Subject Matter: Tennessee Legislation
Following up on the proposed tort reform bills in Tennessee, bills as amended, requiring the loser to pay attorneyâ€™s fees when a motion to dismiss for failure to state a claim is granted (HB 3124) and limiting vicarious liability for punitive damages (HB 3125) advanced from a House Judiciary subcommittee today and could be voted on as early as next week in full committee. Below are summaries of the bills and some comments about the present law related to the punitive damages and vicarious liability. Your comments/questions are welcome and have a nice rest of the week. ~Rebecca
HB 3125 by *Dennis. (*SB 2637 by *Kelsey, Johnson.)
Remedies and Special Proceedings – As introduced, authorizes the award of punitive damages in a civil action against a defendant based on vicarious liability under certain circumstances. – Amends TCA Title 29.
This bill revises the present law provisions regarding the awarding of punitive damages to allow such an award based on vicarious liability, in certain circumstances.
Generally under present law, in a civil action in which punitive damages are sought punitive damages may only be awarded if the claimant proves by clear and convincing evidence that the defendant against whom punitive damages are sought acted maliciously, intentionally, fraudulently or recklessly. In all cases involving an award of punitive damages, the trier of fact, in determining the amount of punitive damages, must consider, to the extent relevant, certain factors, such as: the defendant’s financial condition and net worth; the nature and reprehensibility of the defendant’s wrongdoing; the duration of the defendant’s misconduct and whether the defendant attempted to conceal such misconduct; and any other circumstances shown by the evidence that bear on determining a proper amount of punitive damages.
Punitive or exemplary damages may not exceed an amount equal to the greater of:
(1) Two times the total amount of compensatory damages awarded; or
The limitation on the amount of punitive damages does not apply to actions brought for damages or an injury: if the defendant had a specific intent to inflict serious physical injury, and the defendant’s intentional conduct did, in fact, injure the plaintiff; or if the defendant intentionally falsified, destroyed or concealed records containing material evidence with the purpose of wrongfully evading liability in the case at issue
The culpability of a defendant for punitive damages whose liability is alleged to be vicarious must be determined separately from that of any alleged agent, employee or representative.
This bill adds that punitive damages may be awarded against a defendant based on vicarious liability for the acts or omissions of an agent or employee only if the finder of fact determines by special verdict based on clear and convincing evidence that:
(1) The act or omission was committed by someone employed in a management capacity and acting within the scope of employment;
(2) The defendant was reckless in hiring, retaining, supervising or training the agent or employee and such recklessness was the proximate cause of the act or omission that caused the loss or injury; or
(2) The defendant authorized, ratified or approved the act or omission with knowledge or conscious disregard for the loss or injury.
(1) Specifies that it does not expand or increase the scope of vicarious liability or punitive damages liability under state law; and
(2) Defines "someone employed in a management capacity" as a management-level employee with the stature and authority to set policy and exercise control, discretion, and independent judgment over a significant scope of the employer’s business and where the alleged act or omission warranting punitive damages by such management-level employee was directly within the scope of such authority.
HB 3124 by *Dennis. (*SB 2638 by *Johnson, Ketron.)
Civil Procedure – As introduced, removes judicial discretion to apportion costs and permits recovery of certain litigation costs by the successful party on motions to dismiss. – Amends TCA Title 20; Title 25; Title 27 and Title 29.
Authorizes the presiding judge, in all civil cases and whether tried by a jury or before the court without a jury, to adjudge costs between the litigants.
Requires the court in a civil case, on a trial court’s granting or denial of a motion to dismiss, to award costs and reasonable and necessary attorney’s fees to the prevailing party. Such costs must include all reasonable and necessary litigation costs actually incurred due to the proceedings, including court costs, attorneys’ fees, investigation expenses, deposition costs, reasonable fees for not more than two testifying expert witnesses, court reporter fees, interpreter fees, and guardian ad litem fees. However, this bill would not apply to:
(1) Actions by or against the state, other governmental entities, or public officials acting in their official capacity or under color of law; or
(2) Actions by pro se litigants, except that the court would have discretion to award reasonable costs and attorneys’ fees where the court determines that the pro se party acted unreasonably in bringing the dismissed claim.
An award of costs and attorneys’ fees pursuant to this bill may be made only after all appeals have been exhausted, and attorneys’ fees must be stayed until a final decision that is not subject to appeal is rendered. The party against whom a final judgment is rendered would be responsible for the attorneys’ fees of the prevailing party.
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