                  IN THE COURT OF APPEALS OF TENNESSEE
                             AT KNOXVILLE
                                   December 13, 2001 Session

             MICHAEL SUTTON, ET AL. v. LARRY BARNES, ET AL.

                        Appeal from the Circuit Court for Cocke County
                           No. 26,389-II   Richard R. Vance, Judge

                                    FILED JANUARY 30, 2002

                                  No. E2001-01911-COA-R3-CV


The plaintiffs, Cocke County homeowners, brought this action seeking compensation for damage
caused to their home by blasting activity on their neighbors’ property. In response to interrogatories,
the company that did the blasting identified the Cocke County Highway Commission as the provider
of the explosives. Thereafter, the plaintiffs filed an amended complaint, naming Cocke County and
the Cocke County Highway Commission (collectively “the County”) as additional party defendants.
Upon the County’s motion, the trial court dismissed the plaintiffs’ complaint as to the County,
holding that their action is time-barred. On appeal, the plaintiffs argue that the discovery rule applies
to their action against the County, and, therefore, their claim is not time-barred. The County argues
that even if the plaintiffs’ action is not barred by the applicable statute of limitations, the plaintiffs
have failed to state a claim upon which relief can be granted. We hold that the discovery rule applies
to actions against governmental entities and that there is a genuine issue for trial as to when the
plaintiffs’ cause of action “ar[ose].” We further hold that the complaint adequately states a cause
of action, but only as to the plaintiffs’ claim of common-law negligence. Accordingly, the judgment
of the trial court is affirmed in part and reversed in part.

            Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                  Affirmed in Part and Reversed in Part; Case Remanded

CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which HOUSTON M. GODDARD ,
P.J., and D. MICHAEL SWINEY , J., joined.

Steven Douglas Drinnon, Dandridge, Tennessee, for the appellants, Michael Sutton and Sandra
Sutton.

Douglas L. Dutton and Lisa J. Hall, Knoxville, Tennessee, for the appellees, Cocke County and the
Cocke County Highway Commission.

                                               OPINION
                                                           I.

         The plaintiffs filed their complaint on April 14, 2000, claiming that on April 20, 1999, their
home was damaged by blasting activity on adjacent property belonging to the defendants, Larry
Barnes and Melissa Barnes. The plaintiffs sued the Barnes as well as Bush Construction Company,
Inc.1, the company that did the blasting, and Brockwell Construction Company, Inc., the alleged
supplier of the blasting material.2

        On June 5, 2000, the plaintiffs served their first set of interrogatories upon Bush Construction
Company. Among other things, the interrogatories requested the identity of the person or entity that
supplied the blasting materials used on the Barnes’ property. When Bush Construction Company
did not timely respond, the plaintiffs, on October 16, 2000, filed a motion to compel. Finally, on
November 30, 2000, Bush Construction Company filed its responses and, for the first time,
identified the Cocke County Highway Commission3 as the provider of the explosives. Thereafter,
on December 27, 2000, the plaintiffs moved to amend their complaint to add Cocke County and the
Cocke County Highway Commission as party defendants, which motion was granted. The amended
complaint alleges (1) that the County violated the Tennessee Blasting Standards Act of 1975, T.C.A.
§ 68-105-101, et seq., by selling explosives to unlicensed and unregistered users; and (2) that the
County was negligent in that it “breached a duty of care owed to Plaintiffs by selling and/or
providing said explosives and/or explosive devices to an unlicensed, unregistered, inexperienced and
uncertified person and/or entity.”

        The County filed a motion to dismiss the amended complaint, alleging (1) that the plaintiffs’
action is barred by the one-year statute of limitations4 set forth in the Tennessee Governmental Tort
Liability Act (“GTLA”) and (2) that the plaintiffs failed to state a claim upon which relief could be
granted. The plaintiffs opposed the motion to dismiss, arguing that, pursuant to the discovery rule,
their cause of action did not “arise[]” – and thus the statute of limitations did not begin to run – until
November 30, 2000, when they discovered that the County supplied the explosives that damaged
their property. The plaintiffs submitted the affidavit of Mr. Sutton, in which he states that it was his
understanding at the time of the blasting that Brockwell Construction Company had supplied the
explosives and that although he had “consulted persons in the community,” he did not learn that the
County in fact had provided the explosives until the plaintiffs received Bush Construction



         1
          The shareho lders and emp loyees o f Bush Construction were also sued in their individu al capacity. Fo r ease
of reference, we shall refer to the shareholders and the company collectively as “Bush Construction Company” or “the
company.”
         2
             The plaintiffs eventually took a voluntary nonsuit as to Brockwell Construction Company.
         3
           Although the correct nomenclature of the defendant is the “Cocke County Highway Commission,” the
respo nses id entify it as the “C ock e Co unty Highw ay D epartment.”
         4
         T.C.A. § 29-20-305(b) (2000) provides that an action against a governmental entity “must be commenced
within twelve (12) months after the cause of action arises.” (Emph asis added).

                                                          -2-
Company’s responses to the interrogatories. Mr. Sutton further asserts that he “had no way of
knowing” that the County was the supplier until that time.

        The trial court granted the County’s motion, holding that the discovery rule does not apply
to cases governed by the GTLA and, therefore, the plaintiffs’ claim is time-barred. The trial court
certified the order as a final judgment pursuant to Tenn. R. Civ. P. 54.02. The plaintiffs appeal,
arguing (1) that the discovery rule applies to cases involving the GTLA and (2) that their action is
not barred by the statute of limitations. The County asserts that even if the plaintiffs’ claim is not
time-barred, they have failed to state a claim upon which relief can be granted.

                                                   II.

        The plaintiffs contend that the discovery rule applies and, therefore, their cause of action
against the County “ar[ose]” on November 30, 2000, when they first learned, by way of Bush
Construction Company’s interrogatory responses, that the County had provided the explosives that
damaged the plaintiffs’ property. The County counters that the GTLA must be strictly construed,
and therefore, the discovery rule should not be applied because to do so would effectively enlarge
the period of time within which suit could be brought against a governmental entity.

        Since the trial court had before it the affidavit of Mr. Sutton, we will treat the action of the
trial court in dismissing the plaintiffs’ complaint as one for summary judgment. See Tenn. R. Civ.
P. 12.03. We are obligated to affirm a grant of summary judgment “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” Tenn. R. Civ. P. 56.04.

        We have conducted an extensive search of Tennessee caselaw, including the cases cited by
the parties; however, we have not found any cases in which this “discovery rule” issue has been
squarely addressed. Therefore, we will begin our analysis with an examination of the general
principles of the discovery rule. We will then examine Tennessee cases involving the GTLA statute
of limitations set forth in T.C.A. § 29-20-305(b). Finally, we will look at other jurisdictions to see
how the discovery rule has been applied to governmental tort liability statutes in those venues.

                                                   A.

        The discovery rule provides that the applicable statute of limitations begins to run when the
plaintiff discovers, or in the exercise of reasonable care should have discovered, that an injury was
sustained as a result of wrongful conduct by the defendant. Shadrick v. Coker, 963 S.W.2d 726, 733
(Tenn. 1998). The rule was designed “to alleviate the intolerable result of barring a cause of action
by holding that it ‘accrued’ before the discovery of the injury or the wrong.” Foster v. Harris, 633
S.W.2d 304, 305 (Tenn. 1982).

      Furthermore, it is well-settled that “a cause of action in tort does not accrue until a judicial
remedy is available.” Wyatt v. A-Best, Co., Inc., 910 S.W.2d 851, 855 (Tenn. 1995); Foster, 633

                                                  -3-
S.W.2d at 305. A judicial remedy is considered “available” when (1) a defendant breaches a legally
recognized duty owed to a plaintiff and (2) the breach causes the plaintiff legally cognizable damage.
Wyatt, 910 S.W.2d at 855. A breach of duty occurs when the plaintiff discovers, or “reasonably
should have discovered, (1) the occasion, the manner and means by which a breach of duty occurred
that produced...injury; and (2) the identity of the defendant who breached the duty.” Foster, 633
S.W.2d at 305. “Quite simply, a plaintiff must have discovered the existence of facts which would
support an action in tort against the tortfeasor before suit can be filed.” Wyatt, 910 S.W.2d at 855.
Thus, the plaintiff must have discovered “not only the existence of an injury, but the tortious origin
of the injury.” Id. (quoting Hathaway v. Middle Tennessee Anesthesiology, P.C., 724 S.W.2d 355,
359 (Tenn. Ct. App. 1986)). However, a plaintiff may not delay filing merely because the full
effects of the injury are not actually known; “such a delay would conflict with the purpose of
avoiding uncertainties and burdens inherent in pursuing and defending stale claims.” Wyatt, 910
S.W.2d at 855. Whether the plaintiff has exercised reasonable care in discovering the injury or the
wrong is generally a question for the trier of fact to determine. Id. at 854.

                                                   B.

         We will now examine the statute of limitations set forth in the GTLA. Historically,
governmental entities have been immune from suit based on the concept of sovereign immunity.
See Williams v. Memphis Light, Gas and Water Div., 773 S.W.2d 522, 523 (Tenn. Ct. App. 1988).
However, with the passage of the Tennessee Governmental Tort Liability Act, T.C.A. § 29-20-101,
et seq., the Legislature, acting within its power under Article 1, § 17 of the Tennessee Constitution,
has provided for the waiver of the absolute immunity afforded governmental entities, but only within
certain limitations. See id. One of these limitations is the statute at issue in the instant case, T.C.A.
§ 29-20-305(b), which provides that an action against a governmental entity “must be commenced
within twelve (12) months after the cause of action arises.”

       The GTLA’s waiver of immunity “is narrowly confined in its scope.” Doyle v. Frost, 49
S.W.3d 853, 858 (Tenn. 2001); see T.C.A. § 29-20-201(c) (2000) (“any claim for damages must be
brought in strict compliance with the terms of this chapter”). As the Supreme Court noted in Doyle:

                The limited waiver of governmental immunity provided for in the
                [GTLA] is in clear derogation of the common law. Generally,
                statutes in derogation of the common law are to be strictly construed
                and confined to their express terms, and that rule of construction has
                been expressly incorporated into the Act....

Doyle, 49 S.W.3d at 858 (quoting Ezell v. Cockrell, 902 S.W.2d 394, 399 (Tenn. 1995)).


        Because the GTLA is strictly construed, courts have refused to apply statutes and rules to
cases arising under the GTLA if application of the particular statute or rule would effectively expand
the statute of limitations period set forth in T.C.A. § 29-20-305(b). For example, this Court has held


                                                  -4-
that the savings statute5 does not apply to GTLA actions. See Williams, 773 S.W.2d at 523; Rael
v. Montgomery County, 769 S.W.2d 211, 214 (Tenn. Ct. App. 1988). In Williams, this Court stated,
in pertinent part, as follows:

                     Since the [GTLA] created a new liability, it must be strictly
                     construed. In so doing, we find that the twelve-month limitation
                     period of T.C.A. § 29-20-305(b) for bringing an action is a condition
                     precedent which must be met before a suit may be brought against the
                     governmental entity.

                                                  *        *         *

                     In this case the right to sue [the defendant governmental entity] was
                     granted to [the plaintiff] by statute. However, that statute provided
                     a limited time within which he must exercise that right. [The
                     plaintiff] failed to comply with the condition precedent and, as a
                     result, he lost the right to bring this action. We find that the savings
                     statute cannot be used to extend the period within which to file suit
                     against a governmental entity. The legislature could have made
                     T.C.A. § 28-1-105 applicable to the [GTLA], however, it has chosen
                     not to do so.

Williams, 773 S.W.2d at 523 (citation omitted). For these same reasons, this Court held in Nance
v. City of Knoxville, 883 S.W.2d 629, 631 (Tenn. Ct. App. 1994), that T.C.A. § 28-1-115, which
allows a plaintiff to bring an action in state court following the dismissal of an action in federal
court for lack of jurisdiction, does not apply to GTLA actions because the statute would effectively
extend the GTLA statute of limitations period. See Lynn v. City of Jackson, 63 S.W.3d 332, 337
(Tenn. 2001).

       In Daniel v. Hardin County General Hospital, 971 S.W.2d 21 (Tenn. Ct. App. 1997), this
Court addressed the applicability of the comparative fault joinder statute, which provides that in a




         5
             The Tenn essee savings statute prov ides, in pertinen t part, as follows:

                     If the action is comm enced within the time limited by a rule or statute of limitation,
                     but the judgment or decree is rendered a gain st the plaintiff upon any ground not
                     concluding the plaintiff’s right of action, or where the judgment or decree is
                     rendered in favor of the plaintiff, and is arrested, or reversed on appeal, the
                     plaintiff...may, from time to time, commence a new action within one (1) year after
                     the reversa l or arre st.

T.C.A. § 28 -1-105(a) (200 0).

                                                               -5-
comparative fault case, where, after the expiration of the statute of limitations, the defendant alleges
that a nonparty contributed to the plaintiff’s injury, the plaintiff may within 90 days of the
defendant’s answer alleging such person’s fault, either: “(1) Amend the complaint...pursuant to Rule
15...; or (2) Institute a separate action against that person....” T.C.A. § 20-1-119(a) (Supp. 2001).
This Court has held that this particular provision does not apply to cases arising under the GTLA
because application of the statute would effectively extend the limitations period. Id. at 25. The
Daniel court explained its rationale as follows:

               The legislature was quite clear in stating that “actions must be
               commenced within twelve (12) months after the cause of action
               arises” and that “any claim for damages must be brought in strict
               compliance with the terms of this chapter.” T.C.A. §§ 29-20-201(b),
               29-20-305(b). We cannot change the plain meaning of the words of
               the [GTLA]. The legislature could have made T.C.A. § 20-1-119
               applicable to the [GTLA], however, it has chosen not to do so.

Daniel, 971 S.W.2d at 25. (Emphasis in original).

        Most recently, the Supreme Court has addressed the GTLA statute of limitations in Doyle
v. Frost, 49 S.W.3d 853 (Tenn. 2001). At issue in that case was the application of the relation back
doctrine set forth in Tenn. R. Civ. P. 15.03. Id. at 854. The Court found that the application of Rule
15.03 to a GTLA action does not conflict with a strict interpretation of T.C.A. § 29-20-305(b),
noting that “an amendment under Rule 15.03 made pursuant to the ‘relation back’ doctrine is not
considered excepted from the applicable statute of limitations, it is considered made before the
limitations period expired.” Id. at 858 (emphasis added). The Court noted that the Rule’s
requirement that the affected party receive notice within the applicable limitations period or within
120 days of commencement of the action serves to ensure that the protections afforded by the statute
of limitations, namely the avoidance of adjudicating stale claims and affording notice to defendants,
would not be compromised. Id. at 858, 859.

                                                  C.

        While we are not aware of any Tennessee case squarely addressing the applicability of the
discovery rule to actions arising under the GTLA, other jurisdictions have held that the rule does
apply to similarly-worded statutes addressing tort claims against governmental entities. For
example, in Rio v. Edward Hospital, 472 N.E.2d 421 (Ill. 1984), the Supreme Court of Illinois
applied the discovery rule in a medical malpractice action brought against a governmental entity.
Id. at 425. The plaintiff had filed suit in 1981, alleging that physicians had negligently treated him
at the defendant hospital for a wrist injury in 1979. Id. at 422. According to the Illinois Tort
Immunity Act, the plaintiff was required to give notice of his claim within one year from the date
the cause of action “was received or accrued.” Id. at 423. The plaintiff argued that the discovery
rule should apply, because he had not discovered that he had a cause of action against the defendants
until 1981. Id. at 422. The Illinois Supreme Court agreed with the plaintiff, stating as follows:


                                                  -6-
               The primary purpose of the Tort Immunity Act is to encourage early
               investigation into the claim asserted against the local government at
               a time when the matter is still fresh, witnesses are available, and
               conditions have not materially changed. Such an investigation
               permits prompt settlement of meritorious claims and allows
               governmental entities to plan their budgets in light of potential
               liabilities. Defendants contend that the extension of the discovery
               rule to cases such as this will defeat the purpose of the Tort Immunity
               Act, because it will prevent local governments from conducting
               investigations shortly after the injuries occur. We disagree.... In view
               of the fact that under the provisions of section 8-102 a governmental
               entity need not be given notice for almost a year after the occurrence
               it can hardly be contended that the statute necessarily assures an
               opportunity to conduct an inspection immediately after the injury is
               sustained. An injured party would still be required to give timely
               notice after discovery of his injury. It would be absurd to conclude
               that the General Assembly intended anything more.

Id. at 425 (citations and quotation marks omitted).

         In Callahan v. State, 464 N.W.2d 268 (Iowa 1990), the Iowa Supreme Court applied the
discovery rule in a case brought against the state by a parent who alleged that her child had been
abused while at a state school for the deaf. Id. at 269. The plaintiff did not discover the abuse of
her child until four years after the child withdrew from the school. Id. The state argued that the
claim was barred by the statute of limitations in the state tort claims act, which period of limitations
required the plaintiff to file suit “within two years after such claim accrued.” Id. at 269, 270. The
Supreme Court of Iowa disagreed, noting that “[u]nder the discovery rule, a cause of action based
on negligence does not accrue until plaintiff has in fact discovered that he has suffered injury or by
the exercise of reasonable diligence should have discovered it....” Id. (citation and internal quotation
marks omitted) (emphasis added). Accordingly, the Court held that a claim against the state “does
not accrue until the plaintiff knows or in the exercise of reasonable care should have known both the
fact of the injury and its cause.” Id. at 273. The Court based its holding on several factors, including
the Iowa courts’ “general acceptance of the discovery rule in negligence cases,” the general remedial
purposes of the state tort claims act, and the United States Supreme Court decision in United States
v. Kubrick, 444 U.S. 111, 100 S. Ct. 352, 62 L. Ed. 2d 259 (1979), wherein the discovery rule was
held to apply to the Federal Tort Claims Act, which, the Iowa Supreme Court noted, contained
nearly identical language to the Iowa statute at issue. Callahan, 464 N.W.2d at 271, 273.

        The Utah Supreme Court has recognized that the discovery rule is applicable to the Utah
Governmental Immunity Act. In Warren v. Provo City Corp., 838 P.2d 1125 (Utah 1992), the
plaintiff was injured when the plane he leased from a local flying club crashed. Id. at 1127. Within
one year of the accident, the plaintiff contacted the city airport manager to request information
regarding the flying club’s insurance. Id. at 1128. By the time the airport manager advised the
plaintiff that the flying club had not maintained insurance as required by city aviation regulations,

                                                  -7-
over a year had passed since the accident. Id. The plaintiff brought suit against the city for failing
to enforce its regulations. Id. The Utah Supreme Court stated that the discovery rule is applicable
only “in certain instances,” such as (1) where the rule is mandated by statute; (2) where the plaintiff
is not aware of the cause of action because of misleading conduct or concealment by the defendant;
or (3) where “exceptional circumstances” exist. Id. at 1129-30. The Court determined that none of
these situations existed in the case before it. Id. Specifically, the Court found that the plaintiff had
not conducted a reasonable investigation and, therefore, could not show that he did not know and
could not reasonably have known of the existence of the claim against the city within the limitations
period. Id. at 1129. The Court therefore affirmed the dismissal of the plaintiff’s claim. Id. at 1130-
31.

                                                  D.

         Our review of the foregoing leads us to conclude that the discovery rule should be applied
to cases involving the GTLA. Accordingly, we hold that a cause of action “arises” under the GTLA
when the plaintiff discovers, or in the exercise of reasonable care should have discovered, that he
or she sustained an injury as a result of the defendant’s wrongful conduct. See Shadrick, 963
S.W.2d at 733. In our view, the application of the discovery rule does not conflict with the strict
interpretation mandated by the controlling Tennessee authority cited in this opinion. Unlike the
statutes at issue in Williams, Nance and Daniel, application of the discovery rule would not expand
the 12-month period in which a plaintiff has to file suit under the GTLA. The plaintiff must still file
its action within 12 months of the date on which the cause of action “arises”; the discovery rule
merely operates to determine when the 12 months starts to run.

         Having determined that the discovery rule applies in the instant case, we hasten to add that
we do not pass judgment on the issue of whether the rule operates to toll the statute of limitations
in the instant case. Based upon the record before us, we find there is a genuine issue of material fact
as to whether the plaintiffs exercised reasonable care in discovering the identity of the supplier of
the explosives within the limitations period. See Wyatt, 910 S.W.2d at 854. Accordingly, we hold
that summary judgment is inappropriate on this basis. This issue must be resolved by the trier of
fact.

                                                  III.

        The County argues that even if the plaintiffs’ action is not time-barred, the dismissal of their
action was nevertheless proper because, so the argument goes, the plaintiffs failed to state a claim
upon which relief could be granted. The plaintiffs assert that their complaint adequately states a
cause of action based upon negligence and negligent entrustment. While the trial court based its
dismissal on the ground that the plaintiffs’ complaint was time-barred, the failure to state a cause of
action issue was properly raised below and is, by virtue of the issue stated in the County’s brief, now
before us on this appeal. See Tenn. R. App. P. 27(b).

       The trial court's grant of a motion to dismiss for failure to state a claim upon which relief can
be granted presents a question of law, which we review de novo with no presumption of correctness.

                                                  -8-
Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997). We must examine the complaint
alone, “construe the complaint liberally in favor of the plaintiff, taking all allegations of fact therein
as true.” Cook v. Spinnaker’s of Rivergate, Inc., 878 S.W.2d 934, 938 (Tenn. 1994). The motion
should be denied “unless it appears that the plaintiff[s] can prove no set of facts in support of [their]
claim that would entitle [them] to relief.” Stein, 945 S.W.2d at 716.

         The plaintiffs assert two primary bases for their cause of action against the County. First,
they argue that the County violated the Tennessee Blasting Standards Act of 1975, T.C.A. § 68-105-
101, et seq. (“the Act”), by selling explosives to persons who were not licensed by or registered with
the state as required by the Act. We have reviewed the Act in its entirety and agree with the County
that the Act does not provide any basis for a cause of action against the seller of explosives. The Act
sets forth the requirements of those who use blasting materials; there is no statutory provision
restricting the sale of explosives only to those who are registered, licensed, or otherwise qualified
to use such materials. As to the claim of liability under the Tennessee Blasting Standards Act of
1975, the County’s motion should be granted.

        The other basis for the plaintiffs’ cause of action is common-law negligence, a theory
sometimes referred to in their brief as a theory of negligent entrustment.6 Upon reviewing the
allegations in the plaintiffs’ complaint, which we must take as true, see Cook, 878 S.W.2d at 938,
we find that the plaintiffs have adequately set forth a cause of action for negligence. It is recognized
in Tennessee that a seller of hazardous materials, such as explosives, has a duty to use a degree of
care proportionate to the danger posed to persons who may come into contact with those materials.
See 13 Tenn. Jur. Explosions and Explosives § 3 (1984); see also Read Phosphate Co. v. Vickers,
11 Tenn. App. 146, 154 (1930) (holding seller of sulphuric acid liable for injuries to third party when
seller negligently failed to give notice to the purchaser of the product’s dangerous character). The
plaintiffs in the instant case allege that the County breached its duty of care by selling explosives to
inexperienced, unlicensed, and unregistered persons. We cannot say that “the plaintiff[s] can prove
no set of facts in support of [their] claim that would entitle [them] to relief.” See Stein, 945 S.W.2d
at 716. Accordingly, we hold that the County’s motion to dismiss as to the common-law negligence
claim is not well-taken and should be denied.7

                                                           IV.

       The judgment of the trial court as to the County’s alleged liability under the Tennessee
Blasting Standards Act of 1975 is affirmed. The remainder of the judgment is reversed. This case
is remanded for further proceedings, consistent with this opinion. Costs on appeal are taxed to the
appellees, Cocke County and the Cocke County Highway Commission.


         6
           At this juncture in the proceedings, we do not find it necessary to determin e whether this is an “entrustme nt”
case in the literal sense; clearly the plaintiffs have alleged commo n-law negligence.
         7
           W e note that if the County believ es that th e plain tiffs’ com plaint is so vague or ambiguous that it cannot
reaso nab ly respond to it, the County, upon remand, may file a motion for a more definite statement pointing out the
alleged defects in the co mp laint an d describin g the additional d etails desired. See Tenn. R. Civ. P. 12.05.

                                                           -9-
       _______________________________
       CHARLES D. SUSANO, JR., JUDGE




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