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McCullough v. Vaughn

Court of Appeals of Tennessee, Nashville

April 27, 2017

ROBERT L.McCULLOUGH, JR. et al.
v.
CARLA VAUGHN et al.

          Session March 7, 2017

         Appeal from the Circuit Court for Davidson County No. 14C1784 Kelvin D. Jones, Judge

         This action arises out of a two-car accident. Prior to the commencement of this action, the driver of the vehicle who is the defendant in this action filed a petition in bankruptcy court. Shortly thereafter, and being unaware of the bankruptcy proceeding, Plaintiffs commenced this action naming the driver of the other vehicle as the only named defendant. Summons was issued for the defendant driver as well as Plaintiffs' uninsured motorist insurance carrier. Summons was served on the carrier; however, summons for Defendant was returned unserved, and more than a year passed before Plaintiffs requested issuance of an alias summons. Upon motions of the defendant and the uninsured motorist carrier, the trial court dismissed all claims as time barred upon the finding that Plaintiffs failed to comply with Tenn. R. Civ. P. 3 by obtaining the issuance of a new summons for service of process on the defendant within one year of the issuance of the previous summons that was not served. Plaintiffs appeal contending their claims are not time barred because the defendant filed her bankruptcy petition prior to the commencement of this action and Tenn. Code Ann. § 28-1-109 expressly states, "When the commencement of an action is stayed by injunction, the time of the continuance of the injunction is not to be counted." We agree. The bankruptcy court's automatic stay not only enjoined the commencement of this action but the issuance of process, and Tenn. Code Ann. § 28-1-109 expressly states that the time of the continuance of an injunction is not to be counted in calculating the statute of limitations. The bankruptcy injunction remained in effect for 202 days; therefore, that period is not to be counted. With the addition of 202 days to the period within which Plaintiffs could obtain the issuance of an alias summons under Tenn. R. Civ. P. 3, the issuance of the alias summons was timely. As a consequence, the trial court's order dismissing this case is vacated, and this matter is remanded with instructions to reinstate the complaint as to the defendant driver and the uninsured motorist carrier for further proceedings consistent with this opinion.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Vacated and Remanded

          Brian Dunigan, Goodlettsville, Tennessee, for the appellants, Robert L. McCullough, Jr. and Helen McCullough.

          Jaimee S. Johnson, Hendersonville, Tennessee, for the appellee, Carla Vaughn.

          Glenda A. Hawkins and Matthew T. Moffitt, Nashville, Tennessee, for the appellee, Allmerica Financial Alliance Insurance Company.

          Frank G. Clement, Jr., P.J., M.S., delivered the opinion of the Court, in which Richard H. Dinkins and Arnold B. Goldin, JJ., joined.

          OPINION

          FRANK G. CLEMENT, JR., P.J., M.S.

         This case arises out of an automobile accident that occurred on February 5, 2014, involving Robert and Helen McCullough ("Plaintiffs") and Carla Vaughn ("Defendant"). On May 1, 2014, Plaintiffs filed a complaint against Defendant alleging that the accident was the result of the negligent operation of Defendant's vehicle.

         In addition to filing a summons to be served on Defendant, Plaintiffs also filed a summons to be served on Allmerica Financial Alliance Insurance Company ("Allmerica"), Plaintiffs' uninsured/underinsured motorist insurance carrier, to give Allmerica notice that Plaintiffs intended to rely on their insurance coverage in the event Defendant was uninsured or underinsured.[1] Allmerica was served and timely filed an answer.

         The Sheriff of Robertson County attempted to serve the summons and complaint on Defendant at the address stated on the summons; however, Defendant had moved and the summons was returned to the clerk on May 19, 2014, with the following notation: "[u]nable to serve in Robertson County, new address: 131 Fern Avenue, Nashville." Over a year later, on June 1, 2015, Plaintiff filed an alias summons with the clerk directing service at the Nashville address; however, it was returned unserved. Plaintiff filed a pluries summons on August 28, 2015, requesting service at the same Nashville address, and Defendant was served on September 21, 2015.

         Prior to Defendant being served, Plaintiffs' counsel, Marshall McClarnon, and a claims representative for Defendant's liability insurance carrier, Direct Insurance, engaged in settlement discussions.[2] On June 4, 2014, Direct Insurance informed Mr. McClarnon that it was willing to pay policy limits of $25, 000 and that its claims file was being transferred to attorney Jaimee Johnson to prepare the settlement documents and the necessary court orders. Soon thereafter, Ms. Johnson notified Mr. McClarnon that, on February 27, 2014, Defendant had filed a Chapter 13 bankruptcy petition and the automatic stay was still in effect; therefore, Direct Insurance could not proceed with the proposed settlement.[3] Upon learning of the pending bankruptcy, Plaintiffs filed a motion in the bankruptcy court seeking relief from the automatic stay. The motion was granted on September 17, 2014.

         Two weeks earlier, on September 2, 2014, Ms. Johnson informed Mr. McClarnon that Direct Insurance was still willing to tender policy limits on behalf of Defendant; however, it would require a waiver of Allmerica's subrogation interest prior to remitting its payment.[4] Acting on behalf of Direct Insurance, Ms. Johnson attempted to obtain the waiver from Allmerica but she was unsuccessful.

         On November 5, 2015, Allmerica filed a motion to dismiss the claims against it based on the statute of limitations because Plaintiffs failed to comply with Tenn. R. Civ. P. 3 by filing an alias summons within the required time. On November 13, 2015, Defendant also filed a motion to dismiss based on the statute of limitations.

         Plaintiffs filed a response to both motions to dismiss, contending that they relied on their agreement with Direct Insurance to their detriment in deciding to not immediately reissue service of process on Defendant after the failed service in May 2014. They additionally contended that Allmerica was aware of Plaintiffs' agreement with Direct Insurance; therefore, Allmerica's motion to dismiss should be denied. Further, they contended that Allmerica waived the statute of limitations as a defense by failing to plead it as an affirmative defense in their answer as required by Tenn. R. Civ. P. 8.03.

         Plaintiffs filed a separate motion asking the court to enforce their settlement agreement with Direct Insurance to pay them $25, 000 on behalf of Defendant. In support of this motion, Mr. McClarnon filed an affidavit in which he stated, inter alia, that he and Ms. Johnson had "discussed that the Defendant did not intend to rely on a statute of limitations defense because [they] had an ...


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