Leslie Johansen v. Leon Sharber

02/12/2018

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

December 6, 2017 Session

LESLIE JOHANSEN v. LEON SHARBER, ET AL.

Appeal from the Circuit Court for Rutherford County

No. 69761 Mitchell Keith Siskin, Judge

No. M2017-00639-COA-R3-CV

This appeal concerns a release of liability. Leslie Johansen (“Johansen”) was a passenger

in an ATV accident that resulted in the death of the driver, Lee Martin Sharber. Johansen

sued Leon Sharber, Personal Representative of Lee Martin Sharber’s Estate, in the Circuit

Court for Rutherford County (“the Trial Court”) alleging negligence. Johansen’s

uninsured motorist carrier, GEICO Casualty Company (“GEICO”), was joined as a

defendant. While the tort action was underway and without GEICO’s approval, Johansen

executed a release of claim regarding the Personal Representative which was filed in the

Probate Court for Rutherford County (“the Probate Court”). GEICO filed a motion for

summary judgment, arguing that, as a result of the release, Johansen forfeited any

recovery rights she had against GEICO. The Trial Court granted summary judgment to

GEICO. Johansen appealed. We hold that the release executed by Johansen served to

release GEICO from any liability arising from Johansen’s personal injury claim

stemming from the ATV accident. We affirm the judgment of the Trial Court.

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

Case Remanded

D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which RICHARD H.

DINKINS and JOHN W. MCCLARTY, JJ., joined.

Henry S. Queener, Nashville, Tennessee, for the appellant, Leslie Johansen.

C. Benton Patton and Britney K. Pope, Nashville, Tennessee, for the appellee, GEICO

Casualty Company.

Herbert H. Slatery, III, Attorney General and Reporter, Andrée S. Blumstein, Solicitor

General, and Lindsay H. Sisco, Assistant Attorney General, for the intervenor-appellee,

the Tennessee Attorney General.

OPINION

Background

In November 2014, Johansen filed a claim against the Estate of Lee Martin

Sharber in the Probate Court for medical bills and personal injury. In May 2015,

Johansen sued Leon Sharber, Personal Representative of the Estate of Lee Martin

Sharber, in the Trial Court. In this latter case, Johansen alleged that she was injured as a

result of negligence in the ATV accident. GEICO, Johansen’s uninsured motorist carrier,

was served and joined as a party. In July 2015, Johansen executed a release of claim in

the Probate Court without GEICO’s consent. The effect of this release of claim is the

central disputed issue on appeal.

In November 2016, GEICO filed a motion for summary judgment. GEICO

asserted that the release of claim served to settle Johansen’s tort claim and extinguished

GEICO’s subrogation rights releasing GEICO from any liability to Johansen under the

insurance policy. In December 2016, Johansen filed a response to GEICO’s motion,

arguing among other things that neither Johansen nor the Personal Representative had

intended to settle the tort claim, and that, in any case, the Probate Court lacked

jurisdiction to dispose of tort claims. Johansen argued also that the summary judgment

standard set forth at Tenn. Code Ann. § 20-16-101, which GEICO had cited, violated the

separation of powers doctrine and was unconstitutional. The Attorney General of

Tennessee intervened to defend the statute. In February 2017, the Trial Court entered an

order granting summary judgment to GEICO. The Trial Court attached its detailed

findings of fact and conclusions of law, which stated in part:

The undisputed facts are as follows. The Plaintiff, Leslie Johansen,

was a passenger in an ATV accident that occurred on July 13, 2014. The

driver of the vehicle, Lee Martin Sharber, was killed in the accident.

Defendant Leon Sharber is the Administrator of the probate estate of Lee

Martin Sharber, pursuant to the Order of the Probate Court of Rutherford

County. Defendant GEICO is the Plaintiff’s uninsured motorist carrier. On

November 5, 2014, the Plaintiff filed a claim against the Estate of Lee

Martin Sharber in the Probate Court, in the amount of $150,000.00. On her

Probate Court claim form, the Plaintiff described the “Items and Nature of

Claims” as “Medical Bills/Personal Injury (Estimate).” On July 15, 2015

(during the pendency of the case at bar), the Plaintiff executed a “Release

and Acknowledgment of Satisfaction of Claim” (hereinafter ‘Release’), and

filed the same with the Probate Court the following day. The complete text

of the Release, set forth under the caption of the Probate Court case, is as

follows:

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The undersigned, Leslie Johansen, acknowledges full and

complete satisfaction of the claim filed against the Estate and

releases the Personal Representative from any further liability

on the claim of $150,000.00 that the undersigned filed against

the Estate.

Both the Plaintiff and the Administrator now insist that they did not intend

the Release to affect the case at bar in any way. GEICO was not involved

with the execution of the Release in any way, did not consent to the

Plaintiff’s execution of the Release, and was not informed of the existence

of the Release until after its execution. After execution of the Release, the

Plaintiff was allowed by Leon Sharber (in his capacity as Executor of the

estate) to retain possession of a semi-truck which the decedent had owned.

The semi-truck was eventually sold, and the Plaintiff received a portion of

the proceeds therefrom.

The Trial Court went on to articulate its rationale for finding in favor of GEICO,

stating as follows:

GEICO argues, persuasively, that the effect of the Release was to

destroy its subrogation rights pursuant to T.C.A. § 56-7-1206 and under its

contract with the Plaintiff. Clearly, the Release was a general release as to

the July 13, 2014 ATV accident. The scope and extent of a release depends

on the intent of the parties as expressed in the instrument. Cross v. Earls,

517 S.W.2d 751, 752 (Tenn. 1974). As quoted above, the instrument in

question herein acknowledged “full and complete satisfaction” of the claim

filed by the Plaintiff in the Probate case, and further released the “Personal

Representative from any further liability on the claim of $150,000.00.” As

also quoted above, the “claim” that was released was for “Medical

Bills/Personal Injury (Estimate)” in the amount of $150,000.00, stemming

from the ATV accident. This broad, all-encompassing language

demonstrates the intent of the parties to the Release that it operate as a

general release as to the ATV accident. See Id. (General release covers all

claims between the parties which are in existence and within their

contemplation). When the Plaintiff relinquished her rights through the

execution of the Release, she also extinguished the rights of GEICO under

its claim for subrogation. See Doss v. Tennessee Farmers Mutual Ins. Co.,

2001 WL 1565883 at *3, No. M2000-01971-COA-R3-CV (Tenn. Ct. App.,

M.S., Dec. 10, 2001).

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As to the Plaintiff’s argument that the Release did not operate to

release any claims against Leon Sharber, insomuch as it released only the

estate, such is contradicted by the plain language of the Release itself,

which specifically provides that it “releases the Personal Representative”

from any further liability on the personal injury claim. The Defendant in

the case at bar is “Leon Sharber, Administrator of Estate for Lee Martin

Sharber,” not Leon Sharber individually on his own behalf. The Defendant

herein is, therefore, the same entity -- the personal representative of the

estate -- who was released from liability in the general Release filed with

the Probate Court. Accordingly, the Plaintiff’s assertion that the Release

somehow only operated to release the Estate of Lee Martin Sharber is

simply not correct.

With respect to the Plaintiff’s argument that the Release, having

been prepared under the auspices and caption of the Probate Court case,

could not legally affect the tort ease at bar, such is without merit. Although

the Plaintiff is correct in her assertion that the Probate Court lacks

jurisdiction to dispose of tort claims, the proof of claim that the Plaintiff

filed in the Probate Court did indeed specify that it was intended to

preserve her claim for “Medical Bills/Personal Injury (Estimate).” There

was no challenge to, or ruling regarding the Plaintiff’s claim in Probate

Court, and the claim was ultimately settled pursuant to the Release. The

Probate Court’s lack of jurisdiction over tort claims is inapposite; the claim

was raised, negotiated, and settled. Further, the undisputed proof shows,

that the parties acted in reliance on the Release when Leon Sharber

transferred ownership of the semi-truck to the Plaintiff, and the Plaintiff

subsequently sold the truck and received funds from the sale. These facts

support the Plaintiff’s clear intent to settle her tort claim. The Release is

valid, notwithstanding the Probate Court’s lack of tort jurisdiction.

The Plaintiff further argues that GEICO was not an intended

beneficiary to the contract (the Release), and therefore cannot enforce the

Release. This argument is misplaced, because as the uninsured motorist

carrier, GEICO “stands in the shoes” of the owner or operator of the

uninsured vehicle involved in the accident. See T.C.A. § 56-7-1206(a).

Accordingly, by operation of law, GEICO can indeed enforce the Release,

regardless of whether it was an intended beneficiary of the contract.

Finally, the Plaintiff asserts that there was no meeting of the minds

as to the release, and that such was not intended to impact the instant

litigation. In support of this assertion, the Plaintiff relies upon the affidavits

of herself and Leon Sharber, both of which state that they did not intend to

affect the case at bar when they executed the Release. However, when the

plain meaning of a contract can be ascertained from the language within the

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four corners of the document, the parol evidence rule prevents the Court

from considering other contradictory evidence regarding the parties’

intentions. See Farmers & Merchants Bank v. Petty, 664 S.W.2d 77, 82

(Tenn. App. 1983), perm. app. denied 12/19/83.

Conclusion

Since GEICO has affirmatively negated an essential element (i.e.,

liability) of the Plaintiff’s claim against it, summary judgment is

appropriate, and GEICO’s motion must be granted. Mr. Patton will kindly

prepare an Order consistent with this ruling. This letter will become part of

the record in this cause.

The Trial Court also entered an order dismissing Johansen’s constitutional

challenge to Tenn. Code Ann. § 20-16-101, stating:

This cause came before the Court on the 8th day of February 2017,

pursuant to Rule 24 of the TENNESSEE RULES OF CIVIL

PROCEDURE, following notice to the Attorney General that a challenge,

under the Tennessee constitution to the constitutionality of Tenn. Code

Ann. § 20-16-101 had been raised in Plaintiff’s RESPONSE to Defendant

Geico Casualty Company’s MOTION FOR SUMMARY JUDGMENT.

The Attorney General has intervened to defend the constitutionality of

Tenn. Code Ann. § 20-16-101; and following briefing and argument in

open Court, the Court finds as follows:

The Tennessee Supreme Court’s decision in Rye v. Women’s Care

Ctr. of Memphis, MPLLC, 477 S.W.3d 235 (Tenn. 2015) sets forth the

standard courts must apply in deciding a motion for summary judgment and

renders the question of whether Tenn. Code Ann. § 20-16-101 is

constitutional moot.

It is therefore ordered that the challenge to the constitutionality of

Tenn. Code Ann. § 20-16-101 raised in Plaintiff’s RESPONSE to

Defendant Geico’s MOTION FOR SUMMARY JUDGMENT is denied

and dismissed. All other matters are reserved for further orders of this

court.

In April 2017, the Trial Court entered its “Order Entering Final Judgment,” stating

in part: “[T]he Order entered granting GEICO Casualty Company’s Motion for Summary

Judgment, originally entered on February 28, 2017 will now become a Final Order as to

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GEICO Casualty Company, pursuant to Rule 54.02, as of the date of the entry of this

Order. All other matters are reserved.” Johansen timely appealed to this Court.1

Discussion

Although not stated exactly as such, Johansen raises the following issues on

appeal: 1) whether the Trial Court erred in dismissing Johansen’s constitutional challenge

to Tenn. Code Ann. § 20-16-101, the summary judgment standard enacted by the General

Assembly; and, 2) whether the Trial Court erred in granting GEICO’s motion for

summary judgment.

We first address whether the Trial Court erred in dismissing Johansen’s

constitutional challenge to Tenn. Code Ann. § 20-16-101, the summary judgment

standard enacted by the General Assembly. According to Johansen, the statute violates

the separation of powers doctrine. Tenn. Code Ann. § 20-16-101 (Supp. 2017) provides:

In motions for summary judgment in any civil action in Tennessee, the

moving party who does not bear the burden of proof at trial shall prevail on

its motion for summary judgment if it:

(1) Submits affirmative evidence that negates an essential element of the

nonmoving party’s claim; or

(2) Demonstrates to the court that the nonmoving party’s evidence is

insufficient to establish an essential element of the nonmoving party’s

claim.

The Attorney General correctly points out that the Trial Court did not rely on

Tenn. Code Ann. § 20-16-101 in reaching its decision in this case. As reflected in the

Trial Court’s orders quoted above, the Trial Court applied the Rye standard for summary

judgment established by our Supreme Court, not the summary judgment standard set out

in Tenn. Code Ann. § 20-16-101. Therefore, Johansen’s constitutional challenge entirely

is moot, and need not be considered on its merits. We affirm the Trial Court in its

dismissal of Johansen’s constitutional challenge to Tenn. Code Ann. § 20-16-101.

The next and final issue we address is whether the Trial Court erred in granting

GEICO’s motion for summary judgment. As our Supreme Court has instructed regarding

appellate review of a trial court’s ruling on a motion for summary judgment:

1

Leon Sharber is not a party to this appeal.

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Summary judgment is appropriate when “the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.”

Tenn. R. Civ. P. 56.04. We review a trial court’s ruling on a motion for

summary judgment de novo, without a presumption of correctness. Bain v.

Wells, 936 S.W.2d 618, 622 (Tenn. 1997); see also Abshure v. Methodist

Healthcare–Memphis Hosp., 325 S.W.3d 98, 103 (Tenn. 2010). In doing

so, we make a fresh determination of whether the requirements of Rule 56

of the Tennessee Rules of Civil Procedure have been satisfied. Estate of

Brown, 402 S.W.3d 193, 198 (Tenn. 2013) (citing Hughes v. New Life Dev.

Corp., 387 S.W.3d 453, 471 (Tenn. 2012)).

***

[I]n Tennessee, as in the federal system, when the moving party does not

bear the burden of proof at trial, the moving party may satisfy its burden of

production either (1) by affirmatively negating an essential element of the

nonmoving party’s claim or (2) by demonstrating that the nonmoving

party’s evidence at the summary judgment stage is insufficient to establish

the nonmoving party’s claim or defense. We reiterate that a moving party

seeking summary judgment by attacking the nonmoving party’s evidence

must do more than make a conclusory assertion that summary judgment is

appropriate on this basis. Rather, Tennessee Rule 56.03 requires the

moving party to support its motion with “a separate concise statement of

material facts as to which the moving party contends there is no genuine

issue for trial.” Tenn. R. Civ. P. 56.03. “Each fact is to be set forth in a

separate, numbered paragraph and supported by a specific citation to the

record.” Id. When such a motion is made, any party opposing summary

judgment must file a response to each fact set forth by the movant in the

manner provided in Tennessee Rule 56.03. “[W]hen a motion for summary

judgment is made [and] . . . supported as provided in [Tennessee Rule 56],”

to survive summary judgment, the nonmoving party “may not rest upon the

mere allegations or denials of [its] pleading,” but must respond, and by

affidavits or one of the other means provided in Tennessee Rule 56, “set

forth specific facts” at the summary judgment stage “showing that there is a

genuine issue for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party

“must do more than simply show that there is some metaphysical doubt as

to the material facts.” Matsushita Elec. Indus. Co., 475 U.S. at 586, 106 S.

Ct. 1348. The nonmoving party must demonstrate the existence of specific

facts in the record which could lead a rational trier of fact to find in favor of

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the nonmoving party. If a summary judgment motion is filed before

adequate time for discovery has been provided, the nonmoving party may

seek a continuance to engage in additional discovery as provided in

Tennessee Rule 56.07. However, after adequate time for discovery has

been provided, summary judgment should be granted if the nonmoving

party’s evidence at the summary judgment stage is insufficient to establish

the existence of a genuine issue of material fact for trial. Tenn. R. Civ. P.

56.04, 56.06. The focus is on the evidence the nonmoving party comes

forward with at the summary judgment stage, not on hypothetical evidence

that theoretically could be adduced, despite the passage of discovery

deadlines, at a future trial.

Rye v. Women’s Care Cntr. of Memphis, MPLLC, 477 S.W.3d 235, 250, 264-65 (Tenn.

2015).

Johansen argues that, despite its plain and unambiguous language, the release of

claim did not settle her tort claim. In support of her position, Johansen makes the

following arguments: (1) The defendant in this matter is Leon Sharber rather than the

Estate of Lee Martin Sharber; (2) any “claim” filed by Johansen in the Estate of Lee

Martin Sharber cannot be a tort claim and therefore the “release of claim” cannot release

any such tort claim; and (3) neither Johansen nor the personal representative ever

intended to settle the tort claim.

Before addressing Johansen’s points, we look to the case law regarding releases

and the role of intent. In the Peatross case, this Court discussed as follows:

A release is a contract and the rules of construction applied to

contracts are used in construing a release. Richland Country Club, Inc. v.

CRC Equities, Inc., 832 S.W.2d 554, 557 (Tenn. Ct. App. 1991). Generally

speaking, the scope and extent of release depends on the intent of the

parties as expressed in the instrument. A general release covers all claims

between the parties which are in existence and within their contemplation; a

release confined to particular matters or causes operates to release only

such claims as fairly come within the terms of the release. Cross v. Earls,

517 S.W.2d 751, 752 (Tenn. 1974). In Evans v. Tillett Bros. Constr. Co.,

Inc., 545 S.W.2d 8 (Tenn. Ct. App. 1976), the Court explained how the

scope of a release should be determined:

The scope of a release is determined by the intention of the

parties as expressed in the terms of the particular instrument,

considered in the light of all the facts and circumstances. The

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intention of the parties is to be gathered from the entire

instrument and in such inquiry that construction will be

adopted which gives effect to each and every part of the

instrument where that is possible. In interpreting a release to

determine whether a particular claim has been discharged, the

primary rule of construction is that the intention of the parties

shall govern and this intention is to be determined with a

consideration of what was within the contemplation of the

parties when the release was executed, which in turn is to be

resolved in the light of all of the surrounding facts and

circumstances under which the parties acted.

Id. at 11; see also, Richland, 832 S.W.2d at 557; Jackson v. Miller, 776

S.W.2d 115, 118 (Tenn. Ct. App. 1989). Subsequent decisions have further

explained that “[a] release ordinarily covers all such matters as may fairly

be said to have been within the contemplation of the parties when it was

given.... Consequently a demand of which a party was ignorant when the

release was given is not as a rule ... embraced therein....” Jackson, 776

S.W.2d at 118 (quoting 76 C.J.S. Release § 52 (1952)).

In Evans, plaintiff signed an agreement releasing one tortfeasor from

liability “and all other persons, firms or corporation liable or who might be

claimed to be liable.” Evans, 545 S.W.2d at 10. The defendants filed a

motion for summary judgment asserting that the settlement agreement

released them from liability as well. In response, plaintiff filed an affidavit

indicating that he had been told that the agreement would only release the

defendant driver and that he relied upon this representation when signing

the agreement. Id. On review, the Court found “that the affidavits

submitted in support of the motion created a material issue of fact with

regard to the intention of the parties in releasing an unnamed tortfeasor....”

Id. at 12. Consequently, the Court concluded that summary judgment was

inappropriate. Id.

The Court, in Louis Dreyfus Corp. v. Austin Co., 868 S.W.2d 649

(Tenn. Ct. App. 1993), applied the “intent” approach set forth in Evans.

The Court first examined the language of the release and then considered

the agreement’s terms in light of the surrounding facts and circumstances.

After considering both the terms of the agreement and the extrinsic

evidence explaining those terms, the Court found that summary judgment

was appropriate because “a jury could only conclude that the parties

intended to release the claims now asserted by [plaintiff].” Id. at 656.

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In Richland, defendants moved for summary judgment on the basis

of a release included in an agreement with plaintiff. Richland, 832 S.W.2d

at 557. Plaintiff presented two affidavits to show the intention of the

parties when they signed the release agreement. In granting summary

judgment, the trial court found that the agreement was unambiguous and

therefore did not consider plaintiff’s affidavits. On appeal, the Court

recited the rules on the construction of a release agreement and found that

the trial court erred: “[t]hus, it appears that the circumstances surrounding

the execution of the documents in this case, the situation of the parties, the

business to which the agreements related ... and the subject matter of the

agreements in general should have been considered in construing the effect

of the release.” Id. at 557. Considering this new information, the Court

found that summary judgment was inappropriate because “a trier of fact

could draw different inferences about the parties’ intent.” Id. at 557.

Peatross v. Shelby County, No. W2008-02385-COA-R3-CV, 2009 WL 2922797, at *2-3

(Tenn. Ct. App. Sept. 10, 2009), no appl. perm. appeal filed.

In the present case, the language of the release is unambiguous. Johansen not only

acknowledged complete and full satisfaction of the claim for medical bills and personal

injury filed against the Estate, she released the Personal Representative from any further

liability on the claim of $150,000. Johansen never has explained fully exactly what the

parties were intending to do if not resolve the tort claim. It appears, rather, that Johansen

simply now regrets having signed the release. In light of the release’s unambiguous

language and the lack of surrounding circumstances that would serve to invalidate the

agreement, we see no justification for exploring further the parties’ intent.

We also are unpersuaded by Johansen’s argument concerning the identity of the

defendant. The release of claim specifically released both the Personal Representative as

well as the Estate. In addition, even if Johansen prevailed in her tort action, she would

recover from the Estate of Lee Martin Sharber, not Leon Sharber, individually.

Finally, Johansen states correctly that the Probate Court could not dispose of a tort

claim. However, that is not exactly what happened here. The Probate Court simply

accepted the filing of the release of claim regarding the tort action. The Probate Court

did not attempt to adjudicate the tort claim itself. Johansen and the Personal

Representative settled the tort claim by contractual agreement.

There being no genuine issues of material fact in this case, and with GEICO

having made a properly supported motion for summary judgment, we find no error in the

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Trial Court’s granting summary judgment to GEICO. We, therefore, affirm the judgment

of the Trial Court.

Conclusion

The judgment of the Trial Court is affirmed, and this cause is remanded to the

Trial Court for collection of the costs below. The costs on appeal are assessed against the

Appellant, Leslie Johansen, and her surety, if any.

____________________________________

D. MICHAEL SWINEY, CHIEF JUDGE

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