Limits of Waiver Rule for Minor Medical Expenses
One of the primary issues in our upcoming minor liability waiver interlocutory appeal is whether a parent can waive their right to recover a minor's medical expenses after the parent has signed a waiver. We recently found a case, Grant v. Kia Motors Corp., ___ F.Supp.3d ___, 2016 WL 6247319 (E.D. Tenn. May 10, 2016), which provides an excellent analysis of the so-called waiver rule in Tennessee and, perhaps more importantly, the limits of the same. Here is the pertinent discussion:
In the alternative, Plaintiff Grant argues that even if her individual claims are barred by the statute of repose, she “can still recover medical expenses through the minor children's claims.” (Doc. 78 at 5). Relying primarily on the Tennessee Court of Appeals decision in Palanki ex rel. Palanki v. Vanderbilt Univ., 215 S.W.3d 380 (Tenn. Ct. App. 2006), Plaintiff Grant claims that Tennessee has adopted the “waiver rule” whereby a parent can recover a child's pre-majority medical expenses in a civil action brought on behalf of the minor child by and through the parent as next friend. Indeed, the Palanki court expressly recognized that in a previous case, the Tennessee Court of Appeals “adopted the waiver rule and held that ‘a child under circumstances where the parent has acted as next friend may maintain an action for his medical expenses provided that [the parent] has paid for them ... or is legally obligated to pay them.”10 Id. at 394 (quoting11 Smith v. King, 1984 WL 586817 at *2 (Tenn. Ct. App. Sept. 21, 1984)). This “waiver rule” has been cited approvingly, albeit in dictum, by the Tennessee Court of Appeals as recently as 2015. See Neale v. United Way of Greater Kingsport, 2015 WL 4537119 at *7 (Tenn. Ct. App. July 28, 2015) (“Under the waiver rule, ‘a child under the circumstances where the parent has acted as next friend may maintain an action for his medical expenses provided that [the parent] has paid for them ... or is legally obligated to pay them.’ ”) (quoting Palanki, 215 S.W.3d at 394)). The Tennessee Court of Appeals, therefore, would likely permit the minor Plaintiffs in this action to bring claims for their pre-majority medical expenses through their mother, Plaintiff Grant, as next friend.
This Court, sitting in diversity, must follow state law as announced by the Supreme Court of Tennessee. See Hirsch v. CSX Transp., Inc., 656 F.3d 359, 362 (6th Cir. 2011). Where, as here, “a state appellate court has resolved an issue to which the high court has not spoken, we will normally treat [those] decisions ... as authoritative absent a strong showing that the state's highest court would decide the issue differently.” Kirk v. Hanes Corp. of North Carolina, 16 F.3d 705, 707 (6th Cir. 1994) (emphasis in original) (internal quotation marks omitted); see also Puckett v. Tennessee Eastman Co., 889 F.2d 1481, 1485 (6th Cir. 1989) (“Where a state's highest court has not spoken on a precise issue, a federal court may not disregard a decision of the state appellate court on point, unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.”). For the reasons stated supra Section IV.A.1 and those that follow, the Court is convinced that the Supreme Court of Tennessee would not apply the waiver rule as announced in Palanki to the case at bar.
The extraordinary nature of this finding warrants an in-depth discussion of the history and evolution of the so-called waiver rule, which finds its roots in Smith v. King, 1984 WL 586817 (Tenn. Ct. App. Sept. 21, 1984). Therein, Barbara Ellen Smith, a minor, filed a claim, by her parents as next friends, for personal injuries sustained during a school bus crash. Ultimately, the court concluded,
[u]pon considering the foregoing cases and particularly Wolfe, we are persuaded that Tennessee has adopted the waiver rule and that a child under circumstances where the parent has acted as next friend may maintain an action for his medical expenses provided that he has paid them, as suggested in Burke, or is legally obligated to pay them.12
Id. at *2. The above-quoted sentence suffers from a distinct lack of intra-sentence punctuation and an overreliance on pronouns; at first blush, therefore, it is unclear whether the Smith court intended for the waiver rule to apply to situations in which the parent has paid for or is legally obligated to pay medical expenses, or if the court meant that the child must have paid for or be legally obligated to pay such expenses. The Palanki court resolved this ambiguity in favor of the former, quoting the Smith opinion as follows: “a child under circumstances where the parent has acted as next friend may maintain an action for his medical expenses provided that [the parent] has paid for them ... or is legally obligated to pay them.” Palanki, 215 S.W.3d at 394 (quoting Smith, 1984 WL 586817 at *2). As Defendant KMC identifies, however, a more thorough analysis of Smith and the cases cited therein reveals that the Palanki court should have inserted “the child” into the brackets instead of “the parent.”
The Smith opinion first singles out Wolfe v. Vaughn, 177 Tenn. 678, 152 S.W.2d 631 (1941), as “particularly” instructive. In Wolfe, Effie Vaughn, a six-year-old, was struck and seriously injured by an automobile. She brought suit, by and through her grand uncle as next friend, and a jury awarded her $5,000 for the injuries she sustained and an additional $2,000 for medical expenses.Defendant's primary argument on appeal was that plaintiff should not have been awarded the $2,000 for medical expenses because “the law confers no cause of action upon an infant for such expenses.” Id. at 633. The Wolfe court did not contest this legal argument, noting that a tort committed against a minor “gives rise to two causes of action, one on behalf of the child for pain and suffering, his permanent injury, and impairment of earning capacity after attaining majority, the other on behalf of the parent for loss of services during minority, and expenses of treatment.” Id.The court, however, recognized that Effie's mother was dead, and that her father was “a non compos.” Id. “It thus appear[ed] that she [had] no mother and her father [was] civilly dead; so that unless she could sue for these necessary expenses there was no one who could do so, and certainly the defendants were liable to some one [sic] therefor.” Id. This led the court to allow the minor to recover her pre-majority medical expenses. Id. at 634. (“Upon principle we think that in a case of this character where a child has no parent who can sue for such expenses that she can sue for and recover the same.”). Accordingly, the Wolfe court clearly addressed a situation in which the parents neither paid for nor were legally responsible for the child's medical expenses.
Next, the Smith court's proviso “provided that he has paid them,” references Burke v. Ellis, 105 Tenn. 702, 58 S.W. 855 (1900). In Burke, the Supreme Court of Tennessee held that the trial court erred where, in an action brought by a minor through his next friend, the trial judge instructed the jury that medical expenses incurred by the father for the minor's care could form part of the damage award. The Court elaborated as follows:
It will be seen that the trial judge gives the following elements as entering into the estimate of damages: (1) Sufferings; (2) loss of time; (3) medical expenses incurred; (4) permanent injuries. It is not alleged or shown that the boy incurred any expenses for medical services. It is alleged these were incurred by the father. Such an element was not proper in estimating the damages in a case brought like this, by next friend, for the minor; and, while there is no proof that the child paid any expenses for medical treatment, there is a statement that such expenses were incurred and paid by the father, and the charge was calculated to lead the jury to believe or infer that these expenses incurred and paid by the father might be taken into the estimate in fixing the damages. This was error ... Whether the jury, in finding a round amount of damages, gave any part of it for medical attention and loss of time, we cannot know, but they were warranted by the charge in doing so. This was error.
Id. at 857 (emphasis added). Thus, Burke unmistakably stands for the proposition that it is improper for a jury to consider medical expenses as relevant to damages where, as here, a minor brings claims by next friend. Moreover, by explicitly mentioning twice that there is no proof that the child paid any expenses for medical treatment, the court implies that the outcome may be different if such proof were presented. Accordingly, where the Smith court says that the waiver rule applies to permit a child to recover medical expenses “provided that he has paid them, as suggested in Burke,” Smith, 1984 WL 586817 at *2, it is clear that the “he” to which the Smith court referred was intended to be “the child.”
The Smith court further concluded that the waiver rule applies in a child's cause of action, brought by and through next friend, “provided that he ... is legally obligated to pay them.” Id. In a footnote supporting this proviso, the court explains that “[a]n unemancipated child living at home and being supported by his parent is not necessarily liable for necessaries furnished him,” and cites to Gardner v. Flowers, 529 S.W.2d 708 (Tenn. 1975) and Foster v. Adcock, 161 Tenn. 217, 30 S.W.2d 239 (1930). Smith, 1984 WL 586817 at *2 n.4. Both Gardner and Foster analyze whether a child is legally obligated to pay a debt. Gardner, 529 S.W.2d at 711 (“We agree with what appears to be the majority rule and hold that the inability of parents to pay for essential medical treatment for an infant renders such treatment a necessary for which the infant is liable.”) (emphasis added); Foster, 30 S.W.2d at 240 (“We are of [the] opinion that the obligation here was that of the parent, not that of the child ... The acceptance by the father of the physician's services to this infant, and his subsequent recognition of obligation therefor, by partial payment, coupled with the legal duty resting on the father to provide such necessary services, are circumstances sufficient to support a finding of a contractual obligation on the part of the father. It being the father's debt, the child may not be held thereon.”) (emphasis added) (citations omitted). The discussion of a child's legal obligations in these cases lends further support to the proposition that the “he” in the Smith opinion was intended to mean “the child.”
Finally, the remand order in Smith itself counsels that the waiver rule is to be applied only where the child, and not the parent, paid the medical expenses or was legally obligated to pay them. Immediately after announcing the substance of the waiver rule, the court explained
[i]n the case at bar it is not clear from the record whether the child could bring herself within the exception to the general rule above declared. At the hearing on the motion in limine it appears that the doctor's deposition which showed that the father was billed for the treatment was the only evidence introduced. A subsequent motion to reconsider was overruled. While in the ordinary case it is incumbent upon a plaintiff to present such proof to sustain his position at the time the motion was heard, because we are dealing with a minor we believe it in order that the case be remanded for the child to introduce such proof as she may to enable her to recover on the basis of the rule herein enunciated.
Smith, 1984 WL 586817 at *2. It is clear from this language that the court remanded the case so that the minor plaintiff could present evidence that she, the child, had paid the medical expenses or was legally obligated to pay same. Had the Smith court intended to announce a waiver rule in which a child's claim could proceed if the parent had paid the medical expenses or was legally obligated to pay same, it would have had no occasion to remand the case for additional proof since the trial court had already heard evidence that the father was billed for the medical treatment. For all of these reasons, the Court is convinced that the Palanki court misinterpreted the Smith court and erroneously extended the waiver rule to a situation in which the parent, and not the child, had paid for or was legally responsible to pay medical expenses.
While the waiver rule as announced in Smith was not originally intended to reach situations in which the parent has paid medical expenses, this alone would not be sufficient grounds for this Court to disregard the Tennessee Court of Appeal's decision in Palanki. Taken in conjunction with the above, however, three additional points leave this Court convinced that the Supreme Court of Tennessee would not apply Palanki's enlarged waiver rule to the present situation.
First, the overarching intent of the waiver rule is not to allow a parent to assert his/her claims through his/her child to revive the parent's statutorily barred claims. Instead, as correctly recognized in Palanki, its intent was to prevent the possibility of double recovery. See Palanki, 215 S.W.3d at 394 (“The court reasoned that pursuant to the waiver rule, ‘the parent by bringing suit on behalf of the minor has waived any claim that he might have’ thereby eliminating the concern of double recoveries for pre-majority medical expenses.”) (quoting Smith, 1984 WL 586817 at *2). Here, double recovery is not a concern because, as articulated supra Section IV.A.1, Plaintiff Grant's individual claim for medical expenses is barred by the products liability statute of repose. Tenn. Code Ann. § 29–28–103(a). Second, and relatedly, Plaintiff Grant has not waived her claims in this action. Instead, she appears to have asserted her claim for medical expenses individually from the onset of this litigation. Only when the specter of her claims being time-barred arose did Plaintiff Grant raise the issue of the waiver rule. Finally, and most importantly, the arguments articulated supra Section IV.A.1 apply in full force to the extension of the waiver rule to the facts presented in the case at bar. If the Supreme Court of Tennessee were to accept the Palanki version of the waiver rule in situations like this, that application would effectively allow a parent to collect as damages his/her child's pre-majority medical expenses notwithstanding the fact that the parent's individual claims are barred by Tenn. Code Ann. § 29–28–103(a). This would not only blur the well-established line between a parent's claims and a child's claims in a tort action, see Dudley, 405 S.W.2d at 469, but it would also allow parents to engage in artful pleading to execute an end-run on the statute of repose. Because the Supreme Court of Tennessee has been so reluctant to rewrite statutes of repose, see supra Section IV.A.1, this Court cannot find that said court, if squarely presented with the question,13 would condone such a result.
Because the Court is convinced that the Supreme Court of Tennessee would not apply the waiver rule as erroneously extended in Palanki (and perpetuated in Neale) to the present case, Plaintiff Grant's alternative argument is without merit. Accordingly, in addition to Plaintiff Grant's individual claims being barred by the statute of repose, Plaintiffs cannot recover the children's pre-majority medical expenses through the children's claims.