author: WILLIAM M. BARKER, J„ JANICE M. HOLDER, J.,

text:
    MURFREESBORO MEDICAL CLINIC, P.A. v. David UDOM.
    Supreme Court of Tennessee, at Nashville.
    Feb. 2, 2005 Session.
    June 29, 2005.

      Douglas B. Janney, III, Nashville, Tennessee, for the appellant, David Udom.
    Josh A. McCreary, Murfreesboro, Tennessee, for the appellee, Murfreesboro Medical Clinic, P.A.
   OPINION

WILLIAM M. BARKER, J„

delivered the opinion of the court, in which

E. RILEY ANDERSON and ADOLPHO A. BIRCH, JR., JJ„ joined. JANICE M. HOLDER, J., filed a concurring and dissenting opinion. FRANK F. DROWOTA, III, C.J., not participating.

The issue presented in this case is whether a covenant not to compete is enforceable between a physician and his former employer, a private medical clinic. The trial court concluded that the non-compete agreement was enforceable and enjoined the physician from establishing a medical practice at a location within the restricted area. The Court of Appeals affirmed the trial court’s decision that the non-compete agreement was enforceable, but reversed the grant of the temporary injunction and remanded the case to the trial court for further determinations with respect to the agreement’s “buy-out” provision. After a thorough review of the issues presented, including considerations of public policy, we reverse the Court of Appeals’ judgment. We hold that except for those specifically prescribed by statute, physicians’ covenants not to compete are unenforceable and void.

FACTUAL BACKGROUND

The plaintiff, Murfreesboro Medical Clinic (MMC), is a private medical practice in Murfreesboro, Tennessee, that employs more than fifty physicians. In early 2000, MMC made an offer of employment to the defendant, Dr. David Udom (Dr. Udom), to practice internal medicine at MMC. Dr. Udom verbally accepted the offer. To memorialize this agreement, MMC presented Dr. Udom with an “employment and stock transfer agreement” (the agreement) for his review and signature.

The agreement provided Dr. Udom with an initial two-year term of employment at MMC, with MMC having the option of extending the contract at the expiration of those two years. The agreement also contained a non-compete provision which stated:

[u]pon any termination of this Agreement ..., the Employee agrees not to engage in the practice of medicine within a twenty-five (25) mile radius of the public square of Murfreesboro, Tennessee for a period of eighteen (18) months following such termination.

The agreement further contained a “compensation for competition” provision, referred to by the' parties as a “buy-out” clause. This buy-out clause provided that the non-compete restrictions cited above would be waived “upon the payment by the Employee to the Corporation of an amount equal to twelve times the most recent Initial Monthly Salary ... and the reimbursement of the Corporation for any moving expenses paid to, or on behalf of, the Employee.”

Dr. Udom reviewed the proposed agreement, signed it, and returned it to MMC on or about April 4, 2000. He began work on September 1, 2000, and practiced medicine in the Internal Medicine Department until August of 2002.

On August 13, 2002, as his initial two-year term of employment was about to expire, MMC advised Dr. Udom that it would not renew his contract and that August 31, 2002, would be his last day of employment. After being informed of MMC’s decision, Dr. Udom met with Robert Hardy, MMC’s Chief Executive Officer, who advised Dr. Udom that MMC would enforce the non-compete provision. In early September, Dr. Udom met with Dr. D. Scott Corlew, MMC’s President and Chairman of the Board, to discuss whether the non-compete clause would allow Dr. Udom to become a hospitalist at Middle Tennessee Medical Center (MTMC). He was told that taking a position as a hospi-talist would be in breach of the non-compete provision, even though Dr. Udom would not be directly competing for patients with MMC. Dr. Udom was also told during this meeting that he could not accept a position at the Alvin C. York Veterans Administration Medical Center in Murfreesboro despite the fact that this facility did not directly compete for patients with MMC. In addition, Dr. Udom was informed that the non-compete provision would require him to relinquish his admitting privileges at MTMC.

Dr. Udom states in an affidavit contained in the record that the covenant not to compete would preclude him from practicing medicine at all of the hospitals in the Murfreesboro area, including MTMC in Murfreesboro, Stone Crest Medical Center in Smyrna, Alvin C. York VA Medical Center in Murfreesboro and Summit Hospital in Nashville. It would also restrict him from practicing in several communities surrounding Murfreesboro, including La Vergne, Antioch, Brentwood, Shelbyville, Woodbury, Lascassas and Lebanon.

On October 10, 2002, Dr. Udom sent a letter to MMC, informing it of his intention to open a medical practice in Smyrna, Tennessee. In a second letter dated November 18, 2002, he reiterated his intent and also informed MMC that he did not intend to utilize the “buy-out” clause of the employment agreement.

On December 10, 2002, MMC filed a complaint against Dr. Udom seeking to enjoin him from violating the non-compete provision of his employment agreement. Following a hearing in chancery court on January 10, 2003, MMC was granted a temporary injunction enjoining Dr. Udom from establishing a medical practice in Smyrna, Tennessee, or engaging in the practice of medicine at MTMC in Mur-freesboro, Tennessee. The court ordered MMC to file a $120,000.00 injunction bond and also permitted Dr. Udom to deposit $120,000.00 with the Clerk & Master’s Office as satisfaction of the “buy-out” clause. In addition, Dr. Udom was granted permission to file a Rule 9 interlocutory appeal.

On February 19, 2003, Dr. Udom opened a solo practice in Smyrna, Tennessee. His office was approximately fifteen miles from the public square of Murfreesboro, Tennessee.

In the Court of Appeals, Dr. Udom argued that (1) the trial court erred in granting MMC the temporary injunction and (2) that the covenant not to compete is unenforceable because it is unreasonable in the circumstance, does not secure a protecta-ble interest, is over-broad, and is against public policy. The Court of Appeals reversed the grant of the temporary injunction against Dr. Udom but affirmed the holding that the covenant not to compete was enforceable. The Court of Appeals remanded the case to the Chancery Court to determine “the reasonableness and specific amount to be used in satisfying the buy-out provision.”

We granted Dr. Udom permission to appeal to determine whether the covenant not to compete is enforceable. The issue of whether covenants not to compete are enforceable against physicians is one of first impression for this Court.

ANALYSIS

Our review of the trial court’s conclusions of law is de novo on the record with no presumption of correctness. Tenn. R.App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn.1993). The trial court’s findings of fact, however, are accompanied by a presumption of correctness, unless the evidence preponderates otherwise. Id.

MMC argues that it has a protectable business interest in retaining its patient base. MMC maintains that the covenant not to compete should be enforced because the unique one-on-one relationship between a physician and patient placed Dr. Udom in a heightened position to affect MMC’s ability to retain its patients when he left. MMC further argues that it has a protectable business interest in the substantial resources it has expended in providing training, office space, administrative support and salary to Dr. Udom. In response, Dr. Udom argues that the covenant not to compete is unreasonable, overly broad, and against public policy.

I. Covenants Not to Compete

In general, covenants not to compete are disfavored in Tennessee. See Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471, 472 (Tenn.1984). These covenants are viewed as a restraint of trade, and as such, are construed strictly in favor of the employee. Id. However, if there is a legitimate business interest to be protected and the time and territorial limitations are reasonable then non-compete agreements are enforceable. Id. at 473. Factors relevant to whether a covenant is reasonable include: (1) the consideration supporting the covenant; (2) the threatened danger to the employer in the absence of the covenant; (3) the economic hardship imposed on the employee by the covenant; and (4) whether the covenant is inimical to the public interest. Id. at 472-73 (citing Allright Auto Parks, Inc. v. Berry, 219 Tenn. 280, 409 S.W.2d 361, 363 (1966)). Also, the time and territorial limits must be no greater than necessary to protect the business interest of the employer. Allright Auto Parks, 409 S.W.2d at 363.

Covenants not to compete that implicate important public policy issues are even more strictly construed. See Spiegel v. Thomas, Mann & Smith, P.C., 811 S.W.2d 528, 529-80 (Tenn.1991); Allright Auto Parks, 409 S.W.2d at 364; Med. Educ. Assistance Corp. v. State, 19 S.W.3d 803, 813 (Tenn.Ct.App.1999). For example, in Spiegel, a law firm attempted to enforce the terms of a “deferred compensation agreement,” which was in essence a non-compete agreement, against an attorney formerly employed by the firm. 811 S.W.2d at 529. This Court analyzed the validity of the agreement in terms of its impact on the public good. Id. at 530. Because “[cjoncern for the public good is inherent in the purposes” underlying the ethics rules governing the legal profession, we looked to the legal ethics rules to guide our analysis. Id. We noted the American Bar Association’s position that restrictive covenants were unethical. Id. The ABA’s Ethics Committee views the practice of law as unlike a common business or trade because lawyers deal with clients, not merchandise, and lawyers have a duty to make legal counsel available to the public. Id. We concluded that to enforce the clause in question would violate these ethical standards and therefore held the clause void as against public policy. Id. at 531.

II. Public Policy Considerations in Restrictions on the Practice of Medicine

Much like restrictive covenants in the practice of law, restrictive covenants in the medical profession raise concerns regarding the public good. Having a greater number of physicians practicing in a community benefits the public by providing greater access to health care. Increased competition for patients tends to improve quality of care and keep costs affordable. Furthermore, a person has a right to choose his or her physician and to continue an on-going professional relationship with that physician. See Med. Educ. Assistance Corp., 19 S.W.3d at 816; see also AMA Code of Medical Ethics § E-9.06 (1977). Enforcing covenants not to compete against physicians could impair or even deny this right altogether.

Since 1980 the American Medical Association (AMA) has taken the position that physicians’ non-compete agreements impact negatively on health care and are not in the public interest. See AMA Code of Medical Ethics § E-9.02 (1998). Although stopping short of completely prohibiting covenants not to compete, the AMA strongly discourages them. Id. The AMA has maintained the view for the past twenty-five years that non-compete agreements “restrict competition, disrupt continuity of care, and potentially deprive the public of medical services.” Id. The AMA has also found that a person’s right to choose a physician and free competition among physicians are “prerequisites of ethical practice.” Id. at § E-9.06.

It is important to note that prior to 1980 the AMA took a more lenient stance towards physicians’ non-compete agreements. The official AMA position from 1960 until 1980 stated there was no ethical proscription against a “reasonable agreement not to practice within a certain area for a certain time, if it is knowingly made and understood.” AMA, Principles of Medical Ethics, Opinions and Reports of the Judicial Council 25 (1960).

Despite the AMA’s stated position that non-compete agreements among physi: cians are not in the public interest, we find it curious that a majority of states continue to apply a reasonableness standard in evaluating non-eompete agreements between physicians, similar to the evaluation of covenants in commercial contexts. See, e.g., Canfield v. Spear, 44 Ill.2d 49, 254 N.E.2d 433 (1969) (enforcing a covenant which prohibited a dermatologist from practicing within twenty-five miles of former employer); Duneland Emergency Physician’s Med. Group, P.C. v. Brunk, 723 N.E.2d 963 (Ind.Ct.App.2000) (holding a covenant unenforceable upon concluding that employer had failed to show a protectable business interest); Weber v. Tillman 259 Kan. 457, 913 P.2d 84 (1996) (enforcing a covenant not to compete upon concluding its restrictions were reasonable); Cmty. Hosp. Group, Inc. v. More, 183 N.J. 36, 869 A.2d 884 (2005) (enforcing with modifications a non-compete agreement upon determining that employer had a protectable

business interest and restrictions were reasonable); Karlin v. Weinberg, 77 N.J. 408, 390 A.2d 1161 (1978) (enforcing a covenant not to compete against a physician upon finding that the employer had a legitimate business interest in protecting patient relationships). . We note that the largest number of cases dealing with physician’s covenants not to compete were decided prior to the AMA’s adoption of its current ethical guidelines in 1980. See, e.g., Odess v. Taylor, 282 Ala. 389, 211 So.2d 805 (1968); Canfield v. Spear, 44 Ill.2d 49, 254 N.E.2d 433 (1969); Cogley Clinic v. Martini, 253 Iowa 541, 112 N.W.2d 678 (Iowa 1962); Lareau v. O’Nan, 355 S.W.2d 679 (Ky.1962); Willman v. Beheler, 499 S.W.2d 770 (Mo.1973); Ellis v. McDaniel, 95 Nev. 455, 596 P.2d 222 (1979); Karlin v. Weinberg, 77 N.J. 408, 390 A.2d 1161 (1978); Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966); Gelder Med. Group v. Webber, 41 N.Y.2d 680, 394 N.Y.S.2d 867, 363 N.E.2d 573 (1977); New Castle Orthopedic Assoc, v. Burns, 481 Pa. 460, 392 A.2d 1383, (1978); Oudenhoven v. Nishioka, 52 Wis.2d 503, 190 N.W.2d 920 (1971).

We further find it most surprising that several of the jurisdictions to have addressed this issue since 1980 have placed little emphasis on the general ethical concerns cited by the AMA in discouraging physicians’ non-compete agreements. See Raymundo v. Hammond Clinic Ass’n, 449 N.E.2d 276, 280-81 (Ind.1983) (dismissing as merely “self-serving” the argument that ethical considerations should prohibit enforcement of such covenants and offering no discussion of the AMA’s stance on the issue.); see also Rash v. Toccoa Clinic Med. Assocs., 253 Ga. 322, 320 S.E.2d 170 (1984); Duneland Emergency Physician’s Med. Group, P.C. v. Brunk, 723 N.E.2d 963 (Ind.Ct.App.2000); Weber v. Tillman 259 Kan. 457, 913 P.2d 84 (1996); Gant v. Hygeia Facilities Found. Inc., 181 W.Va. 805, 384 S.E.2d 842 (1989).

Nevertheless, several states, emphasizing public policy concerns, have subjected these covenants to closer scrutiny than non-compete agreements in other contexts. See Valley Med. Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999) (stating that the physician/patient relationship is “special and entitled to unique protection”); Iredell Digestive Disease Clinic v. Petrozza, 92 N.C.App. 21, 373 S.E.2d 449, 455 (1988) (stating that with respect to the doctor/patient relationship, the court was “extremely hesitant to deny the patient-consumer any choice whatsoever”); Ohio Urology, Inc. v. Poll, 72 Ohio App.3d 446, 594 N.E.2d 1027 (1991) (stating that the physician/patient relationship is entitled to unique protection, therefore physician’s non-compete agreements will be “strictly construed” for reasonableness); see also Ellis v. McDaniel, 95 Nev. 455, 596 P.2d 222 (1979); Statesville Med. Group, P.A. v. Dickey, 106 N.C.App. 669, 418 S.E.2d 256 (1992).

Also, three states have in recent years enacted statutes totally prohibiting non-compete clauses in physicians contracts. See Colo.Rev.Stat. Ann. § 8-2-113(3) (2003); Del.Code Ann. tit. 6, § 2707 (1993); Mass. Gen. Laws Ann. ch. 112, § 12X (1991). Additionally, antitrust statutes in several states, although not enacted specifically for this purpose, have been interpreted as prohibiting non-compete clauses between physicians. See Odess v. Taylor, 282 Ala. 389, 211 So.2d 805 (1968); Bosley Med. Group v. Abramson, 161 Cal.App.3d 284, 207 Cal.Rptr. 477 (1984); Bergh v. Stephens, 175 So.2d 787 (Fla.Dist.Ct.App.1965); Gauthier v. Magee, 141 So.2d 837 (La.Ct.App.1962); W. Montana Clinic v. Jacobson, 169 Mont. 44, 544 P.2d 807 (1976); Spectrum Emergency Care, Inc. v. St. Joseph’s Hosp. & Health Ctr., 479 N.W.2d 848 (N.D.1992).

III. Tennessee Code Annotated Section 63-6-204 (Supp.1998)

No Tennessee statute currently prohibits covenants not to compete between physicians. However, our legislature has weighed in on the issue to some extent by enacting Tennessee Code Annotated section 63-6-204 (Supp.1998). This statute specifically allows such non-compete covenants in two limited circumstances and with closely prescribed restrictions. See Tenn.Code Ann. § 63-6-204(d), (e) (Supp. 1998). In adopting this statute in 1997, our legislature recognized two situations in which the public interest weighed in favor of enforcing covenants not to compete against physicians: (1) when the employer is a hospital or an affiliate of a hospital, and (2) when the employer is a “faculty practice plan” associated with a medical school. Id. at (d)(2), (e)(1), (2).

While permitting physician covenants not to compete in the two limited circumstances above, the statute limits the restrictions that may be imposed in either of these situations. For example, if the employer is a hospital and has made a bona fide purchase of the physician’s practice, the maximum geographical restriction in a non-compete agreement is (1) the county in which the primary practice site is located or (2) a ten mile radius from this site, whichever is greater. Id. at (d)(2)(A)(I). Also, the maximum duration of the restriction is two years. Id. at (d)(2)(A)(ii). For physicians whose practices have not been purchased by the employer, the employer may only restrict the physician’s right to treat or solicit former patients (rather than all patients), and this only for a maximum of one year. Id. at (d)(2)(B), (C). Furthermore, if a physician’s employment is terminated by the employer for any reason other than “breach by the employee,” then all non-compete restrictions are void. Id. at (d)(3).

Non-compete provisions involving a faculty practice plan may completely restrict a former employee/physician’s right to practice medicine, but only -within the county in which the primary practice site is located or a ten mile radius, whichever is larger, and for a maximum time of two years. Id. at (e)(2)(A), (B). The statute does, however, allow the contracting parties to agree to further restrictions exceeding these limits if- such restrictions are “reasonable and not inimical to the public interest.” Id. at (e)(6). Importantly, however, the statute does not permit non-compete agreements in either the hospital employer circumstance or the faculty practice plan situation when physicians are practicing ophthalmology, radiology, pathology, anesthesiology or emergency medicine. Further, non-compete agreements are not permitted in either situation for physicians practicing primary care, obstetrics, or pediatrics in an area which has a shortage of these services. Id. at (e)(5).

The legislature, in adopting this statute, found that faculty practice plans were entitled to unique protection due to “special facts above and beyond ordinary competition” that would give an unfair competitive advantage to physicians who were former employees of faculty practice plans. Id. at (e)(1). The General Assembly stated that the “faculty practice plan’s right to be free from unfair competition from a former employed physician outweighs any financial hardship to the former employed physician resulting from the operation of any such restrictive covenant.” Id.

The rationale behind providing special protection to faculty practice plans was discussed in Med. Educ. Assistance Corp. v. State, 19 S.W.3d 803 (Tenn.Ct.App.1999). The court identified two competing public interests in evaluating the enforceability of a non-compete covenant involving a faculty practice plan. Id. at 816. The first interest was “the right of a patient to choose her physician and to be allowed to continue that relationship even after the physician leaves her place of employment.” Id. In competition with this was “the public’s interest in having an accredited, qualified, and well staffed medical college in East Tennessee.” Id. Weighing these, two interests, the court ultimately held that the covenant was enforceable because of the public benefit derived from having physicians trained by qualified faculty. Id.

When Tennessee Code Annotated section 63-6-204 was enacted, it was well established that covenants not to compete were disfavored in Tennessee. See Hasty, 671 S.W.2d at 472. Additionally, covenants not to compete between attorneys had been prohibited for a number of years. See Spiegel, 811 S.W.2d at 529-80. “[T]he Legislature is presumed to know the state of the law at the time it passes legislation.” State v. Mixon, 988 S.W.2d 661, 669 (Tenn.1999); see Cronin v. Howe, 906 S.W.2d 910, 912 (Tenn.1995). Thus, knowing that covenants not to compete were disfavored generally, and that they were prohibited completely in a profession comparable to the practice of medicine, the legislature chose to affirmatively provide for covenants not to compete for physicians, but only in very limited circumstances and with specifically prescribed limits on the scope of those covenants. We find it significant that the legislature chose not to validate all restrictive covenants applying to physicians, especially given that the legislature presumably knew that this Court had found all such covenants to be void as against public policy in a similar profession.

In analyzing this issue, we see no practical difference between the practice of law and the practice of medicine. Both professions involve a public interest generally not present in commercial contexts. Both entail a duty on the part of practitioners to make their services available to the public. Also, both are marked by a relationship between the professional and the patient or client that goes well beyond merely providing goods or services. These relationships are “consensual, highly fiduciary and peculiarly depen-dant on the patient’s or client’s trust and confidence in the physician consulted or attorney retained.” Karlin, 77 N.J. 408, 390 A.2d 1161, 1171 (Smith, J., dissenting). In both contexts, restrictive covenants have a destructive impact on those relationships. The rules governing other businesses and trades are not relevant to either the legal or medical profession, as both often require the disclosure of private and confidential information such as, in the context of physician and patient, personal medical or family history. We agree with the dissent of Justice Smith in Shankman v. Coastal Psychiatric Assocs., 258 Ga. 294, 368 S.E.2d 753 (1988) in which he stated:

The medical profession, like the legal profession, is one that of necessity must have the faith and confidence of its patients (clients) in order to give effective treatment. When a patient (client) has entrusted confidential information to the doctor (lawyer) this creates a relationship of confidence and the patient (client) does not wish to have that relationship involuntarily terminated.

368 S.E.2d at 754 (Smith, J., dissenting). The right of a person to choose the physician that he or she believes is best able to provide treatment is so fundamental that we can not allow it to be denied because of an employer’s restrictive covenant. Were we to hold otherwise, many of Dr. Udom’s patients would be denied the opportunity to choose whether or not they wanted to continue being treated by him. These patients, who have entrusted confidential information to Dr. Udom by virtue of their highly fiduciary relationship with him, should not have that relationship involuntarily terminated.

CONCLUSION

Due to the important public policy considerations implicated by physicians’ covenants not to compete, along with the ethical problems raised by them, and our state legislature’s decision not to statutorily validate all such covenants, we conclude that non-compete agreements such as the one at issue in the present case are inimical to public policy and unenforceable. Public policy considerations such as the right to freedom of choice in physicians, the right to continue an on-going relationship with a physician, and the benefits derived from having an increased number of physicians practicing in any given community all outweigh the business interests of an employer. In addition, we are guided by the American Medical Association’s ethical standards which view covenants not to compete as against public policy, because according to the AMA, such agreements “restrict competition, disrupt continuity of care, and potentially deprive the public of medical services.” Also persuasive is the fact that our legislature has elected to affirmatively provide for such covenants, but in very limited contexts. For these reasons, we hold that except for restrictions specifically provided for by statute, covenants not to compete are unenforceable against physicians.

Costs of this appeal are taxed to the appellee, Murfreesboro Medical Clinic, P.A., or its sureties, for which execution may issue if necessary.

JANICE M. HOLDER, J., filed a concurring and dissenting opinion.

FRANK F. DROWOTA, III, C.J., not participating.

JANICE M. HOLDER, J.,

concurring and dissenting.

Although I agree that the restrictive covenant in this case is unenforceable, I write separately to voice my disagreement with the majority’s holding that restrictive covenants involving physicians are unenforceable and void unless specifically permitted by Tennessee Code Annotated section 63-6-204(d) and (e) (Supp.1998). I do not believe that the legislature’s decision to validate physicians’ restrictive covenants in the two circumstances described in section 63-6-204(d) and (e) prohibits all other restrictive covenants between physicians.

In 1994, the legislature amended section 63-6-204 to include subsection (d). Subsection (d) validates physicians’ restrictive covenants when the employer is a hospital, or an affiliate of a hospital, that has made a bona fide purchase of the physician’s practice. See TenmCode Ann. § 63-6-204(d) (Supp.1994). In 1998, the legislature further amended section 63-6-204 to include subsection (e). Subsection (e) validates restrictive covenants between physicians and faculty practice plans associated with a medical school. See Tenn.Code Ann. § 63-6-204(e) (Supp.1998). The legislative history of subsection 63-6-204(e) indicates that the legislature did not intend a substantive change in the law but merely a clarification of pre-existing law. See Med. Educ. Assistance Corp. v. Mehta, 19 S.W.3d 803, 813 n. 2 (Tenn.Ct.App.1999) (quoting testimony from the Senate General Welfare Committee on May 21, 1997). Thus, the legislature recognized that preexisting law still permitted some forms of covenants-not-to-compete involving physicians even after the enactment of section 63-6-204(d).

In enacting subsections (d) and (e), the legislature chose to regulate only some of the restrictive covenants involving physicians. Had the legislature intended to preclude all other physicians’ restrictive covenants, it could have simply precluded all restrictive covenants.

The majority discusses Spiegel v. Thomas, Mann & Smith, P.C., 811 S.W.2d 528, 531 (Tenn.1991), in which this Court held that restrictive covenants between attorneys are void and unenforceable. The majority concludes that “no practical difference” exists “between the practice of law and the practice of medicine.” This Court, however, is responsible for regulating attorneys’ conduct and prescribing standards of ethical conduct. See Tenn. Sup.Ct. R. 8, 9; see also Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C., 813 S.W.2d 400, 403-04 (Tenn.1991) (discussing the purpose of the Code of Professional Responsibility). In Spiegel, we interpreted the Tennessee Supreme Court Rules as prohibiting attorneys’ restrictive covenants. Spiegel, 811 S.W.2d at 531.

In contrast, the Tennessee Board of Medical Examiners, not this Court, establishes ethical standards for physicians. See Tenn.Code Ann. § 63-6-214(b)(1) (Supp.1999); Swafford v. Harris, 967 S.W.2d 319, 321 (Tenn.1998). In setting these ethical standards, the Board adopted the AMA Code of Medical Ethics, which views non-compete agreements involving physicians unfavorably but does not prohibit them. AMA Code of Medical Ethics § E-9.02 (1998). The twelve-member Board, of which nine members are duly licensed physicians, is in a much better position than this Court to determine whether restrictive covenants involving physicians should be prohibited entirely. See Tenn.Code Ann. § 63-6-101 (1997) (providing for the creation and composition of the Board); see also State v. Robinson, 139 S.W.3d 661, 666-67 (Tenn.Crim.App.2004) (reversing the trial court’s order prohibiting the defendant, a pharmacist, from practicing pharmacy as a condition of probation because “the powers of the Tennessee Board of Pharmacy are adequate to regulate the defendant’s conduct within the profession”).

Physicians’ restrictive covenants that are not otherwise regulated by Tennessee Code Annotated section 63-6-204 (Supp. 1998) are enforceable if reasonable and not injurious to the public. I agree, however, with those jurisdictions that hold these restrictive covenants to a higher level of scrutiny than covenants not to compete in commercial contexts. See e.g., Valley Med. Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277, 1282-83 (1999); Iredell Digestive Disease Clinic v. Petrozza, 92 N.C.App. 21, 373 S.E.2d 449, 455 (1988); Ohio Urology, Inc. v. Poll, 72 Ohio App.3d 446, 594 N.E.2d 1027, 1032 (1991). Factors that should be considered in determining whether a particular restrictive covenant involving a physician meets this heightened scrutiny include: 1) the necessity of protecting a legitimate business interest; 2) the reasonableness of the time and territorial limitations; 3) the economic hardships imposed on the employee, and 4) any harm to the public interest resulting from the covenant.

The business interest that Murfreesboro Medical Clinic (“MMC”) seeks to protect in enforcing the covenant is its continued relationship with its patients. A person, however, has the right to choose a physician and continue a relationship with that physician. Furthermore, the record contains no evidence that Dr. Udom obtained business secrets or removed confidential business information or patient lists upon leaving MMC. The record fails to demonstrate that Dr. Udom, who was a licensed physician when hired by MMC, received advanced training or acquired special skills while employed at MMC other than practical, on-the-job experience. Although MMC expended sums for salary, equipment, office space, and administrative support, these expenditures were necessary for MMC to conduct business independent of Dr. Udom’s presence in the practice.

The twenty-five-mile limitation is overly broad as the evidence fails to demonstrate the extent to which MMC and Dr. Udom would compete for patients within the entire twenty-five-mile area. This area also appears to extend beyond one county and into communities outside of Murfreesboro. The legislature, in choosing to regulate some forms of restrictive covenants involving physicians, has restricted the applicable area to ten miles or the county in which the employer’s site is located, whichever is greater. See Tenn.Code Ann. § 63-6-204(d), (e) (Supp.1998). While this restriction is not applicable to Dr. Udom’s covenant, it is instructive in determining the reasonableness of the restriction at issue.

Furthermore, enforcement of the covenant would inflict an undue hardship on Dr. Udom. The covenant restricts Dr. Udom from practicing in any field of medicine within the restricted area regardless of whether he was competing with MMC in the field of internal medicine. This restriction is particularly harsh because MMC, not Dr. Udom, decided to end the employment relationship, and the evidence does not indicate that MMC terminated the relationship for cause.

Finally, the evidence does not suggest that enforcement of the covenant would result in a shortage of physicians or internal medicine specialists in the area. The remaining factors, however, weigh against enforcement of the covenant. Thus, while I agree that this particular restrictive covenant is unenforceable,'! respectfully dissent from the majority’s holding that all restrictive covenants involving physicians are void and unenforceable absent a specific statutory provision to the contrary.

      . A hospitalist is a physician, usually an internist, who specializes in the care of hospitalized patients. The American Heritage Dictionary (4th ed.2000). As a hospitalist, a physician treats patients who are already in the hospital, not patients who specifically seek out the physician.

      . Veterans Administration hospitals are federally funded facilities that provide treatment only to persons meeting certain eligibility requirements. In general, a person must have been honorably discharged from military service to be eligible for treatment at a VA facility. In addition, length of service, nature of disability, income level and available VA resources also factor into what treatment is available. See 38 U.S.C.A. § 1710 (2003).

      . The American Medical Association, founded in 1847, is the nation’s largest association of physicians, advocating for the profession, physicians, and patients. It was founded for the purpose of “scientific advancement, standards for medical education, launching a program of medical ethics, [and] improved public health.” See www.ama-assn.org/ama/pub/category/12982.html (Last updated March 10, 2005).

      . For a more in-depth review of the approaches taken by jurisdictions nationwide regarding the issue of non-compete agreements and physician contracts see Ferdinand S. Tinio, Annotation, Validity and Construction of Contractual Restrictions On Right of Medical Practitioner to Practice, Incident to Employment Agreement, 62 A.L.R.3d 1014, 1975 WL 37075 (1975); Arthur S. Di Dio, The Legal Implications of Noncompetition Agreements in Physician Contracts, 20 J. Legal. Med. 457 (1999); „ Paula Berg, Judicial Enforcement of Covenants not to Compete Between Physicians: Protecting Doctors’ Interests at Patients’ Expense, 45 Rutgers L.Rev. 1 (1992).

      . A "faculty practice plan” is a non-profit professional corporation affiliated with a medical school whose purpose is to allow physician faculty members of the school to conduct a clinical practice in addition to their faculty duties. See Med. Educ. Assistance Corp., 19 S.W.3d at 806. Maintaining an active practice through the faculty practice plan allows physicians to supplement their base salary from the medical school with other income. Id. Faculty practice plans also give students and resident physicians a place to gain valuable hands-on experience. Id.

      . In fact, if the physician has practiced in the county for five or more years, the employer may restrict the physician’s right to solicit or treat former patients for one year. Tenn.Code Ann. 63~6-204(d)(2)(b). If the physician has practiced in the county for less than five years, the employer may only restrict the physician's right to directly solicit former patients for one year. Id. at (d)(2)(C).

      . While Tennessee Code Annotated section 63-6-204 had been enacted prior to the time Med. Educ. Assistance Corp. was decided, it did not apply because the employment agreement at issue had been entered into prior to the enactment of the statute. 19 S.W.3d at 813. However, the Court of Appeals did comment that the statute was simply a codification of the existing law. Id.


source: Caselaw Access Project

author: ADOLPHO A. BIRCH, JR., J.,

license: Public Domain

text:
    STATE of Tennessee v. Amy Denise SUTTON.
    Supreme Court of Tennessee, at Jackson.
    April 5, 2005 Session.
    June 30, 2005.

      Benjamin S. Dempsey, Huntingdon, Tennessee (on appeal); Guy T. Wilkinson, District Public Defender and Billy R. Roe, Jr., Assistant District Public Defender (at trial), for the appellant, Amy Denise Sutton.
    Paul G. Summers; Attorney General and Reporter; Michael E. Moore, Solicitor General; Mark A. Fulks, Assistant Attorney General; Thomas E. Williams, III, Assistant Attorney General; G. Robert Radford, District Attorney General; and Eleanor Cahill, Assistant District Attorney General, for the appellee, State of Tennessee.
   Opinion

ADOLPHO A. BIRCH, JR., J.,

delivered the opinion of the court, in which

FRANK F. DROWOTA, III, C.J., and E. RILEY ANDERSON, JANICE M. HOLDER, and WILLIAM M. BARKER, JJ., joined.

We granted permission to appeal in this case pursuant to Tennessee Rule of Appellate Procedure 11 to determine the legality of the defendant’s sentence. The defendant, Amy Denise Sutton, was convicted by a jury of theft of property valued between $1,000 and $10,000. The trial court sentenced her to confinement for one year, followed by two years in community corrections. On appeal, she contends that because the length of her confinement exceeds her estimated release eligibility date of 10.8 months, her sentence is illegal. The defendant also challenges the sufficiency of the convicting evidence. Because we conclude' that the defendant’s release eligibility date is a mere possibility and not a right, we find the sentence to be valid. Further, we conclude that sufficient evidence was presented for a rational jury to convict the defendant of the charged offense. Accordingly, we affirm the judgment of the Court of Criminal Appeals.

I. Facts and Procedural History

The Grand Jury for Carroll County indicted the defendant for two counts of theft of property valued between $1,000 and $10,000, a Class D felony. TenmCode Ann. §§ 39-14-103, -105 (1997). On January 28, 2003, an order of nolle prosequi was entered as to one of the counts of theft. On that same day, the defendant was tried for the remaining count of theft.

At trial, Becky Raye Keith, a criminal investigator with the Carroll County Sheriffs Department, testified that on March 21, 2002, she and Roger Wood, another investigator, went to 7405 Highway 70, in Cedar Grove, to investigate the theft of a four-wheeler. The defendant’s brother, Scott Wesley Sutton, and Sutton’s fiancé, Wanda Maness, occupied that residence. While on the property, investigators located a “red Big Bear Yamaha” four-wheeler registered to Marshall K. Canady, who lived in Jackson.

Scott Sutton testified that several times over the course of three years, he had talked to the defendant about getting a four-wheeler. He recalled that about a week before Canady’s four-wheeler was stolen, he had a conversation with the defendant during which the defendant stated that “she might know somebody” who could get a four-wheeler. Sutton testified that within a couple of weeks of the conversation, the defendant had a four-wheeler at her home. Sutton stated that he drove the four-wheeler home, but his testimony was unclear as to payment details. He read a portion of a previous statement in court in which he stated that the defendant had told him that she could get him a four-wheeler for $500. Sutton alternatively told the court that he got the four-wheeler from a person named Sam Rhodes. He acknowledged that he originally told investigators that he got the four-wheeler from the defendant.

Officer Anthony Ray Dickson testified that he was present during two interviews of Sutton, and on both occasions, Sutton claimed he got the four-wheeler from the defendant.

Maness testified that she was present when investigators searched her home on March 21, 2002, and located the stolen four-wheeler. She stated that Sutton obtained the four-wheeler from the defendant’s house. Maness claimed that the four-wheeler came from Sam Rhodes.

Pamela Gaye Canady testified that she and her husband, Keith Canady, are the owners of the four-wheeler. She claimed that she did not give anyone permission to take the four-wheeler. Canady recalled that the couple had paid approximately $4,500 or $4,600 for the four-wheeler about a year prior and that it was still in good condition at the time it was stolen.

Roger Franklin Wood, a Criminal Investigator for the Tennessee Highway Patrol, testified that he, along with investigators Keith and Dickson, went to 7405 Highway 70 on March 21, 2002. He testified that he took sworn statements from Sutton and the defendant. According to Wood, the defendant, in her sworn statement, stated that she bought the four-wheeler from a man named Michael Stanford for $500. Wood investigated the defendant’s story, but he could not find any corroborating evidence.

The defendant testified that she received the four-wheeler from Sam Rhodes, a man that she was dating at the time. She claimed that she did not know the four-wheeler was stolen. The defendant testified that she lied in her original statement to investigators because she was trying to protect Rhodes.

At the conclusion of the trial, the jury found the defendant guilty of theft of property valued between $1,000 and $10,000. See TenmCode Ann. § 39-14-103 (1997). The judgment, however, is unclear as to the exact sentence imposed. It indicates that the defendant is to serve three years in the “TDOC” (Tennessee Department of Correction). Yet, it also indicates that the defendant is to receive a “Community Based Alternative” of two years, with “Service of 1 year and then Community Corrections.” The judgment further indicates under “Special Conditions” that the defendant is to report to the Carroll County jail for service of her sentence. Finally, the judgment indicates that as a Standard Offender, the defendant has a release eligibility of 30%.

The defendant now appeals pursuant to Rule 11 of the Tennessee Rules of Appellate Procedure, contending that her sentence is illegal because her sentence of confinement exceeds her release eligibility date and that insufficient evidence was presented to convict her of theft of property-

II. Standard of Review

The defendant challenges the legality of her split-confinement sentence. In reviewing sentencing issues, this Court shall conduct a de novo review of the record. Tenn. Code Ann. § 40-35-401(d) (2003). “Such review shall be conducted with a presumption that the determinations made by the court from which the appeal is taken are correct.” Id.

The defendant also challenges the sufficiency of the convicting evidence. Our standard of review is “whether, after reviewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979) (emphasis in original); State v. Goodwin, 143 S.W.3d 771, 775 (Tenn.2004). This standard is the same whether the conviction is based upon direct or circumstantial evidence. State v. Carruthers, 35 S.W.3d 516, 557 (Tenn.2000). When reviewing the evidence, “the State is entitled to the strongest legitimate view of the evidence and to all reasonable and legitimate inferences that may be drawn therefrom.” State v. Smith, 24 S.W.3d 274, 279 (Tenn.2000). Questions about the credibility of witnesses, the weight and value of the evidence, as well as all factual issues raised by the evidence are resolved by the trier of fact, and this Court does not re-weigh or re-evaluate the evidence. State v. Evans, 108 S.W.3d 231, 236 (Tenn.2003).

III. Analysis

A. Legality of Sentence

The defendant’s primary contention is that her sentence of confinement for one year is illegal because it exceeds her release eligibility date of 10.8 months. In order to properly address the defendant’s complaint, we must first determine the actual sentence imposed by the trial court. Unfortunately, the judgment form in this case is not clear. In the “[sentenced to” section of the form, the box labeled “TDOC” is checked, and a sentence of three years is written beside it. However, all other language on the document indicates that the defendant is sentenced to one year incarceration followed by two years community corrections. The judgment not only indicates that the defendant is to receive a “Community Based Alternative” of two years, but it also contains handwritten language stating that the sentence should include “[sjervice of 1 year and then Community Corrections.” Thus, we conclude, as did the Court of Criminal Appeals, that the trial court imposed a three-year community corrections sentence, including a one-year period of confinement. We conclude further that any reference to the TDOC was erroneous.

The State contends that the defendant’s sentence is proper because the release eligibility statute, by its own terms, applies only to sentences of incarceration; the State insists that a sentence involving community corrections is not a sentence of confinement to which release eligibility dates apply.

We conclude that the release eligibility statute does not apply to a community corrections sentence. First, we note the obvious — that the release eligibility statute and the community corrections statute are in different chapters of the code. In fact, this Court has previously acknowledged that “community corrections is a distinctly different sentencing scheme than probation.” Carpenter v. State, 136 S.W.3d 608, 611 (Tenn.2004). Further, one of the purposes of the release eligibility statute is to reduce overcrowding in jails. See Tenn.Code Ann. § 40-36-104(4) (2003). Sentences which are solely performed in a community corrections program do not involve a period of confinement' and thus do not affect the overcrowded conditions in the state prison system. Therefore, to the extent that a sentence of community corrections does not include confinement, we conclude that the release eligibility statute does not apply-

We do, however, note an exception to the general rule when community corrections sentences are coupled with a period of confinement. Where an offender is sentenced to a period of confinement in conjunction with a period of community corrections, the release eligibility statute would apply. The statute governing release eligibility status provides that “[a] felony sentence to the department of correction or to a local jail or workhouse shall be served according to this chapter.” Tenn.Code Ann. § 40-35-501(a)(1) (2003). This language is broad enough to include all periods of incarceration, regardless of the fact that they may be coupled with community corrections.

Despite the application of the release eligibility dates to terms of confinement, we conclude that the defendant’s sentence is proper. The crux of the defendant’s argument is that her confinement sentence of one year exceeds her release eligibility date of 10.8 months. Through such an argument, the defendant seems to equate her release eligibility date to her actual release. However, a defendant has no right to a conditional release prior to the expiration of a valid sentence of confinement. Greenholtz v. Inmates of the Neb. Penal and Corr. Complex, 442 U.S. 1, 7, 99 S.Ct. 2100, 60 L.Ed.2d 668 (1979); Daniels v. Traughber, 984 S.W.2d 918, 924 (Tenn.Ct.App.1998); see also Tenn.Code Ann. § 40 — 85—503(b) (2003) (stating that “[r]elease on parole is a privilege and not a right”). A protected liberty interest in parole exists only where the statute creates an expectation of parole. See Greenholtz, 442 U.S. at 11, 99 S.Ct. 2100. We conclude that Tennessee Code Annotated section 40-35-501 (2003), the statute addressing parole eligibility dates, does not provide a certainty of parole for sentences greater than two years. Rather, it simply “provides no more than a mere hope that the benefit will be obtained.” Greenholtz, 442 U.S. at 11, 99 S.Ct. 2100. Thus, the defendant has no “right” to be released on parole after 10.8 months in confinement.

We do, however, note that where there is specific language in a statute indicating that a defendant shall be released upon reaching the release eligibility date, there is more than a mere hope of release. Such is the case for sentences of two years or less. Tennessee Code Annotated section 40-35-501(a)(3) (2003), provides that “ [n] otwithstanding any other provision of law, inmates with felony sentences of two (2) years or less shall have the remainder of their original sentence suspended upon reaching their release eligibility date.” Thus, in sentences of two years or less, defendants have more than a mere hope of release. Instead, they have a right, based on Tennessee Code Annotated section 40-35-501(a)(3) (2003), to have the remainder of their sentence suspended upon reaching their release eligibility date. There is no corresponding right for sentences of more than two years, as is the case here.

B. Sufficiency of the Evidence

The defendant also challenges the sufficiency of the convicting evidence. Specifically, she contends that the evidence was insufficient because it was entirely circumstantial and did not exclude other reasonable theories. “A crime may be established by direct evidence, circumstantial evidence, or a combination of the two.” State v. Hall, 976 S.W.2d 121, 140 (Tenn.1998). “A conviction may be based entirely on circumstantial evidence where the facts are ‘so clearly interwoven and connected that the finger of guilt is pointed unerringly at the Defendant and the Defendant alone.’ ” State v. Smith, 868 S.W.2d 561, 569 (Tenn.1993) (quoting State v. Duncan, 698 S.W.2d 63, 67 (Tenn.1985)). Before an accused may be convicted of a criminal offense based upon circumstantial evidence, the facts and the circumstances “must be so strong and cogent as to exclude every other reasonable hypothesis save the guilt of the defendant, and that beyond a reasonable doubt.” State v. Crawford, 225 Tenn. 478, 470 S.W.2d 610, 612 (1971).

The defendant in this case was convicted of theft of property valued between $1,000 and $10,000. “A person commits theft of property if, with intent to deprive the owner of property, the person knowingly obtains or exercises control over the property without the owner’s effective consent.” TenmCode Ann. § 39-14-103 (1997). In the present case, Ms. Canady testified that she and her husband owned the four-wheeler at issue and that they had not given anyone permission to borrow it. Investigator Keith testified that the stolen four-wheeler had been recovered at the home of the defendant’s brother, Scott Wesley Sutton. Sutton testified that he had obtained the four-wheeler from the defendant’s home. He further testified that he and the defendant had previously discussed his desire to have a four-wheeler. Based on those facts, it is evident that even if the defendant did not steal the four-wheeler, she did exercise control over it. Further, the jury could have inferred that the defendant knew that the four-wheeler was stolen because she admitted that she was trying to protect her boyfriend when she lied to the police. Based on the foregoing, we conclude that sufficient evidence was presented to convict the defendant of theft of property valued between $1,000 and $10,000.

In addition, although the defendant argues that the ' evidence presented was purely circumstantial, it is apparent from the record that the defendant’s statements, the four-wheeler itself, and its possession by the defendant are more in the nature of direct evidence.

IV. Conclusion

Accordingly, we affirm the judgment of the trial court. It appearing that the defendant, Amy Denise Sutton, is indigent, costs are taxed to the State of Tennessee, for which execution may issue if necessary.

      . The defendant's middle name is alternatively spelled "Deniece" and "Denise” throughout the record.

      . We note that the release eligibility date issue arises only with sentences of three years or less. If the sentence is more than three years, then the release eligibility date would be more than one year which can be served in the local jail or workhouse as part of a split-confinement sentence. See Tenn.Code Ann. § 40-35-306(a) (2003).


author: WILLIAM M. BARKER, J.,

text:
    Beverly MILLER, et al. v. UNITED AUTOMAX.
    Supreme Court of Tennessee, at Jackson.
    April 6, 2005 Session.
    June 24, 2005.

      Kevin A. Snider, Germantown, Tennessee, for the appellants, Beverly Miller and Cassandra Meyer.

      Gary C. McCullough, Germantown, Tennessee, for the appellee,. United Automax.
   OPINION

WILLIAM M. BARKER, J.,

delivered the opinion of the court,

in which FRANK F. DROWOTA, III, C.J., and E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and JANICE M. HOLDER, JJ., joined.

This case arises out of the sale of a used car which Plaintiffs, the buyers of the car, maintain was damaged prior to sale despite Defendant’s denial of damage. A jury found for Plaintiffs, the buyers, on their claims for both common law intentional misrepresentation ánd for violation of the Tennessee Consumer Protection Act, Tennessee Code Annotated section 47-18-101 et seq. (1995). Plaintiffs elected to receive the punitive damages awarded by the jury under the common law claim in lieu of treble damages under the Tennessee Consumer Protection Act. When Plaintiffs then requested attorney’s fees under the Act, the trial court held that they could not receive both punitive damages and attorney’s fees. The trial court also held that the election of remedies made by Plaintiffs had become final before the entry of judgment and before Plaintiffs were informed of the amount they might have received in attorney’s fees under the Act and that Plaintiffs could not amend their election of remedies. The Court of Appeals upheld the decision of the trial court. We reverse, holding that Plaintiffs can receive both punitive damages under the common law misrepresentation claim and attorney’s fees under the Tennessee Consumer Protection Act. We remand to the trial court for award of appropriate attorney’s fees and costs.

FACTUAL BACKGROUND

On June 26, 1998, Beverley Miller and Cassandra Meyer (collectively “Plaintiffs”) purchased a used Ford Contour from United Automax (“Defendant”). Plaintiffs contend that the car had been damaged prior to the sale, while Defendant denies that the car was ever damaged.

Plaintiffs brought suit against Defendant in the General Sessions Court for Shelby County. Plaintiffs’ claims included breach of contract, breach of warranty, fraud, misrepresentation, and violation of the Tennessee Consumer Protection Act. Following the January 18, 2000, hearing, the general sessions court entered a judgment in favor of Plaintiffs in the amount of $10,000.00 plus court costs. Defendant timely appealed to the Shelby County Circuit Court.

Plaintiffs’ expert who had testified in the general sessions court trial died before the appeal was heard in the circuit court. Upon Plaintiffs’ motion, the circuit court allowed the deceased expert’s testimony from the transcript of the general sessions court proceedings to be admitted into evidence. A jury trial was held in the circuit court on April 8 and 9, 2003. At the conclusion of the trial, the jury completed written jury verdict forms provided by the trial judge. One form related to Plaintiffs’ misrepresentation claim and another form related to Plaintiffs’ claim under the Tennessee Consumer Protection Act.

In completing the form regarding the misrepresentation claim, the jury found the following:

Question 1: Did the Defendant misrepresent the condition of the vehicle (that it never had been wrecked) at the time it was sold?
Answer: Yes.
Question 2: Was the misrepresentation without negligence, negligent or intentional or reckless?
Answer: Intentional or reckless
Question B: What damage did the Plaintiff sustain that she would not have had if the condition of the automobile was what it was represented to be?
Answer: $899.50.
Question 4: (Answer only if you have found the misrepresentation to have been intentional or reckless. If not intentional or reckless, put “none” after the dollar sign below). What damages, if any, should be awarded to punish the Defendant for the intentional or reckless misrepresentation?
Answer: $3,000.

With respect to the claim under the Tennessee Consumer Protection Act, the jury found as follows:

Question 1:‘ Did the Defendant represent that the automobile was not wrecked when it had, in fact, been in a wreck?
Answer: Yes.
Question 2: What actual damages, meaning loss of money, did the Plaintiff suffer as a result of the representation? Answer: $899.50.

After the trial court informed the parties as to the jury’s conclusions, the following exchange took place between the trial judge and the parties’ attorneys:

MR. SNIDER [Plaintiffs’ Attorney]: Your Honor, I guess, as I understand the election, the election would be between accepting punitive damages [for common law misrepresentation] or, essentially, asking Your Honor for the treble damages [under the Tennessee Consumer Protection Act].
THE COURT: That’s correct.
MR. SNIDER: So I guess based upon the number calculation, I think that would be more than the maximum that you could award anyway.
THE COURT: Yeah.
MR. SNIDER: So we would accept the punitive damages. But we still have the issue — and we were going to do it by separate motion; I think that’s what Your Honor had wanted — in regard to attorney fees.
THE COURT: All right.
MR. McCULLOUGH [Defendant’s Attorney]: Your Honor, please, my understanding is that he’s accepted the misrepresentation — made his election to accept the misrepresentation with the $899.50 and the $3,000.
THE COURT: That’s my understanding.
MR. SNIDER: Correct. But we also have the verdict under the Consumer Protection Act, which would entitle my client to a claim for attorney fees, which you’re going to rule on later.
THE COURT: Okay. There just can’t be any duplication of damages or punitive damages.

A hearing was conducted on April 25, 2003, regarding Plaintiffs’ claim for attorney’s fees under the Tennessee Consumer Protection Act. During this hearing, the plaintiffs attorney made the following remarks:

I think, if I understand [Defendant’s attorney’s argument], and our position is, Your Honor, we don’t dispute that we accepted the punitive damages of misrepresentation, but our understanding was, at least my understanding was, in choosing that is you would just be waiving any claim of treble damages, not that you would be waiving the claim for attorney fees.

However, the trial judge concluded at the hearing: “So I’m going to hold that there was an election made to accept the tort remedy and with the benefits and shortcomings of the tort remedy and that it can’t be changed now after having done so.” The trial court entered an order in which it awarded Plaintiffs $899.50 in actual damages and $3,000 in punitive damages under Plaintiffs’ common law misrepresentation claim. The trial court denied Plaintiffs’ claim for attorney’s fees under the Tennessee Consumer Protection Act.

The Court of Appeals upheld the trial court’s determination that Plaintiffs were forced to elect between receiving punitive damages for their common law misrepresentation claim and attorney’s fees under the Tennessee Consumer Protection Act. The Court of Appeals also upheld the trial court’s determination that the election made by Plaintiffs became final before the entry of judgment and before Plaintiffs were informed of the amount they might have received in attorney’s fees under the Tennessee Consumer Protection Act.

Plaintiffs filed a timely application for permission to appeal, which we granted to determine whether Plaintiffs could recover both punitive damages under the common law claim for misrepresentation and attorney’s fees under the Tennessee Consumer Protection Act.

ANALYSIS

I. Standard of Review

The trial court’s determination that Plaintiffs were not entitled to an award of attorney’s fees after electing punitive damages under the misrepresentation- claim in lieu of treble damages under Consumer Protection Act claim is a question of law. As such, our review of the trial court’s decision is de novo upon the record with no presumption of correctness. See Tenn. R.App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn.1993).

II. The Election of Remedies Doctrine

Plaintiffs'argue that they are entitled to both punitive damages and attorney’s fees because the two remedies are not inconsistent with each other nor do they provide double redress for a single wrong. Plaintiffs reason that the only election that needed to be made was between the award of treble damages and punitive damages, and not between the entire elements and remedies of each theory of recovery. Defendant responds that the election was essentially between the two verdicts with their respective recovery schemes, and because Plaintiffs chose punitive damages under the common law claim, they could not also receive the attorney’s fees that would be available under the Act. We agree with Plaintiffs.

Tennessee Rule of Civil Procedure 8.01 “grants a plaintiff wide latitude in pleading alternative claims for relief and pursuing an array of theories of recovery in a single action.” Concrete Spaces, Inc. v. Sender, 2 S.W.3d 901, 906 (Tenn.1999). This allows Plaintiffs to seek redress both under common law and under the Tennessee Consumer Protection Act. However, in certain circumstances, a plaintiff is required to elect between remedies.

The election of remedies doctrine has two general applications: (1) a plaintiff may be estopped from pursuing additional remedies once a plaintiff has made a choice to pursue a specific remedy in another forum or lawsuit, and (2) a plaintiff may be forced to elect between different remedies “where the remedies are so inconsistent or repugnant that pursuit of one necessarily involves negation of the other.”

Forbes v. Wilson County Emergency Dist. 911 Bd., 966 S.W.2d 417, 421 (Tenn.1998) (internal citations omitted). “For election of remedies to apply, the two remedies sought must be truly repugnant to one another.” Allied Sound, Inc. v. Neely, 909 S.W.2d 815, 822 (Tenn.Ct.App.1995). The purpose behind the election of remedies doctrine is to prevent “double redress” for a single wrong. Forbes, 966 S.W.2d at 421.

Clearly, Plaintiffs are not pursuing additional remedies in another forum or lawsuit. Thus, the only question is whether the two remedies, punitive damages and attorney’s fees, are “truly repugnant to one another.”

In Concrete Spaces, this Court dealt with the election of remedies doctrine in a case involving a claim under the Tennessee Consumer Protection Act and a claim for negligent misrepresentation. In that case, the issue was whether a plaintiff could receive both punitive damages under the common law claim and treble damages under the Act. We held that such a double recovery was impermissible.

Almost every jurisdiction addressing this question has concluded that recovery of both multiple statutory damages and punitive damages constitutes an impermissible double recovery because the two forms of enhanced damages serve the same functions. The purpose of punitive damages is not to compensate the plaintiff but to punish the wrongdoer and to deter others from committing similar wrongs. Because multiple damages are punitive in nature and not intended to compensate for the plaintiffs injury, a plaintiff cannot recover both punitive damages and multiple damages in the same cause of action, even if they are each available, because receipt of both forms of enhanced damages violates the principle against double recovery.

Concrete Spaces, 2 S.W.8d at 906-07 (internal citations omitted).

Plaintiffs concede that they are not entitled to both treble damages under the Tennessee Consumer Protection Act and punitive damages under common law misrepresentation. Nor do they suggest that they could receive actual damages under both verdicts. This result is consistent with our prior holding in Concrete Spaces, 2 S.W.Sd at 906-07. However, unlike Concrete Spaces, this case deals with the recovery of attorney’s fees, not treble damages under the Act, in addition to punitive damages.

The Tennessee Consumer Protection Act provides that once a trial court finds that there has been a violation of the Act, the court may award the plaintiff “reasonable attorney’s fees and costs.” TenmCode Ann. § 47-18-109(e)(l) (1995). Unlike an award of treble damages under the Tennessee Consumer Protection Act, attorney’s fees are not punitive in nature. “The potential award of attorney’s fees under the Tennessee Consumer Protection Act is intended to make prosecution of such claims economically viable to plaintiff.” Killingsworth v. Ted Russell Ford, Inc., 104 S.W.3d 530, 535 (Tenn.Ct.App.2002) (citation omitted). On the other hand, punitive damages are designed to punish wrongful conduct and to deter others from such conduct in the future. See Concrete Spaces, 2 S.W.3d at 906-07. Because the purpose of the attorney’s fees and costs provision is different from the purpose of punitive damages, an award of attorney’s fees and costs under the Tennessee Consumer Protection Act is not duplicative of punitive damages.

Again, the election of remedies doctrine serves only to prevent double redress for a single wrong. See Wimley v. Rudolph, 931 S.W.2d 513, 515 (Tenn.1996); Allied Sound, Inc., 909 S.W.2d at 822. The election is not, as Defendant suggests, between the two separate verdicts, but only between those parts of the recovery that are duplicative. Therefore, while Plaintiffs may not recover both punitive damages and treble damages, they may recover both punitive damages and attorney’s fees.

The other issue raised by Plaintiffs on appeal — whether the trial court erred in’ refusing to allow them to amend their election — has become moot with our determination that Plaintiffs are entitled to both punitive damages under the common law misrepresentation claim and attorney’s fees under the Tennessee Consumer Protection Act.

III. Use of Transcript

Automax raises one additional issue on appeal. It contends that the trial court erred in allowing Plaintiffs to use a transcript from the trial in general sessions court because Defendant paid for the court reporter and Plaintiffs did not share in the cost. Following the trial in general sessions court, and before the trial.in circuit court, the expert for Plaintiffs died. Plaintiffs filed a motion requesting that the expert’s testimony from the lower court be admitted on the transcript. The trial court granted the motion over Defendant’s objection.

A party who does not share in the per diem expense of a- court reporter runs the risk of not having a verbatim record available. This risk stems from the contractual relationship created between the reporter and the payee. See Beef N’ Bird of Am., Inc. v. Cont’l Cas. Co., 803 S.W.2d 234, 241 (Tenn.Ct.App.1990).

The Court of Appeals explains the situation in this case:

It is uncontested that Appellants made arrangements with the court reporter to purchase a copy of the transcript. After procuring the copy, Appellants sought its admission in the trial court. Auto-max contends that Appellants did not “make satisfactory arrangements” with Automax in obtaining the transcript. While it is true that Appellants did not seek Automax’s permission, they were able to buy a transcript from the reporter. Any contractual obligations concerning the transcript arise from the terms of any agreement between Auto-max and the reporter it hired. Consequently, if Automax disagrees with the court reporter’s actions in selling the Appellants a copy of the transcript, that is a dispute between Automax and the court reporter.

' We agree with and adopt this summation from Court of Appeals and hold that Defendant’s issue is without merit.

CONCLUSION

In summary, we hold that an award of attorney’s fees and costs under the Tennessee Consumer Protection Act is not duplicative of punitive damages awarded under a claim, for common law misrepresentation. Therefore, Plaintiffs are allowed to recover attorney’s fees under the Act after having elected to receive punitive damages in lieu of treble damages. We reverse the Court of Appeals and remand the case to the trial court for a determination of appropriate attorney’s fees pursuant to the Tennessee Consumer Protection Act.

Costs of this appeal are assessed to United Automax, and their sureties, for which execution may issue if necessary.


author: E. RILEY ANDERSON, J.,

text:
    Kathryn C. BLACK v. Stevan L. BLACK.
    Supreme Court of Tennessee, at Jackson.
    April 6, 2005 Session.
    July 1, 2005.

      Hal Gerber and Margaret M. Chesney, Memphis, Tennessee, for the Appellant, Kathryn C. Black.
    Daniel L. Taylor, Memphis, Tennessee, for the Appellee, Stevan L. Black.
   OPINION

E. RILEY ANDERSON, J.,

delivered the opinion of the court,

in which FRANK F. DROWOTA, III, C.J., and ADOLPHO B. BIRCH, JR., JANICE M. HOLDER, and WILLIAM M. BARKER, JJ., joined.

We granted this appeal to determine whether the trial court properly dismissed the wife’s complaint for “fraud, deceit, and coercion” after finding that her complaint failed to state an independent action upon which to set aside a final divorce decree. The Court of Appeals affirmed. After reviewing the record and applicable authority, we conclude that the wife failed to allege sufficient facts to support either an independent action to set aside the final divorce decree under Rule 60.02 of the Tennessee Rules of Civil Procedure or a separate common law cause of action for fraud. Accordingly, the Court of Appeals’ judgment is affirmed on the grounds set forth in this opinion.

The appellant, Kathryn C. Black (“Wife”), filed a complaint on February 14, 2003, entitled “Complaint for Damages for Fraud, Deceit, and Coercion” against the appellee, Stevan L. Black (“Husband”), in the Chancery Court for Shelby County, Tennessee. The allegations and evidence are summarized below.

Background

On October 6, 1990, the Husband and Wife were married and remained so for almost ten years, during which time two children were born of the marriage. Unfortunately the relationship deteriorated, and on September 13, 2000, the Husband filed a divorce complaint against the Wife. On the same day, the Husband and the Wife executed and filed a Marital Dissolution Agreement (“MDA”) in the Circuit Court for Shelby County, Tennessee. Later, on November 29, 2000, the Wife and the Husband sighed and filed an amended MDA in the Circuit Court for Shelby County. Both the MDA and the amended MDA were prepared by the Husband, an attorney who practiced law in Tennessee. Neither the Wife nor the Husband was represented by separate counsel.

The initial MDA dated September 13, 2000, stated that the parties would share joint legal custody of the children but that the Husband would have primary custody. It divided the property and assets of the parties and established, among other things, that the Husband would pay the Wife alimony in solido for twenty-four months.

The MDA also stated the Wife had received treatment for alcoholism and would “refrain from the consumption of alcohol in any amount.” It further stated, however, that “[e]ach of the parties has represented to the other that he or she is not under the influence of alcohol or drugs at the execution of this agreement.” Finally, the MDA provided as follows:

Husband and Wife have each read this Agreement and acknowledge that they fully understand the provisions thereof, and that this is a fair and reasonable agreement and is not the result of any fraud, duress, or any undue influence exercised by either party herein upon the other, or by any other person or persons upon either of the parties. They further understand and agree that this Agreement constitutes the entire understanding of the parties, there being no representations, promises, warranties, covenants, or undertakings other than those expressly set forth herein.

The amended MDA executed by the Husband and the Wife on November 29, 2000, stated that the parties “do hereby ratify and affirm the Marital Dissolution Agreement executed by them on September 13, 2000.” The amended MDA, however, then provided that the Wife intended to move to Palm Springs, California, and that the Husband would pay rental payments on the Wife’s leased property for one year.

On December 12, 2000, the Shelby County Circuit Court after a hearing granted a final decree of divorce, which incorporated the provisions of the MDA and the amended MDA.

On February 14, 2003, more than two years after the entry of the final decree of divorce, the Wife filed a “Complaint for Damages for Fraud, Deceit, and Coercion” against the Husband in the Chancery Court for Shelby County, Tennessee. The complaint alleged that the Husband coerced her into signing the MDA while she was under the influence of alcohol and also fraudulently concealed his net worth. She demanded $1,000,000 in compensatory damages and an unspecified amount of punitive damages. The complaint alleged that the following occurred when the Husband presented a proposed MDA to the Wife on September 8, 2000:

When [Wife] told [Husband] she wanted to have the advice of counsel, [Husband] then told her if she did so, and if she did not sign the document, he would have her prosecuted for child abuse and put in jail; that he would see to it that she would never see her children again; that she would have to pay hundreds of thousands of dollars in legal fees; that she would receive nothing in the event of a divorce and she would have to pay child support.

The complaint further alleged that the Wife refused to sign the MDA, began drinking, and was under the influence of alcohol when she met with the Husband and executed the MDA on September 13, 2000. According to the Wife’s complaint, the Husband “repeated the[ ] threats,” and the Wife signed the MDA “due to the capacity and willingness of the [Husband] to carry out his threats.” Finally, the complaint alleged that the Husband “fraudulently concealed his true net worth” by withholding the identity and value of his realty, securities, law practice, office equipment, and furniture.

The Husband filed a motion to dismiss the complaint on the grounds that it failed to state a claim upon which relief could be granted. The motion stated that the Wife had accepted benefits under the final divorce decree entered on December 12, 2000, and had “waited years to raise these complaints.”

The Chancellor granted the motion to dismiss after finding that the Wife’s complaint was “word[ed] in terms of a tort” but was “really effectively ... more of a setting aside [and] modifying the divorce.” The Chancellor explained: “I have read through the allegations and the factual assertions that she makes and they do not ... sound in tort sufficient that this Court can say that there has been presented ... a set of facts ... that one could conceivably have [a] cause of action for fraud-....”

On appeal, the Court of Appeals held that the Wife’s complaint constituted an independent action seeking to set aside the final divorce decree under Rule 60.02 of the Tennessee Rules of Civil Procedure, but that the Wife had failed to allege sufficient facts of extrinsic fraud as required under Rule 60.02. The court further held that the Wife’s allegations of coercion and duress under the particular facts of this case likewise did not establish an independent action under Rule 60.02 to set aside the final divorce decree in the Shelby County Chancery Court. In sum, the court concluded that “the only method by which [the Wife] can challenge the divorce decree on the basis of [the Husband’s] conduct would be by filing a motion pursuant to Rule 60.02” in thé Shelby County Circuit Court.

We granted this appeal.

Analysis

Standard of Review

A motion to dismiss a complaint for failure to state a claim pursuant to Rule 12.02(6) of the Tennessee Rules of Civil Procedure states that the allegations in the complaint, accepted as true, fail to establish a cause of action for which relief can be granted. Leach v. Taylor, 124 S.W.3d 87, 90 (Tenn.2004). A motion to dismiss admits the truth of the relevant and material allegations contained in the complaint. Id.

When reviewing a trial court’s dismissal of a complaint pursuant to Rule 12.02(6), we accept the factual allegations in the complaint as true. Id. Our review of the trial court’s dismissal presents a question of law, which wq review de novo without according a presumption of correctness to the conclusions reached by the trial court. Id.

Allegations of Fraud

The Wife maintains that the complaint stated a common law tort cause of action for fraud; that the complaint was not an action to set aside the divorce decree; and that the trial court therefore erred in characterizing and dismissing her complaint as an action to set aside the final divorce decree under Rule 60.02 of the Tennessee Rules of Civil Procedure. The Husband responds that the action was properly dismissed by the trial court because the complaint sought to set aside the final divorce decree but failed to allege extrinsic fraud or otherwise comply with Rule 60.02.

Tennessee Rule of Civil Procedure 60.02

Given the rulings of the trial court and the Court of Appeals, we begin our analysis of this issue with a review of Rule 60.02, the purpose of which “is to alleviate the effect of an oppressive or onerous final judgment.” Killion v. Dep’t. of Human Servs., 845 S.W.2d 212, 213 (Tenn.1992). The rale may afford relief from judgments or orders in the following circumstances:

On motion and upon such terms as are just, the court may relieve a party ... from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (3) the judgment is void; (4) the judgment has been satisfied, released or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that a judgement should have prospective application; or (5) any other reason justifying relief from the operation of the judgment.

A motion filed under Rule 60.02 “shall be made within a reasonable time, and for reasons (1) and (2) not more than one year after the judgment, order or proceeding was entered or taken.” Tenn. R. Civ. P. 60.02; see also Killion, 845 S.W.2d at 213-14.

Because the Wife filed her complaint in the chancery court, rather than filing a motion in the circuit court within one year of the entry of the final divorce decree, the complaint cannot be considered as a motion for relief from the divorce decree under sections (1) though (5) of Rule 60.02.

Rule 60.02, however, also contains a “savings” provision, which clarifies that the rule “does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order or proceeding, or to set aside a judgment for fraud upon the court.” See Tenn. R. Civ. P. 60.02 (emphasis added). Although there is no time limit for filing an independent action to set aside a judgment, it may be granted “only under unusual and exceptional circumstances” and “where no other remedy is available or adequate.” Whitaker v. Whirlpool Corp., 32 S.W.3d 222, 229-30 (Tenn.Ct.App.2000) (citing Jerkins v. McKinney, 533 S.W.2d 275, 281 (Tenn. 1976)).

Although a motion to set aside a judgment for fraud under section 2 of Rule 60.02 may be based on intrinsic or extrinsic fraud, an independent action to set aside a judgment under the savings provision of Rule 60.02 requires extrinsic fraud. Whitaker, 32 S.W.3d at 230; see also New York Life Ins. Co. v. Nashville Trust Co., 200 Tenn. 513, 292 S.W.2d 749, 751-53 (1956) (independent action to set aside judgment requires extrinsic fraud). Intrinsic fraud occurs “within the subject matter of the litigation,” and it includes such things as falsified evidence, forged documents, or perjured testimony. Whitaker, 32 S.W.3d at 230. Extrinsic fraud, on the other hand, “involves deception as to matters not at issue in the case which prevented the defrauded party from receiving a fair hearing.” Nobes v. Earhart, 769 S.W.2d 868, 874 (Tenn.Ct.App.1988). Examples of extrinsic fraud have included keeping a party from filing a lawsuit by falsely promising a compromise, keeping a party from knowing about a lawsuit, and an attorney’s claiming to represent a party while acting in a manner opposed to the party. See id.

Although the Wife’s complaint was entitled “Complaint for Damages for Fraud, Deceit, and Coercion” and sought relief in the form of compensatory and punitive damages, the Court of Appeals concluded that the substance of the complaint was an independent action under Rule 60.02 to set aside the final divorce decree entered on December 12, 2000. We agree.

The complaint alleges that the Husband acted' fraudulently by withholding the identity and value of his property and securities before the MDA was executed on September 13, 2000. The allegations conflicted with the language of the MDA, which stated in part that the MDA was “fair and reasonable” and “not the result of any fraud, duress, or any undue influence exercised by either party herein upon the other, or by any other person or persons upon either of the parties.” The allegations also conflicted with the language of the amended MDA, which was executed on November 29, 2000, and which ratified and affirmed the provisions of the initial MDA. There is no dispute that both the MDA and the amended MDA were incorporated into the final divorce decree, which was entered by the circuit court on December 12, 2000. In sum, the complaint, even when viewed in a light most favorable to the Wife, was an independent action alleging fraud and seeking relief from the final divorce decree entered on December 12, 2000, in the Shelby County Circuit Court.

As a result, we further agree with the Court of Appeals’ conclusion that the Wife’s complaint did not allege sufficient facts to establish extrinsic fraud as required by the savings provision of Rule 60.02. As discussed above, the complaint alleged that the Husband “fraudulently concealed his true net worth” by withholding the identity and value of his property, securities, law practice, equipment and furnishings. Although these assertions concerned the subject matter of the litigation and may have been sufficient to establish intrinsic fraud had they been pursued within one year of the divorce .decree under section 2 of Rule 60.02, there were no assertions of fraud indicative of “deception as to matters not at issue in the ease ” that “prevented the [appellant] from receiving a fair hearing.” See Nobes, 769 S.W.2d at 874 (emphasis added).

Accordingly, we conclude that the Court of Appeals properly held that the substance of the Wife’s complaint sought to set aside the final divorce decree and did not satisfy the savings provision under Rule 60.02 of the Tennessee Rules of Civil Procedure.

Common Law Fraud

We next consider an issue that was not addressed by the Court of Appeals, in which the Wife maintains that a party may file a common law action for fraud that is separate from either a motion or an independent action to set aside a judgment under Rule 60.02.

Nothing in Rule 60.02, or any other authority cited by the parties, prevents the filing of a common law action for fraud for damages simply because the ground of “fraud upon the court” may serve as a basis for setting aside a judgment. Indeed, as noted above, the Wife framed her complaint as a “Complaint for Damages for Fraud, Deceit and Coercion” and requests relief in the form of compensatory and punitive damages. Thus, even though we agree with the Court of Appeals that the substance of the complaint was an independent action under Rule 60.02 to set aside the divorce decree, we will, in viewing the allegations in a light most favorable to the Wife, also consider whether the complaint contains the elements required for a common law action for fraud.

As this Court has observed, a common law cause of action for fraud has the following elements:

When a party intentionally misrepresents a material fact or produces a false impression in order to mislead another or to obtain an undue advantage over him, there is a positive fraud. The representation must have been made with knowledge of its falsity and with a fraudulent intent. The representation must have been to an existing fact which is material and the plaintiff must have reasonably relied upon that misrepresentation to his injury.

Brown v. Birman Managed Care, Inc., 42 S.W.3d 62, 66-67 (Tenn.2001). In addition, the elements of fraud must be “stated with particularity.” Tenn. R. Civ. P. 9.02.

Here, the Wife’s complaint was properly dismissed because it did not contain the elements required for a common law action for fraud for the reasons set out below. First, the Wife’s complaint does not contain particularized allegations as to the Husband’s misrepresentations or as to the reasonableness of the Wife’s reliance on such statements. Brown, 42 S.W.3d at 66-67; see also Tenn. R. Civ. P. 9.02. Second, the allegations of fraud in the complaint conflict with the initial MDA, which stated that it was “not the result of any fraud....” Moreover, the allegations of fraud in the complaint do not address in any fashion the amended MDA executed by the parties, which ratified the provisions in the initial MDA. Finally, both the MDA and the amended MDA, which addressed the issue of fraud, were incorporated into the final divorce decree. Although the doctrine of res judicata, which precludes litigation of claims that have already been resolved between the parties, will not bar a claim based on extrinsic fraud, see New York Life Ins. Co., 292 S.W.2d at 754-55; Nobes, 769 S.W.2d at 874, the Wife’s complaint fails to allege extrinsic fraud for the reasons discussed above.

Accordingly, the Wife’s complaint was properly dismissed, even if considered as a common law cause of action for fraud, because it did not contain particularized allegations as to the required elements of fraud and because it did not contain any allegations of fraud with regard to the amended MDA, which had ratified the provisions of the initial MDA and was incorporated into the final decree of divorce.

Allegations of Coercion

Finally, the Wife argues that the complaint alleged a cause of action for coercion and that the Chancellor erred in dismissing the complaint.

The Court of Appeals determined that when viewed in a light most favorable to the Wife, the substance of the complaint amounted to an independent action under the savings provision of Rule 60.02 to set aside the final divorce decree based on coercion and duress. We agree.

For example, the complaint alleged that the Husband, a practicing lawyer, knew the Wife was under the influence of alcohol when the MDA was executed on September 13, 2000. The complaint also alleged that the Husband threatened to prosecute the Wife for child abuse and told her she would incur legal fees, “receive nothing,” and have to pay child support. The complaint further asserted that the Wife signed the MDA “due to the capacity and willingness of the [Husband] to carry out his threats.” In short, the Wife’s allegations of coercion relate to the MDA executed by the parties on September 13, 2000, which was incorporated into the final divorce decree entered on December 12, 2000.

As stated earlier, an independent action to set aside a judgment may be filed under Rule 60.02 of the Tennessee Rules of Civil Procedure “only under unusual and exceptional circumstances and ... where no other remedy is available or adequate.” Whitaker, 32 S.W.3d at 229-30. Here, the Wife’s complaint does not establish an independent action for setting aside the judgment based on coercion under the savings provision in Rule 60.02. The complaint was filed over two years after the MDA was executed by the parties and incorporated into the final divorce decree that was entered by the circuit court. Moreover, the complaint makes no allegations of coercion with respect to the amended MDA, which was executed by the parties only two months after the MDA and which ratified the provisions of the MDA. In short, the Wife’s complaint failed to establish an independent action for setting aside the divorce decree under Rule 60.02.

In addition, even if viewed as a common law action for coercion and a request for damages separate from Rule 60.02, the Wife’s complaint fails to state a claim. As noted above, the complaint was filed over two years after the MDA was executed by the parties and incorporated into the final divorce decree. More importantly, the complaint makes no allegations of coercion with respect to the amended MDA, which was executed by the parties only two months after the MDA and which reiterated and ratified the provisions of the MDA. Indeed, the amended MDA reaffirmed the provision stating that the MDA was “not the result of any fraud, duress, or any undue influence exercised by either party herein upon the other....”

Accordingly, the Wife is not entitled to relief on the basis of coercion and duress because the complaint failed to allege a sufficient basis for relief under either Rule 60.02 or the common law.

Conclusion

After reviewing the record and applicable authority, we conclude that the Wife failed to allege sufficient facts to support either an independent action to set aside the final divorce decree under Rule 60.02 of the Tennessee Rules of Civil Procedure or separate common law causes of action for fraud or coercion. Accordingly, the Court of Appeals’ judgment is affirmed on the grounds set forth herein. Costs of the appeal are taxed to' the appellant, Kathryn C. Black, and her sureties, for which execution shall issue if necessary.

      . Accordingly, we express no opinion as to how the present allegations may have related to those provisions.