# Federated Rural Electric Insurance Exchange v. William R. Hill

> Court of Appeals of Tennessee · March 26, 2007

URL: https://www.frixlaw.com/law-library/cases/1052572

## Case

- **Court:** Court of Appeals of Tennessee
- **Decided:** March 26, 2007
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Presiding Judge W. Frank Crawford
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
November 15, 2006 Session

FEDERATED RURAL ELECTRIC INSURANCE EXCHANGE, ET AL. v.
WILLIAM R. HILL, ET AL.

Appeal from the Circuit Court for Davidson County
No. 05C-1284 The Honorable Barbara Haynes, Judge

No. M2005-02461-COA-R3-CV - Filed on March 26, 2007

Employer and its insurer filed suit against employee for fraud in the procurement of workers'
compensation benefits. Employee and his wife filed a counter-complaint alleging intentional
infliction of emotional distress. retaliatory discharge and loss of consortium. The trial court
dismissed the counter-complaint for failure to state a claim. Employee sought to amend the counter-
complaint to add procurement of breach of employment contract and a tortious interference claim
against the insurer. The trial court also denied these claims. Employee and his wife appeal. We
reverse in part, affirm in part, and remand.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Reversed in Part,
Affirmed in Part, and Remanded

W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and HOLLY M. KIRBY , J., joined.

Clifford E. Wilson of Madisonville, Tennessee for Appellants, Federated rural Electric Insurance
Exchange and Fort Loudoun Electric Cooperative

W. Stuart Scott and Autumn L. Gentry of Nashville, Tennessee for Appellees, William R. Hill and
Suzann C. Hill

OPINION

During the course of his employment with Fort Loudoun Electric Cooperative (“Fort
Loudoun,”), William R. Hill allegedly suffered on-the-job injuries to his knees over the course of
several years. In 1990, Fort Loudoun and its insurer, Federated Rural Electric Insurance Exchange
(“Federated” and, together with Fort Loudoun, “Plaintiffs” or “Appellees”) accepted a workers
compensation claim and voluntarily paid Mr. Hill $23,595.00 in temporary total disability benefits
and $51,160.11 in medical benefits for alleged injuries to Mr. Hill’s knees. The 1990 settlement
resulted in 70% permanent partial disability to the body as a whole.
On July 9, 2003, Fort Loudoun and Federated entered into a second settlement with Mr. Hill
whereby they agreed to pay Mr. Hill workers’ compensation benefits for an alleged 1998 injury to
Mr. Hill’s knees. Under the Agreed Order, the Plaintiffs paid medical benefits in the amount of
$114,064.49, case management costs of $8,464.13, and $14,346.42 in temporary disability benefits.
This settlement, along with the 1990 settlement, totaled 100% permanent, partial disability benefits
to the body as a whole. In addition, Federated and Fort Loudoun agreed to leave lifetime future
medical benefits open for treatment of Mr. Hill’s injuries, and paid $2,500.00 as an advance payment
toward future lifetime medical benefits. Combined, the 1990 and 2003 settlements brought Mr. Hill
to over 100% in temporary, total and permanent, partial disability benefits, thereby exceeding the
maximum amount to which a claimant is entitled under the Tennessee Workers’ Compensation Act,
T.C.A. § 50-6-102.

In November 2004, Mr. Hill underwent an arthroscopic procedure on his knees, which was
performed by Dr. Rick Parsons. Thereafter, Mr. Hill was offered light-duty desk work at Fort
Loudoun. While Mr. Hill was out from work and collecting total disability benefits, he was caught
on videotape building a barn. Over the course of several days, Mr. Hill was seen climbing up and
down a ladder, walking over uneven ground, and walking across a roof without apparent difficulty.
After reviewing the videotapes, Mr. Hill’s treating physician, Dr. Parsons, opined in an April 25,
2005 letter that “[Dr. Parsons] certainly do[es] not feel like Mr. Hill is totally disabled to work and
given his documented physical activities . . . it is difficult to imagine the patient having restrictions
given the physical labor he did on an ongoing basis . . . .”

By letter dated May 2, 2005, Fort Loudoun terminated Mr. Hill’s employment. On that same
day, Fort Loudoun and Federated filed suit against Mr. Hill for fraud, pursuant to T.C.A. § 50-6-
225(a)(1) and the Workers’ Compensation Fraud Act, T.C.A. § 56-47-101 et seq., citing Mr. Hill’s
ability to perform strenuous, physical activity as caught on videotape. The Plaintiffs requested a
finding that Mr. Hill was improperly collecting temporary, total disability benefits and a finding that
Mr. Hill had engaged in fraud. The Plaintiffs prayed that Mr. Hill be assessed appropriate penalties
and that his right to any additional workers’ compensation benefits (which had been approved by the
trial court’s order of July 9, 2003, supra) be terminated. At the time they filed the Complaint, the
Plaintiffs also served interrogatories, requests for production of documents and requests for
admissions on Mr. Hill. Mr. Hill was served with these discovery requests on or about May 7, 2005.
Mr. Hill filed no responsive pleadings. Rather, on or about May 23, 2005, Mr. Hill served the
Plaintiffs with notice to take depositions. On May 25, 2005, Plaintiffs filed a Motion to Quash the
discovery requests and, on May 27, 2005, Mr. Hill responded to the Motion to Quash. The motions
were heard on May 27, 2005 and, by order of June 6, 2005, the trial court granted the Motion to
Quash.

On June 2, 2005, Mr. Hill filed a motion to dismiss, in which he first objected to venue in
the Davidson County court. Plaintiffs filed a response to the motion to dismiss on July 8, 2005. The
motion was heard on July 15, 2005. By order of July 27, 2005, the trial court entered an order
denying Mr. Hill’s motion to dismiss and specifically retaining venue.

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On June 9, 2005, Mr. Hill filed an Answer to the Complaint. On July 29, 2005, Mr. Hill filed
a Counter-Complaint against Federated and Fort Loudoun for intentional infliction of emotional
distress and retaliatory discharge. Mr. Hill’s wife, Suzann (together with Mr. Hill, the “Hills” or
“Appellants”) joined in the Counter-Complaint, asserting derivative causes of action and a loss of
consortium claim stemming from the termination of Mr. Hill’s employment. On August 26, 2005,
in response to the Counter-Complaint, Plaintiffs filed a “Motion to Dismiss the Counter-Complaint
for failure to state a claim upon which relief may be granted, to strike the Counter-Complaint, to
Request a more Definitive Statement.” The Hills filed a response to this motion on September 6,
2005 and the motion was heard on September 9, 2005.

On September 21, 2005, the trial court entered an Order, which reads, in relevant part, as
follows:

3. William R. Hill has acknowledged that there is no valid tort of bad
faith claim against the Plaintiffs or either of them. Insofar as the
Counter-Complaint implied a tort of bad faith existed against the
Plaintiffs or either of them, any and all such claims are stricken and
dismissed with prejudice. The Defendant, however, William R. Hill,
through his attorney has taken the position that the Counter-
Complaint, which he previously filed, was not intended to include a
tort of bad faith. There is, therefore, no tort of bad faith which has
been asserted or which will or may be pursued in this lawsuit. This
Court also finds that no tort of bad faith has ever been alleged against
Federated Rural Electric Insurance Exchange and Fort Loudoun
Electric Cooperative.

4. William R. Hill asserts intentional infliction of emotional distress
and what appears to be outrageous conduct. These torts are barred by
the exclusive remedy provisions of the Tennessee Workers’
Compensation Act, T.C.A. § 50-6-108. In addition, the Counter-
Complaint failed to assert the elements which Tennessee law
mandates as necessary to pursue any such tort claims, even if they
were otherwise allowed. These claims are dismissed with prejudice
to the refiling thereof.

5. Suzann Hill asserts entitlement to numerous forms of damages.
The gravamen of her allegations appears to be intentional infliction
of emotional distress and retaliatory discharge. Suzann Hill’s claims
fail to generate a claim upon which relief can be granted under
Tennessee law. Her tort claims are barred by the exclusive remedy
provisions of the Tennessee Workers’ Compensation Act and the
damages she seeks are not damages which she may recover under
retaliatory discharge or otherwise in this lawsuit. In addition, the

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Counter-Complaint fails to assert necessary elements to support these
claims under Tennessee law. Suzann Hill is not a proper party to this
lawsuit. Her claims are loss of consortium or derivative claims of the
torts which are barred by the exclusive remedy provisions of the
Tennessee Workers’ Compensation Act. Any and all claims of
Suzann Hill are dismissed with prejudice.

6. The Counter-Complaint of the Defendant, William R. Hill, is
stricken. William R. Hill shall generate a new Counter-Complaint
which complies with Tennessee law within 30 days of September 15,
2005. This Counter-Complaint shall contain only claims under the
Tennessee Workers’ Compensation Act and for retaliatory discharge.
This Counter-Complaint shall comply with Tennessee law and the
Rules of Civil Procedure including a short and plain statement of each
claim showing that the pleader is entitled to relief and a demand for
judgment for the relief the pleader seeks in harmony with Tennessee
law. The Counter-Complaint shall make a more definite statement as
to each of these two remaining claims in harmony with Tennessee
Rules of Civil Procedure Rule 12.05. Further, only the damages
allowed by Tennessee law for these two remaining claims shall be
pled. In addition, all other claims of the Defendant, William R. Hill,
are dismissed with prejudice to the refiling thereof.

On October 12, 2005, Mrs. Hill filed her Notice of Appeal from the September 21, 2005
Order. On that same day, Mr. Hill filed his First Amended Counter-Complaint. Counsel for
Plaintiffs protested the Amended Counter-Complaint and informed counsel for Mr. Hill that they
would file a motion to dismiss if the Counter-Complaint was not further amended to comply with
Tennessee law and the September 21, 2005 Order. Mr. Hill did not make the requested changes.
Rather, on or about December 1, 2005, Mr. Hill filed a Motion for Default Judgment for Plaintiffs’
alleged failure to answer. On December 8, 2005, Plaintiffs filed a Motion to Dismiss, Motion to
Strike, Motion to Stay Litigation and Response to Motion for Default Judgment, in which Plaintiffs
argued, inter alia, that Mr. Hill had failed to state a claim upon which relief could be granted.

On December 28, 2005, Mr. Hill filed a Motion to Amend the first Amended Counter-
Complaint seeking to add claims against Federated for tortious interference with contract and
procurement of breach of contract. On January 6, 2006, Plaintiffs filed a response in which they
assert that the proposed Amended Counter-Complaint fails to state a claim.

All pending motions were heard on January 20, 2006. On February 13, 2006, the trial court
entered it “Final Order,” which reads, in pertinent part, as follows:

1. The Defendants’ Motion for Default Judgment is overruled. There
is no valid basis for a default judgment against the Plaintiffs in this

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matter. The proposed Counter-Complaint and Amended Counter-
Complaint contain tort claims which the Defendant had previously
been advised violate the exclusive remedy provision of the Tennessee
Workers’ Compensation Act, T.C.A. § 50-6-108. In addition, the tort
claims sought to be included by the Defendant fail to assert the
necessary elements and, therefore, they failed to comply with
Tennessee Rules of Civil Procedure, Rule 12.02(6).

* * *

3. Any and all litigation in this matter is stayed. This Court
previously lifted the Scheduling Order. Since this time, the
Defendant, although he failed to attend a Scheduling Conference set
by this Court, has apparently attempted to pursue litigation before this
Trial Court while simultaneously appealing the September 9, 2005
ruling of this Court to the Court of Appeals. The ruling of the Court
of Appeals could affect the parties, the claims, the legal theories and
the damages. This Court finds it is inappropriate for any additional
litigation to occur in this matter at this time and, therefore, stays any
and all proceedings pending a final ruling from the Appellate Courts
regarding any issues appealed in this case.

Mr. Hill filed a timely Notice of Appeal from this Order and his appeal was consolidated with
Mrs. Hill’s appeal. The Hills raise seven issues for review, as stated in their brief:

1. Whether or not the trial court was correct in overruling the motion
to dismiss filed by William R. Hill seeking to have this litigation
dismissed or transferred to Monroe County asserting that Davidson
County is an improper venue?

2. Whether or not the court’s order dated June 6, 2005 quashing the
notice to take depositions filed by the Hills was erroneous?

3. Whether or not the trial court’s order of September 21, 2005
striking the counter complaint in its entirety was erroneous?

4. Whether or not the trial court’s order of September 21, 2005
dismissing Suzann C. Hill as a party and dismissing her loss of
consortium claim, being a derivative claim of Mr. Hill’s retaliatory
discharge claim, was erroneous?

5. Whether or not the trial court’s order of September 21, 2005,
attempting to prohibit future amendments to the counter-complaint on

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behalf of Mr. Hill was [a violation] of Rule 15 of Tennessee Rules of
Civil Procedure which establishes a liberal policy with regard to the
allowance of amendments to pleadings and whether or not the court
in pursuance of that stated policy was correct when it overruled
Counter-Plaintiffs’ motion to amend to allege a claim against
Federated Rural Electric Insurance Exchange that it tortiously
interfered with Mr. Hill’s contract of employment with Fort Loudoun
Electric Cooperative or that it intentionally interfered with a business
arrangement between William R. Hill and Fort Loudoun Electric
Cooperative?

6. Whether or not the trial court’s order of January 20, 2006, staying
all proceedings at the trial court level, including the workers’
compensation claim of Mr. Hill, while the appeal perfected by Mrs.
Hill was pending, was erroneous?

7. Whether or not the trial court was correct when it refused to grant
Mr. Hill’s motion for default judgment made against Federated Rural
Electric Insurance Exchange and Fort Loudoun Electric Cooperative?

Venue

In the first issue on appeal, Mr. Hill contends that venue for both the Plaintiffs’ Petitions
alleging fraud as well as the Hills’ own counter claims lies in Monroe County, Tennessee, as
opposed to Davidson County, Tennessee. We disagree.

Plaintiffs filed the petition for relief in the Circuit Court at Davidson County, Tennessee in
the same case where a previous settlement agreement was approved, see supra. The gravamen of
Plaintiffs’ suit is that Mr. Hill was guilty of fraudulent acts in obtaining the benefits reflected in the
July 9, 2003 agreed settlement. T.C.A. § 50-6-225(a)(1), under which the Plaintiffs bring their fraud
suit, and the general venue statute for transitory actions, T.C.A. § 20-4-101, both state that an action
may be brought in a county where the claimant resides (versus where the injury occurred). Both
statutes use the permissive language “may file” and “may be brought.” Neither statute, however,
mandates that venue be in a particular locale.

Our Supreme Court has held that, although venue is the personal privilege of the defendant
to be sued in particular counties, it may be waived by a defendant who defends upon the merits
without first interposing an objection to improper venue. See Corky v. Matthews, 541 S.W.2d 789,
791 (Tenn. 1976). Here, Mr. Hill submitted to venue in the Davidson County court by entering into
an agreed settlement that was approved by that court. Plaintiffs’ present action for fraud
contemplates a revisiting or reconsideration of that original settlement agreement in light of the
videotaped evidence. In Freeman v. Marco Transp. Co., 27 S.W.3d 909 (Tenn. 2000), our Supreme
Court addressed the question of venue when reconsidering a claimant’s prior award made pursuant

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to a settlement. In holding that venue for the claimant’s new cause of action requesting
reconsideration of a previous workers’ compensation settlement award should be filed in the court
that approved the original settlement, the Court reasoned:
The statute employs the terms “reconsider” and
“reconsideration.” “Reconsider” means “to consider again,”
especially “with intent to modify an earlier decision.” Webster's II
New College Dictionary 927 (1995). Black's Law Dictionary states
that “reconsideration” implies “a different decision by the entity
which initially decided it.” Black's Law Dictionary 1272 (6th
ed.1990); cf. Lester Witte & Co. v. Pate, 158 Ga.App. 204, 279
S.E.2d 501, 502 (1981) (“reconsider” means “to consider again; to
review with care, especially with a view to a reversal of previous
action.”). We find the language of Tenn.Code Ann. § 50-6-241 to be
unambiguous. By employing the term “reconsider,” it is evident that
the legislature regarded a request for reconsideration brought pursuant
to Tenn.Code Ann. § 50-6-241(a)(2) as a continuation of the original
workers' compensation claim. Furthermore, as the defendant points
out, the statutory language “application to the appropriate court”
clearly indicates there is but one court in which the motion is
appropriate-the court that originally heard the settlement. See 82
Am.Jur.2d Workers' Compensation § 651 (1992) (the court having
jurisdiction to secure compensation is usually empowered to reopen
or modify its awards); 101 C.J.S. Workmen's Compensation § 855
(1958) (“a proceeding to modify an award is not a new proceeding,
but is one based on the jurisdiction of the AAA court acquired in the
original proceeding.”); see also 49 C.J.S. Judgments § 278 (1997).
Thus, we conclude that a motion for reconsideration brought pursuant
to Tenn.Code Ann. § 50-6-241(a)(2) must be filed in the same court
that exercised jurisdiction over the original workers' compensation
claim.

This holding as to Tenn.Code Ann. § 50-6-241(a)(2) is
consistent with this Court's approach regarding modification of
workers' compensation benefits under Tenn.Code Ann. § 50-6-231
(formerly Tenn.Code Ann. 50-1025(b)). Section 231(2) . . . .

Id. at 912.

Although the present case does not turn on the same statute as Freeman, the Court’s logic
is equally applicable here because, as discussed above, the fraud claim requires reconsideration of
the original workers’ compensation settlement.

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However, even if we assume, arguendo, that Plaintiffs’ suit is not, in essence, a
reconsideration, we nonetheless conclude that Mr. Hill has waived his objection to venue by filing
a notice to take deposition in the Davidson County court. See Oakley v. Oakey, No. 01A01-9410-
CH-00506H, 1995 WL 459112 (Tenn. Ct. App., Aug. 4, 1995). (If a party makes a general
appearance and does not take issue with venue, the issue of venue is waived. Id. at *3.)
Quashing the Notice to Take Depositions

It is well settled that decisions regarding pre-trial discovery matters rest within the sound
discretion of the trial court. The decision of the trial court in discovery matters will not be reversed
on appeal unless a clear abuse of discretion is demonstrated. Beaton v. Snyder, 825 S.W.2d 409
(Tenn. 1992); Paine v. Ramsey, 591 S.W.2d 434, 436 (Tenn. 1979). While the “abuse of discretion”
standard limits the scope of our review of discretionary decisions, it does not immunize these
decisions completely from appellate review. Duncan v. Duncan, 789 S.W.2d 557, 561 (Tenn. Ct.
App. 1990). Even though it prevents us from second-guessing the trial court, White v. Vanderbilt
Univ., 21 S.W.3d 215, 223 (Tenn. Ct. App. 1999), or from substituting our discretion for the trial
court’s discretion, Myint v. Allstate Ins. Co., 970 S.W.2d 920, 927 (Tenn. 1998); it does not prevent
us from examining the trial court’s decision to determine whether it has taken the applicable law and
relevant facts into account. Ballard v. Herzke, 924 S.W.2d 652, 661 (Tenn. 1996). We will not
hesitate to conclude that a trial court “abused its discretion” when the court has applied an incorrect
legal standard, has reached a decision that is illogical, has based its decision on a clearly erroneous
assessment of the evidence, or has employed reasoning that causes an injustice to the complaining
party. Clinard v. Blackwood, 46 S.W.3d 177, 182 (Tenn. 2001); Buckner v. Hassell, 44 S.W.3d
78, 83 (Tenn. Ct. App. 2000); Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 709 (Tenn. Ct. App.
1999).

In the instant case, Mr. Hill filed a Notice to Take Depositions of Robert R. Long, CEO of
Fort Loudoun, and Michelle Muller, claims Representative for Federated. Ms. Muller’s residence
and place of employment is in Kansas; however, Mr. Hill’s notice indicates that depositions will be
taken in Vonore, Tennessee. Prior to filing his Notice to Take Depositions, Mr. Hill had filed no
answer, nor had he responded to any of the discovery requests filed by Plaintiffs. In light of these
facts, the Plaintiffs filed a Motion to Quash, which was granted by Order of June 6, 2005. Plaintiffs
take the position that the Hills seek an unfair advantage by attempting to use the discovery process
for surprise and ambush in violation of Tennessee law. The Hills take the position that Plaintiffs’
petition was filled with false accusations and innuendos, and that the voluminous discovery
propounded by Plaintiffs (which include 38 interrogatories, 82 requests to admit, and 22 requests for
production of documents) was designed as a”knock-out punch.” The Hills contend that the requested
depositions were necessary “[i]n order to ascertain the source of what the Hills considered
misinformation and outright fabrication.”

Tenn. R. Civ. P. 26.03 gives the trial court broad discretion to “make any order which justice
requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden
or expense,” including “that discovery not be had,” or “that discovery may be had only on specific
terms and conditions. . . .” Although Tenn. R. Civ. P. 26.04 states that “discovery may be used in

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any sequence and the fact that a party is conducting discovery, whether by deposition or otherwise,
shall not operate to delay any other party’s discovery,” the rule does not provide an absolute right
to conduct discovery in any sequence the parties desire. Rather, the rule grants the trial court power
to order the discovery sequence “for the convenience of parties and witnesses and in the interests of
justice.” Here, it appears that the trial court has done just that. Given the fact that Mr. Hill had not
answered the petition or the discovery requests and the fact that Mr. Hill requested to depose an out-
of-town witness in East Tennessee, we cannot conclude that the trial court abused its discretion or
otherwise violated the rules of discovery in quashing Mr. Hill’s Notice to Take Depositions.

Striking Counter Complaint

In response to Plaintiffs’ Motion to Dismiss the Hills’ Counter-Complaint, the trial court did
so by Order of September 21, 2005. Specifically, the trial court struck and dismissed the tort of bad
faith based upon Mr. Hill’s acknowledgment “that there is no valid tort of bad faith . . . .” The trial
court dismissed Mr. Hill’s claim of intentional infliction of emotional distress and/or outrageous
conduct on the grounds that same is “barred by the exclusive remedy provisions of the Tennessee
Workers’ Compensation Act, T.C.A. § 50-6-108,” and that the Counter-Complaint “failed to assert
the elements . . . necessary to pursue such tort claims . . . .” The trial court also dismissed any and
all claims asserted by Mrs. Hill because her “claims fail to generate a claim upon which relief can
be granted,” and because “[h]er tort claims are barred by the exclusive remedy provisions of the
Tennessee Workers’ Compensation Act and the damages she seeks are not damages which she may
recover under retaliatory discharge or otherwise. . . .” The trial court also ordered Mr. Hill to
produce a new Counter-Complaint that complied with Tennessee law and which specifically contain
“only claims under the Tennessee Workers’ Compensation Act and for retaliatory discharge.”
Furthermore, the trial court instructed Mr. Hill to comply with the Tennessee Rules of Civil
Procedure by setting forth a more definite statement pursuant to Tenn. R. Civ. P. 12.05, and setting
forth a short and plain statement of the claim as contemplated by Tenn. R. Civ. P. 8.01.

On appeal, the Hills assert that the trial court erred in dismissing their respective causes of
action. We will address each of the causes of action set out in the Counter-Complaint in order to
determine whether the trial court abused its discretion in dismissing any or all of these causes of
action.

We first address a technicality, which the Hills raise in their brief. The Hills contend that the
trial court abused Tenn. R. Civ. P. 12.06 by “striking” the entire Counter-Complaint. Specifically,
the Hills assert that, “while applying [Tenn. R. Civ. P.] 12.06 to the Counter-Complaint it does not
lead one to the conclusion that the entire Counter-Complaint should have been stricken.” While we
concede that “[o]rdinarily, a motion to strike is not the proper vehicle by which to strike an entire
pleading,” Curve Elementary School v. Lauderdale Cty. School, 608 S.W.2d 855, 857 (Tenn. Ct.
App. 1980) (citations omitted), Tenn. R. Civ. P. 12.06 may be used to “eliminate an entire pleading,
including a complaint, where its allegations are offensive, scurrilous or in gross violation of Rule
8, Tennessee Rules of Civil Procedure.” Id. (citations omitted). Although the trial court’s
September 21, 2005 Order states that “[t]he Plaintiff’s Motion to Strike is well taken and granted,”

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a closer reading of the substantive paragraphs of the Order indicates that the trial court was, in fact,
applying Tenn. R. Civ. P. 12.02 (6) - “failure to state a claim upon which relief can be granted” - in
dismissing, with prejudice, the Hills’ causes of actions. We will, therefore, review the trial court’s
decision under Tenn. R. Civ. P. 12.02 (6).

A motion to dismiss pursuant to Tenn.R.Civ.P. 12.02(6) for failure to state a claim upon
which relief can be granted is the equivalent of a demurrer under our former common law procedure
and thus is a test of the sufficiency of the leading pleading. See Cornpropst v. Sloan, 528 S.W.2d
188, 190 (Tenn.1975). The motion admits the truth of all relevant and material averments in the
complaint but asserts that the statements do not constitute a cause of action. See id. at 190. In
considering whether to dismiss a complaint for failure to state a claim, the court should construe the
complaint liberally in favor of the plaintiff, taking all of the allegations of fact therein as true. See
Huckeby v. Spangler, 521 S.W.2d 568, 571 (Tenn.1975). A complaint should not be dismissed upon
such a motion “unless it appears beyond doubt that the plaintiff can prove no set of facts in support
of his claim that would entitle him to relief.” Fuerst v. Methodist Hospital South, 566 S.W.2d 847,
848 (Tenn.1978). Obviously, we are limited to an examination of the complaint alone, thus the
factual material in the opinion is taken solely from the complaint.

Mr. Hill’s Causes of Action

T.C.A. § 50-6-108 states, in relevant part:

(a) The rights and remedies granted to an employee subject to the
Workers' Compensation Law, compiled in this chapter, on account of
personal injury or death by accident, including a minor whether
lawfully or unlawfully employed, shall exclude all other rights and
remedies of such employee, such employee's personal representative,
dependents or next of kin, at common law or otherwise, on account
of such injury or death.

Under Tennessee workers’ compensation law, employers are required to pay compensation
for an employee’s personal injury or death by accident arising out of and in the course of employment.
The employee’s remedies under the workers’ compensation statutes are exclusive. T.C.A. § 50-6-
108. Consequently, an employee who is injured in an accident during the course of his or her
employment may recover only workers’ compensation benefits from his or her employer; the statute
bars the employee from filing a personal injury lawsuit for damages against the employer. See
Valencia v. Freeland and Lemm Const. Co., 108 S.W.3d 239, 242 (Tenn. 2003). “[I]n general,
workers’ compensation laws involve a quid pro quo in that workers give up certain common law
rights against their employers in return for a system providing more certain compensation, totally
independent of any fault on the part of the employer.” Perry v. Transamerica Ins. Group, 703
S.W.2d 151 (Tenn. Ct. App. 1984) (citations omitted). Consequently, it appears that the trial court
did not err in holding that Mr. Hill’s causes of action were barred by the exclusive remedy provision
of the Workers’ Compensation Act, supra.

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However, even if we assume, arguendo, that Mr. Hill’s claim of intentional infliction of
emotional distress and/or outrageous conduct could proceed in the face of the authority outlined
above, we nonetheless conclude that Mr. Hill’s Counter-Complaint fails to set out a prima facie case
for this tort. We first note that intentional infliction of emotional distress and outrageous conduct are
simply different names for the same cause of action, which has three essential elements: (1) the
conduct complained of must be intentional or reckless, (2) it must be so outrageous that it is not
tolerated by a civilized society, and (3) it must result in serious mental injury. See Bain v. Wells, 936
S.W.2d 618 (Tenn. 1997). The actionable conduct under this theory must be set out in the pleadings.
Medlin v. Allied Inv. Co., 217 Tenn. 469, 398 S.W.2d 270 (Tenn. 1966). Furthermore, the actionable
conduct should be set out in the complaint describing the substance and severity of the conduct that
is alleged to be outrageous. Braswell v. Carothers, 863 S.W.2d 722 (Tenn. Ct. App.1993). In
Medlin v. Allied Inv. Co., our Supreme Court addressed the question of what constitutes outrageous
conduct and held as follows:

These factors are set out in the Restatement of Torts (2d), § 46,
‘Outrageous Conduct Causing Severe Emotional Distress'.

(1) One who by extreme and outrageous conduct
intentionally or recklessly causes severe emotional
distress to another is subject to liability for such
emotional distress, and if bodily harm results from it,
for such bodily harm.

Clarification of this statement is found in the following comment:

d. Extreme and Outrageous Conduct. The cases thus
far decided have found liability only where the
defendant's conduct has been extreme and outrageous.
It has not been enough that the defendant has acted
with an intent which is tortious or even criminal, or
that he has intended to inflict emotional distress, or
even that his conduct is characterized by ‘malice’, or a
degree of aggravation which would entitle the plaintiff
to punitive damages for another tort. Liability has been
found only where the conduct has been so outrageous
in character, and so extreme in degree, as to go beyond
all bounds of decency, and to be regarded as atrocious,
and utterly untolerable in a civilized community.
Generally, the case is one in which the recitation of the
facts to an average member of the community would
arouse his resentment against the actor, and lead him to
exclaim, ‘Outrageous.

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Medlin, 398 S.W.2d at 274.

Turning to the Counter-Complaint, in support of his claim for intentional infliction of
emotional distress, Mr. Hill avers:

I. That on May 2, 2005, the Counter-Defendants, through
a coordinated and joint plan, filed the original claim in this case . . .
based on the false premise that WILLIAM R. HILL had fraudulently
misrepresented the condition of his right knee in order to fraudulently
obtain workers’ compensation benefits, and which further falsely
claimed that WILLIAM R. HILL claimed that he could not perform
light, sedentary work on February 15, 2005, which information the
Counter-Defendants knew at the time they filed this litigation was
false. In addition to filing the above-described action, which was filed
with false innuendos and outright false statements, the Counter-
Defendants included in their plan the firing of Mr. Hill on that same
date. In addition to the filing of the suit and firing of Mr. Hill, these
parties attached to their joint law suit Interrogatories, Requests to
Admit and Request for Production of Documents, which were
calculated to insult and incense the Counter-Plaintiffs with the full
knowledge that the Counter-Plaintiff WILLIAM R. HILL was already
undergoing treatment for depression brought on by the years of
reoccurring pain, ten (10) surgeries, including a total knee replacement
surgery of the left knee, all arising out of workers’ compensation
injuries. Counter-Plaintiffs aver that the actions of these Counter-
Defendants were taken for the purpose of intentionally inflicting
emotional harm on both of the Counter-Plaintiffs . . . as well as their
good name in the community . . . . Counter-Plaintiffs would further
show that the Counter-Defendants were successful in that this
litigation, coupled with the firing, has caused the emotional harm
intended, making it necessary for the Counter-Plaintiffs to expend
sums to obtain additional medical treatment for depression, which
depression deepened seriously as a result of the malicious actions
taken by the Counter-Defendant, including the flood of false
statements contained in the pleadings coupled with the firing of Mr.
Hill. The Counter-Plaintiffs have worked in their community, their
church and their respective places of employment for nearly three (3)
decades and have strived to set examples for their children and their
peers in the way they have conducted themselves, and to have such
false and malicious allegations made by the Counter-Defendants,
contemporaneously with the firing of Mr. Hill, was most traumatic and
caused emotional pain, anguish, and great stress. Counter-Plaintiffs
would further aver that these actions of the Counter-Defendants were

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done deliberately and for the singular and selfish motive of saving
money for these two (2) Counter-Defendants. For all of which the
Counter-Plaintiffs sue the Counter-Defendants, both jointly and
severally, for the sum of One Million Dollars ($1,000,000.00).

The alleged actionable conduct is not set out in the pleadings, see Medlin v. Allied Inv. Co.,
217 Tenn. 469, 398 S.W.2d 270 (Tenn. 1996). Moreover, taking the allegations as true and construing
them liberally in favor of Mr. Hill, Cook Uithoven v. Spinnaker’s of Rivergate, Inc., 878 S.W.2d 934
(Tenn. 1994), we nonetheless conclude that these pleadings do not constitute “conduct that is so
outrageous that it is not tolerated by a civilized society.” Bain v. Wells, 936 S.W.2d at 622.

Mr. Hill’s claim for retaliatory discharge was also dismissed by the trial court. A cause of
action for discharge in retaliation for asserting a workers’ compensation claim has four elements: (1)
the plaintiff was an employee of the defendant at the time of the injury; (2) the plaintiff made a claim
against the defendant for workers’ compensation benefits; (3) the defendant terminated the plaintiff’s
employment; and (4) the claim for workers’ compensation benefits was a substantial factor in the
employer’s motivation to terminate the employee’s employment. Anderson v. Standard Register Co.,
857 S.W.2d 555, 558 (Tenn. 1993). “The burden of proof rests . . . upon the plaintiff to prove the
elements of the cause of action, including a causal relationship between the claim for workers’
compensation benefits and the termination of employment.” Id. at 558. It is well-settled that
termination without any evidence of a causal link to the workers’ compensation claim is insufficient
to prove retaliatory discharge. Id. When an employee is discharged for reasons other than for
exercising rights under the Workers’ Compensation Act, then the causation element of the employee’s
prima facie case of retaliatory discharge is precluded, and his or her action must fail.

In the instant case, Mr. Hill’s Counter Complaint avers as follows concerning the alleged
retaliatory discharge:

The Counter-Plaintiffs allege that the Counter-Defendants’ actions
constitute a retaliatory discharge of the Counter-Plaintiff WILLIAM
R. HILL, that his firing was the result of his having a workers’
compensation claim which would require, among other things, the
payment by Counter-Defendants for the cost of a right total knee
replacement surgery, along with the rehabilitation expenses, as well as
surgical repairs to the left artificial knee and temporary total disability
benefits during the time period required for the surgery and
rehabilitation, all of which has been known for years by these Counter-
Defendants to be required as his treating physicians have so indicated
as early as the year 2000, which costs would likely exceed
$100,000.00.

III. Comes the Counter-Plaintiffs and sue the Counter-
Defendants for additional cause of action and say that the factual

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allegations contained in Count I and II are incorporated into this Count
as if they were fully copied verbatim at this point. In addition to and
separate and apart from the compensatory damage claim set forth in
Count II, Counter-Plaintiff WILLIAM R. HILL is entitled to be
awarded punitive or exemplary damages against these Counter-
Defendants for the wrongful discharge on May 2, 2005 of Counter
Plaintiff WILLIAM R. HILL, which action was taken as a part of a
common plan by the Counter-Defendants. Counter-Plaintiff
WILLIAM R. HILL would show that FORT LOUDOUN ELECTRIC
COOPERATIVE has a net value in the tens of millions of dollars, the
exact amount of which will be shown to the Court and jury, and that
the Counter-Defendant FEDERATED RURAL ELECTRIC
INSURANCE EXCHANGE has a much higher net value than FORT
LOUDOUN ELECTRIC COOPERATIVE, which value will be shown
to the Court and jury. Counter-Plaintiff avers that the actions of these
Counter-Defendants are willful, calculating and malicious, and that in
order to prevent these two (2) Counter-Defendants from treating other
employees in a similar fashion, the Counter-Plaintiff demands a
judgment for punitive or exemplary damages in such an amount as the
jury might fix to deter the Counter-defendants from such a course of
action in the future.

Although the majority of Mr. Hill’s allegations are conclusory, he does allege that he made
a workers’ compensation claim and that he was discharged because he made such a claim. He also
alleges that this was motivated in part by the Plaintiffs’ desire to save money, because the termination
of his employment would prevent the future payment of medical bills which they had heretofore
agreed to. In any event, Mr. Hill has barely proved his position sufficiently, but we must give every
benefit of the doubt to the non-movant in a 12.02(6) motion. Accordingly, we will reverse the trial
court’s dismissal of the of the Counter-Complaint and retaliatory discharge. We do this with the
understanding that this, in no way, prevents a motion to strike for irrelevant or otherwise scurrilous
allegations in the complaint, nor does this prevent the filing of a summary judgment motion on the
part of Plaintiffs.

Mrs. Hill’s Causes of Action

As discussed above, Mr. Hill sought to add his wife as a counter-plaintiff, asserting loss of
consortium claims and derivative tort claims arising from the alleged tort claims of Mr. Hill. Because
we have determined that the trial court correctly dismissed Mr. Hill’s causes of action, any derivative
claims made by Mrs. Hill must necessarily fail. Concerning Mrs. Hill’s loss of consortium claim, our
Supreme Court has held that loss of consortium is “‘a separate claim from that of an injured spouse.’”
Tuggle v. Allright Parking Sys., 922 S.W.2d 105, 108 (Tenn. 1996)(quoting Jackson v. Miller, 776
S.W.2d 115, 117 (Tenn. Ct. App. 1989)). However, a spouse’s loss of consortium claim exists only
against a third-party tortfeasor. Hanley v. Silver Furniture Mfg. Co., 38 S.W.3d 555, 558 (Tenn.

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2001). An employee’s spouse has no right to bring suit against the employer for loss of consortium.
Napier v. Martin, 250 S.W.2d 35, 36 (Tenn. 1952). Consequently, the trial court was correct in
dismissing both the loss of consortium claim and the derivative claims raised by Mrs. Hill.

Alleged Violation of Tenn. R. Civ. P. 15

Tenn. R. Civ. P. 15.01 provides that the pleadings in a lawsuit may be amended “once as a
matter of course at any time before a responsive pleading is served.” Otherwise, amendment may be
made only “by written consent of the other party or by leave of the court.” The rule provides that
permission to amend should be liberally granted; however, where a motion to amend is filed after a
responsive pleading has been filed, the grant or denial of the motion is within the sound discretion
of the trial court. Such discretionary decisions may not be reversed on appeal, absent a showing of
abuse of discretion, McKinney v. Educator & Executive Insurers, Inc., 569 S.W.2d 829, 833 (Tenn.
Ct. App. 1978); or where failure to allow an amendment will result in injustice. Wilson v. Riccardi,
778 S.W.2d 450, 453 (Tenn. Ct. App. 1989); Hopper v. Davidson County, 333 S.W.2d 917, 920
(Tenn. 1960).

In his motion to amend the first amended Counter-Complaint, Mr. Hill seeks to amend the
Counter-Complaint to allege that Federated “tortiously interfered with an employment contract
between [Fort Loudoun] and [Mr. Hill].” In his motion, Mr. Hill further alleges that Federated
“deliberately set out on a course of action to interfere with that relationship [i.e., the relationship
between Fort Loudoun and Mr. Hill] and to induce [Fort Loudoun] to terminate [Mr. Hill’s
employment] in order that [Federated] could avoid the payment of workers’ compensation benefits.
. . .”

After reviewing the proposed amendments, we perceive that Mr. Hill has failed to state a
claim for either procurement of breach of contract or tortious interference with an employment
contract.

Procurement of Breach of Contract

In order to recover for procurement of breach of contract, a plaintiff must prove seven
elements: (1) there must be a legal contract; (2) the wrongdoer must have knowledge of the existence
of the contract; (3) there must be an intention to induce its breach; (4) the wrongdoer must have acted
with malice; (5) there must be a breach of contract; (6) the act complained of must be the proximate
cause of the breach of contract; and (7) there must have been damages resulting from the breach of
contract. Buddy Lee Attractions, Inc. v. William Morris Agency, Inc., 13 S.W.3d 343, 354-55
(Tenn. Ct. App. 1999); T.C.A. § 47-50-109.

It is uncontested that Mr. Hill was an at-will employee of Fort Loudoun. As such, Mr. Hill
had no employment contract with Fort Loudoun. Absent a legal contract, there can be no inducement
to breach same. The trial court correctly denied Mr. Hill’s request to add this cause of action.

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Tortious Interference with an Employment Contract

A plaintiff may bring a claim for intentional interference with an at-will employment
relationship. In such a claim, the plaintiff must provide specific proof that the defendant committed
per se wrongful acts or committed lawful acts with malice and without justification. Forrester v.
Stockstill, 869 S.W.2d 328, 335 (Tenn. 1994). The Forrester Court outlined three factors to be
discussed in evaluating tortious interference claims: (1) whether the person intended to interfere with
the plaintiff’s employment; (2) whether the defendant interfered with the plaintiff’s employment by
such methods as intimidation, defamation, or violence; and (3) whether the purpose or motive for
interfering was based solely on a desire to harm the plaintiff. Id. at 333-34.
In the instant case, there is no indication that Federated sought to have Mr. Hill fired or that
the termination of Mr. Hill’s employment worked any benefit to Federated. There is no indication
in the record that Federated has failed to comply with the Agreed Order of July 9, 2003. Rather,
Federated is bound by that agreement, regardless of Mr. Hill’s employment status.

Furthermore, there is no actual proof that Federated had any hand in the termination of Mr.
Hill’s employment. It appears that Fort Loudoun chose to terminate Mr. Hill’s employment only after
he was caught on videotape vigorously using the knees he claimed were too painful to perform even
a desk job. Plaintiffs set out in the termination letter that it was the videotaped evidence that provided
the basis for terminating Mr. Hill’s employment due to dishonesty and violation of company policy,
to wit:

This letter is in response to the meeting I had with you on Friday, April
29, 2005. At the meeting you were given the opportunity to share with
me your explanation and reasons for choosing to construct a barn
while off from work with physical restrictions imposed upon you by
your physician, due to your workers’ compensation injury. Your
actions and dishonesty were a definite infraction of FLEC’s Board
Policy 201A rules of conduct and performance. After hearing your
explanation and after careful consideration of all of the information,
I have no choice but to terminate your employment with Fort Loudoun
Electric Ooperative effective immediately.

Consequently, the trial court did not err in disallowing this cause of action.

Although Mr. Hill alleges that the trial court’s Order of September 21, 2005 attempts to
prohibit future amendments to his Counter-Complaint in violation of Tenn. R. Civ. P. 15, a review
of the order reveals no such prohibition. Rather, the court orders Mr. Hill to fashion a Counter-
Compliant that complies with Tenn. R. Civ. P. 8.01 and 12.05. There is no prohibition on Mr. Hill’s
amending his Counter-Complaint to allege any viable claims. However, as discussed above, the
proposed claims are not viable and, therefore, the trial court was correct in disallowing same.

Stay of Proceedings

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In its February 13, 2006 Order, the trial court stayed all litigation pending the ruling of this
Court. The trial court reasoned that our ruling “could affect the parties, the claims, the legal theories
and the damages. . . .” The decision to stay a proceeding is a matter of discretion with the trial court,
and, on appeal, a party taking issue with that decision has the burden to show that the court abused
its discretion. Rachels v. Steele, 633 S.W.2d 473 (Tenn. Ct. App. 1981). The decision of the trial
court will not be disturbed on appeal unless it is clear from the record that there was an abuse of
discretion. Id. at 475.

Turning to the facts of this case, the Hills’ appeal involves numerous claims that were not
allowed by the trial court. The trial court correctly notes that this Court’s decision bears upon the
substantive claims that may be allowed to proceed. As a result, to continue with the litigation would
likely result in undue expense and wasted time in pursuing claims that are not proper. Consequently,
the trial court did not abuse its discretion in staying the proceeding below pending the outcome of this
appeal.

Default Judgment

The trial court has broad discretion in determining whether a grant of default judgment is
proper. The failure to grant a default judgment will not be reversed on appeal absent an abuse of
discretion. See, e.g., Henson v. Diehl Machines, Inc., 674 S.W.2d 307 (Tenn. Ct. App. 1984).

In the instant case, Mr. Hill’s motion for default judgment for failure to answer was quickly
followed by Plaintiffs’ motion to dismiss, see supra. The trial court denied the motion for default
judgment until it had an opportunity to rule on the motion to dismiss. Given the facts of this case,
the trial court’s decision does not constitute an abuse of discretion.

The order of the trial court dismissing the Counter-Complaint on the retaliatory discharge
cause of action is reversed. The order of the trial court in all other respects is affirmed. Costs of this
appeal are assessed against the Appellants, William R. Hill and Suzann C. Hill, and their surety.

__________________________________________
W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1052572. Public record. Not legal advice.