03/24/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
December 14, 2016 Session
JAMES R. GOAN ET AL. V. BILLY B. MILLS
Appeal from the Circuit Court for Hawkins County
No. 09CV0375 Alex E. Pearson, Judge
No. E2016-01206-COA-R3-CV
Plaintiff James R. Goan’s mail delivery vehicle was rear-ended by a vehicle driven by
Billy B. Mills as Plaintiff was delivering mail. The Plaintiff and his wife, Judy Goan,
sued Mills. During settlement negotiations, Plaintiffs offered to settle for $100,000, the
limits of Defendant’s insurance policy. Defendant accepted the offer on December 4,
2013. Over a year later, Defendant filed a motion to enforce the settlement agreement.
The Plaintiffs opposed the motion, arguing that there had been no meeting of the minds
and no enforceable agreement. The trial court enforced the settlement agreement. The
Plaintiffs appeal. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.
Thomas C. Jessee, Johnson City, Tennessee, for appellants, James R. Goan and Judy
Goan.
Thomas L. Kilday, Greeneville, Tennessee, for appellee, Billy Bruce Mills.
OPINION
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I.
The accident occurred on August 22, 2008. Plaintiffs filed their complaint on
August 17, 2009. Settlement negotiations ensued. The record contains correspondence
between the lawyers for the parties. On April 26, 2013, Plaintiffs’ counsel sent
Defendant’s counsel a letter saying:
I met with Mr. Goan who advised he has been approved for
back surgery by workers comp.1 I believe the original
medical bills that we have provided you totaled over
$76,000.00. Obviously they have increased. I believe the
federal workers comp subrogation was approximately
$53,000.00. Obviously it is increasing. I have an agreement
with comp that we can settle this case now, save the costs of
medical discovery and keep the file open while we are
waiting on his surgery. . . . If there is only $100,000.00 in
insurance, I would demand the policy limits primarily
because of workers comp.
(Footnote added.) On August 23, 2013, Plaintiffs’ counsel sent another letter saying:
We have ordered from workers comp the updated numbers on
Mr. Goan. They tell us the total subrogation now is
$78,000.00 . . . Given the $78,000.00, I go back to demanding
the limits which I believe is $100,000.00 but as we discussed
I need a firm number from you to figure out compromising
the comp claim.
On November 6, 2013, Plaintiffs’ counsel reiterated their offer, stating, “we would
renew our demand for the policy limits of $100,000.” This was followed by another
letter on December 4, 2013, saying, “[p]er our discussion, my client has reject[ed] the
$95,000.00 and renews his demand for the policy limits.”
On December 4, 2013, Defendant’s counsel sent Plaintiffs’ attorney a letter
saying:
You have reiterated to me [Plaintiffs’] settlement position that
they will accept [Defendant’s] insurance liability limits of
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Because Plaintiff was injured on the job, his employer, the federal postal service,
provided him workers’ compensation benefits covering his medical expenses.
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$100,000 in full settlement and release of all of their claims
and out of which settlement funds all claims, liens and
subrogation rights of all persons and entities would be
satisfied, including the claim of the United States Postal
Service or any related entity for which like benefits have been
paid to or on behalf of James Goan, and that no medical
expenses have been paid by Medicare, arising out of the
August 22, 2008 accident. In reliance upon this
representation, this will advise that [Defendant] and his
insurer, Tennessee Farmers, accepts the settlement offer.
Pursuant to the foregoing I have requested the issuance of a
settlement check and, upon its receipt, will provide it to you
in exchange for the appropriate settlement documents which I
will provide.
(Emphasis added.)
Over seven months later, Plaintiffs’ counsel sent a letter on July 24, 2014, stating:
Mr. Goan has finally been released. Attached is the note from
OWCP. As you can see our last number was only
approximately $82,000.00. The new claim is $123,398.70.
You and I have your case settled. Mr. Goan has uninsured
motorist of $300,000.00 which would leave $200,000.00
available in this claim.
(Emphasis added.) Defense counsel replied four days later with a letter stating, “[a]s you
have acknowledged in your letter, we have reached an agreement settling [Plaintiffs’]
claim against [Defendant for his] insurance liability limits of $100,000 and since
[Plaintiffs’] settlement demand was formally accepted we have been awaiting instructions
on how the settlement proceeds should be distributed. . .”
On August 11, 2014, Plaintiffs moved to amend their complaint “to add Tennessee
Farmers Mutual Insurance Company, the insurance carrier of plaintiff James R. Goan’s
uninsured and/or under insured motorist coverage, as a party defendant in this action.”
The trial court granted the motion and Plaintiffs filed an amended complaint.
Over eighteen months later, on February 19, 2016, Defendant filed a motion to
enforce the settlement agreement. Plaintiffs filed a response in opposition on April 11,
2016, arguing, for the first time, that
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[d]uring settlement negotiations, counsel for the plaintiffs
repeatedly demanded the limits of the liability insurance
policy, believed to be $100,000.00. Eventually, counsel for
the plaintiffs and [defense] counsel . . . agreed that the
plaintiffs would accept the sum of $100,000.00, representing
the policy limits of the defendant’s liability insurance policy.
Although the plaintiffs’ counsel requested that [defense
counsel] Mr. Kilday provide proof of the limits of the policy,
Mr. Kilday failed to do so. Given the extent of plaintiff
James R. Goan’s injuries, the sum of $100,000.00 does not
adequately compensate the plaintiffs.
Following a hearing on April 15, 2016, the trial court granted the motion to
enforce the settlement agreement in an order entered April 28, 2016, stating that
the Court is of the opinion and finds that an enforceable
contract was entered into among the parties to settle the
plaintiffs’ claim of injuries and damages against the
defendant resulting from a motor vehicle accident occurring
on August 22, 2008 wherein the plaintiffs, James and Judy
Goan, by and through their attorney, offered to settle their
claim of injuries and damages against defendant Billy Bruce
Mills for Mr. Mills’ insurance liability limits of $100,000
which defendant Mills, by and through his attorney, accepted.
Plaintiffs filed a motion to reconsider, arguing that
plaintiffs submit that it is clear from the correspondence
between their counsel and Mr. Kilday that their counsel had
no intention of executing a release of the claims against the
defendant until the Declaration Page of the defendant’s
liability insurance policy was provided to plaintiffs’ counsel,
the Postal Service was advised, and the plaintiffs’ uninsured/
underinsured insurance carrier, Tennessee Farmers, was
advised and added as a party to the suit.
The trial court denied the motion. Plaintiffs timely filed a notice of appeal.
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II.
The issue presented, as quoted verbatim from Plaintiffs’ brief, is whether the trial
court err in granting the Defendant’s Motion to Enforce Settlement, by determining that
there was a binding contract of settlement between the parties? “The determination of
whether a contract has been formed is a question of law” that we review de novo with no
presumption of correctness. Cadence Bank, N.A. v. The Alpha Trust, 473 S.W.3d 756,
773 (Tenn. Ct. App. 2015). In this case, there are no material facts in dispute.
III.
Plaintiffs argue there was no meeting of the minds, and therefore no valid contract,
because Defendant did not provide a copy of the declarations page of his liability
insurance policy. Defendant responds that Plaintiffs’ counsel never requested this
document before settling the case, and that, in any event, everyone involved knew at all
pertinent times that the liability policy limits were $100,000. The record supports
Defendant’s assertions. It is undisputed that the limits were $100,000, and that defense
counsel confirmed this fact, when, by his letter, he accepted the settlement offer saying,
“we have reached an agreement settling [Plaintiffs’] claim against [Defendant for his]
insurance liability limits of $100,000.” Four days after the declarations page was
mentioned for the first time, Defendant provided a copy of it at the motion hearing. The
fact that he did not provide it earlier is not relevant to the issue presented for the reason
there is no evidence that Plaintiffs requested production of the page prior to setting the
case.
Plaintiffs refer us to Tenn. Code Ann. § 56-7-1206 (2008), which provides in
pertinent part:
(a) Any insured intending to rely on the [uninsured motorist]
coverage required by this part shall, if any action is instituted
against the owner and operator of an uninsured motor vehicle,
serve a copy of the process upon the insurance company
issuing the policy in the manner prescribed by law, as though
the insurance company were a party defendant.
* * *
(f) Notwithstanding subsection (c), if a party or parties
alleged to be liable for the bodily injury or death of the
insured offers the limits of all liability insurance policies
available to the party or parties in settlement of the insured’s
claim, the insured or the insured’s personal representative
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may accept the offer, execute a full release of the party or
parties on whose behalf the offer is made and preserve the
right to seek additional compensation from the insured’s
uninsured motorist insurance carrier upon agreement of the
insured or the insured’s personal representative to submit the
insured’s uninsured motorist claim to binding arbitration of
all issues of tort liability and damages . . .
* * *
(g) Parties proposing to accomplish a settlement pursuant to
this section shall comply with the following requirements and
conditions:
(1) Upon request, the insured or the insured’s personal
representative or attorney shall provide the liability insurance
company or companies providing coverage to the party or
parties to be released, the name and address of the insurance
company or companies providing the insured with uninsured
motorist coverage, the policy number or numbers and the
limits of uninsured motorist coverage available to the insured;
(2) The liability insurance company or companies providing
coverage to the party or parties to be released shall give
written notice of the offer to the insured’s uninsured motorist
insurance carrier or its attorney, provide verification of the
coverage upon request and confirm to the uninsured motorist
insurance carrier or its attorney that the party or parties to be
released will agree in writing to cooperate with the uninsured
motorist insurance carrier in connection with the arbitration
of the uninsured motorist claim; provided, that the uninsured
motorist insurance carrier will agree to waive its subrogation
rights against the party or parties to be released[.]
Plaintiffs argue that Defendant’s liability insurance carrier did not comply with
subsection (g)(2) above, which requires “written notice of the offer to the insured’s
uninsured motorist insurance carrier.” We note that, coincidentally, Defendant’s liability
carrier is the same company that provided Plaintiffs’ uninsured motorist coverage.
More importantly, as Defendant argues, there is no documented reference to a
potential claim by Plaintiffs under their uninsured/underinsured motorist policy until after
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the settlement agreement was reached. The first reference in the record to such a
potential claim is the letter written by Plaintiffs’ counsel on July 24, 2014, long after the
agreement on December 4, 2013. On August 11, 2014, Plaintiffs moved to amend their
complaint to allege Defendant did not have adequate insurance coverage and to add their
UM carrier as a defendant. Defense counsel filed his affidavit in which he stated, “[p]rior
to receipt of [Plaintiffs’ counsel’s] letter of July 24, 2014 I was unaware of any uninsured
motorist coverage which Mr. Goan had applicable to this accident, such had never been
mentioned to me and no summons or other process had as of that time been issued to an
uninsured motorist insurer for Mr. Goan.” Thus, there is no indication that the parties
were “proposing to accomplish a settlement pursuant to this section” of Tenn. Code Ann.
§ 56-7-1206, and it is inapplicable under the circumstances of this case.
In short, on December 4, 2013, Defendant sent Plaintiffs a letter stating, “You
have reiterated to me [Plaintiffs’] settlement position that they will accept [Defendant’s]
insurance liability limits of $100,000 in full settlement and release of all of their claims”
and “this will advise that [Defendant] . . . accepts the settlement offer.” More than seven
months passed with no objection from Plaintiffs, and then their counsel sent a letter on
July 24, 2014, that said “[y]ou and I have your case settled.” (Emphasis added.) The
trial court succinctly summed it up at the motion hearing:
And then here’s the crystal clearest language you could ever
have. “You and I have your case settled.” I can’t interpret it
any other way. The case is settled.
IV.
The judgment of the trial court is affirmed. Costs on appeal are assessed to the
appellants, James R. Goan and Judy Goan. The case is remanded for such further action
as may be necessary and for collection of costs assessed below.
_______________________________
CHARLES D. SUSANO, JR., JUDGE
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