Joint and Several Liability – New Tennessee Statute, T.C.A. § 29-11-107 abolishes joint and several liability in most circumstances in Tennessee.

Since Tennessee adopted the doctrine of comparative fault in McIntyre v. Ballentine, 833 S.W.2d 52 (Tenn. 1992), the Tennessee Supreme Court has issued several opinions moving away from the general abolishment of joint and several liability.  The Tennessee Supreme Court has created several exceptions to the general rule that joint and several liability does not apply under Tennessee’s comparative fault scheme.  As a result of these exceptions created by the Court, the Tennessee legislature addressed this issue in the 2013 Tennessee legislative session.  The Tennessee Legislature recently passed Public Chapter No. 317 which was signed into law by Governor Bill Haslam on April 29, 2013.  It created T.C.A. § 29-11-107 which is in effect for all causes of action that accrue on or after July 1, 2013.  The key language in this bill is subsection (a) which provides:

(a)  If multiple defendants are found liable in a civil action governed by comparative fault, a defendant shall only be severally liable for the percentage of damages for which fault is attributed to such defendant by the trier of fact, and no defendant shall be held jointly liable for any damages.

As a result of this new bill, the Tennessee Legislature has codified the abolishment of joint and several liability in almost all circumstances in Tennessee.  There are only two exceptions that remain.  These exceptions are found in subsection (b) which provides:

(b)        Notwithstanding subsection (a), the doctrine of joint and several liability remains in effect:

(1)        To apportion financial responsibility in a civil conspiracy among two (2) or more at at-fault defendants who, each having the intent and knowledge of the other’s intent, accomplish by concert an unlawful purpose, or accomplish by concert a lawful purpose by unlawful means, which results in damage to the plaintiff, and

(2)        Among manufacturers only in a product liability action as defined in § 29-28-102, but only if such action is based upon a theory of strict liability or breach of warranty.  Nothing in this subsection (b) eliminates or affects the limitations on product liability actions found in §29-28-106.

As a result, the doctrine of joint and several liability will still apply to mandate complete financial responsibility of each member of a civil conspiracy under certain circumstances.  Second, joint and several liability will still apply “among manufacturers only” in a product liability action as defined in T.C.A. § 29-28-102 for actions based on the theories of strict liability or breach of warranty (I will have a later blog post that addresses the impact of this change on products liability law in Tennessee – a separate post is needed to discuss this change in detail).

It is clear based on the plain language in the bill and the arguments made in the Tennessee House of Representatives by bill sponsor, Jeremy Durham (House member), that this bill is intended to overrule at least two important Tennessee Supreme Court decisions (you can watch the video of the Civil Justice Sub Committee hearing discussing the specific legislative intent of this statute).  The first case this bill is intended to overrule is the Limbaugh v. Coffee Medical Center, 59 S.W.3d 73 (Tenn. 2001) decision.  In Limbaugh, the Tennessee Supreme Court found that a negligent nursing home and the nursing home’s employee assistant (who was responsible for an intentional tort) were jointly and severally liable to the plaintiff.  In that case, the nursing home was found to be negligent and the employee was found to be responsible for intentional acts.  The Court found “that where the intentional actor and the negligent actor are both named defendants and each are found to be responsible for the plaintiff's injuries, then each defendant will be jointly and severally responsible for the plaintiff's total damages” … “where the intentional misconduct is the foreseeable risk created by the negligent defendant” Limbaugh at 87.  As a result, comparative fault was basically eliminated in this circumstance.  T.C.A. § 29-11-107 overrules the Limbaugh decision and would now make the negligent nursing home and the individual employee (who committed an intentional act) only responsible for their percentage of fault under normal Tennessee comparative fault principles.

The second Tennessee Supreme Court decision the new T.C.A. § 29-11-107 overrules is Resolution Trust Corp. v. Adeolph Block, 924 S.W.2d 354 (Tenn. 1996) which found joint and several liability was appropriate among officers and directors of a corporation in an action for collective breach of fiduciary duty.  The Block decision allowed an entire group of officers or directors to be jointly and severally responsible for the breach of fiduciary duty (thus each one would be 100% liable for any damages).  T.C.A. § 29-11-107 overrules the Block decision and makes each officer or director only responsible for their respective fault under Tennessee comparative fault principles (unless the case came within exception (b)(1) discussed above).

It is important to note that the Turner v. Jordan, 957 S.W.2d 815 (1997) Tennessee Supreme Court decision was not substantively discussed in the legislative discussion of the bill.  The Turner case was factually similar to the Limbaugh decision in some ways except that the intentional tortfeasor was a patient of the facility and was not a party to the case.  However, the Limbaugh decision is built upon the foundation of Turner v. Jordan and this new statute should also effectively overrule the Turner v. Jordan decision based on the plain language of the statute and the application of comparative fault principles.  Subsection (d) of the statute provides some language that indicates to me that Turner v. Jordan is effectively overruled when it states that “Nothing in this section limits the liability of the trier of fact to allocate fault to a nonparty to the suit … Allocations of fault to nonparties shall be used only to determine the liability of named parties.”  The totality of the language in this statute therefore indicates to me that the Turner v. Jordan case has been effectively overruled by this legislative change in addition to the clearly overruled Limbaugh decision.

The entire new statute found in Public Chapter 317 (listed as T.C.A. § 29-11-107), is as follows:

(a)        If multiple defendants are found liable in a civil action governed by comparative fault, a defendant shall only be severally liable for the percentage of damages for which fault is attributed to such defendant by the trier of fact, and no defendant shall be held jointly liable for any damages.

(b)        Notwithstanding subsection (a), the doctrine of joint and several liability remains in effect:

            (1)        To apportion financial responsibility in a civil conspiracy among two (2) or more at at-fault defendants who, each having the intent and knowledge of the other’s intent, accomplish by concert an unlawful purpose, or accomplish by concert a lawful purpose by unlawful means, which results in damage to the plaintiff, and

            (2)        Among manufacturers only in a product liability action as defined in § 29- 28-102, but only if such action is based upon a theory of strict liability or breach of warranty.  Nothing in this subsection (b) eliminates or affects the limitations on product liability actions found in §29-28-106.

(c)         Nothing in this section eliminates or affects the doctrines of vicarious liability or respondeat superior.

(d)        Nothing in this section limits the ability of the trier of fact to allocate fault to a nonparty to the suit, including, but not limited to, an immune third party or a settling party, person, or entity.  Allocations of fault to nonparties shall be used only to determine the liability of named parties and shall not subject nonparties to liability in the action in which the allocation occurred or in any other action.

(e)        Nothing in this section eliminates or diminishes:

            (1)        The filing of cross-claims or counterclaims against any party or third party under Tennessee Rules of Civil Procedure 13 and 14;

            (2)        The assertion by a party of rights to contribution or indemnity;

            (3)        The assertion by a party of comparative fault under Tennessee Rule of Civil Procedure 8.03;

            (4)        The doctrine of superseding and independent intervening cause; or

            (5)        Any defenses or immunities that exist as of the effective date of this act.

(f)         This section shall not prevent parties from entering into a legally enforceable contract that allocates fault in a civil action among the parties to the contract.