April 17, 2013

Court reviews a case involving the TCPA, rules that a violation of the Act requires more than submitting invoices for work which was not performed or poorly performed

MARK BREWER ET AL. v. KITCHEN DESIGNS AND CABINETRY ET AL. (Tenn. Ct. App. April 8, 2013)

General contractor filed breach of contract action against homeowners, alleging the homeowners failed to pay invoices on an extensive home renovation project. The homeowners denied there were outstanding invoices and filed counterclaims for breach of contract and violation of the Tennessee Consumer Protection Act against the general contractor and its owner, in his individual capacity, who contractually agreed to supervise the project for an additional fee. The homeowners alleged the general contractor failed to perform the contract in a workmanlike manner; they also asserted a claim against the owner asserting that he agreed to personally supervise the project for a percentage of the contract and that he breached his agreement by failing to properly supervise the work.

The trial court, Judge Barbara Haynes presiding, awarded summary judgment to the homeowners on all claims and counterclaims. On the homeowners’ counterclaims, Judge Haynes also awarded treble damages, attorney’s fees, and costs, pursuant to the Tennessee Consumer Protection Act. The counter-defendants filed a motion to alter or amend the decision as to the counterclaims; however, Judge Haynes retired before ruling on the motion. The case was then assigned to Judge Hamilton Gayden and, following a hearing, he denied the motion to alter or amend.

The counter-defendants appealed. We affirm the summary dismissal of the general contractor’s breach of contract claim for it is undisputed the homeowners paid the contract amount in full.

As for the homeowners’ counterclaims, we affirm the grant of summary judgment in favor of the homeowners on their breach of contract claim against the general contractor and the award of damages for failing to perform the contract in a workmanlike manner.

We also affirm the grant of summary judgment in favor of the homeowners against the supervisor for failing to properly supervise the work; however, we find the evidence insufficient to establish the damages that proximately resulted from the supervisor’s breach as distinguished from the damages resulting from the general contractor’s breach.

As for the homeowners’ claims that the general contractor and the supervisor violated the Tennessee Consumer Protection Act, we have determined there are material facts in dispute concerning whether the contractor or the supervisor used or employed unfair or deceptive acts or practices in violation of the TCPA; therefore, summary judgment as to the TCPA claims was not appropriate.

We, therefore, reverse the grant of summary judgment on the TCPA claims as to the contractor and the supervisor and remand these claims, and the determination of damages for failing to properly supervise, for further proceedings.

Opinion available at:
https://www.tba.org/sites/default/files/brewerm_040813.pdf

March 10, 2013

Court Reviews Application of Surveyor's Statute of Repose

ISLAND PROPERTIES ASSOCIATES v. THE REAVES FIRM, INC., d/b/aREAVES, SWEENEY, AND MARCUM, ET AL. (Tenn. Ct. App. March 6, 2013)

This is a surveyor negligence case. Appellee developer filed suit against Appellant surveyor, claiming two distinct acts of negligence on surveyor’s part.

The first claim of negligence involved an error allegedly made by surveyor in a 1993 survey. The second claim of negligence involved Appellee’s claim that, upon discovering the 1993 survey error in a subsequent survey that it performed in 2002, surveyor had a duty to inform Appellee of the error.

We conclude that any negligence arising from the 1993 survey claim is barred by the statute of repose, Tennessee Code Annotated Section 28-3-114(a). Despite Appellant’s numerous motions to exclude this cause of action as time barred, the trial court ultimately allowed the 1993 negligent survey claim to be tried to the jury. The jury was then instructed as to both claims of negligence and the jury returned a verdict, wherein it found Appellant surveyor to be forty percent at fault and awarded damages in favor of Appellee. Appellant surveyor appeals.

Because the jury was improperly instructed and was allowed to consider the time-barred claim of negligence, we conclude that the jury was mislead by the instructions. Accordingly, we vacate the judgment on the jury verdict and remand for a new trial. Vacated and remanded.

Opinion available at:
https://www.tba.org/sites/default/files/islandproperties_030613.pdf

March 08, 2013

Court reviews two claims of surveyor negligence

ISLAND PROPERTIES ASSOCIATES v. THE REAVES FIRM, INC., d/b/a REAVES, SWEENEY, AND MARCUM, ET AL. (Tenn. Ct. App. March 6, 2013)

This is a surveyor negligence case. Appellee developer filed suit against Appellant surveyor, claiming two distinct acts of negligence on surveyor’s part. The first claim of negligence involved an error allegedly made by surveyor in a 1993 survey. The second claim of negligence involved Appellee’s claim that, upon discovering the 1993 survey error in a subsequent survey that it performed in 2002, surveyor had a duty to inform Appellee of the error.

We conclude that any negligence arising from the 1993 survey claim is barred by the statute of repose, Tennessee Code Annotated Section 28-3-114(a). Despite Appellant’s numerous motions to exclude this cause of action as time barred, the trial court ultimately allowed the 1993 negligent survey claim to be tried to the jury. The jury was then instructed as to both claims of negligence and the jury returned a verdict, wherein it found Appellant surveyor to be forty percent at fault and awarded damages in favor of Appellee. Appellant surveyor appeals.

Because the jury was improperly instructed and was allowed to consider the time-barred claim of negligence, we conclude that the jury was mislead by the instructions. Accordingly, we vacate the judgment on the jury verdict and remand for a new trial. Vacated and remanded.

Opinion available at:
https://www.tba.org/sites/default/files/islandproperties_030613.pdf

March 01, 2013

Court reviews an agreement between contractors and subcontractors regarding the allocation of damages in a claim against the owner of a construction project

SULLIVAN ELECTRIC, INC. v. ROBINS & MORTON CORPORATION (Tenn. Ct. App. February 28, 2013)

A subcontractor on a large project in Texas sued the general contractor claiming the general contractor breached an agreement the parties made regarding claims both had against the owner of the Texas project. The parties agreed the subcontractor would be entitled to a pro rata share of the settlement or judgment amount if the subcontractor’s claims were not itemized.

The settlement agreement between the general contractor and the owner did not include an itemization of the subcontractor’s claims. The subcontractor had been given a prepayment of its claim against the owner in the amount of $300,000, and applying this to the subcontractor’s pro rata share, the general contractor determined the subcontractor was not entitled to anything more.

The trial court deducted the $300,000 from the subcontractor’s claim and awarded the subcontractor its pro rata share of the difference. Both the subcontractor and general contractor appealed, the subcontractor claiming it was not awarded enough and the general contractor claiming the subcontractor was awarded too much.

We reverse the trial court’s award and hold the $300,000 the subcontractor received as a prepayment was more than it was entitled to pursuant to the terms of the parties’ agreement. Accordingly, the contractor did not breach its agreement, and the subcontractor was not entitled to any damages.

Opinion available at:
https://www.tba.org/sites/default/files/sullivan_022813.pdf

January 30, 2013

Court reviews whether the residential information of third-party contractors are exempt from disclosure under the Public Records Act

MARTIN D. “RED” PATTERSON, AS A CITIZEN OF THE STATE OF TENNESSEE, AND AS BUSINESS MANAGER OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 369, ET AL. v. THE CONVENTION CENTER AUTHORITY OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY (Tenn. Ct. App. January 28, 2013)

Respondent Convention Center Authority appeals the trial court’s determination that the residential addresses of employees of third-party contractors contained in payroll records submitted by the contractors to the Convention Center Authority are not exempt from disclosure under the Tennessee Public Records Act. Petitioners cross-appeal the trial court’s denial of their request for attorney’s fees and costs. We affirm the trial court’s judgment.

Opinion available at:
https://www.tba.org/sites/default/files/pattersonm_011813.pdf

January 10, 2013

Court reviews whether plaintiff was barred from filing suit against his home inspector

DAVID DESGRO v. PAUL PACK d/b/a RESI CHEK (Tenn. Ct. App. January 8, 2013)

Plaintiff, David Desgro, alleged that he hired defendant, Paul Pack d/b/a Resi Chek, to perform an inspection on a house plaintiff wanted to purchase. After defendant inspected the house and reported the house had no major problems, plaintiff purchased the house in reliance on defendant’s report. Plaintiff claims that he then discovered multiple serious issues with the house, including plumbing problems, insulation and heat pump problems, and inadequate floor support.

Plaintiff filed suit 13 months after the inspection was completed, and defendant moved for summary judgment, claiming that plaintiff’s signed contract with defendant provided that plaintiff must file suit on any claims within one year of the date of inspection. The trial court found that plaintiff signed such an agreement and that the contractual limitations period of one year was reasonable. The trial court granted summary judgment to defendant, ruling that plaintiff’s claims were untimely. Plaintiff appeals. We affirm.

Opinion available at:
https://www.tba.org/sites/default/files/desgrod_010813.pdf

December 28, 2012

Court determines which lender holds priority for the purposes of enforcing a lien against a defaulting developer

CHARLES BLALOCK & SONS, INC. v. FAIRTENN, LLC ET AL. (Tenn. Ct. App. December 27, 2012)

Branch Banking and Trust Company (“BB&T”) provided financing for a construction project and recorded a deed of trust. The excavation contractor, Charles Blalock & Sons, Inc., started work on the project and had done substantial work when Marshall & Ilsley Bank (“M&I Bank”) made a loan and recorded its trust deed. BB&T was paid off out of the proceeds of the loan from M&I Bank. Blalock was also paid current with the proceeds from the M&I Bank loan. BB&T released its trust deed.

The developer later defaulted, and Blalock filed this action to enforce its statutory lien. M&I Bank’s assignee, Cay Partners, LLC, filed a counterclaim asserting that it should be entitled to the priority position of BB&T. Blalock and Cay filed competing motions for summary judgment. The trial court granted Blalock’s motion. Cay appeals. We affirm.

Opinion available at:
https://www.tba.org/sites/default/files/blalockc_122712.pdf

December 27, 2012

Court reviews competing lawsuits filed by a homeowner and a contractor against one another over construction contracts

BRIAN BOX v. DAVID GARDNER (Tenn. Ct. App. December 26, 2012)

Homeowner and Contractor filed competing suits against one another in the general sessions court. Homeowner was awarded $1,500.00 against Contractor; Contractor’s suit against Homeowner was dismissed. Contractor then appealed to the circuit court. The circuit court dismissed all actions filed by both parties, finding that the construction contracts required arbitration of disputes. Homeowner appeals and we affirm.

Opinion available at:
https://www.tba.org/sites/default/files/boxb_122612.pdf

Court reviews whether the UCC or the TN Consumer Protection Act applies in a breach of contract case

AUDIO VISUAL ARTISTRY v. STEPHEN TANZER (Tenn. Ct. App. December 26, 2012)

This is a breach of contract case. Appellant/Homeowner contracted with Appellee for the installation of a “smart home” system. After myriad problems arose, Appellant fired Appellee, who filed the instant lawsuit to collect the unpaid balance for equipment and installation.

The trial court determined that the primary purpose of the parties’ agreement was the sale of goods and applied Article 2 of the Uniform Commercial Code. The court granted judgment in favor of Appellee, but allowed certain offsets for items rejected by Appellant.

Appellant appeals, arguing that the trial court erred in applying the UCC, and in its calculation of damages. Appellant also appeals the trial court’s determination that the Tennessee Consumer Protection Act does not apply. Discerning no error, we affirm.

Opinion available at:
https://www.tba.org/sites/default/files/audiovisual_122612.pdf

December 15, 2012

Court reviews the damages awarded in a case involving the defective construction of a home

BROOKE BUTTREY v. HOLLOWAY’S, INC., ET AL. (Tenn. Ct. App. December 13, 2012)

A homeowner sued builders for the defective construction of a house, alleging breach of contract, intentional misrepresentations, and violations of the Tennessee Consumer Protection Act.

The trial court dismissed the Tennessee Consumer Protection Act claims, but found the builders liable for intentional misrepresentations and breach of the contract by failing to build the house in a workmanlike manner. The trial court awarded the homeowner the full amount she paid to have the house built as well as her attorney’s fees.

The builders appealed, claiming the evidence did not support the amount of damages awarded, the evidence did not support the court’s finding of intentional misrepresentation, and the homeowner was not entitled to attorney’s fees.

We modify the damages awarded to the homeowner to conform to the evidence presented. We reverse the court’s award of attorney’s fees, and we reverse the court’s finding that the builders intentionally misrepresented material facts.

Opinion available at:
https://www.tba.org/sites/default/files/buttreyb_121312.pdf

December 12, 2012

Lab to Pursue Fix in Botched Security System (John Serverence, Los Alamos Monitor)

Los Alamos National Security, LLC, is bringing in outside counsel to help it deal with the botched construction of a security upgrade at the lab. Originally, the system was supposed to cost $213 million, but cost overruns have jacked the project up to $254 million, according to a memo written by Lab Director Charlie McMillan, to employees. The National Nuclear Security Administration is holding LANS, LLC accountable for the projected $41 million in cost overruns.

Read the full story at:
http://www.lamonitor.com/content/lab-pursue-fix-botched-security-system

December 07, 2012

TN Supreme Court reviews whether the plaintiff's use of the property was exempt from zoning ordinances limiting his use of the property

READY MIX, USA, LLC v. JEFFERSON COUNTY, TENNESSEE (Tenn. August 30, 2012)

The plaintiff, a producer of construction aggregates, acquired property with proven reserves for mining and quarrying operations. Afterward, Jefferson County enacted a comprehensive zoning ordinance limiting the use of the property to agricultural purposes. Before the passage of the ordinance, the plaintiff undertook various activities designed to establish business operations.

When the county issued a stop work order, the plaintiff, without first receiving a decision from the county’s board of zoning appeals, filed a declaratory judgment action arguing that the portion of the property not previously subject to zoning qualified as a pre-existing non-conforming use, protected by Tennessee Code Annotated section 13-7-208 (1992).

After concluding that the plaintiff was not required to exhaust its administrative remedies, the trial court ruled that the business activities on the property were “in operation” at the effective date of the ordinance for purposes of grandfather protection under section 13- 7-208. Because the Court of Appeals held that the plaintiff had failed to exhaust its administrative remedies, the judgment was set aside.

We hold that the trial court, under these circumstances, did not err by ruling that the plaintiff was not required to exhaust the administrative remedies. We further hold that the evidence does not preponderate against the trial court’s finding that the plaintiff had established operations sufficient to qualify for protection under Tennessee Code Annotated section 13-7-208.

Opinion available at:
https://www.tba.org/sites/default/files/readymix_083012.pdf

Justice Koch’s concurring opinion:
https://www.tba.org/sites/default/files/readymix_CON_083012.pdf

December 05, 2012

Court reviews whether a project owner can claim liquidated damages due to construction delays

RCR BUILDING CORPORATION v. PINNACLE HOSPITALITY PARTNERS, ET AL. (Tenn. Ct. App. November 16, 2012)

This appeal involves a contract for the construction of a hotel. The project owner refused to make the final payment owed to the general contractor, claiming that it was entitled to withhold $237,000 in liquidated damages because the project was not completed on time, in addition to deducting other “offsets” under the contract. The general contractor claimed that the owner was not entitled to liquidated damages for several reasons, including the fact that the owner had caused delays, and the fact that the owner had failed to make a timely claim for liquidated damages as required by the contract.

The trial court granted partial summary judgment to the owner on the issue of liquidated damages, allowing the owner to subtract $237,000 from the final payment it owed under the contract. The court also resolved several other issues between the parties. The trial court declared the owner to be the prevailing party in the litigation and awarded the owner its attorney’s fees. The general contractor appeals. We affirm in part and reverse in part and remand for further proceedings.

Opinion available at:
https://www.tba.org/sites/default/files/rcrbuilding_111612.pdf

Court reviews whether a landowner's water line trespassed on adjacent property

LEROY J. HUMPHRIES, ET AL. v. NICOLAS C. MINBIOLE, ET AL. (Tenn. Ct. App. November 9, 2012)

This appeal involves a dispute between adjacent landowners over Defendants’ installation of a private water line within a right-of-way easement across the Plaintiffs’ property. Following a bench trial, the trial court concluded that Defendants’ private water line trespassed on Plaintiffs’ property. Further, the trial court ordered that the Defendants would be incarcerated if they did not remove the water line and return Plaintiffs’ property to its previous condition within thirty (30) days. Defendants appealed. We affirm in part and remand for further proceedings.

Opinion available at:

https://www.tba.org/sites/default/files/humphriesl_110912.pdf

September 25, 2012

Court reviews Consumer Protection Act and Breach of Warranty claims against a builder

MARK T. WICKHAM v. SOVEREIGN HOMES, LLC (Tenn. Ct. App. September 25, 2012)

Plaintiff homeowner brought an action against Defendant builder alleging, inter alia, breach of warranty and violation of the Tennessee Consumer Protection Act. The trial court awarded summary judgment to Defendant builder. We affirm summary judgment on Plaintiff’s breach of warranty claim; reverse summary judgment on Plaintiff’s Consumer Protection Act claim; and remand for further proceedings.

Opinion available at:
https://www.tba.org/sites/default/files/wickhamm_092512.pdf