Court Opinion

ID: 4088617
Source: CourtListenerOpinion
Date Created: 2016-10-11 18:03:23.384067+00
Date Added: 2024-06-11T13:07:36.091533
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                   September 8, 2016 Session

    CINCINNATI INSURANCE COMPANY v. JOSIE ROCHELLE MALONE

                  Appeal from the Circuit Court for Rutherford County
                          No. 65982    J. Mark Rogers, Judge

                 No. M2015-02362-COA-R3-CV – Filed October 7, 2016

This is an appeal from an order granting summary judgment in which Defendant argues
that summary judgment was improper because a dispute of material fact exists regarding
her affirmative defenses. Finding no error, we affirm.

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

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which D.
MICHAEL SWINEY, C.J., and ANDY D. BENNETT, J., joined.

Lorraine Wade, Nashville, Tennessee, for the appellant, Josie Rochelle Malone.

Ryan N. Clark, Nashville, Tennessee, for the appellee, Cincinnati Insurance Company.

                                             OPINION

        Josie Rochelle Malone (“Defendant”) was the court-appointed conservator for her
mother from 1997 to 2012. As conservator, Defendant acquired a $125,000 bond with
Cincinnati Insurance Company (“Cincinnati”).1 The terms of this bond required, inter
alia, that Defendant pay an annual premium of $560.00. Further, Defendant agreed “to
completely indemnify [Cincinnati] from and against any liability, . . . attorneys fees, and
expenses whatsoever,” which Cincinnati should sustain as surety on the bond.

      The bond premiums were due every November. Defendant paid the bond
premiums on a relatively timely basis between November 2000 and November 2008.
Defendant failed to pay the annual premium in November 2009. As a result, Cincinnati

       1
          Tenn. Code Ann. § 34-1-105 requires a party named as a fiduciary to post a bond to protect the
assets of the ward against loss. See In re Conservatorship of Childs, No. M2008-02481-COA-R3-CV,
2011 WL 51740, at *6 (Tenn. Ct. App. Jan. 5, 2011).
sent a letter to the chancery court on September 23, 2010, requesting that the premium be
paid or that the court release Cincinnati from the bond. Three weeks later, on October 18,
2010, Defendant belatedly paid the premium that had been due since November 2009.

       In August 2011, before the court took action on Cincinnati’s requests, the Clerk
and Master filed a number of reports with the chancery court outlining several
irregularities relating to Defendant’s handling of the conservatorship. Following an
evidentiary hearing, the chancery court found numerous deficiencies with Defendant’s
accounting and on May 9, 2012, entered judgment against Defendant for $12,932.79.
When Defendant did not pay or appeal this judgment, the court entered an order
executing on Cincinnati’s bond. Thereafter, Cincinnati paid the judgment of $12,932.79.

       On January 11, 2013, Cincinnati sued Defendant in general sessions court for
indemnity on the $12,932.79 payment and for attorney’s fees. Defendant did not appear
for the hearing on the civil warrant or otherwise defend the action and the court entered a
default judgment against Defendant.

        Defendant timely appealed to the circuit court where she asserted two affirmative
defenses—the failure to mitigate damages and the doctrine of laches. Specifically,
Defendant presented the novel argument that Cincinnati had a duty to terminate the bond
when she failed to pay her premiums, and by failing to do so, Cincinnati failed to mitigate
its damages. Similarly, Defendant contended that by not terminating the bond for three
years before judgment was entered, Cincinnati unreasonably delayed in pursuing its
rights; thus, the defense of laches should also apply.

       Cincinnati filed a motion for summary judgment arguing that the undisputed facts
show that Defendant breached the indemnity agreement. Defendant filed a response in
which she did not dispute the facts relating to her failure to indemnify Cincinnati, but
argued that summary judgment was inappropriate because questions of fact remain
regarding her affirmative defenses. Although Defendant described the facts supporting
her affirmative defenses in her response to the motion, Defendant did not file a statement
of additional material facts.2

       After considering these arguments, the circuit court held that, in asserting her
affirmative defenses, Defendant failed to comply with Tenn. R. Civ. P. 56.03, which
required Defendant to identify the facts purportedly establishing a factual dispute on her
defenses. Thus, the court granted Cincinnati’s motion for summary judgment and ordered
Defendant to pay Cincinnati $24,180.89. Defendant appealed and argues that the circuit
court erred in granting Cincinnati’s motion for summary judgment.

       2
         Several months later Defendant filed a statement of additional material facts; however,
Defendant subsequently withdrew this statement.

                                             -2-
                                         ANALYSIS

        Tenn. R. Civ. P. 56.03 requires that a party opposing a motion for summary
judgment file a response to each fact set forth in the movant’s statement of undisputed
facts. Additionally,

       [T]he non-movant’s response may contain a concise statement of any
       additional facts that the non-movant contends are material and as to which
       the non-movant contends there exists a genuine issue to be tried. Each such
       disputed fact shall be set forth in a separate, numbered paragraph with
       specific citations to the record supporting the contention that such fact is in
       dispute.

Tenn. R. Civ. P. 56.03. “Although the trial court may, at its discretion, waive the
requirements of [Rule 56.03] where appropriate, the court may also refuse to consider the
factual contentions of a non-complying party even where such facts are ascertainable by
the record.” Holland v. City of Memphis, 125 S.W.3d 425, 428-29 (Tenn. Ct. App. 2003).

       In this case, Defendant failed to file a statement of additional material facts as
contemplated by Rule 56.03. Thus, the circuit court properly determined that Defendant
failed to establish a dispute on her affirmative defenses. However, even if Defendant’s
response is considered sufficient, we believe summary judgment was proper in this case.

        Under the defense of mitigation of damages, “the party injured by the wrongful act
of another has a legal duty to exercise reasonable and ordinary care under these
circumstances to prevent and diminish the damages.” Carolyn B. Beasley Cotton Co. v.
Ralph, 59 S.W.3d 110, 115 (Tenn. Ct. App. 2000) (citations omitted). To the extent that
the injured party fails to do so, he or she cannot recover. Memphis Light, Gas & Water
Div. v. Starkey, 244 S.W.3d 344, 353 (Tenn. Ct. App. 2007). However, the injured party
is not required to mitigate damages where the duty would impose an undue burden or be
impossible under the circumstances. Id.

       Similarly, the doctrine of laches provides that “equity will not intervene on behalf
of one who has delayed unreasonably in pursuing his rights.” Dennis Joslin Co., LLC v.
Johnson, 138 S.W.3d 197, 200 (Tenn. Ct. App. 2003). Laches has two essential elements:
(1) an inexcusably long delay caused by the claimant’s negligence in asserting its claim;
and (2) an injury to another’s rights resulting from this delay. State ex rel. Elvis Presley
Int’l Mem’l Found. v. Crowell, 733 S.W.2d 89, 101 (Tenn. Ct. App. 1987).

      Defendant argues that Cincinnati failed to mitigate its damages by not terminating
the bond after Defendant failed to pay its premiums. However, the record indicates that
Cincinnati requested permission from the chancery court to be released from the bond,

                                            -3-
but the court did not grant this permission. Without such permission, Cincinnati was
obligated to remain as surety on the bond and Defendant’s failure to pay the premiums is
immaterial. See Tenn. Code Ann. § 29-33-107 (“The surety of any guardian . . . who
conceives the surety to be in danger of suffering by the suretyship, and desires to be
relieved therefrom, may file a petition, in writing, in the . . . court having cognizance of
the estate or fund.”); Hartford Accident & Indem. Co. v. White, 115 S.W.2d 249, 252
(Tenn. Ct. App. 1937) (holding that whether or not to grant a surety relief from an
executor’s bond was within the court’s discretion). Thus, Defendant’s argument
regarding the failure to mitigate damages is without merit.

       Further, the record lacks any indication that Cincinnati delayed in asserting its
breach of contract claim. Instead, although Cincinnati had up to six years to file suit, see
Tenn. Code Ann. § 28-3-109, Cincinnati filed suit only four months after paying the
judgment. Additionally, Defendant has not provided evidence showing that she was
prejudiced from this four-month “delay.” Thus, we are also unpersuaded by Defendant’s
argument regarding the defense of laches.

      For the forgoing reasons, we conclude that the circuit court properly granted
Cincinnati’s motion for summary judgment.

                                     IN CONCLUSION

       The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed against Josie Rochelle Malone.

                                                   ________________________________
                                                   FRANK G. CLEMENT, JR., P.J., M.S.

                                            -4-