Diann Parnell v. Victor L. Ivy, Peter J. Dauster, Hardee, Martin, Jaynes & Ivy, P.A., C. Wesley Fowler and Glankler Brown, PLLC

IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

January 21, 2004 Session

DIANN PARNELL v. VICTOR L. IVY, PETER J. DAUSTER, HARDEE,

MARTIN, JAYNES & IVY, P.A., C. WESLEY FOWLER AND GLANKLER

BROWN, PLLC

Appeal from the Circuit Court for Madison County

No. C-02-65, Div. 1 Roy B. Morgan, Jr., Judge

No. W2003-00023-COA-R3-CV

This is a legal malpractice case. The client filed suit in federal court against a municipality for the

death of her husband under the Governmental Tort Liability Act and U.S.C. § 1983. The federal

court dismissed the GTLA claim but retained the §1983 claims. The client dismissed her attorneys,

hired new counsel and filed the GTLA claim in state court. The state court dismissed the GTLA

claim because, while the GTLA claim was pending in federal court, the applicable statute of

limitations expired. The client sued her original attorneys for malpractice. Shortly thereafter, the

client settled the remaining § 1983 claims against the municipality. The defendant attorneys filed

a motion for summary judgment in the malpractice case, arguing that the settlement with the

municipality on the §1983 claims mandated dismissal of the legal malpractice claim. The trial court

granted the summary judgment motion. The client appealed. We reverse, holding that the damages

sought in the legal malpractice lawsuit are separate and distinct from the damages sought in the

underlying lawsuit, and therefore settlement of the underlying lawsuit does not shield the former

attorneys from liability.

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

HOLLY M. KIRBY , J., delivered the opinion of the Court, in which W. FRANK CRAWFORD , P.J., W.S.,

and DAVID G. HAYES, SP .J., joined.

Jeffrey P. Boyd, Jackson, for the appellant Diann Parnell.

Peter J. Dauster, Jackson, pro se and for the appellees Victor L. Ivy and Hardee, Martin, Jaynes &

Ivy, P.A.

Glen G. Reid, Jr. and Jeffrey Fleishmann, Memphis, for the appellees C. Wesley Fowler and

Glankler Brown, PLLC.

OPINION

On January 8, 2000, a City of Trenton police officer observed Joel Parnell (“Mr. Parnell”)

walking the streets of Trenton intoxicated. The police officer picked up Mr. Parnell and drove him

to the city limits, where Mr. Parnell resumed walking in an intoxicated state. A motorist

subsequently ran over and killed Mr. Parnell.

Mr. Parnell’s wife, Plaintiff/Appellant Diann Parnell (“Mrs. Parnell”), retained as her

attorneys the Defendants/Appellees Victor Ivy (“Ivy”) and Peter Dauster (“Dauster”) of the

Defendant/Appellee law firm Hardee, Martin, Jaynes & Ivy, P.A. (“Hardee Martin”)1 to assert claims

arising from Mr. Parnell’s death against the City of Trenton and the City of Trenton Police

Department (collectively, “the City of Trenton”). Hardee Martin then associated

Defendant/Appellee C. Wesley Fowler (“Fowler”), an attorney at the Defendant/Appellee law firm

Glankler Brown, PLLC (“Glankler Brown”).2

On January 5, 2001, Mrs. Parnell’s counsel filed a complaint in federal district court, alleging

a claim against the City of Trenton under the Tennessee Governmental Tort Liability Act (“GTLA

Claim”). Her counsel later filed two amended complaints, adding federal constitutional claims under

§ 1983 of the United States Code (“§ 1983 claims”). On February 22, 2001, the federal district court

dismissed the GTLA claim, declining to exercise supplemental jurisdiction over the matter. The

federal district court retained jurisdiction over the § 1983 claims. Meanwhile, the statute of

limitations on the GTLA claim had expired several days after Hardee Martin and Glankler Brown

originally filed the claim in federal court.

On April 6, 2001, defendant Fowler sent a letter to Mrs. Parnell, informing her that the

federal district court had dismissed the GTLA claim and that the statute of limitations had run on her

GTLA claim. He also advised her in writing that she had a potential legal malpractice claim.

In October 2001, defendant Fowler sent a letter to defendants Ivy and Dauster, opining that

the § 1983 claims had little merit and that a pending motion for summary judgment filed by the City

of Trenton would likely be granted. Fowler indicated that he believed if the GTLA claim were

refiled in state court, it would likely be dismissed as well. On February 12, 2002, Fowler wrote Mrs.

Parnell, telling her that if she wished to refile the GTLA claim, she would have to retain other

counsel and file the claim by February 22, 2002, one year from the day the federal court originally

dismissed the claim.

Mrs. Parnell obtained new counsel, who refiled the GTLA claim in state court on February

22, 2002. The GTLA suit sought identical damages to those sought in the federal § 1983 claims still

pending in federal court. Because the statute of limitations on the GTLA claim had expired while

1

Ivy, Dauster and Hardee Martin will be referred to collectively as “Hardee Martin.”

2

Fowler and Glankler Brown will be referred to collectively as “Glankler Brown.”

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it was pending in federal court, the state trial court dismissed the 2002 lawsuit. Mrs. Parnell then

instituted the instant legal malpractice lawsuit against Hardee Martin and Glankler Brown for

allowing the statute of limitations to run on her GTLA claim.

While the instant malpractice case was pending, Mrs. Parnell settled her § 1983 claims

against the City of Trenton. Pursuant to the settlement agreement, for a settlement amount of $7,500,

Mrs. Parnell executed a document fully releasing the City of Trenton from all claims arising out of

Mr. Parnell’s demise.3

Subsequently, in the legal malpractice lawsuit, Hardee Martin filed a motion for summary

judgment. Hardee Martin noted that Mrs. Parnell sought the same damages in her § 1983 suit as she

sought in the GTLA suit. They argued that because Mrs. Parnell obtained money for those damages

by settling the § 1983 action, she was not damaged by their alleged malpractice. Hardee Martin

argued further that Mrs. Parnell’s settlement agreement absolved the attorneys of any liability for

their alleged malpractice, because Mrs. Parnell’s release of her claims against the City of Trenton

precluded her from bringing the GTLA claim.

The trial court granted the motion, holding:

Because she voluntarily settled with the City of Trenton Defendants,

she cannot, as a matter of law, prove causation or damages with

respect to the legal malpractice case. . . . [I]t is not the Defendants’

alleged negligence which prevents [Mrs. Parnell] from recovering

further against the City of Trenton Defendants; rather, it is her

voluntary act of settling with them and executing a full and final

release in their favor.

Thus, the trial court held that Mrs. Parnell’s settlement agreement, rather than her attorneys’ alleged

malpractice, prevented her from recovering further from the City of Trenton, thereby negating her

attorneys’ negligence. The trial court reasoned, “Even if the Governmental Tort Liability Act claim

were currently pending against the City of Trenton Defendants and was not barred by the statute of

limitations, [Mrs. Parnell] could not recover against them in the face of the full and final release

which she executed.” The trial court reasoned further: “[Mrs. Parnell] has recovered for the alleged

wrongful death of [Mr.] Parnell, and she may not recover twice for [Mr. Parnell]’s death. Regardless

of which theory of recovery [Mrs. Parnell] advances, (Governmental Tort Liability Act, § 1983, or

legal malpractice), the damages she could recover would be the same.” Thus, the trial court found

that Mrs. Parnell could prove neither causation nor damages. In the interest of judicial economy, the

trial court extended the grant of summary judgment to Glankler Brown as well. From that order,

Mrs. Parnell now appeals.

3

W ithout citing to the record, Mrs. Parnell asserts that she reached the settlement agreement with the City of

Trenton before the federal court ruled on the motion for summary judgment.

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On appeal, Mrs. Parnell argues that permitting her to recover for Hardee Martin and Glankler

Brown’s alleged malpractice would not result in a double recovery because the damages in the

malpractice lawsuit differ from the damages sought in the GTLA and § 1983 claims. Mrs. Parnell

argues further that the settlement agreement releasing the City of Trenton from liability does not

absolve Hardee Martin and Glanker Brown from liability, because the release was signed after

Hardee Martin and Glankler Brown permitted the statute of limitations on the GTLA claim to run.

A motion for summary judgment should be granted when the movant demonstrates that there

are no genuine issues of material fact and that the moving party is entitled to judgment as a matter

of law. Tenn. R. Civ. P. 56.04. Summary judgment is only appropriate when the facts and the legal

conclusions drawn from the facts reasonably permit only one conclusion. Carvell v. Bottoms, 900

S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is no presumption of

correctness regarding a trial court’s grant of summary judgment. Bain v. Wells, 936 S.W.2d 618,

622 (Tenn. 1997). Therefore, our review of the trial court’s grant of summary judgment is de novo

on the record before this Court. Warren v. Estate of Kirk, 954 S.W.2d 722, 723 (Tenn. 1997).

To prevail in a legal malpractice action, a plaintiff must show that her attorney owed her a

duty, that the attorney breached that duty, that the plaintiff suffered damages, and that the attorney

was the factual and legal cause of the plaintiff’s damages. Gibson v. Trant, 58 S.W.3d 103, 108

(Tenn. 2001). The Tennessee Supreme Court has defined damages in the context of legal

malpractice as “the loss of a legal right, remedy or interest.” See John Kohl & Co. v. Dearborn &

Ewing, 977 S.W.2d 528, 532 (Tenn. 1998) (defining “legally cognizable damage,” the first element

necessary to the tolling of the statute of limitations for legal malpractice cases).

The parties cite no Tennessee case addressing the issue presented by this fact situation, and

we have found none. Decisions in other states, however, are clear. Though the amount of damages

in a malpractice action are measured with reference to the damages sought in the underlying suit, the

injuries suffered by a plaintiff in a legal malpractice suit are separate and distinct from those suffered

in the underlying suit. For example, in Titsworth v. Mondo, 407 N.Y.S.2d 793 (N.Y. Sup. Ct. 1978),

a tort claimant settled the underlying lawsuit, accepted the settlement payment, and then sued his

attorney, seeking as damages the difference he claimed a jury would have awarded him, but for the

attorney’s malpractice. Id. at 794. On the plaintiff’s personal injury claim, the attorney had filed

a lawsuit seeking $100,000 in damages. Id. The plaintiff discharged the original attorney and hired

another one. Id. The second attorney filed a motion to increase the ad damnum from $100,000 to

$500,000; this was denied, apparently because of an action taken by the original attorney. Id. The

plaintiff settled the underlying lawsuit for $90,000. Id. He then filed a legal malpractice lawsuit

against the original attorney, alleging that the original attorney sued for an inadequate amount on the

personal injury claim and then prevented the plaintiff’s new attorney from increasing the ad

damnum. Id. The defendant attorney argued that the settlement precluded the plaintiff from suing

him for legal malpractice. Id. at 795. Quoting an earlier case, the court held:

“Where the termination is by settlement rather than by a dismissal or

adverse judgment, malpractice by the attorney is more difficult to

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establish, but a cause of action can be made out if it is shown that

assent by the client to the settlement was compelled because prior

misfeasance or nonfeasance by the attorneys left no other recourse *

* * [The] cause of action for legal malpractice must stand or fall on

its own merits with no automatic waiver of a plaintiff’s right to sue

for malpractice merely because plaintiff had voluntarily agreed to

enter into a stipulation of settlement.”

Id. at 796 (quoting Becker v. Julien, Blitz & Schlesinger, 406 N.Y.S.2d 412, 413-14 (N.Y. Sup. Ct.

1977)).

Likewise, in King v. Jones, 483 P.2d 815 (Ore. 1971), the plaintiff hired a law firm to

represent her in a personal injury claim against a car dealership and an unknown driver. Id. at 816.

The plaintiff settled the case. Id. at 816-17. She then sued the attorney for malpractice, alleging that

she would have received a much higher amount had the law firm not allowed the statute of

limitations to run against the driver. Id. at 816. The law firm asserted that the settlement barred the

plaintiff’s malpractice claim. Id. at 816-17. The King court held:

We conclude that plaintiff’s release of [the driver] does not operate

as a bar to plaintiff’s claim for malpractice against the defendants.

Plaintiff’s claim against [the driver] for personal injuries and her

claim against defendants for malpractice are separate and distinct

claims. Her cause of action against defendants arose when they

allowed the statute of limitations to run [on] her claim against [the

driver]. Her subsequent release of [the driver] had no relationship to

the cause of action she had acquired against the defendants.

Id. at 818.

In the case at bar, Mrs. Parnell contends that she would have received a much higher amount,

either through settlement or trial, had the defendant attorneys not permitted the statute of limitations

to run on her GTLA claim. Therefore, in the malpractice lawsuit, she must show that she would

have received more than the $7,500 settlement but for the defendants’ alleged malpractice, and her

damages would be the difference. This is a genuine issue of fact. Although her damages in the

malpractice lawsuit are measured with reference to the underlying claim, her malpractice claim is

separate and distinct.

Likewise, Mrs. Parnell’s release of the City of Trenton does not operate to release Hardee

Martin and Glankler Brown. The record is clear that Mrs. Parnell and the City of Trenton entered

into the settlement agreement after the statute of limitations on the GTLA claim had run and the

claim had been dismissed. As noted above, her claim against the attorneys is separate and distinct,

and not encompassed by the settlement agreement. Under these circumstances, we must conclude

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that the trial court erred in granting summary judgment in favor of Hardee Martin and Glankler

Brown.

The decision of the trial court is reversed. Costs of this appeal are taxed against

Defendants/Appellees Victor L. Ivy, Peter J. Dauster, Hardee, Martin, Jaynes & Ivy, P.A., C. Wesley

Fowler and Glankler Brown PLLC, for which execution may issue if necessary.

___________________________________

HOLLY M. KIRBY, JUDGE

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