Poats v. Nelson ( 1997 )

IN THE COURT OF APPEALS OF TENNESSEE
FILED
GERALD POATS and ) C/A NO. 03A01-9704-CH-00138
CECILIA E. POATS, ) October 30, 1997
)
Plaintiffs-Appellants, ) Cecil Crowson, Jr.
) Appellate C ourt Clerk
) APPEAL AS OF RIGHT FROM THE
) McMINN COUNTY CHANCERY COURT
v. )
)
)
)
CHARLES E. NELSON, )
) HONORABLE EARL H. HENLEY,
Defendant-Appellee. ) CHANCELLOR
For Appellants For Appellee
BOYD W. VENABLE, III JEFFREY L. CUNNINGHAM
Shanks & Blackstock Carter, Harrod & Cunningham
Knoxville, Tennessee Athens, Tennessee
OPINION
AFFIRMED AND REMANDED Susano, J.
1
This case arose out of a contract for the sale of real
estate. The plaintiffs, Gerald Poats and his wife Cecilia E.
Poats (collectively, “the Poats”), sued Charles E. Nelson
(“Nelson”), claiming that Nelson had breached a contract for the
conveyance of two lots in an “airpark” subdivision with access to
the McMinn County Airport. At the close of the Poats’ proof, the
trial court granted Nelson’s motion to dismiss the complaint
pursuant to Rule 41.02(2), Tenn.R.Civ.P. The Poats appealed,
raising two issues which present the following questions for our
review:
1. Where Nelson contracted to sell the Poats
two lots in a subdivision and the Poats paid
for the two subdivision lots, would knowledge
by the Poats of some further approval
necessary for airport access bar an action
for breach of contract, in light of the fact
that Nelson assured the Poats that such
approval would be granted and was a mere
formality?
2. Did Nelson’s use of a plat map,
restrictions, and references to the Lot
numbers in the Bills of Sale constitute a
violation of T.C.A. § 13-3-410, and as a
result of that violation should the trial
court have granted such relief as was
equitably appropriate under the
circumstances?
Nelson raises the following issues in his brief:
1. Did the Chancellor correctly dismiss the
plaintiffs’ claims of negligent
misrepresentation or fraudulent inducement to
contract, when the truth and facts of the
alleged misrepresentation were known to the
plaintiffs prior to entering into the
contract?
2. Is a private right of action pursuant to
T.C.A. § 13-3-410 available to the plaintiffs
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when the same has not been pled in the
complaint as a ground for equitable relief?
3. Are the plaintiffs’ claims barred by the
doctrine of merger?
4. Are the plaintiffs’ claims barred by the
statute of limitations?
We affirm.
I
The Poats and Nelson became acquainted through their
membership in the Swift Association, a national organization,
based in Athens, Tennessee, of owners of Swift Airplanes. At a
1986 Swift Association convention, Nelson, who was the president
of the Swift Association, approached the Poats about purchasing a
lot in a planned subdivision in Athens. The subdivision was to
consist of lots that were suitable for the construction of homes
and airplane hangars. Each lot would also provide access to the
McMinn County Airport.
In December, 1986, the Poats met with Nelson to discuss
purchasing a lot in the subdivision. Nelson showed them a plat
map, which was designated as a “proposal” for the “McMinn County
Airpark.” On December 30, 1986, the Poats and Nelson executed
two bills of sale, by which the Poats purchased two lots in the
“McMinn Co. Airpark.” Mr. Poats testified that, at the time of
the conveyances, he was aware that airport access for the
subdivision had not yet been approved. Nelson, however, assured
the Poats that a majority of the local county commissioners
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supported his plan, and that there would be little difficulty in
obtaining approval for access to the airport.
In April, 1987, the Poats received the warranty deeds
for the two lots and commenced the construction of an airplane
hangar on the property. They subsequently sold their home in
Indiana and moved to Athens. As promised, Nelson petitioned the
County Commission for permission to build his proposed airpark.
Mr. Poats attended some meetings of the Commission’s Airport
Committee with Nelson. In the meantime, the Poats built a home
on their new property. Nelson ultimately addressed the County
Commission on September 19, 1989, at which time the Commission
refused to approve airport access for the subdivision. Nelson
subsequently presented a different proposal and filed complaints
in the McMinn County Chancery Court and with the Federal Aviation
Administration, all of which proved to be unsuccessful.
As a result of the denial of airport access to the
subdivision, the Poats could no longer house their aircraft in
the hangar on their property, since the expense and effort
involved in transporting the plane to the airport was
substantial. They instead were required to rent hangar space at
the airport. They subsequently filed this action, claiming that
Nelson had breached the bills of sale by failing to provide lots
with airport access, i.e, lots in an “airpark” subdivision.
Arguing that they would not have purchased the subject property
had they known that approval of the airpark and access to the
airport would be denied, the Poats sought damages for breach of
contract, or, in the alternative, rescission of the bills of
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sale1. Following the presentation of the Poats’ proof, Nelson
moved for an involuntary dismissal pursuant to Rule 41.02(2),
Tenn.R.Civ.P. The trial court granted Nelson’s motion, finding
that the Poats
...had shown no right to relief in this cause
in that [they] knew at the time of the
transactions in question... that the proposed
airpark had not been approved. The Court
further finds that while both the plaintiffs
and the defendant may have expected approval
of the proposed airpark at an uncertain time
in the future, that such expectation was not
a certainty and that all parties knew of the
uncertainty at the time of entering into the
transaction....
The trial court thus dismissed the Poats’ complaint, and this
appeal followed.
II
In the case of Atkins v. Kirkpatrick, we addressed the
procedures by which a trial court is to determine whether to
grant a Rule 41.02(2) motion for involuntary dismissal:
If a motion to dismiss is made at the close
of Plaintiffs’ proof in a non-jury case,
under T.R.C.P. Rule 41.02(2), the trial court
must impartially weigh and evaluate the
evidence just as though it were making
findings of fact and conclusions of law after
presentation of all the evidence. If the
plaintiff’s case has not been established by
a preponderance of the evidence, the case
should be dismissed if, on the facts found in
the applicable law, plaintiff has shown no
1
At oral argument, counsel for the Poats stated that his clients are not
seeking rescission of the bills of sale; likewise, the Poats do not raise the
question of rescission in their brief. Thus, we need not consider whether
that doctrine is applicable to the facts before us.
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right to relief. City of Columbia v. C.F.W.
Construction Co., 557 S.W.2d 734 (Tenn.1977).
Atkins v. Kirkpatrick, 823 S.W.2d 547, 552 (Tenn.App. 1991); see
also Smith v. Inman Realty Co., 846 S.W.2d 819, 822 (Tenn.App.
1992) and Derryberry v. Hill, 745 S.W.2d 287, 290 (Tenn.App.
1987).
Our standard of review of a trial court’s decision to
grant an involuntary dismissal under Rule 41.02(2) is in
accordance with Rule 13(d), T.R.A.P. Atkins, 823 S.W.2d at 552;
Irvin v. City of Clarksville, 767 S.W.2d 649, 653 (Tenn.App.
1988); Derryberry, 745 S.W.2d at 290. Thus, we are required to
review the record de novo and to presume that the factual
findings of the trial court are correct, unless the evidence
preponderates otherwise. Rule 13(d), T.R.A.P.; Atkins, 823
S.W.2d at 552; Irvin, 767 S.W.2d at 653; Derryberry, 745 S.W.2d
at 290.
III
We shall first address the question of whether the
trial court properly dismissed the Poats’ complaint. The Poats
argue that the trial court erred in dismissing their claim
because they knew, at the time of contracting, that further
governmental approval was necessary to procure airport access.
They contend that Nelson’s assurance that obtaining such approval
was a mere formality constitutes a misrepresentation sufficient
to give rise to an action for breach of the bills of sale. In
6
short, the Poats argue that they did not receive what they had
contracted for -- two lots in an airpark subdivision, with access
to the airport.
Nelson, on the other hand, contends that the trial
court properly dismissed the complaint, given the Poats’
knowledge of the uncertainty surrounding the approval of airport
access. Nelson also argues that the Poats’ claim is more
properly characterized as a claim for misrepresentation or
fraudulent inducement to contract.
Although we disagree with Nelson’s assessment of the
nature of the Poats’ claim, we believe that the trial court
correctly granted a dismissal under Rule 41.02(2), Tenn.R.Civ.P.
The proof clearly establishes that, at the time they entered into
the transactions, the Poats were aware that approval had not been
obtained for access to the airport. Mr. Poats testified that
when he purchased the property, he knew that the County
Commission had not taken official action to approve the airpark.
Therefore, the granting of access to the airport was
not a certainty at the time the bills of sale were executed, but
was merely an event that the parties expected would occur at some
point in the future. Furthermore, there is nothing in the
contracts or elsewhere in the record to indicate that Nelson’s
assurances rose to the level of a guarantee or warranty. Given
the knowledge of the parties, the use of the term “airpark” in
the bills of sale cannot provide the basis for a breach of
contract claim. The Poats were aware that the ultimate decision
7
regarding airport access rested not with Nelson, but with the
appropriate governmental entities. Having used his best efforts
to obtain approval of such access, Nelson cannot be found to have
breached the contracts simply because the anticipated approval
was never granted. Under these circumstances, therefore, the
Poats have shown no right to relief. Atkins, 823 S.W.2d at 552.
IV
The Poats also contend that Nelson’s use of a
subdivision plat map, restrictions and lot numbers in selling the
subject lots constitutes a violation of T.C.A. § 13-3-410, which
prohibits a sale of land
...by reference to or exhibition of or by
other use of a plat of subdivision of such
land without having submitted a plat of such
subdivision to the regional planning
commission and obtained its approval....
Id. They argue that such violation entitles them to equitable
relief.
Our review of the record reveals that the Poats did not
raise this issue prior to this appeal. It is well-established
that issues not raised at the trial level will not be considered
for the first time on appeal. Book-Mart of Florida v. National
Book Warehouse, 917 S.W.2d 691, 694 (Tenn.App. 1995); Sparks v.
Metropolitan Gov’t of Nashville and Davidson County, 771 S.W.2d
430, 434 (Tenn.App. 1989). For this reason, we will not address
the Poats’ second issue.
8
Accordingly, we hold that the trial court properly
dismissed the Poats’ complaint in accordance with Rule 41.02(2),
Tenn.R.Civ.P. In light of this conclusion, it is not necessary
that we reach the additional issues raised by Nelson.
The judgment of the trial court is affirmed. Costs on
appeal are taxed to the appellants and their surety. This case
is remanded to the trial court for the collection of costs
assessed there, pursuant to applicable law.
__________________________
Charles D. Susano, Jr., J.
CONCUR:
_________________________
Houston M. Goddard, P.J.
_________________________
Don T. McMurray, J.
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