Court Reviews the Enforceability of a Materialman's Lien

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Court reviews contract between consumer and utility board

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

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

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

Court reviews fairness of mediation agreement between parties

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

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

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

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

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

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

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

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

Attorney General reviews proposed contracts for home stabilization.

Contracts for home stabilization following damage from vertical settlement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SENATE LOOKS AT REQUIRING CO2 ALARMS FOR NEW CONSTRUCTION.

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

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

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

The Senate Finance Committee approved legislation that creates a procedure for sole proprietors, partners, officers of corporations, and members of limited liability companies engaged in the construction industry to file for an exemption from obtaining workers' compensation insurance on themselves.  The legislation, Senate Bill 3591, comes after the General Assembly voted earlier this year to suspend a new law requiring sole proprietors and partners engaged in the construction industry to carry workers' compensation coverage on themselves.  The new law was suspended due to unintended effects of the measure. 
 
The legislation represents a consensus of all parties after several months of negotiations between those impacted by this matter.  It is designed to address concerns over gaps in coverage and provides exemptions so that small businesses will not be harmed.  It also addresses provability, verifiability and accountability in our state's worker's compensation law. 
 
The proposal aims to address gaps in coverage for workers in the various construction fields without harming small business owners.  The bill reinstates the requirement that sole proprietors and partners engaged in the construction industry carry workers' compensation insurance on themselves but provides a mechanism for exemption.  
 
Those eligible for the exemption, include:
- Up to three officers of a corporation
- Certain members of a  limited liability company, if they own at least 30 percent of the company
- Partners that own at least 30 percent of a limited partnership
- Sole proprietors
- Up to three members of a family-owned business
 
The bill requires any construction services provider requesting exemption, which has not been issued a valid license from the Board of Licensing Contractors, to obtain first a construction services provider registration from the Secretary of State.  They may then apply to the Secretary of State's office either in person or online for an exemption.  No more than three persons on any one commercial job are eligible for an exemption. The bill also requires the provider requesting an exemption be current in paying all taxes. 
 
The cost, under the bill, would total $200 every two years for a construction service provider registration and exemption.  A construction service provider that has been issued a license by the Board of Licensing Contractors would pay $100 every two years for an exemption.  Costs incurred by a construction service provider will be significantly less than a worker's compensation insurance premium based on the construction service provider's payroll.  The bill also increases the penalties against an employer engaged in the construction industry who fails to comply with the law.
 
Finally, the bill creates an offense for an employer knowingly to coerce a job applicant to obtain a worker's compensation exemption or to fire an employee due to failure to receive an exemption.  The proposal establishes a task force that will study the effects of employee misclassification in the construction industry.
 
The bill is supported by the National Federal of Independent Businessmen and the Home Builders Association of Tennessee.  

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

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

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

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