JAY S. GORBAN v. DAVID HARRIS (Tenn.Ct.App. May 29, 2008)
This is a dispute between a homeowner and the contractor he hired to build a sunroom onto his home. We have concluded that the evidence does not preponderate against the trial court's award of a judgment in favor of the homeowner for 60 percent of the requested damages, based upon its allocation of 40 percent of the fault to the homeowner.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/gorbanj_052908.pdf
"Dr. Gorban assigns error to the trial court’s allocation of 40% of the fault to him. The trial court’s comparative fault determination was predicated upon its finding that Dr. Gorban did not provide Mr. Harris with the manufacturer’s instructions regarding the foundation requirements. ... Dr. Gorban further argues that, even if he did not have the foundation instructions, Mr. Harris should have contacted the manufacturer himself. There is no proof that Mr. Harris was aware that additional instructions existed. While Mr. Harris could have contacted the manufacturer, we cannot say that the trial court erred in finding Dr. Gorban at fault for failing to provide the relevant instructions that were in his possession to Mr. Harris." Id.
May 29, 2008
May 19, 2008
Decision reversed because trial court awarded punitive damages based on environmental tort theory, which was rejected by the jury
DAVID GOFF, ET UX, ET AL. v. ELMO GREER & SONS CONSTRUCTION CO., INC. (Tenn.Ct.App. May 19, 2008).
This appeal involves a jury's award of punitive damages. The construction company entered into a contract with the State of Tennessee to widen a portion of a highway. The homeowners entered into a contract with the construction company allowing the construction company to place excess materials generated from the highway project on the homeowners' property. In exchange, the homeowners would receive compensation based on the cubic fill area, and the company would fill and grade that portion of the homeowners' property. The project required that the construction company conduct extensive blasting near the homeowners' house and vehicles. One of the homeowners became concerned when he witnessed the construction company placing various garbage items and tires on his property near the fill area. After three years, the construction company finished the project.
The homeowners brought suit, alleging that the company failed to pay the amount due under the contract and caused damage to their house due to the blasting. The complaint also alleged that the company buried certain items, including tires, on the property which constituted an environmental tort. The homeowners' amended complaint stated a cause of action in nuisance and also sought an award of punitive damages in the amount of $1 million dollars.
The jury returned a verdict in favor of the homeowners for the nuisance claim in the amount of $3,305.00 and found that punitive damages should be imposed on the construction company. The jury found in favor of the construction company for the environmental tort claim. After the second phase of the trial, the jury returned an award of $2 million in punitive damages. The trial court remitted the award to $1 million, the amount of the homeowners' ad damnum. The construction company appeals, and we reverse and remand in part and affirm in part.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/goffd_051908.pdf
"Our Supreme Court, in Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901–02 (Tenn. 1992), laid out the procedural framework for awarding punitive damages. First, the plaintiff must prove by clear and convincing evidence that the defendant acted (1) intentionally, (2) fraudulently, (3) maliciously, or (4) recklessly. Id. at 900–01. Upon such a finding, the jury must then determine the amount of damages during the second phase of the trial[.]" Id.
Trial court: "By intentionally burying tires eight feet tall, thirty-two inches in diameter, and weighing over one ton, the defendant clearly violated the solid waste disposal act. The policy of the state to avoid pollution and the creation of unpermitted landfills was intentionally violated on the lands of another and justifies a substantial punitive damages award." Id. (quoting the trial court).
"The trial court’s findings of fact and conclusions of law are insufficient in that they rely heavily on the environmental tort claim, a theory which the jury rejected. We therefore reverse the award of punitive damages and remand the case to the trial court. On remand, the trial court should apply the Hodges factors and make appropriate findings of fact and conclusions of law in approving or decreasing the award of punitive damages, if the court deems appropriate, based on the nuisance theory." Id.
This appeal involves a jury's award of punitive damages. The construction company entered into a contract with the State of Tennessee to widen a portion of a highway. The homeowners entered into a contract with the construction company allowing the construction company to place excess materials generated from the highway project on the homeowners' property. In exchange, the homeowners would receive compensation based on the cubic fill area, and the company would fill and grade that portion of the homeowners' property. The project required that the construction company conduct extensive blasting near the homeowners' house and vehicles. One of the homeowners became concerned when he witnessed the construction company placing various garbage items and tires on his property near the fill area. After three years, the construction company finished the project.
The homeowners brought suit, alleging that the company failed to pay the amount due under the contract and caused damage to their house due to the blasting. The complaint also alleged that the company buried certain items, including tires, on the property which constituted an environmental tort. The homeowners' amended complaint stated a cause of action in nuisance and also sought an award of punitive damages in the amount of $1 million dollars.
The jury returned a verdict in favor of the homeowners for the nuisance claim in the amount of $3,305.00 and found that punitive damages should be imposed on the construction company. The jury found in favor of the construction company for the environmental tort claim. After the second phase of the trial, the jury returned an award of $2 million in punitive damages. The trial court remitted the award to $1 million, the amount of the homeowners' ad damnum. The construction company appeals, and we reverse and remand in part and affirm in part.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/goffd_051908.pdf
"Our Supreme Court, in Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901–02 (Tenn. 1992), laid out the procedural framework for awarding punitive damages. First, the plaintiff must prove by clear and convincing evidence that the defendant acted (1) intentionally, (2) fraudulently, (3) maliciously, or (4) recklessly. Id. at 900–01. Upon such a finding, the jury must then determine the amount of damages during the second phase of the trial[.]" Id.
Trial court: "By intentionally burying tires eight feet tall, thirty-two inches in diameter, and weighing over one ton, the defendant clearly violated the solid waste disposal act. The policy of the state to avoid pollution and the creation of unpermitted landfills was intentionally violated on the lands of another and justifies a substantial punitive damages award." Id. (quoting the trial court).
"The trial court’s findings of fact and conclusions of law are insufficient in that they rely heavily on the environmental tort claim, a theory which the jury rejected. We therefore reverse the award of punitive damages and remand the case to the trial court. On remand, the trial court should apply the Hodges factors and make appropriate findings of fact and conclusions of law in approving or decreasing the award of punitive damages, if the court deems appropriate, based on the nuisance theory." Id.
May 16, 2008
Case replete with tenets of construction law
CATHERINE SMITH BOWLING, ET AL. V. TODD JONES, ET AL. (Tenn.Ct.App. May 16, 2008).
Plaintiff homeowners sued defendant residential building contractors for breach of a home construction contract upon allegations of defective workmanship and abandonment of contract. The trial court entered judgment in favor of plaintiffs and awarded actual damages in an amount based upon the finding that the house was of no value. The trial court also awarded damages under the Tennessee Consumer Protection Act upon a finding that the defendants violated the Act by willfully and knowingly misrepresenting that they were bonded. Upon appeal, we find no error in the judgment of the trial court, and accordingly, the judgment is affirmed in all respects.
Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2008/bowlingc_051608.pdf
IMPLIED WARRANTY TO BUILD NEW HOME IN A WORKMANLIKE MANNER:
"A contract to construct an entire building is essentially a contract for material and labor, and includes an implied warranty protecting the owner from defective construction. Once a builder undertakes a construction contract, the common law imposes upon him or her a duty to perform the work in a workmanlike manner, and there is an implied agreement that the building or work performed will be sufficient for the particular purpose desired or to accomplish a certain result. Thus, a failure to perform a building contract in a workmanlike manner constitutes a breach of the contract." Id. (citing 13 AM. JUR. 2d Building and Construction Contracts §10 (2000)).
ABANDONMENT = BREACH OF CONTRACT; CONTRACTOR BREACHES BY REFUSING TO PERFORM WORK; OWNER BREACHES BY REFUSING TO PAY:
"The abandonment of a contract gives rise to a cause of action for breach. [] In the instant matter, each party contends that the other abandoned the contract; the Andersons argue that the Jones brothers simply left the job and quit performing their duties under the contract, while the Jones brothers argue that the only reasons they did not complete their contractual duties were that the Andersons abandoned the contract first, by failing to continue to pay draws and purchase building materials and later, by firing them." Id. (citation omitted).
DELEGATION TO INDEPENDENT CONTRACTORS DOES NOT ABSOLVE A CONTRACTOR OF ITS DUTIES TO THE HOMEOWNER:
"[T]he Jones brothers [contend that the subcontractors were independent contractors] and therefore [they] were not ordinarily liable for the negligence of an independent contractor.” ... We find no merit in this argument. The Jones brothers had a contractual duty to construct the house to completion and to perform the construction in a workmanlike manner. Their unilateral delegation of work to third parties did not absolve them of this duty." Id.
NEW HOME CONSTRUCTION WITH SEVER STRUCTURAL DEFECTS IS HELD TO HAVE ZERO VALUE (i.e., $0):
"It is well settled that an owner of property is competent to testify to the value of such property. [] Given the above referenced testimony of the owners and other evidence confirming the house’s structural instability, we believe the trial court’s determination that the house is of zero value is well supported, and we do not find that the evidence preponderates otherwise." Id. (citation omitted).
CONTRACTOR VIOLATED TCPA BY FALSELY REPRESENTING THAT THEY ARE BONDED; IF CONTRACTOR'S BUSINESS CARD SAYS "BONDED" AND CONTRACTOR IS NOT, THEY MUST APPRISE THE OWNER:
"The Jones brothers contend that insufficient evidence was presented to support the trial court’s finding that their violation of the TCPA was willful and knowing. They do not deny that they were not bonded, nor do they deny that they misrepresented to the Andersons that they were bonded and that the Andersons relied upon this misrepresentation. However, the Jones brothers insist that such misrepresentation was unintentional and that the record does not show otherwise. We disagree. First, we note Jerry Jones’s own testimony that prior to their employment by the Andersons, he gave Kimberly Anderson the Jones brothers’ business card, a copy of which is in the record before us. Among other things, this card states that the Jones brothers are “Licensed, Insured, and Bonded.”" Id.
Plaintiff homeowners sued defendant residential building contractors for breach of a home construction contract upon allegations of defective workmanship and abandonment of contract. The trial court entered judgment in favor of plaintiffs and awarded actual damages in an amount based upon the finding that the house was of no value. The trial court also awarded damages under the Tennessee Consumer Protection Act upon a finding that the defendants violated the Act by willfully and knowingly misrepresenting that they were bonded. Upon appeal, we find no error in the judgment of the trial court, and accordingly, the judgment is affirmed in all respects.
Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2008/bowlingc_051608.pdf
IMPLIED WARRANTY TO BUILD NEW HOME IN A WORKMANLIKE MANNER:
"A contract to construct an entire building is essentially a contract for material and labor, and includes an implied warranty protecting the owner from defective construction. Once a builder undertakes a construction contract, the common law imposes upon him or her a duty to perform the work in a workmanlike manner, and there is an implied agreement that the building or work performed will be sufficient for the particular purpose desired or to accomplish a certain result. Thus, a failure to perform a building contract in a workmanlike manner constitutes a breach of the contract." Id. (citing 13 AM. JUR. 2d Building and Construction Contracts §10 (2000)).
ABANDONMENT = BREACH OF CONTRACT; CONTRACTOR BREACHES BY REFUSING TO PERFORM WORK; OWNER BREACHES BY REFUSING TO PAY:
"The abandonment of a contract gives rise to a cause of action for breach. [] In the instant matter, each party contends that the other abandoned the contract; the Andersons argue that the Jones brothers simply left the job and quit performing their duties under the contract, while the Jones brothers argue that the only reasons they did not complete their contractual duties were that the Andersons abandoned the contract first, by failing to continue to pay draws and purchase building materials and later, by firing them." Id. (citation omitted).
DELEGATION TO INDEPENDENT CONTRACTORS DOES NOT ABSOLVE A CONTRACTOR OF ITS DUTIES TO THE HOMEOWNER:
"[T]he Jones brothers [contend that the subcontractors were independent contractors] and therefore [they] were not ordinarily liable for the negligence of an independent contractor.” ... We find no merit in this argument. The Jones brothers had a contractual duty to construct the house to completion and to perform the construction in a workmanlike manner. Their unilateral delegation of work to third parties did not absolve them of this duty." Id.
NEW HOME CONSTRUCTION WITH SEVER STRUCTURAL DEFECTS IS HELD TO HAVE ZERO VALUE (i.e., $0):
"It is well settled that an owner of property is competent to testify to the value of such property. [] Given the above referenced testimony of the owners and other evidence confirming the house’s structural instability, we believe the trial court’s determination that the house is of zero value is well supported, and we do not find that the evidence preponderates otherwise." Id. (citation omitted).
CONTRACTOR VIOLATED TCPA BY FALSELY REPRESENTING THAT THEY ARE BONDED; IF CONTRACTOR'S BUSINESS CARD SAYS "BONDED" AND CONTRACTOR IS NOT, THEY MUST APPRISE THE OWNER:
"The Jones brothers contend that insufficient evidence was presented to support the trial court’s finding that their violation of the TCPA was willful and knowing. They do not deny that they were not bonded, nor do they deny that they misrepresented to the Andersons that they were bonded and that the Andersons relied upon this misrepresentation. However, the Jones brothers insist that such misrepresentation was unintentional and that the record does not show otherwise. We disagree. First, we note Jerry Jones’s own testimony that prior to their employment by the Andersons, he gave Kimberly Anderson the Jones brothers’ business card, a copy of which is in the record before us. Among other things, this card states that the Jones brothers are “Licensed, Insured, and Bonded.”" Id.
May 07, 2008
Res judicata bars challenge to performance bond after judgment on injunctive relief claim; Privity gives right to assert defensive collateral estoppel
TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA as subrogee of SMITH MECHANICAL CONTRACTORS, INC. v. LAWYER'S TITLE INSURANCE CORPORATION, ET AL. (Tenn.Ct.App. May 7, 2008).
Travelers Casualty & Surety Company of America ("Travelers") as subrogee of Smith Mechanical Contractors, Inc. ("Smith Mechanical") sued Lawyer's Title Insurance Company ("Lawyer's Title") and First Tennessee Bank National Association ("the Bank") seeking, among other things, a judgment declaring a mechanic's lien filed by Smith Mechanical to have priority over a deed of trust held by the Bank with regard to real property located in Johnson City, Tennessee. Lawyer's Title and the Bank filed a motion to dismiss or for summary judgment.
After a hearing, the Trial Court entered an order finding and holding, inter alia, that Travelers' complaint was barred under the doctrine of res judicata; that the complaint was barred under the compulsory counterclaim rule; that Travelers never acquired Smith Mechanical's mechanic's lien rights; and, that the Bank had recorded a payment bond ("Performance Bond"), which operated to discharge Smith Mechanical's lien from the real property. Travelers appeals to this Court. We affirm.
Opinion may be found on TBA website:
http://www.tba2.org/tba_files/TCA/2008/travelerscasualty_050708.pdf
"Parties asserting a res judicata defense must demonstrate that (1) a court of competent jurisdiction rendered the prior judgment, (2) the prior judgment was final and on the merits, (3) the same parties or their privies were involved in both proceedings, and (4) both proceedings involved the same cause of action." Id. (citations omitted).
"[O]nce the judgment on the merits became final in the second lawsuit seeking injunctive relief, the doctrine of res judicata through the principle of claim preclusion operates to bar any claims involving the same cause of action which were or could have been brought by Barker Building and Travelers against the Bank in that same action. This includes any claims against the Bank challenging the validity of the Subordination Agreement and Performance Bond." Id.
"Collateral estoppel, an issue preclusion doctrine, ... bars the parties or their privies from relitigating issues that were actually raised and determined in an earlier suit. ... Collateral estoppel may be used by a defendant in the second suit (defensive collateral estoppel), or it may be used by a plaintiff in a second suit (offensive collateral estoppel). In Tennessee the offensive use of collateral estoppel requires that the parties be identical in both actions. Without saying so specifically, however, Tennessee has not required party mutuality in applying defensive collateral estoppel." Id. (citations omitted).
"The issue sought to be precluded in this instance is the issue regarding the validity of the Performance Bond. Lawyer’s Title is in privity with the Bank with regard to this issue. Given this and the fact that the issue sought to be precluded went to final judgment on the merits in [the case] discussed above, Lawyer’s Title can utilize defensive collateral estoppel." Id. (citations omitted).
Travelers Casualty & Surety Company of America ("Travelers") as subrogee of Smith Mechanical Contractors, Inc. ("Smith Mechanical") sued Lawyer's Title Insurance Company ("Lawyer's Title") and First Tennessee Bank National Association ("the Bank") seeking, among other things, a judgment declaring a mechanic's lien filed by Smith Mechanical to have priority over a deed of trust held by the Bank with regard to real property located in Johnson City, Tennessee. Lawyer's Title and the Bank filed a motion to dismiss or for summary judgment.
After a hearing, the Trial Court entered an order finding and holding, inter alia, that Travelers' complaint was barred under the doctrine of res judicata; that the complaint was barred under the compulsory counterclaim rule; that Travelers never acquired Smith Mechanical's mechanic's lien rights; and, that the Bank had recorded a payment bond ("Performance Bond"), which operated to discharge Smith Mechanical's lien from the real property. Travelers appeals to this Court. We affirm.
Opinion may be found on TBA website:
http://www.tba2.org/tba_files/TCA/2008/travelerscasualty_050708.pdf
"Parties asserting a res judicata defense must demonstrate that (1) a court of competent jurisdiction rendered the prior judgment, (2) the prior judgment was final and on the merits, (3) the same parties or their privies were involved in both proceedings, and (4) both proceedings involved the same cause of action." Id. (citations omitted).
"[O]nce the judgment on the merits became final in the second lawsuit seeking injunctive relief, the doctrine of res judicata through the principle of claim preclusion operates to bar any claims involving the same cause of action which were or could have been brought by Barker Building and Travelers against the Bank in that same action. This includes any claims against the Bank challenging the validity of the Subordination Agreement and Performance Bond." Id.
"Collateral estoppel, an issue preclusion doctrine, ... bars the parties or their privies from relitigating issues that were actually raised and determined in an earlier suit. ... Collateral estoppel may be used by a defendant in the second suit (defensive collateral estoppel), or it may be used by a plaintiff in a second suit (offensive collateral estoppel). In Tennessee the offensive use of collateral estoppel requires that the parties be identical in both actions. Without saying so specifically, however, Tennessee has not required party mutuality in applying defensive collateral estoppel." Id. (citations omitted).
"The issue sought to be precluded in this instance is the issue regarding the validity of the Performance Bond. Lawyer’s Title is in privity with the Bank with regard to this issue. Given this and the fact that the issue sought to be precluded went to final judgment on the merits in [the case] discussed above, Lawyer’s Title can utilize defensive collateral estoppel." Id. (citations omitted).
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