Olympia Child Development Center, Inc. v. City of Maryville

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

February 13, 2001 Session

OLYMPIA CHILD DEVELOPMENT CENTER, INC., ET AL. v. CITY OF

MARYVILLE, TENNESSEE

Appeal from the Circuit Court for Blount County

No. L-10699 W. Dale Young, Judge

FILED APRIL 27, 2001

No. E2000-02124-COA-R3-CV

The suit filed in this tort action originally sought a judgment against the defendant, City of Maryville

(“the City”), for damages allegedly sustained by four plaintiffs when a van owned by the plaintiff

Olympia Child Development Center, Inc. (“Olympia”), and driven by the plaintiff Lisa K. Murphy

was struck by a vehicle driven by Rodney Parton, an off-duty police officer employed by the City.

The trial court granted the City summary judgment as to the claims of the remaining plaintiffs,

Olympia and Murphy, finding that their claims are barred by the doctrines of collateral estoppel and

modified comparative fault. Only Olympia appeals. We affirm the grant of summary judgment, but

base our affirmance on a ground other than the one utilized by the trial court.

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

Affirmed; Case Remanded

CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which HERSCHEL P. FRANKS and

D. MICHAEL SWINEY, JJ., joined.

Kevin W. Shepherd, Maryville, Tennessee, for the appellant, Olympia Child Development Center,

Inc.

Nathan D. Rowell, Knoxville, Tennessee, for the appellee, City of Maryville, Tennessee.

OPINION

I. Facts

On November 13, 1995, the plaintiff Lisa K. Murphy was driving a van owned by her

employer, the plaintiff Olympia, a Maryville day care center, in a westerly direction on Everett

Avenue in Maryville. At the same time, Rodney Parton, an off-duty police officer employed by the

defendant, the City, was driving a vehicle owned by his mother, Zula Parton, in a northerly direction

on South Everett High Road. The Olympia van was occupied by several children, including Kevin

Tyler Clendenen and Andrew Tidwell.

When Murphy reached the intersection of Everett Avenue and South Everett High Road, she

brought her van to a stop as required by the stop sign facing traffic proceeding in her direction.

While stopped, Murphy observed a brown car pass in front of her at a high rate of speed. Following

this, and after ascertaining, in her judgment, that the way was clear, she proceeded into the

intersection, at which time her vehicle was struck in the left side by the front of the vehicle being

driven by Rodney Parton. At the time of the collision, Parton and a passenger, his brother Tony

Parton, who was also an off-duty police officer, were not in uniform. They were, however, in pursuit

of the brown car that had passed in front of Murphy because that car had allegedly run Parton’s

vehicle off the road.

The accident resulted in injuries to Murphy; the minors, Kevin Tyler Clendenen and Andrew

Tidwell; and both of the Partons. Olympia allegedly suffered economic losses and injury to its

reputation.1

II. Procedural History of Instant Case

On November 12, 1996, Murphy and Olympia, along with the two shareholders of Olympia,

filed a complaint against the City “in as much [sic] as their agent, Rodney Parton, was the proximate

cause of this accident.” The City filed an answer, denying, among other things, that Parton was

acting within the scope of his employment at the time of the accident. A motion for summary

judgment was filed by the City on January 30, 1998. It was granted by the trial court by way of an

order entered March 27, 1998. The trial court apparently found that the facts before it conclusively

established that Parton was not acting within the scope of his employment with the City at the time

of the collision.

On the first appeal in this matter, we affirmed the judgment of the trial court as to the claims

of the Olympia shareholders2 and as to a portion of the claims of Olympia and Murphy, but vacated

the trial court’s judgment pertaining to the allegation of the complaint that the City was vicariously

liable for the conduct of Parton. As to this allegation, we held, on the record then before us, that

there was a disputed issue of material fact as to whether Parton “was acting within the scope of his

employment [with the City] at the time of the accident.” Olympia Child Dev. Ctr., Inc. v. City of

Maryville, C/A No. 03A01-9804-CV-00136, 1999 WL 64271, at *4 (Tenn. Ct. App. E.S., filed

January 29, 1999). We remanded for further proceedings.

1

While not entirely clear from the compla int, it seems obvious from the record that Olympia’s van suffered

significant dam age in the acc ident.

2

As to the shareholders, we concluded that dismissal was appropriate but not on the ground o f lack of agenc y.

We basically determined that the shareholders had failed to state a claim upon which relief could be granted.

-2-

While the instant case was pending in the trial court following remand, other litigation that

arose out of the subject accident was proceeding apace in that court. The resolution of Olympia’s

claim in that litigation was destined to have an impact on the suit filed by Olympia against the City.

Because of this impact, we will now discuss the related litigation in some detail.

III. The Related Litigation

The complaint in the instant case was not the first complaint filed as a result of this accident.

That honor went to an action filed on May 28, 1996, by the parents of Kevin Tyler Clendenen, one

of the minors riding in the Olympia van at the time of the accident. The Clendenens filed suit against

Rodney Parton; his mother, Zula Parton, on the theory of respondeat superior; Olympia; and

Murphy. Murphy and Olympia responded by filing a cross-claim against Rodney Parton and his

mother. The cross-claim does not mention the City of Maryville or Parton’s employment as a police

officer. It also does not allege that Parton was acting as an agent of the City at the time of the

accident.

In the Clendenens’ action, Melissa Tidwell, acting individually and on behalf of her son,

Andrew Tidwell – the other child injured in the accident – was permitted to intervene and assert a

claim against the Partons. Later, in the same action, Rodney Parton filed a cross-claim against

Olympia and Murphy.

Finally, a second related lawsuit – this one by Tony Parton and his wife, Tania Parton – was

filed on October 11, 1996, against Olympia, Murphy, Rodney Parton, and his mother. Both of these

two related lawsuits were consolidated for trial. Prior to trial, however, the Clendenens settled their

suit against Rodney Parton and his mother. They non-suited their complaint as to Olympia and

Murphy.

On the day of trial, but before a jury was impaneled, the trial court further considered Rodney

Parton’s motion for summary judgment as to Olympia’s cross-claim against him and his mother.

The court below granted Parton’s motion and dismissed Olympia’s cross-claim. On appeal, we

reversed and remanded for a new trial. For more details regarding this phase of the litigation, the

reader is referred to our opinion filed in that appeal. See Olympia Child Dev. Ctr., Inc. v. Parton,

C/A No. E1999-02448-COA-R3-CV, 2000 WL 225894 (Tenn. Ct. App. E.S., filed February 29,

2000). In reversing the trial court, we remanded for a new trial, but solely on the issues of causation

and damages. We noted that the jury’s allocation of fault – in the trial that took place while the

appeal was pending – “as already determined [was] not to be relitigated.” 2000 WL 225894 at *7.

Following the trial court’s dismissal of Olympia’s cross-claim, but before our reversal of that

action, Olympia was no longer in these consolidated actions as a claimant; but it was still very much

a party to the proceedings in a defensive posture, since it was then defending claims asserted by

Rodney Parton, Tony Parton, and the latter’s wife.

-3-

As previously noted, the remaining claims were submitted to a jury. Following a three-day

trial, the jury found, in the words of the February 18, 1999, judgment entered on the jury’s verdict,

“that Rodney Parton was 100% at fault for the accident, and that Lisa K. Murphy, as agent and

employee of Olympia Child Development Center, Inc. was zero at fault.” Money judgments were

entered against Rodney Parton in favor of Andrew Tidwell; his mother, Melissa Tidwell; and

Murphy. All claims against Murphy and Olympia were dismissed as a result of the jury’s verdict.3

IV. The Two Remaining Claims

When the dust had settled after the remands following the two successful Olympia appeals,

and after the final judgment following the jury trial, there were two claims still pending in the trial

court: Olympia v. City of Maryville and Olympia v. Parton.4 The final resolution of the latter case

had the effect of sounding the death knell for Olympia’s claim in Olympia v. City of Maryville.

A.

On September 5, 2000, Olympia settled its claim in Olympia v. Parton when its agent

executed on its behalf a “Release of All Claims” in consideration of a payment of $41,417.10. In

executing the release, Olympia stated that it did

hereby and for their heirs, executors, administrators, successors and

assigns release, acquit, and forever discharge RODNEY PARTON,

ZULA PARTON and ALLSTATE INSURANCE COMPANY and

their agents, servants, successors, heirs, executors, administrators and

all other persons, firms, corporations, associations or partnerships of

and from any and all claims, actions, causes of action, demands,

rights, damages, costs, loss of service, expenses and compensation

whatsoever which the undersigned now have or which may hereafter

accrue on account of or in any way growing out of any and all known

and unknown, foreseen and unforeseen bodily and personal injuries,

mental and emotional distress and the consequences thereof resulting

or to result from the accident, casualty or event which occurred on or

about the 13th day of November 1995 in Blount County, Tennessee.

It is the understanding, agreement and intention of releasors that the

aforesaid consideration is and represents a full and complete

compromise settlement, accord and satisfaction for any and all of the

aforesaid claims and matters being released herein.

3

Tony Parton and his wife later non-suited their action against Rodney Parton. All claims against Zula Parton

were also voluntarily dismissed.

4

W e recognize that Murphy still had a pending claim against the City; but since she did not appeal the trial

court’s dismissal of her claim against the City, we will not further notice her involvement in this litigation.

-4-

As a result of this settlement, an order of compromise and dismissal was entered in the trial court

on September 15, 2000. The order dismissed Olympia’s claim “with full prejudice.” As the

appellant Olympia points out, the order recites that

Olympia Child Development Center, Inc. does not agree that they

have been fully compensated as a result of injuries claimed in their

Complaint, although claims between these parties are herein

compromised by agreement.

With the entry of the order, Olympia v. Parton, passed into history.

B.

On August 6, 1999, before Olympia v. Parton was settled, the City filed a new motion for

summary judgment in Olympia v. City of Maryville. In its motion, the City claimed that there were

no material issues of fact as to the following legal issues:

Plaintiffs’ claims against the City of Maryville are barred by the

doctrines of collateral estoppel and res judicata.

Plaintiffs’ claims against the City of Maryville are barred by the

doctrine of modified comparative fault, as Plaintiff failed to include

the City of Maryville in a previous suit involving the same issues.

In support of its motion, the City relied upon the jury’s verdict in the two related lawsuits – the

verdict finding Parton to be 100% at fault and Murphy, and hence Olympia, 0% at fault.

On July 28, 2000, the trial court filed a memorandum opinion that recites the following:

The Court has carefully studied the Briefs of Law provided by

Counsel for the respective parties and concludes that the Doctrine of

Collateral Estoppel applies to the case at bar.

The Court is persuaded that the Plaintiffs’ claims against the City of

Maryville are further barred by the Doctrine of Modified Comparative

Fault inasmuch as there has been a judicial determination that Rodney

Parton (individually) is 100% at fault in connection with the

automobile accident which is the subject of the case at bar.

Accordingly, the Court is of the opinion and finds that the

Defendant’s Motion for Summary Judgment is well taken and is

granted.

-5-

An order was subsequently entered dismissing the complaint of Olympia in the case of Olympia v.

City of Maryville. It is that dismissal that is now before us on this appeal. As can be seen, this is

the third time that the subject accident and some of the resulting claims have found their way to the

Court of Appeals.

V. Grounds of the City’s Motion for Summary Judgment

The gist of the City’s case is found in the following statement made by it at the trial court

level in a filing in support of its most recent motion for summary judgment:

Plaintiff’s claims against the City of Maryville are barred by the

doctrines of res judicata and collateral estoppel, as it has already been

judicially determined that Rodney Parton was responsible for the

accident giving rise to both this lawsuit and the previous lawsuit.

We agree with the City that it has already been judicially determined – in a way that binds the parties

in the instant case – that Parton was 100% at fault in the accident; but the jury in the related lawsuits

did not have before it the issue of whether Parton was acting within the scope of his employment

with the City at the time of the accident. Parton did not plead immunity under T.C.A. § 29-20-

310(b) (2000).5 Since the immunity issue was not pleaded, there was no reason for the jury to decide

whether or not Parton was acting within the scope of his employment with the City. The jury verdict

means that Parton, as the driver of the vehicle, was the sole cause of the accident. The City would

have us hold that the jury found that Parton, while not acting as a police officer, was the sole cause

of the accident. There is nothing in the pleadings and jury verdict to justify such a holding. Whether

the jury concluded that Parton was or was not on police business at the time of the accident was

immaterial to the issue before them, i.e., whether the person who crashed his vehicle into the

Olympia van was at fault and, if so, to what extent.

While the rules of res judicata and collateral estoppel are clear, see Massengill v. Scott, 738

S.W.2d 629 (Tenn. 1987), they have no application in the instant case where the issue of agency was

not before the jury in the earlier litigation. Just because Parton might have been entitled to raise a

T.C.A. § 29-20-310(b) immunity defense does not mean that the jury’s verdict, in some mystical

way, addressed this never-raised issue or has the effect of barring the instant case. Parton chose not

to raise a T.C.A. § 29-20-310(b) defense. It may be that he chose not to raise this defense because

he honestly believed that he was not engaged in police business at the time of the accident; but on

5

T.C.A. § 29 -20-310(b) (2 000) provid es, in pertinent part, as follows:

No claim may be brought against an employee or judgment entered against an

employee for damages for which the immunity of the governmental entity is

removed by this chapter unless the claim is one for medical malpractice brought

against a health care practitioner.

-6-

the other hand, he may have chosen not to raise this defense out of concern for his job6 or maybe for

a tactical reason associated with his idea as to the best way to defend the action. We do not know

precisely why he failed to raise the immunity defense. One thing, however, is sure: his failure to

raise this immunity defense does not, ipso facto, translate into a binding factual determination that

he was not acting within the scope of his employment with the City at the time of the accident. The

jury’s verdict is neutral on this issue.

If the City is arguing that the jury’s determination that Parton was 100% at fault precludes

any further allocation of fault, the answer to this is simple: Olympia is not attempting to allocate new

fault to the City. It is simply trying to prove agency and thereby make the City responsible,

vicariously, for Parton’s 100% of fault. There is nothing in the doctrines of res judicata or collateral

estoppel that precludes Olympia from attempting to prove agency and thereby cast the City in

judgment for Parton’s fault. On the contrary, the jury’s finding that Parton was 100% at fault – being

consistent with Olympia’s theory of liability against the City and being a determination that has a

preclusive effect as between Olympia and the City – would have been conclusive as to the threshold

issue of fault in the event Olympia v. City of Maryville had gone to trial.7

We find and hold that summary judgment cannot be justified on the grounds asserted by the

City and adopted by the trial court. However, we believe the City is entitled to summary judgment

on the basis that Olympia’s settlement of its claim against Parton, who Olympia contends, was acting

within the scope of his employment with the City at the time of the accident, extinguished the

liability of Parton’s alleged principal.8

VI. The Final Chapter

Olympia settled its claim against Parton, accepted $41,417.10 from him and/or his insurance

company, and released him from liability. As a result of the settlement, Olympia is obviously

precluded from pursuing its claim in the case of Olympia v. Parton. It is also precluded from

pursuing its claim in Olympia v. City of Maryville because the settlement has the effect of also

extinguishing the vicarious liability of the City.

A release of an employee discharges the employer from vicarious liability. See Tutton v.

Patterson, 714 S.W.2d 268, 271 (Tenn. 1986) (release of nurses discharges vicarious liability of

doctor); Craven v. Lawson, 534 S.W.2d 653, 654, 657 (Tenn. 1976) (release of employee discharges

employer’s liability predicated on master-servant or principal-agent relationship); Stewart v. Craig,

208 Tenn. 212, 218, 344 S.W.2d 761, 763 (1961) (covenant not to sue given to employee releases

employer from respondeat superior liability); McGee v. County of Wilson, 574 S.W.2d 744, 745,

6

There is evidence before us that he was discharged as a result of this accident and its aftermath.

7

Cf. Beaty v. McGraw, 15 S.W.3d 819 (T enn. Ct. App. 1998).

8

This issue was not raised in the briefs. The Court, sua sponte , raised it at oral argument. The parties were

asked to ad dress certain cases dealin g with this issue. Bo th sides respo nded in writing to the Cour t’s request.

-7-

747 (Tenn. Ct. App. 1978) (release of sheriff’s deputy precludes recovery from county on the basis

of vicarious liability). Because the City cannot be held vicariously liable for Parton’s conduct as a

result of the release of Olympia’s claim against Parton and because vicarious liability was the only

basis of the cause of action that survived our first opinion in Olympia v. City of Maryville, we

conclude that the City was entitled to summary judgment. Settlement of the claim against Parton

“extinguish[ed] the cause of action against the wrongdoer and since this is true it clearly has the

effect of extinguishing the cause of action against his superior.” Stewart, 344 S.W.2d at 765. It

matters not one whit that Olympia claims that it was not fully compensated as a result of the

settlement with Parton. It is not the amount or adequacy of the settlement with the agent that has the

effect of extinguishing the City’s liability. Rather it is the mere fact that the agent’s liability was

extinguished by the release. If the agent can no longer be found liable in a judicial proceeding – and,

in this case, he clearly cannot – then it automatically follows that the principal cannot be held liable,

where, as here, the sole basis of the cause of action against the principal is vicarious in nature.

We therefore find and hold that the trial court’s judgment was correct, but for a reason other

than the rationale expressed by that court. “We can affirm a trial court’s judgment if the result is

correct even though we disagree with the lower court’s reasoning.” Murvin v. Cofer, 968 S.W.2d

304, 311 (Tenn. Ct. App. 1997); Tenn. R. App. P. 36(a).

VII.

The judgment of the trial court is affirmed. This case is remanded for collection of costs

assessed below, pursuant to applicable law. Costs on appeal are taxed to the appellant, Olympia

Child Development Center, Inc.

___________________________________

CHARLES D. SUSANO, JR., JUDGE

-8-