Wells v. State

Decision Date08 October 2013
Docket NumberNo. W2012-00189-COA-R3-CV,W2012-00189-COA-R3-CV
PartiesAUSTIN WELLS, a disabled person, by and through his conservator and natural mother Carron C. Wells Baker v. STATE OF TENNESSEE and DONALD ESTES and UNIVERSITY OF MEMPHIS FOUNDATION
CourtTennessee Court of Appeals

Direct Appeal from the Circuit Court for Shelby County

Nos. CT-003593-06, CT-002510-07, and CT-004418-07

Jerry Stokes, Judge

A University of Memphis student fell down an elevator shaft while removing artwork following a required University function at property owned by Donald Estes. The student sued Donald Estes and Estes, LLC, the University, and The University of Memphis Foundation. Summary judgment was granted in favor of the Foundation. The jury returned a verdict of $4,103,720.00, and the fault was ultimately allocated as follows: the State 40%; the student 15%; Estes 45%. Based upon an indemnification agreement, the trial court found the State liable for Mr. Estes' share of the jury verdict, or $1,436,215.20. We find that the trial court erred in concluding that the indemnification agreement indemnified Mr. Estes for his own negligence and in granting summary judgment in favor of the Foundation. However, we affirm the trial court's admission of testimony regarding $410,000 in medical bills, its exclusion of evidence regarding the student's alleged drug use, and its capping of the State's liability at $300,000. The case is remanded for further proceedings consistent with this opinion.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Affirmed inPart, Reversed in Part and Remanded

ALAN E. HIGHERS, P.J., W.S., delivered the opinion of the Court, in which DAVID R. FARMER, J., and J. STEVEN STAFFORD, J., joined.

John Packard Wade, Memphis, Tennessee, for the appellant, Donald Estes

Robert E. Cooper, Jr., Attorney General and Reporter, William E. Young, Solicitor General, Joseph F. Whalen, Associate Solicitor General, Nashville, Tennessee, for the appellant, State of TennesseeGary K. Smith, Karen M. Campbell, John McManus, Memphis, Tennessee, for the appellee, Austin Wells

Richard Glassman, Lacey Adair Bishop, Memphis, Tennessee, for the appellee, The University of Memphis Foundation

OPINION
I. FACTS & PROCEDURAL HISTORY

This case stems from a horrific accident involving University of Memphis graphic design student Austin Wells. On the night of December 14, 2005, an exhibit was held at the Second Floor Contemporary Gallery located at 431 South Main Street in downtown Memphis to display the artwork of graduating seniors. Participation in, and attendance at, the exhibit was a graduation requirement.

The University art department leased the historic facility from building owner Donald Estes. The building was comprised of three floors, plus a basement; the first floor housed a furniture business, the second floor housed the art gallery and architects' offices, and the third floor was used as Mr. Estes' residence. An elevator located on the building's north side serviced all floors, but guests to the Second Floor Contemporary Gallery were expected to access the second floor via an outside staircase located at the building's loading dock. The University, however, requested the use of the elevator to haul heavier and larger exhibits, both before and after the event. Mr. Estes granted the University's request, but he insisted that only he operate the elevator.

Prior to the event, Mr. Estes sent an invoice for the gallery rental as well as an indemnification agreement to Hugh Busby, the University art department employee who organized the exhibit. James "Jed" Jackson, chair of the University art department, signed the indemnification agreement, which Mr. Busby then returned to Mr. Estes.

According to Mr. Estes, he informed Hugh Busby that he would be unavailable to operate the elevator on the night of December 14. Therefore, students requiring the use of the elevator for exhibit removal were instructed to return on the morning of December 15. According to Mr. Estes, Mr. Busby indicated that he would supervise exhibit removal on December 15, but Mr. Busby never appeared at the facility for this purpose.

On the morning of December 15, Austin Wells, along with his father and a friend, arrived at the facility to retrieve his exhibit. They began moving the pieces of his exhibit toward the elevator, which was not currently located at the second floor, and Austin left tolocate Mr. Estes. Moments later, Mr. Estes rode the elevator down from the third floor to the second floor, and Mr. Estes, Austin Wells' father, and Austin Wells' friend loaded his exhibit onto the elevator and Mr. Estes maneuvered the elevator to the first floor. After moving the exhibit onto the loading dock, Austin Wells' father began looking for him. His father heard a noise coming from the elevator shaft, and he found his son in the basement in a semiconscious state at the bottom of the elevator shaft. Austin Wells had suffered multiple serious injuries, including traumatic brain injury.1

On July 11, 2006, Austin Wells through his Conservator and mother, Carron C. Wells Baker ("Austin Wells"), filed a Complaint in the Shelby County Circuit Court against Donald Estes and Estes, LLC, (collectively, "Estes") alleging negligence and negligence per se and seeking both compensatory and punitive damages. On November 17, 2006, Austin Wells filed a Complaint in the Tennessee Claims Commission against the State of Tennessee alleging negligence and breach of contract by the University of Memphis with regard to the indemnification agreement and seeking compensatory damages. On March 12, 2007, Estes also filed a Complaint in the Claims Commission against the State of Tennessee alleging breach of contract and/or specific performance related to the indemnification agreement. The Claims Commission Complaints were transferred to the Shelby County Circuit Court on May 10, 2007, and all three cases were consolidated by orders entered August 17, 2007, and June 1, 2009.

Following unsuccessful motions for summary judgment by all parties, Austin Wells filed an amended complaint on December 9, 2009, adding The University of Memphis Foundation (the "Foundation") as a defendant. However, on July 6, 2011, the trial court granted summary judgment in favor of the Foundation finding that the Foundation owed no duty of care to Austin Wells.

The trial court bifurcated the issues of tort liability and indemnification, with liability to be considered first. On October 25, 2011, a jury trial commenced regarding liability, with the trial court sitting as the Claims Commission. The jury returned a verdict of $4,103,472.00, and it allocated the fault as follows: Mr. Estes 35%; the State of Tennessee 60%, and Austin Wells 5%. The trial court upheld the damage amount, but it reapportioned Mr. Estes fault at 45%,2 the State's fault at 40%, and Austin Wells' fault at 15%. Judgments were entered on the jury verdict and on the State's liability.

A trial was then held regarding indemnification. The trial court upheld the indemnification agreement, and therefore, it found the State of Tennessee liable for Mr. Estes' 35% share of the jury verdict, or $1,436,215.20. Judgment was entered against the State in favor of Estes and in favor of Austin Wells as a third party beneficiary. Estes filed a Motion for New Trial, which the trial court denied. The State, Austin Wells, and Estes all filed timely notices of appeal to this Court.

II. ISSUES PRESENTED

The parties present the following issues for review, as summarized: The State of Tennessee:

1. Whether the Indemnification Agreement indemnified Mr. Estes for his own negligence; and

2. If the Indemnification Agreement indemnified Mr. Estes for his own negligence, whether the agreement is void as an ultra vires act.3

Donald Estes:

1. Whether the trial court erred in allowing testimony regarding $410,000 in medical bills;

2. Whether the trial court erred in excluding evidence regarding Austin Wells' alleged drug use; and

3. Whether the trial court erred in granting summary judgment to The University of Memphis Foundation.

Austin Wells:

1. Whether the trial court erred in capping the University of Memphis' liability at $300,000.

For the following reasons, we find that the trial court erred in concluding that the indemnification agreement indemnified Mr. Estes for his own negligence and in grantingsummary judgment in favor of the Foundation. However, we affirm the trial court's admission of testimony regarding $410,000 in medical bills, its exclusion of evidence regarding Austin Wells' alleged drug use, and its capping of the State's liability at $300,000. The case is remanded for further proceedings consistent with this opinion.

III. DISCUSSION
A. Evidentiary Issues

We begin by considering the evidentiary issues raised by Mr. Estes on appeal, as these considerations potentially affect the damages awarded in this case. We review a trial court's decision to admit or exclude evidence under an abuse of discretion standard, giving a wide degree of latitude to the trial court. Biscan v. Brown, 160 S.W.3d 462, 468 (Tenn. 2005) (citing Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 131 (Tenn. 2004)); Otis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 442 (Tenn. 1992) (citations omitted). Under this standard, we will uphold the trial court's determination, irrespective of our inclination to decide the issue differently, so long as the trial court's decision is within the range of acceptable alternatives. Tait v. Tait, 207 S.W.3d 270, 275 (Tenn. Ct. App. 2006) (citing White v. Vanderbilt Univ., 21 S.W.3d 215, 223 (Tenn. Ct. App. 1999)). Even when the trial court abuses its discretion in making an evidentiary ruling, the ruling will not be set aside unless the error "more probably than not affected the judgment or would result in prejudice to the judicial process." Tenn. R. App. P. 36(b).

1. Medical Bills Summary

First, Estes argues that the trial court erred in admitting...

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