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Twenty Holdings, LLC v. Land South TN, LLC

Court of Appeals of Tennessee, Nashville

September 5, 2019

TWENTY HOLDINGS, LLC
v.
LAND SOUTH TN, LLC AND BRANDON MAJORS

          Session: July 9, 2019

          Appeal from the Circuit Court for Davidson County No. 16C-769 Hamilton V. Gayden, Jr., Judge

         Plaintiff sued defendant-company and its employee for damages to its real property when the defendant-company's tractor-trailer collided with the plaintiff's residential properties while the truck was unmanned. The plaintiff raised claims of negligence, gross negligence, recklessness, trespass, negligent hiring, negligent entrustment, and punitive damages. A jury trial occurred, and the trial court granted the defendants' motion for a directed verdict as to all but the plaintiff's negligence claim. The jury later awarded the plaintiff $185, 000.00 for the diminution in value to the real property. Both parties appealed. Discerning no reversible error, we affirm.

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

          Roland W. Baggott, Nashville, Tennessee, for the appellant, Twenty Holdings, LLC.

          David B. Scott and Kobina P. Ankumah, Nashville, and Jay W. Mader, Knoxville, Tennessee, for the appellees, Land South TN, LLC, and Brandon Majors.

          J. Steven Stafford, P.J., W.S., delivered the opinion of the court, in which Richard H. Dinkins and W. Neal McBrayer, JJ., joined.

          OPINION

          J. STEVEN STAFFORD, JUDGE

         Facts and Procedural History

         Plaintiff/Appellant Twenty Holdings, LLC ("Plaintiff") owned real property in Nashville consisting of a duplex rented to two separate tenants. A nearby tenant, Defendant/Appellee Brandon Majors, drove a 2008 Mack Truck ("the truck" or "the tractor") for his employer, Defendant/Appellee Land South TN, LLC ("Land South" and together with Mr. Majors, "Defendants"). On December 5, 2015, Mr. Majors parked the truck, with an attached 53 foot trailer (together with the tractor, "the tractor-trailer"), near his residence at the top of a steep hill with the front of the truck pointing toward the drop off of the hill and toward Plaintiff's property. According to Mr. Majors's later testimony, he parked the tractor-trailer on a relatively flat portion of land before a drop off, which he believed was safe due to his more than a decade of experience driving trucks of this kind. Moreover, he testified that he took various precautions in securing the tractor-trailer, including engaging the parking brake, placing garden timbers under the wheels, letting the trailer down, and placing the tractor-trailer in reverse.

         Despite the precautions, within hours of parking the tractor-trailer at his residence, the tractor-trailer rolled down the hill for a distance of approximately 600 feet. The trailer of the truck detached and stopped on the hill; the truck, however, barreled into Plaintiff's properties, stopping in one home's living area. Two residents were home during the collision, but fortunately were uninjured.

         Plaintiff filed a complaint against Defendants on March 21, 2016, asserting claims of negligence, gross negligence, recklessness, trespass, vicarious liability, negligent entrustment, negligent hiring, and punitive damages. The complaint alleged that the collision had caused significant damage to Plaintiff's properties, as it destroyed a common fire wall between the properties, as well as the properties' front brick wall. The complaint sought $350, 000.00 in compensation for all the claims other than the claim for punitive damages, for which Plaintiff sought $500, 000.00.

         Defendants filed an answer on May 13, 2016, admitting that Plaintiff's property was damaged but denying all liability. Later, on June 28, 2017, Defendants filed a motion for partial summary judgment, seeking dismissal of the punitive damages claim. Plaintiff responded in opposition to Defendants' motion for partial summary judgment on August 28, 2017.

         In the meantime, on August 3, 2017, Plaintiff filed a motion in limine and request for sanctions alleging that Defendants had sold the tractor-trailer, spoliating critical evidence. Plaintiff noted that it learned that the tractor-trailer was no longer in Defendants' possession by virtue of interrogatories sent on August 29, 2016, and answered on October 27, 2016. The tractor, however, was sold on September 12, 2016. As such, Plaintiff sought an order of default judgment against Defendants or, in the alternative, an order establishing that the tractor-trailer was not in good working order, was not parked in a safe manner, that these facts were known to Defendants, and that Defendants acted in conscious disregard of known risks. Plaintiff also sought to prevent Defendants from presenting evidence opposing Plaintiff's claims, as well as a jury instruction requiring a negative inference that examination of the tractor-trailer would have been detrimental to Defendants.

          Defendants responded in opposition to Plaintiff's motion in limine relative to spoliation. Therein, Defendants noted that Plaintiff did not request to inspect the tractor-trailer, but merely asked via interrogatory for the location of the truck, in its August 2016 interrogatory. According to Defendants, Plaintiff only asked to inspect the truck in a third request for production served on or about March 17, 2017, nearly a year after the filing of the complaint. Defendants also too issue with Plaintiff's attempts to conflate the tractor with the trailer involved in the accident; while the tractor, i.e., the truck, was sold, the trailer was not sold and was available for inspection.

         On September 5, 2017, the trial court entered an order denying Defendants' motion for partial summary judgment and granting, in part, Plaintiff's first motion in limine. With regard to spoliation, the trial court explained as follows:

After due proceedings had before this Court and upon considering the pleadings, memoranda, evidence submitted to this Court, the arguments of the parties and the oral arguments of Counsel at the hearing, this Court:
FINDS that the defendants did not have an obligation to ask this Court for permission to sell the Tractor in this case, but did have an obligation to act in good faith;
FINDS that the Tractor was in the control of the defendants;
FINDS that the defendant knew or should have known that the Tractor was relevant to this litigation;
FINDS the defendants did not act in good faith when they sold the Tractor;
FINDS that the plaintiff was prejudiced by the defendants' sale of the Tractor;
FINDS that the spoliation of the Tractors by the defendants is clear; and
FINDS that the evidence that Tractor would have supplied would have been unfavorable to the defendants.
THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED, that the plaintiff's First Motion in Limine and for Rule 37 Sanctions Due to Spoliation of Evidence is GRANTED. Considering the totality of the circumstances, this Court, in its discretion, declines to enter the sanctions proposed by the plaintiff and determines that the proper sanction is that this Court will provide a negative inference related to the Tractor and will: (a) instruct the jury in this matter that the defendants spoliated the Tractor in bad faith so that the evidence the Tractor would have provided could not be brought to this Court; (b) instruct the jury that it may draw a negative inference related to the Tractor due to its spoliation, specifically including that it may, for all purposes, infer that the Tractor was not in good working condition and that it may infer that evidence that would have been provided by the Tractor would be unfavorable to the defendants. Plaintiff is directed to prepare the jury instruction, which shall be submitted to this Court at the appropriate time before trial.

         The trial court further ruled that the spoliation of evidence could be related to Plaintiff's punitive damages claim. As such, the trial court denied Defendants' motion for partial summary judgment as to that claim.

         Plaintiff filed a second motion in limine on April 27, 2018. Among other things, Plaintiff sought entry of an order declaring the truck a "commercial vehicle" rather than a "farm vehicle," and a jury instruction directing the jury to draw a negative inference from Defendants' failure to comply with regulations applicable to commercial vehicles. Plaintiff also sought an order that the proper measure of damages was cost of repair.

         In addition to filing a response to Plaintiff's second motion in limine relative to damages, Defendants filed their own motion in limine on April 27, 2018. Therein, Defendants asked the trial court to determine the proper measure of damages in advance of trial. Specifically, Defendants asked that Plaintiff be prevented from arguing that the measure of damages should be cost of repair and that the measure of damages be set as the difference between the reasonable market value of the property prior to and after the collision. Plaintiff responded in opposition to Defendants' motion in limine on May 7, 2018, requesting that the trial court rule, as a matter of law, that the damage to Plaintiff's property was temporary and the proper measure of damages is cost to repair.

         The trial court entered an order on June 11, 2018, denying the parties' motions in limine relative to the measure of damages. Instead, the trial court ruled that the jury would first decide by questionnaire whether the damage to Plaintiff's property was temporary or permanent and the trial court would thereafter instruct the jury on the proper measure of damages. The trial court also denied Plaintiff's motion in limine related to whether the tractor was a farm or commercial vehicle. As such, the trial court ruled that neither party would be permitted to present evidence as to this issue.

         Plaintiff filed a third motion in limine on June 20, 2018, requesting inter alia, an order preventing Defendants from presenting any evidence "that contradicts" the trial court's previous order finding spoliation of the tractor. The trial court eventually denied this request by order entered July 2, 2018.

         The case was tried before a jury June 25 through 28, 2018. Defendants admitted negligence immediately prior to trial. After the jury was selected, on the second day of trial, the trial court heard oral argument on its previously ordered spoliation ruling, presumably as it related to Plaintiff's third motion in limine, discussed supra. The trial court orally ruled that its spoliation ruling would be amended to provide only a rebuttable presumption that the evidence was spoliated and detrimental to Defendants. Counsel for Plaintiff then argued that because of this ruling, the trial court's prior ruling excluding evidence of whether the tractor was a farm or commercial vehicle should be reversed and Plaintiff be permitted to submit evidence that Defendants did not comply with applicable regulations. The trial court agreed, but counsel for Defendants objected that it was not prepared to present proof on this issue, having relied on the earlier exclusion. The trial court then essentially offered Plaintiff two options: withdraw its request to present evidence on this issue or take a mistrial. Plaintiff chose to proceed with the trial. The trial court gave a spoliation instruction to the jury that contained a rebuttable presumption and Plaintiff discussed spoliation in its opening statement.

         At trial, Mr. Majors testified that he took several precautions in securing the tractor-trailer when he parked. Over objection, the police investigator assigned to the case gave his opinion that the brakes on the truck were not "set" prior to the incident. The parties also presented competing evidence on the damages incurred by Plaintiff. Plaintiff presented proof that the total damages, including lost rent and cost of repair, totaled $391, 400.00. In contrast, Defendants' real estate expert testified that the difference in market value of the property before and after the collision was $0, i.e., that the land was worth the same amount with or without the structures on it.

         The trial court granted Plaintiff a directed verdict on negligence and vicarious liability at the close of Plaintiff's proof. At the same time, the trial court granted a directed verdict to Defendants as to gross negligence, recklessness, trespass, negligent entrustment, negligent hiring, and punitive damages. In ruling, the trial court specifically rejected the police investigator's testimony regarding the tractor-trailer's brakes as being outside his area of expertise. The trial court at that time also reversed its previous ruling regarding spoliation, finding instead that Defendants should not be found to have spoliated the tractor, given that Plaintiff had ample time to request inspection of the tractor prior to its sale. In addition, the trial court noted that Plaintiff's complaint did not include allegations that the truck was malfunctioning at the time of the incident.

         Following the presentation of Defendants' proof, the parties and the trial court also participated in a charge conference concerning the jury instructions. In particular, Plaintiff objected to the inclusion of Tennessee Pattern Jury Instruction Civil 14.45, arguing that it conflicted with two special instructions chosen by the parties. The trial court overruled Plaintiff's objection and presented the jury with four damages instructions outlining the measure of damages appropriate as to both permanent and temporary damage. During deliberations, the jury asked the following question: "If we go with permanent damages, are we limited to the fair value before and after the accident?" After a conference with the parties, the trial court responded in the affirmative.

         The jury then returned a unanimous verdict for the diminished value of the property in the amount of $185, 000.00 and $0.00 for lost rental income. Plaintiff filed separate motions for discretionary costs and prejudgment interest on July 9, 2018. Defendants also sought an award of discretionary costs by motion filed July 12, 2018. The jury verdict was filed on July 16, 2018, and a substituted order of judgment was entered on the same day.

         On August 9, 2018, Plaintiff filed a request for findings of fact and conclusions law pursuant to Rule 52.01 of the Tennessee Rules of Civil Procedure. On August 14, 2018, Plaintiff also filed a motion for new trial. On August 17, 2018, the trial court entered an order granting Plaintiff's motion for discretionary costs but denying Plaintiff's motion for prejudgment interest and Defendants' motion for discretionary costs. On September 20, 2018, the trial court entered an order denying Plaintiff's motion for new trial, except to the extent that the trial court had denied prejudgment interest. Instead, the trial court ruled that it would allow prejudgment interest from the date of the incident at 5%. The trial court also denied Plaintiff's request for additional findings of fact and conclusions of law. Plaintiff thereafter filed a timely notice of appeal to this Court.

         Issues Presented

         Plaintiff raises the following issues, which are taken and slightly restated from its brief:

1. Whether the trial court erred when it declined to rule on the determination of whether the Tractor was a commercial vehicle or a farm vehicle and excluded the evidence that the defendants failed to maintain the records required by the Federal Motor Carrier Regulations.
2. Whether the trial court erred by applying an incorrect legal standard when granting the directed verdict on the trespass claim at the close of Plaintiff's proof.
3. Whether the trial court erred when it reversed its prior evidentiary ruling and sanction on spoliation at the close of Plaintiff's proof.
4. Whether the trial court erred when it granted a directed verdict on plaintiff's claims for gross negligence, recklessness, trespass, negligent entrustment, negligent hiring and punitive damages.
5. Whether the trial court erred when instructed the jury on the measure of damages, specifically that it instructed the Jury on both permanent damages and temporary damages and issued conflicting instructions.
6. Whether the trial court erred when it failed to award the plaintiff pre-judgment interest at the rate of 10% per annum.

         In the posture of Appellee, Defendants argue that the trial court erred in awarding prejudgment interest.

         Analysis

         I. Exclusion of Evidence that Tractor-trailer was a Commercial Vehicle

         Plaintiff first asserts that the trial court erred in refusing to make a determination as to whether the tractor-trailer was a farm or commercial vehicle and thereafter excluding evidence that Defendants failed to maintain records on the vehicle pursuant to Tennessee regulations applicable to commercial vehicles. "Issues regarding admission of evidence in Tennessee are reviewed for abuse of discretion." DeLapp v. Pratt, 152 S.W.3d 530, 538 (Tenn. Ct. App. 2004) (citing Dickey v. McCord, 63 S.W.3d 714, 723 (Tenn. Ct. App. 2001)). "[T]rial courts are accorded a wide degree of latitude in their determination of whether to admit or exclude evidence, even if such evidence would be relevant." Dickey, 63 S.W.3d at 723.

         In this case, the evidence in dispute concerns Defendants' alleged noncompliance with certain reporting regulations applicable to commercial vehicles. See Tenn. Comp. R. & Regs. 1340-06-01-.08 (adopting federal motor carrier safety regulations); see also 49 C.F.R. § 390.5 (defining a "Covered farm vehicle"); 49 C.F.R. § 396.3 (requiring regular inspections, maintenance, and record keeping of motor carriers); 49 C.F.R. § 396.11 (requiring daily reports from drivers). Plaintiff asserts that the tractor-trailer was not a farm vehicle, but a commercial vehicle, and was therefore subject to all relevant inspection, maintenance, and record keeping regulations. Plaintiff further contends that the trial court exclusion of evidence that Defendants did not comply with these regulations was an abuse of discretion and should result in reversal on appeal, as these failures support Plaintiff's claim of gross negligence, recklessness, trespass, and punitive damages.

         Defendants disagree that the trial court erred in excluding this evidence, arguing that the tractor-trailer was a combined farm vehicle under Tennessee law. Moreover, Defendants argue that Plaintiff cannot now complain regarding the exclusion of this evidence where it was ...


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