Natalie Sharp v. Tennessee Department of Commerce And Insurance ( 2017 )


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  •                                                                                            11/09/2017
    IN THE COURT OF APPEALS OF TENNESSEE
    AT NASHVILLE
    April 11, 2017 Session
    NATALIE SHARP v. TENNESSEE DEPARTMENT OF
    COMMERCE AND INSURANCE
    Appeal from the Circuit Court for Davidson County
    No. 15C3610     Thomas W. Brothers, Judge
    No. M2016-01207-COA-R3-CV
    This appeal involves the trial court’s order of disclosure of certain public records over the
    objection of the Tennessee Department of Commerce and Insurance and the
    corresponding denial of attorney fees for failure to disclose the said records. We affirm.
    Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
    Affirmed; Case Remanded
    JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which FRANK G.
    CLEMENT, JR., P.J., M.S and ANDY D. BENNETT, J., joined.
    Herbert H. Slatery, III, Attorney General & Reporter; Andrée S. Blumstein, Solicitor
    General; and Janet M. Kleinfelter, Deputy Attorney General, Nashville, Tennessee, for
    the appellant, State of Tennessee, Department of Commerce and Insurance.
    Jackie Sharp, Jr., Nashville, Tennessee, for the appellee, Natalie Sharp.
    OPINION
    I.     BACKGROUND
    In December 2011, the Executive Director of the Board of Cosmetology
    discovered that a license technician, Latrisha Johnson (“Johnson”), had destroyed a
    number of cosmetology licensee files and had likely been collecting bribes and
    fraudulently issuing cosmetology licenses. Maliaka Bass, Deputy General Counsel for
    the General Civil Division of the Tennessee Department of Commerce and Insurance
    (“the Department”), began an investigation. As part of her investigation, General Bass
    requested an internal audit of reciprocal license applications issued from July 1, 2011,
    through February 14, 2012. On March 13, 2012, the Department notified Johnson of its
    intent to dismiss her from employment based upon the allegations. Johnson resigned two
    days later. On May 24, 2012, the Office of Internal Audit issued a final audit
    investigation report related to the missing applications.
    As a result of the final audit, the Department revoked the licenses of those it
    believed fraudulently obtained a license. The Department also brought an administrative
    action to revoke the license of Lee Phan, an owner of a nail salon, upon discovery of his
    alleged involvement in the scheme. Natalie Sharp (“Petitioner”) represents Mr. Phan.
    On January 20, 2015, Petitioner submitted a public records request to the
    Department pursuant to the Tennessee Public Records Act, codified at Tennessee Code
    Annotated section 10-7-101, et seq., in which she sought to inspect the final audit
    investigation report, as well as supporting documentation. The Department denied the
    request, citing the attorney work product and attorney-client doctrines.
    On January 31, 2015, Petitioner submitted a second public records request in
    which she sought the following:
    (1)    All correspondence regarding cosmetology licensing between [the
    Department] and media outlets and their representatives, including, but not
    limited to, Jennifer Kraus of News Channel 5[;]
    (2)   A list of the [employee numbers for] Mark Green, Shilina Brown,
    and Roxana Gumucio[; and]
    (3)   All correspondence between [the Department] and witnesses
    subpoenaed for APD Case No. 12.09-12456A.
    While not indicated in her request, Petitioner sought the information for purposes of
    drafting a brief in support of her request for judicial review of the administrative decision
    to revoke Mr. Phan’s license. The brief was due on March 13, 2015.
    The Department, through Anthony Glandorf, replied to the request by email,
    advising Petitioner that the request could not be completed until February 20, 2015. The
    employee numbers were provided on February 19; however, Mr. Glandorf sent additional
    emails in which he extended his estimation of the time necessary to compile the requested
    documents. Petitioner did not respond to the emails.
    On March 6, Mr. Glandorf informed Petitioner that he had compiled the witness
    correspondence, and on March 26, he informed her that the remaining records were
    available. Petitioner asked to inspect the records on March 27. Her request was denied
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    because Mr. Glandorf was out of the office on that date. Petitioner did not inspect the
    records until August 18.
    On September 30, 2015, Petitioner filed suit against the Department, requesting
    access to the final audit report and supporting documentation. She further asserted that
    the Department failed to furnish a completed records request form in response to her
    January 31 request. Further, she claimed that there was an unreasonable delay in
    providing the records and that the Department improperly redacted information and
    improperly refused inspection of non-responsive records. Plaintiff sought attorney fees
    based upon the Department’s willful violations of the TPRA.
    The Department denied wrongdoing, citing the attorney work product doctrine as
    pertinent to the January 20 request. Relative to the January 31 request, the Department
    claimed that it redacted information that was privileged or non-responsive to the request.
    The case proceeded to a hearing, after which the court held that the Department
    had improperly denied the January 20 request. In so holding, the court found that the
    final audit report, while produced in anticipation of litigation, was “ordinary work
    product,” that Petitioner demonstrated a substantial need for the report, that the attorney
    work product protection had been waived because details of the report had been disclosed
    in the notice of intent to dismiss Johnson, and that the report was no longer protected
    because there was no possibility of litigation concerning Johnson’s dismissal. Relative to
    the January 31 request, the court found that Petitioner failed to establish that the
    Department acted in bad faith in failing to use the correct form and in failing to produce
    the records within the original time estimation. However, the court reserved ruling on
    whether the records had been improperly redacted, finding that an in camera inspection of
    the documents was necessary to determine if the redactions were overbroad as alleged.
    Following an in camera inspection of the redacted documents, the court found that
    additional pieces of correspondence should have been provided but that the remaining
    correspondence did not merit disclosure because the correspondence consisted of
    communications between state employees or involved attorney-client communications.
    The court noted that any correspondence beyond the date of the request was also not
    subject to disclosure. The court denied attorney fees. This timely appeal followed the
    denial of post-trial motions.
    II.    ISSUES
    We consolidate and restate the issues on appeal as follows:
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    A.    Whether the court erred in finding that the Department erroneously
    denied the January 20 request for the final audit report.
    B.     Whether the court erred in finding that the Department was not
    required to disclose the entirety of the media correspondence in response to
    the January 31 request.
    C.     Whether the court erred in denying Petitioner’s request for attorney
    fees and costs.
    III.   STANDARD OF REVIEW
    On appeal, the factual findings of the trial court are accorded a presumption of
    correctness and will not be overturned unless the evidence preponderates against them.
    See Tenn. R. App. P. 13(d). The trial court’s conclusions of law are subject to a de novo
    review with no presumption of correctness. Blackburn v. Blackburn, 
    270 S.W.3d 42
    , 47
    (Tenn. 2008); Union Carbide Corp. v. Huddleston, 
    854 S.W.2d 87
    , 91 (Tenn. 1993).
    Decisions pertaining to whether to award attorney fees should not be overturned
    absent an abuse of discretion. Under the abuse of discretion standard, this court is bound
    by the principle that the trial court “will be upheld so long as reasonable minds can
    disagree as to propriety of the decision made.” Deakins v. Deakins, E2008-00074-COA-
    R3-CV, 
    2009 WL 3126245
    , at *7 (Tenn. Ct. App. Sept. 30, 2009) (quoting Eldridge v.
    Eldridge, 
    42 S.W.3d 82
    , 85 (Tenn. 2001)). A trial court abuses its discretion when it
    “applie[s] an incorrect legal standard, or reache[s] a decision which is against logic or
    reasoning that cause[s] an injustice to the party complaining.” State v. Shirley, 
    6 S.W.3d 243
    , 247 (Tenn. 1999) (citation omitted).
    IV.    DISCUSSION
    A.
    The TPRA provides, in pertinent part, as follows:
    All state, county and municipal records shall, at all times during business
    hours, which for public hospitals shall be during the business hours of their
    administrative offices, be open for personal inspection by any citizen of this
    state, and those in charge of the records shall not refuse such right of
    inspection to any citizen, unless otherwise provided by state law.
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    Tenn. Code Ann. § 10-7-503(a)(2)(A). Disclosure of documents and papers prepared in
    anticipation of litigation or in preparation for trial are generally protected from discovery
    under the TPRA based upon the work product doctrine. Arnold v. City of Chattanooga,
    
    19 S.W.3d 779
    , 786 (Tenn. Ct. App. 1999); see generally Hickman v. Taylor, 
    329 U.S. 495
    , 509-12 (1947) (setting forth the work product doctrine).
    Rule 26.02(3) of the Tennessee Rules of Civil Procedure codified the work
    product doctrine as follows:
    [A] party may obtain discovery of documents and tangible things otherwise
    discoverable under subdivision (1) of this rule and prepared in anticipation
    of litigation or for trial by or for another party or by or for that other party’s
    representative (including an attorney, consultant, surety, indemnitor,
    insurer, or agent) only upon a showing that the party seeking discovery has
    substantial need of the materials in the preparation of the case and is unable
    without undue hardship to obtain the substantial equivalent of the materials
    by other means. In ordering discovery of such materials when the required
    showing has been made, the court shall protect against disclosure of the
    mental impressions, conclusions, opinions, or legal theories of an attorney
    or other representative of a party concerning the litigation.
    (Emphasis added.). The work product doctrine may be waived under very specific and
    narrow circumstances, namely when the use of the document is unfair and inconsistent
    with the claim of privilege or when the claim of privilege has been waived or has expired.
    As a threshold issue, Petitioner claims that the final report was not protected
    because it was not prepared in anticipation of litigation. The trial court swiftly rejected
    this argument, noting that the final audit was initiated by General Bass in anticipation of
    litigation. The record supports this finding.
    The Department first claims that the court erred in finding that the report was
    subject to disclosure because it was “ordinary work product”, not “opinion work
    product.” In determining whether the report was subject to disclosure, the court
    considered whether the report contained “mental impressions, conclusions, opinions, or
    legal theories,” thereby entitling it to a broader protection. See Boyd v. Comdata
    Network, Inc., 
    88 S.W.3d 203
    , 221 (Tenn. Ct. App. 2002) (holding that a “far stronger
    showing of necessity” is required to obtain attorney work product that contains the
    attorney’s opinions or mental impressions). The court found that the report did not
    contain such material, thereby requiring disclosure upon a proper showing. The record
    supports this finding.
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    Next, the Department argues that the court erred in finding that the attorney work
    product protection no longer applied based upon a finding of waiver or expiration. This
    was an alternative ruling issued by the trial court. First, the trial court found that
    Petitioner made a proper showing of necessity, namely that she had a substantial need for
    the report to aid in her defense of Mr. Phan and that she was unable to obtain the report
    without undue hardship. The record supports this finding as well, thereby requiring
    disclosure without need for further justification. In the event of further appellate review,
    we will address the alternative grounds relied upon by the trial court.
    Relative to waiver, some of the information contained in the report was relied
    upon as justification for the Department’s intent to dismiss Johnson. The report was also
    relied upon to revoke the licenses of those it believed fraudulently obtained a license,
    including Mr. Phan. The use of the report in this manner is inconsistent with a claim of
    privilege. 
    Arnold, 19 S.W.3d at 787
    (“Courts have universally held that a party is
    prevented from invoking the work product doctrine immunity as both sword and
    shield.”). With these considerations in mind, we conclude that the record supports the
    court’s finding of waiver.
    Relative to expiration, the court found that any protection of the report provided
    by the work product doctrine expired because there was no longer any possibility of civil
    litigation relative to Johnson given that any potential claim would be barred by the one-
    year statute of limitations under the Governmental Tort Liability Act. The Department
    claimed at trial and now on appeal that the protection of attorney work product extends
    beyond the termination of litigation for which the documents were generated and can be
    claimed in subsequent litigation. We agree. “The work product doctrine is not case
    specific,” meaning that “work product that was privileged in prior litigation remains
    privileged in subsequent litigation.” Swift v. Campbell, 
    159 S.W.3d 565
    , 573 (Tenn. Ct.
    App. 2004) (citations and footnotes omitted). “This is especially true when the
    subsequent litigation is closely related to the prior litigation.” 
    Id. (citation omitted).
    While Johnson may no longer file a claim related to her termination, Mr. Phan’s litigation
    was ongoing, at least at the time the public record request was made. However, this
    conclusion does not require reversal given Petitioner’s proper showing of substantial
    need and the Department’s waiver of the protection.
    B.
    Petitioner argues that the court erred in ruling that she was not entitled to inspect
    all media correspondence in response to her January 31 request. She claims that all
    information should have been released regardless of its responsiveness to her request and
    that the Department failed to meet its burden to demonstrate that disclosure was
    unwarranted. The Department responds that the court properly ruled that Petitioner was
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    not entitled to access records that were either unresponsive or privileged
    communications. We agree with the Department.
    “Any request for inspection or copying of a public record shall be sufficiently
    detailed to enable the governmental entity to identify the specific records for inspection
    and copying.” Tenn. Code Ann. § 10-7-503(a)(4) (emphasis added).1 Here, Petitioner
    requested
    (4)    All correspondence regarding cosmetology licensing between [the
    Department] and media outlets and their representatives, including, but not
    limited to, Jennifer Kraus of News Channel 5[;]
    (5)   A list of the [employee numbers for] Mark Green, Shilina Brown,
    and Roxana Gumucio[; and]
    (6)   All correspondence between [the Department] and witnesses
    subpoenaed for APD Case No. 12.09-12456A.
    The Department produced documents that were responsive to the request but redacted
    communications that were either non-responsive or privileged. With the exception of the
    records the court found were unlawfully withheld, the Department complied with the
    request and was not required to produce non-responsive or privileged communications
    pursuant to the TPRA.
    Next, Petitioner claims that the Department’s failure to specifically identify each
    privileged communication was in violation of Rule 26.02(5) of the Tennessee Rules of
    Civil Procedure.2 These records were not submitted in response to a discovery request
    1
    Petitioner claims that a prior version of the TPRA permitted the inspection of nonexempt records. Prior
    to a 2016 amendment to the TPRA, Section 10-7-503(a)(4) provided,
    This section shall not be construed as requiring a governmental entity or public official to
    sort through files to compile information; however, a person requesting the information
    shall be allowed to inspect the nonexempt records.
    The TPRA still required a “sufficiently detailed” request to enable the production of the “specific
    records” sought. Tenn. Code Ann. § 10-7-503(a)(7)(B) (2015). The TPRA also does not prohibit the
    redaction of non-responsive or confidential information, prior to or following the 2016 amendment.
    2
    “When a party withholds information otherwise discoverable under the rules by claiming that it is
    privileged or subject to protection as trial preparation material, the party shall make the claim expressly
    and shall describe the nature of the documents, communications, or things not produced or disclosed in a
    manner that, without revealing information itself privileged or protected, will enable other parties to
    assess the applicability of the privilege protection.” Tenn. R. Civ. P. 26.02(5).
    -7-
    but were produced pursuant to the TPRA, which only requires a written denial that
    includes the basis for such denial. With the above considerations in mind, we hold that
    the record supports the court’s denial of access to the non-responsive and privileged
    communications.
    C.
    Petitioner claims that the court abused its discretion by refusing to award attorney
    fees. Tennessee follows the American Rule which provides that “litigants pay their own
    attorney’s fees absent a statute or an agreement providing otherwise.” State v. Brown &
    Williamson Tobacco Corp., 
    18 S.W.3d 186
    , 194 (Tenn. 2000); accord Taylor v. Fezell,
    
    158 S.W.3d 352
    , 359 (Tenn. 2005). “Under the American [R]ule, a party in a civil action
    may recover attorney fees only if: (1) a contractual or statutory provision creates a right
    to recover attorney fees; or (2) some other recognized exception to the American [R]ule
    applies, allowing for recovery of such fees in a particular case.” Cracker Barrel Old
    Country Store, Inc. v. Epperson, 
    284 S.W.3d 303
    , 308 (Tenn. 2009). A right to recover
    attorney fees in cases filed pursuant to the TPRA was created by Tennessee Code
    Annotated section 10-7-505(g), which provides,
    If the court finds that the governmental entity, or agent thereof, refusing to
    disclose a record, knew that such record was public and willfully refused to
    disclose it, such court may, in its discretion, assess all reasonable costs
    involved in obtaining the record, including reasonable attorneys’ fees,
    against the nondisclosing governmental entity. In determining whether the
    action was willful, the court may consider any guidance provided to the
    records custodian by the office of open records counsel as created in title 8,
    chapter 4.
    (Emphasis added.). Here, the Department relied upon exceptions provided by state law in
    withholding the requested information. The denial of attorney fees is also a discretionary
    matter. With these considerations in mind, we affirm the denial of attorney fees.
    V.     CONCLUSION
    The judgment of the trial court is affirmed, and the case is remanded for such
    further proceedings as may be necessary. Costs of the appeal are taxed one-half to the
    appellant, State of Tennessee, Department of Commerce and Insurance and one-half to
    the Appellee, Natalie Sharp.
    _________________________________
    JOHN W. McCLARTY, JUDGE
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