Charles Truax v. Memphis Light Gas & Water Division

IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

November 18, 2010 Session

CHARLES TRUAX v. MEMPHIS LIGHT GAS & WATER DIVISION

Direct Appeal from the Chancery Court for Shelby County

No. CH-08-1929-1 Walter L. Evans, Chancellor

No. W2010-00479-COA-R3-CV - Filed December 7, 2010

Plaintiff filed a cause of action asserting breach of contract and violation of the Tennessee

Human Rights Acts. The trial court awarded summary judgment to Defendant Memphis

Light Gas & Water Division based on the applicable statute of limitations. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the trial court Affirmed and

Remanded

D AVID R. F ARMER, J., delivered the opinion of the Court, in which A LAN E. H IGHERS, P.J.,

W.S., and H OLLY M. K IRBY, J., joined.

Edgar Davison, Memphis, Tennessee, for the appellant, Charles Traux.

Bruce A. McMullen, Stacie S. Winkler and Joann Coston-Holloway, Memphis, Tennessee,

for the appellee, Memphis Light Gas & Water Division.

MEMORANDUM OPINION 1

Plaintiff Charles Truax (Mr. Truax) was employed by the City of Memphis

Engineering Division from August 1983 through June 21, 1991. When his employment with

the City began, Mr. Truax became a participant in the 1978 City of Memphis Pension and

1

Rule 10 of the Rules of the Court of Appeals of Tennessee provides:

This Court, with the concurrence of all judges participating in the case, may affirm, reverse

or modify the actions of the trial court by memorandum opinion when a formal opinion

would have no precedential value. When a case is decided by memorandum opinion it shall

be designated “MEMORANDUM OPINION”, shall not be published, and shall not be cited

or relied on for any reason in any unrelated case.

Retirement System Benefit Plan. On June 24, 1991, he began working for the Memphis

Light, Gas and Water Division (“MLGW”) and became a participant in the 1988 MLGW

Retirement and Pension System Plan. In August 1991, Mr. Truax requested that MLGW

credit his years of service with the City to the MLGW pension plan. Also in August 1991,

the City rolled-over Mr. Truax’s pension contribution to an IRA fund. In September 2000,

Mr. Truax and four other MLGW employees requested a credit of previous service to the

MLGW pension plan. The MLGW pension board denied that request at its April 5, 2001,

meeting. Mr. Truax apparently took no further action until 2005, when he again sought

credit for previous service. By correspondence dated October 26, 2005, counsel for MLGW

advised Mr. Truax that his request had been denied. Mr. Truax repeated his request in

October 2007, and it was again denied by correspondence dated October 25, 2007. On

November 2, 2007, counsel for MLGW responded to Mr. Truax’s letter of October 31, 2007,

again advising him that he was not entitled to a credit for prior City service under the MLGW

pension plan.

In October 2008, Mr. Truax filed an action for declaratory judgment and complaint

for damages against MLGW in the Chancery Court for Shelby County. In his complaint, Mr.

Truax asserted that MLGW had wrongfully determined that he was not entitled to credit in

the MLGW pension system for his years of service with the Engineering Division. Mr.

Truax asserted that MLGW had acted in violation of Memphis City Ordinance Section 25-

163,2 that its refusal was a breach of the MLGW pension plan in effect at the time he was

hired,3 and that the MLGW pension plan had been administered in a discriminatory manner

in violation of the Tennessee Human Rights Act (“THRA”). He prayed for a declaration that

he was entitled to credit for prior service to the City, an order that the amount of $17,453.20

be credited to him, compensatory damages for non-pecuniary losses in the amount of

$100,000, and costs and attorney’s fees.

MLGW answered in December 2008 denying Mr. Truax’s allegations. MLGW

asserted 11 affirmative defenses, including the applicable statutes of limitations. In February

2009, MLGW moved to dismiss and/or for summary judgment. The trial court denied this

motion in May 2009 based upon Mr. Truax’s request for additional time to conduct

discovery. MLGW again filed a motion to dismiss and/or for summary judgment and

2

Currently codified as Memphis Code of Ordinances § 4-28-4.

3

It is unclear whether Mr. Truax is asserting breach of the MLGW pension plan in effect as of 1978

or 1988. In his brief to this Court, Mr. Truax asserts his claim for breach of contract is for breach of the 1978

plan. In his complaint, he asserts that the 1978 MLGW pension plan was in effect when he began

employment with MLGW. MLGW, on the other hand, asserts the plan in effect when Mr. Truax was hired

was the 1988 plan. Resolution of this discrepancy is unnecessary in light of our disposition of this matter,

however.

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statement of undisputed facts in October 2009.

Following a hearing on December 17, 2009, the trial court awarded summary

judgment to MLGW. In its final order of January 26, 2010, the trial court determined that

Mr. Truax’s breach of contract and THRA claims were barred by the applicable statute of

limitations. The trial court also stated that Mr. Truax’s action was not a petition for certiorari

and that a private cause of action existed under Memphis Ordinance § 25-163. Mr. Truax

filed a timely notice of appeal to this Court.

Issues Presented

Mr. Truax presents the following issues for our review, as we slightly reword them:

(1) Whether the trial court erred by dismissing Mr. Truax’s cause of action

for breach of the MLG&W pension plan as barred by the applicable

six-year statute of limitations.

(2) Whether the trial court erred by dismissing Mr. Truax’s claim under the

THRA as time barred by the applicable one-year statute of limitations.

MLG&W raises the following additional issues, as slightly reworded:

(1) Whether the trial court erred by ruling that a private cause of action

exists under (former) Memphis City Ordinance § 25-163 (now codified

at Memphis Code of Ordinances § 4-28-4).

(2) Whether the trial court erred by ruling that action for declaratory

judgment and claim for damages was not properly a common law writ

of certiorari that was subject to a sixty-day limitations period.

Standard of Review

We review a trial court’s award of summary judgment de novo, with no presumption

of correctness, reviewing the evidence in the light most favorable to the nonmoving party and

drawing all reasonable inferences in that party’s favor. Martin v. Norfolk S. Ry. Co., 271

S.W.3d 76, 84 (Tenn. 2008) (citations omitted). Summary judgment is appropriate only

where the “pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits . . . show that there is no genuine issue as to any material fact and

that the moving party is entitled to a judgment as a matter of law.” Id. at 83 (quoting Tenn.

R. Civ. P. 56.04). The burden is on the moving party to demonstrate that there are no

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genuine issues of material fact and that it is entitled to judgment as a matter of law. Id.

(citations omitted).

After the moving party has made a properly supported motion, the nonmoving party

must establish the existence of a genuine issue of material fact. Id. (citations omitted). To

satisfy its burden, the nonmoving party may: (1) point to evidence of over-looked or

disregarded material factual disputes; (2) rehabilitate evidence discredited by the moving

party; (3) produce additional evidence that establishes the existence of a genuine issue for

trial; or (4) submit an affidavit asserting the need for additional discovery pursuant to Rule

56.06 of the Tennessee Rules of Civil Procedure. Id. (citations omitted). The court must

accept the nonmoving party’s evidence as true, resolving any doubts regarding the existence

of a genuine issue of material fact in that party’s favor. Id. (citations omitted). A disputed

fact that must be decided to resolve a substantive claim or defense is material, and it presents

a genuine issue if it reasonably could be resolved in favor of either one party or the other.

Id. (citations omitted). With this standard in mind, we turn to whether the trial court erred

by awarding summary judgment in this case.

Discussion

We turn first to Mr. Truax’s assertion that the trial court erred by dismissing his cause

of action based upon the six-year statute of limitations applicable to claims asserting breach

of contract. In his brief to this Court, Mr. Truax asserts his breach of contract action did not

accrue until November 2, 2007. He asserts that, although he went before the pension board

in 2001, MLGW did not conclusively and finally deny his request for credit for prior service

until November 2007. He contends that MLGW’s refusal to credit his prior years of service

constitutes a breach of the 1978 pension plan, and that the continuing violations doctrine is

applicable to this case. MLGW, on the other hand, asserts that, assuming the statute of

limitations applicable to breach of contract actions applies in this case, Mr. Truax’s action

accrued in April 2001, when his request was first denied.

An action for breach of contract accrues when one party demonstrates a clear intention

not to be bound by the contract. Coleman Mgmt., Inc. v. Meyer, 304 S.W.3d 340, 348 (Tenn.

Ct. App. 2009). Contrary to Mr. Truax’s assertion that his request was not affirmatively

denied until 2007, the record demonstrates that the MLGW pension board explicitly denied

his request in April 2001. The minutes of the April 5, 2001, board meeting state:

It was motioned by Mr. Tune and seconded by Mr. Gardiner and

carried:

THAT, the Board would accept the report from Mr. Carney and deny

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the prior service requests.

The motion carried with Ms. Dawson voting no.

Mr. Truax thanked the Board for its support in researching the prior

service requests. He discussed his specific prior service request.

The 2005 and 2007 correspondence in the record reflect MLGW’s continued assertion that

Mr. Truax was not entitled to a credit for previous service because his employment was not

a “transfer” as required by the pension plan. Correspondence dated October 26, 2005, for

example, states:

I thought you have been fully and thoroughly apprised of the discussions and

actions of the Benefits Committee and Pension Board concerning who is

entitled to purchase prior service . . . .

You have previously applied to purchase prior City service as credited

service in the MLGW Pension System. . . . That request has been denied . . .

. That denial was final.

Mr. Truax relies on Owens v. University Club of Memphis, No.

02A01-9705-CV-00103, 1998 WL 719516 (Tenn. Ct. App. Oct. 15, 1998), for the

proposition that the continuing violations doctrine applies to this action. We must disagree.

The continuing violations doctrine is most often applied in actions alleging discrimination,

where it may be difficult to pinpoint discrete acts of discrimination apart from a pattern of

discriminatory conduct. Under the doctrine, “a plaintiff may be granted relief for a

time-barred act by linking a series of related acts, one or more of which falls within the

limitations period.” Frazier v. Heritage Fed. Bank for Sav., 955 S.W.2d 633, 637 (Tenn. Ct.

App. 1997). In Owens, we applied the doctrine to claims under the Tennessee Tip Statute,

noting that “although the Tennessee Tip Statute states that ‘[e]ach failure to pay an employee

constitutes a separate offense,’ the circumstances of this case warrant application of the

continuing violation doctrine” because it “would not be reasonable to require that each

plaintiff file suit after each paycheck in which the [Defendant] Club withheld tips.” Owens,

1998 WL 719516, at *15. In this case, MLGW continually and repeatedly denied Mr.

Truax’s request. However, any breach of contract occurred, if at all, on April 5, 2001, when

the MLGW pension board affirmatively denied Mr. Truax’s request for prior service credit.

The continuing violations doctrine does not stand for the proposition that a plaintiff may

avoid an applicable statute of limitations simply by repeating the same request. We

accordingly affirm the trial court’s dismissal of Mr. Truax’s action for breach of contract

based upon the statute of limitations.

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We turn next to whether the trial court erred by dismissing Mr. Truax’s claims under

the THRA based on the applicable one-year statute of limitations. In his complaint, Mr.

Truax asserted that, in August 1996 and May 2005, MLGW allowed two other employees

to transfer previous years of service. In his brief to this Court, Mr. Truax asserts that his

action is not barred by the statute of limitations because “the discriminatory conduct . . . has

not ceased. Mr. Truax is still being denied his prior service credit[.]” Mr. Truax’s argument,

as we perceive it, is that the continuing violations doctrine should apply to his action under

the THRA.

As noted above, the continuing violations doctrine is most frequently applied in

actions alleging discriminatory conduct. It was adopted in Tennessee “as a means for dealing

with discrimination which may not be immediately apparent to the victim.” Frazier, 955

S.W.2d at 637. As noted above, it permits a plaintiff to demonstrate a pattern of

discrimination by linking a series of acts where one or more falls within the statutory period.

“The crucial issue is whether the nature of the discriminatory acts were ‘not apparent when

they were committed but became so when viewed in the light of the later acts.’” Id. (quoting

Moskowitz v. Trustees of Purdue University, 5 F.3d 279, 282 (7th Cir.1993)). In this case,

none of the acts complained of by Mr. Truax fell within the one-year limitations period. We

affirm dismissal of Mr. Truax’s claim under the THRA based on the statute of limitations.

With respect to Mr. Truax’s claim that MLGW’s denial of his request for service

credit violated Memphis Ordinance § 25-163, the trial court determined that a private right

of action exists under the ordinance, but dismissed Mr. Truax’s claim to the extent that it

sought relief under the ordinance. Mr. Truax has not appealed that dismissal. We therefore

decline to address MLGW’s assertion that the trial court erred in determining that a private

right of action exists under the ordinance as unnecessary in light of our disposition of this

matter.

Holding

In light of the foregoing, the judgment of the trial court is affirmed. Remaining issues

are pretermitted as unnecessary in view of this holding. Costs of this appeal are taxed to the

Appellant, Charles Truax, and his surety, for which execution may issue if necessary.

_________________________________

DAVID R. FARMER, JUDGE

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