Walker v. Sidney Gilreath & Associates

• Citation: 40 S.W.3d 66
• Parties: Joe H. WALKER v. SIDNEY GILREATH & ASSOCIATES, et al.
• Decision Date: 12 March 2001
• Court: Court of Appeals of Tennessee

40 S.W.3d 66

Joe H. WALKER v. SIDNEY GILREATH & ASSOCIATES, et al.

Court of Appeals of Tennessee, Middle Section, at Knoxville.

July 20, 2000.

Permission to Appeal Denied March 12, 2001.

Norbert J. Slovis, Knoxville, TN, for appellant, Joe H. Walker.

R. Franklin Norton and Geoffrey D. Kressin, Knoxville, TN, for appellee, Sidney Gilreath & Associates.

Darryl G. Lowe, Knoxville, TN, for appellees, Gary McDonald and Brenda Hall.

Permission to Appeal Denied by Supreme Court March 12, 2001.

OPINION

CAIN, J., delivered the opinion of the court, in which CANTRELL, P.J., M.S., and KOCH, J., joined.

This is a legal malpractice action in which Plaintiff appeals summary judgment entered for all Defendants. Plaintiff claims that Defendants, attorneys who represented him in a personal injury case, failed to file a Tenn.R.Civ.P. 54.04 motion for discretionary costs. The trial court held that compliance with the applicable standard of care involved genuine issues of material fact but sustained the summary judgment of all Defendants on the basis of the speculative character of Plaintiff's damages. We reverse and remand.

Plaintiff, Joe H. Walker, was at the time of the accident in this case and is presently incumbent Public Defender for the 9th Judicial District of Tennessee. On May 17, 1991, he was driving his Mazda automobile on Highway 27 in Harriman, Roane County, Tennessee, accompanied by his son seated in the front passenger seat. He suddenly stopped his automobile, a 1983 Mazda EX-7 in order to avoid striking a pedestrian, one Dennis Morelock. His automobile was then struck from the rear by a truck belonging to Bert Hatmaker doing business as Bert Hatmaker Trucking and driven by Andrew B. Bolton. In the accident, both Joe H. Walker and his son Andrew Walker received catastrophic spinal cord injuries rendering both of them quadriplegic. The case involving Andrew Walker is not involved in this appeal.

Defendants at bar, Sidney Gilreath & Associates, Gary McDonald and Brenda Hall, were employed to represent Joe Walker and his son in the underlying tort action against Mazda, Bert Hatmaker Trucking and Andrew Bolton. Efforts at mediation and settlement were not productive and, following an extended jury trial, a verdict was rendered finding the pedestrian Morelock 64% at fault, Plaintiff Joe H. Walker 13% at fault, the defendant Mazda 13% at fault, and the defendants Bolton and Hatmaker jointly 10% at fault. The same jury returned a verdict for damages in the amount of $4,292,019. The portion of the judgment attributable to pedestrian Morelock was uncollectible, and the defendants Bolton/Hatmaker settled pre-trial. Joe Walker, having been found less than 50% at fault, recovered from Mazda the sum of $557,962.47, same being 13% of the total damages awarded by the jury.

The underlying tort case was an expensive one involving millions of dollars in damages. However, collectibility of such damages was largely dependant on the extent to which fault could be attributed to Mazda. Under the contingent fee arrangement between Plaintiff and Gilreath & Associates, Plaintiff was responsible for payment of expenses including those advanced by Gilreath & Associates. The total amount of advanced expenses made by Gilreath & Associates on behalf of Joe and Andrew Walker was $241,954.40. Of these expenses, Gilreath & Associates, in the final distribution after the verdict, agreed to absorb $20,225.72 leaving a balance in expenses of $221,728.78 paid by Plaintiff and his son, either from independent funds or from their final recovery.

At the time of the trial of the underlying tort action, Rule 54.04(2) of the Tennessee Rules of Civil Procedure provided:

Costs not included in the bill of costs prepared by the clerk are allowable only in the court's discretion. Discretionary costs allowable are: reasonable and necessary court reporter expenses for depositions or trials, reasonable and necessary expert witness fees for depositions or trials, and guardian ad litem fees; travel expenses are not allowable discretionary costs. Subject to Rule 41.04, a party requesting discretionary costs shall file and serve a motion within thirty (30) days after the entry of judgment. The trial court retains jurisdiction over a motion for discretionary costs even though a party has filed a notice of appeal.

Gilreath & Associates, McDonald and Hall did not file a motion to seek discretionary costs from Mazda resulting in the present suit for legal malpractice.

Lawrence Leibowitz, an attorney licensed to practice in Tennessee, reviewed various documents and facts in the underlying case. He concluded that, in his professional opinion, Defendants did not deviate from or fall below the standard of care or standard of practice for attorneys practicing law in Knox County and Roane County, Tennessee in not filing a motion for discretionary costs. He further opined that under the facts of the underlying case, the trial court would not have awarded discretionary costs even if a motion had been filed. He filed an affidavit to this effect in support of the motion for summary judgment. The Leibowitz affidavit was countered by the affidavit of Patricia Murphy, a practicing attorney in Roane County, Tennessee, who opined that discretionary costs should have been sought and that Judge Simmons, who tried the underlying tort case, generally allowed discretionary costs to the prevailing party under Rule 54.

Barbara Scalf, Deputy Circuit Court Clerk of Roane County, filed an affidavit stating that "whenever appropriate motions and affidavits have been filed pursuant to Tenn. Rules of Civil Procedure 54.04 the trial judge awarded discretionary costs to the prevailing party or parties." She searched the records in all of the counties wherein Judge Simmons presided over the court and stated that she was unable to find a case where Judge Simmons had denied a motion for discretionary costs to the prevailing party "whenever an appropriate motion and affidavit were filed."

At a relatively early stage of the pre-trial proceedings in the underlying tort action, Plaintiff became dissatisfied with Mr. Gilreath for not keeping him informed as to the proceedings. Particularly disquieting to Plaintiff was the intervention by Blue Cross/Blue Shield for a substantial subrogation interest without sharing in litigation expenses. Plaintiff thereupon entered an appearance himself as counsel of record along with Defendants Gilreath, McDonald and Hall.

It is undisputed in this record that no motion under Rule 54.04(2) of the Tennessee Rules of Civil Procedure for discretionary costs was ever filed in the underlying tort case. The record before this court in this appeal is very limited in this respect and provides very little insight into the reasons no such motion was filed. However, the record does disclose a sharp, factual dispute as to who made the decision not to file the Rule 54.04 motion. Says Mr. Gilreath in response to interrogatory:

ANSWER: Post trial motions, including a motion for discretionary costs, were discussed with Joe Walker on several occasions by phone and in person, some of which were in the presence of Gary McDonald. The substance of the conversations included the quotient verdict, discretionary costs, and the possibility of Mazda filing a motion for new trial which we wanted to avoid. I told Joe Walker that I would not file any post trial motions, including a motion for discretionary costs. Joe Walker was an attorney of record. He could file a motion for discretionary costs if he so chose.

Mr. McDonald, in affidavit, says:

In any attorney-client relationship, the attorney provides information and advice to the client, and the client makes the decision as to all matters. In this specific instance, Plaintiff and Defendants engaged in a telephone conference during which several matters, including the question of filing for discretionary costs, were discussed. The Defendant Attorneys advised Walker not to file a motion for discretionary costs and it was his specific decision not to file such a motion. Further, since he was attorney of record as well as the Plaintiff, Walker was fully capable of filing his own motion for discretionary costs if he did not agree with the advice provided to him by the Defendant Attorneys.

In one affidavit, Plaintiff made the following statement:

"The only attorney in the Walker v. Mazda suit that Joe Walker has ever spoken with regarding discretionary costs was Mr. John McReynolds, attorney for Mazda. This conversation took place subsequent to Mr. Walker's conversation with Mr. Leibowitz. Mr. McReynolds advised that he and Mr. Gilreath discussed discretionary cost applications after the judgment had been entered and the Mr. Gilreath filed no discretionary cost motion. Mr. McReynolds stated that he was considering filing an application for a large amount of discretionary costs on behalf of Mazda and that although there was no actual agreement, neither filed for discretionary costs."

In the second affidavit, Plaintiff stated: "As to paragraph five in the Gary McDonald Affidavit, Plaintiff Joe H. Walker emphatically denies each and every statement therein. As the defendants' former client, the Plaintiff denies he made the decisions as to all matters at any time. The telephone conference Mr. McDonald alludes to is a figment of Mr. McDonald's imagination or else is an intentional misstatement of fact."

In sustaining the motion for summary judgment filed by Defendants, the trial court held:

This is a unique action for legal malpractice. The sole complaint by the Plaintiff, who is a licensed attorney, is that the Defendant attorney, after a significant recovery in a multi-party tort case, was negligent in not filing a motion for discretionary costs. Having found there is at least a contested issue of material fact as to whether Defendants' failure to file a motion is a violation of the standard of care, the sole issue is whether the

...