On March 11, 2016, the Tennessee Court of Appeals for the Western Division of Tennessee decided Melanie Jones v. Shavonna Rachelle Windham, 2016 Tenn. App. LEXIS 182 (Tenn. Ct. App. March 11, 2016). In a two to one decision, with a persuasive dissent, the Court of Appeals decided a matter of first impression and determined that Tennessee would not adopt what is becoming the majority rule across the country in favor of the minority approach.
The issue deals with cases where the plaintiff sues an employer principle under theory of vicarious liability for the negligence of its employer agent, along with an independent cause of action for negligence entrustment. In what has been the majority approach, when a defendant admits the employee/agent was acting in the course and scope of its employment when the accident occurred, the plaintiff cannot maintain a separate cause of action for negligent entrustment against the employer, as such basically results in a double recovery. The basis of the majority approach is that negligent entrustment was developed after vicarious liability and was adopted as a way of protecting injured plaintiffs who did not have the means to satisfy a potential judgment or to protect against companies claiming that every employee was not acting in the course and scope of the employment when the injury happened. In other words, if a plaintiff was unable to establish vicarious liability of the principle, they could establish an alternative cause of action against the principle for negligent entrustment. However, regardless of what theory they are able to proceed against, they are only entitled to one recovery for their loss. If they are able to recover for vicarious liability against the agent and the principle through imputed negligence, then there is no point in allowing a double recovery for negligent entrustment for the same loss. Alternatively, if the plaintiff is unable to establish vicarious liability of the principle for the negligence of the plaintiff, they still can recover from the principle in the negligent entrustment.
The Tennessee Court of Appeals refers to the two approaches as the preemption rule and the non-preemption rule. Under the preemption rule, when the defendant admits liability under theories of vicarious liability, the plaintiff cannot recover for negligent entrustment. The non-preemption rule allows a plaintiff to maintain both causes of action alternatively. The Court of Appeals, in adopting the non-preemption rule, found persuasive a recent opinion from the Kentucky Supreme Court in M.V. Transportation, Inc. v. Allgeier, 433 S.W.3d 324 (K.Y. 2014). Additionally, the majority opinion of the Court found that the rule of preemption was not in accord with Tennessee’s adoption of comparative fault or Tennessee jurisprudence. The Court of Appeals, in the majority opinion, felt that any prejudice which can be caused by allowing the plaintiff to maintain both a negligent entrustment action after the employer has admitted liability under vicarious liability can be alleviated by the Judge through pretrial motions. The dissenting opinion, however, finds that the rule of preemption is persuasive and articulates a number of valid reasons why it is in accord with Tennessee jurisprudence.
This decision has been appealed to the Tennessee Supreme Court. Sean W. Martin, a shareholder in the Chattanooga office, is leading a team of defense lawyers with the Tennessee Defense Lawyers Association to support this appeal and, if the petition is granted, will prepare an amicus curae brief to persuade the Supreme Court to adopt the rule of preemption. Several years prior to this decision, Mr. Martin was able to persuade a Federal Judge sitting in the Eastern District of Tennessee to adopt the rule of preemption in a transportation case. The rule of preemption is more in line with Tennessee jurisprudence and it will be beneficial to our industry partners. If the rule of preemption is adopted, it will end the practice of putting transportation companies on trial, spending the bulk of the case and resources arguing about general safety of the company, its adherence to transportation regulations, and other factors oftentimes having nothing to do with the actual facts of the accident. If adopted, it will bring transportation cases more in line with garden-variety car accident cases, where the focus of the liability is on the actions of the drivers of the vehicles and not the transportation company.
In addition to supporting the efforts of overturning the majority opinion in this case, Mr. Martin will also be presenting a webinar for the Tennessee Defense Lawyers Association on May 18, 2016 to discuss both the rule of preemption and non-preemption, the benefits of each approach, supporting for the adoption of the rule of preemption, as well as the practical application and commonsense approach when dealing with both approaches, depending upon how the Tennessee Supreme Court adopts. For more information about the webinar, please visit www.tdla.net.