We affirm the trial court’s denial of the motion to
alter or amend summary judgment.
D.
Regarding plaintiff’s fraud claim, the trial court found and held in pertinent part as
follows:
Defendant established that [it] properly mailed the checks that
Plaintiff requested. Brown intercepted and forged Fuller’s
endorsement on the checks. Defendant argues that Plaintiff
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has not alleged any facts with particularity that demonstrate
that [defendant] committed any fraudulent act as required by
[Tenn. R. Civ. P.] 9.02. In construing the complaint liberally,
the Court discerns Fuller’s only allegation against [defendant]
directly is that [it] failed to advise Fuller that [it] had
terminated Brown in 2009. Thus Fuller’s fraud cause of
action against Allianz, at best, is for fraudulent concealment
or nondisclosure of known facts. However both of these
causes of action require a “duty to disclose.”
. . . Only where there is a previous definite fiduciary
relationship between the parties or where it appears one or
each of the parties to the contract expressly reposes a trust
and confidence in the other or where the contract or
transaction is intrinsically fiduciary and calls for perfect good
faith, does a duty to disclose exist. Walker v. First State
Bank, 849 S.W.2d 337 (Tenn. Ct. App. 1992).
Here Plaintiff has alleged no such duty. The Court
determines that Defendant has established it is entitled to
summary judgment on grounds that Plaintiff has failed to
state a claim of fraud against Fuller as Allianz demonstrated
that Plaintiff’s evidence is insufficient to establish an
essential element of Plaintiff's claim, i.e., a duty to disclose.
Thus the Court determines Allianz has shifted the burden of
production to Plaintiff to demonstrate a material issue of fact
for trial.
Plaintiff may not now merely rest upon his allegations but
must demonstrate the existence of specific facts in the record
which could lead a rational trier of fact to find in favor of
Fuller. Rye, 477 S.W.3d at 265. Here Fuller failed to set
forth facts of any fraudulent act of Allianz and failed to
demonstrate any duty Allianz owed to Plaintiff to disclose
that it terminated Brown.
In Tennessee, “a party may be held liable for damages caused by his failure to
disclose material facts to the same extent that a party may be liable for damages caused
by fraudulent or negligent misrepresentations.” Patel v. Bayliff, 121 S.W.3d 347, 352-53
(Tenn. Ct. App. 2003); see also Robert J. Denley Co. v. Neal Smith Constr. Co., No.
M2006-00629-COA-R3-CV, 2007 WL 1153121, at *6 (Tenn. Ct. App., filed Apr. 19,
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2007) (“Concealment or non-disclosure of facts may also constitute fraud, if the party
charged with fraud had knowledge of an existing fact or condition and a duty to disclose
the fact or condition.”). As reiterated in Fulmer v. Follis, No. W2017-02469-COA-R3-
CV, 2018 WL 6721248, at *5 (Tenn. Ct. App., filed Dec. 20, 2018):
“A party commits fraudulent concealment for failing to
disclose a known fact or condition where he had a duty to
disclose and another party reasonably relies upon the
resulting misrepresentation, thereby suffering injury.” Dixon
v. Chrisco, No. M2018-00132-COA-R3-CV, 2018 WL
4275535, at *4 (Tenn. Ct. App. Sept. 7, 2018) (quoting Odom
v. Oliver, 310 S.W.3d 344, 349 (Tenn. Ct. App. 2009)
(internal quotation marks omitted). In order to establish a
fraudulent concealment claim, a party must show “(1) the
defendant had knowledge of a material existing fact or
condition, and that (2) the defendant had a duty to disclose
the fact or condition.” Id. (quoting Pitz, 2004 WL 2951979, at
*8).
In Briggs & Stratton Power Prods. Grp., LLC v. Osram Sylvania, Inc., No. W2016-
01799-COA-R3-CV, 2017 WL 5992361, at *11 (Tenn. Ct. App., filed Dec. 4, 2017), this
Court stated,
When does someone have a duty to disclose? “ ‘The duty to
disclose arises when (1) there is a fiduciary relationship
between the parties; (2) one of the parties has expressly
reposed trust and confidence in the other; or (3) the contract is
intrinsically fiduciary and calls for perfect good faith.’ ”
Gurley v. Hickory Withe Partners, L.P., No. W2002–02050–
COA–R3–CV, 2003 WL 22204520, at *4 (Tenn. Ct. App.
Sept. 10, 2003) (quoting Cont’l Land Co., Inc. v. Inv. Props.
Co., No. M1998–00431–COA–R3–CV, 1999 WL 1129025,
at *6 (Tenn. Ct. App. Dec. 10, 1999)).
In the present case, plaintiff has not demonstrated that he was in a fiduciary relationship
with defendant, that he expressly reposed trust and confidence in defendant, or that his
contract with defendant is intrinsically fiduciary. There is no indication that the
transactions between plaintiff and defendant were anything other than relatively simple
commercial transactions, conducted at arm’s length. Plaintiff purchased several annuities
from defendant, and then applied for withdrawals from them. Defendant processed the
withdrawal applications and mailed the checks, which named plaintiff as payee, to
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plaintiff’s address. Some five months later, defendant terminated Brown’s employment
as an agent licensed to sell its annuities. Plaintiff has not presented any evidence from
which a trier of fact could reasonably conclude that defendant was under a duty to
disclose this to plaintiff. “Without a duty to disclose, there can be no fraudulent
concealment.” Id. at *12.
E.
Plaintiff’s TCPA claim is governed by a five-year statute of repose, Tenn. Code
Ann. § 47-18-110, stating as follows:
Any action commenced pursuant to § 47-18-109 shall be
brought within one (1) year from a person’s discovery of the
unlawful act or practice, but in no event shall an action under
§ 47-18-109 be brought more than five (5) years after the date
of the consumer transaction giving rise to the claim for relief.
The trial court found and held as follows regarding defendant’s assertion of the statute of
repose as an affirmative defense:
Plaintiff alleges that Allianz aided and abetted Mr. Brown’s
violation of the TCPA. Plaintiff alleges Brown violated the
TCPA by fraudulently endorsing and depositing two checks
dated March 20, 2009. Thus the consumer transaction giving
rise to Plaintiff’s claim for relief occurred on March 20, 2009.
Therefore any TCPA claim had to be filed by 2014. Plaintiff
failed to file Fuller I until July 15, 2015. Thus the filing of
Fuller II within one year from the non-suit of Fuller I does
not preserve the barred action.
It is undisputed that the last “consumer transaction giving rise to the claim for relief” took
place on March 20, 2009. Plaintiff did not file an action against defendant until 2015.
We affirm the trial court’s ruling that his TCPA claim is barred by the statute of repose.
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V.
The judgment of the trial court is affirmed. Costs on appeal are assessed to the
appellant, John R. Fuller. The case is remanded to the trial court for collection of costs
assessed below, if any.
_______________________________
CHARLES D. SUSANO, JR., JUDGE
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