# FILED
October 9, 199 6 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COURT OF AP PEALS OF

TENNESSEE, WESTE RN SECTION AT JACKS ON

_______________________________________________________ ) HOWARD A.WOODS, ) Shelby County Circuit Court ) No. 65172 T.D. Plaintiff

/Appella nt. ) ) VS. ) C. A. NO. 02A01-9510-CV-00218 ) MUTUAL OF OMAHA, ) ) Defendant/Appellee. ) ) And ) ) CNA INSURANCE COMPANY, ) and EASTWOOD HOSPITAL , ) ) Defend ant. )

______________________________________________________________________________ From the Circuit Cou

rt of Shel by C ounty

at Memphis
. Honorable Robert A. Lanier, Judge

Howard A. Wo ods , Pro Se Plaintiff /Appella nt.
Philip E. Mischke , WYATT, TARRANT & COMBS, Memphis, Tennessee Attorney for D efendant/Appellee, Mutual of Omaha.

OPINI ON FIL

ED: AFFIRMED FARMER, J.
CRAWFORD, P.J., W.S. : (Concur s) LILLARD, J. : (Concur s)1 Woods filed suit against various defendants; however, the judgme nt before us enters summary judgmen t in favor of Omaha

only and was r

endere d final by

the trial court in accord ance with Rule 54. 02 T.R.C.P. T hus, Omah a is the on

ly A ppellee for purp oses of th

is appeal. This case co ncerns t he validity o f a “Compr

omiseSettlement Release” executed by t he appellant, Howard A. Woods (Woods), in favor of the appellee, Mutual of Oma ha (Omaha). Woods challen ges its validity on the ground of mental incapacity . The trial court entered summary judgment in favor of Omaha and Woods has appealed. For r easons he reinaf ter expre ssed, we

affirm.

In March 1991, Omaha issued Woods t wo insurance policies (medical and disability ). During the processing of a claim filed by Woods, Omaha discovere d certain misrepresentations on Woods’ application for insurance which, according to Omaha, invalidated the policies by their own terms. Omaha

informed Woods in November 1991 that the policies were “cance lled from the issue date.” In Jan ua ry 1992, Woodsfiled suit agains t Omaha a

lleging wrongf ul termina

tion of his insurance. On Marc h 27, 1992, Woods execu te d the relea se at issue here which, in sum, releases Omaha fr om all cla

ims arisin g out of t

he afor emention ed insura

nce polic ies in con siderati o n fo r $12,000. A check for that amoun t was n ego tiated by Woods on Mar

ch 30, 199 2. The re

lease expressly provided for the d ismissal with prejud

ice of Woo ds’ lawsu

it.

In June 1994, Woods filed the present action in general sessions court again claiming that Om ah a h ad wr on gf

ul ly terminat

e d his insurance. 1 The suit was apparently dismissed and Woods appealed the deci sion to cir

cuit cour t. There after, Omaha fi led a motio n “to dis miss or in the alternative for summary judgment,” asserting that the action was barre d by the appli cable

statute of li mitations and the doctrines of res judica ta and accord and satisfaction. The aff idavit of J ane t Stewart, Omaha’ssecond vice pre sident an d counsel, was sub mitted on it s behalf. The aff idavit set forth the termsof the re

lease a s hereto fore specified a nd include d a copy

of the re lease . The tria

l court granted Omaha’s motion based on the re lease.

Woods then filed a “Motion for New Trial,” asserting that he had, since entry

of the summary judgment, “ga thered [a]ffidavits from his doctors to clarify his mental and physical condition on 3/27/92 . . . .” No affidavits were attached to the motion. Woods additionally filed a “Motion to Set Aside” the r uling. The affidavit of Dr. Dale Foste r was attached, which states, asrelevant here:

I am a ps ychologi s t with the Germantown Psycholog ical Associates, P.C. . . . Mr. Woods is currently under my care and has requested that I inform you conce

rning the history of

his psychologica

l condition as indicated by his trea

tment while under my ca

re. Mr. Woods first

came to me

on April 6, 1992 pre senting

with paranoia, psy chotic th

in king, numerous somatic complaints, and ex tr em e a nx ie ty. He has received a

diagnosis of Schizophrenia, Paranoid ty pe

. . . . It is my opinion

tha t, due to his mental state at that time, he was not ca pable of ent ering i nto a c ontra ct wit h full knowl edge and ability to unders tand the c onseque nces of t hat contr act.

The record next includes a document filed by Woods entitled “Amend[ed] Complai nt, ” which includes the affidavits of Dr. George Chu, address ing Woods’ physical condition while hospitalized in Apr il and May 1991 as the re sult of an automobile accident, and Dr. John Howser, wh ich als o addresses Woods’ physical condition subs equent to t he acci dent. Woodsalso file d a “Motio n to Extend Time to File Bey ond the Allotted Time After a Ruling,” so as to file additional expert affida vits regarding his mental

capacity “in 1992,” and various other motions. After entertaining the motions, the trial court entered an order deny ing Woods’ motion to set aside.
Woods thereafter filed additional motions, with the court subsequently entering an “Order on Motions and Final Judgmen t as t o Mutual of Omaha.”The judg ment, fro m which thi s app eal lies, grants Woods’ requests to file a copy of his medical records from Southeast Mental Health Center and to reconsider

the summary judg ment entered in favor of Omaha. The judgment further reflects the trial court’s denial of Woods’ motion to set asid e the summa

ry judgmen t after its consideration of the medical records and “a ll other documents submitted by [Woods], . . .”

The issue bef

ore us is w

hether t he trial c ourt was c orrect i n entering summary judgment for Mutual of

Omaha. I

n ruling on motions f

or summar

y ju dgment, we are

to consider the matter in the same manner as a motion for a directed ver dict made at the close of the plaintiff’s proof, i.e., all

evidenc e must be viewed in a light most

favora ble to the motio n’s opponent and a lllegitima

te conclusions of fact must be drawn i n that pa rty’s favor . It is only when there is no disputed issue of material fact th at summary judg ment should be granted by the trial court and sustained by the court of a ppeals. E.g., Fly v. Cannon , 813 S.W.2d 458, 460 (Tenn. App. 1991). The party see

king summary judg

ment carries the burden

of persuading the court that no ge nuine and material factual issues exist and that he is, there fore, e ntitled to judgment as a matter of law. Once this is shown by the moving pa rty, then the nonmovant must demonstrate, by affidavits or

discovery materia ls, that there is a genuine, material factdisp ute wa rrant ing a trial. Byrd v. Ha ll , 847 S.W.2d 208, 211 (Tenn. 1993).

As heretofore noted, the trial court gr anted Omaha’s motion for summary judgme

nt based on the rele ase executed by

Woods, who now c halleng es its validity upon the ground tha t he
was mentally

incompet ent to exec

ute it. The mental incapacity r equired to invalidate a contract was discussed by the middle section of this Court in Roberts v. Roberts , 827 S.W.2d 788 (Tenn. App. 1991) , when stati ng:

No published Tennessee authority is found which d efin es [the] degree of mental

inca pacity requir

ed to invalidate a contract. .

. . In 17 C.J.S. Contr

acts § 133(1)(e), pp. 860, 861, 862, is found the following text:

The test of mental capacity to c ontrac t is wh ether the person in question possesses suffici en t mind to understand, in a rea so nable manner, the nature, extent, character, an d effect of the act or transaction i n which he is engaged; the law doe s not gauge contractual capacity by the standard of mental capaci ty possessed by rea sonably prudent men. It is notnecessa

ry to show that

a person was incompetent to transact any

kind of bus iness, but

to invalida

te his contract it is sufficient to sho w that he w as menta lly incompetent

to deal with the particular contract in issue, . . . On the other hand, to av oid a cont ract it is insufficient

t o show merely that the pe rson was of unsound mind or insa

ne when it was made , but it must also be shown that this unsoundness or insanity was of such a character that he had no reasonable perception or understanding of the nature or terms of the contract. The extent

or deg ree of i ntellect

gener ally is notin issue, but merely the mental capacity to know the natur e and ter ms of the c ontract .

. . . there must, to invalidate the contrac t, beat the time thereof such impairmen t o f reasoning powers a s t o make the person incapable of acting rationa lly in the transaction involved, or such mental unsoundne ss as occasions an inabil ity to comprehend the subject of

the contract and its na

ture and probable consequ ences, or as re

nders th e individu al incap able of under standing and acting with discretion in the business at hand; a

nd it has b een he ld that to invalida te his contract

there must be anentire loss of a person’s understanding as respec ts such transaction. In th e final a

naly sis, contr

actual c apacity

is a question to be resolved in the light of the facts of each case and the surr

ounding circumst ances.

Roberts , 827 S.W.2d at 791-92.

In view of Roberts , we hold that in order for Woods to defeat Omaha’s motion for summary judgment, the record before us must esta

blish his me

ntal inco mpetenc y w ith respect to the particular contract in issue. We find nothi ng in this re cord, ho wever, specific ally address ing this
concern. The records of Southeast Mental Health Center include an “intake summary ,” dated March 6, 1992, which references Woods’ overall mental status at that time, as does another psyc hological evaluation of Woods dated January 4, 1994. We find both of t hese assessme nts of little

import in determining whether Woods had the capacity to execute the relea se in ques tion. The r ecord a lso includes the Department of Health and Human Service’ s decision that Woods is disabled for purposes of the Social Security Act. The decision states that Woods “has been disabled since April 29, 1991, . . . He has a

psychotic disorder not

otherwise specified, possible paranoid schizophrenia, borderline intellectual functioning, carpel tunnel sy ndrome, and cervical facet sy ndrome, which are considered

to be ‘sever

e’ under the Socia l Security Regula tions.” Asis appar

ent, the Department’s decision does not concern Woods’ capacity to understand and appreciate the c ont ract in question. The only evidenc e in the r

ecord a ddressin g Woods’ c apacity to enter into a contra

ct is the a ffidavit of Dr. Foster, which we

find inadequate on the issue. Dr. Fost er’s af fidavit e stablishe s that he d id notbegin treating Woods until April 6, 1992, which was after the agreement’s execution. Moreover, the affidavit refers only

to Woods’ general inability to e nt er into a contract and does not make specific reference to the c ontract at issue.

We conclude that when the evidence is viewed in a light

most favo

rable to Woods,no genuine issue of material fact is created regarding

his mental capacity to e

xecute the release on March27, 1992. Th e judgment of the trial court is, according ly, affirmed. Costs are assessed ag ai ns t H ow ar d A . W oo ds , f or wh ic h e xe cu ti on ma y is su e i f n ec es sa ry.

______________________________ FAR MER , J.

______________________________ CRAWFORD, P.J., W.S. (Conc urs)

______________________________ LI LL ARD, J. (Conc

urs)