Volunteer Concrete Walls v. Community Trust & Banking Co., and Construction Consultants, Inc. ( 2006 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
September 21, 2006 Session
VOLUNTEER CONCRETE WALLS, LLC., v. COMMUNITY TRUST &
BANKING CO., AND CONSTRUCTION CONSULTANTS, INC.
Direct Appeal from the Chancery Court for Hamilton County
No. 05-0368 Hon. Howell N. Peoples, Chancellor
No. E2006-00602-COA-R3-CV - FILED DECEMBER 4, 2006
In this breach of contract action, the Chancellor dismissed the Complaint and Counter-Complaint
and Ordered plaintiff to remove the lien on the property where the construction of a wall was placed.
We affirm.
Tenn. R. App. P.3 Appeal as of Right; Judgment of the Chancery Court Affirmed.
HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the court, in which CHARLES D. SUSANO ,
JR., J., and SHARON G. LEE, J., joined.
Michael A. Wagner, Chattanooga, Tennessee, for appellant.
John T. Rice, Chattanooga, Tennessee, for appellees.
OPINION
In this action, Community Trust and Banking Company (“CTBC”) retained
Construction Consultants, Inc. (“CC”) as the general contractor for the construction of a bank facility
in Ooltewah, Tennessee (the “CTBC Property”). CC asked Volunteer Concrete Walls, LLC
(“VCW”) to pour a concrete wall at the site. In October 2004, VCW provided CC with a “Verbal
Quotation Order” providing an initial estimate. After various revisions, the last estimate recorded
on the Verbal Quotation Order was $19,760. Jim Simmons, CC’s project superintendent, signed
this Verbal Quotation Order on December 17. On December 20, CC prepared a contract for VCW,
but did not present it to VCW. In January 2005, VCW spent four or five days constructing the wall,
and on January 21, VCW sent CC an invoice for $20,835. After VCW left the work site, Alan Bone,
VCW’s principal, called CC’s offices to “mak[e] sure everyone was happy.” During the
conversation, Bone learned that CC required additional paper work, and a few days later, Bone
received a contract in the mail from CC. Bone called CC’s principal, Bruce Case, and refused to
sign the contract. Bone also faxed a copy of the Verbal Quotation Order to CC on the same day, and
on February 23, CC issued a check to VCW for $17,784.1 On March 7, VCW filed a lien upon the
CTBC Property in the amount of $21,352.
On April 4, VCW filed a Complaint against CC and CTBC, alleging that the Verbal
Quotation Order signed by Jim Simmons constituted a binding contract and that CC had breached
that contract. CC answered, denying the Verbal Quotation Order constituted a contract and that
VCW failed to complete the work for which it was hired. The Answer included a Counter-
Complaint alleging that VCW breached its contract by providing substandard and incomplete work.
The Chancery Court held a bench trial, and following trial the Court filed a
Memorandum Opinion which found that there was no evidence that Jim Simmons was authorized
to sign any contracts, and VCW was entitled to recover only under a quantum meruit theory. The
Chancellor also found that there was no evidence of the value of the work that was done; the wall,
as constructed by VCW, did not meet industry standards; and there was no evidence of what the
parties actually intended to have done. Accordingly, the Court dismissed both the original
Complaint and the Counter-Complaint, and the costs were taxed among the parties. Subsequently,
the Chancery Court entered an Order requiring VCW to remove the lien with the cost of removal
split equally between the plaintiff and defendants.
This appeal ensued, and in non-jury cases, we review the Trial Court’s decision de
novo upon the record of the proceedings below. Keaton v. Hancock County Bd. of Educ., 119
S.W.3d 218, 222 (Tenn. Ct. App. 2003). We presume the Chancellor’s findings of fact are correct,
unless the evidence preponderates to the contrary. Tenn. R. App. P. 13(d). This presumption of
correctness, however, does not apply to the Court’s conclusions of law. Keaton, 119 S.W.3d at 222.
At the close of VCW’s proof, the defendants moved orally for “a directed verdict.”
The Trial Court neither granted nor denied the motion at that time. The defendants then presented
their evidence, and on appeal, the defendants argue the Chancery Court erred in not granting the
“directed verdict” at the close of VCW’s proof.
“Motions for a directed verdict are neither necessary nor proper in a case which is
being tried without a jury.” City of Columbia v. C.F.W. Constr. Co., 557 S.W.2d 734, 740 (Tenn.
1977). The proper procedure in such cases is to move for an involuntary dismissal pursuant to Tenn.
R. Civ. P. 41.02(2). When a party improperly moves for a directed verdict during a bench trial, the
courts should treat the motion as one for an involuntary dismissal. See Scott v. Pulley, 705 S.W.2d
1CC determined this amount by deducting a 10% retainage from the $19,760 estimate in the
Verbal Quotation Order.
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666, 672 (Tenn. Ct. App. 1985).
In this case, the defendants’ presentation of proof constitutes a waiver of their right
to appeal the Chancery Court’s treatment of their motion. We have held that when a Tenn. R. Civ.
P. 41.02(2) motion is denied, “the moving party may stand on its motion and bring an appeal or
present its evidence; it cannot do both.” Adelsperger v. Adelsperger, 970 S.W.2d 482, 484 (Tenn.
Ct. App. 1997). When the moving party presents its own proof after challenging the legal
sufficiency of its adversary’s proof, the moving party waives any right to insist that the fact finder
subsequently look exclusively at its adversary’s evidence. See Nashville Ry. & Light Co. v.
Henderson, 99 S.W. 700 (Tenn. 1907).2
VCW’s Complaint alleged that CC signed the Verbal Quotation Order, which became
an enforceable contract. The Chancery Court found that, although CC’s superintendent signed the
Verbal Quotation Order, there was no evidence that he had authority to do so; and the Order was not
enforceable.
VCW argues the Verbal Quotation Order was an enforceable contract because
Simmons had authority to sign on behalf of CC., and an agent’s authority consists of both actual
authority and apparent or ostensible authority. Milliken Group, Inc. v. Hays Nissan, Inc., 86 S.W.3d
564, 567 (Tenn. Ct. App. 2001). Actual authority “‘consists of the powers which a principal directly
confers upon an agent or causes or permits him to believe himself to possess.’” Id. (quoting 2A
C.J.S. Agency § 147 (1972)). At trial, CC’s president, Bruce Case, testified that Jim Simmons was
CC’s superintendent on the job. He testified that, although Mr. Simmons had authority to sign orders
for extra work, he did not have authority to sign contracts on behalf of CC. The evidence does not
preponderate against the Trial Court’s finding that Simmons did not have actual authority to sign the
contract. The issue thus becomes whether Simmons had apparent authority to sign the Verbal
Quotation Order on CC’s behalf. Apparent authority exists when a principal’s conduct clothes the
agent with the appearance of authority. S. Ry. Co. v. Pickle, 197 S.W. 675, 677 (Tenn. 1917). The
principal’s conduct establishes apparent authority if “(1) the principal actually or negligently
acquiesced in another party’s exercise of authority; (2) the third person had knowledge of the facts
and a good faith belief that the apparent agent possessed such authority; and (3) the third person
relied on this apparent authority to his or her detriment.” White v. Methodist Hosp. South, 844
S.W.2d 642, 646 (Tenn. Ct. App. 1992). The second element requires the third party (i.e., VCW)
to show that it was actually aware of the facts which allegedly gave the agent apparent authority.
VCW argues that CC clothed Mr. Simmons with apparent authority by employing
him as superintendent at the job site. Yet, VCW presented no witnesses who were present when Mr.
Simmons signed the Verbal Quotation Order, and consequently provided no evidence of what facts
were actually known by VCW’s representatives. VCW’s only witness was its owner, Alan Bone,
but Mr. Bone admitted that he had no personal knowledge of the circumstances surrounding
2
Nashville Ry. & Light Co., indicates that this principle applied to motions for involuntary
nonsuit. The modern involuntary dismissal is analogous to the involuntary nonsuit.
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Simmons’s signature. Bone then testified that Dewayne Roberts was present when Simmons signed
the Verbal Quotation Order, but VCW did not call either Roberts or Simmons as witnesses. There
is nothing in the Record to indicate that these individuals were not available to testify, and a party’s
failure to call a witness with particular knowledge of the facts, who would naturally favor that party’s
position, generally raises an inference that the testimony would have been unfavorable to the party
who failed to call that witness. Milliken Group, Inc., 86 S.W.3d at 569. The evidence does not
preponderate against the Chancellor’s finding that there was no evidence of Simmons’s alleged
authority to sign the Verbal Quotation Order on CC’s behalf. Tenn. R. App. P. 13(d).
The Trial Court also addressed whether VCW was entitled to recover its claim for
$3,051 in quantum meruit, and dismissed the claim because “[t]here [was] no evidence of the value
of the work that was done.” VCW disputes this finding and argues that the Verbal Quotation Order
shows “what was being charged for everything.” However, “[Q]uantum meruit recoveries are limited
to the actual value of the goods or services, not their contract price.” Castelli v. Lien, 910 S.W.2d
420, 427 (Tenn. Ct. App. 1995). VCW presented no evidence of the actual value of the services or
the extent to which it made a profit or a loss on the work. Cases clearly hold that evidence of the
contract price, alone, is not sufficient to support an action in quantum meruit. Warren Bros. Co. v.
Metro. Gov’t of Nashville and Davidson County, 540 S.W.2d 243, 247 (Tenn. Ct. App. 1976); see
also John J. Heirigs Const. Co. v. Exide, 709 S.W.2d 604, 607 (Tenn. Ct. App. 1986); Lange v.
Wright, No. M2001-02368-COA-R3-CV, 2002 WL 31467882, at *2 (Tenn. Ct. App. Nov. 6, 2002).
We pretermit plaintiff’s remaining issues because of our holdings on the foregoing
issues.
Finally, defendants argue that the Trial Court erred in dismissing their Counter-Claim.
At trial, the defendants presented evidence that the Verbal Quotation Order was not an enforceable
contract, but they did not present sufficient evidence of the parties’ intentions to establish an
alternate enforceable contract between the parties. They did not satisfy this element, and their breach
of contract action was properly dismissed by the Chancellor.
Defendants also requested damages against VCW, pursuant to T.C.A. § 27-1-122,
for filing a frivolous appeal. This statute “must be interpreted and applied strictly so as not to
discourage legitimate appeals.” Davis v. Gulf Ins. Group, 546 S.W.2d 583, 586 (Tenn. 1977). A
debatable factual or legal dispute will preclude an award of damages for frivolous appeal. Anderson
v. Dean Truck Line, Inc., 682 S.W.2d 900, 902 (Tenn. 1984); Davis, at 586. VCW presented
debatable, factual and legal disputes. Accordingly, an award of damages for filing a frivolous appeal
is not warranted in this case.
In conclusion, the defendants’ complain about the Chancery Court’s allocation of cost
between the plaintiff and defendants for the removal of the lien on the property. However,
defendants cited no authority in support of their position, and “Where a party makes no legal
argument and cites no authority in support of a position, such issue is deemed waived and will not
be considered on appeal.” Branum v. Akins, 978 S.W.2d 554, 558 (Tenn. Ct. App. 1998); see also
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Tenn. R. App. P. 27(a)(7), (b).
We affirm the Chancery Court’s dismissal of VCW’s Complaint and defendants’
Counter-Complaint, and tax the cost equally between the plaintiff and defendants.
______________________________
HERSCHEL PICKENS FRANKS, P.J.
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