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Teague v. Kidd

Court of Appeals of Tennessee, Knoxville

May 25, 2017


          Session April 18, 2017

         Appeal from the Chancery Court for Polk County No. 2013-CV-18 Jerri Bryant, Chancellor

         In this fraudulent conveyance action, a trial by jury resulted in judgment for decedent's estate against defendants. Defendants filed a motion for a new trial asserting that: (1) the trial court erred in failing to grant a mistrial after counsel for decedent's estate made a comment about one of the defendant's credibility from "past cases" purportedly in the presence of the jury; and (2) no evidence supports the jury verdict. The trial court denied the post-trial motion and affirmed the jury verdict. Defendants appealed. We affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

          William J. Brown, Cleveland, Tennessee, for the appellants, Garnette Kidd, and William Kidd.

          Andy D. Lewis, Chattanooga, Tennessee and R. Prince Miller, Jr., Cleveland, Tennessee, for the appellee, Tamala Teague.

          J. Steven Stafford, P.J., W.S., delivered the opinion of the court, in which Charles D. Susano, and Thomas R. Frierson, II, JJ, joined.




         This is the second case involving the same parties. In Teague v. Kidd, No. E2011-02363-COA-R3-CV, 2012 WL 5869637 (Tenn. Ct. App. Nov. 21, 2012) ("Teague I"), the Administrator of Lola Lee Duggan's ("Decedent") estate sued Garnette Kidd ("Ms. Kidd"), Decedent's daughter and her attorney-in-fact, and William Kidd ("Mr. Kidd, " or, together with Ms. Kidd, "Appellants"), Ms. Kidd's husband, in February 2009 in the Polk County Chancery Court for breach of fiduciary duty and misappropriation of Decedent's funds. While the litigation was pending, the Administrator died, and Plaintiff/Appellee Tamala Teague ("Appellee") subsequently replaced the Administrator as successor personal representative for Decedent's estate. After a bench trial, the trial court entered judgment against Appellants in the amount of $267, 305.31. On appeal, this Court affirmed liability with respect to Ms. Kidd but reversed the trial court's finding with respect to Mr. Kidd because Mr. Kidd did not owe a fiduciary duty to Decedent. As a result, this Court, after appropriate credits, modified the judgment amount to $196, 731.48, [1] the total owed by Ms. Kidd individually.

         During the pendency of Teague I, on October 29, 2009, before judgment had been obtained, Ms. Kidd combined an individual certificate of deposit ("CD") owned solely by her in the amount of $46, 817.55 with a CD owned by Mr. Kidd in the amount of $50, 999.76, to create a single new joint CD in the amount of $97, 853.25 with right of survivorship, at the Peoples Bank of East Tennessee ("the bank"). After Teague I was finalized on April 30, 2013, Appellee filed the instant suit in the trial court against Appellants on the same day, alleging fraudulent conveyance pursuant to the Uniform Fraudulent Transfer Act ("UFTA"), Tennessee Code Annotated sections 36-3-301 et seq., based on Appellants' act of combining their individual CDs, and seeking to set aside the consolidation. The complaint alleged that Appellee, as judgment creditor, could not recover Ms. Kidd's funds that had been commingled because the funds were purportedly held as a joint account with right of survivorship. Appellee, by affidavit, also requested that a temporary restraining order be issued in order to enjoin Appellants from dissipating the assets in their jointly-owned CD pending further hearing. As a result, the trial court issued a temporary injunction on May 3, 2013, enjoining Appellants from "dissipate[ing], spend[ing], or liquidat[ing] [the jointly-owned CD] in [the bank]." Appellants thereafter filed an answer, denying all material allegations, and a motion to dissolve the temporary restraining order. The trial court subsequently denied the motion to dissolve the temporary restraining order.

         Additional contentious filings ensued prior to the trial in the instant case. For one, Appellee noticed a deposition for Ms. Kidd and Mr. Kidd. According to Appellants' brief, Appellants filed two motions to quash the deposition for Ms. Kidd, citing her mental conditions and presented an affidavit and deposition of Ms. Kidd's psychiatrist. The trial court entered an order on April 12, 2016, finding that Ms. Kidd "would suffer psychiatric harm if she was required to testify either at a deposition or at trial." Because the trial court could not require Ms. Kidd to testify at a deposition, the trial court provided as a sanction that Ms. Kidd would not be allowed to testify at trial. As a result, Ms. Kidd neither attended nor testified at trial.

         On April 12 and 13, 2016, this case was tried before a jury. During opening statements, counsel for Appellee made the following statement:

This case has a long history. For one thing, you're not going to he[ar] from Ms. Kidd today. This case, a lot of it boils down to credibility. You're not going to be able to see or hear Ms. Kidd in this case.
We have Mr. Kidd, who is here. In previous cases, he's been found to not be credible.

         Appellant's counsel objected and requested to approach the bench. The trial transcript indicates that "a bench conference was had out of the hearing of the jury[.]" During the conference, Appellants requested a mistrial. Appellee's counsel responded with: "Give him the mistrial. I don't think it is." The trial court, however, denied the motion. No curative instruction was requested.

         During Appellee's case-in-chief, a representative at the bank, Cindy Prince, and Mr. Kidd testified, but Ms. Kidd neither appeared at trial nor testified. Ms. Prince testified that in her role as branch manager at the bank, she was responsible for helping customers open new accounts and managing CDs for the bank's customers. According to Ms. Prince, she had long time contact with Ms. Kidd as a customer and generally remembered helping her with her banking transactions, such a helping Ms. Kidd open a CD account. Ms. Prince explained that the bank sends out annual statements of interest paid by the bank to the customer by way of a 1099 form. Ms. Prince identified 1099 forms for the years 2007 through 2009 that were sent to Ms. Kidd, and these were introduced into evidence.

         Ms. Prince also identified a CD in both Appellants' names dated October 29, 2009. Ms. Prince testified that the CD was jointly owned by Appellants and was marked as "joint with survivorship, " meaning that either Mr. or Ms. Kidd could do whatever they wanted with the CD. Although Ms. Prince acknowledged that her signature was on the CD as the bank representative, she had no independent recollection of the transaction or any comments made during the process of executing the CD with Appellants. Appellee also introduced a document with the word "PAID" across the top, which Ms. Prince identified as a CD that Ms. Kidd purchased in August 20, 1996, designating Mr. Kidd as a beneficiary, and which was "cashed out and paid out" to her.[2] On cross-examination, Ms. Prince testified that she never discussed the legal consequences or protections afforded to the customers by their decision to combine individual CDs.

         According to Mr. Kidd, between February 2009, when the first lawsuit was filed, and April 21, 2011, the entry of the judgment in the first case prior to the remand from the Court of Appeals, he understood that both he and Ms. Kidd were at risk to have a judgment rendered against them, and, in fact, a judgment was subsequently rendered against them. Mr. Kidd identified the temporary restraining order entered in October 2010 that enjoined both Appellants from disposing of any property, including any financial accounts and certificates of deposits. Mr. Kidd testified that neither he nor Ms. Kidd had any legal education and that he knew nothing about protections afforded a married couple by having jointly owned property. Mr. Kidd denied having any knowledge that a jointly owned CD could be protected if only one of the parties had a judgment against them.

         Mr. Kidd further testified that Appellants combined their CDs for "convenience" so that they would receive "one 1099 instead of two." When asked whether he received any 1099s, Mr. Kidd replied "I don't know." Mr. Kidd also testified that Appellants designated Ms. Kidd's nephew, with whom Appellants had a close relationship, as the beneficiary on the jointly-owned CD. Mr. Kidd introduced a copy of a recorded deed of trust that secured the earlier amended judgment from Teague I against Ms. Kidd in the amount of $267, 305.31 to show that Appellants were not rendered insolvent as a result of the consolidation.

         At the end of the trial, Appellee acknowledged that no evidence of insolvency was presented and dismissed all of her claims against Appellants with the exception of the "actual intent" fraud claim pursuant to T.C.A. § 66-3-305(a) based on Appellants' consolidation of their individual CDs.

         The case was submitted to the jury. The jury was presented with a single question: "On October 29, 2009, did [Ms. Kidd] transfer her [CD] and combine it with [Mr. Kidd's CD] to create the joint [CD] at [the bank] with actual intent to hinder, delay, or defraud the [Decedent's estate]?" After deliberations, the jury returned with a verdict of "Yes." The trial court entered a judgment on the verdict on May 18, 2016. On June 15, 2016, Appellants filed a motion for a new trial on the following bases: (1) that the verdict was contrary to the weight of the evidence; and (2) that the trial court's action in allowing Appellee's statement to be admitted in opening statement regarding Mr. Kidd's credibility constituted an "improper comment by the [trial] court on the evidence."

         By order of September 12, 2016, the trial court noted that the jury heard Mr. Kidd's testimony, which included several inconsistent statements, and therefore was able to judge his credibility. In addition, based on Ms. Kidd's failure to testify and absence from trial, the trial court stated that the jury was allowed to conclude that her testimony would have been adverse to her. As such, the trial court found that the verdict was supported by the weight of the evidence. The trial court also found that, although counsel for Appellee made a reference to Mr. Kidd's credibility in the first case during opening statement: (1) the issue was not argued during closing; (2) no proof was put on regarding Mr. Kidd's credibility in the first case during the course of the trial for the instant case; (3) the jury instructions admonishing the jury-that it was the sole judge as to credibility, that it was the sole finder of fact, that it was to look at only the evidence in this case, and that statements made by counsel were not evidence-were sufficient to negate any issue concerning the opening statement. Accordingly, the trial court denied Appellants' motion for a new trial. This appeal followed.


         Appellants raise the following issues for our review, which we have slightly restated and reordered as follows:

1.Did the trial court commit reversible error by permitting the Appellee's counsel to state to the jury in opening statement that the trial court had previously found Mr. Kidd to not be credible and denying a mistrial or providing curative instruction?
2.Was there sufficient material evidence presented to the jury to justify its finding that Appellants acted with fraudulent intent to hinder, delay or defraud the Appellee from collecting on a judgment against Ms. Kidd through the consolidation of her CD with Mr. Kidd?


         Denial of Mistrial Based on Comments Regarding Mr. Kidd's ...

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