Kershaw v. Levy, M2017-01129-SC-R11-CV

• Decision Date: 18 September 2019
• Docket Number: No. M2017-01129-SC-R11-CV,M2017-01129-SC-R11-CV
• Citation: 583 S.W.3d 544
• Parties: Polly Spann KERSHAW v. Jeffrey L. LEVY
• Court: Tennessee Supreme Court

583 S.W.3d 544

Polly Spann KERSHAW

v.Jeffrey L. LEVY

No. M2017-01129-SC-R11-CV

Supreme Court of Tennessee, AT NASHVILLE.

February 6, 2019 Session

FILED September 18, 2019

Connie Reguli, Brentwood, Tennessee, for the Plaintiff/Appellant, Polly Spann Kershaw.

Jeffrey J. Switzer, Nashville, Tennessee, for the Defendant/Appellee, Jeffrey L. Levy.

Holly Kirby, J., delivered the opinion of the Court, in which Jeffrey S. Bivins, C.J., and Cornelia A. Clark, Sharon G. Lee, and Roger A. Page, JJ., joined.

Holly Kirby, J.

We granted permission to appeal in this case to clarify application of the doctrine of judicial estoppel. The plaintiff filed this legal malpractice action against an attorney who represented her in her divorce. She asserts that the attorney’s actions so compromised her position in the divorce proceedings that she was forced to settle on unfavorable terms. After the attorney filed a motion for summary judgment, the trial court applied the doctrine of judicial estoppel. Citing the plaintiff’s sworn acknowledgment in her marital dissolution agreement that the divorce settlement was "fair and equitable," the trial court held that the plaintiff was estopped from asserting in the legal malpractice action that the divorce settlement terms were unfavorable. On this basis, the trial court granted summary judgment to the defendant attorney. The Court of Appeals affirmed. We hold that the trial court should not have applied the doctrine of judicial estoppel to the statements at issue because they are not directly contradictory statements of fact. The plaintiff’s sworn acknowledgment in her marital dissolution agreement is instead a context-related legal conclusion, and the plaintiff offers a reasonable explanation for any apparent discrepancy between her sworn acknowledgment in the divorce and her assertions in this legal malpractice action. As a result, we hold that the trial court erred in granting summary judgment on the basis of judicial estoppel. We reverse the grant of summary judgment and remand the case for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

Beginning in November 2006, Defendant/Appellee Jeffrey L. Levy represented Plaintiff/Appellant Polly Spann Kershaw in her divorce. Mr. Levy represented Ms. Kershaw for a period of about seven months.¹

By the time Ms. Kershaw retained Mr. Levy, the divorce proceedings had been contentious for some time. The divorce court² had already held Ms. Kershaw in contempt once, and a second petition for contempt was pending against her.³ Discovery requests were outstanding, and Ms. Kershaw had not yet responded.

In the prior contempt proceedings, the divorce court imposed sanctions on Ms. Kershaw. The sanctions consisted of granting Ms. Kershaw’s husband a default judgment on his divorce complaint, striking all of Ms. Kershaw’s pleadings, and barring Ms. Kershaw from asserting any defenses to the husband’s claims.

After Ms. Kershaw retained Mr. Levy, the divorce court extended the deadline for Ms. Kershaw to respond to the pending discovery. It also apparently agreed to lift the sanctions, provided Ms. Kershaw timely filed her discovery responses.

Mr. Levy mailed Ms. Kershaw’s discovery responses to opposing counsel. Later, Ms. Kershaw’s husband claimed to the divorce court that Ms. Kershaw’s discovery responses were not timely filed. Mr. Levy responded by saying that he put Ms. Kershaw’s discovery responses in the mail on the day of the deadline. This representation turned out to be false. Opposing counsel provided the divorce court with Ms. Kershaw’s postmarked discovery responses, which indicated that Mr. Levy actually mailed them two days after the extended discovery deadline.

After determining that Ms. Kershaw’s discovery responses were in fact not timely, the divorce court reinstated the sanctions against Ms. Kershaw. Thus, it awarded the husband a default judgment of divorce, accepted the husband’s alleged facts and claims as true, struck Ms. Kershaw’s pleadings, and barred Ms. Kershaw from raising any defenses. The divorce court also awarded attorney fees to the husband.

Perhaps not surprisingly, Mr. Levy withdrew as counsel of record. Ms. Kershaw retained new counsel and entered into mediation on her divorce.

Before the divorce was finalized, Ms. Kershaw filed the instant legal malpractice action against Mr. Levy. The trial court temporarily stayed the legal malpractice action, pending resolution of Ms. Kershaw’s divorce. It lifted the stay when the divorce was settled and finalized.

In the malpractice action against Mr. Levy, Ms. Kershaw contended that the divorce court reinstated the sanctions against her because Mr. Levy failed to timely file the discovery responses and then misrepresented when he mailed them. She asserted that Mr. Levy’s actions caused her to lose possession of her home, lose primary custody of her children, owe various judgments and fees to the husband, and face the prospect of a divorce trial with no prayer for relief. She claimed that Mr. Levy’s actions so compromised her position that she had no negotiating leverage; as a result, she was left with little choice but to agree to an unfavorable divorce settlement.

In settling her divorce, Ms. Kershaw and her husband signed a marital dissolution agreement (MDA). The MDA included the following provision:

Each party represents to the other and acknowledges that this Agreement is entered into without undue influence, fraud, coercion, or misrepresentation, or for any reason not herein stated. The provisions in this Agreement and their legal effect are fully known by each of the parties, and each party acknowledges that the Agreement is fair and equitable and that it is being entered into voluntarily and with advice of counsel.

The MDA also vacated the contempt judgments and sentences against Ms. Kershaw. The signatures of both Ms. Kershaw and her husband were notarized. The MDA was incorporated into the November 21, 2007 final decree of divorce.

After Ms. Kershaw settled her divorce, Mr. Levy filed a motion for summary judgment in the instant legal malpractice action. The motion argued that the trial court should apply the doctrine of judicial estoppel to Ms. Kershaw’s claim that his negligence forced her to agree to unfavorable divorce terms because the above-quoted MDA acknowledgment attested to the fairness and equity of the settlement. If Ms. Kershaw were unable to claim that her divorce settlement was unfair, Mr. Levy’s theory went, she could not establish that she had been harmed by his alleged negligence in representing her.

The trial court granted summary judgment to Mr. Levy. It reasoned that Ms. Kershaw "signed the marital dissolution agreement under oath. [Ms. Kershaw] voluntarily agreed to a divorce settlement which she acknowledged to be fair and equitable. Thus, she is judicially estopped from claiming in this suit that the settlement was not fair and equitable." On this basis, the trial court dismissed Ms. Kershaw’s complaint.

Ms. Kershaw appealed, and the Court of Appeals affirmed. Kershaw v. Levy , No. M2017-01129-COA-R3-CV, 2018 WL 2126808 (Tenn. Ct. App. May 8, 2018), perm. app. granted (Sept. 18, 2018). Ms. Kershaw sought permission to appeal to this Court, arguing that the trial court erred in dismissing her complaint on the basis of judicial estoppel. We granted Ms. Kershaw’s application for permission to appeal in order to address that issue. See Hodge v. Craig , 382 S.W.3d 325, 333–34 (Tenn. 2012) (footnote omitted) ("The scope of our review ... depends, in large part, on the issues that the parties have presented to this Court.").

STANDARD OF REVIEW

In this appeal, Ms. Kershaw asks us to determine whether the trial court properly granted summary judgment to Mr. Levy. We review a lower court’s decision on a summary judgment motion de novo with no presumption of correctness. Beard v. Branson , 528 S.W.3d 487, 494–95 (Tenn. 2017) (citations omitted). "Summary judgment is proper where ‘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 moving party is entitled to a judgment as a matter of law.’ " Id. (quoting Tenn. R. Civ. P. 56.04 ).

Ms. Kershaw argues in this appeal that the trial court misapplied the doctrine of judicial estoppel; this issue presents a question of law, which is also reviewed de novo. Frazier v. Pomeroy , No. M2005-00911-COA-R3CV, 2006 WL 3542534, at *10 (Tenn. Ct. App. Dec. 7, 2006) (citing Carvell v. Bottoms , 900 S.W.2d 23, 30 (Tenn. 1995) ; Terrell v. Terrell , 200 Tenn. 289, 292 S.W.2d 179, 182 (1956) ) ("A trial court’s application of the doctrine of judicial estoppel presents a question of law which this court reviews de novo.").

ANALYSIS

The doctrine of judicial estoppel has long been applied in Tennessee.⁴ McLemore v. Memphis & C.R. Co. , 111 Tenn. 639, 69 S.W. 338, 344 (1902) ("The law of judicial estoppel is firmly established in this state...."). In general, "[u]nder the doctrine of judicial estoppel ‘a party will not be permitted to occupy inconsistent positions or to take a position in regard to a matter which is directly contrary to, or inconsistent with, one previously assumed by him, at least where he had, or was chargeable with, full knowledge of the facts....’ " Marcus v. Marcus , 993 S.W.2d 596, 602 (Tenn. 1999) (quoting Obion County v. McKinnis , 211 Tenn. 183, 364 S.W.2d 356, 357 (1962) ).

The purpose of judicial estoppel "is not to protect the parties from allegedly dishonest conduct by the adversary." John S. Nichols, Safeguarding the Truth in Court: The Doctrine of Judicial Estoppel , 13 S.C. Law. 32, 34 (2002) (citations omitted). Rather, "the doctrine acts to ensure the integrity of the judicial process." Id. ; see also Allen v. Neal , 217 Tenn. 181, 396 S.W.2d 344, 346 (1965) (citation omitted) (describing judicial estoppel as "not [based] on prejudice to adverse party by reason thereof, as...