March 25, 2011

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

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

March 14, 2011

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

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

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

February 28, 2011

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

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

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

February 27, 2011

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

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

February 25, 2011

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

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

February 20, 2011

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

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

January 13, 2011

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

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

December 30, 2010

OSHA: Most Frequently Cited Standards of 2010

The following were the top 10 most frequently cited standards in fiscal year 2010 (October 1, 2009 through September 30, 2010):
  1. Scaffolding, general requirements, construction (29 CFR 1926.451)
  2. Fall protection, construction (29 CFR 1926.501
  3. Hazard communication standard, general industry (29 CFR 1910.1200
  4. Ladders, construction (29 CFR 1926.1053
  5. Respiratory protection, general industry (29 CFR 1910.134
  6. Control of hazardous energy (lockout/tagout), general industry (29 CFR 1910.147
  7. Electrical, wiring methods, components and equipment, general industry (29 CFR 1910.305
  8. Powered industrial trucks, general industry (29 CFR 1910.178)
  9. Electrical systems design, general requirements, general industry (29 CFR 1910.303
  10. 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):
  1. Fall protection, construction (29 CFR 1926.501
  2. Electrical, general requirements, construction (29 CFR 1926.403)
  3. Safety training and education, construction (29 CFR 1910.21
  4. Control of hazardous energy (lockout/tagout), general industry (29 CFR 1910.147)
  5. Machines, general requirements, general industry (29 CFR 1910.212)
  6. General duty clause (Section 5(a)(1) of the OSH Act)
  7. Excavations, requirements for protective systems, construction (29 CFR 1926.652)
  8. Lead, general industry (29 CFR 1910.1025)
  9. Grain handling facilities (29 CFR 1910.272)
  10. 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

December 29, 2010

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

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

December 01, 2010

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

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

November 29, 2010

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

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

November 23, 2010

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

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

November 18, 2010

Court Reviews Damages Owed in a Defective Driveway Case

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