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

  OLYMPIA CHILD DEVELOPMENT CENTER, INC., ET AL. v. CITY OF
                  MARYVILLE, TENNESSEE

                       Appeal from the Circuit Court for Blount County
                           No. L-10699     W. Dale Young, Judge

                                      FILED APRIL 27, 2001

                                  No. E2000-02124-COA-R3-CV


The suit filed in this tort action originally sought a judgment against the defendant, City of Maryville
(“the City”), for damages allegedly sustained by four plaintiffs when a van owned by the plaintiff
Olympia Child Development Center, Inc. (“Olympia”), and driven by the plaintiff Lisa K. Murphy
was struck by a vehicle driven by Rodney Parton, an off-duty police officer employed by the City.
The trial court granted the City summary judgment as to the claims of the remaining plaintiffs,
Olympia and Murphy, finding that their claims are barred by the doctrines of collateral estoppel and
modified comparative fault. Only Olympia appeals. We affirm the grant of summary judgment, but
base our affirmance on a ground other than the one utilized by the trial court.

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

CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which HERSCHEL P. FRANKS and
D. MICHAEL SWINEY, JJ., joined.

Kevin W. Shepherd, Maryville, Tennessee, for the appellant, Olympia Child Development Center,
Inc.

Nathan D. Rowell, Knoxville, Tennessee, for the appellee, City of Maryville, Tennessee.

                                              OPINION

                                               I. Facts

       On November 13, 1995, the plaintiff Lisa K. Murphy was driving a van owned by her
employer, the plaintiff Olympia, a Maryville day care center, in a westerly direction on Everett
Avenue in Maryville. At the same time, Rodney Parton, an off-duty police officer employed by the
defendant, the City, was driving a vehicle owned by his mother, Zula Parton, in a northerly direction
on South Everett High Road. The Olympia van was occupied by several children, including Kevin
Tyler Clendenen and Andrew Tidwell.

        When Murphy reached the intersection of Everett Avenue and South Everett High Road, she
brought her van to a stop as required by the stop sign facing traffic proceeding in her direction.
While stopped, Murphy observed a brown car pass in front of her at a high rate of speed. Following
this, and after ascertaining, in her judgment, that the way was clear, she proceeded into the
intersection, at which time her vehicle was struck in the left side by the front of the vehicle being
driven by Rodney Parton. At the time of the collision, Parton and a passenger, his brother Tony
Parton, who was also an off-duty police officer, were not in uniform. They were, however, in pursuit
of the brown car that had passed in front of Murphy because that car had allegedly run Parton’s
vehicle off the road.

        The accident resulted in injuries to Murphy; the minors, Kevin Tyler Clendenen and Andrew
Tidwell; and both of the Partons. Olympia allegedly suffered economic losses and injury to its
reputation.1

                                   II. Procedural History of Instant Case

         On November 12, 1996, Murphy and Olympia, along with the two shareholders of Olympia,
filed a complaint against the City “in as much [sic] as their agent, Rodney Parton, was the proximate
cause of this accident.” The City filed an answer, denying, among other things, that Parton was
acting within the scope of his employment at the time of the accident. A motion for summary
judgment was filed by the City on January 30, 1998. It was granted by the trial court by way of an
order entered March 27, 1998. The trial court apparently found that the facts before it conclusively
established that Parton was not acting within the scope of his employment with the City at the time
of the collision.

         On the first appeal in this matter, we affirmed the judgment of the trial court as to the claims
of the Olympia shareholders2 and as to a portion of the claims of Olympia and Murphy, but vacated
the trial court’s judgment pertaining to the allegation of the complaint that the City was vicariously
liable for the conduct of Parton. As to this allegation, we held, on the record then before us, that
there was a disputed issue of material fact as to whether Parton “was acting within the scope of his
employment [with the City] at the time of the accident.” Olympia Child Dev. Ctr., Inc. v. City of
Maryville, C/A No. 03A01-9804-CV-00136, 1999 WL 64271, at *4 (Tenn. Ct. App. E.S., filed
January 29, 1999). We remanded for further proceedings.




         1
           While not entirely clear from the compla int, it seems obvious from the record that Olympia’s van suffered
significant dam age in the acc ident.

         2
         As to the shareholders, we concluded that dismissal was appropriate but not on the ground o f lack of agenc y.
We basically determined that the shareholders had failed to state a claim upon which relief could be granted.

                                                         -2-
        While the instant case was pending in the trial court following remand, other litigation that
arose out of the subject accident was proceeding apace in that court. The resolution of Olympia’s
claim in that litigation was destined to have an impact on the suit filed by Olympia against the City.
Because of this impact, we will now discuss the related litigation in some detail.

                                      III. The Related Litigation

        The complaint in the instant case was not the first complaint filed as a result of this accident.
That honor went to an action filed on May 28, 1996, by the parents of Kevin Tyler Clendenen, one
of the minors riding in the Olympia van at the time of the accident. The Clendenens filed suit against
Rodney Parton; his mother, Zula Parton, on the theory of respondeat superior; Olympia; and
Murphy. Murphy and Olympia responded by filing a cross-claim against Rodney Parton and his
mother. The cross-claim does not mention the City of Maryville or Parton’s employment as a police
officer. It also does not allege that Parton was acting as an agent of the City at the time of the
accident.

       In the Clendenens’ action, Melissa Tidwell, acting individually and on behalf of her son,
Andrew Tidwell – the other child injured in the accident – was permitted to intervene and assert a
claim against the Partons. Later, in the same action, Rodney Parton filed a cross-claim against
Olympia and Murphy.

        Finally, a second related lawsuit – this one by Tony Parton and his wife, Tania Parton – was
filed on October 11, 1996, against Olympia, Murphy, Rodney Parton, and his mother. Both of these
two related lawsuits were consolidated for trial. Prior to trial, however, the Clendenens settled their
suit against Rodney Parton and his mother. They non-suited their complaint as to Olympia and
Murphy.

        On the day of trial, but before a jury was impaneled, the trial court further considered Rodney
Parton’s motion for summary judgment as to Olympia’s cross-claim against him and his mother.
The court below granted Parton’s motion and dismissed Olympia’s cross-claim. On appeal, we
reversed and remanded for a new trial. For more details regarding this phase of the litigation, the
reader is referred to our opinion filed in that appeal. See Olympia Child Dev. Ctr., Inc. v. Parton,
C/A No. E1999-02448-COA-R3-CV, 2000 WL 225894 (Tenn. Ct. App. E.S., filed February 29,
2000). In reversing the trial court, we remanded for a new trial, but solely on the issues of causation
and damages. We noted that the jury’s allocation of fault – in the trial that took place while the
appeal was pending – “as already determined [was] not to be relitigated.” 2000 WL 225894 at *7.

        Following the trial court’s dismissal of Olympia’s cross-claim, but before our reversal of that
action, Olympia was no longer in these consolidated actions as a claimant; but it was still very much
a party to the proceedings in a defensive posture, since it was then defending claims asserted by
Rodney Parton, Tony Parton, and the latter’s wife.




                                                  -3-
         As previously noted, the remaining claims were submitted to a jury. Following a three-day
trial, the jury found, in the words of the February 18, 1999, judgment entered on the jury’s verdict,
“that Rodney Parton was 100% at fault for the accident, and that Lisa K. Murphy, as agent and
employee of Olympia Child Development Center, Inc. was zero at fault.” Money judgments were
entered against Rodney Parton in favor of Andrew Tidwell; his mother, Melissa Tidwell; and
Murphy. All claims against Murphy and Olympia were dismissed as a result of the jury’s verdict.3

                                       IV. The Two Remaining Claims

        When the dust had settled after the remands following the two successful Olympia appeals,
and after the final judgment following the jury trial, there were two claims still pending in the trial
court: Olympia v. City of Maryville and Olympia v. Parton.4 The final resolution of the latter case
had the effect of sounding the death knell for Olympia’s claim in Olympia v. City of Maryville.

                                                         A.

       On September 5, 2000, Olympia settled its claim in Olympia v. Parton when its agent
executed on its behalf a “Release of All Claims” in consideration of a payment of $41,417.10. In
executing the release, Olympia stated that it did

                  hereby and for their heirs, executors, administrators, successors and
                  assigns release, acquit, and forever discharge RODNEY PARTON,
                  ZULA PARTON and ALLSTATE INSURANCE COMPANY and
                  their agents, servants, successors, heirs, executors, administrators and
                  all other persons, firms, corporations, associations or partnerships of
                  and from any and all claims, actions, causes of action, demands,
                  rights, damages, costs, loss of service, expenses and compensation
                  whatsoever which the undersigned now have or which may hereafter
                  accrue on account of or in any way growing out of any and all known
                  and unknown, foreseen and unforeseen bodily and personal injuries,
                  mental and emotional distress and the consequences thereof resulting
                  or to result from the accident, casualty or event which occurred on or
                  about the 13th day of November 1995 in Blount County, Tennessee.
                  It is the understanding, agreement and intention of releasors that the
                  aforesaid consideration is and represents a full and complete
                  compromise settlement, accord and satisfaction for any and all of the
                  aforesaid claims and matters being released herein.


         3
          Tony Parton and his wife later non-suited their action against Rodney Parton. All claims against Zula Parton
were also voluntarily dismissed.

         4
          W e recognize that Murphy still had a pending claim against the City; but since she did not appeal the trial
court’s dismissal of her claim against the City, we will not further notice her involvement in this litigation.

                                                         -4-
As a result of this settlement, an order of compromise and dismissal was entered in the trial court
on September 15, 2000. The order dismissed Olympia’s claim “with full prejudice.” As the
appellant Olympia points out, the order recites that

               Olympia Child Development Center, Inc. does not agree that they
               have been fully compensated as a result of injuries claimed in their
               Complaint, although claims between these parties are herein
               compromised by agreement.

With the entry of the order, Olympia v. Parton, passed into history.

                                                B.

      On August 6, 1999, before Olympia v. Parton was settled, the City filed a new motion for
summary judgment in Olympia v. City of Maryville. In its motion, the City claimed that there were
no material issues of fact as to the following legal issues:

               Plaintiffs’ claims against the City of Maryville are barred by the
               doctrines of collateral estoppel and res judicata.

               Plaintiffs’ claims against the City of Maryville are barred by the
               doctrine of modified comparative fault, as Plaintiff failed to include
               the City of Maryville in a previous suit involving the same issues.

In support of its motion, the City relied upon the jury’s verdict in the two related lawsuits – the
verdict finding Parton to be 100% at fault and Murphy, and hence Olympia, 0% at fault.

       On July 28, 2000, the trial court filed a memorandum opinion that recites the following:

               The Court has carefully studied the Briefs of Law provided by
               Counsel for the respective parties and concludes that the Doctrine of
               Collateral Estoppel applies to the case at bar.

               The Court is persuaded that the Plaintiffs’ claims against the City of
               Maryville are further barred by the Doctrine of Modified Comparative
               Fault inasmuch as there has been a judicial determination that Rodney
               Parton (individually) is 100% at fault in connection with the
               automobile accident which is the subject of the case at bar.

               Accordingly, the Court is of the opinion and finds that the
               Defendant’s Motion for Summary Judgment is well taken and is
               granted.



                                                -5-
An order was subsequently entered dismissing the complaint of Olympia in the case of Olympia v.
City of Maryville. It is that dismissal that is now before us on this appeal. As can be seen, this is
the third time that the subject accident and some of the resulting claims have found their way to the
Court of Appeals.

                         V. Grounds of the City’s Motion for Summary Judgment

        The gist of the City’s case is found in the following statement made by it at the trial court
level in a filing in support of its most recent motion for summary judgment:

                   Plaintiff’s claims against the City of Maryville are barred by the
                   doctrines of res judicata and collateral estoppel, as it has already been
                   judicially determined that Rodney Parton was responsible for the
                   accident giving rise to both this lawsuit and the previous lawsuit.

We agree with the City that it has already been judicially determined – in a way that binds the parties
in the instant case – that Parton was 100% at fault in the accident; but the jury in the related lawsuits
did not have before it the issue of whether Parton was acting within the scope of his employment
with the City at the time of the accident. Parton did not plead immunity under T.C.A. § 29-20-
310(b) (2000).5 Since the immunity issue was not pleaded, there was no reason for the jury to decide
whether or not Parton was acting within the scope of his employment with the City. The jury verdict
means that Parton, as the driver of the vehicle, was the sole cause of the accident. The City would
have us hold that the jury found that Parton, while not acting as a police officer, was the sole cause
of the accident. There is nothing in the pleadings and jury verdict to justify such a holding. Whether
the jury concluded that Parton was or was not on police business at the time of the accident was
immaterial to the issue before them, i.e., whether the person who crashed his vehicle into the
Olympia van was at fault and, if so, to what extent.

        While the rules of res judicata and collateral estoppel are clear, see Massengill v. Scott, 738
S.W.2d 629 (Tenn. 1987), they have no application in the instant case where the issue of agency was
not before the jury in the earlier litigation. Just because Parton might have been entitled to raise a
T.C.A. § 29-20-310(b) immunity defense does not mean that the jury’s verdict, in some mystical
way, addressed this never-raised issue or has the effect of barring the instant case. Parton chose not
to raise a T.C.A. § 29-20-310(b) defense. It may be that he chose not to raise this defense because
he honestly believed that he was not engaged in police business at the time of the accident; but on




       5
           T.C.A. § 29 -20-310(b) (2 000) provid es, in pertinent part, as follows:

                   No claim may be brought against an employee or judgment entered against an
                   employee for damages for which the immunity of the governmental entity is
                   removed by this chapter unless the claim is one for medical malpractice brought
                   against a health care practitioner.

                                                            -6-
the other hand, he may have chosen not to raise this defense out of concern for his job6 or maybe for
a tactical reason associated with his idea as to the best way to defend the action. We do not know
precisely why he failed to raise the immunity defense. One thing, however, is sure: his failure to
raise this immunity defense does not, ipso facto, translate into a binding factual determination that
he was not acting within the scope of his employment with the City at the time of the accident. The
jury’s verdict is neutral on this issue.

        If the City is arguing that the jury’s determination that Parton was 100% at fault precludes
any further allocation of fault, the answer to this is simple: Olympia is not attempting to allocate new
fault to the City. It is simply trying to prove agency and thereby make the City responsible,
vicariously, for Parton’s 100% of fault. There is nothing in the doctrines of res judicata or collateral
estoppel that precludes Olympia from attempting to prove agency and thereby cast the City in
judgment for Parton’s fault. On the contrary, the jury’s finding that Parton was 100% at fault – being
consistent with Olympia’s theory of liability against the City and being a determination that has a
preclusive effect as between Olympia and the City – would have been conclusive as to the threshold
issue of fault in the event Olympia v. City of Maryville had gone to trial.7

         We find and hold that summary judgment cannot be justified on the grounds asserted by the
City and adopted by the trial court. However, we believe the City is entitled to summary judgment
on the basis that Olympia’s settlement of its claim against Parton, who Olympia contends, was acting
within the scope of his employment with the City at the time of the accident, extinguished the
liability of Parton’s alleged principal.8

                                                VI. The Final Chapter

       Olympia settled its claim against Parton, accepted $41,417.10 from him and/or his insurance
company, and released him from liability. As a result of the settlement, Olympia is obviously
precluded from pursuing its claim in the case of Olympia v. Parton. It is also precluded from
pursuing its claim in Olympia v. City of Maryville because the settlement has the effect of also
extinguishing the vicarious liability of the City.

       A release of an employee discharges the employer from vicarious liability. See Tutton v.
Patterson, 714 S.W.2d 268, 271 (Tenn. 1986) (release of nurses discharges vicarious liability of
doctor); Craven v. Lawson, 534 S.W.2d 653, 654, 657 (Tenn. 1976) (release of employee discharges
employer’s liability predicated on master-servant or principal-agent relationship); Stewart v. Craig,
208 Tenn. 212, 218, 344 S.W.2d 761, 763 (1961) (covenant not to sue given to employee releases
employer from respondeat superior liability); McGee v. County of Wilson, 574 S.W.2d 744, 745,

         6
             There is evidence before us that he was discharged as a result of this accident and its aftermath.

         7
             Cf. Beaty v. McGraw, 15 S.W.3d 819 (T enn. Ct. App. 1998).

         8
          This issue was not raised in the briefs. The Court, sua sponte , raised it at oral argument. The parties were
asked to ad dress certain cases dealin g with this issue. Bo th sides respo nded in writing to the Cour t’s request.

                                                             -7-
747 (Tenn. Ct. App. 1978) (release of sheriff’s deputy precludes recovery from county on the basis
of vicarious liability). Because the City cannot be held vicariously liable for Parton’s conduct as a
result of the release of Olympia’s claim against Parton and because vicarious liability was the only
basis of the cause of action that survived our first opinion in Olympia v. City of Maryville, we
conclude that the City was entitled to summary judgment. Settlement of the claim against Parton
“extinguish[ed] the cause of action against the wrongdoer and since this is true it clearly has the
effect of extinguishing the cause of action against his superior.” Stewart, 344 S.W.2d at 765. It
matters not one whit that Olympia claims that it was not fully compensated as a result of the
settlement with Parton. It is not the amount or adequacy of the settlement with the agent that has the
effect of extinguishing the City’s liability. Rather it is the mere fact that the agent’s liability was
extinguished by the release. If the agent can no longer be found liable in a judicial proceeding – and,
in this case, he clearly cannot – then it automatically follows that the principal cannot be held liable,
where, as here, the sole basis of the cause of action against the principal is vicarious in nature.

         We therefore find and hold that the trial court’s judgment was correct, but for a reason other
than the rationale expressed by that court. “We can affirm a trial court’s judgment if the result is
correct even though we disagree with the lower court’s reasoning.” Murvin v. Cofer, 968 S.W.2d
304, 311 (Tenn. Ct. App. 1997); Tenn. R. App. P. 36(a).

                                                  VII.

       The judgment of the trial court is affirmed. This case is remanded for collection of costs
assessed below, pursuant to applicable law. Costs on appeal are taxed to the appellant, Olympia
Child Development Center, Inc.


                                                         ___________________________________
                                                         CHARLES D. SUSANO, JR., JUDGE




                                                  -8-
