# Siskin Hospital for Physical Rehabilitation, Inc. v. Dr. James P. Little

> Court of Appeals of Tennessee · October 8, 2024

URL: https://www.frixlaw.com/law-library/cases/10598562

## Case

- **Court:** Court of Appeals of Tennessee
- **Decided:** October 8, 2024
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Judge John McClarty
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

10/08/2024
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
May 15, 2024 Session

SISKIN HOSPITAL FOR PHYSICAL REHABILITATION, INC. V.
DR. JAMES P. LITTLE

Appeal from the Chancery Court for Hamilton County
No. 20-0204 Jeffrey M. Atherton, Chancellor1
___________________________________

No. E2023-01328-COA-R3-CV
___________________________________

This appeal concerns the trial court’s dismissal of the defendant’s claims for the return of
funds held by the plaintiff hospital as untimely filed. We reverse the dismissal, holding
that the plaintiff was estopped from pleading the statute of limitations as a defense and that
the plaintiff revived the obligation throughout its repeated negotiations with the defendant.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Reversed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which D. MICHAEL SWINEY,
C.J. and THOMAS R. FRIERSON, II, joined.

Rebecca M. Little, Chattanooga, Tennessee, for the appellant, Dr. James P. Little.

Joseph R. White, Chattanooga, Tennessee, and Jonathan G. Rose, Washington, D.C., for
the appellee, Siskin Hospital for Physical Rehabilitation, Inc.

OPINION

I. BACKGROUND

In 1989, James P. Little, M.D. was the president and owner of Occupational,
Alternative & Rehabilitation Services (“OARS”). As president of OARS, Dr. Little entered
into an agreement with Siskin Hospital for Physical Rehabilitation, Inc. (“Siskin”) under
which OARS provided staffing and other services to Siskin, including a physician to serve
in a full-time physician capacity as Medical Director. In accordance with the agreement,
Dr. Little was appointed as the Medical Director.

1
Sitting by interchange.
As pertinent to this appeal, Dr. Little paid $7,500 per year from his Medical Director
stipend into what he believed was a Section 457 nonqualified retirement plan, for a total
amount of $37,500 paid between 1991 and 1996. He received audit statements from Siskin
confirming the receipt of these funds.

On July 27, 2000, Siskin invoked the no-fault 180-day notice of termination of Dr.
Little’s 1989 agreement. In December 2000, Dr. Little filed a complaint against Siskin,
alleging contract and tort claims. During the pendency of the litigation, Dr. Little began
contacting Siskin to request the disbursement of his retirement contributions. Through
counsel, Dr. Little demanded payment of the funds contributed, plus interest, by letter dated
October 29, 2002, which provided as follows:

This will confirm our telephone conversation today concerning Dr. Little’s
request for payment from [Siskin] in the amount of $37,500 plus interest.
This is the amount held by [Siskin] pursuant to [the agreement] to establish
a plan under Section 457 of the Internal Revenue Code for Dr. Little’s
benefit.

As you may know, a Section 457 plan permits a tax-exempt organization,
like [Siskin], to establish a deferred compensation arrangement for both
employees and independent contractors. [Siskin] told Dr. Little that it had
created such a plan for him and accepted payments to the plan[.] [Siskin’s]
records confirm such payments were remitted . . . in the amount of $37,500.

When Dr. Little recently contacted [Siskin] about withdrawing the funds
from the plan, he was told for the first time that the plan had never been
created. This statement is contrary to [Siskin’s] prior representations[.]

I’m sure you appreciate the potential adverse tax implications to Dr. Little if
[Siskin] failed to properly establish the 457 plan. Accordingly, Dr. Little’s
request for payment of the amount contributed to the plan, plus interest, but
no damages is very reasonable.

Siskin again confirmed receipt of the funds but advised Dr. Little that his funds were not
put into a Section 457 plan as he believed. However, Dr. Little did not amend his complaint
to include his claim of retirement benefits.2 Instead, Dr. Little sent a letter to then Senator
Bill Frist, advising him of the current litigation and advising him of Siskin’s failure to hold
his funds in a 457 plan. The letter, dated September 20, 2003, provided, in pertinent part,
as follows:

2
His complaint was voluntarily dismissed at a later date.
-2-
Since leaving the hospital, I continue to experience flagrant violations of
ethical and legal standards. On an unrelated topic (retirement funds held by
the hospital), IRS regulations permit withdrawal of Section 457 retirement
funds from an organization at time of departure. Due to financial problems
caused by my loss of privileges several months ago, I requested transfer of
my retirement funds to an individual IRA account . . . . VALIC, the firm
responsible for current retirement funds, acknowledged the contributions, but
intimated that the “hospital had not created a Section 457 plan.”
Furthermore, the VALIC representative indicated that the hospital would
write a check for the exact amount of the contributions (which dated from
the early nineties). However, [Siskin] was unwilling to pay interest [but]
offered no solution for the fact that their actions had profound IRS
implications.

Dr. Little also mentioned that he had been advised that he “may have passed the statute of
limitations related to his retirement account.” He opined that it “seemed odd” because he
would not access his account until he reached retirement age. Senator Frist did not respond.

In December 2013, through counsel, Dr. Little sent a second demand letter. Siskin
responded with a check for $37,500 on December 30, 2013. Dr. Little returned the check.

In July 2014, through counsel, Dr. Little reached out again to determine “the status
of Siskin’s position with respect to issuing payment to Dr. Little the full amount of
principal and interest that he should have received in connection with his contributions to
Siskin’s Section 457 nonqualified retirement plan.” He continued, “To the extent Siskin
failed to ever establish a 457 plan altogether, Dr. Little requests that Siskin issue a check
for the full amount of principal plus interest at a rate of 10% compounded annually from
the date of his first contribution to the present date.”

Siskin responded by letter dated, September 10, 2014, from President and CEO
Carol Sim, who advised that she “would like to resolve this issue in a fair way.” She
continued,

I believe that Siskin Hospital should reimburse Dr. Little his contributions
plus compounded interest that his contributions accrued while intermingled
in the same account as Siskin Hospital’s investments, at the same rate of
return experienced by the Hospital.

To that end, I suggest Siskin Hospital issue a check to Dr. Little for the
principal amount of $37,500 plus $47,135.64 for a total of $82,635.64.

The amount was not agreeable to Dr. Little, who, through counsel, sent a third demand
letter in November 2018. Dr. Little acknowledged that the funds had most likely not been
-3-
placed into a 457 account as promised, resulting in unsavory tax implications for him. He
suggested return of the funds, plus interest commensurate with the rate of return that his
contributions would have achieved if the funds had been invested properly. The parties
continued to exchange letters discussing the return of the funds and the applicable interest
rate. One such letter, dated March 22, 2019, from Siskin to Dr. Little provided as follows:

As previously explained to you by Siskin Hospital, the actual amount of
interest earned on the $37,500 principal amount is calculated by looking to
Siskin Hospital’s investments with Ponder Investment Company. . . . [T]he
actual interest calculation is based on Siskin Hospital’s actual investment
returns with Ponder Investment Company, which is where Dr. Little’s
retirement contributions would have been invested if co-mingled with Siskin
Hospital’s investment portfolio at the time of receipt. This results in an
interest payment of approximately $47,197.28 (i.e., $84,697.28 total when
combined with the $37,500 principal amount). There is simply no basis to
use any other interest rate and it appears that Dr. Little is attempting to rely
on impermissible hindsight in order to argue that a higher interest rate is
required. Please also note that 457 plans are not required to provide
participants with any particular interest rate or with any specific investment
options.

The continued correspondence between the parties culminated in an unsuccessful final
mediation on December 16, 2019.

On March 9, 2020, Siskin filed the instant action in the Chancery Court of Hamilton
County, requesting a declaratory judgment establishing that any breach of contract claim
filed by Dr. Little would be barred by the applicable statute of limitations. Siskin admitted
that it accepted the contributions from Dr. Little and that it remained in possession of the
contributions and interest earned thereon for the past 34 years. However, Siskin asserted
that there was no Section 457 plan in existence for its employees until two years after Dr.
Little’s agreement was terminated. Siskin asserted that Dr. Little was aware of his potential
breach of contract or similar claims as it related to his retirement contributions while
prosecuting his original complaint but failed to include his claims in the ongoing litigation.

On April 9, 2020, Dr. Little responded by filing a motion to dismiss, arguing that
the chancery court did not have subject matter jurisdiction over his deferred compensation
retirement benefits governed by the Employee Retirement Income Security Act
(“ERISA”). Accordingly, on April 24, 2020, Dr. Little filed an action against Siskin in the
United States District Court for the Eastern District of Tennessee. Dr. Little asserted
several claims under ERISA, along with alternative state law claims for breach of contract,
promissory estoppel, and unjust enrichment. Siskin moved to dismiss, arguing that Dr.
Little did not have standing to sue under ERISA because he was not an employee and that

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any applicable statute of limitations had since expired.3 The district court denied the
motion to dismiss, finding that Dr. Little had pled sufficient facts to survive dismissal on
the pleadings. The court deferred ruling on the state law claims and ordered further
discovery on the issue of whether Dr. Little was an employee pursuant to ERISA.

Following a hearing, the district court found that the evidence in the record only
established that Dr. Little “believed” he was paying into a 457 deferred compensation plan
but that he did not establish the actual existence of such a plan. The court noted that ERISA
jurisprudence emphasizes the necessity of a written plan, which was not produced in the
record for the court’s consideration. The court concluded,

There is no doubt that there are claims that need to be resolved with respect
to the money that [Dr. Little] paid to Siskin believing he was contributing to
a 457 plan. Yet there is no ERISA claim that can possibly be resolved in this
Court – there is no plan, no plan administrator, and no administrative record.
The Court does not imply that this is due to some fault of [Dr. Little] or that
he does not have potentially meritorious claims against Siskin related to the
money he contributed and what he was told about those funds. However,
because there is no written plan before the Court, there is nothing for the
Court to enforce. Accordingly, [Dr. Little’s] ERISA claims fail because,
while [Dr. Little] has shown some level of objectionable conduct on Siskin’s
part, he cannot prove the existence of an ERISA plan, an essential element
to his claims.

The court granted judgment in Siskin’s favor and dismissed the ERISA claims with
prejudice. Noting that there was no longer a federal question conferring original
jurisdiction over the action, the court declined to exercise supplemental jurisdiction to
consider the state claims and dismissed them without prejudice.

Back in chancery court, Dr. Little filed a counter-complaint against Siskin on
November 21, 2021, asserting a myriad of claims sounding in contract and unjust
enrichment. Dr. Little asserted that Siskin provided audit statements for a 457 plan that
did not exist and fraudulently concealed its noncompliance with federal regulations all
while wrongfully retaining his contributions. Dr. Little claimed that Siskin assured him
that his payments would be returned with interest before ultimately filing the instant action.

Siskin responded with a motion to dismiss on April 4, 2022, requesting a finding
that any claims regarding Dr. Little’s contributions over 20 years ago were time-barred.
The trial court denied the motion, holding that there were genuine issues of material fact
in dispute concerning the expiration of the applicable statute of limitations.

3
The chancery court stayed its proceedings, pending the resolution of Dr. Little’s federal claims.
-5-
The parties proceeded to a bench trial solely on the issue of the running of the statute
of limitations on the claims regarding Dr. Little’s alleged deferred compensation
contributions. Dr. Little testified concerning the history of his payments, receipt of audit
statements, and attempts to recoup his losses from Siskin throughout the years.

Following the hearing, the court dismissed Dr. Little’s breach of contract claims as
untimely filed, finding that the undisputed facts demonstrated that he was put on inquiry
notice that his contributed funds were not being held as promised, that he was not enrolled
as a participant in a Section 457 plan, and that Siskin did not intend to provide him with
457 retirement benefits decades before this action commenced. The court also found that
the unjust enrichment/conversion claims were filed beyond the applicable three-year
statute of limitations. This appeal followed the denial of post-trial motions.

II. ISSUES

Dr. Little raised a myriad of issues that we summarize into the following categories:

(A) Whether the court erred in denying his request to submit the issue of
the running of the statute of limitations to a jury.

(B) Whether the court erred in its dismissal of the claims as untimely.

(C) Whether Dr. Little is entitled to attorney fees on appeal.

III. STANDARD OF REVIEW

Our review of the trial court’s decision is de novo upon the record, and the trial
court’s factual findings are presumed correct, unless the preponderance of the evidence is
otherwise. Tenn. R. App. P. 13(d); Alexander v. Inman, 974 S.W.2d 689, 692 (Tenn. 1998).
The trial court’s conclusions of law are subject to de novo review, with no presumption of
correctness. S. Constructors, Inc. v. Loudon Cnty. Bd. of Ed., 58 S.W.3d 706, 710 (Tenn.
2001); Ganzevoort v. Russell, 949 S.W.2d 293, 296 (Tenn. 1997).

“In all actions tried upon the facts without a jury, the court shall find the facts
specially and shall state separately its conclusions of law and direct the entry of the
appropriate judgment.” Tenn. R. Civ. P. 52.01. If the trial court makes the required
findings of fact, appellate courts review the trial court’s factual findings de novo upon the
record, accompanied by a presumption of the correctness of the findings, unless the
preponderance of the evidence is otherwise. Kelly v. Kelly, 445 S.W.3d 685, 692 (Tenn.
2014) (citing Tenn. R. App. P. 13(d)); Armbrister v. Armbrister, 414 S.W.3d 685, 692
(Tenn. 2013). “Appellate courts will not re-evaluate a trial judge’s assessment of witness
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credibility absent clear and convincing evidence to the contrary.” Wells v. Tennessee Bd.
of Regents, 9 S.W.3d 779, 783 (Tenn. 1999).

IV. DISCUSSION

A.

As a threshold issue, Dr. Little argues that the court erred by failing to submit the
issue of the running of the statute of limitations to a jury. Tennessee Code Annotated
section 21-1-103 provides as follows:

Either party to a suit in chancery is entitled, upon application, to a jury to try
and determine any material fact in dispute, save in cases involving
complicated accounting, as to such accounting and those elsewhere excepted
by law or by this code, and all the issues of fact in any proper cases, shall be
submitted to one (1) jury.

Once a demand for a jury has been made, Rule 38.05 of the Tennessee Rules of Civil
Procedures provides that the demand “may not be withdrawn without the consent of all
parties.” This court has noted that “the statutory right extends only to the determination of
any material facts in dispute and that the court may deny a request for a jury in ‘cases of
such a complicated and intricate nature involving mixed questions of law and fact not
suitable for solution by a jury.”’ Sasser v. Averitt Exp., Inc., 839 S.W.2d 422, 434 (Tenn.
Ct. App. 1992) (quoting Moore v. Mitchell, 205 Tenn. 591, 597, 329 S.W.2d 821, 824
(1959)). Accordingly, the chancery court has discretion in determining whether a bench
trial or submission to the jury is warranted depending on the facts and circumstances of the
case. See generally In re Estate of Thompson, 952 S.W.2d 429, 432 (Tenn. Ct. App. 1997)
(providing that similar discretion should be afforded to the probate courts).

Here, the record reflects that Dr. Little made his first jury request in his counter-
complaint. Following its dismissal of Siskin’s motion for summary judgment, the trial
court bifurcated the statute of limitations issue and set the matter for a bench trial. This
order is absent from the record. The parties proceeded through the bench trial, after which
Dr. Little requested that the statute of limitations issue be submitted to a jury in his closing
arguments. Siskin asserts on appeal that Dr. Little waived review of the issue when he
failed to object before the court proceeded with the bench trial.

The record before this court is simply unclear as to when and why the court
determined to proceed with the bench trial on the issue of the running of the statute of
limitations when a jury request had been made. Additionally, the Rules of Appellate
Procedure provide that this court is not required to grant relief with respect to an alleged
-7-
error of the trial court if the complaining party “failed to take whatever action was
reasonably available to prevent or nullify the harmful effect of an error.” Tenn. R. App. P.
36(a). Apart from his second request in his closing argument after the proceedings had
concluded, Dr. Little does not cite to any place in the record where he objected to the
bifurcation of the proceedings and a bench trial on the issue of the statute of limitations.
He cannot now complain that the trial court’s action was erroneous based upon this issue.
See, e.g., Ford v. Ford, No. E2005-01772-COA-R3-CV, 2006 WL 842890, at *2 (Tenn.
Ct. App. Mar. 30, 2006) (“When a trial court makes an [alleged] error [] an aggrieved party
cannot remain silent, ‘tuck’ the error away in the party’s hip pocket, and then use it on
appeal to his or her advantage.”). Had Dr. Little made such an argument, he, like every
appellant in every case, was tasked with preparing a record for this court’s review that
conveys “a fair, accurate and complete account of what transpired with respect to those
issues that are the bases of appeal.” Tenn. R. App. P. 24(b). This issue is waived.

B.

Dr. Little filed his counter-complaint for breach of contract and additional common
law claims on November 21, 2021. His breach of contract claim was subject to dismissal
if his claim accrued prior to November 21, 2015. See Tennessee Code Annotated section
28-3-109(a)(3) (providing that causes of actions based upon contract must be commenced
within six years after the cause of action accrued). His common law claims are properly
categorized as claims for injuries to personal property that were subject to dismissal if the
claims accrued prior to November 21, 2018. See Tenn. Code Ann. § 28-3-105 (providing
that actions for injuries to personal property “shall be commenced within [three] years from
the accruing of the cause of action”).

The discovery rule is applicable in determining when the statute of limitations
expired. Our Supreme Court explained its interpretation of the rule as follows:

[T]he discovery rule does not delay the accrual of a cause of action and the
commencement of the statute of limitations until the plaintiff knows the full
extent of the damages . . . or until the plaintiff knows the specific type of
legal claim it has. The discovery rule is not intended to permit a plaintiff to
delay filing suit until the discovery of all the facts that affect the merits of his
or her claim.

Under the current discovery rule, a cause of action accrues and the statute of
limitations begins to run not only when the plaintiff has actual knowledge of
a claim, but also when the plaintiff has actual knowledge of facts sufficient
to put a reasonable person on notice that he [or she] has suffered an injury as
a result of wrongful conduct. This latter circumstance is variously referred
to as constructive notice or inquiry notice. Quoting the Iowa Supreme Court,
-8-
we have explained that inquiry notice charges a plaintiff with knowledge of
those facts that a reasonable investigation would have disclosed . . . . [O]nce
a plaintiff gains information sufficient to alert a reasonable person of the need
to investigate the injury, the limitation period begins to run.

Redwing v. Cath. Bishop for Diocese of Memphis, 363 S.W.3d 436, 459 (Tenn. 2012)
(internal quotations and footnotes omitted). “It is not required that the plaintiff actually
know that the injury constitutes a breach of the appropriate legal standard in order to
discover that he has a ‘right of action.’” Carvell v. Bottoms, 900 S.W.2d 23, 29 (quoting
Roe v. Jefferson, 875 S.W.2d 653, 658 (Tenn. 1994)). “[T]he plaintiff is deemed to have
discovered the right of action if he is aware of facts sufficient to put a reasonable person
on notice that he has suffered an injury as a result of wrongful conduct.” Id.

The trial court found that the statute of limitations on the breach of contract claim
expired in 2019, at the latest, which was six years after Siskin’s offer of payment without
interest in December 2013. Dr. Little asserts that the trial court erred in dismissing the
action as untimely when Siskin did not indicate a clear intent to refuse payment until its
filing of the declaratory judgment action on March 9, 2020. He argues that the court failed
to consider relevant tolling doctrines, e.g., equitable estoppel and revival, based upon
Siskin’s repeated assurances that his funds were safely held and would be returned.

Our Supreme Court addressed the doctrine of equitable estoppel in Redwing. The
Court stated, in pertinent part,

In the context of a defense predicated on a statute of limitations, the doctrine
of equitable estoppel tolls the running of the statute of limitations when the
defendant has misled the plaintiff into failing to file suit within the statutory
limitations period. When the doctrine of equitable estoppel is applicable, it
prevents a defendant from asserting what could be an otherwise valid statute
of limitations defense.

The party invoking the doctrine of equitable estoppel has the burden of proof.
Thus, whenever a defendant has made out a prima facie statute of limitations
defense, the plaintiff must demonstrate that the defendant induced him or her
to put off filing suit by identifying specific promises, inducements,
suggestions, representations, assurances, or other similar conduct by the
defendant that the defendant knew, or reasonably should have known, would
induce the plaintiff to delay filing suit.

***

Plaintiffs asserting equitable estoppel must have acted diligently in pursuing
their claims both before and after the defendant induced them to refrain from
-9-
filing suit. The statute of limitations is tolled for the period during which the
defendant misled the plaintiff. The plaintiff must demonstrate that suit was
timely filed after the plaintiff knew or, in the exercise of reasonable diligence,
should have known that the conduct giving rise to the equitable estoppel
claim had ceased to be operational.

Redwing, 363 S.W.3d at 460 (citations and footnote omitted). “Similarly, a defendant may
revive a plaintiff’s remedy that had been barred by the running of a statute of limitations
either by expressly promising to pay the debt or by acknowledging the debt and expressing
a willingness to pay it.” Ingram v. Earthman, 993 S.W.2d 611, 633–34 (Tenn. Ct. App.
1988) (internal citations and footnotes omitted). In such cases,

The expression of willingness to pay the debt that must accompany the
acknowledgment of the debt may be implied from the defendant’s words or
acts but . . . the words or acts must amount to a recognition of the continuing
obligation. Persons who successfully establish the revival exception to a
statute of limitations defense must file suit with the applicable limitations
period measured from when the conduct constituting the revival occurred.

Id. at 634.

Here, Dr. Little identified several demands of payment that were met by Siskin’s
acknowledgment of the debt and offers of repayment. In December 2013, Siskin responded
to Dr. Little’s demand for payment with a check in the amount of $37,500. In September
2014, Siskin’s President and CEO advised by letter that she “would like to resolve this
issue in a fair way” and offered payment of the original amount, plus interest, for a total
amount of $82,635.64. Again, in April 2019, Siskin suggested that a fair payment would
consist of “the actual amount of interest earned on the $37,500 principal amount,” for a
new total payment of $84,697.28. These offers occurred before the parties participated in
their last mediation in December 2019. Siskin likewise assured Dr. Little throughout the
pertinent time period that his funds were invested and accruing interest. Dr. Little promptly
filed suit when Siskin filed its declaratory judgment action indicating an intent to refuse
payment altogether on the obligation. Relative to the revival of the debt obligation, Siskin
offered assurances that it would repay the debt with interest as late as April 2019. The only
issue between the parties related to the amount of interest owed on the funds. Accordingly,
we conclude that the trial court erred in determining that Dr. Little’s claims were untimely.

C.

Tennessee follows the American Rule which provides that “litigants pay their own
attorney[ ] fees absent a statute or an agreement providing otherwise.” State v. Brown &
Williamson Tobacco Corp., 18 S.W.3d 186, 194 (Tenn. 2000); accord Taylor v. Fezell,
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158 S.W.3d 352, 359 (Tenn. 2005). Dr. Little does not cite to a statute or agreement in
support of his request for attorney fees on appeal. We also cannot say that the instant
appeal was frivolous. Tenn. Code Ann. § 27-1-122 (providing the reviewing court with
the authority to award attorney fees when it appears that the appeal was frivolous or taken
solely for delay). We respectfully deny the request for attorney fees on appeal.

V. CONCLUSION

For the reasons stated above, we reverse the decision of the trial court. The case is
remanded for further proceedings. Costs of the appeal are taxed to the appellee, Siskin
Hospital for Physical Rehabilitation, Inc.

_________________________________
JOHN W. MCCLARTY, JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10598562. Public record. Not legal advice.