Christopher FURLOUGH v. SPHERION ATLANTIC WORKFORCE, LLC.
No. M2011-01445-SC-R3-WC
Supreme Court of Tennessee, at Nashville.
Feb. 22, 2013.
397 S.W.3d 114
CORNELIA A. CLARK, J.
Oct. 3, 2012 Session.
The trial court found that all nine of the non-exclusive factors weighed against a termination of Mother‘s parental rights. In addition, the trial court considered the 2004 modification of the parenting plan in determining the best interests of the children. Although we have concluded that the order amending the parenting plan has no preclusive effect on the determination of the best interests of the children, the trial court properly considered the parties’ actions with respect to the modification of the parenting plan. The modification provided for visits with the children while Mother was imprisoned and addressed Mother‘s co-parenting rights after her release. After Father remarried, the children stopped visiting Mother in prison.
The trial court considered Father‘s acknowledgment that he entered into a mediated agreement “in the children‘s best interest” and that the mediation addressed the time frame when Mother was no longer incarcerated. At the time of the mediated agreement, Father was well-aware of Mother‘s criminal background. At the hearing on the termination of Mother‘s parental rights, Father based his assertion that Mother‘s parental rights should be terminated on essentially the same facts existing at the time of Mother‘s incarceration.
Having reviewed the record, we agree with the trial court that none of the factors support termination of Mother‘s parental rights. We therefore cannot conclude that Father has proven by clear and convincing evidence that it is in the best interests of the children to terminate Mother‘s parental rights. See In re Bernard T., 319 S.W.3d at 596-97.
Substantial Risk of Harm
Finally, Mother raises the issue of whether the Tennessee constitution requires a trial court to make a finding that there is a substantial risk of harm to the children before a parent‘s rights can be terminated. It has long been the rule that this Court will not address questions not raised in the trial court. Lawrence v. Stanford, 655 S.W.2d 927, 929 (Tenn.1983); see also
III. Conclusion
We reverse the judgment of the Court of Appeals and affirm the trial court‘s amended order concluding that Father and Stepmother have not shown by clear and convincing evidence that terminating Mother‘s parental rights is in the best interests of the children. Costs of this appeal are taxed to Robert W. and Loy W., and their surety, for which execution may issue, if necessary.
Michael Anthony Walker, Nashville, Tennessee, for the appellee, Christopher Furlough.
OPINION
CORNELIA A. CLARK, J., delivered the opinion of the Court, in which GARY R. WADE, C.J., JANICE M. HOLDER, and WILLIAM C. KOCH, JR., JJ., joined.
We accepted review of this appeal to determine whether, when a workers’ com-pensation settlement involving an employee represented by counsel is approved by
Factual and Procedural History
Evidence Presented at Trial
In the fall of 2001, Christopher Furlough (“Employee“) injured his back in the course and scope of his employment with Beard Property Maintenance, Inc. Dr. Thomas J. O‘Brien, an orthopaedic surgeon, treated Employee and performed surgery in 2002 on his back. After Employee attained maximum medical improvement, Dr. O‘Brien assessed a 10% permanent partial impairment rating to the body as a whole as a result of the injury.
Employee was struck in the back by a large recycling bin on December 4, 2005, while working for Spherion Atlantic Workforce, LLC (“Employer“). This injury occurred in the same location on his back as the prior injury. Employee promptly reported the injury, and Employer provided him with a list of medical care providers.
Employee initially selected a chiropractor from this list, who declined to treat him. Employee was then referred to Concentra Medical Center, where Dr. William Dutton recommended physical therapy and placed Employee on light duty.
At the time of the injury, Employee had been working on Fridays, Saturdays, and Sundays, while attending college courses on Tuesdays and Thursdays. On December 10, 2005, Employer offered Employee a light-duty job alphabetizing files at its recruiting center. Employee reported for work and attempted to perform this job for one day. However, Employee testified that the twisting this assignment required of him caused such pain in his back and leg that he could not continue. Over the ensuing three days, Employee called Employer and reported that he could not do the job. Employee believed that his calling in three times unable to work had resulted in the termination of his employment; therefore, Employee did not seek further work with Employer.1 Employee continued attending college courses twice a week from 8:00 a.m. to 1:00 p.m.
On December 13, 2005, Employee consulted neurosurgeon Dr. Robert Weiss, who ordered imaging studies. Dr. Weiss noted that Employee complained primarily of pain on his right side, but the tests showed disc degeneration and protrusion only on the left side. For this reason, Dr. Weiss concluded that surgery would not benefit Employee. On December 21, 2005, Dr. Weiss opined that Employee had reached maximum medical improvement and discharged Employee from his care, without assessing any permanent impairment rating, imposing any permanent physical restrictions, or referring Employee to another medical provider for evaluation.
Frustrated with the pain he still experienced and the lack of treatment he had received, Employee sought relief from Dr. O‘Brien, the orthopaedic surgeon who
As a result, Employee decided to consult with a lawyer and eventually contacted the Law Office of Donald D. Zuccarello. Mr. Zuccarello personally met with Employee at a McDonald‘s restaurant to discuss his case. After Employee signed a contract with Mr. Zuccarello, Employee was referred to Dr. Richard Fishbein, an orthopaedic surgeon, for an independent medical evaluation in April 2006. Dr. Fishbein opined that Employee had reached maximum medical improvement and assigned him a 13% permanent impairment rating to the body as a whole. However, Dr. Fishbein acknowledged that this figure included both of Employee‘s work injuries; that is, he did not “subtract out” the 10% permanent impairment rating assigned Employee as a result of his 2001 injury.
A benefit review conference was held on June 8, 2006, and was attended by Employee, attorneys for both parties, and Workers’ Compensation Specialist Michelle L. Thomas. Delain Deatheridge, an attorney and associate of Mr. Zuccarello‘s firm, represented Employee at the conference. The parties agreed upon a settlement that provided for a lump sum payment of $11,500 (minus $2300 in attorney‘s fees), corresponding to a 12.4% permanent partial disability to the body as a whole, and future medical benefits. The parties negotiated a few changes to the agreement, as reflected in their correspondence. The final settlement was approved by Workers’ Compensation Specialist Jim McGrath2 of the Department of Labor and Workforce Development (“Department“) at a second hearing on June 21, 2006, pursuant to
After executing the settlement, Employee consulted with Dr. Stanley Hopp, an orthopaedic surgeon. Dr. Hopp eventually performed three surgeries on Employee‘s back, the first in November 2006. Shortly thereafter, Employee retained new counsel, Michael Walker. On April 18, 2008, almost two years after the settlement, Mr. Walker filed in the Circuit Court for Davidson County a petition to set aside the settlement. A hearing was held on the petition on December 1, 2010. Central to Employee‘s argument that the settlement should be set aside was his assertion that paragraph 2.3 of the agreement was inaccurate:
Employee returned to the pre-injury employment at a wage equal to or greater than the wage Employee was receiving at the time of injury. However, Employee has since been terminated; therefore, the maximum permanent partial disability that Employee may receive is one and one-half (1 1/2) times the medical impairment rating under
Tenn. Code Ann. § 50-6-241 (2004) .
Employer proffered the affidavit of Vanessa Nunez, custodian of Employer‘s business records, who stated that Employee had been terminated on December 13, 2005—the same day Dr. Weiss examined Employee. On the other hand, Employee
Employee admitted reading paragraph 2.3 of the settlement agreement, but he denied comprehending it, and he testified that neither Ms. Deatheridge nor Specialist McGrath explained to him what the various provisions meant. Employee did not remember Specialist McGrath specifically, although he did recall meeting with a “gentleman“—without his attorney present and for no more than two minutes—who told him, “put your initials here, here, here and there” but did not explain anything to him. Employee testified that he signed and initialed whatever was placed in front of him because he was still in pain, had not received adequate treatment, and believed that he could obtain prompt treatment only if he settled his case.
Neither Employee, who testified in person, nor Ms. Deatheridge, who testified by deposition, could clearly recall the benefit review conference. Ms. Deatheridge testified that she worked at Mr. Zuccarello‘s firm for about three years and handled approximately three hundred workers’ compensation cases. Although she could not recall specific details of Employee‘s case, Ms. Deatheridge testified that the one and one-half times cap would only apply to a terminated employee who had been terminated for cause. She testified that the applicability of this cap was critically important for negotiating a favorable settlement but that she would have accepted Employee‘s understanding of his employment status at face value. Ms. Deatheridge stated that she would not advise an employee to settle a claim merely to obtain prompt medical treatment, nor would she recommend that a client sign an unfavorable settlement. She testified that her practice was to explain the options to her clients, answer their questions, and be present when they initialed the checklist enumerating their rights under the law. It was also her practice to sign the settlement documents only after her clients had done so. As to the merits of Employee‘s settlement, Ms. Deatheridge testified that because Dr. Weiss released Employee without assigning him an impairment rating, “there is always a chance if he goes to court that he could receive the zero percent.”
Ruling of Trial Court
The trial court noted that Employee‘s injury occurred on December 4, 2005, and that Dr. Weiss opined that Employee reached maximum medical improvement on December 21, 2005, a conclusion the trial court found implausible: “I don‘t see how a man with that kind of injury that he had, having had a previous back injury and back surgery and the injury that he described, how he could have reached maximum medical improvement in 17 days.” Although the trial court recognized that Employer offered Employee light-duty work, it credited Employee‘s testimony that he was physically unable to do the job. The trial court also credited Employee‘s testimony that he received no notice of termination from Employer. The trial court declined to decide whether Employee had been terminated, but found that even if Employee had been terminated, there was “certainly no proof” that he had been terminated for cause.
I think Ms. Deatheridge is a fine person. Mr. Zuccarello is a fine person. They‘re both fine lawyers. But Mr. Furlough was simply not represented at this proceeding. An attorney was present, but he was not represented. He did not understand and he did not comprehend what was happening at the benefit review conference, and he couldn‘t be expected to based on the short period of time that he spent with both Attorney Don Zuccarello at McDonald‘s and the short period of time and little discussion he had with Ms. Deatheridge at the Tennessee Department of Labor.
Despite this finding, the trial court acknowledged that substantial preparation had occurred before the benefit review conference: “Now, I agree that Mr. Zuccarello and Ms. Deatheridge and whomever at the law office gathered medical information, requested [an] independent medical evaluation and did those things, all the things that you might should [sic] do to protect your client. But Mr. Furlough was not explained what was being done, why it was being done, and what his options were.”
The trial court granted Employee‘s petition to set aside the settlement, citing two distinct rationales. First, the trial court premised relief on its holding that “Mr. Furlough did not receive substantial benefits provided by the workers’ compensation laws.” See
Although the trial court found that “the settlement is not effective and is not entitled to the same standing as a judgment,” the trial court nevertheless relied upon
And I rely upon the Court‘s inherent authority to set aside the settlement when it does not comply with the applicable law. And I also find that based on clear and convincing evidence, there‘s two bases for setting aside; first of all, the Court‘s inherent authority to do so; and then secondly, based upon Rule 60.02(5), and I realize it was not pled, I‘m allowing the petition to be amended to conform to the proof, and Rule 60.02(5) does apply in this case. And it‘s been established, in my view, by clear and convincing evidence.
As a procedural matter, the trial court indicated that Employee could properly file a claim for workers’ compensation benefits or request another benefit review conference:
I think the benefit review conference procedure has been exhausted. And I think [Employee is] ready to file something in court. That‘s my feeling now. If Mr. Walker feels like out of an abundance of caution to make another request for a benefit review conference, then that‘s fine. I mean, what I found is Mr. Furlough was present at the benefit
review conference. Even though [Ms. Deatheridge] was present, he was not represented by counsel. And he was not afforded the benefits under the workers’ compensation law for that approval. So the approval is set aside. Now, I think they went through the process required in filing a lawsuit. That‘s my feeling.
Employer timely filed an appeal, see
Ruling of Appeals Panel
The Special Workers’ Compensation Appeals Panel did not reach the merits of this dispute; instead, the Panel dismissed the appeal and vacated the trial court‘s judgment on a procedural issue not raised by the parties: “A settlement approved by the department shall not become final until the statistical data form required by this section is fully completed and received by the department.”
It was the apparent intention of the parties to exhaust the BRC process by reaching a mediated settlement under subsection (b) of this rule. As a result of procedural error, however, they failed to do so. We do not find any evidence that they exhausted the BRC process by any of the other means delineated in the rule. In view of the parties’ failure to exhaust statutorily available administrative remedies, we conclude that Employee‘s suit to set aside the settlement agreement was filed prematurely. Accordingly, this appeal is dismissed, the judgment of the trial court is vacated, and the case is remanded to the Department of Labor for further proceedings. We make no determination regarding the merits of the parties’ arguments as to whether the settlement agreement, had it become final, should have been set aside.
We granted Employer‘s motion seeking full Court review of the Panel‘s decision.
Standard of Review
Whether a trial court has subject matter jurisdiction over a case is a question of law that we review de novo with no presumption of correctness. Word v. Metro Air Servs., Inc., 377 S.W.3d 671, 674 (Tenn.2012). This appeal also involves an issue of statutory construction, which we review de novo with no presumption of correctness. Mills v. Fulmarque, Inc., 360 S.W.3d 362, 366 (Tenn.2012). On the other hand, we review the trial court‘s factual findings “de novo upon the record of the trial court, accompanied by a presumption of correctness of the finding[s], unless the preponderance of the evidence is otherwise.”
Analysis
Procedures for Approving Settlements
The Workers’ Compensation Law provides that “interested parties shall have
If parties seek to have their settlement “approved by the judge of the circuit court or chancery court of the county where the claim for compensation is entitled to be made,” the judge must “examine the proposed settlement to determine whether the employee is receiving, substantially, the benefits provided by this chapter.”
If, however, the parties dispute whether a claim is compensable, or the amount of compensation, “the parties may settle the matter without regard to whether the employee is receiving, substantially, the benefits provided by this chapter; provided, that the settlement is determined ... to be in the best interest of the employee.”
In this case, the parties did not seek court approval under subsection (a) and could not have proceeded under subsection (b) because, at all times relevant to this appeal, subsection (b) applied only to settlements not providing for future medical benefits, among other restrictions. See
The parties here sought Department approval pursuant to
(1) The commissioner or the commissioner‘s designee may approve a proposed settlement among the parties if:
(A) The settlement agreement has been signed by the parties;
(B) The commissioner or the commissioner‘s designee has determined that the employee is receiving, substantially, the benefits provided by this chapter, ... and
(C) If the employee was not represented by counsel at a benefit review conference, the settlement agreement shall be reviewed by a specialist within the department who was not associated with the employee‘s case.
(2) Among the parties, a settlement approved by the commissioner pursuant to this subsection (c) shall be entitled to the same standing as a judgment of a court of record for purposes of
§ 50-6-230 and all other purposes. A settlement approved by the commissioner may be appealed as a final order pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.(3)(A) For settlements in which the employee is represented by counsel, the parties shall seek the approval of the department as provided in this subsection (c), unless the parties agree to seek the approval of a court pursuant to subsection (a).
(B) For settlements in which the employee is not represented by counsel, the parties shall seek the approval of a court pursuant to subsection (a), unless the parties agree to seek approval from the department pursuant to subsection (c).
...
(5) In approving settlements pursuant to this subsection (c), ... [i]f the injured employee is not represented by counsel, then the commissioner or the commissioner‘s designee shall thoroughly inform the employee of the scope of benefits available under this chapter,
the employee‘s rights and the procedures necessary to protect those rights. Tenn.Code Ann. § 50-6-206(c) .
With this statute in mind, we address the Panel‘s holding that “Employee‘s lawsuit to set aside the settlement agreement was filed prematurely,” either because “the proposed settlement did not become final” or due to “the parties’ failure to exhaust statutorily available administrative remedies.”
Finality of Settlements
Although not raised by the parties, the Panel examined the SD-1 form, found that “many parts of the form were left blank,” and held that “the proposed settlement did not become final” due to the “clear and unambiguous” language of
In cases involving a workers’ compensation settlement that is submitted to the department for approval, the statistical data form required by this section shall also be completed and submitted to the department at the time of the submission of the settlement for approval. A settlement approved by the department shall not become final until the statistical data form required by this section is fully completed and received by the department.
The Legislature has tasked the Department with promulgating the SD-1 form for the purpose of aiding the Department in administering the workers’ compensation system.
In addition, the General Assembly has cast the Department, not the courts, in the role of policing the completeness of SD-1 forms by vesting the Department with the power to penalize employers who neglect their duty to “complete substantially and file the statistical data form with such frequency as to indicate a general business practice.”
Our conclusion that courts have no authority to second-guess the Department‘s approval of the SD-1 form is buttressed by
In the event of an appeal of a workers’ compensation trial verdict to the supreme court of Tennessee, this section shall neither abrogate nor supercede the Rules of Appellate Procedure regarding the computation of the time for the proper filing of a notice of appeal. The information submitted in the statistical data form shall not be admissible on appeal for any purpose.
In summary, although the Workers’ Compensation Law requires the submission of “fully completed” SD-1 forms along with proposed settlements submitted to the Department for approval, the Legislature has explicitly tasked the Department, not courts, with scrutinizing the content of those forms. Where, as here, the Department approves the proposed settlement, the Department shall be deemed to have approved the accompanying SD-1 form as “fully completed.” Therefore, the Panel erred by finding that the settlement was not “final” for purposes of
Exhaustion of Administrative Remedies
The Panel also determined that the parties failed to exhaust the administrative remedies available, despite their intention to reach a mediated settlement; therefore, the Panel concluded that Employee‘s petition to set aside the settlement agreement was not properly before the circuit court: “In view of the parties’ failure to exhaust statutorily available administrative remedies, we conclude that Employee‘s lawsuit to set aside the settlement agreement was filed prematurely.” Because we disagree with the Panel‘s finding that the parties did not exhaust the benefit review conference process, we hold that the trial court did not lack subject matter jurisdiction on this ground.
We have long recognized the general rule that when an administrative remedy is provided by statute, that remedy must be exhausted before relief may be sought in court. Bracey v. Woods, 571 S.W.2d 828, 829 (Tenn.1978) (quoting Tenn. Enamel Mfg. Co. v. Hake, 183 Tenn. 615, 194 S.W.2d 468, 470 (1946)). “The exhaustion doctrine serves to prevent ‘premature interference with agency processes.‘” Thomas v. State Bd. of Equalization, 940 S.W.2d 563, 566 (Tenn.1997) (quoting 2 Am.Jur.2d Administrative Law § 505 (1994)).
The plain words of the Workers’ Compensation Law expressly require exhaustion: “No claim for compensation under this chapter shall be filed with a court having jurisdiction to hear workers’ compensation matters, as provided in
(1) The Benefit Review Conference Process shall be deemed exhausted only upon occurrence of any of the following:
...
(b) Reaching of a mediated settlement, as evidenced by a signed document executed by the proper parties, including the Workers’ Compensation Specialist;
The Panel‘s opinion implies that Employee was required to again exhaust administrative remedies before petitioning the trial court to set aside the Department-approved settlement. We disagree. Although we agree that Employee must exhaust the benefit review conference process to file “a claim for compensation” under the Workers’ Compensation Law,
UAPA Appeal
Finally, we address Employer‘s assertion that the trial court lacked subject matter jurisdiction to set aside the settlement because the only means of judicial review of a Department-approved settlement is an appeal under the Uniform Administrative Procedures Act (“UAPA“). As support for this assertion, Employer relies on
Employer is correct that an appeal of a Department-approved settlement is governed by the UAPA. Employee is now foreclosed from appealing the settlement because he failed to file a petition for review in the appropriate court within sixty days of the final administrative order approving the settlement. See
Tennessee Rule of Civil Procedure 60.02
On motion and upon such terms as are just, the court may relieve a party ... from a final judgment, order or proceed-ing
for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) fraud ..., misrepresentation, or other misconduct of an adverse party; (3) the judgment is void; (4) the judgment has been satisfied, ...; or (5) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1) and (2) not more than one year after the judgment, order or proceeding was entered or taken.... This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order or proceeding, or to set aside a judgment for fraud upon the court.
We have recognized the propriety of seeking relief under this rule from court-approved settlements of workers’ compensation claims, although such relief is rare and “disfavored.” Henderson v. SAIA, Inc., 318 S.W.3d 328, 338 (Tenn.2010) (affirming denial of motion to set aside on
In the case of a Department-approved settlement, there is no court order, only a final administrative order. Nonetheless, the Legislature has declared that a settlement approved by the Department pursuant to
However, we have characterized relief under
A party seeking relief under
All motions for relief based on
Although motions based on
With these principles in mind, we consider the merits of Employee‘s petition to set aside the parties’ settlement agreement.
Merits of Employee‘s Petition
As we have noted, parties are generally free to settle workers’ compensation claims. See
(c)(1) The commissioner or the commissioner‘s designee may approve a proposed settlement among the parties if:
(A) The settlement agreement has been signed by the parties;
(B) The commissioner or the commissioner‘s designee has determined that the employee is receiving, substantially, the benefits provided by this chapter, ... and (C) If the employee was not represented by counsel at a benefit review conference, the settlement agreement shall be reviewed by a specialist within the department who was not associated with the employee‘s case.
...
(3)(A) For settlements in which the employee is represented by counsel, the parties shall seek the approval of the department as provided in this subsection (c), unless the parties agree to seek the approval of a court pursuant to subsection (a).
(B) For settlements in which the employee is not represented by counsel, the parties shall seek the approval of a court pursuant to subsection (a), unless the parties agree to seek approval from the department pursuant to subsection (c).
...
(5) In approving settlements pursuant to this subsection (c), ... [i]f the injured employee is not represented by counsel, then the commissioner or the commissioner‘s designee shall thoroughly inform the employee of the scope of benefits available under this chapter, the employee‘s rights and the procedures necessary to protect those rights.
Tenn.Code Ann. § 50-6-206 .
Certain of these requirements are not in dispute; the parties do not dispute, for example, that the settlement agreement was signed by the parties,
Here, the trial court granted relief under
The evidence preponderates against the trial court‘s finding that Employee was “not represented” by counsel. In fact, it is beyond dispute that Employee was represented by counsel in this matter. Employee met with Donald D. Zuccarello to discuss his potential claim; Employee signed an “Employment Contract” with the Law Office of Donald D. Zuccarello; Mr. Zuccarello‘s firm arranged for Dr. Fishbein to provide an independent medical examination of Employee; an associate of Mr. Zuccarello‘s firm, Delain Deatheridge, attended the benefit review conference with Employee; Employee paid $2300 in attorney‘s fees out of his $11,500 lump sum settlement; and Employee signed a “Client Statement of Understanding” and initialed this statement: “I HAVE REVIEWED AND DISCUSSED WITH MY ATTORNEY FROM THE LAW OFFICE OF DONALD D. ZUCCARELLO ANY AND ALL FINAL ORDERS, JUDGMENT ORDERS, SETTLEMENT AGREEMENTS, AND RELEASES AND
The trial court acknowledged that Employee retained Mr. Zuccarello‘s firm to represent him. However, the trial court appears to have interpreted “not represented by counsel” in
The trial court also granted relief based on its finding that under the settlement agreement Employee was not receiving, substantially, the benefits provided by the Workers’ Compensation Law. See
What the workers’ compensation statutes provide for depends, of course, on the facts of each case. One of the most important facts in determining potential workers’ compensation benefits is whether the employee returned to work for the pre-injury employer at a wage no less than that earned by the employee at the time of the injury. If so, the maximum permanent partial disability benefits that the employee may receive is one and one-half times the medical impairment rating; if not, the employee may receive up to six times the medical impairment rating. Compare
We have recognized that, if applied woodenly, the bright-line test of
We have recognized that the circumstances to which this concept must be applied “are remarkably varied and complex,” Tryon, 254 S.W.3d at 328, but “[t]hree factors guide the analysis: (1) whether the injury rendered the employee unable to perform the job; (2) whether the employer refused to accommodate work restrictions ‘arising from’ the injury; and (3) whether the injury caused too much pain to permit the continuation of the work.” Williamson v. Baptist Hosp. of Cocke Cnty., Inc., 361 S.W.3d 483, 488 (Tenn.2012).
The parties vigorously dispute whether the higher cap should have applied in this case. Employer contends that it did return Employee to work but that Employee simply walked off the job. Employer alternately contends that it fired Employee for cause, and that employees fired for cause are not entitled to the higher cap. See Carter v. First Source Furniture Grp., 92 S.W.3d 367, 371-72 (Tenn.2002). Employee contends that although he attempted to return to work, he simply could not perform the work required due to his injury. Employee further contends that he was terminated, if at all, because of his injury and that the higher cap should have applied.
We need not resolve this dispute, however, for although Employee‘s petition does not reference
The [Department‘s] Approval [of the settlement] incorrectly stated that Petitioner (employee) had been terminated and that because of said termination the maximum permanent partial disability award that the employee could receive was 1.5 times the medical impairment rating under
Tenn.Code Ann. § 50-6-241 .
As already explained, motions seeking relief pursuant to
Moreover, the trial court erred in granting relief based on
Inherent Authority
Finally, we address the trial court‘s alternative basis for granting relief—the “inherent authority” of the court:
And I rely upon the Court‘s inherent authority to set aside the settlement when it does not comply with the applicable law. And I also find that based on clear and convincing evidence, there‘s two bases for setting aside; first of all, the Court‘s inherent authority to do so; and then secondly, based upon 60.02(5), and I realize it was not pled, I‘m allowing the petition to be amended to conform to the proof, and 60.02(5) does apply in this case. And it‘s been established, in my view, by clear and convincing evidence.
In so ruling, the trial court relied upon Dennis v. Erin Truckways, Ltd., 188 S.W.3d 578, 589 (Tenn.2006).
In Dennis, the employee—who was permanently and totally disabled as a result of a work-related injury—was initially unrepresented by counsel, but hired an attorney after encountering difficulty getting his medical bills paid. Id. at 582. After the employee filed a complaint seeking workers’ compensation benefits, an insurance adjuster repeatedly told the employee that he could only obtain 400 weeks of benefits and that a lawyer would take 25% of his recovery. Id. Relying on this egregious misinformation, the employee discharged his attorney before the benefit review conference, at which the mediator neglected to inform the employee that he could qualify for lifetime benefits. Id. at 582-83. Nearly two years after the benefit review conference, the employee filed a petition in the trial court to set aside the settlement, and the trial court granted the petition. Id. at 586. The employer appealed, and this Court heard the appeal. Id.
In Dennis, we affirmed the trial court‘s grant of relief from the settlement. Id. at 592. In addressing the employer‘s argument that the trial court erred in setting aside the settlement pursuant to
Rule 60.02 provides that relief may be had from judgments or orders for such reasons as mistake, excusable neglect, or fraud. The rule also provides, however, that it “does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order or proceeding....” Id. We agree with Dennis that we need not analyze whether relief from the settlement would have been proper underRule 60.02 , because the trial court did not rely on the rule in setting aside the settlement. Rather, the court relied on its inherent authority to set aside the settlement where it did not comply with the applicable law, and we affirm the trial court‘s exercise of its discretion.
Dennis, 188 S.W.3d at 589. The Court in Dennis failed to discuss an earlier decision, Jerkins v. McKinney, 533 S.W.2d 275 (Tenn.1976), which interpreted the “‘savings’ provision” of
In Jerkins, the trial court granted a motion for summary judgment in a civil
A different trial judge, designated to adjudicate the lawsuits challenging the judgment, ruled that, under Tennessee Rule of Civil Procedure 60, the defendant had the right to appeal within thirty days after entry of the second order denying the motion for new trial, that the defendant still had a right to appeal “by way of ‘writ of error,‘” and “that absent a showing of having exhausted his remedies in the underlying action,” the defendant had “no right to maintain” the independent actions. Id.
The defendant appealed, and the Court of Appeals reversed the trial court‘s judgment and remanded for further proceedings. This Court granted review and reversed the judgment of the Court of Appeals. Id. at 282.
In so doing, this Court explained that the defendant had three options open to him when he discovered, after the time for appeal had run, that an order overruling his motion for new trial had been entered, including: 1) appealing in reliance upon the plaintiff‘s “waiver of timeliness;” 2) filing a motion for relief under
The Court concluded that the facts of Jerkins justified “invocation of [Rule] 60.02(1) providing relief against a judgment for ‘mistake, inadvertence, surprise or excusable neglect.‘” Id. at 281. The Court concluded that the trial court‘s action in entering a second order denying the motion for new trial “so as to start the time for an appeal running anew was appropriate relief under Rule 60.02(1),” id., and opined that “this was virtually the exclusive remedy” under the circumstances presented in Jerkins. Id. The Court also held that upon becoming aware of the facts and circumstances “indicating a necessity for such relief,” the trial court
The Court then turned its attention to the “more difficult issue” of “whether an independent action was proper under the facts and circumstances presented.” Id. at 281. Given the “absence of Tennessee authority,” the Court looked to “treatises and cases construing the similar federal rule.” Id. The Court stated that “[r]esort to an independent action may be had only rarely, and then only under unusual and exceptional circumstances.” Id. (quoting 11 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2868 (1965)). Like the corresponding provision of the federal rule, the Court held that the portion of
Generally, such an independent action must show a recognized ground, such as fraud, accident, mistake or the like, for equitable relief and that there is no other available or adequate remedy. It must also appear that the situation in which the party seeking relief finds himself is not due to his own fault, neglect, or carelessness. In this type of action, it is fundamental that equity will not grant relief if the complaining party ‘has, or by exercising proper diligence would have had, an adequate remedy at law, or by proceedings in the original action ... to open, vacate, modify or otherwise obtain relief against [] the judgment.’ The granting of relief in this unusual type of proceeding lies largely within the discretion of the trial judge.
533 S.W.2d at 281 (emphasis added) (quoting Winfield Assocs., Inc. v. Stonecipher, 429 F.2d 1087, 1090 (10th Cir.1970)). Jerkins thus identified three criteria a plaintiff must establish to maintain an independent action: 1) a recognized ground for relief; 2) an absence of “fault, neglect, or carelessness;” and 3) “no other available or adequate remedy.” Id.
The Court then applied this tripartite test to the facts in Jerkins and held the independent action inappropriate. The Court explained that, while the defendant had been the “victim of mistake, inadvertence, surprise and excusable neglect of others and was himself free from fault, neglect or carelessness,” the defendant had “three complete and adequate remedies” that he failed to pursue, including “a
The Court of Appeals has applied Jerkins and recognized the propriety of an independent action where the plaintiff was free from fault, showed a recognized ground for equitable relief, and lacked alternative remedies. Tanner, 150 S.W.3d at 165. In Tanner, the aggrieved party sought to set aside a general sessions default judgment where he had not been served with the warrant. The Court of Appeals emphasized that an appeal from the denial of his
Conversely, in Tip‘s Package Store, Inc., the Court of Appeals refused to grant relief in an independent action because the defendants “had an adequate remedy available to them to challenge the denial of their motion seeking to set aside the judgment, if indeed there was error.” 86 S.W.3d at 558. In that case, the defendants had moved to intervene in the circuit court following a judgment by that court against their clients, who would be seeking indemnification. Id. Because the motion to intervene was a proper mechanism for setting aside the judgment, the defendants could have appealed the trial court‘s denial of that motion—but did not. Id. The Court of Appeals concluded that, because the defendants failed to avail themselves of an “available and adequate remedy,” they could not collaterally attack the judgment in a subsequent suit. Id. (citing Jerkins, 533 S.W.2d at 282).
In affirming the grant of relief in Dennis, this Court failed to discuss or apply Jerkins. Understandably, then, the trial court in this case did not apply Jerkins when considering the propriety of Employee‘s independent action seeking relief from the Department-approved settlement, which is legislatively deemed a final judgment. However, Jerkins and its progeny accurately reflect the state of the law in this area. To avoid confusion, we caution that Dennis should not be read as implicitly abrogating Jerkins or authorizing an independent action without satisfaction of the Jerkins test.9
Applying Jerkins, we conclude that Employee failed to establish at least two of the three criteria necessary to obtain relief in an independent action collaterally attacking a final judgment. First, it is clear that Employee had other available and adequate remedies. Employee either could have timely sought relief for the alleged mistake pursuant to
Conclusion
The Panel erred in setting aside the Department-approved settlement as non-final based on its conclusion that the SD-1 form was not “fully completed” and in concluding that the benefit review conference process had not been exhausted. The trial court erred in setting aside the Department-approved settlement pursuant to
CORNELIA A. CLARK
JUSTICE
SHARON G. LEE, J., not participating.