Tennessee Construction Law

Court reviews a breach of contract and Consumer Protection Act claim against a home builder

2012-01-30T19:04:00.004-05:00

ROBERT F. MEREDITH ET AL. v. KENNETH L. WELLER ET AL. (Tenn. Ct. App. January 25, 2012)]

The plaintiff, Robert F. Meredith ("the Owner"), appeals a judgment rendered against him in favor of his home builder, Kenneth L. Weller ("the Builder"), on the Builder's counterclaim for breach of contract and for attorney's fees incurred in defending the Owner's claims for, among other things, defective construction, misrepresentation, breach of contract, and violations of the Tennessee Consumer Protection Act, Tenn. Code Ann. sections 47-18-101 et seq. (2001)("the TCPA"). The Builder asks us to award him his attorney's fees incurred in defending the Owner's appeal. We affirm the judgment of the trial court in all respects. We also award the Builder his reasonable attorney's fees incurred on appeal and remand to the trial court for a hearing to determine those fees.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2012/meredithr_012512.pdf

Court reviews whether a property owner breached a construction contract

2012-01-16T16:20:00.003-05:00

GEORGE SANDERS, Individually and d/b/a SMS Contractors, Inc. v. BREATH OF LIFE CHRISTIAN CHURCH, INC., ET AL. (Tenn. Ct. App. January 13, 2012)

This is a contract case. The construction contract at issue provided for a specific contract amount plus a commission to the general contractor on any work done beyond the additional contract amount. After being dismissed from the job, the project manager for the general contractor sued both the general contractor and the owner of the property. The general contractor and the property owner then both sued the project manager and each other.

After the property owner failed to satisfactorily respond to discovery requests, the trial court excluded all evidence of the property owner's damages that had not already been provided in detail in discovery. The parties proceeded to trial, at which point the chancellor ordered that all issues of damages beyond the base contract damages would be referred to a special master.

After trial, the chancellor found that the property owner materially breached the contract and awarded the remaining balance to be paid on the contract to the general contractor. The special master awarded the project manager damages for work performed as a direct subcontractor on the project and awarded the general contractor delay damages and the commission on all extra work done on the project. The trial court concurred in the findings of the special master and the property owner appealed, raising a number of issues. We affirm in part, vacate in part, and remand for further proceedings.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2012/sandersg_011312.pdf

Court reviews whether a construction company is liable for injuries that occurred on a section of highway on which it worked

2012-01-12T16:00:00.000-05:00

JOSHUA N. LEE, v. LYONS CONSTRUCTION COMPANY, INC. (Tenn. Ct. App. January 10, 2012)

Plaintiff and others sustained injuries in a single car accident and sued defendant construction company and the Tennessee Department of Transportation, alleging that defendant construction company had recently completed work on that section of the highway where the accident occurred, and that a low point in the pavement caused plaintiff to lose control of his vehicle and wreck. Defendant answered, stating that they had completed the required construction on that section of the highway, and the State had accepted its work pursuant to Tenn. Code Ann. section 12-4-501 et seq. which provides upon proper completion of the work the contractor "is discharged from all liability to any party". Defendant filed a Motion for Summary Judgment which the Trial Court granted and plaintiff appealed. We hold that summary judgment for the defendant in this case was proper, and affirm the Judgment of the Trial Court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2012/leej_011012.pdf

2 courts back TDOT suspension of 2 contractors (Associated Press)

2012-01-09T09:00:00.000-05:00

2 courts back TDOT suspension of 2 contractors (Associated Press)

NASHVILLE, Tenn. (AP) — Two courts in Nashville have backed a decision by state transportation officials to bar two guardrail companies that were implicated in corruption investigations from bidding on projects.

Lu Inc. and Tennessee Guardrail contend in separate lawsuits that their suspensions weren't proper.

Lu Inc. owner and president Novice Cole has acknowledged giving a Tennessee Department of Transportation supervisor $30,000 as the TDOT worker oversaw a 2005 Interstate 65 widening project in Nashville. Cole has not been criminally charged and claimed in his lawsuit that the suspension of his Kingston Springs-based company violated terms of a 2006 agreement he reached with TDOT, according to The Tennessean (http://tnne.ws/tIShL9.)

The state argued before Davidson County Chancellor Russell T. Perkins that Lu's suspension was required to preserve "public confidence in the integrity of the department's bidding and contracting processes" and was based on evidence of irregularities" committed by Cole.

In his lawsuit, Cole noted the payments to the TDOT supervisor occurred in 2005, and he held that a one-year bidding suspension should be overturned. He contended the 2006 settlement with TDOT keeps the state from punishing him for anything the state knew about at the time of the agreement.

Full article located at: http://www.knoxnews.com/news/2011/nov/08/2-courts-back-tdot-suspension-of-contractors/

Knoxville contractor joins ICE enforcement program

2012-01-05T09:00:00.000-05:00

Knoxville contractor joins ICE enforcement program (Josh Flory, Knoxville News-Sentinel)

To many business owners, voluntarily opening their books for a federal inspection may sound like a terrible idea.

One local contractor is doing just that, though, and says its customers are the reason.

On Monday, general contractor J.A. Fielden became the first company in the state to join the U.S. Immigration and Customs Enforcement "IMAGE" program.

Launched in 2006, IMAGE — which stands for ICE Mutual Agreement between Government and Employers — requires participants to submit to an inspection of their I-9 employment records. In return, the agency agrees to waive or mitigate any fines associated with violations and to refrain from additional I-9 inspections for two years.

Full article located at: http://www.knoxnews.com/news/2011/nov/07/knox-contractor-first-state-join-ice-program/

Guest Post by Alex Levin: Contractor’s Top Questions Regarding Surety Bonding

2012-01-03T10:00:00.003-05:00

Surety bonds are a necessary requirement not only for contractors, but also for a variety of small businesses to open. Although required for thousands of businesses to operate, much is unknown about their functions and the process of how to obtain a surety bond. To help clear up the mystery behind the bonding process, the following is look into the most frequently asked questions regarding surety bonding.

What is a surety bond?

Surety bonds are a form of contract. In most cases, they are a financial guarantee that protects customers’ money. In all cases it involves three parties:

- An obligee – the party requiring the bond – most often it’s a government entity
- A principal – the company or individual that is purchasing the bond
- A surety – the agency who writes and sells the bond(s)

If the principal should default on any specifications of the bond, a claim can be made seeking retribution. If the claim is found to be valid, compensation is used by the surety agency who will then, in turn, seek repayment from the principal. Because of this, a risk assessment is always performed in order to ensure principals are financial secure to repay in the event damages should be sought against them.

What are the benefits of becoming bonded?

Even for those that are working on private construction projects, obtaining surety bonds is seen as a validation of the company’s professionalism. Those that are able to acquire a surety bond typically are more financially secure than those who are unable to purchase a bond. Banks and financial lenders also view surety bonds as a form of verification of the company’s trustworthiness and financial stability.

For those that are bidding on a project, surety bonds also help validate the project owner’s financial security. As many know, contractors have faced bankruptcy as the project owner’s funding was not verified. Prior to writing and issuing bonds, the surety will investigate the source and amount of available funds. Sureties also help review contracts to ensure there isn’t any language present that will add unnecessary risk to the project. As a whole, surety bonds help protect project owners and the contracting companies that are preforming the work on the project.

Why are surety bonds required?

Although many have not heard about surety bonds, the fact is they’ve been a necessary requirement for several years. The Miller Act, which was passed in 1935, requires contract surety bonds on federal construction projects. In specific, the law specifies both performance bonds and payment bonds (commonly referred to as material and labor payment bonds). The act specifies these bonds must be in place for projects exceeding $100,000, but many state legislatures have adopted the same theory and require them on smaller projects. These regulations are also known as Little Miller Acts.

Aren't surety bonds another form of insurance?

This is the most common misconception regarding surety bonding. Although both insurance policies and surety bonds have the same goal – to protect consumers – the main difference is where the element of risk lies. In regards to insurance policies, it is traditionally a two-person agreement with the company issuing the policy assuming risk.

However, with surety bonds the principal (or the company purchasing the bond) is assigned risk and the bond protects obligees. If a claim is filed against the bond purchaser, the surety agency will make initial payments to the obligee, and then seek retribution from the principal.

The services bonds and insurance policies provide are also different from one to another. Insurance policies are written to assist in times of loss, however surety bonds are written under the assumption (and hope) no claims will be filed against the principal. Because of this, should a claim be filed against an individual or company, it is extremely difficult for that individual to purchase surety bonds in the future.

Alex Levin is a writer for several surety organizations. Although much is unknown about them, surety bonds are a necessary requirement for many small businesses to open and are required on almost all major construction projects.

TN Supreme Court reviews the Claims Commission's interpretation of a contract with the State of Tennessee

2011-12-27T13:02:00.006-05:00

RAY BELL CONSTRUCTION COMPANY, INC. v. STATE OF TENNESSEE, TENNESSEE DEPARTMENT OF TRANSPORTATION (Tenn. December 12, 2011)

A construction company entered into a contract with the State of Tennessee to restructure an interstate interchange. The contract provides that the contract completion date "may be extended in accordance with the Standard Specifications, however, no incentive payment will be made if work is not completed in its entirety by December 15, 2006."

The Claims Commission found that the contract contained a latent ambiguity requiring extrinsic evidence to interpret the contract. The Claims Commission considered extrinsic evidence and concluded that the construction company was entitled to the maximum incentive payment and an extension of the contract completion date. A divided Court of Appeals affirmed the judgment of the Claims Commission. We hold that the contract is unambiguous and does not permit an extension of the incentive date. Accordingly, we reverse the Court of Appeals and remand to the Claims Commission for modification of the final judgment.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2011/raybell_121211.pdf

Court reviews whether a contractor breached its contract to construct a parking lot

2011-12-22T10:00:00.000-05:00

FILMtech, Inc., v. CHARLIE McANALLY, d/b/a GRAINGER PAVING (Tenn. Ct. App. December 21, 2011)

Plaintiff brought this action against this contractor alleging breach of contract to construct an asphalt parking lot for plaintiff. The Trial Court determined that defendant breached the contract and awarded damages. On appeal, we affirm the Judgment of the Trial Court.

Full opinion available at:
http://www.tba2.org/tba_files/TCA/2011/filmtech_122211.pdf

Court reviews whether a purchaser of real estate effectively exercised its right to terminate a contract.

2011-12-21T09:30:00.000-05:00

CAMERON GENERAL CONTRACTORS, INC. v. KINGSTON PIKE, LLC (Tenn. Ct. App. December 21, 2011)

Cameron General Contractors, Inc., a Nebraska corporation ("Cameron"), sued Kingston Pike, LLC, a Georgia limited liability company ("Kingston Pike"), for breach of a contract concerning the sale of real property located in Knoxville, Tennessee. Prior to trial, Cameron elected to exercise its contractual right to terminate the contract, and the case proceeded to trial on the issue of damages.

After a bench trial, the Trial Court entered its order finding and holding, inter alia, that the contract did not limit Cameron to the return of its earnest money, and granting Cameron a judgment against Kingston Pike for damages in the amount of $872,418.22, plus attorney's fees of $137,656.56. Kingston Pike appeals to this Court.

We find and hold that the contract at issue clearly and unambiguously provides that once Cameron chose to terminate the contract, Cameron's sole remedy for Kingston Pike's breach was a return of Cameron's earnest money deposit. We, therefore, reverse the Trial Court's October 28, 2010 order.

Full opinion available at:
http://www.tba2.org/tba_files/TCA/2011/cameron_122111.pdf

Court reviews whether the principal of an LLC authorized advances and pledgings of collateral.

2011-12-14T13:07:00.000-05:00

REGIONS BANK v. BRIC CONSTRUCTORS, LLC, F/K/A BRIC CONTRACTORS, LLC, AND PATRICIA MCINTOSH (Tenn. Ct. App. December 14, 2011)

This is an action to collect a debt and to recover collateral. The defendant LLC obtained a line of credit from the plaintiff bank. The LLC borrowed against the line of credit to purchase certain property, and the property was pledged as collateral.

Several months later, the line of credit was converted into a fixed amount loan over a longer term, and a new security agreement was executed pledging the same collateral. On the same day, the LLC obtained another line of credit secured by the LLC's accounts receivable. The next day, the LLC took an advance on the new line of credit.

The LLC made monthly payments on both obligations for almost a year, and then it defaulted. The plaintiff bank filed this lawsuit against the LLC and its principal to collect on the loans and to recover the collateral. The LLC contended that the principal of the LLC did not sign key documents, did not authorize advances, and did not authorize the pledge of the collateral.

After a bench trial, the trial court held in favor of the bank based on, among other things, its finding that the principal of the LLC had ratified any allegedly unauthorized advances made under the lines of credit. The defendants now appeal. We reverse the finding of ratification as to one advance and remand for further findings; in all other respects, the decision of the trial court is affirmed.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/regionsbank_121411.pdf

Court: Contractors liable for what their subs do (Jackson Sun)

2011-11-03T19:13:00.001-04:00

A ruling from the Tennessee Supreme Court last week made it easier for homeowners to hold contractors responsible for shoddy work by subcontractors. The court has found that contractors have a duty to perform services in a "careful, skillful, diligent and workmanlike manner" that can't be fully delegated to another contractor they hire.

Read more about the issues that led up to the decision in the Tennessee Bar Journal.

The Jackson Sun carried this AP story

State Supreme Court ruling finds liability for contractors using subs

2011-11-03T19:11:00.001-04:00

A ruling from the Tennessee Supreme Court has made it easier for homeowners to hold contractors responsible for shoddy work by subcontractors.

The court has found that contractors have a duty to perform services in a “careful, skillful, diligent and workmanlike manner” that can’t be fully delegated to another contractor they hire.

The 5-0 ruling in a case from Chattanooga over a botched roof repair job that caused a fire could have broad implications for homeowners and contractors because most home construction and repair work involves bringing in subcontractors to handle parts of the job.

The opinion written by Justice Gary Wade and released last week said this was the first time the state Supreme Court had taken up the issue of whether a contractor was absolved from liability under the contract by hiring a subcontractor.

The case began when Robert and Joanie Emerson signed a contract with Winters Roofing Co. to replace a roof. Company owner Martin Winters subcontracted out the work. When the Emersons complained that the new roof leaked, Winters brought in a different subcontractor for repairs.

The subcontractor used a propane torch on the roof, and a few hours later the house caught fire. A fire investigator for the insurance company concluded the open flame roofing work started the fire, which caused more than $870,000 in damages to the home on Sept. 26, 2007.

Neither Winters nor the subcontractor had liability insurance, although Winters tried to obtain it the day after the fire and then filed a claim that said the fire happened seven days later, the ruling said.

The Emersons’ insurance company sued Winters, who argued that he wasn’t at the site while the subcontractor was working and wasn’t responsible for his mistakes.

The trial court dismissed the lawsuit, saying the couple’s insurance company couldn’t recover damages because the fire wasn’t a foreseeable part of the contract. It also said that the only way Winters could be held responsible was if it was shown that he was negligent in his hiring or supervision of the subcontractor.

Last year the Tennessee Court of Appeals overturned that decision.

“The defendant had an implied duty to perform the services required by his contract with the Emersons in a careful, skillful, diligent, and workmanlike manner,” the Supreme Court ruling says.

It concluded that while Winters had lawfully delegated his responsibility to install a proper roof to the subcontractors, he still was liable for the shoddy work.

http://www.jacksonsun.com/article/20111030/NEWS01/111030004/State-Supreme-Court-ruling-finds-liability-contractors-using-subs-

TN Supreme Court whether a contractor can be held liable for damage caused by an independent subcontractor.

2011-11-03T18:52:00.005-04:00

FEDERAL INSURANCE COMPANY A/S/O ROBERT AND JOANIE EMERSON v. MARTIN EDWARD WINTERS, D/B/A WINTERS ROOFING COMPANY (Tenn. October 24, 2011)

The defendant contractor entered into a contract to replace a roof. When the newly installed roof developed leaks, the defendant hired an independent contractor to make the necessary repairs. While performing the work, the independent contractor caused a fire, resulting in an $871,069.73 insurance claim by the homeowners. As subrogor to the homeowners' rights and claims arising out of the fire, the plaintiff insurance company sued the defendant in both tort and in contract. The defendant filed a motion for summary judgment, asserting that because he had subcontracted the work, he could not be liable. The trial court granted the motion on both the negligence and breach of contract claims.

The Court of Appeals reversed, holding that the defendant had a non-delegable contractual duty to perform the roofing services in a careful, skillful, and workmanlike manner. This Court granted the defendant's application for permission to appeal in order to determine the propriety of the claim under the theory of contract. Because the defendant had an implied non-delegable duty to install the roof in a careful, skillful, diligent, and workmanlike manner, the judgment of the Court of Appeals is affirmed. The case is remanded to the trial court for proceedings consistent with this opinion.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2011/federalinsurance_102411.pdf

New Government Crackdown On Independent Contractors Coincides with IRS Offer to Come Clean

2011-11-01T19:09:00.001-04:00

The IRS has launched a new program that will enable many employers to resolve past worker classification issues at a relatively low tax cost by voluntarily reclassifying their workers.

This new program offers employers an opportunity to come into compliance by making a payment covering past payroll tax obligations.

This IRS "Fresh Start" initiative coincides with another new government Department of Labor program to crack down on employers who misclassify employees as independent contractors (see right-hand box for more information).

The new IRS Voluntary Classification Settlement Program "is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government," according to the IRS.

See full article at: http://www.maloneynovotny.com/news-resources/latest-news/2011/100311.html

Court reviews the foreseeability of plaintiff's harm and the possible liability of a condominium complex

2011-10-25T19:03:00.000-04:00

MARQUETTE WEAVER v. FOUR MAPLES HOMEOWNERS ASSOCIATION and WESTWOOD MANAGEMENT CORPORATION (Tenn. Ct. App. October 25, 2011)

This is a premises liability case in which the Plaintiff/Appellant, a resident of Defendants/Appellees' condominium complex, was assaulted by unknown individuals. Appellant filed suit, asserting negligence on the part of Appellees in failing to timely repair a vehicle access gate on the property.

The trial court granted summary judgment to Appellees, finding that Appellees owed no duty to Appellant as the harm was not reasonably foreseeable. We conclude that the evidence creates a dispute as to whether the underlying assault was foreseeable and, therefore, the grant of summary judgment was erroneous. Reversed and remanded.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/weaverm_102511.pdf

Court reviews whether the seller of a home should indemnify the builder for damages relating to a breach of contract dispute

2011-10-13T18:27:00.000-04:00

TRIANGLE AMERICAN HOMES v. SAMUEL B. HARRISON, ET AL. (Tenn. Ct. App. October 13, 2011)

In this indemnity case, Jere Krieg ("Builder"), through Triangle American Homes, Inc., initially filed a complaint for attachment and damages against Samuel and Lauren Harrison (collectively "the Harrisons") relating to the construction of a modular home. When the Harrisons filed a counterclaim, arguing that Builder had failed to perform pursuant to their contract, Builder brought a third-party complaint against All American Homes of Tennessee, LLC ("Seller"), alleging that Seller should indemnify Builder.

Builder and the Harrisons entered into a settlement agreement. In the remaining suit for indemnification, Seller argued that Builder was not entitled to indemnity because the damages and losses sustained by Builder were a result of Builder's actions. Following a bench trial, the trial court held that Builder was entitled to damages in the amount of $45,000 and attorney fees in the amount of $45,000, for a total award of $90,000. Seller appeals. We modify the award of attorney fees to $18,084 and affirm the decision of the trial court in all other respects.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/triangle_101311.pdf

Court reviews a breach of contract dispute involving the paving of a drag strip

2011-09-27T12:34:00.002-04:00

NORTHWEST TENNESSEE MOTORSPORTS PARK, LLC v. TENNESSEE ASPHALT COMPANY (Tenn. Ct. App. September 23, 2011)

This is a breach of contract case. Appellants contracted with Appellees to pave their existing drag strip. Because the soil under the drag strip contained too much moisture, the paving project failed and other parts of the drag strip not included in the contract were damaged. The trial court awarded damages for the Appellant, but later reduced the damages by the amount over and above the original contract. Appellant appeals. Because the Appellant failed to present any evidence that Appellee breached the contract, we reverse and remand.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/northwest_092311.pdf

Guest Post: Tennessee surety bond basics for contractors

2011-09-12T10:00:00.002-04:00

Tennessee surety bond basics for contractors
Danielle Rodabaugh, Surety Bonds Insider

The understanding most contractors have of surety bond legalities typically doesn't go much further than the fact that they have to buy bonds before beginning projects. Unfortunately, all too often contractors only really learn about surety bonds after a claim has been made and they're in the the midst of a lawsuit. This article will explore some key legal points that local contractors should know about Tennessee surety bonds.

What exactly are surety bonds?

Surety bonds are not insurance policies. Although insurance companies almost always underwrite surety bonds, they do not function in the same way. Insurance agents expect claims to be made against insurance policies. Conversely, surety providers do not expect claims to be made against bonds, and, if they are, the surety expects the contractor to pay for costs.

Surety bonds are risk mitigation tools that are used to reduce instances of fraud and malpractice across a number of different industries. In the construction industry, surety bonds are also called "contract bonds" or "construction bonds." Government agencies require the use of specific construction bonds that vary depending on the project type and its geographic location. Common ones include bid bonds, performance bonds and payment bonds, just to name a few. No matter the specific bond title, though, they all work in the same basic way.

How do surety bonds work?

Each surety bond that's issued essentially functions as a legally binding contract that joins three entities together.

The principal is the contractor or construction firm that purchases the bond to guarantee the quality of future work.

The obligee is the government agency or other project owner that requires the bond to protect against financial loss.

The surety is the agency that executes the bond and acts as an intermediary between the principal and obligee.

If a principal fails to meet the bond's terms, then the obligee can make a claim on the bond to gain reparation. If the claim is found to be valid, the surety will be held responsible for paying the claim. The surety then expects the principal to repay the agency for all costs, which is a major distinction between surety bonds and insurance policies.

Who benefits from surety bond protection?

Generally speaking, contractor bonding provides legal protection to government agencies and other project owners who fund a construction project. Most contract bonds are required in case a contractor leaves a project incomplete or does unsatisfactory work, in which case the obligee can make a claim on the bond. Who exactly receives the bond's financial protection, though, depends on the bond's language. For instance, payment bonds actually protect subcontractors and material suppliers by guaranteeing they will be paid for their services.

Which laws require contract bonds in Tennessee?

A number of different laws regulate the use of surety bonds in Tennessee. For starters, the federal Miller Act requires the use of separate payment and performance bonds on every publicly funded project that's contracted for $100,000 or more. The Tennessee Board for Licensing Contractors does not require construction professionals to post a surety bond to get a contractor's license, however, surety bonds can be required for bidding or obtaining contractor permits from local government agencies in the state. Exact contract bond requirements vary by jurisdiction, so contractors should check with the government agency that enforces local construction regulations before beginning any project.

Surety bonds and the Tennessee home improvement contractor license

To get a home improvement contractor license in Tennessee, applicants must provide original proof of $10,000 worth of financial responsibility via either a 1) surety bond with written power of attorney attached, 2) cash bond, 3) property bond or 4) irrevocable letter of credit.

How do contractors get a Tennessee surety bond?

The first step to getting a surety bond is to find a surety provider that best meets the company's needs. The surety industry's leading providers offer online services to help Tennessee contractors get the surety bonds they need as quickly and easily as possible. Contractors can fill out online applications in just a few minutes.

Surety providers will conduct a thorough background check to decide whether an applicant qualifies for a contract bond. This typically involves an examination of the applicant's financial history, credit score and work record. If a business shows signs of financial instability or poor performance, the surety provider will simply refuse to issue the bond. If a contractor fails to secure the necessary bond(s), the business will not be able to legally work on the project. Ignoring surety regulations can result in heavy fines, legal action and license revocations.

Once a business secures the bond, it makes a legally binding promise to fulfill the bond's contractual language. This typically means the contractor agrees to finish the project at hand according to contract.

Although it might seem complicated, the goal of the surety bond process is twofold:

keep financially unstable or otherwise unqualified construction professionals from working in the market

protect government agencies, project owners and consumers from financial loss

Since surety bonds play such an important role in Tennessee's construction industry, a basic understanding of their functionality can help contractors undergo the process much more easily.

Danielle Rodabaugh is the editor of the Surety Bonds Insider, a publication that provides in-depth analyses of developments within the surety industry. The publication is sponsored by SuretyBonds.com, a nationwide surety bond producer that helps contractors and their lawyers understand the legal implications of the surety bond process.

TN Supreme Court considers home repair case

2011-09-10T17:54:00.002-04:00

September 4, 2011

The Tennessee Supreme Court heard oral arguments last week on a case that could change a homeowner's ability to recover damages when a subcontractor botches a home repair or remodeling job. The case involves a Hamilton County couple whose house was destroyed by a fire while someone was fixing their roof. If the court finds in favor of the owner of the roofing company homeowners are going to have to be more vigilant, Nashville attorney John Day said. Day also wrote about the case in a recent Tennessee Bar Journal column.

Read the full story on the Tennessean's website.

Tennessee High Court hears Botched Home Repair Case

2011-09-08T18:00:00.001-04:00

September 3, 2011

The Tennessee Supreme Court is considering a case that could change a homeowner's ability to recover damages when a subcontractor botches a home repair or remodeling job.

The case involves a Hamilton County couple whose house was destroyed by a fire while someone was fixing their roof.

The Tennessee Supreme Court heard oral arguments in the case Thursday.

Robert and Joanie Emerson hired a company to repair their roof but, unbeknownst to them, the firm subcontracted the job out to someone else. The Emersons accuse the subcontractor of setting the house on fire while using a propane torch during the repairs.

The damage amounted to more than $800,000.

Because repair and construction work is often subcontracted out to cheap laborers who lack insurance, some legal experts say a decision in favor of the general contractor could leave many homeowners saddled with the costs for botched repair jobs.

The full article is located at: http://www.expertwitnessinconstruction.com/httpdocs/news-Botched_Home_Repair.php

Court reviews a case involving a breach of implied warranty dispute over unimproved real property

2011-09-01T18:03:00.000-04:00

JERRY ANN WINN v. WELCH FARM, LLC, ET AL. (Tenn. Ct. App. September 1, 2011)

The buyer of unimproved real property sued the sellers for breach of implied warranties, imposition of a permanent nuisance, and diminution in value of the property; buyer also sought damages for alleged violations of the Tennessee Real Estate Broker License Act, the duty of good faith and fair dealing, the Tennessee Consumer Protection Act, and negligence.

The trial court held that Tennessee does not provide a cause of action for breach of implied warranty in the sale of unimproved real property; the court also held that buyer had not demonstrated a genuine issue of material fact as to whether the lot was "unbuildable." The court granted summary judgment to the defendants, and the buyer appealed. Buyer asserts that the sellers had a duty to disclose "possible adverse soil conditions." She also urges this Court to adopt a cause of action for breach of implied warranty of suitability for residential construction. We affirm the judgment of the trial court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/winnj_090111.pdf

Court reviews the trial court's interpretation of the mechanic's and materialmen's liens statutes

2011-08-30T18:08:00.000-04:00

TRI AM CONSTRUCTION, INC., ET AL. v. J & V DEVELOPMENT, INC., ET AL. (Tenn. Ct. App. August 30, 2011)

This interlocutory appeal stems from a lien enforcement action. Tri Am Construction, Inc. ("Tri Am") filed a complaint in the Chancery Court for Rhea County ("the Trial Court") against J & V Development, Inc. ("J & V"), Randall E. Vick, Brenda B. Jung, and Branch Banking and Trust Company ("BB&T") to enforce a lien.

BB&T moved to dismiss Tri Am's complaint, citing alleged fatal procedural defects. The Trial Court denied BB&T's motion to dismiss and allowed Tri Am to amend its complaint to cure the procedural defects. We granted permission for this interlocutory appeal.

We find that the Trial Court did not err in liberally construing the revised mechanic's and materialmen's liens statutes to permit Tri Am to amend its complaint in order to cure the procedural defects. We further find that the Trial Court did not err in declining to hold that BB&T's rights would be retroactively impaired by the liberal application of the revised mechanic's and materialmen's liens statutes. We affirm the judgment of the Trial Court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/triamconstruct_083011.pdf

Court Reviews Whether the Trial Court had Jurisdiction to Confirm an Arbitration Award

2011-08-22T14:31:00.001-04:00

LEE BROWN AND GUTTERSHUTTER OF NASHVILLE, LLC v. DAVID STYLES ET AL. (Tenn. Ct. App. August 22, 2011)

Appeal from a judgment confirming an arbitration award. The principle defense is that the appellant, the party against whom the arbitration award was issued, was never a party to the arbitration agreement at issue and did not participate in the arbitration proceedings. The trial court confirmed the arbitration award and enrolled a judgment against the appellant in the amount of $78,956.80 plus costs.

We reverse the confirmation of the award against the appellant upon the finding that the trial court lacked subject matter jurisdiction to confirm the award. This is because the statute which confers jurisdiction upon the court to confirm arbitration awards, Tenn. Code Ann.section 29-5-302, requires a written arbitration agreement between the parties, and there is no written agreement between the appellant and appellee to arbitrate. Thus, the trial court was without jurisdiction to confirm an arbitration award against the appellant.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/brownl_082211.pdf

Court reviews whether a valid contract existed between home buyer and seller for the repair of a drain

2011-08-01T14:47:00.000-04:00

DENISE JEREMIAH and TIMOTHY JEREMIAH v. WILLIAM BLALOCK (Tenn. Ct. App. August 1, 2011)

The plaintiff home buyer and defendant home seller entered into an agreement to repair a drain at some future date because it had been improperly piped out of the buyer's house. When the time for performance came, the drain was not moved, resulting in damages to the buyer's home. The buyer sued for breach of contract. The circuit court granted a directed verdict to the defendant on the ground that there was no consideration to support the contract. We find that the mutual promises made by the parties constituted adequate consideration. We accordingly reverse the trial court and remand this case for such further proceedings as necessary.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/jeremiahd_080111.pdf

Judy Greenwald: Professional liability risks grow with green construction

2011-07-24T14:57:00.001-04:00

Challenges facing risk managers and insurers in developing errors and omissions coverage for “green” construction projects are similar to but also different than standard construction risks.

The difference generally is found in new technology and materials, which are untested and often experimental, and can lead to unfounded expectations, observers say.

Despite recent attention on the subject, “green building sustainable design has been around for decades,” said Paul Ablan, Minnetonka, Minn.-based senior vp and managing director of professional liability at OneBeacon Professional Insurance, a unit of Hamilton, Bermuda-based OneBeacon Insurance Group Ltd.

Professionals long have sought to operate more efficiently and economically while taking the environment into account, but it is only in the past several years that sustainable design has gained more governmental and public focus, Mr. Ablan said.

Read more at: http://www.expertwitnessinconstruction.com/httpdocs/news-Green_Construction_Liability_Risks.php

Property Damage Exclusion Precludes Duty to Defend (Wiley Rein, LLP)

2011-07-19T14:54:00.001-04:00

The United States District Court for the District of Colorado has held that an insurer did not owe a duty to defend under a Non-Profit Executive Protection and Employment Practices Liability Insurance (D&O) policy issued to a condominium association (the Association) because the claims in the underlying breach of contract suit fell under the policy’s property damage exclusion. Beauvallon Condominium Assoc., Inc. v. Granite State Ins. Co., 2011 WL 2565474 (D. Colo. June 29, 2011).

After the retailers began to complain about problems with common elements, including drainage from the roof and interior leakage from overhead plumbing defects, the owner of the retail spaces filed suit against the Association, demanding repair of the common elements.

Read more at http://www.expertwitnessinconstruction.com/httpdocs/news-Property_Damage_Exclusion.php

Court Reviews Defendant's Failure to Pay a Contractor the Balance of a Settlement Agreement

2011-07-19T10:37:00.000-04:00

REGENCY CONSTRUCTION, LTD, INC. ET AL. v. KATHY LESLIE ET AL. (Tenn. Ct. App. July 19, 2011)

This dispute arises from an agreement to construct a duplex in a residential area. The issue in dispute pertains to the cost of change orders that were not reduced to writing as the construction contract required. To resolve the dispute amicably, the parties entered into an agreement titled "Settlement of Disputed Amount." The defendant paid part of the agreed amount timely but failed to pay the balance of $23,000. This action followed. The trial court ruled in favor of the contractor for the balance owed pursuant to the agreement and applied an offset in favor of the defendant in the amount of $5,220.55. Defendant appealed. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/regencyconstruction_071911.pdf

Court Reviews an Administrative Agency's Affirmation of a Workplace Violation Citation

2011-07-18T18:32:00.004-04:00

SWIFT ROOFING, INC. v. STATE OF TENNESSEE, COMMISSIONER OF LABOR AND WORKFORCE DEVELOPMENT (Tenn. Ct. App. July 14, 2011)

This appeal arises from a petition seeking judicial review of an administrative agency order, which affirmed citations for workplace safety violations. The Chancery Court affirmed the citations.

After reviewing the appellate record, we conclude that the administrative agency did not provide the required findings of fact, conclusions of law, and reasons for its decision. Consequently, judicial review is not possible based on the record before this Court. Therefore, we vacate the order of the Chancery Court and remand for further proceedings consistent with this opinion.

Full opinion is available here:
http://www.tba2.org/tba_files/TCA/2011/swiftroofing_071411.pdf

Court Reviews a Recission of Contract Case Against Builders of a Home

2011-07-16T10:33:00.000-04:00

HOSIE JOHNSON ET AL. v. NICK DATTILO ET AL. (Tenn. Ct. App. July 15, 2011)

The purchasers of a lot and newly constructed residence filed this action against the builders, seeking damages and rescission of the construction and sale agreement. The plaintiffs allege the defendants breached the agreement by failing to construct the home in accordance with "good building practices," and breached the implied warranty of workmanship. They also allege that statements made by the foreman during construction, concerning the condition of the property, amount to a violation of the Tennessee Consumer Protection Act, Tenn. Code Ann. section 47-18-104(b)(7), as well as common law negligent and fraudulent misrepresentation. The trial court granted the defendant's motion for a directed verdict on all claims. Finding plaintiffs failed to provide evidence of key elements in each of their claims, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/johnsonh_071511.pdf

Earl K. Messer: Insurance coverage for construction defects

2011-07-14T14:59:00.000-04:00

Contractor liability insurance coverage in construction defect cases is a matter that is hotly litigated. On the one hand, coverage often exists when a defect causes harm to a third party’s property. On the other hand, if the only harm is to the insured contractor’s defective work itself, there is usually no coverage. In between lies controversy. A key area of dispute is where defective work on one part of a construction project causes harm to another part of the same project, a common occurrence. Courts are split on whether coverage exists under such circumstances, although the trend appears to be in favor of coverage.

Read the full story here: http://www.expertwitnessinconstruction.com/httpdocs/news-Construction_Defect_Insurance_Coverage.php

TN Supreme Court Reviews Whether a Construction-Related Injury was Negligence Subject to the Governmental Tort Liability Act

2011-06-29T21:04:00.002-04:00

DALTON REB HUGHES ET AL. v. THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE ET AL. (Tenn. May 24, 2011)

After being injured when he jumped out of the path of a front-end loader owned by a governmental entity and operated by its employee, the plaintiff filed suit, claiming that the employee either was negligent in his operation of the equipment or had acted intentionally and that the governmental entity was liable under the Governmental Tort Liability Act. The trial court entered judgment for the plaintiff against the governmental entity and the Court of Appeals affirmed.

The governmental entity sought permission to appeal, arguing first that the employee had acted outside the scope of his employment and, secondly, that he had committed an assault against the plaintiff, either of which would preclude liability under the Act. Although we hold that the employee's conduct fell within the scope of his employment, his operation of the equipment constituted the intentional tort of assault rather than negligence. The governmental entity cannot, therefore, be held liable under the Act absent proof of its negligent supervision. The judgment of the Court of Appeals is reversed as to the governmental entity, and the cause is remanded to the trial court for entry of judgment against the employee.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2011/hughesd_052411.pdf

An ICE Storm of Immigration Audits is Coming

2011-06-25T18:30:00.000-04:00

An ICE Storm of Immigration Audits is Coming
Dana Olsen
Corporate Counsel
June 22, 2011

For the second time this year, auditors at the U.S. Immigration and Customs Enforcement branch of the Department of Homeland Security are cracking down on employers to ensure compliance with workplace eligibility laws. Ian MacDonald, an immigration attorney at Littler Mendelson, says the audits are not going to stop anytime soon.

The government announced last week its intention to audit the hiring records of 1,000 employers of all sizes across the country. ICE says the selection of targeted employers is random, but MacDonald says certain industries are particularly prone to the audits. In February, the agency made a similar announcement and investigated 1,000 employers. Adding in whistleblower tips, the latest action brings the number of I-9 audits for fiscal year 2011 up to 2,300.

See complete article:
http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202498023756

Court Reviews a Dismissed Cased Involving a Dispute Arising from the Construction of Two Houses

2011-06-15T21:07:00.000-04:00

TERRY LAKE AND LINDA OUSLEY V. LOUIS HAYNES, BARBARA HAYNES AND RUNNING BEAR CONSTRUCTION (Tenn. Ct. App. June 9, 2011)

This is a construction case. The plaintiffs hired the defendant construction company to build two residential houses. Disputes arose during construction over completion of the work and the plaintiffs did not make some payments to the construction company. After the plaintiffs terminated the contract, they sued the defendant construction company. The construction company filed a counter-complaint. After a trial, the trial court dismissed the plaintiffs' complaint and the defendants' counter-complaint. However, the trial court failed to issue written findings of fact and conclusions of law as required under Rule 52.01 of the Tennessee Rules of Civil Procedure. We vacate the trial court's judgment and remand the cause to the trial court for written findings of fact and conclusions of law.

Opinion available at:
 http://www.tba2.org/tba_files/TCA/2011/laket_060911.pdf

Court Reviews Whether a Contractor Violated the TN Consumer Protection Act by Hiding Unsuitable Soil

2011-05-19T12:23:00.003-04:00

SPRING CRESS REALTY, LLC v. LARRY E. BROWN DBA S&B ASSOCIATES ET AL. (Tenn. Ct. App. May 16, 2011)

This is an action by an owner/developer of real property, Spring Cress Realty, LLC, against its excavation contractor, Larry E. Brown dba S&B Associates. The primary factual allegation is that the excavator intentionally hid approximately 40,000 cubic yards of unsuitable soil in an "engineered fill." The complaint included a claim that Brown violated the Tennessee Consumer Protection Act ("the TCPA"), Tenn. Code Ann. section 47-18-101 et seq.(2001). After a bench trial, the court awarded Spring Cress a judgment against Brown for compensatory damages of $551,295, trebled under the TCPA to $1,653,885. Brown appeals raising issues as to the preponderance of the evidence and the statute of limitations applicable to the TCPA claim. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/springcress_051611.pdf

Court Reviews Whether A Builder Constructed a House in Accordance with "Good Building Practices"

2011-05-18T16:16:00.003-04:00

ROGER WILKES, ET AL. v. SHAW ENTERPRISES, LLC (Tenn. Ct. App. May 5, 2011)

This is an appeal of the trial court's determination on remand that the Appellee did not breach the parties' contract when it constructed the Appellant's house without through-wall flashing and weep holes, as required by the applicable building code. The parties' contract provided that the builder would construct the house in accordance with "good building practices." The trial court concluded the builder constructed the house in accordance with good building practices even though it was not in strict conformance with the building code. We affirm this holding. The Appellants also appeal the trial court's failure to award them their attorneys' fees and costs incurred in their first appeal. We remand this matter to the trial court with directions that it award to Appellants reasonable attorneys' fees and costs incurred in their first appeal, as determined by the trial court.

Opinion available here:
http://www.tba2.org/tba_files/TCA/2011/wilkesr_050511.pdf

Court Reviews the Dismissal and Abatement of a Counterclaim in a Case Involving the Demolition and Construction of a Residential Garage

2011-03-25T11:17:00.001-04:00

DAVID BATES D/B/A DAVID BATES CONSTRUCTION CO. v. CAROLINE BENEDETTI (Tenn. Ct. App. March 22, 2011)

David Bates d/b/a David Bates Construction Co. ("Plaintiff") sued Caroline Benedetti ("Defendant") for breach of a construction contract involving demolition of an existing residential garage and construction of a new one. Defendant answered the complaint and filed a counterclaim.

After a bench trial, the Trial Court entered its order finding and holding, inter alia,
(1) that Plaintiff had not proven damages,
(2) that Defendant had failed to comply with Tenn. Code Ann. section 66-36-103 with regard to her counterclaim and, therefore, pursuant to the statute her counterclaim should be abated, and
(3) that Defendant also had failed to give notice and an opportunity to cure pursuant to the common law and that her counterclaim should be dismissed for that reason as well.

Defendant appeals the abatement and dismissal of her counterclaim. We find that Tenn. Code Ann. section 66-36-103 does not apply to the case at hand, but that the Trial Court correctly dismissed Defendant's counterclaim. We, therefore, affirm the Trial Court's order.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/batesd_032211.pdf

Court Reviews whether Defendant Violated the Consumer Protection Act in a Cases Involving the Construction of a Home

2011-03-14T11:25:00.000-04:00

ROBERT SHROUT, et al., v. HALL CONSTRUCTION, et al. (Tenn. Ct. App. March 14, 2011)

This case arose over the construction of a home for plaintiffs. Plaintiffs sued the construction company and a bank and several individuals. The Trial Court resolved the issues as to defendants, except Mark Rodriguez, prior to trial. The plaintiffs' case against Rodriguez was tried by the Trial Court who directed a verdict at the end of plaintiffs' proof. Plaintiffs appealed to this Court.

Plaintiffs insisted that material evidence established a violation of the Consumer Protection Act by defendant, and the directed verdict should be reversed. Upon review of the evidentiary record, we conclude that the Trial Judge properly directed a verdict in favor of the defendant, and we affirm the Trial Court's Judgment.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/shroutr_031411.pdf

Court Reviews a Contractor's Claim for Lien Enforcement Against Homeowners

2011-03-14T11:21:00.000-04:00

WISE CONSTRUCTION, LLC, ET AL. v. THOMAS BOYD, ET AL (Tenn. Ct. App. March 14, 2011)

This appeal involves a home construction dispute between an LLC contractor and the homeowners. The contractor entered into a written contract with the homeowners for the construction of a 6000 square foot home. Upon the relationship between the parties becoming strained, the homeowners claim the contractor told them to find another builder. The contractor contends it was fired from the project. The instant action was commenced by the contractor to enforce a lien. The trial court found in favor of the contractor. The homeowners appeal. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/wiseconstruction_031411.pdf

SWINEY dissenting
http://www.tba2.org/tba_files/TCA/2011/wiseconstruction_DIS_031411.pdf

Court Reviews the Award of Damages in a Case about the Construction of a Defective Dentist Office

2011-02-28T20:01:00.001-05:00

CHARLES PESCE v. EAST TENNESSEE CONSTRUCTION SERVICES, INC. (Tenn. Ct. App. February 28, 2011)

Charles Pesce ("the Owner") is a practicing dentist. He contracted with East Tennessee Construction Services, Inc. ("the Builder") to build him a new office for his practice on a lot owned by him. The Builder constructed the building, but with numerous undisputed defects.

The Owner filed this action which culminated in a bench trial that lasted several days. Based upon diminution in value, the trial court awarded the Owner $282,000 in damages. The trial court expressly found that the cost to repair the structure was an unacceptable measure of damages because it "is disproportionate . . . to the difference in the value of the structure actually constructed and the one contracted for." The court awarded the Owner discretionary costs of over $10,000.

The Owner appeals challenging the measure of damages as well as the amount awarded under the diminution in value measure. The Owner also challenges the trial court's failure to order the Builder to reimburse him for fees charged by one of the Owner's experts in connection with his discovery deposition taken by the Builder. The Builder challenges the award of discretionary costs and argues that the damages awarded are excessive. We reverse in part and affirm the remaining judgment as modified.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/pescec_022811.pdf

SWINEY concurring
http://www.tba2.org/tba_files/TCA/2011/pescec_CON_022811.pdf

Court Reviews Whether a City Council Acted Illegally in Approving a Planned Development and a Street Closure

2011-02-28T19:59:00.000-05:00

NATHAN E. STEPPACH, JR. v. WILLIAM H. THOMAS, JR., ET AL. (Tenn. Ct. App. February 28, 2011)

This is the second appeal of this case, which arises from the grant of a writ of certiorari by the Shelby County Chancery Court. Upon review of the Memphis City Council's record, the trial court found that the Appellee City had not acted arbitrarily, capriciously, or illegally in either approving a planned development, or in approving the companion street closure.

The trial court granted partial summary judgment in favor of the City, thereby affirming the City Council's action in approving the planned development. The issue of the companion street closure proceeded to hearing, with the trial court ultimately affirming the City Council's decision. Appellant appeals, arguing that the City Council's decision was made in violation of the Memphis City Charter and ordinances, and that the decision was the product of corruption within the City Council. Discerning no error, we affirm the action of the trial court and remand for further proceedings.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/steppachn_022811.pdf

Court Reviews a Case Involving a Non-Performing Construction Company, a Developer, and Homeowners

2011-02-27T18:13:00.002-05:00

DANIEL CAVANAUGH, et al., v. AVALON GOLF PROPERTIES, LLC. (Tenn. Ct. App. February 24, 2011)

Plaintiffs purchased a residential lot from defendant developer, but the purchase contract required plaintiffs to use defendant construction company to build their home. Before the home was completed, defendant construction company defaulted on paying materialmen and suppliers and abandoned the project.

Plaintiffs brought this action alleging that developer knew, or should have know, that the construction company was incapable of performing the required construction services, and that the developer owed plaintiff a fiduciary duty to provide a contractor who could perform the work in a good, workmanlike manner. They further alleged a breach of contract, in violation of the Tennessee Consumer Protection Act.

A default judgment was entered against the construction company, and the developer filed a Motion for Summary Judgment which the Trial Court ultimately granted against plaintiffs. Plaintiffs appealed and we affirm the Judgment of the Trial Court.

Opinion available here:
http://www.tba2.org/tba_files/TCA/2011/cavanaugh_022411.pdf

Court Reviews the Allocation of Responsibility Between Developers in a Case Involving Construction of a Road

2011-02-25T20:02:00.000-05:00

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY v. BARRY CONSTRUCTION COMPANY, INC., ET AL. (Tenn. Ct. App. February 25, 2011)

This matter is before the court for a second time. The Metropolitan Government of Nashville and Davidson County initiated suit to compel two developers to complete an unfinished portion of a road in a planned unit development or to recover damages equal to the cost of completing the road if it completed the road itself.

The trial court dismissed the action, finding that the amended complaint did not provide a legal basis for requiring either developer to complete the road. On appeal this Court vacated the trial court's order and remanded the case for the court to consider the appropriate allocation of responsibility for construction of the road between the two developers.

While the appeal was pending, the Metropolitan Government acquired the land and subsequently completed the unfinished portion of the road. On remand, the trial court assessed costs of constructing the road to the developers equally, but assessed the land-acquisition costs entirely to one developer. The Metropolitan Government appeals. Finding no error in the trial court's allocation of responsibility, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/barryconstruction_022511.pdf

Court Reviews Negligent and Fraudulent Misrepresentation in a Case Involving the Failure to Disclose Defects in a Home

2011-02-20T18:11:00.000-05:00

EDMOND CATO ET AL. v. D. L. BATTS ET AL. (Tenn. Ct. App. February 18, 2011)

Purchasers of home filed this action against the sellers for negligent misrepresentation and fraudulent misrepresentation for the failure to disclose defects in the home. The trial court found for the purchasers on their claim of negligent misrepresentation but denied their claim of fraudulent misrepresentation and their request for rescission. Purchasers appealed contending the trial court erred by not finding fraudulent misrepresentation and partially denying their motion to alter or amend the judgment in which they sought to introduce new evidence. We affirm the ruling of the trial court in all respects.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/catoe_021811.pdf

Court Reviews the Validity of a Land Survey in a Case about a Boundary Dispute between Hunting Clubs

2011-01-13T14:41:00.000-05:00

OPEN LAKE SPORTING CLUB v. LAUDERDALE HAYWOOD ANGLING CLUB (Tenn. Ct. App. January 13, 2011)

This appeal involves a dispute over the location of a boundary line between tracts of land owned by two hunting clubs. After many years of litigation, the parties agreed that a new survey would be conducted by a new surveyor and that they would be bound by his decision.

After the new surveyor filed a report and survey, one of the clubs filed a motion to set aside the survey, contending that the new surveyor did not make an independent determination regarding the location of the boundary line, but rather, copied a previous survey that was completed in the past. The trial judge refused to hold a hearing regarding the validity of the survey because the parties had agreed to be bound by the surveyor's decision. We reverse and remand for further proceedings.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/openlake_011311.pdf

OSHA: Most Frequently Cited Standards of 2010

2010-12-30T14:45:00.001-05:00

The following were the top 10 most frequently cited standards in fiscal year 2010 (October 1, 2009 through September 30, 2010):

Scaffolding, general requirements, construction (29 CFR 1926.451)
Fall protection, construction (29 CFR 1926.501)
Hazard communication standard, general industry (29 CFR 1910.1200)
Ladders, construction (29 CFR 1926.1053)
Respiratory protection, general industry (29 CFR 1910.134)
Control of hazardous energy (lockout/tagout), general industry (29 CFR 1910.147)
Electrical, wiring methods, components and equipment, general industry (29 CFR 1910.305)
Powered industrial trucks, general industry (29 CFR 1910.178)
Electrical systems design, general requirements, general industry (29 CFR 1910.303)
Machines, general requirements, general industry (29 CFR 1910.212)

The following are the standards for which OSHA assessed the highest penalties in fiscal year 2010 (October 1, 2009 through September 30, 2010):

Fall protection, construction (29 CFR 1926.501)
Electrical, general requirements, construction (29 CFR 1926.403)
Safety training and education, construction (29 CFR 1910.21)
Control of hazardous energy (lockout/tagout), general industry (29 CFR 1910.147)
Machines, general requirements, general industry (29 CFR 1910.212)
General duty clause (Section 5(a)(1) of the OSH Act)
Excavations, requirements for protective systems, construction (29 CFR 1926.652)
Lead, general industry (29 CFR 1910.1025)
Grain handling facilities (29 CFR 1910.272)
Ladders, construction (29 CFR 1926.1053)

For more detailed information, visit Frequently Cited OSHA Standards. At that site, you can generate a report on the most frequently cited federal or state OSHA standards by your SIC code and the number of employees in your establishment.

Article located at: http://www.osha.gov/dcsp/compliance_assistance/frequent_standards.html

Court Reviews a Judgment in Favor of a Bank against Defaulting Borrowers

2010-12-29T14:43:00.000-05:00

GREENBANK, F/K/A GREENE COUNTY BANK v. BARBARA J. THOMPSON, ET AL. (Tenn. Ct. App. December 29, 2010)

Bank provided a loan to Borrowers for the purchase of real property and construction of a log cabin home. After Borrowers defaulted on the loan, Bank sold the property at a foreclosure sale.

Bank then initiated a lawsuit alleging conversion, negligent business representation, and promissory fraud. Bank also sought a deficiency judgment for the difference in the amount owed on the loan and the foreclosure sale price. After a bench trial, the trial court awarded a judgment for $61,782.12 and a deficiency judgment for $300,644.92 in favor of Bank. Borrowers appeal. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/greenbank_122910.pdf

Court Reviews Whether the Trial Court Properly Held Home Inspectors Individually Liable in a Negligence Case

2010-12-01T16:50:00.000-05:00

JOHN GALLON, ET AL. v. HARRY ELBERSON, ET AL. (Tenn. Ct. App. December 1, 2010)

The plaintiff home buyers filed suit against two home inspectors and a home inspection company after discovering defects in the home that were not mentioned in the inspection report. The court found that the defendants were negligent and granted the plaintiffs a judgment for damages against the home inspectors and the inspection company, individually, jointly and severally.

The defendants argue on appeal that the judgment was not supported by the evidence and that in holding them individually liable, the court pierced the corporate veil without the proof of the extraordinary circumstances normally required for a court to do so.

We affirm the finding of liability and the judgment for damages, but we vacate the judgment as to one of the individual defendants, because the evidence preponderated against the trial court's finding that he was in partnership with the other individual defendant.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/gallonj_120110.pdf

Court Reviews Whether a Construction Company is Entitled to a Modification of the Incentive Provision of a Contract with TDOT

2010-11-29T15:11:00.002-05:00

RAY BELL CONSTRUCTION CO., INC. v. STATE OF TENNESSEE, TENNESSEE DEPARTMENT OF TRANSPORTATION (Tenn. Ct. App. November 29, 2010)

This case concerns an alleged breach of contract involving the incentive clause of a Tennessee Department of Transportation ("TDOT") road construction contract. Before the Claims Commission, TDOT argued that the contract language was clear in prohibiting an extension, alteration, or amendment of the incentive clause.

The Claims Commission agreed with the position of Ray Bell Construction Company ("RBCC") that it was entitled to a modification of the incentive provision. To so find, the Commission held that "a definite latent ambiguity exists for which parol evidence not only is admissible, but frankly, absolutely necessary in both understanding and deciding the issues in this case." TDOT has appealed. We affirm the decision of the Claims Commission.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/raybell_112910.pdf

SWINEY, Dissenting:
http://www.tba2.org/tba_files/TCA/2010/raybell_DIS_112910.pdf

Court Reviews Whether a Quantum Meruit Award and the Denial of an Offset was proper in a case between a Construction Company and a Demolition Subcontractor

2010-11-23T15:09:00.001-05:00

DILLARD CONSTRUCTION, INC. v. HAVRON CONTRACTING CORP. ET AL. (Tenn. Ct. App. November 23, 2010)

The only parties left litigating in what started out as a complex construction dispute are, on one side, Dillard Construction, Inc , and, on the other, Dillard's demolition subcontractor, Havron Contracting Corp. After a bench trial and several post-trial motions, the court held that:

(1) Dillard, while not having a contract with Havron, was required by quantum meruit to pay Havron $91,100 for work performed by Havron's subcontractors;
(2) Dillard was not entitled to an offset against that judgment for damage done to electrical equipment by Havron's subcontractor;
(3) Havron was entitled to recover from Dillard, under a "passthrough" indemnity theory, the attorney's fees awarded against Havron and in favor of its subcontractor; and
(4) Havron was not entitled to recover the attorney's fees that it, Havron, incurred in defending against the claims of its subcontractor.

Dillard appeals challenging both the quantum meruit award and the denial of an offset. Havron challenges the trial court's denial of indemnification for attorney's fees Havron incurred in defending the claims of its subcontractor. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/dillardconstruction_112310.pdf

Court Reviews Damages Owed in a Defective Driveway Case

2010-11-18T16:47:00.001-05:00

EARL FAULKNER, ET AL. v. TOM EMMETT CONSTRUCTION COMPANY (Tenn. Ct. App November 18, 2010)

Earl and Faye Faulkner ("Plaintiffs") hired Tom Emmett Construction Company ("Defendant") to construct a new driveway at their home in Knox County. Plaintiffs refused to pay $8,000 of the total $18,000 contract price because they were dissatisfied with the workmanship of the driveway.

Plaintiffs sued Defendants seeking as damages what it would cost to remove and replace the allegedly defective driveway. Defendant asserted that the driveway was properly constructed and filed a counterclaim for the remaining $8,000 balance owed on the oral contract.

Following a bench trial, the Trial Court concluded that any problems with the driveway were not sufficient to require that it be removed and replaced. Because there was a problem with how the concrete on one portion of the driveway had been poured, the Trial Court required Plaintiffs to pay Defendant only $5,000 of the remaining $8,000 owed on the contract. Plaintiffs appeal. We affirm as modified.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/faulknere_111810.pdf

Court Reviews a Construction Financing Case between Financier and Property Owner

2010-11-10T16:49:00.000-05:00

WADE PHELPS/PHELPS HARRINGTON CONSTRUCTION CO., INC. v. C & C CONSTRUCTION CO., LLC, ET AL. (Tenn. Ct. App. November 10, 2010)

Contractor agreed to build duplex for property owner, with plaintiff providing construction financing. At closing, contractor was paid, but contractor did not pay plaintiff as agreed. Plaintiff sued property owner, contractor, and bank.

We previously affirmed the trial court's grant of summary judgment to the bank, finding that contractor and plaintiff were in a joint venture, such that payment to contractor was payment to plaintiff.

Property owner then moved for summary judgment, which the trial court granted. Because we find no separate agreement between property owner and plaintiff requiring repayment directly to plaintiff, plaintiff's cause of action against property owner is precluded, and the trial court's grant of summary judgment is affirmed.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/wadephelps_111010.pdf

Court Reviews Whether Purchaser of Recently-Foreclosed Property has Standing to Bring a Suit Against Property’s Sellers

2010-11-03T14:06:00.001-04:00

PROVIDENCE CROSSINGS, LLC v. SC REALTY CAPITAL, L.P., SC CAPITAL, LLC, AND SMITH REALTY INTERESTS, L.P. (Tenn. Ct. App. November 3, 2010)

Purchaser of landlocked property brought action against the sellers, seeking to recover damages allegedly caused by the failure of the sellers to complete a road extension or otherwise to insure reasonable access to the property, which had been purchased for development of multi-family rental units.

The trial court granted summary judgment to the sellers, finding that the right of the purchaser to proceed with the action was extinguished when the bank that provided financing for the development of the property foreclosed on the loan secured by the property and subsequently sold the property to another entity. The court concluded that the purchaser did not have standing to pursue the claims.

Finding that a genuine issue of material fact exists as to whether the purchaser's cause of action was included in the assets foreclosed upon, we reverse the judgment of the trial court and remand for further proceedings.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/providencecrossings_110310.pdf

CLEMENT concurring in the judgement
http://www.tba2.org/tba_files/TCA/2010/providencecrossings_CON_110310.pdf

Court Reviews a Contractor’s Mistake in Making a Construction Bid

2010-10-29T13:59:00.001-04:00

PRESTIGE LAND COMPANY v. BRIAN MULLINS EXCAVATING CONTRACTORS, INC. (Tenn. Ct. App. October 29, 2010)

Prestige Land Company ("Developer") owned land upon which it intended to build a commercial shopping center. An estimate to complete the project was obtained. Thereafter, the project was opened up for bidding. Brian Mullins Excavating Contractors, Inc. ("Contractor") bid on the project. Although Contractor's bid was significantly lower than the next lowest bid, it was only 10% lower than the estimated costs of construction. Contractor was unaware that it had made a unilateral mistake in its bid. Contractor was awarded the project. Eventually, Contractor was unable to complete the project because it ran out of money due to its unilateral bidding mistake.

Developer sued for breach of contract, and Contractor filed a counterclaim for fraud and other claims. The Trial Court awarded Contractor a judgment for $101,357.05. Finding no clear and convincing evidence of fraud by Developer, we vacate the judgment for Contractor and enter a judgment for Developer in the amount of $128,326.56.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/prestigeland_102910.pdf

Court Reviews Whether Defendant Signed A Credit Application in His Personal Capacity

2010-10-28T13:57:00.000-04:00

84 LUMBER COMPANY v. R. BRYAN SMITH, ET AL. (Tenn. Ct. App. October 28, 2010)

84 Lumber Company ("84 Lumber") sued R. Bryan Smith ("Smith") and Allstates Building Systems, LLC ("Allstates") for a balance owed on an open account. Both sides filed motions for summary judgment. The Circuit Court granted 84 Lumber summary judgment, and entered a judgment against Smith and Allstates in the amount of $27,611.31 plus attorney's fees and costs in the amount of $6,500.00. Smith appeals to this Court.

We find that Smith did not sign the credit application in his personal capacity and, therefore, did not guarantee Allstates' debt. We reverse the grant of summary judgment against Smith, and grant summary judgment to Smith. We affirm the grant of summary judgment against Allstates.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/84lumber_102810.pdf

SUSANO, concurring in part and dissenting in part:
http://www.tba2.org/tba_files/TCA/2010/84lumber_CON_102810.pdf

TN Supreme Court Reviews Whether an Appraisal can Form the Basis of a Fraudulent Misrepresentation Claim

2010-10-26T13:53:00.000-04:00

JOSEPH DAVIS ET AL. v. PATRICK J. McGUIGAN ET AL. (Tenn. October 26, 2010)

This appeal arises from a trial court's grant of summary judgment in an action against a real estate appraiser for fraudulent misrepresentation and for violation of the Tennessee Consumer Protection Act. A husband and wife alleged that the appraiser, who was hired by the bank financing the husband and wife's home construction, recklessly overestimated the value of their proposed construction and that they reasonably relied on the appraisal value to their detriment.

The Court of Appeals affirmed the trial court's ruling, holding that an appraisal is an opinion that cannot form the basis for a fraudulent misrepresentation claim. We hold that an opinion can form the basis of a fraudulent misrepresentation claim. We further hold that genuine issues of material fact preclude summary judgment as to the husband and wife's claims against the appraiser. We reverse the Court of Appeals and remand the case to the trial court for further proceedings consistent with this opinion.

Opinion may be found at:
http://www.tba2.org/tba_files/TSC/2010/davisj_102610.pdf

KOCH and CLARK, dissenting:
http://www.tba2.org/tba_files/TSC/2010/davisj_DIS_102610.pdf

Court Reviews Summary Judgment Ruling in a Case Between a Home Purchaser and a Licensed Contractor

2010-09-29T10:10:00.000-04:00

NATALIE HAGAN v. MICHAEL PHIPPS ET AL. (Tenn. Ct. App. September 29, 2010)

This appeal involves claims by a home purchaser against a licensed contractor and a business associate of the unlicensed builder who built the home in question and sold it to the plaintiff. The trial court granted the contractor defendant's motion for summary judgment on all claims against him based upon its conclusions that the unlicensed builder was not the agent of the licensed contractor and that there was no predicate tort for civil conspiracy because the builder intended to use the house for his personal residence. Because we find that there are issues of material fact that must be resolved, we reverse the trial court's grant of summary judgment.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/hagann_092910.pdf

Court Reviews Priority Issues in a Case Involving Lien Enforcement

2010-09-28T10:07:00.005-04:00

EAST TENNESSEE GRADING, INC., v. BANK OF AMERICA, N.A., et al. (Tenn. Ct. App. September 28, 2010)

Plaintiff brought this action to enforce a lien for excavation and road work done in a residential development, because the owner had not paid for the construction work performed. An agreed judgment was entered as to plaintiff's claims against defendant, Seven Lakes Development, awarding judgment against that defendant for materials and labor performed on the property. One parcel of property, however, totaling 6.36 acres was owned by defendants Coughlins, which was subject to a deed of trust in favor of Bank of America. The Trial Court held that Bank of America had priority over plaintiff as to 1.9 acres because plaintiff had not filed its Notice of Lien timely to maintain priority over the subsequent owners pursuant to Tenn. Code Ann. section 66-11-112. The Trial Court also held that plaintiff had priority over Bank of America as to 4.46 acres because plaintiff's Notice of Lien was filed before the Amended Deed of Trust in favor of Bank of America was filed. On appeal, we affirm the Judgment of the Trial Court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/easttenngrading_092810.pdf

Court Reviews the Enforceability of a Materialman's Lien

2010-09-16T09:57:00.007-04:00

CENTURY FIRE PROTECTION, LLC., v. FOWLERS' HOLDINGS, LLLP., et al. (Tenn. Ct. App. September 16, 2010)

Plaintiff alleged that it delivered materials and provided labor for the installation of a fire protection system on the property of defendant and defendant had failed to pay money still owed under the contract. Plaintiff sought a materialmen's lien to enforce any judgment obtained against defendant for the amount of monies owed under the contract. Defendants answered, filed a counter-complaint and raised multiple defenses. The Trial Court conducted an evidentiary hearing and ruled in plaintiff's favor, holding that plaintiff was entitled to recover monetary damages and the materialmen's lien would be enforced. Defendants have appealed and we affirm the Judgment of the Trial Court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/centuryfire_091610.pdf

Court reviews directed verdict order in a case about a leaky building

2010-08-27T09:53:00.006-04:00

E & J CONSTRUCTION COMPANY v. LIBERTY BUILDING SYSTEMS, INC. (Tenn. Ct. App. August 27, 2010)

E & J Construction Company ("Plaintiff") purchased a metal building from Liberty Building Systems, Inc. ("Defendant"). The metal building was purchased by Plaintiff for one of its customers, Camel Manufacturing Company ("Camel"). Plaintiff constructed the metal building for Camel and connected it to an existing building. Almost from the outset, there was a problem with leaking. Plaintiff sued Defendant raising various claims including, among others, breach of contract. After the Trial Court granted Defendant's motion for partial summary judgment, the case proceeded to trial on the few remaining claims. At the conclusion of Plaintiff's proof, the Trial Court granted Defendant's motion for directed verdict. Plaintiff appeals. We reverse the grant of a directed verdict on Plaintiff's breach of contract claim and remand for further proceedings. The judgment of the Trial Court otherwise is affirmed.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/ejconstruction_082710.pdf

Court reviews breach of contract and prompt pay notice issues in a case involving residential subdivision developers

2010-08-16T14:15:00.014-04:00

CLAIBORNE HAULING, LLC v. WISTERIA PARK, LLC (Tenn. Ct. App. August 16, 2010)

Claiborne Hauling, LLC, contracted with Wisteria Park, LLC, to perform the excavating and grading, including installation of storm sewers and sanitary sewers, for a residential subdivision Wisteria was developing. The contract calls for Claiborne Hauling to commence work on November 6, 2006, with a substantial completion date of April 5, 2007. The contract further provides that Claiborne Hauling will receive a bonus of $500 per day for early completion but will pay a $500 per day "penalty" if completion extends past May 31, 2007. Claiborne did not finish by May 31, 2007.

Wisteria "fired" Claiborne Hauling during a heated exchange in August 2007, and confirmed termination of the contract in a letter from counsel. The ground stated for termination is failure to complete the project by May 31, 2007. However, Wisteria did not secure approval of its plans for construction of the sewer system until June 8, 2007.

When Wisteria did not pay the invoices and change orders outstanding at the time of the termination, Claiborne Hauling first sent a "prompt pay notice" and then filed this action alleging breach of contract against Wisteria. Wisteria answered and filed a counterclaim asserting, among other things, that it was entitled to recover $500 per day from May 31, 2007, until substantial completion, as liquidated damages.

After a bench trial, the court found that Wisteria was guilty of the first material breach and awarded Claiborne Hauling a judgment in the amount of $301,430.62, which included attorney fees under the Prompt Pay Act, Tenn. Code Ann. section 66-34-602 (2004). Wisteria appeals. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/claibornehauling_081610.pdf

Court reviews suit against Planning Commission challenging their approval of a Planned Unit Development

2010-08-06T14:20:00.000-04:00

ANDREW BERNARD SHUTE, JR., ET AL. v. METROPOLITAN GOVERNMENT OF NASHVILLE, DAVIDSON COUNTY, TENNESSEE, ET AL. (Tenn. Ct. App. August 6, 2010)

The Nashville Metropolitan Council approved a Planned Unit Development (PUD) for a large residential subdivision to be constructed by Habitat for Humanity. The Metropolitan Planning Commission subsequently approved a site plan for the first phase of the subdivision, over the objections of neighboring landowners, who then challenged the approval by filing a petition for writ certiorari in the Chancery Court. The petitioners also mounted a challenge against the entire project based on the ground that the PUD had become "inactive" because construction had not yet begun, even though six years had passed since it was initially approved. The Planning Commission rejected the challenge, finding that the project was still "active" and, therefore, that the PUD did not have to go through the process of approval for a second time. The neighbors then filed a second petition for writ of certiorari.

The trial court consolidated the two petitions and heard arguments that the procedures the Planning Commission followed in reaching its decisions violated the petitioners' constitutional rights. The court dismissed both petitions, ruling that the Planning Commission had not acted illegally, arbitrarily or fraudulently, and that the petitioners' constitutional rights were not violated. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/shutea_080610.pdf

Court reviews whether a city is estopped from refusing to re-zone property based on a verbal commitment

2010-07-27T14:19:00.001-04:00

STONEYBROOK GOLF COURSE, LLC v. CITY OF COLUMBIA (Tenn. Ct. App. July 27, 2010)

Stoneybrook Golf Course, LLC, purchased approximately 190 acres of land ("the Property") - on part of which was located a golf course - with plans to develop the vacant land surrounding the course. Before purchasing the Property, Stoneybrook met with the mayor and other officials of the City of Columbia and received their verbal assurances of strong support for the annexation of the 190 acres into the City and the re-zoning of the area to permit the building of condominiums.

After Stoneybrook purchased the Property, the city council of Columbia refused to go forward with the annexation and re-zoning until a comprehensive land use plan could be completed against which to evaluate the proposed re-zoning. Stoneybrook filed this action against the City, claiming, in essence, that the City's refusal to act promptly in accord with the verbal "commitment" constitutes an unconstitutional moratorium and, alternatively, that the City is estopped from refusing to re-zone the Property. The trial court dismissed the complaint on the pleadings. Stoneybrook appeals. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/stoneybrook_072710.pdf

Court reviews contract between consumer and utility board

2010-07-23T11:10:00.003-04:00

GARY COOPER v. CLINTON UTILITIES BOARD (Tenn. Ct. App. July 23, 2010)

Plaintiff brought this action, charging defendant utility breached its contract with plaintiff to construct a line and deliver electricity to his property. Defendant filed a Motion for Summary Judgment and the Trial Judge held that there was no meeting of the minds between the parties and defendant was not obligated to construct a line to deliver electricity to plaintiff's dwelling. On appeal, we affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/cooperg_072310.pdf

Court reviews fairness of mediation agreement between parties

2010-07-21T10:55:00.006-04:00

ROB MATLOCK d/b/a ROB MATLOCK CONSTRUCTION v. REGINA M. ROURK (Tenn. Ct. App. July 21, 2010)

A homeowner and a contractor agreed to use mediation to resolve their disagreement over the contractor's bill for home renovations. The mediation resulted in an agreement, signed by both parties and their attorneys, which provided that the homeowner would pay the contractor $14,000 and that the parties would release each other from any and all claims. The homeowner paid $11,000, but refused to pay the rest. The contractor sued for the deficiency and filed a motion for summary judgment. The homeowner argued that she did not owe the money because the mediation procedure was unfair and because it did not comply with the requirements of Supreme Court Rule 31. The trial court granted summary judgment to the contractor and ordered the homeowner to pay him $3,000. We affirm the trial court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/matlockr_072110.pdf

Court reviews whether construction company violated the terms of a settlement agreement

2010-07-20T10:27:00.002-04:00

BERKELEY PARK HOMEOWNERS ASSOCIATION, INC., ET AL. v. JOHN TABOR, ET AL. (Tenn. Ct. App. July 20, 2010)

Berkeley Park Homeowners Association, Inc., and Southern Traditions Partners, LLC (collectively referred to as "Berkeley Park") filed a motion for contempt against John Tabor and Tabor Construction, Inc. (collectively called "Tabor"), seeking to enforce a 20061 mediated settlement agreement governing the construction of a house being built by Tabor in Southern Traditions' development known as Berkeley Park Subdivision. Berkeley Park alleged that Tabor was in violation of numerous provisions of the mediated agreement, while Tabor contended that the parties had reached another agreement in 2007 that superseded the earlier agreement.

Following a bench trial, the court held that there was no superseding agreement and that the evidence clearly and convincingly showed Tabor had violated the provisions of the mediated agreement. The court entered judgment in favor of Berkeley Park, awarding it damages of $34,042.11, including attorney's fees. Tabor appeals. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/taborj_072010.pdf

Attorney General reviews proposed contracts for home stabilization.

2010-07-06T10:01:00.000-04:00

Contracts for home stabilization following damage from vertical settlement

The Attorney General reviews whether these proposed contracts constitute contracts of insurance under Tennessee law. Using a hypothetical fact pattern and contract proposal, the Attorney General analyzes the service-indemnity test and contingency issues and determines that yes, certain contracts for home stabilization are indeed contracts of insurance under Tennessee law.

Opinion may be found at:
http://www.tba2.org/tba_files/AG/2010/ag_10_85

Court reviews whether trial court properly found for the State and granted a new trial to 2nd Defendant in a case involving interstate "crash cushions"

2010-06-30T13:30:00.001-04:00

REGINALD DENARD USHER, SON OF REGINALD SMITH, DECEASED v. CHARLES BLALOCK & SONS, INC. ET AL. (Tenn. Ct. App. June 30, 2010)

Reginald Smith ("the Decedent") died when the exposed metal edge of a device known as a "Guardrail Energy-Absorbing Terminal" ("the crash cushion") penetrated the window of the cab of his moving overturned tractor-trailer and cut him nearly in half.

His son, Reginald Denard Usher ("the plaintiff"), filed this action in the trial court against Charles Blaylock & Sons, Inc. The plaintiff also filed a claim against the State with the Tennessee Claims Commission. The essence of the claims is that the crash cushion was negligently placed at the end of a series of concrete barriers that served to separate traffic entering on and exiting from the roadway connecting to the temporary end of Interstate 140 in Blount County.

The alleged negligence was the failure to install a "transition panel" between the last concrete barrier and the crash cushion. Such a panel is designed to cover the otherwise exposed edge of the crash cushion thereby preventing vehicles from "snagging" the exposed metal edge. Eventually, the claim against the State was joined with the claim against Blaylock.

The case was tried to a jury with the circuit judge sitting as the Claims Commissioner; the jury was utilized by the trial judge in an advisory capacity with regard to the claim against the State. The jury returned a verdict in favor of the plaintiff. The jury found that the plaintiff's total damages were $2,000,000. It apportioned fault 25% to the Decedent, 37.5% to the State, and 37.5% to Blaylock. Acting as the Claims Commissioner, the trial court went against the advice of the jury and dismissed the claim against the State. The court found (1) that the plaintiff failed to carry the burden of proof with respect to the applicable standard of care for installing crash cushions; (2) that the plaintiff failed to prove a breach of duty; and (3) that, in any event, the Decedent was at least 50% at fault for speeding through a construction zone in foggy conditions.

Later, the trial court granted Blalock's motion for judgment notwithstanding the verdict and entered judgment in its favor. The court held (1) that Blalock was not responsible, as a matter of law, for leaving off the transition panel because the State's inspector on the scene "directed" Blalock to leave it off; (2) that the plaintiff failed to carry the burden of proving, by expert testimony, what a reasonably prudent contractor would have done under the circumstances; and (3) again, that the Decedent was at least 50% at fault. The court, acting as 13th juror, conditionally granted Blalock a new trial in the event the judgment in its favor was vacated or reversed. The plaintiff appeals.

We affirm the judgment in favor of the State. We vacate the judgment in favor of Blalock and remand for a new trial as to that defendant.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/usherr_063010.pdf

Court reviews whether a contractor can prosecute a subcontractor's claim against TDOT on their behalf as a "pass-through" claim

2010-06-25T13:10:00.007-04:00

KAY AND KAY CONTRACTING, LLC v. TENNESSEE DEPARTMENT OF TRANSPORTATION (Tenn. Ct. App. June 25, 2010)

Kay and Kay Contracting, LLC ("Contractor") entered into a contract with the Tennessee Department of Transportation ("TDOT") to build a bridge in Campbell County, Tennessee. Contractor subsequently entered into a subcontract with Whitley County Stone, LLC ("Subcontractor") to provide the excavation and grading work on the project. Subcontractor does not have a written contract with TDOT.

Both Contractor and Subcontractor filed claims with the Claims Commission alleging they were owed money by TDOT. Subcontractor was dismissed as a party because it did not have a written contract with TDOT, as required by Tenn. Code Ann. section 9-8-307(a)(1)(L). The Commissioner, however, determined that Contractor was allowed to prosecute Subcontractor's claim as a "pass-through" claim. The sole issue on this interlocutory appeal is whether Tenn. Code Ann. section 9-8-307(a)(1)(L) removes the State's sovereign immunity such that Contractor can assert a "pass-through" claim against TDOT on Subcontractor's behalf. We conclude that sovereign immunity from such a claim is not removed, and we reverse the judgment of the Claims Commission.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/kayandkay_062510.pdf

Court reviews whether trial court properly found that Appellant was an unlicensed contractor

2010-06-25T13:08:00.004-04:00

GLEN CRUZEN v. AYMAN AWAD (Tenn. Ct. App. June 25, 2010)

This case arises out of the alleged breach of a contractual agreement entered by and between Appellant and Appellee for the repair and renovation of a commercial building. Appellant filed suit, asserting that Appellee had failed to fully compensate Appellant for his work on the building. The trial court granted Appellee's motion for summary judgment, finding that Appellant was an unlicensed contractor under Tenn. Code Ann. secton 62-6-102, and that his recovery was, therefore, limited to actual documented expenses under Tenn. Code Ann. section 62-6-103(b). Finding no error, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/cruzeng_062510.pdf

State Senate Committee considers mandatory installation of Carbon Monoxide alarms for new residential construction

2010-05-21T15:44:00.001-04:00

SENATE LOOKS AT REQUIRING CO2 ALARMS FOR NEW CONSTRUCTION.

Carbon monoxide alarms - Legislation, Senate Bill 3581, was approved by Senate Commerce Committee members this week to require new residential construction to contain a carbon monoxide alarm detector. The detectors can be combined with smoke detectors. Carbon monoxide cannot be detected through normal human senses as it is odorless and invisible. Each year in the U.S., 400 people die and 20,000 seek hospital treatment due to carbon monoxide poisoning. The cost of the detectors is as low as $20.00.

The Senate Bill may be accessed at this address:
http://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SB3581

Worker's Compensation bill addresses gaps in coverage while protecting small businesses

2010-05-20T13:06:00.000-04:00

The Senate Finance Committee approved legislation that creates a procedure for sole proprietors, partners, officers of corporations, and members of limited liability companies engaged in the construction industry to file for an exemption from obtaining workers' compensation insurance on themselves. The legislation, Senate Bill 3591, comes after the General Assembly voted earlier this year to suspend a new law requiring sole proprietors and partners engaged in the construction industry to carry workers' compensation coverage on themselves. The new law was suspended due to unintended effects of the measure.

The legislation represents a consensus of all parties after several months of negotiations between those impacted by this matter. It is designed to address concerns over gaps in coverage and provides exemptions so that small businesses will not be harmed. It also addresses provability, verifiability and accountability in our state's worker's compensation law.

The proposal aims to address gaps in coverage for workers in the various construction fields without harming small business owners. The bill reinstates the requirement that sole proprietors and partners engaged in the construction industry carry workers' compensation insurance on themselves but provides a mechanism for exemption.

Those eligible for the exemption, include:
- Up to three officers of a corporation
- Certain members of a limited liability company, if they own at least 30 percent of the company
- Partners that own at least 30 percent of a limited partnership
- Sole proprietors
- Up to three members of a family-owned business

The bill requires any construction services provider requesting exemption, which has not been issued a valid license from the Board of Licensing Contractors, to obtain first a construction services provider registration from the Secretary of State. They may then apply to the Secretary of State's office either in person or online for an exemption. No more than three persons on any one commercial job are eligible for an exemption. The bill also requires the provider requesting an exemption be current in paying all taxes.

The cost, under the bill, would total $200 every two years for a construction service provider registration and exemption. A construction service provider that has been issued a license by the Board of Licensing Contractors would pay $100 every two years for an exemption. Costs incurred by a construction service provider will be significantly less than a worker's compensation insurance premium based on the construction service provider's payroll. The bill also increases the penalties against an employer engaged in the construction industry who fails to comply with the law.

Finally, the bill creates an offense for an employer knowingly to coerce a job applicant to obtain a worker's compensation exemption or to fire an employee due to failure to receive an exemption. The proposal establishes a task force that will study the effects of employee misclassification in the construction industry.

The bill is supported by the National Federal of Independent Businessmen and the Home Builders Association of Tennessee.

Court reviews denial of motion to compel arbitration in a recission of contract case

2010-05-20T12:45:00.000-04:00

FRANKE ELLIOTT, ET AL. v. ICON IN THE GULCH, LLC (Tenn. Ct. App. May 20, 2010)

Purchasers of pre-construction condominium units sued the developer seeking rescission of their contracts to purchase the units. The developer filed a motion to compel mediation and/or arbitration pursuant to the contract. The trial court denied the motion and the developer appeals. Finding error, we reverse and remand.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/elliottf_052010.pdf

Workers Compensation update: Lawmakers strike deal on independent contractors

2010-04-30T13:49:00.002-04:00

According to the Tennessean, lawmakers have struck a deal on how to cover independent contractors for accidents on the job. Yesterday, a House committee passed a new bill that would let the owners of small construction firms opt out of Tennessee's workers' compensation insurance program if they can prove they have no employees other than themselves.

The full story may be found at: http://www.tennessean.com/article/20100429/NEWS0201/4290322/1009/NEWS02

"The bill essentially would undo a 2008 law that would have required all contractors to have workers' comp insurance, even if they had no employees and were covered for accidents by their own health insurance policies." Id.

"The new bill — which is supported by groups representing large and small contractors — would limit exemptions to contractors that can show they own at least 30 percent of the company they work for and that they have either a supervisory role or are performing the work themselves." Id.

"Contractors would have to reapply for exemptions every two years. They could have to pay a $50 filing fee, money that would be used for enforcement." Id.

Court reviews whether a city failed on its three defenses in a case brought by two trade contractors

2010-04-29T12:41:00.010-04:00

LEE MASONRY, INC. v. CITY OF FRANKLIN, TENNESSEE STANSELL ELECTRIC COMPANY, INC. V. CITY OF FRANKLIN, TENNESSEE (Tenn. Ct. App. April 29, 2010)

Two trade contractors alleged that the City breached its contract with them by failing to take reasonable measures to guard against delays and disruptions by other contractors in the City's coordination, management, and scheduling of the contractors and by failing to pay the retainages they were due. The contractors sought damages for the delays.

The City raised three defenses: (1) the "no damages for delays" provision of the contracts; (2) untimely notice of claims by the contractors; and (3) the contractors' acknowledgment and acceptance of time extensions without a reservation for increased compensation in the change orders they executed. The trial court concluded that all three of the City's defenses failed and awarded damages to the contractors. We affirm the trial court's decisions.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/leemasonry_042910.pdf

Court reviews whether the city of Franklin did, in fact, fail on its three defenses in a breach of contract claim

2010-04-29T00:34:00.003-04:00

LEE MASONRY, INC. v. CITY OF FRANKLIN, TENNESSEE STANSELL ELECTRIC COMPANY, INC. V. CITY OF FRANKLIN, TENNESSEE (Tenn. Ct. App. April 29, 2010)

Two trade contractors alleged that the City breached its contract with them by failing to take reasonable measures to guard against delays and disruptions by other contractors in the City's coordination, management, and scheduling of the contractors and by failing to pay the retainages they were due. The contractors sought damages for the delays. The City raised three defenses: (1) the "no damages for delays" provision of the contracts; (2) untimely notice of claims by the contractors; and (3) the contractors' acknowledgment and acceptance of time extensions without a reservation for increased compensation in the change orders they executed. The trial court concluded that all three of the City's defenses failed and awarded damages to the contractors. We affirm the trial court's decisions.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/leemasonry_042910.pdf

Court reviews whether construction company was relieved of its contractual obligation due to a material breach as a result of prospective buyers' failure to pay

2010-04-26T12:39:00.008-04:00

COREY GERULIS AND WIFE SARA FELMLEE v. DANIEL A. JACOBUS, ET AL. (Tenn. Ct. App. April 26, 2010)

Prospective buyers entered into a contract with construction company for purchase of a home; the contract was amended to provide that a garage would be constructed. A letter was subsequently prepared specifying a time for the buyers to tender payment for the garage. The buyers failed to secure a loan to finance construction of the garage until a year after closing. When the construction company refused to build the garage for the amount specified in the contract amendment, the buyers initiated this action.

The trial court found that the letter clarified the amendment by setting a time for performance and that the buyers' failure to pay within that time was a breach of the agreement which relieved the construction company of its contractual obligations; the court consequently dismissed buyers' action. Finding that there was not an agreement between the parties, the trial court's determination that the letter clarified the amendment is reversed. Finding that a reasonable time for performance was 90 days from closing on the home, and that the buyers' failure to tender payment within such period was a material breach, we affirm the trial court's determination that the construction company was relieved of its contractual obligations.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/gerulisc_042610.pdf

Court reviews whether failure to tender payment constitutes a material breach and relieves a construction company of its contractual obligations

2010-04-26T00:30:00.001-04:00

COREY GERULIS AND WIFE SARA FELMLEE v. DANIEL A. JACOBUS, ET AL. (Tenn. Ct. App. April 26, 2010)

Prospective buyers entered into a contract with construction company for purchase of a home; the contract was amended to provide that a garage would be constructed. A letter was subsequently prepared specifying a time for the buyers to tender payment for the garage. The buyers failed to secure a loan to finance construction of the garage until a year after closing. When the construction company refused to build the garage for the amount specified in the contract amendment, the buyers initiated this action.

The trial court found that the letter clarified the amendment by setting a time for performance and that the buyers' failure to pay within that time was a breach of the agreement which relieved the construction company of its contractual obligations; the court consequently dismissed buyers' action. Finding that there was not an agreement between the parties, the trial court's determination that the letter clarified the amendment is reversed. Finding that a reasonable time for performance was 90 days from closing on the home, and that the buyers' failure to tender payment within such period was a material breach, we affirm the trial court's determination that the construction company was relieved of its contractual obligations.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/gerulisc_042610.pdf

Court reviews trial court's grant of summary judgment and award of attorney's fees

2010-04-15T18:38:00.004-04:00

BOBBY R. HOPKINS v. DOYLE K. RIGGS, ET AL. (Tenn. Ct. App. April 15, 2010)

Bobby R. Hopkins (Hopkins) sued Doyle K. Riggs and Ruth Riggs (the Riggs) alleging, in part, that the Riggs had contracted to construct a road on the Riggs' property for Hopkins' use and had failed to construct an adequate road. The Riggs filed a motion for summary judgment and the Trial Court granted them summary judgment. The Riggs then sought attorney's fees pursuant to the parties' contract. The parties then reached an agreement with regard to attorney's fees, an agreement which the Riggs subsequently alleged was breached by Hopkins. The Riggs then filed a motion and the Trial Court entered an order granting the Riggs additional attorney's fees.

Hopkins appeals to this Court raising issues regarding the grant of summary judgment and the award of attorney's fees. We affirm the grant of summary judgment, hold that the Riggs were entitled to an award of attorney's fees pursuant to the parties' contract, vacate the Trial Court's November 25, 2008 Order granting additional attorney's fees, and remand this case to the Trial Court for entry of an order that complies with the parties' August 6, 2008 agreement.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/hopkinsb_041510.pdf

Court reviews summary judgment ruling and award of attorney's fees in a case about road construction

2010-04-15T12:32:00.005-04:00

BOBBY R. HOPKINS v. DOYLE K. RIGGS, ET AL. (Tenn. Ct. App. April 15, 2010)

Bobby R. Hopkins (Hopkins) sued Doyle K. Riggs and Ruth Riggs (the Riggs) alleging, in part, that the Riggs had contracted to construct a road on the Riggs' property for Hopkins' use and had failed to construct an adequate road. The Riggs filed a motion for summary judgment and the Trial Court granted them summary judgment. The Riggs then sought attorney's fees pursuant to the parties' contract. The parties then reached an agreement with regard to attorney's fees, an agreement which the Riggs subsequently alleged was breached by Hopkins. The Riggs then filed a motion and the Trial Court entered an order granting the Riggs additional attorney's fees. Hopkins appeals to this Court raising issues regarding the grant of summary judgment and the award of attorney's fees.

We affirm the grant of summary judgment, hold that the Riggs were entitled to an award of attorney's fees pursuant to the parties' contract, vacate the Trial Court's November 25, 2008 Order granting additional attorney's fees, and remand this case to the Trial Court for entry of an order that complies with the parties' August 6, 2008 agreement.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/hopkinsb_041510.pdf

Court reviews trial court's interpretation of a settlement agreement

2010-04-08T18:35:00.005-04:00

THOMAS GAZLAY, d/b/a PERSONALIZED PLANTING, INC., v. TULSI ASSOCIATES, et al., and THE ESTATE OF HOWARD SEXTON, for decedent HOWARD SEXTON, et al., d/b/a PRECISION CONSTRUCTION COMPANY (Tenn. Ct. App. April 8, 2010)

Plaintiff subcontractor, sued contractor, who constructed a hotel for co-defendant owner of hotel for breach of contract. Construction company cross-filed against defendant hotel owner. The Trial Court, after hearing proof, entered a joint settlement judgment against both defendants on behalf of the plaintiff and based the judgment on the terms of the settlement agreement which had been entered in a prior action in a suit between the defendants. The owner of the hotel appealed. We hold the Trial Court erred in its interpretation of the settlement agreement between the defendants, and set aside the judgment against appellant and direct that the contractor is liable for all the damages awarded, based on appellants' cross-action against the contractor.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/gazlayt_040810.pdf

Court reviews trial court's interpretation of a settlement agreement between a contractor and a hotel owner

2010-04-08T12:28:00.001-04:00

THOMAS GAZLAY, d/b/a PERSONALIZED PLANTING, INC., v. TULSI ASSOCIATES, et al., and THE ESTATE OF HOWARD SEXTON, for decedent HOWARD SEXTON, et al., d/b/a PRECISION CONSTRUCTION COMPANY (Tenn. Ct. App. April 8, 2010)

Plaintiff subcontractor, sued contractor, who constructed a hotel for co-defendant owner of hotel for breach of contract. Construction company cross-filed against defendant hotel owner. The Trial Court, after hearing proof, entered a joint settlement judgment against both defendants on behalf of the plaintiff and based the judgment on the terms of the settlement agreement which had been entered in a prior action in a suit between the defendants. The owner of the hotel appealed.

We hold the Trial Court erred in its interpretation of the settlement agreement between the defendants, and set aside the judgment against appellant and direct that the contractor is liable for all the damages awarded, based on appellants' cross-action against the contractor.

Opinion Available At:
http://www.tba2.org/tba_files/TCA/2010/gazlayt_040810.pdf

Court reviews trial court's decision in a case about a boundary dispute

2010-04-01T18:33:00.004-04:00

MARILOU GILBERT v. DON BIRDWELL and wife, CHRISTINE BIRDWELL (Tenn. Ct. App. April 1, 2010)

This case arises from a boundary line dispute. Appellants appeal the trial court's denial of their petition to reopen proof after the court rendered its decision, establishing the disputed boundary in accordance with the Appellee's survey. Finding no error, we affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/gilbertm_040110.pdf

Court reviews trial court decision not to reopen proof in a case regarding a boundary dispute

2010-04-01T12:26:00.001-04:00

MARILOU GILBERT v. DON BIRDWELL and wife, CHRISTINE BIRDWELL (Tenn. Ct. App. April 1, 2010)

This case arises from a boundary line dispute. Appellants appeal the trial court's denial of their petition to reopen proof after the court rendered its decision, establishing the disputed boundary in accordance with the Appellee's survey. Finding no error, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/gilbertm_040110.pdf

Court reviews TCPA damages awards and breach of warranty and contract claims

2010-03-31T18:33:00.000-04:00

SCOTT CAMPBELL, ET AL. v. WILLIAM H. TEAGUE, ET AL. (Tenn. Ct. App. March 31, 2010)

This is a construction case. Appellants/Builders appeal the trial court's award of damages to Appellees/Homeowners pursuant to the Tennessee Consumer Protection Act, and arising from Appellants/Builders' breach of warranty and contract. Discerning no error, we affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/campbells_033110.pdf

Court reviews whether trial court properly awarded damages pursuant to the TN Consumer Protection Act

2010-03-31T09:33:00.004-04:00

SCOTT CAMPBELL, ET AL. v. WILLIAM H. TEAGUE, ET AL. (Tenn. Ct. App. March 31, 2010)

This is a construction case. Appellants/Builders appeal the trial court's award of damages to Appellees/Homeowners pursuant to the Tennessee Consumer Protection Act, and arising from Appellants/Builders' breach of warranty and contract. Discerning no error, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/campbells_033110.pdf

Attorney General Reviews Fees and Regulations for Construction of Schools in Special School Districts

2010-03-09T09:35:00.001-05:00

Fees and regulations for construction of schools in special school districts (TN Attorney General Opinion 10-27, March 9, 2010)

The attorney general reviews two questions:
1. Can a city require a special school district to pay building permit and plan review fees for construction and/or renovation of a school located within the city limits?
2. Does a special school district have to conform to planning and zoning regulations of the city for school district-owned property located within the city limits?

He concludes that the answers to both questions depend on the provisions of the private act creating the special school district and the local planning and zoning regulations, because special school districts are created by the Tennessee General Assembly.

Opinion may be found at:
http://www.tba2.org/tba_files/AG/2010/ag_10_27.pdf

Court reviews validity of materialman's lien

2010-03-08T16:49:00.001-05:00

BOLON CUSTOM KITCHENS v. ROBERT AND NORMA PARMAN (Tenn. Ct. App. March 8, 2010)

Materials supplier filed suit to enforce a lien upon property for unpaid costs of improvement to the residence; the trial court granted supplier's motion for summary judgment. The property owners appeal, asserting that supplier's lien was barred by the filing of the Notice of Completion or, in the alternative, that supplier's Notice of Lien was not properly filed with the Register's Office. Finding that supplier had a valid lien, the trial court's judgment is affirmed.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/parmanr_030810.pdf

TSC holds collecting additional privilege taxes based on additional square footage is prohibited

2010-02-25T15:52:00.001-05:00

HOME BUILDERS ASSOCIATION OF MIDDLE TENNESSEE, ET AL. v. WILLIAMSON COUNTY, ET AL. (Tenn.Ct.App. February 25, 2010)

This appeal involves a question of law concerning the interpretation of the Williamson County Adequate Facilities Tax Act, which imposes a privilege tax based upon the gross square footage of new construction in Williamson County. In 2005, the County notified certain builders of new residential construction that a review for the period from January 1, 1998, through December 31, 2003, indicated that the builders owed an additional amount of privilege tax because the actual square footage of the completed construction was greater than the projected square footage at the time the privilege tax was paid. The builders objected to payment of the additional privilege tax and filed an action for declaratory judgment, contending that the County's belated collection attempts were in derogation of the Act.

The trial court granted summary judgment in favor of the County, and the Court of Appeals affirmed. We accepted this case for review to determine whether, after the privilege tax is paid based upon the projected square footage of new development before construction, the County is authorized to collect an additional privilege tax after construction based upon the actual completed square footage. We hold that after the County collects the privilege tax based upon the projected square footage, the language of the Act prohibits the County from later collecting additional privilege taxes based upon the actual square footage of the completed project. Accordingly, we reverse the judgment of the Court of Appeals, vacate the trial court's grant of summary judgment in favor of the County, grant summary judgment in favor of the builders, and remand to the trial court for further proceedings as necessary.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TSC/2010/homebuilders_022510.pdf

A dissenting opinion may be found here:
http://www.tba2.org/tba_files/TSC/2010/homebuilders_diss_022510.pdf

Court reviews trial court's decision in a case about a disfunctional partnership

2010-02-03T16:47:00.002-05:00

BEVERLY MORAN v. ELLIOT WILLENSKY (Tenn. Ct. App. February 3, 2010)

This case arises from a partnership gone bad. The trial court found that the Appellant wrongfully dissociated from the partnership. Pursuant to the Tennessee Uniform Partnership Act, Tenn. Code Ann. section 61-1-101 et seq., the trial court awarded Appellee project costs, and winding up costs, including attorney's fees. Appellant appeals. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/moranb_020310.pdf

Court reviews whether trial court properly dismissed materialman's lien

2010-01-29T16:42:00.002-05:00

E. W. STEWART LUMBER CO. v. MEREDITH CLARK & ASSOCIATES, LLC AND LEROY DODD (Tenn. Ct. App. January 29, 2010)

Supplier of building materials filed materialman's lien on property after contractor failed to pay for materials provided for building a house on the property. On cross motions for summary judgment, the trial court struck down liens the supplier had filed against the subject property and dismissed the supplier's action; supplier appeals. Finding error, we reverse and remand to the trial court for further proceedings.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/stewart_012910.pdf

Can a municipality charge a fee for a building permit on agricultural land

2010-01-28T15:28:00.000-05:00

Ability of Municipalities to Charge a Fee for Building Permits for Agricultural (AG January 28, 2010)

Tenn. Code Ann. 6-54-126 does not prohibit a municipality from charging a fee for building permits on agricultural land. It is only concerned with a municipality's power to regulate use of the land and not with it's ability to require a building permit.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/AG/2010/ag_10_12.pdf

Court reviews whether property owner is protected against a remote material supplier's lien

2010-01-28T15:18:00.000-05:00

E. W. STEWART LUMBER CO., D/B/A STEWART BUILDER SUPPLY v. MEREDITH CLARK & ASSOCIATES, LLC AND LEROY Tenn.Ct.App. January 28, 2010)

Supplier of building materials filed materialman's lien on property after contractor failed to pay for materials provided for building a house on the property. On cross motions for summary judgment, the trial court struck down liens the supplier had filed against the subject property and dismissed the supplier's action; supplier appeals. Finding error, we reverse and remand to the trial court for further proceedings.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2010/stewart_012910.pdf

Appeals court affirms trial court ruling of failure to state a claim

2010-01-25T15:05:00.000-05:00

LEONARD PORTER, JR. ET AL. v. CITY OF CLARKSVILLE ET AL. (Tenn. Ct. App. January 25, 2010)

This action arises from the issuance of stop work orders that prevented the plaintiffs from completing the construction of their new residence. The plaintiffs brought this action against the City of Clarksville and the Clarksville Building and Codes Department under the Governmental Tort Liability Act (GTLA) asserting numerous and varied claims, including claims for false statements, fraud, deception, conspiracy, discrimination, malicious harassment, coercion, and violation of due process, and requested financial damages, emotional damages, and punitive damages. The defendants filed a Tenn. R. Civ. P. 12.02(6) Motion to Dismiss on the grounds that the action was a de facto appeal of the administrative hearing on the stop work orders and that the defendants were immune under the GTLA. The trial court granted the motion to dismiss finding that the plaintiffs failed to state a claim upon which relief could be granted. We affirm.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2010/porterl_012610.pdf

TCA overturns trial court ruling regarding TCPA

2010-01-19T14:57:00.001-05:00

CITICAPITAL COMMERCIAL CORPORATION v. CLIFFORD COLL (Tenn. Ct. App. January 19,2010)

A finance company that owned a security interest in a Hyundai excavator appeals the award of a judgment against it in favor of a consumer for violations of the Tennessee Consumer Protection Act. The consumer alleged in his complaint that the creditor and the equipment company that sold the excavator to the consumer had engaged in unfair and deceptive trade practices, because the excavator was defective when it was delivered, it never worked properly, and the defendants failed to make repairs and refused to permit him to trade for another excavator. The financing company denied any wrongdoing and asserted the one-year statute of limitations as an affirmative defense. The equipment company that sold the excavator went out of business and dissolved prior to trial. The only claim tried was the consumer's TCPA claim against the finance company.

The trial court denied the finance company's Tenn. R. Civ. P. 50.01 motion for a directed verdict on the statute of limitations defense, finding that the TCPA claim was timely filed within the five-year statute of repose. At the conclusion of the jury trial, the consumer prevailed on his TCPA claim and the trial court awarded treble damages and attorneys' fees based on a finding the finance company "willfully and knowingly" violated the TCPA. We have determined the TCPA claim was barred by the one-year statute of limitations; therefore, the trial court erred in denying the motion for a directed verdict, and the judgment of the trial court is reversed.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2010/citicapital_012010.pdf

Tennessee Legislature suspends Workers' Compensation regulations. Sources indicate either until March 28, 2010 or 2011.

2010-01-18T10:41:00.004-05:00

From the Knoxville Bar Association's legislative update: "Worker's Compensation -- The General Assembly approved legislation calling for immediate suspension of a new law to require sole proprietors and partners engaged in the construction industry to carry workers' compensation coverage on themselves due to unintended effects of the act. The law will be suspended until March 28, 2010. In the meantime, the legislature will discuss alternative ways to address gaps in coverage for workers in companies of all sizes in the various construction fields in order to address the problem without harming small business owners."

However, other independent sources say the regulations are suspended until March 28, 2011.

Humphrey on the Hill
Examiner.com

Court reviews whether statute of limitations had expired on inverse condemnation and nuisance claims

2009-12-28T16:38:00.001-05:00

H.P. LARGE, and TERRANCE R. CRAIG, d/b/a GREENFIELD LAND AND CATTLE COMPANY, v. GREENE COUNTY, TENNESSEE (Tenn. Ct. App. December 28, 2009)

Plaintiffs alleged that defendant had constructed a bridge over Lick Creek which was adjacent to their property, and the bridge had caused their property to repeatedly flood. They further alleged that they were entitled to recover damages under the theory that the County maintained a temporary nuisance which damaged their property. Defendant filed a Motion for judgment on the pleadings which characterized plaintiffs' cause of action as an inverse condemnation action.

Affidavits and other documents were filed in the record and the Trial Court agreed with the defendant that plaintiffs' action was based on inverse condemnation and the statute had run on that action. The Trial Judge also ruled that the statute had run on the nuisance claim. On appeal, we affirm the Trial Judge's holding that plaintiffs' action was a nuisance type taking and was governed by the inverse condemnation statute, and we agree that the record demonstrates that the statute of limitations had run on plaintiffs' claims.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2009/hplarge_122809.pdf

Susano’s dissenting opinion is available at:
http://www.tba2.org/tba_files/TCA/2009/hplarge_DIS_122809.pdf

Appelate Court affirms trial court ruling that statute of limitaions had run

2009-12-28T13:02:00.000-05:00

H.P. LARGE, and TERRANCE R. CRAIG, d/b/a GREENFIELD LAND AND CATTLE COMPANY, v. GREENE COUNTY, TENNESSEE (Tenn. Ct. App. December 28, 2009)

Plaintiffs alleged that defendant had constructed a bridge over Lick Creek which was adjacent to their property, and the bridge had caused their property to repeatedly flood. They further alleged that they were entitled to recover damages under the theory that the County maintained a temporary nuisance which damaged their property.

Defendant filed a Motion for judgment on the pleadings which characterized plaintiffs' cause of action as an inverse condemnation action. Affidavits and other documents were filed in the record and the Trial Court agreed with the defendant that plaintiffs' action was based on inverse condemnation and the statute had run on that action. The Trial Judge also ruled that the statute had run on the nuisance claim.

On appeal, we affirm the Trial Judge's holding that plaintiffs' action was a nuisance type taking and was governed by the inverse condemnation statute, and we agree that the record demonstrates that the statute of limitations had run on plaintiffs' claims.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2009/hplarge_122809.pdf

A dissenting opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2009/hplarge_DIS_122809.pdf

TCA upholds judgment for homebuyer

2009-12-28T12:46:00.000-05:00

TIMOTHY BOWEN, ET AL. v. SAMUEL E. RASNAKE (Tenn. Ct. App. December 28, 2009)

Timothy Bowen and his wife Leanne Bowen ("the Buyers") contracted to purchase a house from Samuel E. Rasnake ("the Seller") that was still under construction. The Buyers experienced numerous problems with the house and filed their complaint against the Seller for defective construction, breach of warranty and misrepresentation. After a bench trial, the court awarded the Buyers judgment against the Seller in the amount of $42,300. The Seller appeals. We affirm.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2009/bowent_122809.pdf

Lawmakers to suspend new Workers Compensation requirements for further study in the legislature

2009-12-23T11:41:00.003-05:00

Workers comp law change eyed
Lawmakers meet with contractors upset over measure
Knoxville News Sentinel

When they return to the Capitol next month, state lawmakers will be under pressure to change a workers compensation law that takes effect on Dec. 31.

At a breakfast meeting on Tuesday, a trio of local legislators heard from contractors who are upset about a provision that places new insurance mandates on certain businesses. The meeting was co-hosted by the National Federation of Independent Business, and featured Knoxville Reps. Harry Tindell, a Democrat, and Bill Dunn, a Republican, along with Sen. Doug Overbey, a Maryville Republican.

Jim Brown, NFIB's state director, said he's been told by members of the legislative leadership that a suspension of the law should happen quickly after lawmakers resume their business on Jan. 12. Brown also said the Department of Labor has indicated contractors who are found to be in violation before the law is suspended will be given 60 days to come into compliance.
But Overbey pointed out that it's dangerous to predict legislative action, saying "how long it will take and what it will do I wouldn't start to predict." The senator also said he's getting an equal number of letters from people who say the law should be left alone, as from those who are calling for a suspension.

Sam Sole, a local siding contractor, attended the meeting and said the law will put him out of business. His two biggest customers, Sole said in an interview, typically build 150 to 180 homes a year between them, but through the first six-and-a-half months of this year had only built six. His gross profit on six homes, Sole said, adds up to around $6,000, making it impossible to afford the new insurance mandate.

And the possibility that the law will be suspended? "How can I trust the same people that put it in as law (in the first place)?" he said.

Article located at: http://www.knoxnews.com/news/2009/dec/16/workers-comp-law-change-eyed/

TCA affirms Summary Judgment in favor of defendant

2009-12-15T17:11:00.001-05:00

JULIANNA WALKER and MARY S. WHITE v. CALVIN BEASLEY, JIMMIE BEASLEY, JACK S. HALL, JR., MARY HALL, JOHN CHORLEY, TAYLOR-MADE CONSTRUCTION, INC.,TENNESSEE FARMERS MUTUAL INSURANCE COMPANY, WILLIAM R. PASCHALL, and JUNE RASMUSSEN (Tenn. Ct. App. December 15, 2009)

This appeal involves insurance coverage. The plaintiffs purchased an undeveloped parcel of real property and hired a contractor to build a house on it. After the house was constructed, the plaintiffs discovered that cleared timber was buried underneath the land on which the house stood. Thereafter, the house developed structural problems, such as foundation cracks and non-alignment of doors and windows. The plaintiffs made a claim for coverage under their homeowners insurance policy; however, the insurer denied the claim, citing an exclusion of coverage for damages resulting from settling. The plaintiffs filed suit against inter alia the insurer alleging breach of contract and bad faith, and the plaintiffs and the insurer filed cross-motions for summary judgment.

After conducting a hearing on the matter and considering expert testimony that the damage was caused by settling, the trial court granted the insurer's motion for summary judgment. The plaintiffs now appeal, arguing that the settlement in this case is so excessive as to remove it from the ordinary meaning of the term "settling." We affirm.

The full text of this opinion may be found on the TBA website at:
http://www.tba2.org/tba_files/TCA/2009/walkerj_121509.pdf