ESI COMPANIES, INC. v. RAY BELL CONSTRUCTION COMPANY, INC., ET AL. (Tenn.Ct.App. February 29, 2008).
This appeal involves the applicability and enforceability of a forum selection clause in a construction contract. The contract was for the design and construction of a Kentucky correctional facility. The contract between the Commonwealth of Kentucky and the general contractor, a Tennessee corporation, provided that all actions on the contract must be filed in Franklin County Circuit Court in Frankfort, Kentucky. The general contractor entered into a subcontract with another Tennessee corporation for the performance of certain work on the Kentucky correctional facility. The subcontract incorporated all terms of the original contract by reference and contained a "flow-down" provision. The subcontractor later sued the general contractor in Shelby County, Tennessee. When the general contractor moved to dismiss for lack of venue, the subcontractor contended that the forum selection clause did not apply to its claims. The subcontractor also contended that the forum selection clause was unenforceable under the facts of this case.
The trial court found in favor of the subcontractor. We granted the general contractor's Rule 10 application for extraordinary appeal. We reverse and remand, finding that the forum selection clause was applicable and enforceable, and the lawsuit should have been filed in Kentucky.
Cases available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/esi_022908.pdf
"The General Contractor also argues that the forum selection clause requires the Subcontractor to file its lawsuit in Kentucky because of the following provision of the Subcontract: 'Article VII - (a) Contractor shall have the same rights and privileges as against the Subcontractor herein as the Owner in the Design/Build Contract has against Contractor. Subcontractor shall have the same rights, remedies and privileges against the Contractor herein as the Contractor in the Design/Build Contract has against Owner.'" Id.
"The aforementioned provision is an example of a “flow-down” or “conduit” clause. Flow-down clauses are commonly used in subcontracts and are closely related to the concept of incorporation by reference. See T. Bart Gary, Incorporation by Reference and Flow-Down Clauses, 10 Constr. Lawyer 1, 45 (Aug. 1990). “If the clause functions as intended, the same rights and obligations of the subcontractor should flow from the subcontract up through the general contractor to the owner, and conversely down the same contractual chain.” Id. The use of flowdown clauses “represents efforts to ensure consistency of obligations throughout the various tiers of the contracting process.” Id. at 44." Id.
"We agree with the General Contractor’s contention, as the Subcontract clearly provided that “ALL TERMS AND CONDITIONS OF THE CONTRACT BETWEEN THE COMMONWEALTH OF KENTUCKY AND RAY BELL CONSTRUCTION COMPANY, INC. ARE FULLY INCORPORATED HEREIN BY REFERENCE.” Because the terms of the Contract were expressly incorporated into the Subcontract, the language of the Contract became a part of the Subcontract, and both writings must be construed together. See Staubach Retail Services-Southeast, LLC v. H.G. Hill Realty Co., 160 S.W.3d 521, 525 (Tenn. 2005); T.R. Mills Contractors, Inc. v. WRH Enterprises, LLC, 93 S.W.3d 861, 870 (Tenn. Ct. App. 2002). ... Pursuant to the flowdown clause, the General Contractor has the same right to enforce the forum selection clause against the Subcontractor. Similarly, the General Contractor’s corresponding remedy against the Owner was to file an action in Kentucky, and pursuant to the flow-down provision, the Subcontractor has that same remedy." Id.
February 29, 2008
February 28, 2008
Certain water/wastewater authorities have a statutory obligation to maintain sewer lines beyond customer property lines
Effect of Statute Requiring Maintenance of Sanitary Sewer Connections - Tenn. Attorney General Opinion No. 08-35 (February 26, 2008).
"The obligation for maintaining sewer lines beyond the property line of a customer, then, applies to any water and wastewater treatment authority created in accordance with Tenn. Code Ann. §§ 68-221-601 to 68-221-618 that also meets the criteria in Tenn. Code Ann. § 68-221-209(b)(1)(A) and (B) above. The provisions for maintaining sewer line connections in Tenn. Code Ann. § 68-221-209(b)(1) were added to the statute in 1999. According to [TDEC], which regulates these entities, this legislation applies to a number of existing water and wastewater treatment authorities in Tennessee, and not just the Hamilton County Water and Wastewater Treatment Authority. It is the opinion of this Office, therefore, that the provisions in Tenn. Code Ann. § 68-221-209(b)(1), requiring maintenance of sanitary sewer connections, constitute a general law of statewide application and a uniform policy on the maintenance of public sewage treatment works." Id.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/AG/2008/ag_08_35.pdf
"The obligation for maintaining sewer lines beyond the property line of a customer, then, applies to any water and wastewater treatment authority created in accordance with Tenn. Code Ann. §§ 68-221-601 to 68-221-618 that also meets the criteria in Tenn. Code Ann. § 68-221-209(b)(1)(A) and (B) above. The provisions for maintaining sewer line connections in Tenn. Code Ann. § 68-221-209(b)(1) were added to the statute in 1999. According to [TDEC], which regulates these entities, this legislation applies to a number of existing water and wastewater treatment authorities in Tennessee, and not just the Hamilton County Water and Wastewater Treatment Authority. It is the opinion of this Office, therefore, that the provisions in Tenn. Code Ann. § 68-221-209(b)(1), requiring maintenance of sanitary sewer connections, constitute a general law of statewide application and a uniform policy on the maintenance of public sewage treatment works." Id.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/AG/2008/ag_08_35.pdf
Parties purchasing sewer taps for future use should contract for exclusivity and priority of their use
JOHN R. SHOMO ET AL. v. CITY OF FRANKLIN, TENNESSEE (Tenn.Ct.App. February 25, 2008).
The Shomos owned several sewer taps on undeveloped property. The City of Franklin sold sewer taps on the property, offering lower prices than the Shomos. The Shomos sued Franklin asserting causes of action for breach of contract, unjust enrichment, conversion, and violation of the duties of a public utility. The trial court granted Franklin's motion to dismiss on the grounds that the complaint contained no set of facts that would entitle the Shomos to any relief according to law. We affirm.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/shomoj_022508.pdf
"The Shomos contend that Wills had an 'understanding' with MLSTC that as to the Wills properties these taps would be sold first. An 'understanding' is not necessarily an enforceable contract. In fact, the Shomos have failed to allege that Wills and MLSTC had a binding or enforceable contract regarding MSLTC’s sale of future taps. The Shomos attach great significance to a letter written by Franklin’s attorney in 2002. Yet, what is absent from that letter is more significant than what is in it. The letter contains no indication by Franklin of exclusivity or priority for the Shomos’ taps in relation to the Wills properties. It recognizes the right of Wills or his affiliates to use the taps in connection with his properties. It does not recognize an obligation on Franklin’s part to require the use of those taps at the beginning of development or at any time thereafter." Id.
The Shomos owned several sewer taps on undeveloped property. The City of Franklin sold sewer taps on the property, offering lower prices than the Shomos. The Shomos sued Franklin asserting causes of action for breach of contract, unjust enrichment, conversion, and violation of the duties of a public utility. The trial court granted Franklin's motion to dismiss on the grounds that the complaint contained no set of facts that would entitle the Shomos to any relief according to law. We affirm.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/shomoj_022508.pdf
"The Shomos contend that Wills had an 'understanding' with MLSTC that as to the Wills properties these taps would be sold first. An 'understanding' is not necessarily an enforceable contract. In fact, the Shomos have failed to allege that Wills and MLSTC had a binding or enforceable contract regarding MSLTC’s sale of future taps. The Shomos attach great significance to a letter written by Franklin’s attorney in 2002. Yet, what is absent from that letter is more significant than what is in it. The letter contains no indication by Franklin of exclusivity or priority for the Shomos’ taps in relation to the Wills properties. It recognizes the right of Wills or his affiliates to use the taps in connection with his properties. It does not recognize an obligation on Franklin’s part to require the use of those taps at the beginning of development or at any time thereafter." Id.
February 27, 2008
Change orders failing written requirement are awarded equitably; Contractor who agreed to authorities' "specifications" was subject to all of them
M. R. STOKES COMPANY, INC. v. MICHAEL L. SHULAR, ET AL. (Tenn.Ct.App. February 27, 2008).
This is a construction case. In a contract prepared by the plaintiff, contractor agreed to install sewer lines, water lines, roads and to perform certain site preparation work for a section of a subdivision development owned by the defendant-owner. The total contract price is $925,000, which includes the material and labor to complete the project. The trial court entered judgment for contractor. Owner appeals and contractor cross-appeals. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
Cases available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/stokesm_022708.pdf
"It is well-settled in Tennessee that contract provisions can be waived, especially in construction projects because of the nature of construction which often require decisions to be made quickly to keep the project progressing. Moore Constr. Co. v. Clarksville Dep’t of Elect., 707 S.W.2d 1, 13 (Tenn. Ct. App. 1985). It is common for courts to find that “an owner has waived a written notice requirement in cases where extra work has been ordered verbally by the owner or the extra work has been performed with the owner's knowledge and without its objection.” Id. (citations omitted). The course of dealing between the parties can also amount to a waiver where the conduct of the parties makes it clear that they did not intend to rely strictly upon a contract's written notice requirement. Realty Shop, Inc. v. RR Westminster Holding, Inc., 7 S.W.3d 581, 601 (Tenn. Ct. App. 1999)." Id.
"We find that the parties “have not expressly or implicitly agreed upon a reasonable price nor have they agreed upon a practicable method of determination of price.” Accordingly, we hold that any agreement to “settle up” based upon “time and materials” at the end of the Project is unenforceable. Although we find that no enforceable contract exists, it would be inequitable for Owner to receive a windfall for the improvements Contractor made on Owner’s behalf. For that, we turn to equitable remedies. It is well settled that the theories of unjust enrichment, quasi contract, contracts implied in law, and quantum meruit are essentially the same. Paschall's, Inc. v. Dozier, 407 S.W.2d 150, 154 (Tenn. 1966). Unjust enrichment is a quasi-contractual theory or is a contract implied-inlaw in which a court may impose a contractual obligation where one does not exist. Whitehaven Community Baptist Church v. Holloway, 973 S.W.2d 592, 596 (Tenn. 1998) (citing Paschall's, 407 S.W.2d at 154-55). Such contracts are not based upon the intention of the parties but are obligations created by law and are “founded on the principle that a party receiving a benefit desired by him, under the circumstances rendering it inequitable to retain it without making compensation, must do so.” Paschall's, 407 S.W.2d at 154." Id.
"The Contract does not say “Contractor agrees to comply with the Standards and Specifications manual” or “agrees to pass all WHUD objective tests,” but rather that Contractor agrees to meet all White House Utility specifications. ... A plain language reading of the Contract indicates that Contractor agrees to comply with what White House Utility District specifies, whether written or not, subjective or objective. The term “specifications” is, by its nature, a broad term. Had Contractor intended to be bound to a more narrow definition, it should have drafted the Contract language accordingly. Contractor had worked with WHUD before and was aware of WHUD’s strict guidelines when drafting the Contract. The purpose of the Contract between Contractor and Owner was for Contractor, in part, to install the sewer lines for Owner so that Owner could develop an operating subdivision with plumbing that is acceptable to WHUD. Contractor did not fulfill its obligations under the Contract, and we reverse the trial court’s decision holding that Contractor did not breach its Contract with Owner." Id.
"Owner refused to pay the Contractor its final pay application, which was the retainage amount of $43,678.00. ... Our review of the record reveals that when the final pay application was submitted, Contractor had not completed its obligations under the Contract. The sewer lines had not been accepted by WHUD and a portion of the lines needed repairs. The retainage was not due until 30 days after completion. Having found that Contractor breached its Contract with Owner and did not complete its obligations under the Contract, we find that the retainage is not due to Contractor." Id.
This is a construction case. In a contract prepared by the plaintiff, contractor agreed to install sewer lines, water lines, roads and to perform certain site preparation work for a section of a subdivision development owned by the defendant-owner. The total contract price is $925,000, which includes the material and labor to complete the project. The trial court entered judgment for contractor. Owner appeals and contractor cross-appeals. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
Cases available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/stokesm_022708.pdf
"It is well-settled in Tennessee that contract provisions can be waived, especially in construction projects because of the nature of construction which often require decisions to be made quickly to keep the project progressing. Moore Constr. Co. v. Clarksville Dep’t of Elect., 707 S.W.2d 1, 13 (Tenn. Ct. App. 1985). It is common for courts to find that “an owner has waived a written notice requirement in cases where extra work has been ordered verbally by the owner or the extra work has been performed with the owner's knowledge and without its objection.” Id. (citations omitted). The course of dealing between the parties can also amount to a waiver where the conduct of the parties makes it clear that they did not intend to rely strictly upon a contract's written notice requirement. Realty Shop, Inc. v. RR Westminster Holding, Inc., 7 S.W.3d 581, 601 (Tenn. Ct. App. 1999)." Id.
"We find that the parties “have not expressly or implicitly agreed upon a reasonable price nor have they agreed upon a practicable method of determination of price.” Accordingly, we hold that any agreement to “settle up” based upon “time and materials” at the end of the Project is unenforceable. Although we find that no enforceable contract exists, it would be inequitable for Owner to receive a windfall for the improvements Contractor made on Owner’s behalf. For that, we turn to equitable remedies. It is well settled that the theories of unjust enrichment, quasi contract, contracts implied in law, and quantum meruit are essentially the same. Paschall's, Inc. v. Dozier, 407 S.W.2d 150, 154 (Tenn. 1966). Unjust enrichment is a quasi-contractual theory or is a contract implied-inlaw in which a court may impose a contractual obligation where one does not exist. Whitehaven Community Baptist Church v. Holloway, 973 S.W.2d 592, 596 (Tenn. 1998) (citing Paschall's, 407 S.W.2d at 154-55). Such contracts are not based upon the intention of the parties but are obligations created by law and are “founded on the principle that a party receiving a benefit desired by him, under the circumstances rendering it inequitable to retain it without making compensation, must do so.” Paschall's, 407 S.W.2d at 154." Id.
"The Contract does not say “Contractor agrees to comply with the Standards and Specifications manual” or “agrees to pass all WHUD objective tests,” but rather that Contractor agrees to meet all White House Utility specifications. ... A plain language reading of the Contract indicates that Contractor agrees to comply with what White House Utility District specifies, whether written or not, subjective or objective. The term “specifications” is, by its nature, a broad term. Had Contractor intended to be bound to a more narrow definition, it should have drafted the Contract language accordingly. Contractor had worked with WHUD before and was aware of WHUD’s strict guidelines when drafting the Contract. The purpose of the Contract between Contractor and Owner was for Contractor, in part, to install the sewer lines for Owner so that Owner could develop an operating subdivision with plumbing that is acceptable to WHUD. Contractor did not fulfill its obligations under the Contract, and we reverse the trial court’s decision holding that Contractor did not breach its Contract with Owner." Id.
"Owner refused to pay the Contractor its final pay application, which was the retainage amount of $43,678.00. ... Our review of the record reveals that when the final pay application was submitted, Contractor had not completed its obligations under the Contract. The sewer lines had not been accepted by WHUD and a portion of the lines needed repairs. The retainage was not due until 30 days after completion. Having found that Contractor breached its Contract with Owner and did not complete its obligations under the Contract, we find that the retainage is not due to Contractor." Id.
Expert and lay testimony regarding causation, even if somewhat vague, is enough to survive summary judgment
THOMAS MORROW, ET AL. v. RONNIE BULL, ET AL. (Tenn.Ct.App. February 27, 2008).
The tenants, who leased a newly-constructed house from the builder/owner, sued the builder/owner alleging, among other things, that the house was negligently constructed in that it was built on a site that unreasonably exposed the house to excessive moisture and with a deficient water runoff and drainage system. The tenants sought compensation for personal injury and property damage allegedly caused by toxic mold in the house due to excessively wet basement walls. The trial court granted the builder/owner summary judgment. Upon review, we vacate the trial court's summary judgment based on our finding that genuine issues of material fact exist.
Cases available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/morrowt_022708.pdf
"The trial court ruled that Mr. Tiano’s affidavit was insufficient to create a genuine issue of material fact, stating that “the affidavit does not point to any one condition which did cause the mold and, therefore, deals in possibilities, not probabilities.” While Mr. Tiano’s opinion as to potential causation of the mold infestation could have been stated with more certainty, it is clearly not so vague as to be completely discounted on a summary judgment determination. We note in this regard that all nine of the possible causes identified by Mr. Tiano involve defective or insufficient construction of the house." Id.
"The combination of the expert and lay testimony clearly creates a genuine issue of material fact regarding whether water runoff from the school construction caused the mold growth under plaintiffs’ home, especially when viewing the evidence in the light most favorable to plaintiffs." Id. (citing Hardaway v. Hamilton County, No. E2006-01977-COA-R3-CV, 2007 WL 4207930, at *2 (Tenn. Ct. App. E.S., filed Nov. 29, 2007)).
The tenants, who leased a newly-constructed house from the builder/owner, sued the builder/owner alleging, among other things, that the house was negligently constructed in that it was built on a site that unreasonably exposed the house to excessive moisture and with a deficient water runoff and drainage system. The tenants sought compensation for personal injury and property damage allegedly caused by toxic mold in the house due to excessively wet basement walls. The trial court granted the builder/owner summary judgment. Upon review, we vacate the trial court's summary judgment based on our finding that genuine issues of material fact exist.
Cases available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/morrowt_022708.pdf
"The trial court ruled that Mr. Tiano’s affidavit was insufficient to create a genuine issue of material fact, stating that “the affidavit does not point to any one condition which did cause the mold and, therefore, deals in possibilities, not probabilities.” While Mr. Tiano’s opinion as to potential causation of the mold infestation could have been stated with more certainty, it is clearly not so vague as to be completely discounted on a summary judgment determination. We note in this regard that all nine of the possible causes identified by Mr. Tiano involve defective or insufficient construction of the house." Id.
"The combination of the expert and lay testimony clearly creates a genuine issue of material fact regarding whether water runoff from the school construction caused the mold growth under plaintiffs’ home, especially when viewing the evidence in the light most favorable to plaintiffs." Id. (citing Hardaway v. Hamilton County, No. E2006-01977-COA-R3-CV, 2007 WL 4207930, at *2 (Tenn. Ct. App. E.S., filed Nov. 29, 2007)).
Actual notice of restrictive covenants prevents estoppel argument, even when the covenants were not technically part of the deed
JOE GAMBRELL, ET AL. v. SONNY NIVENS, ET AL. (Tenn.Ct.App. February 27, 2008).
This case involves the enforcement of restrictive covenants in equity. After subdividing their property, imposing restrictions on the three lots they sold, and retaining the remaining land, vendors brought suit against remote grantees to enforce the restrictive covenants and to enjoin them from operating a wedding chapel, for commercial use, on the land.
The central issue on appeal is whether the restrictions bind the remote grantees when the covenants were listed on an undated and unsigned attachment to a deed that neither identified encumbrances nor incorporated the attached restrictions. Following a trial on the matter, the trial court permanently enjoined the commercial activity because the remote grantees took title with actual notice of the restrictions. Finding ample support for the imposition of an equitable servitude, we concur in the trial court's judgment. Affirmed and remanded.
Cases available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/gambrellj_022708.pdf
"[T]he Nivenses had actual notice of the restrictions. Generally, factual assertions contained in a deed bind the grantor and the grantee. Duke v. Hopper, 486 S.W.2d 744, 748 (Tenn. Ct. App. 1972). To assert estoppel, however, a party damaged by a false factual assertion must establish (1) its lack of knowledge, without fault, of the true facts, (2) its reliance upon the false factual assertion, and (3) its consequent action based upon that untrue statement. Id. ... They could not have reasonably relied on the face of the Gambrell-Foshee deed when they had actual notice of the restrictions." Id.
"An equitable servitude is a “covenant respecting the use of land enforceable against successor owners or possessors in equity regardless of its enforceability at law.” 2 American Law of Property § 9.31 (A.J. Casner ed. 1952). ... For a covenant to bind remote grantees in equity, (1) it must “touch and concern” the land; (2) the original parties to the covenant must intend that it run with the land and bind remote grantees; and (3) the remote grantee must have had notice of the covenant. Id. at *1-*2 (quoting 5 Richard R. Powell & Patrick J. Rohan, The Law of Real Property § 673 (1991)). To have binding effect, valid restrictions on property need not be in the chain of title if the purchaser had actual notice of them. [citations omitted]. Nonetheless, even where the remote grantee takes title with actual notice, the first two requirements - - that the covenant “touch and concern” the land and that the original parties intend the covenant to run - - must still be established." Id.
"Under Tennessee law, undated and unsigned writings located below the signatures and the certificate of acknowledgment in a deed do not constitute part of that deed. Anderson v. Howard, 74 S.W.2d 287, 390 (Tenn. Ct. App. 1934). To conclude otherwise would “open wide the door to the perpetration of fraud.” Id. But there is no dispute regarding the agreement between the Gambrells and Mr. Foshee at the time of the conveyance. The record makes clear that the language of the deed itself did not express the true intention of the parties. In his deposition, Mr. Foshee unequivocally stated that the terms of their contract included the restrictions, that he understood the restrictions would run with the land for thirty years, and that the list was attached to the deed and duly recorded. Despite the omission of encumbrances on the face of the Gambrell-Foshee deed, Mr. Foshee never believed his property to be unencumbered. Certainly, the undated, unsigned, and unacknowledged written covenants fail in form; however, the original covenanting parties confirmed their substance." Id.
This case involves the enforcement of restrictive covenants in equity. After subdividing their property, imposing restrictions on the three lots they sold, and retaining the remaining land, vendors brought suit against remote grantees to enforce the restrictive covenants and to enjoin them from operating a wedding chapel, for commercial use, on the land.
The central issue on appeal is whether the restrictions bind the remote grantees when the covenants were listed on an undated and unsigned attachment to a deed that neither identified encumbrances nor incorporated the attached restrictions. Following a trial on the matter, the trial court permanently enjoined the commercial activity because the remote grantees took title with actual notice of the restrictions. Finding ample support for the imposition of an equitable servitude, we concur in the trial court's judgment. Affirmed and remanded.
Cases available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/gambrellj_022708.pdf
"[T]he Nivenses had actual notice of the restrictions. Generally, factual assertions contained in a deed bind the grantor and the grantee. Duke v. Hopper, 486 S.W.2d 744, 748 (Tenn. Ct. App. 1972). To assert estoppel, however, a party damaged by a false factual assertion must establish (1) its lack of knowledge, without fault, of the true facts, (2) its reliance upon the false factual assertion, and (3) its consequent action based upon that untrue statement. Id. ... They could not have reasonably relied on the face of the Gambrell-Foshee deed when they had actual notice of the restrictions." Id.
"An equitable servitude is a “covenant respecting the use of land enforceable against successor owners or possessors in equity regardless of its enforceability at law.” 2 American Law of Property § 9.31 (A.J. Casner ed. 1952). ... For a covenant to bind remote grantees in equity, (1) it must “touch and concern” the land; (2) the original parties to the covenant must intend that it run with the land and bind remote grantees; and (3) the remote grantee must have had notice of the covenant. Id. at *1-*2 (quoting 5 Richard R. Powell & Patrick J. Rohan, The Law of Real Property § 673 (1991)). To have binding effect, valid restrictions on property need not be in the chain of title if the purchaser had actual notice of them. [citations omitted]. Nonetheless, even where the remote grantee takes title with actual notice, the first two requirements - - that the covenant “touch and concern” the land and that the original parties intend the covenant to run - - must still be established." Id.
"Under Tennessee law, undated and unsigned writings located below the signatures and the certificate of acknowledgment in a deed do not constitute part of that deed. Anderson v. Howard, 74 S.W.2d 287, 390 (Tenn. Ct. App. 1934). To conclude otherwise would “open wide the door to the perpetration of fraud.” Id. But there is no dispute regarding the agreement between the Gambrells and Mr. Foshee at the time of the conveyance. The record makes clear that the language of the deed itself did not express the true intention of the parties. In his deposition, Mr. Foshee unequivocally stated that the terms of their contract included the restrictions, that he understood the restrictions would run with the land for thirty years, and that the list was attached to the deed and duly recorded. Despite the omission of encumbrances on the face of the Gambrell-Foshee deed, Mr. Foshee never believed his property to be unencumbered. Certainly, the undated, unsigned, and unacknowledged written covenants fail in form; however, the original covenanting parties confirmed their substance." Id.
Description of real property in contract for sale failed to adequately define dimensions and was therefore unenforceable under the statute of frauds
BRIGADOON PARTNERS, LLC v. DALE HUGHES, ET AL. (Tenn.Ct.App. February 27, 2008).
The plaintiff purchaser brought this action for specific performance of an agreement for the sale of a parcel of real estate. The trial court granted the seller summary judgment upon its finding, among other things, that the property description in the agreement was insufficient to satisfy the requirements of the statute of frauds. We affirm the trial court's judgment that the description of the property, which was to be divided from a larger tract owned by the seller, as "[i]n Cleveland, Tennessee, fronting on Paul Huff Pkwy at exit 27, and being further described as 1.5 acres fronting on the PKWY and I-75," was insufficient, and therefore the sale agreement was unenforceable pursuant to the statute of frauds.
Cases available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/brigadoonpartners_022708.pdf
"As in Gorbics, the property description in the agreement in this case makes it possible to ascertain one definite corner of the property to be sold – the southwest corner – because the tract is said to front I-75 and the Paul Huff Parkway. But it is impossible to tell the shape or dimensions of the parcel, and to determine how much, if any, frontage on Ellis Circle Drive the parties intended to include in the sale, because, as in Gorbics, the parcel to be sold was to be divided from a larger tract owned by the sellers. The trial court so held, noting that “[t]here is an unlimited number of shapes that this property could in the defendants’ four acres2 that this Court is not at liberty to make decisions concerning.” Because “the description employed is one that must necessarily apply with equal exactness to any one of an indefinite number of tracts,” Dobson v. Litton, 45 Tenn. (5 Cold.) at 620, 1868 WL 2161 at *2, parol evidence was inadmissible to show that the parties intended to designate a particular tract by the description. Id." Id.
The plaintiff purchaser brought this action for specific performance of an agreement for the sale of a parcel of real estate. The trial court granted the seller summary judgment upon its finding, among other things, that the property description in the agreement was insufficient to satisfy the requirements of the statute of frauds. We affirm the trial court's judgment that the description of the property, which was to be divided from a larger tract owned by the seller, as "[i]n Cleveland, Tennessee, fronting on Paul Huff Pkwy at exit 27, and being further described as 1.5 acres fronting on the PKWY and I-75," was insufficient, and therefore the sale agreement was unenforceable pursuant to the statute of frauds.
Cases available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/brigadoonpartners_022708.pdf
"As in Gorbics, the property description in the agreement in this case makes it possible to ascertain one definite corner of the property to be sold – the southwest corner – because the tract is said to front I-75 and the Paul Huff Parkway. But it is impossible to tell the shape or dimensions of the parcel, and to determine how much, if any, frontage on Ellis Circle Drive the parties intended to include in the sale, because, as in Gorbics, the parcel to be sold was to be divided from a larger tract owned by the sellers. The trial court so held, noting that “[t]here is an unlimited number of shapes that this property could in the defendants’ four acres2 that this Court is not at liberty to make decisions concerning.” Because “the description employed is one that must necessarily apply with equal exactness to any one of an indefinite number of tracts,” Dobson v. Litton, 45 Tenn. (5 Cold.) at 620, 1868 WL 2161 at *2, parol evidence was inadmissible to show that the parties intended to designate a particular tract by the description. Id." Id.
February 25, 2008
Cout finds implied terms of contract for construction of cable television system to be "same as or better" than existing system within six months
BOGGS KURLANDER STEELE, LLC V. HORIZON COMMUNICATIONS, INC. (Tenn.Ct.App. February 22, 2008).
This appeal involves a declaratory judgment regarding the termination of a contract to install a cable system and provide cable service to a trailer park as well as a counter-complaint for damages. The trial court determined that the contract was properly terminated and dismissed the counter-complaint. On appeal, the Appellant argues that (1) the Appellee waived its contractual right to have this matter decided pursuant to Kentucky law; (2) that the trial court erred in determining that it materially breached the contract by failing to install a new system in a timely manner; (3) that the trial court erred in determining that it did not provide cable service equal to the service rendered by the former cable provider; (4) that the trial court erred in determining that the contract was properly terminated; (5) that it is entitled to damages because the Appellee failed to notify the Appellant with information about new residents as required by the contract; and (6) that the trial court erred by awarding the Appellee its attorney's fees and failing to award the Appellant its attorney's fees.
We find that the Appellee has waived its right to have this matter determined pursuant to Kentucky law. The trial court did not err in determining that the Appellant materially breached the contract by not providing cable service equal to the service previously provided and that the contract was properly terminated. Furthermore, we find that the Appellant is not entitled to damages because the Appellant did not prove what damages it incurred due to the Appellee's failure to provide the homes of new residents as required by the contract. Finally, the trial court did not err in awarding the Appellee's attorney's fees. The judgment of the trial court is affirmed, and this cause is remanded to the trial court for the award of Appellee's attorney's fees on appeal.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/boggskurlandersteele_022208.pdf
"[T]he majority owner of Horizon testified that his company installed higher grade amplifers, replaced defective amplifiers, began replacing old cable with more appropriate cable and “it was made very clear that the old system would stay in place to ensure a smooth transition for when we did rebuild the system.” He further testified that to improve the signal quality, they decided to go to a digital system immediately and did so. Therefore, ... we find that the parties reasonably expected Horizon’s system to be the same as or better than Mr. Clinnard’s system. Thus, Horizon was required by the Contract to provide cable service equal to or better than Mr. Clinnard’s system." Id.
"Since the trial court found, without objection by either party, that six months was a reasonable time for the transition to take place, Horizon had six months from the date of the Contract to provide cable service equal to or better than Mr. Clinnard’s system, and Horizon breached the contract by not providing cable service that met that requirement. ... [W]e find that the preponderance of the evidence supports the trial court’s finding that Horizon did not provide cable service equal to or better than Mr. Clinnard’s system within the six month transition period. Thus, Horizon breached the Contract on December 26, 2003, six months after the date of the contract, and the breach was clearly material because cable television service was what the Contract was all about." Id.
This appeal involves a declaratory judgment regarding the termination of a contract to install a cable system and provide cable service to a trailer park as well as a counter-complaint for damages. The trial court determined that the contract was properly terminated and dismissed the counter-complaint. On appeal, the Appellant argues that (1) the Appellee waived its contractual right to have this matter decided pursuant to Kentucky law; (2) that the trial court erred in determining that it materially breached the contract by failing to install a new system in a timely manner; (3) that the trial court erred in determining that it did not provide cable service equal to the service rendered by the former cable provider; (4) that the trial court erred in determining that the contract was properly terminated; (5) that it is entitled to damages because the Appellee failed to notify the Appellant with information about new residents as required by the contract; and (6) that the trial court erred by awarding the Appellee its attorney's fees and failing to award the Appellant its attorney's fees.
We find that the Appellee has waived its right to have this matter determined pursuant to Kentucky law. The trial court did not err in determining that the Appellant materially breached the contract by not providing cable service equal to the service previously provided and that the contract was properly terminated. Furthermore, we find that the Appellant is not entitled to damages because the Appellant did not prove what damages it incurred due to the Appellee's failure to provide the homes of new residents as required by the contract. Finally, the trial court did not err in awarding the Appellee's attorney's fees. The judgment of the trial court is affirmed, and this cause is remanded to the trial court for the award of Appellee's attorney's fees on appeal.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/boggskurlandersteele_022208.pdf
"[T]he majority owner of Horizon testified that his company installed higher grade amplifers, replaced defective amplifiers, began replacing old cable with more appropriate cable and “it was made very clear that the old system would stay in place to ensure a smooth transition for when we did rebuild the system.” He further testified that to improve the signal quality, they decided to go to a digital system immediately and did so. Therefore, ... we find that the parties reasonably expected Horizon’s system to be the same as or better than Mr. Clinnard’s system. Thus, Horizon was required by the Contract to provide cable service equal to or better than Mr. Clinnard’s system." Id.
"Since the trial court found, without objection by either party, that six months was a reasonable time for the transition to take place, Horizon had six months from the date of the Contract to provide cable service equal to or better than Mr. Clinnard’s system, and Horizon breached the contract by not providing cable service that met that requirement. ... [W]e find that the preponderance of the evidence supports the trial court’s finding that Horizon did not provide cable service equal to or better than Mr. Clinnard’s system within the six month transition period. Thus, Horizon breached the Contract on December 26, 2003, six months after the date of the contract, and the breach was clearly material because cable television service was what the Contract was all about." Id.
February 22, 2008
Fair rental value damages must not be "disproportionate, speculative, or unfair"
BEVERLY C. SMITH v. RONNIE R. SMITH ET AL. (Tenn.Ct.App. February 22, 2008).
Buyers of commercial property, who were denied possession of that property for a period of two years, appeal from the trial court's determination that they failed to carry their burden of proving a fair rental value for one of the three units of the property. Finding that the evidence preponderates against the trial court's determination, we reverse.
Opinion available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/smithb_022208.pdf
"The unrebutted testimony of Ronnie Smith established a fair rental value of $600 per month for C Building. Moreover, the cancelled checks of Mr. Buckner supported Mr. Smith’s testimony concerning his current rental agreement with Mr. Buckner, which includes $600 in rent for C Building. The amount Ronnie Smith and Mr. Bucker agreed to in an arms-length transaction is at least some evidence of the rental value at the time of the breach. See BanccorpSouth, 223 S.W.2d at 231; Myer v. Whitacre, No. 01-A-01-9701-CH00014, 1997 WL 367483, at *2 (Tenn. Ct. App. July 2, 1997). ... In this context, the $600 rental value for C Building does not seem disproportionate, speculative, or unfair." Id.
Buyers of commercial property, who were denied possession of that property for a period of two years, appeal from the trial court's determination that they failed to carry their burden of proving a fair rental value for one of the three units of the property. Finding that the evidence preponderates against the trial court's determination, we reverse.
Opinion available at the Tennessee Bar Association website:
http://www.tba2.org/tba_files/TCA/2008/smithb_022208.pdf
"The unrebutted testimony of Ronnie Smith established a fair rental value of $600 per month for C Building. Moreover, the cancelled checks of Mr. Buckner supported Mr. Smith’s testimony concerning his current rental agreement with Mr. Buckner, which includes $600 in rent for C Building. The amount Ronnie Smith and Mr. Bucker agreed to in an arms-length transaction is at least some evidence of the rental value at the time of the breach. See BanccorpSouth, 223 S.W.2d at 231; Myer v. Whitacre, No. 01-A-01-9701-CH00014, 1997 WL 367483, at *2 (Tenn. Ct. App. July 2, 1997). ... In this context, the $600 rental value for C Building does not seem disproportionate, speculative, or unfair." Id.
February 21, 2008
Court takes the plain meaning of a homeowner's association declaration to find that developer's obligation to pay fees had not commenced
CORDOVA THE TOWN HOMEOWNERS ASSOCIATION, INC. v. GILL DEVELOPMENT COMPANY, INC. (Tenn.Ct.App. Feb. 21, 2008).
This appeal involves the interpretation of a declaration of covenants for a homeowners’ association. The declaration made the developer a member of the homeowners’ association, insofar as the developer owned lots within the development. It also stated that the obligation to pay assessments on a given lot did not begin until either the lot was transferred from the developer or improvements on the lot were completed, whichever occurred first. The homeowners’ association sued the developer, seeking damages for unpaid assessments on lots owned by the developer, on which improvements were not complete. The trial court granted the motion for summary judgment filed by the homeowners’ association. The developer appeals. We reverse, concluding that the declaration of covenants provides that the obligation to pay assessments on the lots owned by the developer had not yet commenced.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/cordovat_091208.pdf
"Resolution of this dispute requires interpretation of the terms of the Declaration. At the outset, we note that our construction of the Declaration must proceed as would construction of any other written agreement. [] Accordingly, our first concern is the contracting parties’ mutual intent. [] If we find the Declaration to be unambiguous as it is written, the intention of the parties will be determined by the Declaration’s plain meaning. [] If a material part of the Declaration appears to be ambiguous, we look to extrinsic evidence. The ambiguity may be resolved against the party who drafted the Declaration." Id. (citations omitted).
"It is undisputed that the lots for which the assessments are sought are owned by Gill Development or were owned by Gill Development at one time. It is also undisputed that the improvements on those lots were incomplete at the time when the assessments were allegedly due. Accordingly, Gill Development’s obligation to pay assessments had not yet commenced." Id.
This appeal involves the interpretation of a declaration of covenants for a homeowners’ association. The declaration made the developer a member of the homeowners’ association, insofar as the developer owned lots within the development. It also stated that the obligation to pay assessments on a given lot did not begin until either the lot was transferred from the developer or improvements on the lot were completed, whichever occurred first. The homeowners’ association sued the developer, seeking damages for unpaid assessments on lots owned by the developer, on which improvements were not complete. The trial court granted the motion for summary judgment filed by the homeowners’ association. The developer appeals. We reverse, concluding that the declaration of covenants provides that the obligation to pay assessments on the lots owned by the developer had not yet commenced.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/cordovat_091208.pdf
"Resolution of this dispute requires interpretation of the terms of the Declaration. At the outset, we note that our construction of the Declaration must proceed as would construction of any other written agreement. [] Accordingly, our first concern is the contracting parties’ mutual intent. [] If we find the Declaration to be unambiguous as it is written, the intention of the parties will be determined by the Declaration’s plain meaning. [] If a material part of the Declaration appears to be ambiguous, we look to extrinsic evidence. The ambiguity may be resolved against the party who drafted the Declaration." Id. (citations omitted).
"It is undisputed that the lots for which the assessments are sought are owned by Gill Development or were owned by Gill Development at one time. It is also undisputed that the improvements on those lots were incomplete at the time when the assessments were allegedly due. Accordingly, Gill Development’s obligation to pay assessments had not yet commenced." Id.
Court looked to understandings between parties to a real estate transaction and awarded a prescriptive easement for access
WILLARD D. GORE, ET AL. v. TONY STOUT, ET AL. (Tenn.Ct.App. Feb. 20, 2008)
This appeal involves a dispute between two landowners over use of a route across the defendants' land that the plaintiffs use for access to their nearby land. Plaintiffs filed suit contending they had a right to use the disputed route. The trial court determined that the route had been dedicated and accepted as a public road, that the plaintiffs were entitled to a prescriptive easement over the defendants' land, and that the plaintiffs had a right to use the road by adverse possession. We have determined that the contested section of the route is not a public road, that adverse possession does not apply, and that the plaintiffs are entitled to a prescriptive easement over the defendants' land.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/gorew_022008.pdf
"To establish a public road by implication, the proponent must satisfy two requirements. First, the landowner must intend to dedicate the road to the public. McCord v. Hays, 302 S.W.2d 331, 333 (Tenn. 1957). Second, the public must expressly or impliedly accept the road. Id. The burden of proof is heavy. In short, the proponent must present 'proof of facts from which it positively and unequivocally appears that the owner intended to permanently part with his property and vest it in the public, and that there can be no other reasonable explanation of his conduct. In other words, dedication is a question of intention, and the intent must be clearly and satisfactorily proven.' ... Mr. Stout asked the county to gravel the entire length of the track. But this was just an attempt to get a little free work, to “gouge” the county as Mr. Stout put it. His intent was to save money, not to donate a road to the county. The county declined his request." Id. (quoting McKinney v. Duncan, 118 S.W. 683, 684 (Tenn. 1909)).
"An easement is an interest in another's real property that confers on the easement holder an enforceable right to use that real property for a specific use. Brew v. Van Deman, 53 Tenn. (6 Heisk.) 433, 436 (1871)). The most common form of an easement is a right of passage across another's property. Shew v. Bawgus, 227 S.W.3d 569, 578 (Tenn. Ct. App. 2007). In Tennessee, easements can be created in several ways: (1) express grant, (2) reservation, (3) implication, (4) prescription, (5) estoppel, and (6) eminent domain. Pevear v. Hunt, 924 S.W.2d 114, 115-16 (Tenn. Ct. App. 1996). A prescriptive easement is an implied easement that is premised on the use of the property rather than language in a deed. Shew, 227 S.W.3d at 578. To create a prescriptive easement, the use and enjoyment of the property must be adverse, under a claim of right, continuous, uninterrupted, open, visible, exclusive, with the knowledge and acquiescence of the owner of the servient tenement, and must continue for the full prescriptive period. Pevear, 924 S.W.2d at 116 (citing Keebler v. Street, 673 S.W.2d 154 (Tenn. Ct, App. 1984). The proponent must prove each of the elements by “clear and convincing evidence.” Stone v. Buckley, 70 S.W.3d 82, 86 (Tenn. Ct. App. 2001). In Tennessee the prescriptive period is twenty years. Nashville Trust Co. v. Evans, 206 S.W.2d 911, 913 (Tenn. Ct. App. 1947). ... All of this evidence – Johnson and Mr. Gore’s discussions, the fact that there is no other feasible access to Gore’s land, and their use of the route both before and after the sale – can only lead to one conclusion: Johnson and Gore had a parol understanding that Johnson was transferring the right to use the route." Id.
This appeal involves a dispute between two landowners over use of a route across the defendants' land that the plaintiffs use for access to their nearby land. Plaintiffs filed suit contending they had a right to use the disputed route. The trial court determined that the route had been dedicated and accepted as a public road, that the plaintiffs were entitled to a prescriptive easement over the defendants' land, and that the plaintiffs had a right to use the road by adverse possession. We have determined that the contested section of the route is not a public road, that adverse possession does not apply, and that the plaintiffs are entitled to a prescriptive easement over the defendants' land.
Opinion available at the Tennessee Bar Association website: http://www.tba2.org/tba_files/TCA/2008/gorew_022008.pdf
"To establish a public road by implication, the proponent must satisfy two requirements. First, the landowner must intend to dedicate the road to the public. McCord v. Hays, 302 S.W.2d 331, 333 (Tenn. 1957). Second, the public must expressly or impliedly accept the road. Id. The burden of proof is heavy. In short, the proponent must present 'proof of facts from which it positively and unequivocally appears that the owner intended to permanently part with his property and vest it in the public, and that there can be no other reasonable explanation of his conduct. In other words, dedication is a question of intention, and the intent must be clearly and satisfactorily proven.' ... Mr. Stout asked the county to gravel the entire length of the track. But this was just an attempt to get a little free work, to “gouge” the county as Mr. Stout put it. His intent was to save money, not to donate a road to the county. The county declined his request." Id. (quoting McKinney v. Duncan, 118 S.W. 683, 684 (Tenn. 1909)).
"An easement is an interest in another's real property that confers on the easement holder an enforceable right to use that real property for a specific use. Brew v. Van Deman, 53 Tenn. (6 Heisk.) 433, 436 (1871)). The most common form of an easement is a right of passage across another's property. Shew v. Bawgus, 227 S.W.3d 569, 578 (Tenn. Ct. App. 2007). In Tennessee, easements can be created in several ways: (1) express grant, (2) reservation, (3) implication, (4) prescription, (5) estoppel, and (6) eminent domain. Pevear v. Hunt, 924 S.W.2d 114, 115-16 (Tenn. Ct. App. 1996). A prescriptive easement is an implied easement that is premised on the use of the property rather than language in a deed. Shew, 227 S.W.3d at 578. To create a prescriptive easement, the use and enjoyment of the property must be adverse, under a claim of right, continuous, uninterrupted, open, visible, exclusive, with the knowledge and acquiescence of the owner of the servient tenement, and must continue for the full prescriptive period. Pevear, 924 S.W.2d at 116 (citing Keebler v. Street, 673 S.W.2d 154 (Tenn. Ct, App. 1984). The proponent must prove each of the elements by “clear and convincing evidence.” Stone v. Buckley, 70 S.W.3d 82, 86 (Tenn. Ct. App. 2001). In Tennessee the prescriptive period is twenty years. Nashville Trust Co. v. Evans, 206 S.W.2d 911, 913 (Tenn. Ct. App. 1947). ... All of this evidence – Johnson and Mr. Gore’s discussions, the fact that there is no other feasible access to Gore’s land, and their use of the route both before and after the sale – can only lead to one conclusion: Johnson and Gore had a parol understanding that Johnson was transferring the right to use the route." Id.
February 02, 2008
Tennessee statute mandates that local governments contracting with "pure" construction managers must use competitive bidding and licensed contractors
Local Government Contracts With "Pure" Construction Managers
TN Attorney General Opinions
Date: 2008-02-01
Opinion Number: 08-16
Opinion available at:
http://www.tba2.org/tba_files/AG/2008/ag_08_16.pdf
"Tenn. Code Ann. § 12-4-106(a)(1) does not prohibit local government contracts for 'pure' construction managers from being awarded based on competitive bids. ... Pursuant to Tenn. Code Ann. § 62-6-103(a)(1), any corporation engaged in contracting in Tennessee must be licensed as provided in the Contractors Licensing Act of 1994, Tenn. Code Ann. § 62-6-101, et seq. ... Tenn. Code Ann. § 5-7-107 does not authorize counties to contract with 'pure' construction managers without competitive bidding. Rather, that statute permits local governments to contract with construction managers to superintend construction projects." Id.
TN Attorney General Opinions
Date: 2008-02-01
Opinion Number: 08-16
Opinion available at:
http://www.tba2.org/tba_files/AG/2008/ag_08_16.pdf
"Tenn. Code Ann. § 12-4-106(a)(1) does not prohibit local government contracts for 'pure' construction managers from being awarded based on competitive bids. ... Pursuant to Tenn. Code Ann. § 62-6-103(a)(1), any corporation engaged in contracting in Tennessee must be licensed as provided in the Contractors Licensing Act of 1994, Tenn. Code Ann. § 62-6-101, et seq. ... Tenn. Code Ann. § 5-7-107 does not authorize counties to contract with 'pure' construction managers without competitive bidding. Rather, that statute permits local governments to contract with construction managers to superintend construction projects." Id.
Subscribe to:
Posts (Atom)