Steve Perlaky v. Jimmy Chapin ( 2018 )

07/27/2018
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs May 30, 2018
STEVE PERLAKY v. JIMMY CHAPIN, ET AL.
Appeal from the Chancery Court for Hamilton County
No. 15-0407 Jeffrey M. Atherton, Chancellor
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No. E2017-01995-COA-R3-CV
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The plaintiff filed a claim for trespass against the defendants. The trial court found
trespass and awarded nominal damages and attorney’s fees to the plaintiff. After a
hearing on the parties’ respective motions to alter or amend the judgment, the trial court
vacated the award of attorney’s fees and declined to increase the amount of nominal
damages to the plaintiff. The plaintiff appeals. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
JOHN W. MCCLARTY, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and CHARLES D. SUSANO, JR., J., joined.
John M. Wolfe, Jr., Chattanooga, Tennessee, for the appellant, Steve Perlaky.
Thomas E. LeQuire, Chattanooga, Tennessee, for the appellees, Jimmy Chapin and
Cummings Cove, LLC.
OPINION
I. BACKGROUND
In 1998, Steve Perlaky (“Perlaky”) obtained real property on Aetna Mountain in both
Hamilton and Marion counties, as well as non-exclusive, perpetual easement rights to access this
property by way of Aetna Mountain Road. In 2002, Cummings Cove, LLC (“LLC”) acquired
nearby property on Aetna Mountain, expressly subject to the ingress and egress easement
mentioned above. Jimmy Chapin (“Chapin”), the developer for LLC, proceeded to obstruct
Aetna Mountain Road by felling 400 or 500 trees across the road, setting up a steel gate, and
placing security guards at the gate to monitor access. This activity severely limited Perlaky’s
access to his property. Perlaky brought an action against Chapin and LLC in 2014 but took a
voluntary nonsuit. Perlaky re-filed his action on July 15, 2015.
The trial court found that the LLC committed trespass and initially awarded Perlaky
nominal damages in the amount of $174.14 and consequential damages in the form of attorney’s
fees. Both parties then filed motions to alter or amend the judgment. Defendant LLC requested
that the court reverse the award of attorney’s fees to Perlaky, arguing that attorney’s fees are not
recoverable in a trespass case under Tennessee case law precedent. On the other hand, Perlaky
requested that the court, among other things, increase his compensatory damages and expand the
award of attorney’s fees to cover prior litigation, beginning in 2001. Following a hearing on the
parties’ respective motions to alter or amend the judgment, the trial court declined to increase
Perlaky’s award of nominal damages but granted LLC’s motion to set aside the award of
attorney’s fees to the plaintiff, finding that Tennessee law does not permit the award of
attorney’s fees in cases of trespass.
The trial court judge expressed his displeasure with Tennessee precedent foreclosing his
exercise of discretion in awarding attorney’s fees to the plaintiff, especially where he believed
the facts of the case warranted such an award:
[W]ith regard to [defendant’s] motion to alter or amend, on the
narrow issue of the fact that at this point the law concerning
trespass does not specifically provide for attorney’s fees, and I
would like the order to reflect that this Court is of the opinion it
should, and the Court’s order to reflect that in this case it is clearly
warranted based upon the Defendant’s conduct and the
Defendant’s admission of that conduct, but under the current state
of the law, attorney’s fees on the trespass action are not allowable
and; therefore, the motion to alter or amend in that noted context is
granted.
And again:
I think it’s just a tragedy. I want somebody to appeal it. Who will
appeal it? If I rule against you, [Plaintiff], will you take it up? If I
rule against you, will you take it up? Because I am ruling against
somebody because this has got to go up (sic). So who will take it
up? Who has got the reason to appeal this?
Perlaky thereafter timely filed this appeal.
II. ISSUES
We restate the issues raised on appeal by Perlaky as follows:
A. Whether the trial court erred in awarding plaintiff nominal
damages in the amount of $174.14 in a trespass action.
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B. Whether the trial court erred in denying attorney’s fees to
plaintiff in a trespass action.
III. STANDARD OF REVIEW
“With regard to our review of damage awards, ‘whether the trial court utilized the proper
measure of damages is a question of law that we [review] de novo.’” Jackson v. Bownas, No.
E2004-01893-COA-R3-CV, 2005 WL 1457752, *8 (Tenn. Ct. App. 2005) (citing Beaty v.
McGraw, 15 S.W.3d 819, 829 (Tenn. Ct. App. 1998)). “The amount of the award, however, is a
question of fact if within the limits set by law.” Id.; see Tenn. R. App. P. 13(a) and (d). This
court must review findings of fact de novo with a presumption of correctness for the trial court’s
findings of fact, unless against the preponderance of the evidence. Tenn. R. App. P. 13(d);
Brooks v. Brooks, 992 S.W.2d 403, 404 (Tenn. 1999). For the evidence to preponderate against
the trial court’s fact findings, “it must support another finding of fact with greater convincing
effect.” Jackson, 2005 WL 1457752, at *6; The Realty Shop Inc. v. R.R. Westminster Holding,
Inc., 7 S.W.3d 581, 596 (Tenn. Ct. App. 1999).
IV. DISCUSSION
A.
Every trespass gives the aggrieved party the right to nominal damages and all
consequential damages. Jackson, 2005 WL 1457752, at *8; Meighan v. U.S. Sprint Commc’ns
Co., 924 S.W.2d 632, 641 (Tenn. 1996); Schumpert v. Moore, 149 S.W.2d 471, 473 (Tenn. Ct.
App. 1940). In Tennessee, the rules for damages in trespass actions are to compensate the
injured party and to punish the trespasser and deter their wrongful conduct. Meighan, 924
S.W.2d at 641. Furthermore, Tennessee has long recognized the right of the injured party for
trespass to be awarded damages to the value of the use and their enjoyment of the property.
Jackson, 2005 WL 1457752, at *8; Anthony v. Constr. Prods., Inc., 677 S.W.2d 4, 10 (Tenn. Ct.
App. 1984); Citizens Real Estate & Loan v. Mountain States Dev. Corp., 633 S.W.2d 763, 767
(Tenn. Ct. App. 1981); see Cole v. Clifton, 833 S.W.2d 75, 76-77 (Tenn. Ct. App. 1992);
Uhlhorn v. Keltner, 723 S.W.2d 131, 135 (Tenn. Ct. App. 1986).
The trial court is afforded great deference in measuring damages in the context of
trespass on property:
We must remember that this is not a case in which there was a
legal or lawful taking of complainants’ land by eminent domain,
wherein the authorities cited by defendants’ counsel would apply.
This was a wilful (sic) taking or encroachment by the defendants
on complainants’ land without authority or legal sanction. The
courts can hardly be expected to sanction such action by holding
that, after one has unlawfully appropriated the property of another
and erected a building thereon, or otherwise appropriated to his
use, the only remuneration the owner can claim or expect is the
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market value of the property taken as measured by the formula laid
down in eminent domain cases involving a willing seller and
willing buyer.
Jones v. Morrison, 458 S.W.2d 434, 439 (Tenn. Ct. App. 1970). Moreover, “the trial’s court
(sic) determination about the amount of the award is accorded a presumption of correctness
which we will alter only ‘when the trial court has adopted the wrong measure of damages or
when the evidence preponderates against the amount awarded.’” Jackson, 2005 WL 1457752, at
*9 (citing Beaty, 15 S.W.3d at 829).
Although Perlaky presented the losses incurred by Raccoon Mountain Campground, LLC
as a result of the trespass, the trial judge declined to award these damages to Perlaky personally;
Raccoon Mountain Campground, LLC was not a party to the suit. The trial judge also found the
expert testimony on the estimate of lost timber profits unpersuasive. Thus, the trial court found
that the plaintiff did not present sufficient evidence of actual damages.
Even where no actual damages are proven, the plaintiff is still entitled to nominal
damages. Jackson, 2005 WL 1457742, at *8; Price v. Osborne, 147 S.W.2d 412, 413 (Tenn. Ct.
App. 1940); see 87 C.J.S. Trespass § 108. The trial court based Perlaky’s nominal damages on
the award given to the prevailing party in Price v. Osborne, and adjusted it for inflation, arriving
at $174.14. Price, 147 S.W.2d at 413. In our view, the evidence does not preponderate against
the nominal damages awarded to the plaintiff. Therefore, we affirm the decision of the trial
court.
B.
Attorney’s fees are not recoverable for trespass actions. Gottschall v. Fenn, 1986 WL
655, *6 (Tenn. Ct. App. Jan. 7, 1986); see also Caldwell v. Canada Trace, Inc., No. W2007-
00783-COA-R3-CV, 2008 WL 2901343, *2 (Tenn. Ct. App. 2008) (holding that attorney fees
are not recoverable as consequential damages in trespass actions). Tennessee follows the
American Rule with regard to attorney fees. Peach v. Medlin, No. W2003-02152-COA-R3-CV,
2004 WL 948481, *13 (Tenn. Ct. App. 2004) (citing John Kohl & Co. P.C. v. Dearborn &
Ewing, 977 S.W.2d 528, 534-35 (Tenn. 1998)):
The well-established American rule . . . provides that attorney’s
fees may not be awarded to the prevailing party absent statutory
authorization or an agreement between the parties so providing.
See, e.g., Olson v. Fraase, 421 N.W.2d 820, 828-29 (N.D. 1988);
Began v. Dixon, 547 A.2d 620, 624-25 (Del. Super. Ct. 1988);
Whitney v. Buttrick, 376 N.W.2d 274, 281 (Minn. App. 1985);
Stinson v. Feminist Women’s Health Center, 416 So. 2d 1183, 1185
(Fla. App. 1982); Sorenson v. Fio Rito, 90 Ill. App. 3d 368, 45 Ill.
Dec. 714, 413 N.E.2d 47, 51-58 (1980). Tennessee courts have
long adhered to the American rule, concluding that an award of
attorney’s fees as part of the prevailing party’s damages is contrary
to public policy. See, e.g., Pullman Standard v. Abex Corp., 693
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S.W.2d 336, 338 (Tenn. 1985); Gray v. Boyle Inv. Co., 803 S.W.2d
678, 684 (Tenn. Ct. App. 1990); John J. Heirigs Constr. Co. v.
Exide, 709 S.W.2d 604, 609 (Tenn. Ct. App. 1986); Pinney v.
Tarpley, 686 S.W.2d 573, 581 (Tenn. Ct. App. 1984); Goings v.
Aetna Casualty & Sur. Co., 491 S.W.2d 847, 848 (Tenn. Ct. App.
1972); Raskind v. Raskind, 325 S.W.2d 617, 625 (1959). [. . .]
Without an agreement between the parties or a controlling statute,
attorney’s fees [. . .] may not be awarded.
We are alerted to no statute, nor are we aware of one, permitting or
mandating the recovery of attorney’s fees in an action for
intentional or willful trespass. Moreover, in Gottschall v. Fenn,
this Court determined, inter alia, that attorney’s fees “are not in the
nature of damages recoverable for trespass.”
Peach, 2004 WL 948481, at *13 (citation omitted). As stated above, there is no current statutory
scheme for awarding attorney’s fees in trespass claims which would alert the opposing side to
the fact that the plaintiff sought such an award in this trespass action, nor was any mention made
of attorney’s fees in the pleadings, so attorney’s fees will not be awarded to Perlaky in this case.1
Finally, even if attorney’s fees were considered here as punitive damages, the trial court
must have awarded actual damages for punitive damages to be considered. Peach, 2004 WL
948481, at *13; see Davenport v. Chrysler Credit Corp., 818 S.W.2d 23 (Tenn. Ct. App. 1991).
The trial court did not award actual damages, so attorney’s fees cannot be awarded here as
punitive damages.
Based on case law precedent in Tennessee, the plaintiff may not be awarded attorney’s
fees in this trespass action. We thus affirm the trial court’s judgment denying an award of
attorney’s fees.
V. CONCLUSION
We affirm the decision of the trial court and remand this cause for all further proceedings
as may be necessary and consistent with this opinion. The costs of this appeal are assessed to the
appellant, Steve Perlaky.
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JOHN W. MCCLARTY, JUDGE
1
The plaintiff’s counsel wanted to create a legal foundation for obtaining attorney’s fees
by analogizing the instant case to qui tam and libel of title actions, but the trial judge found this
argument unpersuasive. See Tenn. Code Ann. § 4-18-101 et seq.
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