Henry Kent Sudberry v. Royal & Sun Alliance ( 2006 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
December 13, 2005 Session
HENRY KENT SUDBERRY v. ROYAL & SUN ALLIANCE, ET AL.
Appeal from the Circuit Court for Rutherford County
No. 47920 Robert E. Corlew, Judge
No. M2005-00280-COA-R3-CV - Filed on July 27, 2006
Trial court granted motion to dismiss tort claims as barred by statute of limitations where the injury
alleged was loss of employment. To the extent the employee alleged he had a contract for continued
employment, his complaint was not subject to Tenn. R. Civ. P. 12.02(6) dismissal because the three
year statute of limitations applies to cases involving loss of property, including contractual rights.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Affirmed in Part, Reversed in Part
PATRICIA J. COTTRELL, J., delivered the opinion of the court, in which WILLIAM C. KOCH , JR., P.J.,
M.S., and WILLIAM B. CAIN , J., joined.
David H. Dunaway, LaFollette, Knoxville, for the appellant, Henry Kent Sudberry.
Larry G. Trail, Murfreesboro, Tennessee, for the appellees, Royal & Sun Alliance, Investigations and
Intelligence Services, Inc.
OPINION
This matter comes to us after the trial court dismissed plaintiff’s action as barred by the
statute of limitations. The issue on appeal is whether the one (1) year statute of limitations of Tenn.
Code Ann. § 28-3-104(a)(1), governing personal injury, or the three (3) year statute of limitations
of Tenn. Code Ann. § 28-3-105, governing property damage, applies to tort claims where the
resulting injury is loss of employment.
Mr. Sudberry brought suit against numerous defendants claiming that their allegedly tortious
conduct caused the loss of Mr. Sudberry’s job at Nissan. According to Mr. Sudberry’s complaint,
he is a 54 year old man who had been employed by Nissan for approximately 18 years before he was
wrongfully terminated, as a result of defendants’ actions, on December 12, 2000.
This suit arose out of Mr. Sudberry’s workers’ compensation claim involving injuries
sustained while employed by Nissan. Apparently, Nissan’s workers’ compensation carrier,
defendant Royal & Sun Alliance (“Royal”), hired defendant Investigations and Intelligence Services,
Inc. (“Investigations”) to investigate Mr. Sudberry’s claim. According to the complaint, the
defendants, composed of Royal, Investigations, various Nissan employees, and a physician, sought
to have Mr. Sudberry fired for violation of company rules while knowing there were in fact no such
violations. Mr. Sudberry’s employer, Nissan, is not a party to this lawsuit. Plaintiff alleges
defendants conspired to have Mr. Sudberry fired “in order to retaliate against [him] for [his] having
filed a workers’ compensation claim and in order to allow the plaintiff to be replaced by a younger
employee and/or other employees who were not as vested with employment rights as [Mr.
Sudberry].”
According to plaintiff’s complaint, the defendants’ behavior amounts to “a tortious
interference and/or an intentional interference with an employment relationship” between Mr.
Sudberry and Nissan. In addition, plaintiff alleges the defendants placed him in a “false light,”
retaliated against him for filing a worker’s compensation claim, and violated Tenn. Code Ann. § 47-
50-409, which prohibits procurement of breach of contract.
While it is not entirely clear, Mr. Sudberry appears to allege alternative theories of recovery
or, at least, alternative characterizations of his employment relationship with Nissan. He alleged
both: (1) that he had mere expectancy of continued employment with Nissan and, alternatively, (2)
that he had a contract of continued employment with Nissan. Specifically, regarding his future
prospects with Nissan, Mr. Sudberry alleges the following in his complaint:
Based upon the length of the Plaintiff’s employment and the Plaintiff’s work
record, the Plaintiff believed that he had a secure job until his retirement or
unless he committed some act or omission that provided a good cause to terminate
him from his employment. The Plaintiff had planned to remain with his employer
until he retired . . . .
[t]he Plaintiff, . . . had an expressed and/or otherwise an implied contract of
continued employment with his employer, and the Plaintiff had a property interest
in his labor and the right to work at his position without unjustified interference by
the Defendants. (emphasis added).
Mr. Sudberry alleges that, due to the defendants’ tortious actions, he lost his job with Nissan,
resulting in loss of wages, inability to accrue additional pension benefits and loss of insurance. Mr.
Sudberry maintains that his loss of employment, and defendants’ actions, exacerbated his diabetes,
caused severe emotional distress, and damaged his standing in the community.
Mr. Sudberry filed his complaint on February 26, 2003, more than two years after his
termination. The trial court granted defendants’ motions to dismiss finding that the one-year period
of Tenn. Code Ann. § 28-3-104 governed and that plaintiff’s action was time barred. Mr. Sudberry
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appeals and argues that his claim alleges a tort against property and, consequently, that the three (3)
year period in Tenn. Code Ann. § 28-3-105 governs.
I. STANDARD OF REVIEW
A Tennessee Rule of Civil Procedure 12.02(6) motion to dismiss for failure to state a claim
tests the legal sufficiency of the complaint itself. Willis v. Dept. of Corrections, 113 S.W.3d 706,
710 (Tenn. 2003); Doe v. Sundquist, 2 S.W.3d 919, 922 (Tenn. 1999). The standard of appellate
review of a dismissal under Rule 12.02(6) requires that we take the factual allegations in the
complaint as true. Willis, 113 S.W.3d at 710. The trial court should grant a motion to dismiss only
“when it appears that the plaintiff can prove no set of facts in support of the claim that would entitled
the plaintiff to relief.” Willis, 113 S.W.3d at 710. The issue presented to us involves the
interpretation and application of statutes of limitations. Since review of the trial court’s
interpretation of a statute of limitations is a question of law, our review is de novo, without a
presumption of correctness. Fahrner v. SW Manufacturing, Inc., 48 S.W.3d 141, 144 (Tenn. 2001).
II. ANALYSIS
Tennessee Code Annotated § 28-3-104(a)(1) provides that actions for “injuries to the person”
must be commenced within one year after the cause of action accrued. When the action is for
“injuries to personal . . . property,” Tennessee Code Annotated § 28-3-105(1) provides the period
is three (3) years. The parties appear to agree that the action accrued upon Mr. Sudberry’s
termination. The question then is whether his action is for injury to Mr. Sudberry’s property or to
him personally.
In order to make this determination, we must look to the “gravamen” of the complaint.
Gunter v. Laboratory Corporation of American, 121 S.W.3d 636, 638 (Tenn. 2003); Tip’s Package
Store, Inc. v. Commercial Ins. Managers, Inc., 86 S.W.3d 543, 551 (Tenn. Ct. App. 2001). For
purposes of deciding which statute of limitation applies, the “gravamen” of the complaint is
determined on the basis of the claimed damage. Gunter, 121 S.W.3d at 641-42; Tip’s Package
Store, 86 S.W.3d at 551. Thus, although Mr. Sudberry has alleged various causes of action, that is
not the determinative factor. The applicability of either statute of limitation at issue herein must be
determined by the type of injury alleged because the legislature has defined the limitations period
of Tenn. Code Ann. §§ 28-3-104 and 105 by reference to the injury sustained.
Our Supreme Court in Gunter v. Laboratory Corporation of America, supra, has recently
reiterated how we are to distinguish injuries to the person under the one-year period of Tenn. Code
Ann. § 28-3-104 from injuries to property under Tenn. Code Ann. § 28-3-105. It is clear that our
courts have historically described “injuries to the person” in Tenn. Code Ann. § 28-3-104 as
encompassing more than simply bodily injury. Gunter, 121 S.W.3d at 642; Tip’s Package Store, 86
S.W.3d at 551.
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Inclusion of the phrase “injuries to the person” in Tenn. Code Ann. § 28-3-104 is intended
to provide a limitations period for actions brought for injuries caused by invasion of rights that
“inhere in man as a rational being” or rights that one is entitled to by simply being a person in the
eyes of the law. Gunter, 121 S.W.3d at 642 (quoting Brown v. Dunston, 219 Tenn. 291, 409 S.W.2d
365, 367 (1966). These rights are distinguished from rights that exist by virtue of property
ownership or contract. Gunter, 121 S.W.3d at 642 (quoting Brown v. Dunstan, 219, 409 S.W.2d
365, 367 (1966).
In this case, the injury from which all other alleged damages flow is the termination of Mr.
Sudberry’s employment. If Mr. Sudberry had a contract for continued employment or for
employment for a definite term that had not yet expired, then his injury arises by virtue of losing his
contract right, which is property. If, on the other hand, Mr. Sudberry did not have a contract of
continued employment, then his injury does not arise from a loss of a property or contractual interest
and is a personal injury.1
This conclusion is supported by the Tennessee Supreme Court’s decision in Weber v. Moses,
938 S.W.2d 387 (Tenn. 1986), wherein the Court decided which statute of limitations governs when
the tort of retaliation is alleged resulting in the loss of a job. In Weber, the plaintiff alleged that his
employer terminated his employment contract because the plaintiff hired a black woman. Id. at 389.
The employment contract at issue provided that it could be terminated by either party upon written
notice. Id. at 388. Thereafter, the plaintiff sued his employer for, among other things,2 the tort of
retaliatory discharge. Id. at 393. The court in Weber found that the statute of limitations for the tort
of retaliatory discharge is governed by the general tort statute of limitations of Tenn. Code Ann. §
28-3-104, which is one year. Id. at 393.
In reaching this conclusion, the Weber court favorably cited the Court of Appeals decision
in Headrick v. Union Carbide Corp., 825 S.W.2d 424 (Tenn. Ct. App. 1991). In Headrick, the
plaintiff filed a retaliatory discharge claim alleging she lost her job because she filed for workers’
compensation benefits. Id. at 425. She claimed lost wages as a result of losing her job. Id. We
believe the reasoning in Headrick is applicable to the issue before us:
To determine the real purpose of the claim, the court must look to the basis for
damages. Dunstan, 409 S.W.2d at 367; Bland v. Smith, 197 Tenn. 683, 277 S.W.2d
377 (1955). Plaintiff asserts her discharge deprived her of wages to which she would
otherwise be entitled as well as unspecified “damages.” Authorities indicate
damages in retaliatory discharge claims are for injuries personal to the employee.
1
W hile it is true that an individual has a “property interest in his labor,” Ladd v. Roane Hosiery, 556 S.W .2d
758, 760 (Tenn. 1977), this is the type of right an individual has by virtue of being a person, not by virtue of a special
legal status, such as a party to a contract.
2
Mr. W eber also brought a retalitory discharge claim under the Tennessee Human Rights Act, Tenn. Code Ann.
§ 4-21-311, which is governed by a one-year limitation period. Weber, 938 S.W .2d at 390.
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In Clanton v. Cain-Sloan Co., 677 S.W.2d 441 (Tenn. 1984), the court said an
employee at-will, like plaintiff, has an action for retaliatory discharge when the
employer discharges the employee for filing a workers’ compensation claim. The
court did not alter the definition of an at-will employee, however, and at-will
employees hired for an indefinite term may be discharged for any reason or no
reason. 677 S.W.2d at 443. To argue that plaintiff’s discharge damaged a property
interest in her continuing employment undoes the meaning of at-will employment.
To so hold would endow plaintiff with a property interest in her employment
that she did not possess. Cain-Sloan recognizes the tort of retaliatory discharge, not
as a way to insure employment but as a means to guard against retaliation for
asserting statutory rights to workers’ compensation benefits. Accordingly, without
a property interest in employment, the employee’s damages for discharge must
be personal.
In Brown v. Dunstan, 409 S.W.2d 365, the Tennessee Supreme Court distinguished
personal injuries from property damages as follows:
[I]t is then our conclusion that the phrase “injuries to the person” as
used in the instant statute is to be construed comprehensively and as
contemplating its application to actions involving injuries that are
other than physical. Its purpose is to include within that period of
limitation actions brought for injuries resulting from invasions of
rights that inhere in man as a rational being, that is, rights to which
one is entitled by reason of being a person in the eyes of the law.
Such rights, of course, are to be distinguished from those which
accrue to an individual by reason of some peculiar status or by virtue
of an interest created by contract or property.
In a retaliatory discharge case, the employer uses the threat of unemployment to deter
an employee from receiving benefits to which the employee is entitled merely by
being an employee injured on the job. Accordingly, “the invasion of rights” in a
retaliatory discharge is perforce personal.
Id. at 425-26, (emphasis added). The Court in Headrick also noted that damages for retaliatory
discharge were treated as personal injury damages for federal tax purposes. Id. at 426.
Thus, in deciding whether Tennessee Code Annotated § 28-3-105 applies to a tort action
where the alleged injury is loss of employment, the determinative consideration is whether the
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plaintiff had a contract for continued or future employment, i.e., whether the contract of employment
is for a definite term or terminable at will.3
We find that where the employment relationship is for a definite term, i.e. not terminable at
will, then an interest in an employment contract is damaged thereby triggering the three (3) year
period of Tenn. Code Ann. § 28-3-105. Otherwise, if the employment relationship is not for a
definite term and/or is terminable at will then no property interest in future employment exists to be
damaged thus falling under injury to the person pursuant to Tenn. Code Ann. § 28-3-104.
As discussed earlier, this appeal is from an order granting the defendants’ motion to dismiss.
Consequently, we must regard all factual allegations in the complaint as true and construe them in
the light most favorable to Mr. Sudberry. While the defendants’ argued that Mr. Sudberry’s
employment was terminable at will, there is nothing in the record at this stage regarding the basis
for this argument. In his complaint, Mr. Sudberry alleged that he had an express or implied contract
with Nissan for continued employment. We, therefore, construe the allegation of “continued
employment” to mean that Nissan or Mr. Sudberry could not terminate this contract at will.
Consequently, Mr. Sudberry alleged, at least as an alternative theory of recovery, that the actions of
defendants deprived him of his contract of continued employment with Nissan, which is an injury
to property.
Since the Mr. Sudberry alleged that his contract with Nissan was one for continued
employment, we find, for purposes of the motion to dismiss only, that he alleged damages caused
by loss of a contract and this claim is subject to the three (3) year limitations period of Tenn. Code
Ann. § 28-3-105. Dismissal of this part of plaintiff’s claim is reversed. Of course, the defendants
may later attempt to establish that Mr. Sudberry had no contract for continued employment, and, if
they are successful, his claims would be subject to dismissal because they were not filed within the
one-year statute of limitations.
3
W e are not persuaded by plaintiff’s argument that the three (3) year period of Tenn. Code Ann. § 28-3-105
automatically applies to any claim of inducement of breach of contract and unlawful interference with a business. First,
it is clear that the cause of action does not determine the applicability of a limitation period. The statutes at issue provide
limitations periods by reference to what is damaged. W e must do likewise. Further, none of the cases cited by plaintiff
appear to discuss the statute of limitations where the allegedly tortious act interfered with an employment relationship
that was terminable at will or of an indefinite time period. See Carruthers Ready-Mix, Inc. v. Cement M asons Local
Union, 779 F.2d 320, 324 (6th Cir. 1985) (involved action by subcontractor against union which was allegedly trying
to get general contractors to boycott the subcontractor); Harvey v. Martin, 714 F.2d 650, 651 (6th Cir. 1983)
(employment relationship at issue with U.S. Postal Service subject to civil service); Smith v. Rosenthal Collins Group,
LLC, 340 F.Supp2d 860, (W .D. Tenn. 2004) (plaintiff alleged an independent Contractor’s Agreement without further
detail); Edwards v. Travelers Insurance of Hartford, Conn., 563 F.2d 105, 115-16 (6th Cir. 1977) (alleged interference
with attorney/client relationship); Collins v. Greene County Bank, 916 S.W .2d 941, 947 (Tenn. Ct. App. 1955) (alleged
interference with business relationship and financial backing); Lyne v. Price, No. W2000-00870-COA-R3-CV, 2002 W L
1417177, (Tenn. Ct. App. June 27, 2002) (involved intentional interference with employment relationship terminable
at will but did not address statute of limitations issue).
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To the extent that Mr. Sudberry plead alternative claims that are based upon an employment
relationship of an indefinite term or terminable at will, such claims are governed by the one (1) year
period of Tenn. Code Ann. § 28-3-104. Dismissal as to those claims is affirmed.
III. CONCLUSION
The judgment of the trial court is affirmed in part, and reversed reversed in part, and the
matter is remanded. Costs are assessed against appellees, Royal & Sun Alliance, Investigations and
Intelligence Services, Inc., for which execution may issue if necessary.
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PATRICIA J. COTTRELL, JUDGE
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