Lind v. Beaman Dodge, Inc.

• Decision Date: 15 December 2011
• Docket Number: No. M2010–01680–SC–S09CV.,M2010–01680–SC–S09CV.
• Citation: 356 S.W.3d 889
• Parties: Michael LIND v. BEAMAN DODGE, INC., d/b/a Beaman Dodge Chrysler Jeep et al.
• Court: Tennessee Supreme Court

356 S.W.3d 889

Michael LIND

v.BEAMAN DODGE, INC., d/b/a Beaman Dodge Chrysler Jeep et al.

No. M2010–01680–SC–S09CV.

Supreme Court of Tennessee, at Nashville.

Sept. 1, 2011 Session at Knoxville.Dec. 15, 2011.

J. Britt Phillips and Joy B. Day, Franklin, Tennessee, for the appellant, Beaman Dodge, Inc.

Mark P. Chalos, Nashville, Tennessee, for the appellee, Michael Lind.

OPINION

GARY R. WADE, J., delivered the opinion of the Court, in which JANICE M. HOLDER and SHARON G. LEE, JJ., joined. CORNELIA A. CLARK, C.J., filed a separate opinion concurring in the judgment, in which WILLIAM C. KOCH, JR., J., joined.

GARY R. WADE, J.

The plaintiff, who had purchased a truck from an automobile dealership, filed a products liability suit in 2007 against not only the manufacturer, but also the dealership, as seller. Later, the plaintiff entered a voluntary nonsuit as to the seller and proceeded only against the manufacturer. Over one year after the order granting nonsuit, the manufacturer declared bankruptcy, and, in 2009, the plaintiff again sued the seller, alleging both negligence and strict liability in tort. The seller filed a motion to dismiss, contending that the suit was barred by the statute of limitations. The trial court denied the motion but granted an interlocutory appeal. The Court of Appeals denied the appeal. This Court granted the seller's application for permission to appeal to consider the application of the saving statute to these unique circumstances. We hold that the plaintiff may proceed under the strict liability claim because that cause of action did not accrue until the manufacturer was judicially declared insolvent. Because, however, the second suit alleged acts of negligence on the part of the seller, an exception to the statutory rule prohibiting products liability suits against sellers, and could have been brought in 2007, the statute of limitations is a bar to recovery under that theory. The judgment of the trial court is, therefore, affirmed in part and reversed in part, and the cause is remanded for trial.

On March 28, 2006, Michael Lind (the “Plaintiff”) was injured as he stepped out of his 2004 Dodge Ram 2500 truck onto Fox Hollow Road in Christiana, Tennessee, near its intersection with Manchester Highway. Almost a year later, on March 19, 2007, he filed suit against the truck's manufacturer, DaimlerChrysler Corporation (“Chrysler”),¹ and the seller, Beaman Dodge, Inc., d/b/a Beaman Dodge Chrysler Jeep (the “Defendant”). The Plaintiff alleged that when he stopped his truck on a flat surface and placed it in park in order to get a closer look at what appeared to be a snake in the roadway, the truck, with the engine still engaged, “self-shifted” into reverse, running over his left foot and arm, breaking his arm and wrist, tearing a rotator cuff, and damaging muscles and ligaments in the arm. The Plaintiff alleged that his truck had “consistently experienced problems with [its] parking system, and that he had taken the vehicle for service on several occasions and the problem was not corrected.” In his complaint, the Plaintiff alleged a strict liability claim, contending that the truck was “defective or unreasonably dangerous in that it failed to properly secure in the ‘park’ position, and the alarm indicating danger did not properly function.” He also asserted a negligence-based claim, pointing out that shortly after his accident, he had received a “recall notice” from Chrysler regarding the problems with the “out-of-park” alarm system, and, in consequence, asserted that both Chrysler and the Defendant, a car dealership in Nashville, “knew” or in “the exercise of reasonable care should have known” that the vehicle was “defective or unreasonably dangerous.” The Plaintiff further alleged that the negligence of Chrysler and the Defendant proximately caused the accident. Chrysler, which answered the complaint in the name of DaimlerChrysler Company LLC, denied liability, relying upon the standards outlined in the Tennessee Products Liability Act of 1978 (the “TPLA”), Tenn.Code Ann. §§ 29–28–101 to –108 (2000), and pled other defenses to the claim. The Defendant also responded to the complaint,² denying liability and specifically invoking the protections provided sellers as set out in Tennessee Code Annotated section 29–28–106, a part of the TPLA:

(a) No “ product liability action,” as defined in § 29–28–102(6), shall be commenced or maintained against any seller when the product is acquired and sold by the seller ... under circumstances in which the seller is afforded no reasonable opportunity to inspect the product in such a manner which would or should, in the exercise of reasonable care, reveal the existence of the defective condition. The provisions of the first sentence of this subsection shall not apply to:

(1) Actions based upon a breach of warranty, express or implied, as defined by title 47, chapter 2; or

(2) Actions where the manufacturer of the product or part in question shall not be subject to service of process in the state of Tennessee and where service cannot be secured by the long-arm statutes of Tennessee; or

(3) Actions where the manufacturer has been judicially declared insolvent.

(b) No “product liability action,” as defined in § 29–28–102(6), when based on the doctrine of strict liability in tort, shall be commenced or maintained against any seller of a product which is alleged to contain or possess a defective condition unreasonably dangerous to the buyer, user or consumer unless the seller is also the manufacturer of the product or the manufacturer of the part thereof claimed to be defective, or unless the manufacturer of the product or part in question shall not be subject to service of process in the state of Tennessee or service cannot be secured by the long-arm statutes of Tennessee or unless such manufacturer has been judicially declared insolvent.³

Tenn.Code Ann. § 29–28–106(a)–(b) (emphasis added).

The Plaintiff entered a voluntary nonsuit as to the Defendant on December 21, 2007, pursuant to Rule 41 of the Tennessee Rules of Civil Procedure, but continued the litigation against Chrysler. When, however, Chrysler filed a voluntary bankruptcy petition on April 30, 2009, in the United States Bankruptcy Court for the Southern District of New York, an automatic stay issued in accordance with section 362 of the Bankruptcy Code.⁴ See generally 11 U.S.C.A. § 362 (West 2004).

On August 17, 2009, the Plaintiff, represented by new counsel, again filed suit against the Defendant based upon strict liability and negligence. ⁵ In Count One of the complaint, the Plaintiff alleged that Chrysler had been judicially declared insolvent, asserting the Defendant's liability under both Tennessee Code Annotated section 29–28–106(a)(3) and (b). In Count One, he claimed that the truck sold to him by the Defendant was “defective and/or unreasonably dangerous” both “in design or formation” and “due to inadequate warnings” regarding the “park-to-reverse defect,” ⁶ which the Plaintiff contended involved a delay in the engagement of the reverse gear, subjecting a driver who exits the vehicle with the engine in operation to sudden and unexpected backward movement. In Count Two, the Plaintiff alleged negligence, claiming that the Defendant failed to exercise ordinary care in the inspection, marketing, advertising, and sale of Dodge Ram trucks by continuing to sell them even though the Defendant “knew or should have known that [they] contained the unreasonably dangerous park-to-reverse defect and w[ere] defective.” In response, the Defendant filed a motion to dismiss, arguing that the suit, filed more than one year after the voluntary nonsuit to the March 19, 2007 complaint, was time-barred by the applicable rule.

While denying the Defendant's motion to dismiss on the basis that “the limitation period ... did not begin to run until the manufacturer was adjudicated bankrupt,” the trial court granted the Defendant's application for an interlocutory appeal because it determined that appellate review would “prevent needless, expensive and protracted litigation.” Tenn. R.App. P. 9(a)(2). The Court of Appeals denied interlocutory review. Because the question of whether the one-year saving statute under Tennessee Code Annotated section 28–1–105 applies under these circumstances is one of first impression, this Court granted the Defendant's application for permission to appeal.

Scope of Review and Statutory Construction

The scope of review after the grant or denial of a motion to dismiss involves a question of law. See Trau–Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696–97 (Tenn.2002). A motion to dismiss pursuant to Rule 12.02(6) of the Tennessee Rules of Civil Procedure seeks only to determine whether the pleadings state a claim upon which relief can be granted. Such a motion challenges the legal sufficiency of the complaint, not the strength of the plaintiff's proof. See Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 422, 426 (Tenn.2011). The motion admits the truth of all relevant and material averments contained in the complaint, but asserts that such facts do not constitute a cause of action. Id.; see also Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn.1997). In considering a motion to dismiss, the Court is required to take the relevant and material factual allegations in the complaint as true and to construe liberally all allegations in favor of the plaintiff. Stein, 945 S.W.2d at 716; see also Webb, 346 S.W.3d at 426 (observing that “Tennessee follows a liberal notice pleading standard, which recognizes that the primary purpose of pleadings is to provide notice of the issues presented to the opposing party and court” (citation omitted)). Additionally, this Court's review of a trial court's determinations on issues of law is de novo, without any presumption of correctness. Frye v. Blue Ridge Neuroscience Ctr., P.C., 70 S.W.3d 710, 712 (Tenn.2002)...