August 22, 2008

Court denies waiver and awards attorneys fees to contractor after appeal establishes contractual right to recover

HOMEBUILDERS McGEE & STORY, LLC v. HENRY BUCKNER (Tenn.Ct.App. August 22, 2008).

This is the second appeal of a contract dispute between a homeowner and the contractor he engaged to make improvements to his home. The homeowner contends that the trial court erred by awarding the contractor attorney's fees on remand following the first appeal because the contractor waived its claim of attorney's fees, the contractor is judicially estopped to claim attorney's fees, and the trial court lacked jurisdiction to award attorney's fees following remand. We have determined the contractor had not waived its claim and it was not judicially estopped to assert a claim for attorney's fees. We have also determined that the trial court had jurisdiction to award attorney's fees pursuant to the contract following remand of the first appeal.

Opinion may be found at TBA website:

"Litigation between the parties arose after Mr. Buckner unilaterally terminated the services of Homebuilders when the project was only 30% complete. ... When Mr. Buckner refused to pay any portion of the final bill, Homebuilders filed a Complaint against Mr. Buckner for breach of contract in the circuit court. ... Mr. Buckner filed a Complaint in chancery court against Homebuilders and its principals for fraud, breach of contract, violations of the Tennessee Consumer Protection Act, negligent misrepresentation, negligence, and breach of fiduciary duty. The two cases were soon consolidated into the circuit court action. ... [T]he trial court dismissed the parties’ respective breach of contract claims on a finding the Construction Management Agreement was not enforceable because the parties did not have a meeting of the minds. The trial court also dismissed all other claims of each party, including Mr. Buckner's claims for fraud, violations of the Tennessee Consumer Protection Act, negligent misrepresentation, negligence, and breach of fiduciary duty. Within a week of the foregoing judgment being entered by the trial court, Homebuilders filed a motion seeking to recover its attorney’s fees. Prior to that motion being heard, Mr. Buckner filed his notice of appeal. Immediately thereafter, the trial court entered an order stating that the motion for attorney’s fees would be taken under advisement pending the appeal. Thus, Homebuilders’ motion for attorney’s fees remained unresolved while Mr. Buckner pursued his first appeal." Id.

"We determined in the first appeal that the Agreement constituted an enforceable contract because it sufficiently identified the scope of the work and the price of the work, which was an agreed budget of $175,000 with a management fee of “Cost Plus 17%.” [] We also found that Homebuilders was entitled to damages resulting from Mr. Buckner’s breach of the contract in the amount of $25,328." Id. (citations omitted).

"Homebuilders had filed a motion to recover its attorney’s fees prior to the first appeal ... based on the fact that Homebuilders had been the prevailing party on Mr. Buckner’s claims based on the Tennessee Consumer Protection Act. Homebuilders had not filed a motion for attorney’s fees pursuant to the contract because the court found there was no enforceable contract between the parties. Thus, at that time, there was no contractual basis upon which Homebuilders could recover its attorney’s fees. It was not until this court had respectfully disagreed with the trial court’s conclusion on the contract claim that Homebuilders was in a posture to file a motion to recover its attorney’s fees based on contract." Id.