Thomas C. Farnsworth, Jr. v. Gary P. Faulkner ( 2001 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
May 1, 2001 Session
THOMAS C. FARNSWORTH, JR. v. GARY P. FAULKNER, ET AL.
Direct Appeal from the Chancery Court for Shelby County
No. 109428-3 D. J. Alissandratos, Chancellor
No. W2000-02031-COA-R3-CV - Filed August 2, 2001
This appeal arises from the trial court’s granting of a motion of summary judgment. The court ruled
that Shop had violated an Agreement which incorporated in its entirety a previous lease of certain
property. As a result, Owner was awarded the repair costs for certain repairs that Shop had been
responsible for under the lease. Owner was also awarded attorney’s fees and expenses. Shop
appealed, arguing that certain material facts were in dispute and thus summary judgment was
inappropriate. We affirm in part and reverse in part.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in part;
Reversed in part; and Remanded
DAVID R. FARMER , J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J., W.S.
and ALAN E. HIGHERS, J., joined.
Stuart B. Breakstone, Memphis, Tennessee, for the appellant, Gary P. Faulkner, individually and
doing business as Faulkner’s Body Shp, Inc., a/ka Gary Faulkner Body Shop, Inc.
E. Nicole Trail, Memphis, Tennessee, for the appellee, Thomas C. Farnsworth, Jr.
OPINION
In September, 1986, Faulkner’s Body Shop, Inc. (Shop),1 signed a lease with Thomas C.
Farnsworth, Jr. to rent property at 5161 Wilfong Road, Memphis, Tennessee in order to operate
1
Faulkner’s Body Shop, Inc. was also doing business under the name Gary Faulkner Body Shop, Inc.
its business.2 The lease covered a term of 120 months.3 In 1996, Shop requested permission to
assign the Lease to a third party. 4 A settlement agreement (Agreement) was executed in July,
1996 between Mr. Farnsworth, Shop and the third party providing for this assignment. The
Agreement provided that Shop “repair[] and restore[] the Leased Premises as required by the
Lease and as described below in this Agreement.” The Agreement contained specific terms
dealing with repair of the roof of the premise.
A dispute arose between the parties concerning several sets of repairs and who was
responsible for their cost. Shop argued that it had met its responsibility under the Agreement,
stating that the Agreement only incorporated certain parts of the prior lease. Mr. Farnsworth
argued that the prior lease was incorporated in its entirety. The parties also disputed whether
several specific repairs were required under either document. Mr. Farnsworth undertook these
repairs and filed suit seeking damages against Shop and Mr. Faulkner, claiming that Shop had
breached the Agreement.5
After several depositions were taken by the parties, Mr. Farnsworth filed a motion for
summary judgment. The trial court granted this motion, finding that Shop was guilty of a breach
of the Agreement. As a result, the court awarded damages totaling $40,717.21 and attorney’s
fees and expenses in the amount of $25,000.6 Shop appealed, claiming that genuine and material
issues of fact remained to be decided and that summary judgment was inappropriate.
The issues, as we perceive them, are as follows:
I. Did the trial court err in determining that the Agreement adopted the lease
in its entirety?
II. Did the trial court err through its determination that Shop was responsible
to pay Mr. Faulkner’s attorney’s fees?
III. Did the trial court err through its determination that Shop was responsible
to pay for repairs to the premise?
2
Gary P. Faulkner, the president of Faulkner Body Shop, Inc., individually guaranteed the obligations under
the lease and all subseq uent agreem ents.
3
The lease was draf ted by M r. Farnsw orth.
4
The assignees were Jim Richardson, Joe Richardson and Don Vestal. These parties are not involved in the
case curre ntly befo re this cour t.
5
Mr. Farnsw orth brough t suit against Mr. Faulkn er individually as gu arantor of Sho p’s obligations.
6
The trial court, in its July 21, 2000 order references an Exhibit A, which con tains “a detailed list of each cost
and the interest on such.” However, no such Exhibit A was included in the record.
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IV. Did the trial court err in granting Mr. Farnsworth’s motion for summary
judgment where Shop disputed the repair costs of certain damages?
When reviewing a grant of summary judgment, an appellate court must
decide anew if judgment in summary fashion is appropriate. Cowden v. Sovran
Bank, 816 S.W.2d 741, 744 (Tenn. 1991); Gonzalez v. Alman Constr. Co., 857
S.W.2d 42, 44-45 (Tenn. Ct. App. 1993). Since this determination involves a
question of law, there is no presumption of correctness as to the trial court's
judgment. Robinson v. Omer, 952 S.W.2d 423, 426 (Tenn. 1997); Hembree v.
State, 925 S.W.2d 513, 515 (Tenn. 1996). In making our determination, we must
view the evidence in the light most favorable to the nonmoving party, and we
must draw all reasonable inferences in favor of that party. Byrd v. Hall, 847
S.W.2d 208, 210-11 (Tenn. 1993). Summary judgment is appropriate only if there
are no genuine issues of material fact and then only if the undisputed material
facts entitle the moving party to a judgment as a matter of law. Tenn. R. Civ. P.
56.04; Byrd, 847 S.W.2d at 211.
Phung v. Case, No. 03A01-9811-CV-00388, 1999 WL 544650, at *2 (Tenn. Ct. App. July 28,
1999).
Adoption of the Lease in the Agreement
Mr. Farnsworth, in his motion for summary judgment, argued that he “entered into a
Lease and a subsequent Agreement with [Shop] and that [Shop] breached both the Lease and
Agreement causing [him] to incur significant damages as well as attorney’s fees and court costs.”
As such, Mr. Farnsworth argued that no genuine issue of material fact existed and that he was
entitled to judgment as a matter of law. The trial court agreed and awarded Mr. Farnsworth
damages, attorney’s fees and expenses.
It is clear that the Agreement between the parties “set[] forth the entire understanding of
the parties, replacing any and all prior agreements relating to the subject matter.” Shop argued
that this term intended the Agreement to replace all but selected portions of the lease. However,
Mr. Farnsworth argued, and the trial court clearly agreed, that the section of the Agreement that
stated that “[a]ll relevant terms of the Lease are incorporated into this Agreement by reference”
incorporated the lease between the parties in its entirety into the Agreement. Thus, in order to
properly review this case, it is first necessary for this court to examine the Agreement to
determine if the trial court was correct in its construction of the terms of the Agreement.
The rules of contract construction must be applied to resolve any conflict between
contracting parties. See Coble Sys., Inc. v. Gifford Co., 627 S.W.2d 359, 363 (Tenn. Ct. App.
1982).
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First and most important is the primary rule that the intent of the parties must
prevail. Ohio Cas. Co., Inc. v. Travelers Indemnity Company, 493 S.W.2d 465(Tenn. 1973). Second, the courts will construe the writing so as to avoid the
conflict if possible. Bartlett v. Phillips-Cary Mfg. Co., 392 S.W.2d 325 (Tenn.
1965). Third, if the provisions are so repugnant that they cannot stand together,
the first shall be given effect and the latter rejected. 17 Am. Jur. Contracts, § 267;
Bartlett v. Phillips-Cary Mfg. Co., supra; Smithart v. John Hancock Mut. Life
Insurance Company, 71 S.W.2d 1059 (Tenn. 1934). Fourth, written or
typewritten terms will control printed parts of an agreement where there is an
apparent inconsistency. 17 Am. Jur.2d Contracts, § 271; Tindell v. Bowers, 216
S.W.2d 752 (Tenn. 1949). Fifth, doubtful language in a contract should be
interpreted most strongly against the party who drew or prepared it. 17 Am.
Jur.2d Contracts, § 276; Fuller v. Orkin Exterminating Co. Inc., 545 S.W.2d 103(Tenn. Ct. App. 1975). This last rule is to be applied, however, only where other
rules of construction fail to give certainty to the written expression. 17 Am.
Jur.2d Contracts, § 276; Crouch v. Shepard, 44 Tenn. 383 (1867).
Coble Sys., Inc., 627 S.W.2d at 363.
In examining the case before us, we find that section eleven of the Agreement clearly
intended to adopt “all relevant terms of the Lease” into the agreement. The parties disagree on
whether it was their intention that this term to adopt the lease in its entirety. Thus, it is necessary
for us to continue our examination. In doing so, we find that the Agreement has no conflicting
terms and that, contrary to the claims of Shop, contains no repugnant terms.7 As this case does
not involve any conflict over typed or handwritten terms taking precedence over printed
language, we are left to consider the fifth rule of construction. The fifth rule states that “doubtful
language in a contract should be interpreted most strongly against the party who drew or prepared
it.” Id. In this case, Mr. Farnsworth drafted the agreement, thus, any doubtful language in the
Agreement must be interpreted in favor of Shop.
The trial court accepted Mr. Farnsworth’s argument that the language, “all relevant terms
of the Lease,” should be interpreted to mean “all terms of the Lease.” The court clearly erred in
this determination. “All relevant terms of the Lease” is clearly “doubtful language” that could be
interpreted as representing the desire to adopt all terms of the previous lease or only some of the
terms of the previous lease. As Mr. Farnsworth drafted the Agreement, this court must interpret
7
Shop claims that several terms in the Agreement are repugnant. The specific terms require that Shop pay for
repairs to the roof before the assignment of the property to the third party as well as providing $4,568 to com pensate
Mr. Farnsw orth for re pairs to the roof that w ill be re quire d in the future due to the re mova l of ce rta in e quipme nt . We
do not fin d these term s to be repu gnant.
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the Agreement in Shop’s favor and thus find that the former lease was not adopted in its entirety
in the Agreement.8
Attorney’s Fees
It is a general rule in this State that litigants must pay their own attorney
fees. Howard G. Lewis Const. Co., Inc. v. Lee, 830 S.W.2d 60, 64 (Tenn. Ct.
App. 1991). In the absence of a statutory provision or a contractual agreement
between the parties, attorney fees, incurred by a litigant, are not a proper element
of damages. John J. Heirigs Const. Co., Inc. v. Exide, 709 S.W.2d 604, 609
(Tenn. Ct. App. 1986); Goings v. Aetna Cas. & Sur. Co., 491 S.W.2d 847, 848
(Tenn.Ct. App. 1972). Such an award is contrary to the public policy of
Tennessee. Howard G. Lewis Const. Co., Inc., 830 S.W.2d at 64.
Morrow v. Bobbitt, 943 S.W.2d 384, 392 (Tenn. Ct. App. 1996).
The trial court awarded attorney’s fees to Mr. Farnsworth under a section included in the
original lease.9 This award was in error. Upon our review, we find nothing in the Agreement to
suggest that the section allowing recovery of attorney’s fees under the lease was a “relevant term”
that the parties intended to be included in the Agreement. To find otherwise would be to
interpret the doubtful language of the Agreement in favor of Mr. Farnsworth. Such an
interpretation would be in violation of the fifth rule of contract construction. As such, the trial
court’s award of attorney’s fees to Mr. Farnsworth is hereby reversed.
Repairs under the Agreement
If the language of a contract is
plain, simple and unambiguous . . . “it is the function of a court to interpret and
enforce contracts as they are written, notwithstanding they may contain terms
which may be thought harsh and unjust. A court is not at liberty to make a new
contract for parties who have spoken for themselves.”
Petty v. Sloan, 277 S.W.2d 355, 359 (Tenn. 1955) (citing Smithart v. John Hancock Mut. Life
Ins. Co., 71 S.W.2d 1059, 1063 (Tenn. 1934)).
8
W e note that the Agreement involved three parties, Mr. Farnsworth, Shop and the third party assignee. Our
findings in this matter are not intended to determine which terms of the previous lease apply to the third party assignee.
9
The Agreement does not contain any terms allowing for the recovery of attorney’s fees
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Upon our review, we find that the Agreement contains “plain, simple and unambiguous”
language as it refers to the repairs that Shop is contracted to make to the premises. Id. The
Agreement states that Shop “will . . . cause the Leased Premises to comply with the requirement
of the Lease including, but not limited to, all of the repairs and work described.” Thus, it is clear
that Shop was required under the Agreement to “repair[] and restore[] the Leased Premises as
required by the Lease.” Thus, the trial court properly found that Shop was bound under the
Agreement to make all repairs required under the lease, and we hereby affirm this finding.
Disputed Damages
In determining whether or not a genuine issue of material fact exists for
purposes of summary judgment, courts in this state have indicated that the
question should be considered in the same manner as a motion for directed verdict
made at the close of the plaintiff's proof, i.e., the trial court must take the strongest
legitimate view of the evidence in favor of the nonmoving party, allow all
reasonable inferences in favor of that party, and discard all countervailing
evidence. Downen v. Allstate Ins. Co., 811 S.W.2d 523, 524 (Tenn. 1991); Poore
v. Magnavox Co., 666 S.W.2d 48, 49 (Tenn. 1984); Dunn v Hacket, 833 S.W.2d
78, 80 (Tenn. Ct. App. 1992); Wyatt v. Winnebago Industries, Inc., 566 S.W.2d
276, 279 (Tenn. Ct. App. 1977); Taylor v. Nashville Banner Pub. Co., 573
S.W.2d 476, 480 (Tenn. Ct. App. 1978). Then, if there is a dispute as to any
material fact or any doubt as to the conclusions to be drawn from that fact, the
motion must be denied. Poore, 666 S.W.2d at 49 (“[I]f the mind of the court
entertains any doubt whether or not a genuine issue exists as to any material fact it
is its duty to overrule the motion.”); Dooley v. Everett, 805 S.W.2d 380, 383
(Tenn. Ct. App. 1990).
Byrd v. Hall, 847 S.W.2d 208, 210-11 (Tenn. 1993).
In this case, the trial court found that Shop was responsible for all repairs due under the
lease. For the reasons stated above, we agree. However, Shop disputed the costs of several
repairs, citing testimony in various depositions. Specifically, Mr. Faulkner, in his June 7, 2000
deposition, stated that it was his belief that “the paint on the exterior of the building could have
been easily matched requiring only portions of the exterior to be repainted rather than the entire
exterior of the building.” Thus, in effect, Shop argues that Mr. Farnsworth could have avoided a
portion of the costs awarded by the trial court for this repair.
In addition, Shop cited testimony in a deposition by the property manager of Mr.
Farnsworth in which the manager stated that Shop was only responsible for repairs that would
restore the building to its condition at the beginning of the lease.10 This manager also stated that
he was unsure if several fire doors had been installed on the property at the beginning of the
10
This limita tion is also listed u nder the r epair sectio n of the lea se.
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lease. Mr. Farnsworth, in his own deposition, also stated that he was uncertain if the fire doors
had been in place at the time the lease began. Thus, Shop disputed whether the repair costs for
the fire doors should have been included in the trial court’s summary judgment award.
Clearly, Shop has sufficiently disputed Mr. Farnsworth’s factual claims in these matters
such that it was inappropriate for the trial court to award these repairs on a summary judgment
motion. As a result, we hereby reverse that portion of the trial court’s damage award that
represents the cost of the repairs for painting the exterior of the building and repairing the fire
doors, as well as any interest that arose from those awards. These issues are remanded to the trial
court in order for it to make a factual determination of what portion of those repair costs, if any,
for which Shop was liable. The remainder of the trial court’s award for damages is affirmed.11
Conclusion
Based on the foregoing conclusion, the trial court is affirmed in part and reversed in part.
Cost on appeal are to be taxed equally to plaintiff, Thomas C. Farnsworth, and defendants, Gary
P. Faulkner and Faulkner’s Body Shop, Inc., and their sureties, for which execution may issue if
necessary.
___________________________________
DAVID R. FARMER, JUDGE
11
As we lack E xhibit A of the trial court o rder, we cann ot give a specific dollar am ount for these rep airs.
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