Court Opinion

ID: 3006583
Source: CourtListenerOpinion
Date Created: 2015-10-01 21:08:14.419248+00
Date Added: 2024-06-11T15:03:12.663303
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                  July 24, 2015 Session

              MARK A. COHEN v. RICHARD A. DEMONBREUN

                 Appeal from the Circuit Court for Davidson County
                       No. 13C4965 Carol Soloman, Judge

                          ________________________________

  No. M2014-02403-COA-R3-CV – Filed September 30, 2015
                   _________________________________

This appeal arises from the dismissal of suit for unpaid fees. An expert and an attorney
entered into a services agreement in March 2005. The expert first invoiced for his services in
January 2006. Additional services were rendered after that date, and the expert sent
additional invoices. Despite repeated requests from the expert and promises from the
attorney, invoices went unpaid except for a small partial payment. On September 19, 2013,
the expert filed suit against the attorney in general sessions court and obtained a default
judgment. Attorney then appealed to circuit court. On a motion for summary judgment, the
trial court found that suit was barred by the applicable statute of limitations. We reverse.

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

W. NEAL MCBRAYER, J., delivered the opinion of the Court, in which ANDY D. BENNETT and
RICHARD H. DINKINS, JJ., joined.

James C. Edwards, Madison, Tennessee, for the appellant, Mark A. Cohen.

No brief filed on behalf of the appellee, Richard A. Demonbreun.
                                             OPINION

                                   I. FACTUAL BACKGROUND1

      In March 2005, Mark A. Cohen entered into a written agreement with an attorney,
Richard A. Demonbreun, to provide services as an expert in connection with a medical
malpractice case. The agreement contained the following provisions relating to
compensation:

               1. Attorney hereby retains Dr. Cohen to research, prepare a written or
       oral report, and, if necessary, testify concerning his findings at the agreed upon
       hourly rate of $425 per hour plus any actual expenses incurred. Dr. Cohen
       agrees not to charge more than $3,500 without prior approval.

               2. In addition to the above fees, Attorney agrees to pay Dr. Cohen at
       the rate of $425 per hour (including travel time), plus expenses for time spent
       testifying at either depositions or trials in this case. Attorney agrees to be fully
       responsible for all such charges—even if the opposing counsel requests the
       deposition. Although Dr. Cohen may bill opposing counsel directly as a
       courtesy, a copy of the bill and any late payment notices may be sent to
       Attorney, and will be Attorney‟s ultimate responsibility.

               3. Attorney agrees to pay Dr. Cohen a non-refundable fee of $1,500 to
       retain him for such services. Dr. Cohen will bill against this retainer based on
       his hourly rates and expenses as described herein.

               ....

               5. Attorney agrees to render payment to Dr. Cohen within 30 days of
       receipt of the statement requesting such payment. Attorney further agrees to
       pay interest at the rate of 1.5% per month on any delinquent accounts. This
       agreement is between the Attorney and Dr. Cohen, and failure by Attorney‟s
       client and/or opposing counsel to reimburse the Attorney shall not be deemed
       grounds for late payment to Dr. Cohen.

       As contemplated by the agreement, Dr. Cohen sent Mr. Demonbreun invoices for his
services. Along with a cover letter dated January 25, 2006, Dr. Cohen sent an invoice to

       1
         The facts are drawn from the pleadings, the exhibits filed in support of the motion for summary
judgment, and the exhibits to the affidavit of Mark A. Cohen.
                                                   2
Mr. Demonbreun for $3,825.00. After deduction of the $1,500 retainer, the invoice showed a
balance due of $2,325.00. Consistent with the parties‟ agreement, the January 2006 invoice
contained the following legend: “Terms: Net 30 days. Accounts over 30 days will be subject
to interest at the rate of 1.5% per month beginning with date of original bill.” The legend
with the “net thirty” payment terms appeared on each subsequent invoice.

       Mr. Demonbreun apparently failed to pay the January 2006 invoice,2 which prompted
an e-mail from Dr. Cohen. On November 1, 2006, Mr. Demonbreun responded by e-mail
with reassurances and promises of future work and payments:

        Mark: I am glad you have emailed me. The case is set for trial the week of
        Sept. 17, 2007. It is likely that the [attorney for the defendant] will want to
        take your discovery deposition in the next couple of months. Of course, she
        will pay for your time on that. I have been going through a very difficult cash
        problem here and feel very badly that this amount is outstanding. . . . .

        I appreciate your offer to try and work something out here. Let me see if I can
        get a $500 check written in the next week and begin to get some payment on
        this. The discovery deposition will help this matter generate some income for
        you, and I greatly appreciate all you have do [sic] so far. It is likely the case
        will settle sometime in the Spring.

The check for $500 never came, but Mr. Demonbreun made additional promises of payment.

       In February 2007, after further prodding, Mr. Demonbreun sent another e-mail to
Dr. Cohen. This time Mr. Demonbreun went into further detail on the financial strain he was
under, but he nonetheless promised a partial payment.

        Mark: I received your email and am embarrassed that I have not been able to
        send a check. The costs of carrying this case have been more than my little
        law office can handle: this past month is [sic] cost $4000 just to have the
        medical records duplicated in order for the two doctors and the physician‟s
        [sic] assistant I have needed to retain to be able to have everything from which
        to testify. I know this does not excuse my failing to send a check. It just
        seems I cannot get caught up. I have talked with Mark and he cannot help me

        2
          Subsequent invoices make reference to an outstanding invoice dated April 4, 2006, also in the
amount of $2,325.00. The April 2006 invoice is not included in the record. We cannot determine whether the
April 2006 invoice was a repeat of the January 2006 invoice or included only services rendered after January
2006 that coincidentally totaled the same amount as the January 2006 invoice.
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      cover any expenses right [sic]. I will mail a check for $250 on Friday and will
      find this amount by then.

In his reply, Dr. Cohen seemed agreeable to partial payments but stressed that he must be
paid in full prior to trial. He also noted that defense counsel might discover that he was
unpaid. Ultimately, Mr. Demonbreun sent Dr. Cohen a payment of $300.

       The repeated requests for payment and the concern that the defense would inquire
about the lack of payment to his experts led Mr. Demonbreun to file a motion in limine on
August 27, 2007. The motion in limine requested that the court “prohibit the defendants
from presenting any testimony, making comments or offering into evidence proof of any kind
of communication” regarding fee agreements with his experts. The motion admitted that the
experts had not been paid and made the following reference to an agreement with the experts
to make payment at a later date:

              That counsel for the [plaintiff], due to his limited financial resources for
      trial preparation on this case, has reached an agreement with his expert
      witnesses that they will be paid at a future date, which may be before or after
      this matter is resolved either through trial or settlement, and that the counsel
      for the defendants has asked questions during depositions about these
      necessary fee arrangements in an attempt to discredit the validity of their
      testimony. The expert witnesses involved in this proceeding for the plaintiff
      have agreed to testify based upon their concerns about the severe breach of the
      standard of care that occurred which resulted in the death of a young woman at
      the age of only 27 years of age [sic]. Any reference to the willingness of these
      witnesses to be paid at a later date is irrelevant, prejudicial and has no
      probative value to the issues involved in this lawsuit and should not be
      permitted before the jury for any reason.

Later that same day, Dr. Cohen sent Mr. Demonbreun an e-mail, referencing an attached
agreement, asking him to acknowledge both the outstanding balance due and that payment
was not contingent upon the outcome of trial. Apparently unaware of the motion in limine,
Dr. Cohen also again raised the specter of opposing counsel learning that Mr. Demonbreun
was “behind on payments to experts.”

       Mr. Demonbreun responded the next day. Besides informing Dr. Cohen of the motion
in limine, Mr. Demonbreun offered new hope for payment:

      Mark: I have filed a Motion in Limine to take care of any concerns you have
      here. The jury will not be permitted to hear any comments by [defense
                                          4
      counsel] relative to your fee being outstanding or anything to do with payment.
      You may be asked about what you have charged which is entirely appropriate,
      but I have anticipated this issue and went ahead and filed a motion so [defense
      counsel] would not attempt to make an issue out of the fact that her firm has a
      much deeper pocket than I do.

      I am hopeful also that my home sale is finalized very soon and when that loan
      closes I will be paid over $600,000 in equity proceeds from which I plan to pay
      you immediately. But with the mortgage crisis there may be [sic] delay [sic]
      getting that done. Let me know if you still need us [sic] to execute this
      Agreement based on the motion and the fact your fee payment will not be
      mentioned in court.

The record does not reveal how Dr. Cohen responded.

        The trial, which commenced on September 17, 2007, ended in a mistrial. Watkins v.
Affiliated Internists, P.C., No. M2008-01205-COA-R3-CV, 2009 WL 5173716, at *6, *8
(Tenn. Ct. App. Dec. 29, 2009). Shortly after the mistrial was declared, in a letter dated
September 21, 2007, Dr. Cohen sent a new invoice to Mr. Demonbreun that included, not
only the previous balance and accrued interest, but also new charges for services rendered
from July through September 2007 and expenses. The charges for new services totaled
$6,808.33, and the expenses totaled $226.15.

      After sending another invoice in April 2008 showing accrued interest on the balance
due, Dr. Cohen received the following e-mail from Mr. Demonbreun:

      Mark: I have been forced to file for Chapter 11 protection due to my home sale
      not closing. We were in court last week and are expecting to get the case re-
      set for trial in the near future. I apologize for the delay and will do everything
      possible to resume payments to you as soon as possible.

The case never went to trial again. The trial court dismissed the case on a motion for
summary judgment. We affirmed the dismissal on appeal. Watkins v. Affiliated Internists,
P.C., No. M2011-00541-COA-R3-CV, 2012 WL 4086139 (Tenn. Ct. App. Sept. 17, 2012).

                                II. PROCEDURAL HISTORY

       On September 19, 2013, Dr. Cohen filed a warrant in the Metropolitan General
Sessions Court for Davidson County, Tennessee, against Mr. Demonbreun for his
outstanding fees plus attorneys‟ fees and expenses. The general sessions court entered a
                                            5
default judgment in the amount of $19,781.33. Mr. Demonbreun appealed the judgment to
circuit court.

         Before the Circuit Court for Davidson County, Tennessee, Mr. Demonbreun,
representing himself, moved for summary judgment. As grounds for his motion,
Mr. Demonbreun stated “plaintiff and defendant executed a contract on March 30, 2005, and
suit was filed in an effort to collect monies allegedly owed on that contract September 19,
2013, more than eight (8) years later.” In response, citing Mr. Demonbreun‟s promises of
payment, Dr. Cohen argued that the doctrine of equitable estoppel tolled the running of the
statute of limitations.

       The trial court granted the motion for summary judgment. The court‟s order made no
reference to the separate invoices for services. Instead, the court noted that the parties‟
agreement had been executed on March 30, 2005, and that the “cause of action to collect
monies allegedly due on the [agreement] had not been filed in the Davidson County General
Sessions Court until [a date], well outside the six (6) year limitations period.” The order also
did not specifically reference the estoppel defense. Instead, focusing solely on the e-mail in
which Mr. Demonbreun advised of his bankruptcy filing, the court stated “this
communication . . . does not provide sufficient evidence of a promise to pay the alleged debt
which would extend the limitations period to include the filing date . . . .”

                                        III. ANALYSIS

                                  A. STANDARD OF REVIEW

       Summary judgment may be granted only “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment as
a matter of law.” Tenn. R. Civ. P. 56.04; see also Martin v. Norfolk S. Ry. Co., 271 S.W.3d
76, 83 (Tenn. 2008); Penley v. Honda Motor Co., 31 S.W.3d 181, 183 (Tenn. 2000); Byrd v.
Hall, 847 S.W.2d 208, 215 (Tenn. 1993). The court is not to “weigh” the evidence when
evaluating a motion for summary judgment or substitute its judgment for that of the trier of
fact. Martin, 271 S.W.3d at 87; Byrd, 847 S.W.2d at 211. Instead, the court is to “take the
strongest legitimate view of the evidence in favor of the nonmoving party.” Id. at 210.
When considering a motion for summary judgment, courts grant “all reasonable inferences in
favor of [the nonmoving party] and discard all countervailing evidence.” Id. at 210-11.

      Defenses based on statutes of limitations are particularly well suited to summary
judgment motions because the facts material to the defense are often undisputed. Cherry v.
Williams, 36 S.W.3d 78, 83 (Tenn. Ct. App. 2000). The statute of limitations is an
                                            6
affirmative defense. Tenn. R. Civ. P. 8.03. As such, a party asserting a claim is barred by
the statute of limitations has the burden of establishing all of its elements. Carr v. Borchers,
815 S.W.2d 528, 532 (Tenn. Ct. App. 1991).

       A trial court‟s decision on a motion for summary judgment enjoys no presumption of
correctness on appeal. Martin, 271 S.W.3d at 84; Blair v. W. Town Mall, 130 S.W.3d 761,
763 (Tenn. 2004). We review the summary judgment decision as a question of law. Martin,
271 S.W.3d at 84; Blair, 130 S.W.3d at 763. Accordingly, we must review the record de
novo and make a fresh determination of whether the requirements of Tennessee Rule of Civil
Procedure 56 have been met. Eadie v. Complete Co., 142 S.W.3d 288, 291 (Tenn. 2004);
Blair, 130 S.W.3d at 763.

                                 B. STATUTE OF LIMITATIONS

        The trial court granted summary judgment solely on the statute of limitations. A
statute of limitations defense “triggers the consideration of three components—the length of
the limitations period, the accrual of the cause of action, and the applicability of any relevant
tolling doctrines.” Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436,
456 (Tenn. 2012). With respect to the first component, the gravamen of Dr. Cohen‟s action
is breach of contract. See Mid-S. Indus., Inc. v. Martin Mach. & Tool, Inc., 342 S.W.3d 19,
29 (Tenn. Ct. App. 2010) (applicable statute of limitations determined by the gravamen of the
action). Consequently, the length of the limitation period is six years from the date the cause
of action accrues. Tenn. Code Ann. § 28-3-109(a)(3) (2000).

       In a breach of contract case, the cause of action accrues on the date of breach. Greene
v. THGC, Inc., 915 S.W.2d 809, 810 (Tenn. Ct. App. 1995). We have described the date of
breach as the date “when a contracting party first knows or should know that the contract will
not be performed.” Wilkins v. Third Nat. Bank in Nashville, 884 S.W.2d 758, 762 (Tenn. Ct.
App. 1994). We have also recognized that, with some contracts, there can be more than one
breach and each breach can accrue at different times. Collins v. Summers Hardware and
Supply Co., 88 S.W.3d 192, 201 (Tenn. Ct. App. 2002). We describe such contracts as
severable. Id. at 197. For example, with an installment note, “the cause of action accrues on
each installment when it becomes due and the Statute begins to run from that moment on that
installment.” Farmers & Merchants Bank v. Templeton, 646 S.W.2d 920, 923 (Tenn. Ct.
App. 1982). As a result, “suit may be brought in successive actions upon each default in an
installment for the amount of the default installment.” Id.

       We conclude the contract at issue here is severable, such that Mr. Demonbreun could
commit more than one breach. See Collins, 88 S.W.3d at 201 (employment contract
providing for payment of commissions was severable). In light of this determination, we
                                             7
must determine when breaches occurred and a cause or causes of action accrued. Here, the
parties‟ agreement conditions Mr. Demonbreun‟s liability on the receipt of an invoice.3
Therefore, a breach occurred and a cause of action accrued on the 31st day following the
receipt of an invoice for services and non-payment. See Strickland v. City of Lawrenceburg,
611 S.W.2d 832, 837 (Tenn. Ct. App. 1980) (No liability arises under a contract “until such
time as the condition precedent was fulfilled.”).

       Dr. Cohen filed suit within six years on only one of the two breaches. A breach
occurred and the cause of action accrued for those services first invoiced on January 25,
2006, sometime in late February 2006, assuming receipt of the invoice within a few days of
January 25. For those additional services and expense first invoiced on September 27, 2007,
the breach occurred and the cause of action accrued in late September or early October 2007,
again depending upon receipt of the invoice.

        Having determined that suit was filed beyond six years for one of the two breaches for
which plaintiff sought recovery, we consider the “applicability of any relevant tolling
doctrines.” Redwing, 363 S.W.3d at 456. In response to the motion for summary judgment,
Dr. Cohen relied upon the doctrine of equitable estoppel. The doctrine “tolls the running of
the statute of limitations when the defendant has misled the plaintiff into failing to file suit
within the statutory limitations period.” Id. at 460. As the party invoking the doctrine, Dr.
Cohen had the burden of proving its applicability. Id.

        To establish the applicability of the doctrine of equitable estoppel, a plaintiff must
prove two elements. First, the plaintiff must prove “that the defendant induced him or her to
put off filing suit by identifying specific promises, inducements, suggestions, representations,
assurances, or other similar conduct by the defendant that the defendant knew, or reasonably
should have known, would induce the plaintiff to delay filing suit.” Id. Second, the plaintiff
must prove that the “„delay in filing suit was not attributable to [his or her] own lack of
diligence.‟” Id. (quoting Hardcastle v. Harris, 170 S.W.3d 67, 85 (Tenn. Ct. App. 2004)).

        Taking “the strongest legitimate view of the evidence in favor of the nonmoving
party,” Byrd, 847 S.W.2d at 210, Dr. Cohen demonstrated both elements necessary for the
application of the doctrine of equitable estoppel. Dr. Cohen has shown promises to pay his
claim within the applicable statute of limitations upon which he apparently relied.

        3
         Where the claim is for a sum of money allegedly owed pursuant to a contract, a cause of action does
not always accrue on demand. See, e.g., Tenn. Code Ann. § 28-3-109(c); Hamilton Nat’l Bank v. McCanless,
144 S.W.2d 768, 769 (Tenn. 1940) (cause of action on a demand note accrues on the date of execution of the
note).

                                                     8
       Where by promises or appearances one party is induced to believe that the
       other party is going to pay a claim or otherwise satisfy the claims of the first
       party, and in reliance on that representation the first party delays filing suit
       within the applicable statute of limitations, the party making the
       representations may be estopped to raise the statute of limitations as a defense.

Sparks v. Metro. Gov’t of Nashville & Davidson Cnty., 771 S.W.2d 430, 433 (Tenn. Ct. App.
1989). Dr. Cohen also appears to have acted diligently by filing suit just over one year after
our decision affirming the dismissal of the wrongful death action for which he was hired as
an expert. Watkins, 2012 WL 4086139, at *1. As noted above, the motion in limine filed by
Mr. Demonbreun represented that he had agreed to pay experts possibly as late as the
resolution of the case.

        Because of the limited record before us, we cannot make a conclusive determination
that the doctrine of equitable estoppel applies. As noted above, many of the “facts” are
drawn from exhibits to the affidavit of Dr. Cohen, which Mr. Demonbreun has not had the
opportunity to challenge and the trier of fact has not scrutinized. We can conclude, however,
that there is a genuine issue for trial, and therefore, summary judgment was not appropriate.
See Tenn. R. Civ. P. 56.06.

                                     III. CONCLUSION

       We conclude that suit was filed within six years of one of the alleged breaches of the
parties‟ agreement. We also conclude that disputed issues of material fact exist as to whether
the doctrine of equitable estoppel tolls the applicable statute of limitations. Therefore, we
reverse the judgment of dismissal and remand with instructions to deny the motion for
summary judgment.

                                                   _________________________________
                                                   W. NEAL McBRAYER, JUDGE

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