Davey Mann and wife, Teresa Mann v. Alpha Tau Omega Fraternity, Inc., a non-profit organization

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
February 20, 2013 Session

DAVEY MANN and wife, TERESA MANN v. ALPHA TAU OMEGA
FRATERNITY, Inc., a non-profit organization, ET AL.

Direct Appeal from the Circuit Court for Shelby County
No. CT-00364607 John R. McCarroll, Judge

No. W2012-00972-COA-R3-CV - Filed March 22, 2013

Plaintiffs sued the defendant national fraternity, among others, following an automobile
accident with an apparent fraternity pledge. The trial court granted summary judgment to the
national fraternity finding that it owed no duty of care to Plaintiffs, and it denied Plaintiffs’
motion to amend to allege the national fraternity’s vicarious liability based upon a
principal/agent relationship between the national fraternity and the local fraternity chapter
and/or between the national fraternity and local fraternity chapter members/prospective
members. For the following reasons, we reverse the trial court’s grant of summary judgment
to the national fraternity as well as its denial of Plaintiffs’ motion to amend, and we remand
for further proceedings consistent with this opinion.

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

A LAN E. H IGHERS, P.J., W.S., delivered the opinion of the Court, in which D AVID R. F ARMER,
J., joined and Holly M. Kirby, J., joined in result only.

Gary K. Smith, J. Mark Benfield, Memphis, Tennessee, for the appellants, Davey Mann and
wife, Teresa Mann

G. Coble Caperton, Mary L. Wagner, Memphis, Tennessee, for the appellee, Alpha Tau
Omega Fraternity, Inc.
 OPINION

I. F ACTS & P ROCEDURAL H ISTORY

On July 22, 2006, Davey Mann and Teresa Mann (“Plaintiffs”) were injured in an
automobile accident when Jeffrey Callicutt allegedly crossed the centerline, causing a head-
on collision. Prior to the accident, Callicutt had allegedly consumed alcoholic beverages at
the home of Eric and Lori Cox during a social gathering of members/prospective members
of Alpha Tau Omega Fraternity (“ATO” or “National ATO”), specifically its University of
Memphis, Tennessee Zeta Rho Chapter (“Local ATO”).

On July 17, 2007, Plaintiffs filed a personal injury lawsuit against Jeffrey Callicutt and
his parents, William and Deborah Callicutt, National ATO, Local ATO, Eric and Lori Cox,
and “John Doe, A through Z[.]” On March 3, 2008, Plaintiffs filed an amended complaint,
specifically naming defendants previously identified as “John Doe, A through Z[.]”
However, the trial court dismissed these newly-added defendants based upon the statute of
limitations. The defendant Callicuts then amended their answer to allege the comparative
fault of the previously dismissed defendants, and Plaintiffs filed a second amended complaint
to assert claims against them. The newly-added defendants were again dismissed based upon
the statute of limitations, but their dismissal was ultimately reversed by the Tennessee
Supreme Court. See Mann v. Alpha Tau Omega Fraternity, 380 S.W.3d 42 (Tenn. 2012).

On March 25, 2011, National ATO–the only defendant involved in the current
appeal–filed a Motion for Summary Judgment and an accompanying memorandum, a
Statement of Undisputed Facts, and the Affidavit of its Chief Executive Officer, Wynn
Smiley. National ATO claimed that it did not and could not control the day-to-day operations
of its local chapters and that its disciplinary powers were limited to post-violation
punishment. Thus, National ATO claimed that as a matter of law it did not owe a duty of
care to Plaintiffs, and therefore, it could not be held liable for their injuries and/or damages.

On January 5, 2012, Plaintiffs responded by arguing that a special relationship existed
between National ATO and Local ATO, and that based upon this relationship, National ATO
owed a duty of care to Plaintiffs. Specifically, Plaintiffs argued that National ATO possessed
the ability and authority to control Local ATO, and that its mere failure to do so should not
absolve it of liability. That same day, Plaintiffs filed a third motion to amend their
complaint, seeking to allege a principal/agent relationship between National ATO and co-
defendants Local ATO, driver Jeffrey Calicutt, and alleged Local ATO members/officers E.J.
Cox, Daniel Kelly, Nicholas Beaver, Zachary Beaver, and John Condon, III, and to allege
National ATO’s vicarious liability based upon this relationship.

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 On January 12, 2012, a hearing was held on National ATO’s Motion for Summary
Judgment, after which, the trial court entered an Order granting the motion, finding that the
undisputed facts demonstrated that National ATO did not owe a legal duty to Plaintiffs, and
therefore that National ATO had negated an essential element of Plaintiffs’ claims. The trial
court also denied Plaintiffs’ motion to amend because it found an amendment “would be
futile because of the Court’s ruling on [National ATO’s] Motion for Summary Judgment .
. . that there is no duty on the part of [National ATO].” The trial court’s order was made final
pursuant to Tennessee Rule of Civil Procedure 54.02, and Plaintiffs timely appealed to this
Court.

II. I SSUES P RESENTED

Appellants present the following issues for review, as summarized:

1. Whether the trial court erred in granting National ATO’s Motion for Summary
Judgment finding that it owed no legal duty to Appellants; and

2. Whether the trial court erred in denying Appellants’ Motion to Amend Complaint.

For the following reasons, we reverse the trial court’s grant of summary judgment to National
ATO as well as its denial of Plaintiffs’ motion to amend, and we remand for further
proceedings consistent with this opinion.

III. D ISCUSSION

1. Grant of Summary Judgment

As stated above, National ATO moved for summary judgment claiming that, as a
matter of law, it did not owe a duty of care to Plaintiffs. In granting summary judgment to
National ATO, the trial court determined that the undisputed facts demonstrated that National
ATO did not owe a legal duty to Plaintiffs, and therefore that National ATO had negated an
essential element of Plaintiffs’ negligence claim.

A motion for summary judgment should 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

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moving party is entitled to a judgment as a matter of law.” Tenn. R. Civ. P. 56.04.
“When ascertaining whether a genuine dispute of material fact exists in a particular case,
the courts must focus on (1) whether the evidence establishing the facts is admissible, (2)
whether a factual dispute actually exists, and, if a factual dispute exists, (3) whether the
factual dispute is material to the grounds of the summary judgment.” Green v. Green,
293 S.W.3d 493, 513 (Tenn. 2009).

“The party seeking the summary judgment has the burden of demonstrating that no
genuine disputes of material fact exist and that it is entitled to a judgment as a matter of
law.” Green, 293 S.W.3d at 513 (citing Martin v. Norfolk S. Ry., 271 S.W.3d 76, 83
(Tenn. 2008); Amos v. Metro. Gov't of Nashville & Davidson County, 259 S.W.3d 705,
710 (Tenn. 2008)). “The moving party may make the required showing and therefore shift
the burden of production to the nonmoving party by either: (1) affirmatively negating an
essential element of the nonmoving party's claim; or (2) showing that the nonmoving
party cannot prove an essential element of the claim at trial.” Martin, 271 S.W.3d at 83
(citing Hannan v. Alltel Publ'g Co., 270 S.W.3d 1, 5 (Tenn. 2008)).1 In order to negate an
essential element of the claim, “the moving party must point to evidence that tends to
disprove an essential factual claim made by the nonmoving party.” Id. at 84 (citing Blair
v. W. Town Mall, 130 S.W.3d 761, 768 (Tenn. 2004)). “It is not enough for the moving
party to challenge the nonmoving party to ‘put up or shut up’ or even to cast doubt on a
party’s ability to prove an element at trial.” Hannan, 270 S.W.3d at 8. “If the moving
party is unable to make the required showing, then its motion for summary judgment will
fail.” Martin, 271 S.W.3d at 83 (citing Byrd v. Hall, 847 S.W.2d 208, 215 (Tenn. 1993)).

If the moving party does make a properly supported motion, “[t]he non-moving
party must then establish the existence of the essential elements of the claim.” McCarley
v. West Quality Food Serv., 960 S.W.2d 585, 588 (Tenn. 1998). The nonmoving party is
required to produce evidence of specific facts establishing that genuine issues of material
fact exist. Martin, 271 S.W.3d at 84 (citing McCarley, 960 S.W.2d at 588; Byrd, 847
S.W.2d at 215). “The nonmoving party may satisfy its burden of production by: (1)
pointing to evidence establishing material factual disputes that were over-looked or
ignored by the moving party; (2) rehabilitating the evidence attacked by the moving party;
(3) producing additional evidence establishing the existence of a genuine issue for trial; or
(4) submitting an affidavit explaining the necessity for further discovery pursuant to

1
Recently, the Tennessee General Assembly enacted a law that legislatively reversed the Tennessee
Supreme Court’s holding in Hannan. See Tenn. Code Ann. § 20-16-101. However, the statute applies only
to cases filed on or after July 1, 2011. Thus, in this appeal, we apply the summary judgment standard set
forth in Hannan.

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Tenn. R. Civ. P., Rule 56.06.” Id. (citing McCarley, 960 S.W.2d at 588; Byrd, 847
S.W.2d at 215 n.6). “The nonmoving party's evidence must be accepted as true, and any
doubts concerning the existence of a genuine issue of material fact shall be resolved in
favor of the nonmoving party.” Id. (citing McCarley, 960 S.W.2d at 588). The resolution
of a motion for summary judgment is a matter of law, which we review de novo with no
presumption of correctness.

On appeal, Plaintiffs argue that the trial court erred in granting summary judgment
to National ATO based upon its conclusion that National ATO had negated the “duty”
element of Plaintiffs’ claim.2 “In order to establish a prima facie claim of negligence,
basically defined as the failure to exercise reasonable care, a plaintiff must establish the
following essential elements: ‘(1) a duty of care owed by defendant to plaintiff; (2)
conduct below the applicable standard of care that amounts to a breach of that duty; (3) an
injury or loss; (4) cause in fact; and (5) proximate, or legal, cause.’” Giggers v. Memphis
Hous. Auth., 277 S.W.3d 359, 364 (Tenn. 2009) (quoting McCall v. Wilder, 913 S.W.2d
150, 153 (Tenn. 1995)). “[A]lthough all persons have a duty to use reasonable care to
refrain from conduct that will foreseeably cause injury to others, as a general rule, one
person owes no affirmative duty to protect or warn others endangered by the conduct of a
third party.” Newton v. Tinsley, 970 S.W.2d 490, 492 (Tenn. Ct. App. 1997) (citing
Bradshaw v. Daniel, 854 S.W.2d 865, 870 (Tenn. 1993); Nichols v. Atnip, 844 S.W.2d
655, 661 (Tenn. Ct. App. 1992)). However, “[t]o mitigate the harshness of this rule, the
courts of this state have carved out exceptions in cases where the defendant stands in
some special relationship either to the individual whose conduct threatens to cause harm
or to the individual exposed to the harm.”3 Id. (citing Bradshaw, 854 S.W.2d at 871;
Nichols, 844 S.W.2d at 661); see also Downs ex rel. Downs v. Bush, 263 S.W.3d 812, 819
(Tenn. 2008) (“[I]f an individual stands in a special relationship to another individual
who is the source of the danger . . . then the individual assumes an affirmative duty to
exercise reasonable care to either control the danger or protect the vulnerable.”) (citations
omitted). “[I]n order for the duty to control a third party’s conduct to arise, the actor must

2
Generally, “negligence cases are not amenable to disposition on summary judgment.” Fruge v. Doe,
952 S.W.2d 408, 410 (Tenn. 1997) (citing McClenahan v. Cooley, 806 S.W.2d 767, 775–76 (Tenn. 1991);
Keene v. Cracker Barrel Old Country Store, Inc., 853 S.W.2d 501, 502–03 (Tenn. Ct. App. 1992)). However,
any civil case, including a negligence case, may be resolved at the summary judgment stage if the matter “can
be and should be resolved on legal issues alone.” Id. (citing Mansfield v. Colonial Freight Sys., 862 S.W.2d
527 (Tenn .Ct. App. 1993)).
3
Plaintiffs do not allege the existence of a special relationship between themselves and National
ATO. Instead, they argue only that a special relationship existed between National ATO and Local ATO
and/or between National ATO and Local ATO members/prospective members.

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have the means and ability to control the third party.” Id. (citing Carroll v. Thomas, 1988
WL 22833, at *3 (Tenn. Ct. App. Mar. 8, 1988) perm. app. denied (Tenn. May 23,
1988)).

In considering whether a defendant owes a duty of care to a particular plaintiff,
Tennessee courts consider both public policy and whether the risk of harm is
unreasonable. Downs, 263 S.W.3d at 820 (citing Burroughs v. Magee, 118 S.W.3d 323,
329 (Tenn. 2003); Turner v. Jordan, 957 S.W.2d 815, 818 (Tenn. 1997)). “Public policy
considerations are relevant because ‘the imposition of a legal duty reflects society’s
contemporary policies and social requirements concerning the right of individuals and the
general public to be protected from another’s act or conduct.’” Id. (quoting Bradshaw,
854 S.W.2d at 870). Additionally, as stated by our Supreme Court:

The foreseeability of the harm is a key factor in the equation
because, in general terms, “[f]oreseeability is the test of negligence.” “‘A
risk is foreseeable if a reasonable person could foresee the probability of its
occurrence or if the person was on notice that the likelihood of danger to
the party to whom is owed a duty is probable.’” However, foreseeability
alone does not create a duty to exercise reasonable care. If the risk is
foreseeable, then courts should weigh the remaining factors to determine if
an imposition of duty is justified. In the end, whether a defendant owed or
assumed a duty of care to a plaintiff is a question of law for the court to
decide.

Id. (internal citations omitted).

This appeal centers upon whether a special relationship existed between National
ATO and Local ATO or between National ATO and Local ATO members4 such that a duty

4
A dispute exists regarding the status of Jeffrey Callicutt’s ATO membership. Plaintiffs claim that
prior to the incident, Mr. Callicutt “had recently accepted a bid . . .to become a[n ATO] pledge[.]” National
ATO, however, contends that Mr. Callicutt “was never a pledge or active member” of Local ATO, and that
he “[h]e had only been offered an invitation to join and had not been through the pledging ceremony[.]”
Notwithstanding this factual dispute, National ATO states that Mr. Callicutt’s membership status is not
material to its Motion for Summary Judgment, and Plaintiffs do not raise this factual dispute as a ground
precluding summary judgment. For the purpose of this appeal, we find it unnecessary to differentiate
between fraternity members and prospective fraternity members. Thus, we will consider whether a special
(continued...)

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could be imposed upon National ATO to control the conduct of a third party–Local ATO or
Local ATO members. National ATO contends that no special relationship existed because,
it claims, it lacked the ability to control either Local ATO or Local ATO members. In
support of this lack-of-control argument, National ATO cites the Affidavit of its CEO, Wynn
Smiley, which provided in part:

[National ATO] is a non-profit corporation, incorporated under the laws of the
state of Maryland with offices located at 1 North Pennsylvania Street, 12 th
floor, Indianapolis, Indiana, 46204. [National ATO] exists to ensure
ritualistic conformity with the fraternity’s traditions and to further the
fraternity’s purpose of friendship and brotherhood, education, and service to
the community.
[National ATO] does not and cannot control the day to day activities of
the local chapters. All of the local chapters are self governing and financially
self sufficient. . . . [National ATO] only has the ability to remove a local
chapter’s charter or suspend an individual member for that chapter or
member’s failure to abide by policies adopted by the National Fraternity.
However, the National Fraternity only does so after the occurrence of any such
conduct and notice of said conduct to [National ATO].

Essentially, National ATO claims that because of the distance between its Indiana
headquarters and the University of Memphis, the fraternity’s large number of undergraduate
members, and its alleged ability to impose only after-incident punishment, it had no ability
to control the actions of Local ATO or its members. Accordingly, National ATO argues that
no special relationship arose between it and Local ATO and/or its members, and therefore,
that it owed no duty of care to Plaintiffs.

Additionally, National ATO insists that public policy considerations do not support
the finding of a duty in this case. National ATO points out that it is undisputed that prior to
the collision, driver Jeffrey Callicut had attended a gathering at the home of Eric and Lori
Cox, and that National ATO had no prior knowledge of this gathering. National ATO
contends that “it is unreasonable to expect that [National ATO] in Indiana would be able to
predict” the sequence of events which led to the collision. Furthermore, National ATO
insists that “any possible benefit” of imposing a duty upon it would be greatly outweighed

4
(...continued)
relationship existed between National ATO and assumed-pledge Mr. Callicutt.

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by increased oversight costs as well as the change of National ATO’s purpose “from that of
a fraternal brotherhood to that of a parental and policing organization.” National ATO cites
numerous cases in which courts in other jurisdictions have found a lack of control between
a national fraternity and its local chapter.

Plaintiffs, of course, contend that a special relationship existed between National ATO
and Local ATO and/or its members/prospective members, and therefore, that National ATO
owed a duty of care to Plaintiffs. As evidence of “control” creating a special relationship,
Plaintiffs primarily rely upon National ATO’s bylaws, which provide in part:

Article I.
Purpose
Section 1. The purposes for which the Alpha Tau Omega Fraternity, Inc., a
non-profit corporation formed under the Laws of the State of Maryland on
January 1, 1879 (hereinafter “Alpha Tau Omega”) is organized and shall be
operated are those that are exclusively social, educational, and charitable in
nature, including, without limiting the generality of the foregoing, promoting
and cultivating social interaction among its members; a fraternity for the
promotion and culture of friendship and brotherly love among its members;
educating and training its members to be leaders in daily life, including the
development of proper values; and to encourage its members to provide service
to their communities, states, and country; and Alpha Tau Omega shall be
empowered to engage in other and further means as may be necessary and
proper to accomplish the foregoing purposes, not without the scope of the
subsequent section hereof.
....
Article IV.
Board of Directors
Section 1. There shall be a board of directors which shall govern, supervise
and control the business, property, and affairs of Alpha Tau Omega. The
Board of Directors shall determine the policies of Alpha Tau Omega and
prosecute its purposes, including amending the Policies and Procedures of
Alpha Tau Omega, appointing and remunerating agents and employees,
monitoring the budget of Alpha Tau Omega, providing for the collecting and
disbursing of the funds of Alpha Tau Omega, and granting and revoking
charters of chapters and alumni associations.

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 ....

Article VII.
Judicial
Section 1. The judicial power of Alpha Tau Omega shall be vested in a
National Chancellor and such bodies subordinate to the National Chancellor
as may be established by the Board of Directors. . . .

Section 2. The judicial power shall extend to all cases involving individual
and chapter discipline, those arising under these Bylaws or the Policies and
Procedures, to all controversies between Alpha Tau Omega and a chapter
thereof, to all controversies between officers thereof, to all controversies
between chapters thereof, to all controversies between a chapter and a member
thereof, and to all controversies between a chapter and a member of another
chapter.

(emphasis added). Plaintiffs claim that the bylaws demonstrate National ATO’s ability to
control Local ATO, and they maintain that National ATO’s apparent decision not to exercise
this control should not foreclose a duty finding. Moreover, Plaintiffs contend that even if
National ATO is limited to after-incident response, a prior alcohol violation at Local ATO
afforded National ATO the opportunity to exercise its control, yet it declined to do so.
Finally, Plaintiffs argue that public policy dictates a duty finding in this case because the
foreseeable risk of harm greatly outweighs National ATO’s costs in implementing an
effective alcohol policy.

In response, National ATO argues that its bylaws do not grant it the control Plaintiffs
suggest. National ATO points out that the bylaws define “Alpha Tau Omega” as “Alpha Tau
Omega Fraternity, Inc., a non-profit corporation formed under the Laws of the State of
Maryland on January 1, 1879[,]” and therefore, it contends that pursuant to Article IV of the
bylaws, its board of directors is only vested with authority to “govern, supervise and control”
National ATO–not Local ATO or its members/prospective members–and that its board of
directors’ control over Local ATO is limited to granting charters and revoking charters after
a violation has occurred. Finally, National ATO contends that any alleged prior violation
does not create a duty, but instead “would relate solely to the issue of negligence of [National
ATO] if it owed a duty of care.” Moreover, at oral argument before this Court, National
ATO claimed that the prior incident was non-alcohol-related, and therefore, that it had no
bearing on this case.

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 In its Order granting National ATO’s motion for summary judgment, the trial court
listed the undisputed facts as follows:5

a. This action arises out of an automobile accident which occurred on July 22,
2006[.]
b. During said accident a vehicle driven by Defendant Jeffrey Callicut collided
with the Plaintiffs’ vehicle.
c. The vehicle driven by Jeffrey Callicutt was owned by his parents, William
and Deborah Callicutt.
d. Defendant Alpha Tau Omega (hereinafter “National Fraternity”) had no
ownership interest in the vehicle in which Mr. Callicutt was driving at the time
of the accident.
e. The local Chapter of the National Fraternity at the University of Memphis
is named the Tennessee Zeta Rho Chapter of Alpha Tau Omega Fraternity
(hereinafter, “Local Chapter”).
f. Prior to the accident alleged in Plaintiff’s Complaint, Mr. Callicutt attended
a gathering at the home of Eric and Lori Cox.
g. The National Fraternity did not and never has held any ownership interest
in the home of Eric and Lori Cox.
h. The National Fraternity did not have knowledge of the gathering prior to the
accident alleged in Plaintiff’s Complaint.
i. The National Fraternity has not appointed the Local Chapter, nor any
individual member thereof, as agent or representative of National Fraternity.6
j. The National Fraternity is a not-for-profit corporation with its principal place
of business in Indianapolis, Indiana.
k. The National Fraternity has approximately 130 local chapters at universities
and colleges across the United States.
l. National Fraternity does not supervise the day to day operations of its local
chapters.

5
The trial court’s findings are fully supported by the National ATO’s Statement of Undisputed Facts
and Plaintiffs’ Response thereto.
6
In their Response to National ATO’s Statement of Undisputed Facts, Plaintiffs agreed that no agent
had been “formal[ly]” appointed, but they contended that “the question of agency is a question of fact for
a jury to determine.”

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Based upon these facts, the trial court concluded that National ATO had negated an essential
element of Plaintiffs’ claim–that National ATO owed a duty of care to Plaintiffs–and
therefore, it dismissed Plaintiffs’ claim against National ATO.

Although both parties place great emphasis on National ATO’s bylaws, we are not
convinced that resolution of this case is predicated upon a consideration of them. As stated
above, “in order for the duty to control a third party’s conduct to arise, the actor must have
the means and ability to control the third party.” Newton, 970 S.W.2d at 492 (citing Carroll,
1988 WL 22833, at *3). Even if National ATO is correct that the bylaws do not grant
National ATO authority to control its local chapters or those chapters’ members, it does not
necessarily follow that such authority could not be derived elsewhere. Additionally, that
National ATO undisputedly does not supervise the day-to-day operations of its local chapters
does not equate to a finding that it could not exercise such supervision if it desired to do so
or that it should not exercise such supervision based upon public policy considerations.

Moreover, National ATO’s claim that it is able to impose only after-incident
punishment, even if true, does not foreclose a finding of control in this case because the
evidence demonstrates that National ATO was aware of alcohol-related recruitment
violations in 2005–one year prior to the incident in question.7 National ATO may very well
be correct that its headquarters’ distance from Memphis and its large number of
undergraduate members renders chapter/member control infeasible; however, infeasibility
does not satisfy the stringent Hannan standard which requires a moving party to affirmatively
negate an essential element of the nonmovant’s claim. At a trial in this matter, the evidence
may be deemed insufficient to demonstrate that National ATO possessed the means and
ability to control Local ATO and/or its members/prospective members. See id. (citation

7
The record indicates that Local ATO was found guilty of the following Interfraternity Council
Recruitment Violations:
Article III, Section 1: No chapter members (active, inactive new member or alumni)
collectively, or individually, shall purchase for, serve to, sell or give any form of alcoholic
beverages to a rushee. If it is discovered the rules had been broken, violating chapters and
individual members will be severely punished. The penalty may include, but is not limited
to, disciplinary probation, suspension from IFC, fine assessment and/or loss of
organizational status by University officials.
Article III, Section 3: No chapter shall have a third party (i.e. girlfriend, non-Fraternity
member, friend) purchase for, sell to, give to, or serve alcohol to a rushee and member
fraternities found in violation may face a Judicial process outlined in The Judicial Board
Manual and Judicial Code for the Interfraternity Council of the University of Memphis.
The record demonstrates that a representative at National ATO’s headquarters was copied on the
correspondence in the matter.

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omitted). However, for summary dismissal, National ATO is required to affirmatively
demonstrate that it lacked control or that control cannot be proven at trial. Because we find
that National ATO has demonstrated neither, we conclude that the trial court erred in
granting summary judgment. The grant of summary judgment to National ATO is therefore
reversed.

2. Denial of Motion to Amend Complaint

As stated above, after granting National ATO’s motion for summary judgment, the
trial court denied Plaintiffs’ motion to amend their complaint to allege a principal/agent
relationship between National ATO and co-defendants Local ATO, driver Jeffrey Calicutt,
and alleged Local ATO members/officers E.J. Cox, Daniel Kelly, Nicholas Beaver, Zachary
Beaver, and John Condon, III, and to allege National ATO’s vicarious liability based upon
this relationship. In denying the motion, the trial court found an amendment “would be futile
because of the Court’s ruling on [National ATO’s] Motion for Summary Judgment . . . that
there is no duty on the part of [National ATO].”

A trial court’s decision to grant or deny a motion to amend a pleading pursuant to
Tennessee Rule of Civil Procedure 15.01 is within the sound discretion of the trial court and
will not be reversed on appeal absent an abuse of discretion. Conley v. Life Care Centers
of Am., Inc., 236 S.W.3d 713, 723 (Tenn. Ct. App. 2007). A trial court abuses its discretion
“only when it ‘applie[s] an incorrect legal standard, or reache[s] a decision which is against
logic or reasoning that cause[s] an injustice to the party complaining.’” Eldridge v. Eldridge,
42 S.W.3d 82, 85 (Tenn. 2001) (quoting State v. Shirley, 6 S.W.3d 243, 247 (Tenn. 1999)).
However, “[w]hile decisions whether to permit an amendment are discretionary . . . Tenn.
R. Civ. P. 15.01 substantially lessens a trial court’s discretion to deny a requested
amendment.” Hardcastle v. Harris, 170 S.W.3d 67, 80-81 (Tenn. Ct. App. 2004) (citing
Daniels v. Talent, 212 Tenn. 447, 462, 370 S.W.2d 515, 522 (1963); Branch v. Warren, 527
S.W.2d 89, 91-92 (Tenn. 1975)); see also Tenn. R. Civ. P. 15.01 (“[L]eave to amend shall
be freely given when justice so requires.”). A trial court may consider several factors when
deciding whether to allow leave to amend a pleading, including “lack of notice, bad faith by
the moving party, repeated failure to cure deficiencies by previous amendments, undue delay
in the filing of the motion, undue prejudice to the opposing party, and futility of the proposed
amendment.”8 Conley, 236 S.W.3d at 723-24 (citing Hall v. Shelby Cnty. Ret. Bd., 922

8
In Hardcastle, the middle section of this Court stated that “the most important [factor] is the
proposed amendment’s potential prejudicial effect on the opposing party.” 170 S.W.3d at 81 (citing 6 Charles
(continued...)

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S.W.2d 543, 546 (Tenn. Ct. App. 1995)).

“It has long been the view of Tennessee courts that, in its broadest sense, the term
agency ‘includes every relation in which one person acts for or represents another.’”
McInturff v. Battle Ground Academy of Franklin, No. M2009-00504-COA-R3-CV, 2009
WL 4878614, at *2 (Tenn. Ct. App. Dec. 16, 2009) (citing Boren ex rel. Boren v. Weeks, 251
S.W.3d 426, 432 (Tenn. 2008)). To determine whether an agency relationship exists, the
court examines the parties’ relationship and their conduct. Id. (citations omitted). “‘Whether
an agency relationship exists ‘is a question of fact under the circumstances of the particular
case[.]’’” Id. (quoting McCay v. Mitchell, 62 Tenn. App. 424, 463 S.W.2d 710, 715 (Tenn.
Ct. App. 1970)). “The right to control the conduct of the agent is the essential test in
determining whether an agency relationship exists.” Id. (quoting Jack Daniel Distillery v.
Jackson, 740 S.W.2d 413, 416 (Tenn. 1987)).

On appeal, Plaintiffs contend that the trial court erroneously focused on the duty owed
directly to Plaintiffs by National ATO when it should have focused on the duty owed to
Plaintiffs by National ATO by virtue of National ATO’s principal/agent relationship with co-
defendants Local ATO, driver Jeffrey Calicutt, and alleged Local ATO members/officers E.J.
Cox, Daniel Kelly, Nicholas Beaver, Zachary Beaver, and John Condon, III. They further
argue that existence or non-existence of an agency relationship is a question fact which
should be decided by a jury.

National ATO, however, asserts two primary reasons to support its argument that the
trial court correctly denied Plaintiffs’ motion to amend. First, National ATO relies upon
delay. It points out that Plaintiffs’ complaint had previously been amended twice and that
Plaintiffs did not seek the third amendment until January 5, 2012–ten months after National
ATO filed its motion for summary judgment, six days prior to the hearing on National ATO’s
motion for summary judgment, four and one-half years after Plaintiffs filed their first
complaint, and four months prior to the scheduled trial.

Second, National ATO contends that an amendment to allege vicarious liability would
be futile. Essentially, National ATO contends that the trial court has already determined that
it did not control Local ATO and/or its prospective members, and therefore, that no agency
relationship can be found. Additionally, National ATO claims that Plaintiffs have

8
(...continued)
A. Wright et al., Federal Practice and Procedure § 1487, at 613 (2d ed. 1990)).

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acknowledged that National ATO did not formally appoint Local ATO or any member
thereof as its agent, and it argues that Plaintiffs cannot prove the elements of an apparent
agency–specifically that Plaintiffs relied upon an apparent agency relationship to their
detriment.

In light of our finding that National ATO failed to affirmatively demonstrate that it
lacked control of Local ATO and/or its members/prospective members or that such control
could not be proven at trial, and our resulting reversal of summary judgment, we likewise
find that lack of control has not been demonstrated for the purpose of rendering an agency
amendment futile. Moreover, Plaintiffs’ acknowledgment–that National ATO had not
formally appointed Local ATO or any Local ATO member to act as its agent–was made only
for the purpose of ruling on summary judgment, and therefore, we find that an amendment
to allege agency would not be rendered futile based upon such. Finally, we note that the trial
court’s denial of Plaintiffs’ motion to amend was not based upon delay and that National
ATO has cited no potential prejudicial effect from allowing the amendment. Accordingly,
we decline to find undue delay under the circumstances of this case.

In sum, we conclude that the trial court abused its discretion in finding that Plaintiffs’
amendment would be futile, and in denying their motion to amend on this basis. The denial
of Plaintiffs’ motion to amend is therefore reversed.

IV. C ONCLUSION

For the aforementioned reasons, we reverse the trial court’s grant of summary
judgment to National ATO as well as its denial of Plaintiffs’ motion to amend, and we
remand for further proceedings consistent with this opinion. Costs of this appeal are taxed
to Appellee, Alpha Tau Omega Fraternity, Inc., for which execution may issue if necessary.

_________________________________
ALAN E. HIGHERS, P.J., W.S.

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