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Johansen v. Sharber

Court of Appeals of Tennessee, Nashville

February 12, 2018

LESLIE JOHANSEN
v.
LEON SHARBER, ET AL.

          Session December 6, 2017

         Appeal from the Circuit Court for Rutherford County No. 69761 Mitchell Keith Siskin, Judge

         This appeal concerns a release of liability. Leslie Johansen ("Johansen") was a passenger in an ATV accident that resulted in the death of the driver, Lee Martin Sharber. Johansen sued Leon Sharber, Personal Representative of Lee Martin Sharber's Estate, in the Circuit Court for Rutherford County ("the Trial Court") alleging negligence. Johansen's uninsured motorist carrier, GEICO Casualty Company ("GEICO"), was joined as a defendant. While the tort action was underway and without GEICO's approval, Johansen executed a release of claim regarding the Personal Representative which was filed in the Probate Court for Rutherford County ("the Probate Court"). GEICO filed a motion for summary judgment, arguing that, as a result of the release, Johansen forfeited any recovery rights she had against GEICO. The Trial Court granted summary judgment to GEICO. Johansen appealed. We hold that the release executed by Johansen served to release GEICO from any liability arising from Johansen's personal injury claim stemming from the ATV accident. We affirm the judgment of the Trial Court.

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

          Henry S. Queener, Nashville, Tennessee, for the appellant, Leslie Johansen.

          C. Benton Patton and Britney K. Pope, Nashville, Tennessee, for the appellee, GEICO Casualty Company.

          Herbert H. Slatery, III, Attorney General and Reporter, Andrée S. Blumstein, Solicitor General, and Lindsay H. Sisco, Assistant Attorney General, for the intervenor-appellee, the Tennessee Attorney General.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Richard H. Dinkins and John W. McClarty, JJ., joined.

          OPINION

          D. MICHAEL SWINEY, CHIEF JUDGE

         Background

         In November 2014, Johansen filed a claim against the Estate of Lee Martin Sharber in the Probate Court for medical bills and personal injury. In May 2015, Johansen sued Leon Sharber, Personal Representative of the Estate of Lee Martin Sharber, in the Trial Court. In this latter case, Johansen alleged that she was injured as a result of negligence in the ATV accident. GEICO, Johansen's uninsured motorist carrier, was served and joined as a party. In July 2015, Johansen executed a release of claim in the Probate Court without GEICO's consent. The effect of this release of claim is the central disputed issue on appeal.

         In November 2016, GEICO filed a motion for summary judgment. GEICO asserted that the release of claim served to settle Johansen's tort claim and extinguished GEICO's subrogation rights releasing GEICO from any liability to Johansen under the insurance policy. In December 2016, Johansen filed a response to GEICO's motion, arguing among other things that neither Johansen nor the Personal Representative had intended to settle the tort claim, and that, in any case, the Probate Court lacked jurisdiction to dispose of tort claims. Johansen argued also that the summary judgment standard set forth at Tenn. Code Ann. § 20-16-101, which GEICO had cited, violated the separation of powers doctrine and was unconstitutional. The Attorney General of Tennessee intervened to defend the statute. In February 2017, the Trial Court entered an order granting summary judgment to GEICO. The Trial Court attached its detailed findings of fact and conclusions of law, which stated in part:

The undisputed facts are as follows. The Plaintiff, Leslie Johansen, was a passenger in an ATV accident that occurred on July 13, 2014. The driver of the vehicle, Lee Martin Sharber, was killed in the accident. Defendant Leon Sharber is the Administrator of the probate estate of Lee Martin Sharber, pursuant to the Order of the Probate Court of Rutherford County. Defendant GEICO is the Plaintiff's uninsured motorist carrier. On November 5, 2014, the Plaintiff filed a claim against the Estate of Lee Martin Sharber in the Probate Court, in the amount of $150, 000.00. On her Probate Court claim form, the Plaintiff described the "Items and Nature of Claims" as "Medical Bills/Personal Injury (Estimate)." On July 15, 2015 (during the pendency of the case at bar), the Plaintiff executed a "Release and Acknowledgment of Satisfaction of Claim" (hereinafter 'Release'), and filed the same with the Probate Court the following day. The complete text of the Release, set forth under the caption of the Probate Court case, is as follows:
The undersigned, Leslie Johansen, acknowledges full and complete satisfaction of the claim filed against the Estate and releases the Personal Representative from any further liability on the claim of $150, 000.00 that the undersigned filed against the Estate.
Both the Plaintiff and the Administrator now insist that they did not intend the Release to affect the case at bar in any way. GEICO was not involved with the execution of the Release in any way, did not consent to the Plaintiff's execution of the Release, and was not informed of the existence of the Release until after its execution. After execution of the Release, the Plaintiff was allowed by Leon Sharber (in his capacity as Executor of the estate) to retain possession of a semi-truck which the decedent had owned. The semi-truck was eventually sold, and the Plaintiff received a portion of the proceeds therefrom.

         The Trial Court went on to articulate its rationale for finding in favor of GEICO, stating as follows:

GEICO argues, persuasively, that the effect of the Release was to destroy its subrogation rights pursuant to T.C.A. § 56-7-1206 and under its contract with the Plaintiff. Clearly, the Release was a general release as to the July 13, 2014 ATV accident. The scope and extent of a release depends on the intent of the parties as expressed in the instrument. Cross v. Earls, 517 S.W.2d 751, 752 (Tenn. 1974). As quoted above, the instrument in question herein acknowledged "full and complete satisfaction" of the claim filed by the Plaintiff in the Probate case, and further released the "Personal Representative from any further liability on the claim of $150, 000.00." As also quoted above, the "claim" that was released was for "Medical Bills/Personal Injury (Estimate)" in the amount of $150, 000.00, stemming from the ATV accident. This broad, all-encompassing language demonstrates the intent of the parties to the Release that it operate as a general release as to the ATV accident. See Id. (General release covers all claims between the parties which are in existence and within their contemplation). When the Plaintiff relinquished her rights through the execution of the Release, she also extinguished the rights of GEICO under its claim for subrogation. See Doss v. Tennessee Farmers Mutual Ins. Co., 2001 WL 1565883 at *3, No. M2000-01971-COA-R3-CV (Tenn. Ct. App., M.S., Dec. 10, 2001).
As to the Plaintiff's argument that the Release did not operate to release any claims against Leon Sharber, insomuch as it released only the estate, such is contradicted by the plain language of the Release itself, which specifically provides that it "releases the Personal Representative" from any further liability on the personal injury claim. The Defendant in the case at bar is "Leon Sharber, Administrator of Estate for Lee Martin Sharber, " not Leon Sharber individually on his own behalf. The Defendant herein is, therefore, the same entity -- the personal representative of the estate -- who was released from liability in the general Release filed with the Probate Court. Accordingly, the Plaintiff's assertion that the Release somehow only operated to release the Estate of Lee Martin Sharber is simply not correct.
With respect to the Plaintiff's argument that the Release, having been prepared under the auspices and caption of the Probate Court case, could not legally affect the tort ease at bar, such is without merit. Although the Plaintiff is correct in her assertion that the Probate Court lacks jurisdiction to dispose of tort claims, the proof of claim that the Plaintiff filed in the Probate Court did indeed specify that it was intended to preserve her claim for "Medical Bills/Personal Injury (Estimate)." There was no challenge to, or ruling regarding the Plaintiff's claim in Probate Court, and the claim was ultimately settled pursuant to the Release. The Probate Court's lack of jurisdiction over tort claims is inapposite; the claim was raised, negotiated, and settled. Further, the undisputed proof shows, that the parties acted in reliance on the Release when Leon Sharber transferred ownership of the semi-truck to the Plaintiff, and the Plaintiff ...

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