Session April 17, 2019
from the Circuit Court for Hamilton County No. 10C340 Kyle E.
plaintiff in this action is a retired employee of the
defendant county. She filed a complaint in October 2009,
asserting claims of negligence, breach of contract,
intentional or negligent misrepresentation, and breach of
fiduciary duty related to a county employee's alleged
faulty advice and lack of disclosure to her concerning the
interplay of her disability benefits policy and her
retirement plan. Upon the county's motion, the trial
court granted partial summary judgment in favor of the county
in July 2016, dismissing the plaintiff's claims of
misrepresentation and breach of fiduciary duty. The trial
court subsequently denied the county's motion for
judgment on the pleadings as to the remaining issues.
Following a bench trial in July 2018, the trial court entered
a judgment awarding to the plaintiff the amount of $13,
985.52. The county timely appealed. Having determined that
the trial court's final order does not sufficiently
explain the legal basis upon which the money judgment was
awarded, we vacate the judgment and remand to the trial court
for entry of findings of fact and conclusions of law
explaining the basis of the judgment or, in the alternative,
reconsideration of the judgment.
R. App. P. 3 Appeal as of Right; Judgment of the Circuit
Court Vacated; Case Remanded.
Neill Southerland, Chattanooga, Tennessee, for the appellant,
Hamilton County, Tennessee.
Charles P. Dupree, Chattanooga, Tennessee, for the appellee,
R. Frierson, II, J., delivered the opinion of the court, in
which Charles D. Susano, Jr., and John W. McClarty, JJ.,
R. FRIERSON, II, JUDGE
Factual and Procedural Background
plaintiff, Carol Lee, was employed by the defendant, Hamilton
County, Tennessee ("the County"), in its juvenile
detention center for fourteen years prior to her retirement
on September 24, 2008. On October 1, 2009, Ms. Lee filed a
complaint against the County in the Hamilton County Chancery
Court ("chancery court"), alleging
"negligence, intentional or negligent misrepresentation,
and breach of contract by misrepresentation" in the
County's "selection, [maintenance], servicing,
handling, advising and representing" Ms. Lee concerning
"the selection and operation of a disability benefits
policy and the timing and selection of [Ms. Lee's]
retirement benefits" without disclosure to Ms. Lee of
"the resulting effects and the damages to her." Ms.
Lee also asserted a claim for breach of fiduciary duty.
specifically alleged, inter alia, that prior to her
retirement, she had not realized that her long-term
disability benefits, which she had acquired after attending a
presentation sponsored by the County and which she been
receiving for several months after the onset of an illness,
would be affected by her decision to begin drawing retirement
benefits from the Tennessee Consolidated Retirement Services
("TCRS"). Ms. Lee further alleged that she had made
the decision to retire based on advice she had received from
a County human resources employee, later identified as Brenda
trial, Ms. Lee testified that she had visited the human
resources department when she was contemplating her best
recourse because her various forms of leave were running out
and she had been informed by her physician that she should
not return to work in the juvenile detention center.
According to Ms. Lee, once Ms. Hixson ascertained that Ms.
Lee had been employed by the County for a sufficient period
of time to be vested in its retirement system, Ms. Hixson
told Ms. Lee that she thought "the best thing [Ms. Lee]
could do was retire." According to Ms. Lee, Ms. Hixson
subsequently told her in response to a question that because
Ms. Lee had already applied for the long-term disability
benefits, those benefits would not be affected by her
undisputed that approximately two months after Ms. Lee's
retirement, she was notified by Mutual of Omaha, her
long-term disability insurance provider, that her benefits
would be reduced due to her receipt of retirement benefits
and that she would be liable for overpayment of disability
benefits. According to Ms. Lee's testimony,
Mutual of Omaha contacted her repeatedly by mail and
telephone, urging her to apply for Social Security benefits,
which would then be offset against her long-term disability
benefits. In her complaint, Ms. Lee requested a total of $55,
000.00 in damages, comprised of the "lost value of her
retirement and/or full value of the disability policy,
damages for her stress and harassment, interest, attorney
fees and costs of this cause . . . ."
the County's motion, the chancery court determined that
it lacked subject matter jurisdiction, pursuant to Tennessee
Code Annotated § 29-20-307 (2012) of the Governmental
Tort Liability Act ("GTLA"), which provides for
exclusive jurisdiction over GTLA claims in circuit court with
the exception of certain counties wherein the circuit
court's jurisdiction is concurrent with general sessions
court. The chancery court transferred this case to the
Hamilton County Circuit Court ("trial court") in an
order entered on March 4, 2010. After initially being
dismissed twice without prejudice on "procedural
steps" orders, the case was eventually restored to the
trial court docket by an agreed order entered on March 4,
2014. The County filed an answer in the trial court on July
17, 2014, inter alia, denying all substantive
allegations, denying that any of its employees acted as
agents for insurance or retirement benefits offered,
asserting that Ms. Lee "committed comparative fault by
failing to seek advice" from the benefits companies
themselves, and asserting immunity under the GTLA. Upon Ms.
Lee's subsequent motion to set the case for hearing, the
trial court entered four successive agreed orders resetting
the trial date.
County filed a motion for summary judgment on February 16,
2016, arguing that it was entitled to judgment as a matter of
law because (1) Ms. Lee's claims of negligent
misrepresentation, intentional misrepresentation, and breach
of contract by misrepresentation were precluded by Tennessee
Code Annotated § 29-20-205(6) of the GTLA; (2) Ms.
Lee's negligence claim was time-barred by operation of
Tennessee Code Annotated § 29-20-305(b) (providing a
twelve-month statute of limitations for actions commenced
under the GTLA); and (3) the County had not acted as Ms.
Lee's agent and owed her no fiduciary duty. The County
filed with its motion affidavits executed by human resources
employees dealing with employee benefits, as well as specific
documents pertaining to Ms. Lee's various short and
long-term leaves of absence and ultimate retirement. Ms. Lee
filed a response objecting to the County's motion,
attaching to her response depositions taken of Ms. Lee and
Ms. Hixson. The County then filed a reply.
13, 2016, the trial court, with Judge W. Neil Thomas, III,
then presiding, entered a "Memorandum and Order,"
granting partial summary judgment in favor of the County
concerning Ms. Lee's claims of intentional or negligent
misrepresentation and breach of fiduciary duty. The dismissal
of these claims is not at issue on appeal. However, the trial
court denied summary judgment "as to the remaining
issues in the case."
various motions filed by the parties to set the case for
trial and to continue the case, the County filed a
"Motion for Judgment on the Pleadings," pursuant to
Tennessee Rule of Civil Procedure 12.03, on May 31, 2018. In
this motion, the County stated that the trial court's
July 2016 order had indicated that "the two (2)
remaining matters are: (a) whether [Ms. Lee] has brought a
valid claim for misrepresentation under a contract theory;
and, if so, (b) when [Ms. Lee] knew, or should have known, of
her alleged damages." The County then argued that
"[t]here being no contract between the parties, Hamilton
County cannot be held liable under a contract theory of
recovery." Ms. Lee filed a response objecting to the
motion on the basis that the County was attempting to
re-litigate its summary judgment motion. Specifically, Ms.
Lee asserted that in the July 2016 order, the trial court had
"ruled then on all the [County's] objections and
left the remaining issues for trial." Ms. Lee did not
specify in her response what the remaining issues were. The
County filed a reply, again asserting that the case was
appropriate for Rule 12.03 relief.
a hearing, the trial court, with Judge Kyle E. Hedrick now
presiding, entered an order on July 13, 2018, denying the
County's motion for judgment on the pleadings. The court
found in pertinent part:
A Memorandum and Order was filed on July 13, 2016 granting
summary judgment as to the claims of misrepresentation and
breach of fiduciary duty, but denying the motion with respect
to the remaining claims. In short, it appears as if [the
County] seeks a rehearing on the denied portions of the
motion for summary judgment by filing the Rule 12.03 motion.
In fact, during the hearing on the current motion, counsel
for [the County] relied primarily upon an admitted fact that
was a part of the filing of the motion for summary judgment.
Given that this court has already addressed these same issues
in its Memorandum and Order of July 13, 2018, (and denied the
same); the motion of the [County] is denied.
trial court conducted a bench trial on July 17, 2018, hearing
testimony presented by Ms. Lee; Holly Wormsley, who had
overseen payroll for the County; Alecia Poe, the
Administrator of Human Resources for the County; and Jim
Gaines, an insurance broker who testified that he managed
insurance accounts owned by County employees but was not a
County employee himself. At the close of Ms. Lee's proof,
her counsel requested permission to read Ms. Hixson's
deposition testimony into the record. The trial court denied
this request in the absence of Ms. Hixson's testimony at
trial; however, the court did allow Ms. Hixson's
deposition to be introduced into the record for
identification purposes only.
close of the County's proof, the County moved for a
"directed verdict" on the basis that no contract
existed between Ms. Lee and the County concerning her
long-term disability insurance. On appeal, the County
acknowledges that it intended to request involuntary
dismissal, pursuant to Tennessee Rule of Civil Procedure
41.01(2), instead of a directed verdict pursuant to Tennessee
Rule of Civil Procedure 50. Upon the County's motion, the
trial court stated from the bench that the evidence
demonstrated no basis to find that a contract existed between
the parties and orally ruled in the County's favor on the
breach of contract claim. The trial court further found,
however, that the claim of negligence survived and ordered
that the parties address in their closing arguments "the
negligence of the County with respect to the representation
that [Ms. Lee] should take her retirement benefits."
30, 2018, the trial court entered a "Judgment
Order," awarding a judgment in the amount of $13, 985.52
to Ms. Lee. In the order, the court incorporated a memorandum
opinion, which the court described as its "findings of
fact and legal conclusions" that had been announced on
the record at the close of trial. The court did not
memorialize its oral ruling on the County's motion for
involuntary dismissal (or directed verdict) or its ruling on
the breach of contract claim in either the judgment order or
the memorandum opinion. In its memorandum opinion, the court,
inter alia, found Ms. Lee to be "highly
credible" and found that the "only evidence"
presented as to why Ms. Lee applied for retirement benefits
was that "she was told to" by Ms. Hixson.
Determining that the reduction in Ms. Lee's income
amounted to $582.73 per month for twenty-four months, the
court awarded to Ms. Lee a money judgment against the County
in the amount of $13, 985.52. The County timely appealed.
County presents two issues on appeal, which we have restated
1. Whether the trial court erred by awarding damages that
were not supported by its findings of fact and by issuing a
decision that did not constitute a legal conclusion as
required by Tennessee Rule of Civil Procedure 52.01.
2. Whether the trial court erred by denying the County's
motion for involuntary dismissal.
presents an additional issue, which we have similarly
restated as follows:
3. Whether the trial court properly based its judgment in
favor of Ms. Lee on the negligence of a County employee in
failing to advise Ms. Lee about the effect of retirement
benefits on long-term disability benefits.
Standard of Review
review of the trial court's judgment following a non-jury
trial is de novo upon the record with a presumption
of correctness as to the trial court's findings of fact
unless the preponderance of the evidence is otherwise.
See Tenn. R. App. P. 13(d); Rogers v. Louisville
Land Co., 367 S.W.3d 196, 204 (Tenn. 2012). "In
order for the evidence to preponderate against the trial
court's finding of fact, the evidence must support
another finding of fact with greater convincing effect."
Wood v. Starko, 197 S.W.3d 255, 257 (Tenn. Ct. App.
2006) (citing Rawlings v. John Hancock Mut. Life Ins.
Co., 78 S.W.3d 291, 296 (Tenn. Ct. App. 2001)). We
review the trial court's conclusions of law de
novo with no presumption of correctness. Hughes v.
Metro. Gov't of Nashville & Davidson Cty., 340
S.W.3d 352, 360 (Tenn. 2011). The trial court's
determinations regarding witness credibility ...