Teresa Kocher v. Laua Bearden , 546 S.W.3d 78 ( 2017 )

05/15/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
April 4, 2017 Session1
TERESA KOCHER, ET AL. v. LAUA BEARDEN, ET AL.
Direct Appeal from the Circuit Court for Shelby County
No. CT-003028-15 Rhynette N. Hurd, Judge
No. W2016-02088-COA-R3-CV
This appeal involves a third-party’s attempt to intervene in this case in order to gain
access to documents in the record, as the entire record was previously sealed by the trial
court pursuant to an agreed order between the original parties. The trial court denied the
third-party’s motion to intervene and also denied its motion to modify the order sealing
the record. For the following reasons, we reverse the trial court’s denial of the motion to
intervene, vacate its denial of the motion to modify the protective order sealing the
record, and remand for further proceedings.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed in
part, Vacated in part, and Remanded
BRANDON O. GIBSON, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and W. MICHAEL MALOAN, SP. J., joined.
Andre Bernard Mathis and John Irving Houseal, Jr., Memphis, Tennessee, for the
appellant, Durham School Services, LP.
Hardin Chase Pittman, William Anderson Hampton, and R. Layne Holley, Germantown,
Tennessee, for the appellees, Laua Bearden and Sheryl Bearden.
John R. Holton, Memphis, Tennessee, for the appellees, Timothy Kocher and Teresa
Kocher.
Darryl D. Gresham, Memphis, Tennessee, Guardian ad Litem.
1
Oral Argument in this case was heard at the University of Tennessee at Martin.
OPINION
I. FACTS & PROCEDURAL HISTORY
The original parties involved in this proceeding were Mr. and Mrs. Laua Bearden
(“the Beardens”) and Mr. and Mrs. Timothy Kocher (“the Kochers”) and their minor son.
On October 23, 2014, the Kochers’ thirteen-year-old son was riding his bicycle to school
when he was struck by a truck driven by Mr. Bearden. On July 20, 2015, the Kochers
and Beardens filed a “Joint Petition for Approval of Minor’s Settlement” in the circuit
court of Shelby County. That same day, the circuit court entered an “Agreed Order
Sealing File and Barring Public Access to Hearings.”2 The agreed order stated,
This case is before the Court upon the joint requests of the parties to seal
the judicial record of this case from public inspection and to bar public
access to the courtroom while the Court hears any matters in this case[.]
Having duly considered the contemporaneous Joint Petition for Approval of
Minor’s Settlement and the statements of counsel for the parties, the Court
finds the requests well-taken due to the sensitive nature of the evidence and
factual issues before the Court and the privacy interests of the instant minor
[] and his family[.]
The agreed order required the court clerk to seal the judicial record and withhold it from
public access, “barring all but the parties and the Guardian ad Litem from accessing the
record.”3
Two months later, on September 23, 2015, the Kochers filed a separate lawsuit in
circuit court against Durham School Services, LP (“Durham”), asserting claims
individually and as parents, guardians, and next friends of their son. Durham provided
school bus services to students at the child’s middle school. The Kochers alleged that the
bus to which their son was assigned was negligently operated on the morning of the
accident and left their son’s bus stop before the designated time. According to the
Kochers, the child returned home and told his father that he was going to ride his bicycle
to school, and he was struck by a truck before he reached the school. The Kochers’
2
When documents are ordered to be filed “under seal,” it generally means that the document in question is
filed with the court clerk as part of the court’s record in the case, but the clerk and the parties are
prohibited from showing the document to anyone not a party to the lawsuit. In re NHC-Nashville Fire
Litig., 293 S.W.3d 547, 561 (Tenn. Ct. App. 2008). The sealed documents are often kept in an opaque
covering, taped shut, in the court clerk’s file, and designated as “under seal.” Id. at 562 n.7.
3
This agreed order is the only document that appears in the appellate record from the original proceeding
between the Kochers and the Beardens. The style of the case indicates that the petition was brought by
the Kochers as parents, guardians, and next friends of their son, and as “Co-Petitioners/Plaintiffs,” and the
Beardens were designated as the “Co-Petitioner[s]/Defendant[s].”
2
complaint alleged that Durham’s actions proximately caused their child’s injuries and
damages. The complaint further alleged that “there are no other persons or entities, other
than [Durham], who are responsible, either directly or indirectly, for the injuries and
damages to Plaintiffs herein.”
Durham removed the lawsuit to the United States District Court for the Western
District of Tennessee. There, Durham filed an answer asserting that the conduct of other
persons, including the driver of the vehicle that struck the child, proximately caused the
child’s injuries. Durham asserted the comparative fault of the driver, Mr. Bearden.
Discovery ensued. Durham propounded interrogatories asking the Kochers to identify all
documents they sent to or received from the driver of the vehicle (or his insurer). They
also asked whether the Kochers had entered into any compromise or settlement with the
driver. The Kochers refused to answer these interrogatories, claiming that such
information was subject to a court order prohibiting disclosure. Durham also served the
Kochers with requests for production of documents, seeking any documents exchanged
with the driver, complaints they filed against him, or settlement agreements with him, but
the Kochers again claimed that such information was subject to a court order prohibiting
disclosure. Durham also asked for any documents filed in the circuit court case between
the Kochers and the Beardens, but the Kochers again refused, stating that the record was
“filed under seal.”
Durham subsequently filed a motion to compel discovery. The motion was heard
by Chief United States Magistrate Judge Diane Vescovo. Magistrate Judge Vescovo
concluded that the documents and information sought by Durham’s interrogatories and
requests for production of documents were relevant under Rule 26(b)(1) of the Federal
Rules of Civil Procedure. However, at the time of the hearing, the agreed order sealing
the record in the Kocher-Bearden case remained sealed along with the rest of the record,
so the extent of its protection was not clear to Magistrate Judge Vescovo or to Durham.
As a result, Magistrate Judge Vescovo directed Durham
to first file a motion with the Shelby County Circuit Court in Docket No.
CT-003028-15 to unseal the case to obtain the information and documents
sought in [the discovery requests] and to determine if the order sealing
Docket No. CT-003028-15 precludes the plaintiffs from responding to
discovery requests propounded in this case, particularly as to documents
that are not on file with the Shelby County Circuit Court, such as
correspondence predating the filing of the Circuit Court case, sworn
statements taken in conjunction with the matter giving rise to the Circuit
Court case, or settlement agreements, if any, or to discussing the facts of
the case in response to discovery requests or depositions.
3
The motion to compel discovery was denied without prejudice.
On August 25, 2016, Durham filed a motion to intervene in the Kocher-Bearden
case in Shelby County circuit court. Durham sought permissive intervention pursuant to
Tennessee Rule of Civil Procedure 24.02 “in order to gain access to certain sealed
documents filed in this matter.” Specifically, Durham sought intervention “for the
limited purpose of seeking to unseal these proceedings to obtain information and
documents that Judge Vescovo has found are relevant to the lawsuit filed by Plaintiffs
against Durham.” Durham asserted that common questions of fact and law existed and
that its intervention would not unduly delay or prejudice the adjudication of the rights of
the original parties. Durham referenced “the general public right of access to courts and
their records.”
Durham attached a proposed “Intervenor’s Complaint,” indicating that it would
seek an order either unsealing the record or modifying the agreed order to allow Durham
to access the information and documents filed in the case solely for purposes of the
lawsuit filed against it.4 Durham emphasized that it did not intend for the information to
be made available to the general public and suggested that the “the seal can just be
limited to the original parties to this lawsuit and Durham.” Durham also suggested that a
protective order could be entered in federal court to prevent exposure of the protected
information. Durham also attached to its motion to intervene the complaint filed by the
Kochers against Durham, the answer filed by Durham asserting comparative fault, the
Kochers’ discovery responses, and Judge Vescovo’s order.
The Kochers and the Beardens opposed Durham’s attempt to intervene and its
attempt to modify the agreed order sealing the record. According to the response filed by
the Beardens, the original matter had already been concluded by a settlement that was
approved by the court and completed by the Kochers, Beardens, and the Beardens’
insurance carrier. The Beardens argued that permissive intervention was prohibited
because no question remained for adjudication in the Kocher-Bearden case. They
claimed that Durham was attempting to inject new claims or issues in the case. The
Beardens acknowledged the pending federal case involving Durham’s allegedly negligent
operation of the school bus but insisted that no common legal or factual question existed
for resolution. The Beardens suggested that the Kocher-Bearden case involved “a
different theory of liability, Mr. Bearden’s negligent driving.” They also argued that
permitting Durham to intervene would substantially prejudice the original parties, their
insurer, and the guardian ad litem, while only furthering Durham’s private interest in
discovery.
4
Durham later filed a separate motion to modify the order sealing the record apart from its motion to
intervene.
4
The circuit court held a hearing on September 14, 2016, in order to consider
Durham’s motion to intervene and its motion to modify the agreed order sealing the case.
The circuit court denied both motions, stating, “Durham has not met its burden to
establish the common legal or factual questions necessary to sustain permissive
intervention under T.R.C.P. 24.02 or its burden to justify modification of the Court’s
prior protective order of July 20, 2015.” However, for the benefit of the district court, the
circuit court judge read into the transcript the provisions of the agreed order sealing the
record. Durham timely filed a notice of appeal to this Court.
While this appeal was pending, the discovery disputes continued in district court.5
Durham filed a renewed motion to compel discovery, which a magistrate judge granted in
part, requiring the Kochers to reveal the monetary settlement amount that resolved their
claim against the Beardens. The magistrate judge concluded that the agreed order from
circuit court “only sealed from the public the following documents: the joint petition, the
order approving the joint petition, the guardian ad litem’s report, and the agreed order
sealing the file.” The magistrate judge’s ruling was reviewed and upheld by the district
court judge. He concluded that “disclosure of the settlement amount does not conflict
with the Order Sealing the Case entered . . . in the related Circuit Court matter” as it
“made no reference to divulging the contents of the settlement agreement.”
At oral argument before this Court, Durham’s attorney explained that the issues
raised in this appeal are not moot because Durham still seeks access to the documents
that were filed in the circuit court case and remain under seal.
II. ISSUES PRESENTED
Durham presents the following issues for review on appeal:
1. Whether the trial court erred in finding that Durham was not entitled
to permissive intervention pursuant to Rule 24.02 when Durham sought to
modify the order sealing the case; and
2. Whether the trial court erred in denying Durham’s motion to modify
the agreed order sealing the case.
For the following reasons, we reverse the trial court’s denial of the motion to intervene,
vacate its denial of the motion to modify the order sealing the record, and remand for
further proceedings.
5
Durham filed a motion to consider post-judgment facts with regard to the order entered by the district
court. That motion is hereby granted.
5
III. DISCUSSION
A. Motion to Intervene
Tennessee Rule of Civil Procedure 24.02 governs permissive intervention.
Durham sought to intervene pursuant to Rule 24.02(2), which provides:
Upon timely application anyone may be permitted to intervene in an action:
. . . (2) when an applicant’s claim or defense and the main action have a
question of law or fact in common. In exercising discretion the court shall
consider whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties.
Tenn. R. Civ. P. 24.02(2). Simply put, “[i]f the would-be intervenor’s claim or defense
contains a question of law or fact that is also raised by the main action then the
requirement of the rule has been satisfied and the trial court is afforded discretion to
permit intervention.” Ballard v. Herzke, 924 S.W.2d 652, 656 (Tenn. 1996) (citing
Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, 7C Federal Practice and
Procedure Civil 2d, § 1911, pp. 358-63 (West 1986)).
Ballard is procedurally analogous to this case and particularly instructive with
regard to the issue before us. In Ballard, a newspaper and group of journalists filed a
motion to intervene in a case for the purpose of requesting that the trial court rescind a
protective order so that all proceedings and records would be open to the press and the
public. Id. The trial court allowed them to intervene and modified the protective order.
Id. The case eventually made its way to the Tennessee Supreme Court. The court first
addressed the issue of permissive intervention. The court concluded that “third parties,
including media entities, should be allowed to intervene to seek modification of
protective orders to obtain access to judicial proceedings or records.” Id. at 657 (citations
omitted). The court continued,
In such circumstances, intervention “is not dependent on, nor is it
determined by, the status or identification of the parties nor the nature of
the dispute.” [citation omitted] Moreover, the question of intervention is
collateral to, and does not have any bearing on, the primary issue—
modification of the protective order. What is necessary is that the proposed
intervenor demonstrate that its claims have “a question of law or fact in
common” with the main action.
Here, as in all such cases, by virtue of the fact that the media entities
challenge the validity of the protective order entered in the main action,
6
they meet the requirement of Rule 24.02, that their claim have “a question
of law or fact in common” with the main action.
Id. The court explained that once a common question of law or fact is established, the
decision to allow intervention is a matter entrusted to the trial court’s discretion. Id. at
658.6
Thus, Ballard and other Tennessee cases have “firmly establishe[d] the right of the
public, including the media, to intervene in court proceedings for the purpose of attending
the proceedings, or for the purpose of petitioning the Court to unseal documents and
allow public inspection of them.” Knoxville News-Sentinel v. Huskey, 982 S.W.2d 359,
362 (Tenn. Crim. App. 1998). In the case before us, the proposed intervenor, Durham,
challenges the continuing validity of the agreed order sealing the record. Applying the
reasoning of Ballard, we conclude that Durham meets the requirement of Rule 24.02 of a
question of law or fact in common with the main action. Accordingly, we disagree with
the trial court’s finding that “Durham has not met its burden to establish the common
legal or factual questions necessary to sustain permissive intervention under T.R.C.P.
24.02.”
We also disagree with the appellees’ argument on appeal that no question or issue
regarding the protective order remained pending or ongoing for the trial court to
adjudicate. See Ballard, 924 S.W.2d at 659 (“Once entered, protective orders need not
remain in place permanently, [] and their terms are not immutable. It is well-settled that a
trial court retains the power to modify or lift a protective order that it has entered.”);
Autin v. Goetz, No. W2016-00099-COA-R3-CV, 2017 WL 702494, at *18 (Tenn. Ct.
App. Feb. 22, 2017) (no perm. app. filed) (concluding that “the trial court’s well-settled
power to modify a protective order extends for the life of the protective order” and “is not
terminated by the dismissal of the underlying cause of action”). The trial court retains
supervisory power over its files and records. Ballard, 924 S.W.2d at 662 n.6.
Because a common question of law or fact existed, the trial court was afforded
discretion to permit intervention. See id. at 656. Rule 24.02 provides that “[i]n
exercising discretion the court shall consider whether or not the intervention will unduly
delay or prejudice the adjudication of the rights of the original parties.” Despite the
appellees’ arguments to the contrary, we conclude that Durham did not seek to inject any
6
“A trial court abuses its discretion when it applies an incorrect legal standard, reaches an illogical
conclusion, bases its decision on a clearly erroneous assessment of the evidence, or employs reasoning
that causes an injustice to the complaining party.” State v. Davis, 466 S.W.3d 49, 61 (Tenn. 2015) (citing
State v. Clark, 452 S.W.3d 268, 287 (Tenn. 2014)).
7
new claims or issues in the Kocher-Bearden case, such as discovery or issues of fault.
The Kocher-Bearden case was already settled. Durham sought to intervene only for the
limited purpose of modifying the agreed order to gain access to the documents in the
record. We discern no undue delay or prejudice to the adjudication of the rights of the
original parties if intervention is permitted under the circumstances of this case. We
therefore reverse the trial court’s decision denying Durham’s motion to intervene.7
B. Motion to Modify the Protective Order
As noted above, even though the trial court denied Durham’s motion to intervene,
it stated in its order that “Durham has not met its burden to establish the common legal or
factual questions necessary to sustain permissive intervention under T.R.C.P. 24.02 or its
burden to justify modification of the Court’s prior protective order of July 20, 2015.”
(Emphasis added.) Accordingly, we will also consider the issue of modifying the
protective order.
“‘[T]he courts of this country recognize a general right to inspect and copy public
records and documents, including judicial records and documents.’” In re NHC-
Nashville Fire Litig., 293 S.W.3d at 560 (quoting Nixon v. Warner Commc’ns, Inc., 435
U.S. 589 (1978)). “For more than a century, Tennessee courts have recognized the
public’s right to inspect governmental records.” Tennessean v. Metro. Gov’t of Nashville,
485 S.W.3d 857, 864 (Tenn. 2016) (citing State ex rel. Wellford v. Williams, 75 S.W.
948, 959 (Tenn. 1903)). In Tennessee, “[t]here is a presumption of openness for
governmental records.” Id. The Tennessee Constitution expressly provides that “all
courts shall be open.” Tenn. Const. Art. I, § 17.8 “The rule that judicial proceedings,
including judicial records, are presumptively open is well established in the Constitution
7
We reject the appellees’ suggestion that a party seeking to intervene must have “sufficiently aligned or
common” interests with an original party, pursuant to the Ballard decision. They suggest that Durham
cannot intervene in this case because its interests are contrary to those of the Beardens and Kochers.
However, a close reading of the Ballard decision reveals that it does not establish such a rule.
The defendants in Ballard had argued that intervention was not necessary because the existing
parties adequately represented the interests of the would-be intervenor. Id. at 657; compare Tenn. R. Civ.
P. 24.01 (requiring consideration of whether the proposed intervenor’s interest is “adequately represented
by existing parties” for an intervention as of right). The supreme court disagreed with the defendants and
found intervention appropriate because the intervenor’s interest was “not identical” to that of the existing
parties. Id. at 657-58 (emphasis added). The court did not hold that intervention is prohibited if the
intervenor has an interest contrary to the original parties.
8
The appellees argue that this Court cannot consider this Constitutional provision or caselaw that was not
cited by Durham in the trial court. We disagree. “It is the duty of this Court to apply the controlling law,
for which there is a basis in the record, whether or not cited or relied upon by the parties.” Coffee v.
Peterbilt of Nashville, Inc., 795 S.W.2d 656, 658 n.1 (Tenn. 1990).
8
of Tennessee and case law.” Baugh v. United Parcel Serv., Inc., No. M2012-00197-
COA-R3-CV, 2012 WL 6697384, at *6 (Tenn. Ct. App. Dec. 21, 2012); see, e.g., In re
NHC-Nashville Fire Litig., 293 S.W.3d at 571 (explaining that the permissive intervenor
had “a presumptive right of access to documents filed in court”). “[T]he Tennessee
Supreme Court has recognized a qualified right of the public, founded in common law
and the First Amendment to the United States Constitution, to attend judicial proceedings
and to examine the documents generated in those proceedings.” Huskey, 982 S.W.2d at
362.
Still, the right of access is not absolute, and “[c]ourts have inherent power to seal
their records when privacy interests outweigh the public’s right to know.”9 Id. at 362 n.1.
Every court has “inherent supervisory authority” over its own records and files. In re
Lineweaver, 343 S.W.3d 401, 413 (Tenn. Ct. App. 2010); In re NHC-Nashville Fire
Litig., 293 S.W.3d at 561. Access may be denied where court files might become
vehicles for improper purposes, such as promoting public scandal or publication of
libelous statements. In re NHC-Nashville Fire Litig., 293 S.W.3d at 561.
Protective orders strike a balance between these public and private concerns.
Ballard, 924 S.W.2d at 658. “Protective orders are intended to offer litigants a measure
of privacy, while balancing against this privacy interest the public’s right to obtain
information concerning judicial proceedings.” Id. Any restriction on public access to
judicial proceedings and documents “must be narrowly tailored to accommodate the
competing interest without unduly impeding the flow of information.” Huskey, 982
S.W.2d at 363.
“The presumption of openness may be overcome only by an overriding
interest based on findings that closure is essential to preserve higher values
and is narrowly tailored to serve that interest. The interest is to be
articulated along with findings specific enough that a reviewing court can
determine whether the closure order was properly entered.”
9
In Ballard, our supreme court discussed the standards governing the issuance of a protective order in the
context of discovery pursuant to Tennessee Rule of Civil Procedure 26.03. See Ballard, 924 S.W.2d at
658; In re NHC-Nashville Fire Litig., 293 S.W.3d at 563 (recognizing that “Ballard dealt exclusively with
discovery filed with the court and did not address protective orders on unfiled discovery”). However, the
case before us does not involve a protective order entered for purposes of discovery, as there was no
discovery between the Kochers and the Beardens. Instead, the trial court exercised its inherent authority
to seal its record. We find some principles enunciated in Ballard to be generally applicable to protective
orders like the one entered in this case but do not deem it appropriate to apply Ballard’s Rule 26.03
analysis to the protective order before us.
9
In re NHC-Nashville Fire Litig., 293 S.W.3d at 560 (quoting State v. Drake, 701 S.W.2d
604, 607-08 (Tenn. 1985)). “Ballard is but the last in a line of Tennessee cases
recognizing the public’s right to intervene and examine judicial proceedings when the
public’s right to know can be balanced against the right of litigants to a fair adjudication
of the substantive civil or criminal proceeding.” Huskey, 982 S.W.2d at 362.
In sum, the reason for sealing judicial records must be “compelling.” Baugh, 2012
WL 6697384, at *7 (quoting In re NHC, 293 S.W.3d at 567). This Court has
“caution[ed] trial courts not to seal records simply because a party requests this be done.”
Warwick v. Jenkins, Habenicht & Woods, PLLC, No. E2012-00514-COA-R3-CV, 2013
WL 1788532, at *1 n.1 (Tenn. Ct. App. Apr. 25, 2013). “In order to maintain public
confidence in our judicial system it is important that litigation remain open and accessible
to the public absent a valid reason for keeping information from the public eye.” Id.
In the case at bar, the appellate record contains the agreed order sealing the record
“due to the sensitive nature of the evidence and factual issues before the Court and the
privacy interests of the instant minor [] and his family” in addition to the trial court’s
order denying modification because Durham failed to meet “its burden to justify
modification.” On appeal, the appellees assert that this matter involves private litigants
and matters of private concern. They represent that the sealed record contains “the Joint
Petition for Approval of Minor’s Settlement; the Order Appointing the Guardian ad
Litem; the Agreed Order Sealing the File; the Order Granting the Joint Petition; and the
Report of the Guardian ad Litem, including all exhibits.” The appellees argue that
disclosure of the currently sealed documents would result in “embarrassment and undue
burden” to the Beardens and impact their financial privacy because “insurance coverage
correlates to a policy holder’s financial net worth.” They claim that the Kochers’ son is
“a vulnerable minor” who should remain “safe from those who might wrongfully exploit
information about his settlement.” They also argue that revelation of the sealed
documents would breach the guardian ad litem’s duty of confidentiality and
“detrimentally expose the private claim-management practices of [the Beardens’ liability
insurer].”
This Court is not privy to the documents and information in the record that the
trial court deemed appropriate to seal. As a result, we are unable to determine precisely
how or if revelation of the information would prejudice the appellees if unsealed. Even
assuming for the sake of argument that there is a valid reason for sealing the documents
from the view of the general public, we discern no reason why Durham should be
prevented from obtaining the documents solely for the limited purpose of defending itself
in the Kochers’ lawsuit. At the same time, we recognize that “the trial court is in the best
10
position to weigh fairly the competing needs and interests of the parties” when
considering a protective order. Ballard, 924 S.W.2d at 661. Due to the lack of detailed
information in the appellate record about the sealed documents and the trial court’s lack
of findings to justify the decision to deny the motion for modification of the protective
order, we deem it appropriate to vacate the trial court’s denial of the motion and remand
for the trial court to consider the issue in light of the principles discussed in this opinion.
See, e.g., Baugh, 2012 WL 6697384, at *7 (reversing the placement of settlement
documents under seal where the trial court did not state any reason for sealing the
settlement documents, as we had “no basis upon which to determine that the reason for
sealing the records was compelling”). If the trial court determines on remand that the
record should remain sealed due to a compelling reason, that reason “is to be articulated
along with findings specific enough that a reviewing court can determine whether the
closure order was properly entered.” In re NHC-Nashville Fire Litig., 293 S.W.3d at 560
(quotation omitted).
IV. CONCLUSION
For the aforementioned reasons, the decision of the trial court is hereby reversed in
part, vacated in part, and remanded for further proceedings. Costs of this appeal are
taxed to the appellees, Laua Bearden, Sheryl Bearden, Timothy Kocher, and Teresa
Kocher, for which execution may issue if necessary.
_________________________________
BRANDON O. GIBSON, JUDGE
11