Court Opinion

ID: 4644045
Source: CourtListenerOpinion
Date Created: 2020-12-17 16:14:08.968106+00
Date Added: 2024-06-11T08:42:11.613219
License: Public Domain

12/17/2020
               IN THE COURT OF APPEALS OF TENNESSEE
                            AT JACKSON
                        Assigned on Briefs November 2, 2020

APRIL HAWTHORNE v. MORGAN & MORGAN NASHVILLE PLLC ET
                        AL.

                 Appeal from the Chancery Court for Shelby County
                     No. CH-19-1232 Jim Kyle, Chancellor
                     ___________________________________

                          No. W2020-01495-COA-T10B-CV
                       ___________________________________

A Tennessee Supreme Court Rule 10B petition for recusal appeal was filed in this Court
following the denial of a motion that sought the disqualification of the trial court judge.
For the reasons stated herein, we affirm the trial court’s denial of the motion.
Tenn. Sup. Ct. R. 10B Interlocutory Appeal as of Right; Judgment of the Chancery
                         Court Affirmed and Remanded

ARNOLD B. GOLDIN, J., delivered the opinion of the court, in which D. MICHAEL SWINEY,
C.J., and JOHN W. MCCLARTY, J., joined.

Darrell G. Townsend, Nashville, Tennessee, for the appellants, Morgan & Morgan
Nashville Management, Inc., Kathryn Elaine Barnett, Morgan & Morgan - Nashville
PLLC, Morgan & Morgan PA, and John Bryan Morgan.

John Timothy Edwards and Frank L. Watson, III, Memphis, Tennessee, for the appellee,
April Hawthorne.

                                       OPINION

                         Background and Procedural History

       This is an accelerated interlocutory appeal filed pursuant to Tennessee Supreme
Court Rule 10B. The appeal arises out of litigation in the Shelby County Chancery Court,
where the Appellee/Respondent, April Hawthorne (“Ms. Hawthorne”), filed a proposed
class action lawsuit asserting claims for legal malpractice, breach of fiduciary duty,
negligent supervision, aiding and abetting breach of fiduciary duty, and punitive damages
(“the Malpractice Suit”). This lawsuit was brought against attorneys who had represented
Ms. Hawthorne and others in a prior class action case in Chancery Court, one that
concerned the mishandling of human remains at the Galilee Memorial Gardens cemetery.
In her first amended complaint in the Malpractice Suit, Ms. Hawthorne asserted that the
named Defendant attorneys, “along with their corporate affiliates, recklessly consider[ed]
themselves to be infallible . . . [and] wielded total control of the Galilee Class Action . . .
and egregiously and inexcusably refused to entertain, respond to, and accept over $25
million dollars in settlement offers made by the Funeral Home Defendants during the trial
of the Galilee Class Action.” According to a subsequently-filed second amended complaint
in the Malpractice Suit, wherein it appears that an attempt was made to recast the amount
and nature of the damages at issue in the case,1 Ms. Hawthorne specifically charged that
the Defendants had “egregiously and inexcusably refused to entertain, respond to, and
accept over $14,475,000.00 in settlement offers made by the Funeral Home Defendants
during the trial of the Galilee Class Action, leading Plaintiff and the Class Members to
suffer $11,124,250.00 in liquidated damages.”

       Although the Malpractice Suit was originally assigned to Part I of the Shelby County
Chancery Court, it was subsequently transferred to Part II. Of note, Part II of the Shelby
County Chancery Court is currently presided over by Chancellor Jim Kyle, the same
Chancellor who oversaw the prior Galilee Class Action litigation. This proved to be a point
of contention for the named Defendants in the Malpractice Suit, who filed a “Motion for

        1
          Although briefing has been submitted to this Court regarding whether this case involves
unliquidated damages and therefore should properly be in Circuit Court as opposed to Chancery, we make
no further inquiry into the matter in this Opinion. As it is, there is no indication in the briefing that the
Appellants ever objected by plea in the trial court that the case involved unliquidated damages and therefore
should be in Circuit Court. There is nothing prohibiting the Chancery Court from exercising jurisdiction
over the case in the absence of such an objection. Tennessee Code Annotated section 16-11-102 instructs
as follows:

        (a) The chancery court has concurrent jurisdiction, with the circuit court, of all civil causes
        of action, triable in the circuit court, except for unliquidated damages for injuries to person
        or character, and except for unliquidated damages for injuries to property not resulting from
        a breach of oral or written contract; and no demurrer for want of jurisdiction of the cause
        of action shall be sustained in the chancery court, except in the cases excepted.

        (b) Any suit in the nature of the cases excepted in subsection (a) brought in the
        chancery court, where objection has not been taken by a plea to the jurisdiction, may
        be transferred to the circuit court of the county, or heard and determined by the
        chancery court upon the principles of a court of law.

Tenn. Code Ann. § 16-11-102 (emphases added). Based on the submissions before us, Ms. Hawthorne’s
complaint was recently amended, and we do not intend to suggest that Appellants are foreclosed on remand
from raising any jurisdictional grievance they may have with respect to the prosecution of that complaint
in the Chancery Court. We merely note that, there being no evidence of an objection taken by a plea to
jurisdiction in the trial court, there is no basis to presently conclude that the Chancery Court is not permitted
to hear the lawsuit. Our present inquiry is singularly confined to whether the Chancellor at issue erred in
denying the Appellants’ motion for disqualification.

                                                     -2-
Disqualification of Judge” seeking Chancellor Kyle’s recusal. In pertinent part, the
Defendants’ motion for disqualification stated that Chancellor Kyle had personal
knowledge of facts which were in dispute and that, because of his personal involvement in
the Galilee Class Action litigation, he was likely to be a witness in the Malpractice Suit.
Ms. Hawthorne filed a response in opposition to the motion, and later, on October 9, 2020,
the trial court judge entered an order denying the Defendants’ motion for disqualification.
In relevant part, this order held as follows:

       This Court is unable to provide any testimony regarding the attorneys’
       actions in negotiating settlements . . . because all of these negotiations took
       place outside of the courtroom. Accordingly, this Court has no personal
       knowledge of the disputed settlements at issue in this case. Because a witness
       may not be called to testify unless the witness has personal knowledge of the
       matter, it is this Court’s opinion that it cannot be called as a material witness
       in this case.

The present appeal followed when the Defendants in the Malpractice Suit, the Appellants
herein, filed a petition for recusal appeal in this Court on October 30, 2020 pursuant to
Tennessee Supreme Court Rule 10B. See Tenn. Sup. Ct. R. 10B, § 2.01 (“If the trial court
judge enters an order denying a motion for the judge’s disqualification or recusal . . . the
trial court’s ruling . . . can be appealed in an accelerated interlocutory appeal as of right.”).
On November 3, 2020, this Court entered an order directing Ms. Hawthorne to file an
answer to the petition. That answer having since been filed and, further, being of the
opinion that the parties’ submissions are sufficient to foster a review of this matter, we
proceed to adjudicate this appeal without oral argument. See Tenn. Sup. Ct. R. 10B, § 2.06
(providing that the accelerated interlocutory appeal shall be decided on an expedited basis
and, in the court’s discretion, without oral argument).

                         Issue on Appeal and Standard of Review

       In this appeal, we are tasked with deciding whether the trial court erred in denying
the Defendants’ motion to disqualify the trial court judge. A trial court’s ruling on a motion
for disqualification or recusal is reviewed under a de novo standard of review. Tenn. Sup.
Ct. R. 10B, § 2.01.

                                         Discussion

       “The right to a fair trial before an impartial tribunal is a fundamental constitutional
right.” Bean v. Bailey, 280 S.W.3d 798, 803 (Tenn. 2009) (quoting State v. Austin, 87
S.W.3d 447, 470 (Tenn. 2002)). Preserving public confidence in judicial neutrality,
however, requires more than ensuring that a judge is impartial in fact. Kinard v. Kinard,
986 S.W.2d 220, 228 (Tenn. Ct. App. 1998). It is also important that a judge be perceived
to be impartial. Id. In keeping with this principle, Tennessee Supreme Court Rule 10,
                                              -3-
Code of Judicial Conduct Rule 2.11 provides that “[a] judge shall disqualify himself or
herself in any proceeding in which the judge’s impartiality might reasonably be
questioned[.]” Even when a judge sincerely believes that he or she can preside over a
matter in a fair and impartial manner, recusal is nonetheless required where a reasonable
person “in the judge’s position, knowing all of the facts known to the judge, would find a
reasonable basis for questioning the judge’s impartiality.” Davis v. Liberty Mut. Ins. Co.,
38 S.W.3d 560, 564-65 (Tenn. 2001) (quoting Alley v. State, 882 S.W.2d 810, 820 (Tenn.
Crim. App. 1994)). As noted by the Defendants in their “Motion for Disqualification of
Judge,” Tennessee Supreme Court Rule 10, Code of Judicial Conduct Rule 2.11 requires,
inter alia, that a judge shall disqualify himself or herself if the judge has “personal
knowledge of facts that are in dispute” or if the judge is “likely to be a material witness in
the proceeding.”

       In this matter, the Defendants contend that they will be calling Chancellor Kyle as
an essential witness to prove the falsity of Ms. Hawthorne’s allegation that the Galilee
Class Action would have settled for huge sums but for alleged malpractice. Chancellor
Kyle will be a key witness, they suggest, due to the requirement that settlements in class
actions must garner the consent of the trial court. According to their argument, “only
Chancellor Kyle . . . can offer testimony on the key issue of what would have been
reasonable proposed settlements which would have been approved by the trial court with
non-settling defendants in the underlying case.” Although the Defendants correctly note
the responsibility that trial judges have relative to settlements in class action proceedings,
we are not persuaded by their argument that recusal is required here or that Chancellor
Kyle will be a witness relative to the Malpractice Suit.

       As an initial matter, we observe that the theory of the Malpractice Suit is not even
predicated on factual questions of which Chancellor Kyle has any knowledge. The
pleadings filed by Ms. Hawthorne make clear that the negligence asserted against the
Defendants is related to negotiations occurring outside of trial. Indeed, as the second
amended complaint states:

       Plaintiff does not allege that Defendants engaged in any malpractice in
       connection with the litigation of the trial of the underlying Galilee Class
       Action Lawsuit. Plaintiff does not allege that Defendants engaged in any
       “misconduct” that any person in the courtroom, including the Chancellor
       who tried the matter, could observe in open court. Plaintiff’s malpractice
       claims arise solely out of the egregious and unethical behavior alleged herein
       whereby Defendants refused to consider the Funeral Home Defendants’
       settlement offers and their ability to pay and their unethical practice of
       withholding these settlement offers from the named Class representatives and
       the Class Members.

                                            -4-
Of course, as we have already noted, when Chancellor Kyle denied the Defendants’
“Motion for Disqualification of Judge,” he reasoned that there was no basis to even attempt
to call him as a material witness because he had “no personal knowledge of the disputed
settlements at issue.”

        The Defendants assert that this reasoning is overly narrow and ignores the role
Chancellor Kyle would have had in potentially approving the settlement offers Ms.
Hawthorne places at the forefront of her Malpractice Suit. They appear to reason that
Chancellor Kyle must necessarily testify as to how he would have dealt with any settlement
offers in order to allow the jury to determine whether final approval would have been given
to any class settlements in the Galilee Class Action. As explained below, we respectfully
disagree with the Defendants’ conclusion that such a question would be one for the jury
such that Chancellor Kyle would need to testify. Thus, this cited basis for disqualification,
i.e., that Chancellor Kyle is likely to be a material witness in the Malpractice Suit, is
without support.

      In a claim for legal malpractice, a plaintiff must establish the following elements:

       (1) that the accused attorney owed a duty to the plaintiff, (2) that the attorney
       breached that duty, (3) that the plaintiff suffered damages, (4) that the breach
       was the cause in fact of the plaintiff’s damages, and (5) that the attorney’s
       negligence was the proximate, or legal, cause of the plaintiff’s damages.

Gibson v. Trant, 58 S.W.3d 103, 108 (Tenn. 2001). In order to prove damages in the
malpractice suit, the plaintiff must “prove that he would have obtained relief in the
underlying lawsuit, but for the attorney’s malpractice; consequently, the trial of a legal
malpractice claim becomes, in effect, a ‘trial within a trial.’” Shearon v. Seaman, 198
S.W.3d 209, 214 (Tenn. Ct. App. 2005). No doubt, the assertion here is that favorable
settlements in the underlying lawsuit would have been achieved absent the Defendants’
negligence. Clearly, therefore, that is part of the case Ms. Hawthorne must establish in her
“trial within a trial.” In our view, however, the jury is not in a position to make the
determination of whether any alleged settlements would have been approved in the
underlying litigation. That question is for the court, not the jurors as factfinders, and
therefore, there is no basis to solicit supposed factual testimony from Chancellor Kyle on
the question. He does not need to testify.

        We reach our conclusion on this issue as a result of the duty that a trial judge has to
approve settlements in class actions. See Tenn. R. Civ. P. 23.05 (“A certified class action
shall not be voluntarily dismissed or compromised without approval of the court.”).
Indeed, it is not within the province of a jury in the Malpractice Suit to find whether such
a settlement would have been approved because that would not have been a factual question
for the jury in the Galilee Class Action. See Piscitelli v. Friedenberg, 105 Cal. Rptr. 2d
88, 99 (Cal. Ct. App. 2001) (noting that there are “numerous out-of-state authorities
                                             -5-
holding that in legal malpractice cases, whether a court or jury decides the underlying case-
within-a-case does not turn on the identity or expertise of the trier of fact, but whether the
issues are predominately questions of fact or law”). Approval of a class action settlement
is a discretionary judicial function. In re Pacer Int’l, Inc., No. M2015-00356-COA-R3-
CV, 2017 WL 2829856, at *5 (Tenn. Ct. App. June 30, 2017).

        Although it did not specifically deal with class action settlements, a case from the
Illinois Court of Appeals, First National Bank of LaGrange v. Lowrey, 872 N.E.2d 447
(Ill. App. Ct. 2007), is particularly instructive for our purposes here. There, the court
considered a legal malpractice case that stemmed from a medical malpractice action
pursued as a result of physical and mental injuries that a minor suffered at birth. The legal
malpractice case centered on allegations that counsel had rejected a $1 million settlement
offer from the medical malpractice defendants without discussing it with the minor child’s
mother. Id. at 455-56. On appeal, the Lowrey court noted that, “because the underlying
medical malpractice action involved a minor, the trial court would have had to approve any
settlement agreed to by the parties.” Id. at 468. The court then considered whether, in the
legal malpractice case, it was the responsibility of the trial court or jury to determine
whether approval would have been given to the settlement in the medical malpractice
action. The court ultimately determined this responsibility was with the trial court, not the
jury, explaining in pertinent part as follows:

       [W]e conclude that the issue of whether the trial court would have approved the
       settlement is a question of law to be decided by the trial court in the legal malpractice
       case. A review of the law applicable to a minor involved in litigation convinces us
       that this issue must be decided by the trial court. In Illinois, a minor involved in
       litigation is a ward of the court, and it is the court that is vested with the duty and
       discretion to protect the minor’s interests. Wreglesworth v. Arctco, Inc., 316
       Ill.App.3d 1023, 1026, 250 Ill.Dec. 495, 738 N.E.2d 964 (2000). Moreover,
       consistent with that duty, it is the trial court that is statutorily required to approve or
       reject any settlement agreed to on the minor’s behalf. See 755 ILCS 5/19–8 (West
       2004). We do not believe that the jury should assume a role in a legal malpractice
       case that the legislature has specifically committed to the discretion of the trial court.
       To do so would be contrary to the legislature’s intent and would give the jury a
       power in the context of a legal malpractice case that it would not otherwise possess.
       Accordingly, we find that it was the responsibility of the trial judge in the legal
       malpractice case to determine whether the settlement would have been approved by
       the court in the underlying medical malpractice action.

Id. at 470.

       A similar logic applies in the legal malpractice action here. Any approval of
settlement offers would have been a discretionary decision for the trial court to make in the
Galilee Class Action. It was a judicial decision, not a factual determination. As such, the
                                           -6-
jury has no role in the Malpractice Suit in determining that particular component of the
case. Therefore, the claimed need for Chancellor Kyle’s testimony on the subject is wholly
without support.2

                                               Conclusion

       In light of the foregoing discussion, we conclude that Chancellor Kyle will not likely
be a material witness in the litigation. Accordingly, the trial court’s denial of the “Motion
for Disqualification of Judge” is hereby affirmed.

                                                                   s/ Arnold Goldin
                                                                   ARNOLD GOLDIN, JUDGE

        2
           There is also some suggestion by the Defendants that they will call Chancellor Kyle to testify as
to other matters, matters they assert will later be injected into the lawsuit in future pleadings. In a
declaration submitted with the “Motion for Disqualification of Judge,” one of the Defendants, alluding to
third-party claims yet to be asserted, claims that a significant issue in the case will be who had what
responsibilities to communicate with the class members and class representatives. Building on this point
in their petition for recusal appeal, the Defendants assert that only Chancellor Kyle can testify concerning
the responsibilities imposed by his orders. As an initial matter, we are of the opinion that this asserted
basis for recusal is somewhat premature. It is predicated on the notion that additional claims will later be
asserted. We decline the invitation to hold that the trial judge should have recused himself on the basis that
certain allegations, if asserted, would justify disqualification. We will not pass on the question in this
appeal, but we do note that Ms. Hawthorne makes several compelling arguments in response, among others,
that the testimony supposedly needed on these subjects is either available from the existing record or would
be inappropriate advisory or expert legal testimony. Assuming arguendo we agreed that the unpled
allegations relied upon by the Defendants would warrant the Chancellor’s disqualification, we would in
effect be mandating recusal on a record that does not yet exist. This we will not do.
                                                    -7-