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As established by the Tennessee tort reform legislation of 2011, T.C.A. § 29-39-102 provides for a $750,000.00 or $1,000.00.00 cap on "non-economic damages" based on certain factors (See http://www.tennesseedefenselitigation.com/BlogEntry.aspx?id=21). However, these caps have certain exceptions. These exceptions are found in subsection T.C.A. § 29-39-102(h) which provides as follows:
(h) The limitation on the amount of noneconomic damages imposed by subdivision (a)(2) and subsections (b)-(e) shall not apply to personal injury and wrongful death actions:
(1) If the defendant had a specific intent to inflict serious physical injury, and the defendant's intentional conduct did, in fact, injure the plaintiff;
(2) If the defendant intentionally falsified, destroyed or concealed records containing material evidence with the purpose of wrongfully evading liability in the case at issue; provided, however, that this subsection (h) does not apply to the good faith withholding of records pursuant to privileges and other laws applicable to discovery, nor does it apply to the management of records in the normal course of business or in compliance with the defendant's document retention policy or state or federal regulations; or
(3) If the defendant was under the influence of alcohol, drugs or any other intoxicant or stimulant, resulting in the defendant's judgment being substantially impaired, and causing the injuries or death. For purposes of this subsection (h), a defendant shall not be deemed to be under the influence of drugs or any other intoxicant or stimulant, if the defendant was using lawfully prescribed drugs administered in accordance with a prescription or over-the-counter drugs in accordance with the written instructions of the manufacturer.
(4) If the defendant's act or omission results in the defendant being convicted of a felony under the laws of this state, another state, or under federal law, and that act or omission caused the damages or injuries;
It is important to note that the original bill did not have the fourth exception found in (h)(4). That exception was added on June 12, 2012 with the provision that "this act shall take effect upon becoming a law, the public welfare requiring it." See bill found at http://www.tn.gov/sos/acts/107/pub/pc0902.pdf. Since the addition of subsection (h)(4) will most likely be interpreted as a substantive change to the statute it will be interesting to see if the courts apply this retroactively to the date that the tort reform bill went into effect for all injuries or events that occur on or after October 1, 2011. Most likely, however, the fourth exception will only apply to injuries or events that occur on or after June 12, 2012.
Subsection (h)(1) could cause a significant increase in litigation over the intent behind damages caused by the defendant. Specifically, if the defendant had a specific "intent to inflict serious physical injury" and the intentional conduct actually did "in fact, injure the plaintiff" then the caps will not apply. This is a relatively narrow exception that is designed to prevent a defendant from taking advantage of the caps after they intentionally inflict serious personal injury upon another person.
Subsection (h)(2) provides an exception to the caps if the defendant intentionally "falsified, destroyed, or concealed records" that contain "material evidence" for the specific purpose of trying to evade liability. This provides some real teeth to a spoliation defense. The court could provide an instruction to the jury pertaining to spoliation of documents and also hold that the spoliation causes the lifting of the caps found in T.C.A. § 29-39-102. In a significant injury case this could have a very substantial penalizing effect on the defendant.
Subsection (h)(3) provides an exception to the caps in T.C.A. § 29-39-102 if the defendant was under the influence of "alcohol, drugs or any other intoxicant or stimulate, resulting in his or her judgment being substantially impaired, and causing the injuries or death." As a result, this exception has three specific components. First, the defendant must actually be under the influence of alcohol, drugs, or another intoxicant or stimulant. Second, the intoxicant must result in the defendant's judgment being "substantially impaired". Obviously, this will be fruitful ground for disagreement between plaintiff and defense attorneys. Finally, the “substantial impairment” must cause the injuries or death at issue. Interestingly, there is an exception to this exception if the defendant was lawfully using prescribed drugs and complying with the prescription was or using over-the-counter drugs in accordance with the written instructions of the manufacturer.
Subsection (h)(4) provides an exception to the caps if the defendant’s action or omission, that is the basis for the lawsuit, also causes the defendant to be convicted of a felony. The conviction can be in any state or under federal law.
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