In Tennessee, a person can be compelled to arbitrate a dispute if he or she is a party to an agreement providing for arbitration. Is the owner of a corporation or LLC bound by the company's agreement to arbitrate disputes. Of course not. That is one of the benefits of incorporation. In this case, the Court noted that "the owner is not a signatory to the contract; in fact, his name does not appear anywhere in the contract. Moreover, the owner did not negotiate the contract with the Plaintiffs. The fact that the owner owned the company which was dissolved a year later in August 2008, may or may not make him liable for certain obligations of the company but it does not make him a party to the agreement to arbitrate at issue here. As an aside, the court states that this is an issue of subject matter jurisdiction that cannot be waived.
See Lee Brown and Guttershutter of Nashville, LLC v. David Styles, LLC
Tuesday, August 23, 2011
Thursday, August 4, 2011
COMPARATIVE FAULT AND ADDING ADDITIONAL PARTIES
This case highlights a nuance of civil procedure that only civil procedure geeks like me would enjoy. As with all good stories, it involves alcohol and minding your own business.
On July 22, 2006, the Manns were in their car minding their own business when a car operated by Mr. Callicutt (a student at the University of Memphis and a member of the ATO fraternity) crossed the centerline and hit the Manns' car head on. As a result of this accident, the Manns were injured.
On July 17, 2007, the Manns filed a lawsuit alleging that immediately prior to the accident, Mr. Callicut consumed alcoholic beverages at an ATO social gathering conducted at a private home. As the lawsuit was filed within one year of the accident, the statute of limitations had not run. Of course, I am shocked that alcoholic beverages would be consumed at a fraternity social gathering, especially the ATO house at my alma mater. But, on to the story.
The Manns sued the Mr. Callicut, his parents who owned the car, the ATO chapter and the owners of the residence at which the alcohol was allegedly served. The homeowners, in their answer, denied serving alcohol at the party and deny any knowledge of alcohol consumption by Mr. Callicut at their home. The ATO chapter also denied providing alcoholic beverages at the party, but admitted that a "social gathering" took place. The ATO chapter's answer identified all of the chapter's members.
In response, the plaintiffs filed an amended complaint adding some of the individual ATO members as defendants. Even though this amended complaint was filed within 90 days of the filing by ATO of its answer identifying the chapter members, the individual members filed a motion to dismiss asserting that the statute of limitations had run. In an interesting twist of civil procedure, the defendants won.
Tennessee adopted the doctrine of "comparative fault" in 1991. Under the doctrine of comparative fault, a defendant can assert in his or her answer that a portion of fault was attributable to the negligence of another person who was not a defendant. Tennessee Code Annotated section 20-1-119 gives the plaintiff the right to file an amended complaint adding this new person as a defendant. The key is that the amended complaint must be filed "within ninety (90) days of the filing of the first answer or first amended answer alleging that person's fault." If the Plaintiff does so, the amended complaint relates back to the date of the original complaint for statute of limitations purposes.
In this case, the answer identified these individuals as members, but it did not assert that fault should be apportioned to any of them. Therefore, the answer did not trigger the provisions of section 20-1-119.
Then, the ATO chapter filed an amended answer that asserted the comparative fault of the individual members. The plaintiffs filed an amended complaint adding the individual members as defendants. Problem solved? WRONG.
When the second amended complaint was filed, the individual chapter members were "parties" to the lawsuit. The statute clearly states that the statute of limitations relates back only for persons who are not parties to the lawsuit. Because the trial court did not make its ruling on the motion to dismiss final for purposes of Rule 54, the members remained parties to the action. Therefore, section 20-1-119 does not apply.
So, the question is what would you have done? This case also highlights that the use of "John Doe" is ineffective in Tennessee.
See Mann v. Alpha Tau Omega Fraternity, et al.
On July 22, 2006, the Manns were in their car minding their own business when a car operated by Mr. Callicutt (a student at the University of Memphis and a member of the ATO fraternity) crossed the centerline and hit the Manns' car head on. As a result of this accident, the Manns were injured.
On July 17, 2007, the Manns filed a lawsuit alleging that immediately prior to the accident, Mr. Callicut consumed alcoholic beverages at an ATO social gathering conducted at a private home. As the lawsuit was filed within one year of the accident, the statute of limitations had not run. Of course, I am shocked that alcoholic beverages would be consumed at a fraternity social gathering, especially the ATO house at my alma mater. But, on to the story.
The Manns sued the Mr. Callicut, his parents who owned the car, the ATO chapter and the owners of the residence at which the alcohol was allegedly served. The homeowners, in their answer, denied serving alcohol at the party and deny any knowledge of alcohol consumption by Mr. Callicut at their home. The ATO chapter also denied providing alcoholic beverages at the party, but admitted that a "social gathering" took place. The ATO chapter's answer identified all of the chapter's members.
In response, the plaintiffs filed an amended complaint adding some of the individual ATO members as defendants. Even though this amended complaint was filed within 90 days of the filing by ATO of its answer identifying the chapter members, the individual members filed a motion to dismiss asserting that the statute of limitations had run. In an interesting twist of civil procedure, the defendants won.
Tennessee adopted the doctrine of "comparative fault" in 1991. Under the doctrine of comparative fault, a defendant can assert in his or her answer that a portion of fault was attributable to the negligence of another person who was not a defendant. Tennessee Code Annotated section 20-1-119 gives the plaintiff the right to file an amended complaint adding this new person as a defendant. The key is that the amended complaint must be filed "within ninety (90) days of the filing of the first answer or first amended answer alleging that person's fault." If the Plaintiff does so, the amended complaint relates back to the date of the original complaint for statute of limitations purposes.
In this case, the answer identified these individuals as members, but it did not assert that fault should be apportioned to any of them. Therefore, the answer did not trigger the provisions of section 20-1-119.
Then, the ATO chapter filed an amended answer that asserted the comparative fault of the individual members. The plaintiffs filed an amended complaint adding the individual members as defendants. Problem solved? WRONG.
When the second amended complaint was filed, the individual chapter members were "parties" to the lawsuit. The statute clearly states that the statute of limitations relates back only for persons who are not parties to the lawsuit. Because the trial court did not make its ruling on the motion to dismiss final for purposes of Rule 54, the members remained parties to the action. Therefore, section 20-1-119 does not apply.
So, the question is what would you have done? This case also highlights that the use of "John Doe" is ineffective in Tennessee.
See Mann v. Alpha Tau Omega Fraternity, et al.
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