Settlement Agreement – Difficulty to overturn a settlement agreement

Posted on Jul 25 2012 8:18AM by Attorney, Jason A. Lee

Brief Summary:  This new case shows how difficult it is to overturn a settlement agreement in Tennessee.  It is difficult even when the plaintiff misrepresents material facts that were in dispute in the settled lawsuit.  The Tennessee Court of Appeals found it is an important public policy to keep “circumstances by which a party may overturn a prior final judgment” very narrow.


Analysis:  The Tennessee Court of Appeals decision of Tia Gentry v. Dale Larkin, E2011-02402-COA-R3-CV, 389 S.W.3d 329 (filed July 13, 2012) decided a case involving the “slayer’s statute”.  This case has very interesting facts and deals with an important question of law in Tennessee pertaining to overturning a settlement agreement due to fraud. 


Tennessee has a “slayer’s statute” or “killing statute” found in T.C.A. § 31-1-106.  This statute provides: 


Any person who kills, or conspires with another to kill, or procures to be killed, any other person from whom the first named person would inherit the property, either real or personal, or any part of the property, belonging to the deceased person at the time of the deceased person's death, or who would take the property, or any part of the property, by will, deed, or otherwise, at the death of the deceased, shall forfeit all right in the property, and the property shall go as it would have gone under § 31-2-104, or by will, deed or other conveyance, as the case may be; provided, that this section shall not apply to any killing done by accident or in self-defense.


As a result, this statute basically forbids an individual from inheriting any property or recovering any life insurance proceeds from a deceased if that individual was responsible for killing that deceased. 


The facts in this case arise from the 2003 death of Theresa Larkin.  Theresa Larkin’s minor daughter, Tia Gentry, asserted that her step-father, Dale Larkin, killed her mother and therefore he should not recover any of the substantial life insurance proceeds that she had at the time of her death.  A lawsuit was filed and the parties eventually settled the lawsuit in 2006.  The minor child of the deceased received, among other things, $500,000.00 out of the insurance proceeds. 


After the settlement the deceased’s body was exhumed and additional investigation led to the conviction of Dale Larkin for first degree murder for the death of his wife, Theresa Larkin.  As a result the minor child, Tia Gentry, (who was no longer a minor) sued Dale Larkin alleging he committed fraud by improperly inducing the settlement in the first lawsuit with his “persistent denial of his having killed Theresa Larkin.” 


The Trial Court dismissed the cause of action finding that the settlement agreement should not be overturned under these circumstances.  The case was appealed and the Tennessee Court of Appeals addressed whether the settlement agreement could be overturned based on the alleged “misrepresentations” and “fraudulent inducement” of Dale Larkin regarding the murder of his wife.


The Court of Appeals decided multiple issues in this case however the one I will address today is whether the assertions by Dale Larkin about his innocence at the time of the settlement constituted actionable fraud.  The Court held that Mr. Larkin’s claim that he did not commit murder did not form a basis for “actionable fraud.”  The Court found Tia Gentry never relied upon Mr. Larkin’s representations that he did not kill her mother.  In fact, Tia Gentry always maintained Mr. Larkin killed her mother.  An essential element of a claim for fraud in Tennessee is the actual detrimental reliance upon the fraud.  (See McNeil v. Nofal, 185 S.W.3d 402, 408 (Tenn. Ct. App. 2005) “An essential requirement of any action for fraud, deceit, failure to disclose or negligent or innocent misrepresentations is detrimental reliance on a false premise”).  The Gentry Court then stated as follows: 


Gentry may now be dissatisfied with the settlement, but Larkin’s murder conviction does not alter the fact that she, albeit as a minor through adult intermediaries, arrived at a bargained-for agreement that subsequently was duly approved and entered by the Law Court for Washington County. Both parties in this effectively winner-takes-all dispute risked losing at trial, and the agreement eliminated the risk of loss for both parties. Gentry has failed to persuade us that Larkin’s assertions of innocence in the death of Teresa Larkin, assertions that apparently carry on today, deceitfully influenced her settlement as her entire case against Larkin has always rested entirely on a scenario whereby Larkin killed Teresa Larkin in a manner covered by the “Slayer’s Statute.”  There was no reliance by Gentry on Larkin’s assertions of innocence, and without any such reliance there can be no actionable claim for fraud. See Brown v. Birman Managed Care Inc., 42 S.W.3d 62, 66-67 (Tenn. 2001).


Interestingly, the Tennessee Court of Appeals noted that the Court was “not happy with the results of our decision” but the Court is “not free to decide cases based upon our personal preferences but instead must decide them based upon the law.”  The Court next noted:


Nevertheless, the principle of the finality of judgments is deeply significant to our judicial system. Without high thresholds for attempts to overturn final judgments, our judicial system could collapse under the weight of perpetual re-attempts. A lack of certainty and resolution would prevail.  Therefore, the circumstances by which a party may overturn a prior final judgment are narrow.


The significance of this case is to show how difficult it is to overturn or reverse a settlement agreement or final judgment in Tennessee.  Even though Mr. Larkin was actually convicted of first degree murder after the settlement agreement, this fact was not sufficient to overturn the settlement.  This is true even though he represented to the opposing parties that he did not kill his wife.

TAGS: Fraud, Post Judgment Motions, Settlement, Civil Procedure
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Jason A. Lee is a Member of Burrow Lee, PLLC. He practices in all areas of defense litigation inside and outside of Tennessee.

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Tennessee Defense Litigation Blog
Jason A. Lee, Member of Burrow Lee, PLLC
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E-mail: jlee@burrowlee.com