The opinion
07/02/2024
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 10, 2024 Session
F.W. WHITE & ASSOCIATES, LLC, ET AL. v. JOHN R. CHILTON, ET AL.
Appeal from the Chancery Court for Anderson County
No. 15CH7230 Don R. Ash, Senior Judge
No. E2023-00414-COA-R3-CV
This appeal arises from a business relationship that deteriorated. F.W. White & Associates,
LLC (“FWA”), through Fenton W. White, Jr. (“White”) (“Appellees,” collectively), sued
John R. Chilton (“Chilton”), Centennial Village Apartments, LLC, and Centennial Village
Development, LLC (“Appellants,” collectively) in the Chancery Court for Anderson
County (“the Trial Court”) for breach of contract and quantum meruit. Appellants, in turn,
sued Appellees for slander of title based on Appellees’ having recorded a document
asserting an interest in the real property at issue. Appellants also sued FWA’s attorney
Gregory Pratt (“Pratt”), who recorded the document. The Trial Court granted summary
judgment to Pratt based on the litigation privilege. Following a bench trial, the Trial Court
awarded FWA judgment against Appellants in the amount of $125,000.00 for money owed
under a May 2008 consulting agreement (“the 2008 Agreement”). Regarding Appellants’
slander of title claim, the Trial Court found that White believed he was owed money and
did not act maliciously. Appellants raise several issues on appeal. Meanwhile, Appellees
contend that the Trial Court erred in declining to award FWA its attorney’s fees and costs
under the 2008 Agreement. We affirm the Trial Court. On remand, the Trial Court is to
determine and award to FWA its reasonable attorney’s fees and costs incurred on appeal
related to the enforcement of the 2008 Agreement.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed;
Case Remanded
D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and THOMAS R. FRIERSON, II, JJ., joined.
Gregory Brown and G. Alan Rawls, Knoxville, Tennessee, for the appellants, John R.
Chilton, Centennial Village Apartments, LLC, and Centennial Village Development, LLC.
Matthew A. Grossman and Rebekah P. Harbin, Knoxville, Tennessee, for the appellees,
F.W. White & Associates, LLC, and Fenton W. White, Jr.
W. Morris Kizer, Knoxville, Tennessee, for the appellee, Gregory Pratt.
OPINION
Background
In July 2007, FWA entered into an agreement with Centennial Village
Development, LLC, under which FWA would provide consulting services. FWA was to
receive a commission if certain commercial retail districts were sold to certain specified
buyers. In May 2008, FWA and Centennial Village Development, LLC entered into
another contract—the 2008 Agreement—which forms the basis for much of the present
lawsuit. Under the 2008 Agreement, FWA was to be paid $5,000 per month as a consulting
fee, cancellable on thirty days’ notice. The 2008 Agreement provided that “any
modification of this Agreement or additional obligation assumed by any party in
connection with this Agreement shall be binding only if evidenced in writing signed by
each party or an authorized representative of each party.”
In August 2012, White sought to modify the 2008 Agreement. In an email to White,
Chilton expressed his views on White’s proposal, stating in part:
“Fenton, I have reviewed your email concerning compensation. To say the
least, it was very hard to comprehend . . . [b]ut anyway I did finally finish
reviewing it and here is what I propose . . . . [White] would continue with
the same consulting work, for Centennial Village Apartments LLC and
Centennial Village Development LLC that [he had] been doing through the
final payment of the acquisition of 90% or more . . . . [T]his agreement would
be contingent upon the apartment sale netting me a minimum of $5,458,507
as shown in your prepared ‘Fee Exhibit B . . . .”
White wrote: “I agree with everything except the guarantee of apartment price. . . If that is
agreeable I [will] find Paul [Coleman, attorney of record for Centennial Village
Development, LLC] and get this drawn up.” Chilton responded: “I am not about to agree
to any compensation with out some type of minimum net to me.” Chilton later said that he
wanted “to review the ‘final documents’ before agreeing to a no minimum.” Centennial
Village Development, LLC paid FWA $5,000.00 per month until June 2013. In September
2014, Appellants’ counsel sent a letter to White terminating payments under the 2008
Agreement.
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In December 2014, Chilton entered into an agreement to sell the remaining
Centennial Development property for $25,000,000.00. White believed that he had not been
fully compensated for his services to Appellants. In January 2015, FWA—through Pratt—
recorded the Memorandum of Contract and Right to Receive Payment (“the MOC”) on the
apartment property at issue with the Anderson County Register of Deeds, in the amount of
$600,000.00. The MOC purported that, based on an August 24, 2012 agreement, Appellees
were entitled to $600,000.00 upon the sale of the property. The MOC referenced Exhibit
B containing the terms of the agreement, but no such agreement was attached. Centennial
placed $900,000.00 from the sale into a non-interest-bearing escrow account to secure the
buyers from FWA’s claims.
In June 2015, FWA sued Appellants in the Trial Court. In February 2016, FWA
filed its operative second amended complaint, alleging breach of contract and quantum
meruit. According to FWA, the parties modified their contractual relationship on August
24, 2012, such that FWA was entitled to the sum of $600,000.00 from the sale of
Appellants’ apartment complex. FWA stated, in part: “Because White has spent numerous
hours over several years working under the expectation that he would be paid, it would be
unjust [and] inequitable for Defendants to retain the benefits conferred without fully
compensating White.” In April 2016, Appellants filed an answer, counterclaim, and third-
party complaint against Appellees and Pratt asserting slander of title among other things.
In June 2016, Appellants filed an amended counterclaim and third-party complaint.
Appellants alleged that “White, FWA and Pratt had no factual or legal basis for filing and
recording the Cloud on Title so as to cloud Centennial Village Apartments’ title to the
Apartment Property.”
In November 2018, Pratt filed an answer seeking dismissal of the claims against
him based on the litigation privilege. Pratt later filed a motion for summary judgment,
which the Trial Court granted in April 2022. In its order granting Pratt’s motion for
summary judgment, the Trial Court stated, in part:
In his Motion for Summary Judgment, Pratt raises the litigation
privilege as a potential defense for all of Defendants’ claims against him, as
he was the attorney of record for F.W. White & Associates for all relevant
time periods in this case. Defendants seem to argue Mr. Pratt personally
recorded the MOC, which resulted in significant damages to the Defendants
in defending the title.
Regarding the litigation privilege, the Court finds the signing of the
MOC and the OLA [Open Listing Agreement] falls under conduct not
communications. All claims against Mr. Pratt concern his involvement in
the signing of the MOC and the results which came after. The Court must
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analyze Mr. Pratt’s conduct with the factors set out in Unarco Material
Handling, Inc. v. Liberato, 317 S.W.3d 227, 238 (Tenn. Ct. App. 2010). To
address whether Mr. Pratt was (1) acting in the capacity of counsel for a client
when the conduct occurred, the Court finds there is no proof to suggest
otherwise as he signed both agreements as the Attorney for F.W. White and
Associates (MOC) or on behalf of The Pratt Law Firm (OLA). The Court
does not find Mr. Pratt was acting personally or for his own self-interest (2)
in entering into these agreements. Mr. Pratt’s signing these agreements is
related to this litigation (3) as the MOC he signed is about the property at
issue between Plaintiffs and Defendants. Finally, (4) the Court finds there is
a real nexus between Mr. Pratt’s conduct and the litigation under
consideration because he represented the Plaintiff when the MOC was
entered into.
After considering the relevant factors with Mr. Pratt’s conduct and the
allegations against him, the Court concludes the litigation privilege applies
to bar all of Defendants’ claims against Mr. Pratt, Third-Party Defendant.
Accordingly, Defendants’ Third-Party claims against Greg Pratt for Slander
of Title, Quiet Title, Tortious Interference with a Contract and Business
Relations, Breach of Fiduciary Duty and Conspiracy to Breach are hereby
DISMISSED with prejudice.
The remaining claims between the remaining parties proceeded to a November 2022
bench trial. In December 2022, the Trial Court entered its judgment. The Trial Court
rejected FWA’s theory that FWA was owed $600,000.00 from the sale of the property.
The Trial Court also rejected FWA’s quantum meruit claim. However, the Trial Court
awarded FWA a judgment against Defendants in the amount of $75,000.00 for missed
payments under the 2008 Agreement. The Trial Court ordered that the MOC be declared
void and that Chilton was entitled to the $900,000.00 in escrow. Finally, the Trial Court
declined to award either side attorney’s fees and costs. In its order, the Trial Court stated,
in part:
22. Chilton testified a meeting occurred on or around August 24, 2012
between Mr. White, Mr. Chilton, and attorney Paul Coleman, in which he
discussed paying White $200,000.00 from the proceeds of the commercial
property sale, and/or $100,000.00 from the first payment to Chilton if the
purchase of depreciation is in the form of an installment note, and/or
$300,000 to be paid from the final payment of the acquisition of 90% or more
of Centennial Village Apartments or Centennial Village Properties I, LLC.
23. Paul Coleman testified, after Mr. White left the meeting, Chilton told
Coleman he would never agree to the proposed agreement and told Coleman
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not to draw up the discussed agreement. This conversation was never
disclosed to Mr. White.
24. Chilton testified White provided him with a final package concerning the
apartment property on August 30, 2012, so it could be sent out.
25. In September 2014, Counsel for Centennial Village Development wrote
a letter to White to cease payment under the 2008 Consulting Agreement.
26. Centennial Village Development continued paying F.W. White &
Associates the monthly consulting fee of $5,000.00 until June 2013.
2013 Bank scheme
27. On March 13, 2013, Centennial Village Development (Chilton) and
White entered into an agreement whereby Centennial (Chilton) would sell 11
acres of the original property to White for approximately $750,000.00.
White borrowed $382,000.00 from First State Financial, Inc. (“FWA Loan”),
using the property as collateral. The borrowed money was paid to Chilton
and he paid the interest payments on another loan.
28. John Davenport (Banker) testified he agreed to the above scheme for
White to borrow the money so Chilton could pay on the large apartment loan.
29. There was also a buyback agreement whereby Chilton could buy the
property back for assumption of the $382,000.00 loan. This took place and
White was compensated two payments of $10,000.00 for his efforts. There
were no responsibilities White owed to the Bank.
30. The 11-acre property was transferred from White back to Chilton by a
quitclaim deed dated November 6, 2014.
31. The maturity date for the FWA Loan was February 28, 2014.
32. Chilton testified First State called his notes due when White was late in
turning over financial statements, even though the two are unrelated. Initially
First State agreed to extend the Loan to August 28, 2014, but after FWA
failed to timely submit the required financial documents, First State refused
to extend the Loan past April 7, 2014.
33. After April 7, 2014, Centennial Village Development defaulted on the
Loan and First State sent several notices of foreclosure.
34. Chilton testified he negotiated a resolution with First Bank, in order to
avoid foreclosure, whereby First State would release Chilton and White from
their personal guarantees if Chilton transferred the two properties to First
State’s affiliate by a Deed of Trust in Lieu of Foreclosure.
Cloud on Title
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35. On January 5, 2015, White recorded a Lien and Memorandum of Contract
and Right to Receive Payment on the apartment property with the Anderson
County Register of Deeds in the amount of $600,000.00 (the “Cloud on
Title”).
36. Attorney Greg Pratt testified no writing (“Exhibit B”) was attached to the
Memorandum of Contract as referenced in the Memorandum. He further
testified this was recorded as a Lien against Mr. Chilton’s property.
37. The original purchase price for the apartment complex was
$25,000,000.00, based on the first Agreement for Purchase and Sale and Joint
Escrow Instructions dated December 12, 2014. After some discussion
between Chilton and the buyer, the purchase price was reduced by
$625,000.00, making the agreed final purchase price $24,375,000.00.
38. A Seller’s Statement for the apartment sale, dated July 22, 2015, reflects
$900,000.00 in escrow was charged to resolve “Fenton White Litigation”.
***
Second Amended Complaint
The Court finds the parties are bound by the 2008 Agreement, which
obligates the payment of $5,000.00 per month until the letter terminating the
contract in September 2014. The Court further declares there is no quasi
contract based on the email correspondence between Counsel in August
2012; therefore, the terms of the 2008 Agreement were never modified.
There was clearly not a meeting of the minds concerning White’s proposed
modification of the terms of compensation as there is no proof Chilton ever
accepted White’s proposed terms.
The Court finds White was compensated the $5,000.00 monthly
retainer payment until June 2013, as referenced by the September 18, 2014
letter from Chilton’s Counsel. Because there was no modification to the
2008 Consulting Agreement, and no meeting of the minds concerning the
2012 proposed modifications, the Court finds the Defendants did not breach
the contract concerning the properties.
Count III of the Second Amended Complaint is a claim for quantum
meruit in the event the Court does not find the 2012 correspondence
constitutes an enforceable contract. The Court finds the 2008 Consulting
Agreement is the relevant and enforceable contract governing these parties’
agreement regarding services and compensation. The Court further finds the
Defendant has not been unjustly enriched based on Plaintiff’s argument.
Considering both elements for a claim for quantum meruit based on unjust
enrichment are not met (i.e. when no contract exists between the parties and
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when the defendant would be unjustly enriched), the Court declines to find
Plaintiff is due additional compensation based on the doctrine of quantum
meruit or quasi contract.
The Court finds White was paid $5,000.00 monthly until June 2013,
but the letter terminating his employment agreement was not sent until
September 2014 (an approximate 15-month lapse). Accordingly, the Court
hereby awards Fenton White a judgment in the amount of $75,000.00
($5,000.00 x 15 months) against John Chilton, Centennial Village
Developments, and Centennial Village Apartments, which represents
White’s unpaid balance under the 2008 Consulting Agreement.
Counterclaim
Slander of Title
One issue for the Court to decide is whether White lawfully recorded
the Cloud on Title in 2015. The Court finds this was not a malicious act on
Mr. White’s part, as he believed he was owed the money he sought based on
their agreement and the actions of Chilton.
Defendant claims White made multiple false statements in recording
the Cloud on Title which reduced the purchase price of the apartment
complex by $625,000.00 and this is the basis for their claim for slander. The
Court finds there was no direct proof the Cloud on Title was the basis for the
purchase price reduction of the apartment complex. Eventually, there was a
sale contract entered and $900,000.00 put into an escrow account for White-
related litigation.
Plaintiff offered several cases in which liens have been recorded in
connection with judicial proceedings and this has been considered absolutely
privileged. See Desgranges v. Meyer, No. E2003-02006-COA-R3-CV, 2004
WL 1056603 (Tenn. Ct. App. Dec. 4, 2003); citing Donahoe Instr. Co. v.
Mount Vernon Assocs., 235 Va. 531, 369 S.E.2d 857, 4 Va. Law Rep. 3040
(1988); Frank Pisano & Assoc. v. Taggart, 29 Cal. App. 3d 1, 105 Cal. Rptr.
414 (1972). The Court declines to find White’s actions in recording the Lien
are absolutely privileged because the Lien was recorded in January 2015 and
the Complaint was filed six months later in June 2015. The two are
connected in many ways, but they were not filed in conjunction with one
another.
One of the essential elements for a claim under slander of title is for
the defendant to have acted maliciously. Finch v. Raymer, No. W2012-
00974-COA-R3CV-2013 WL 1896323 at *15 (Tenn. Ct. App. May 6, 2013).
The Court finds White did not act maliciously in recording the Cloud on
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Title, and as such Count I of Defendants’ Counterclaim is hereby
DISMISSED with prejudice.
Quiet Title
Count II of the Counterclaim seeks for the Cloud on Title to be quieted
and a judgment rendered in Defendants’ favor concerning the Property at
issue in the MOC. The Court finds Defendants’ action to quiet title is a
remedy, and not a separate cause of action. Goryoka v. Quicken Loan, Inc.,
519 Fed. Appx. 926 (U.S. Ct. App. Mar. 18, 2013).
On January 8, 2015, F.W. White & Associates, LLC, and Fenton
White filed a “Memorandum of Contract and Right to Receive Payment”
against Centennial Village Apartments, LLC, Centennial Village
Development, LLC, and John Chilton. In this Lien, White cites to an
agreement for payment of $600,000.00 as evidenced by a writing “attached
as Exhibit B”. A review of the document shows there is no Exhibit B.
Because of this failure, the Court determines this Lien is invalid and should
be stricken. Any Cloud from this title is hereby removed. Defendants’ claim
for quiet title is GRANTED as to Lien No. 15000163 (Book 1612, Pages
1083-1087), Anderson County, Tennessee, Register of Deeds.
***
Conclusion
Based on the arguments of the parties, the relevant pleadings, and all
applicable authority, the Court DISMISSES with prejudice Counts I and II
of Plaintiffs’ Second Amended Complaint regarding breach of contract.
Representing the balance owed to Plaintiff under the 2008 Consulting
Agreement, the Court awards Fenton White a judgment against John Chilton
in the amount of $75,000.00, for which execution may issue.
The Court DISMISSES with prejudice Defendants’ Counterclaims
(Counts I, III, IV, V, VI, VII and VIII). As to Count II to quiet title, the Court
orders the Lien filed by Fenton White is hereby declared void (Lien No.
15000163 (Book 1612, Pages 1083-1087), Anderson County, Tennessee,
Register of Deeds). Mr. Chilton is to receive the $900,000.00 sum currently
being held in escrow by Commonwealth Land Title Insurance Company.
Plaintiff requested an award of attorney’s fees based on the 2008
Consulting Agreement. The Court finds there was not sufficient proof to find
this appropriate. Each party is to be responsible for his own attorney’s fees
....
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(Record citations and footnote omitted).
Appellants filed a motion to alter or amend, as did FWA. In February 2023, the
Trial Court entered an order denying Appellants’ motion while granting FWA’s request for
an additional $50,000.00 to account for other missed payments under the 2008 Agreement,
bringing judgment for FWA to $125,000.00. In its order on post-trial motions, the Trial
Court stated, in part:
Defendant seeks to alter or amend the Court’s Final Order entered
December 13, 2022. Specifically, Defendant suggests the Court should:
1) Remove the $75,000 award to Plaintiff; or
2) Alternatively, revise the award to Plaintiff to be set off by the $20,000
overpayments to White while he was under contract with Evanston Financial
Corporation.
Defendant argues Trial Exhibit #10 (August 24, 2012 Email) showing
a potential renegotiation of the 2008 Consulting Agreement (Trial Exhibit
#3) contains a clause which terminates said consulting agreement. The Court
noted the 2008 Consulting Agreement states “any modification of this
Agreement or additional obligation assumed by any party in connection with
this Agreement shall be binding only if evidenced in writing signed by each
party or an authorized agent of each party.” Defendant also argues Trial
Exhibit #10 is not a contract, is not enforceable and violates the written notice
requirement of Trial Exhibit #3, except in regard to Defendant’s termination
of the contract. The Court is not persuaded by Defendant’s argument [that]
Trial Exhibit #10 serves as notice of termination of the 2008 Consulting
Agreement. Defendant’s Motion to Alter or Amend is DENIED as to his
request for the Court to remove the $75,000 award in damages to Plaintiff.
Alternatively, Defendant argues he should not be required to pay
$20,000 of the withheld contract funds because Plaintiff and Evanston
Financial Corporation entered into an agreement in which Plaintiff would
receive 1% of the Note amount and further agreed “that with respect to the
Project Loan, it will not accept any compensation from any other party
directly or indirectly.” The Court finds Defendant is arguing he should get
the benefit of a contract he is not a party to. The Court does not agree with
Defendant’s position, accordingly Defendant’s Motion to Alter or Amend is
DENIED as to the request for a $20,000 offset in Plaintiff’s award.
For the first time, Defendant orally complains the Court granted relief,
namely enforcing the May 1, 2008 Consulting Agreement when its
enforcement was not alternatively pled in Plaintiff’s Second Amended
Complaint. In response, Plaintiff cites to his Complaint’s prayer for relief
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which states, “That the Court specifically enforce the terms of the
agreements”. Plaintiff further argues his Complaint should be liberally
construed. The Court finds the 2008 Consulting Agreement and its terms
were thoroughly discussed at the trial in this case, and the Defendant argued
its enforceability, in fact for some time frame, insisted at the terms set out in
Trial Exhibit #10. To the extent Defendant’s argument is a new request to
alter or amend, Defendant’s motion is denied.
***
Based on the Court’s previous damages award to Plaintiff, Plaintiff
was awarded his $5,000 contractual amount for the months he was not paid
between June 2013 and September 2014 (15 months x $5,000 = $75,000).
The Court did not include the nine (9) months between March-November
2010 which the proof at trial shows Plaintiff was not paid the $5,000 monthly
fee. The Court finds the 2008 Consulting Agreement is separate and apart
from the FHA Agreement between Plaintiff and Evanston; therefore, the
monthly payments should not have ceased under the 2008 Consulting
Agreement.
The Court also agrees with Plaintiff’s position the September 2014
letter provided notice of the termination of the 2008 Consulting Agreement,
which was “cancellable on 30 days notice.” This means Plaintiff’s damages
award should have been through October 2014, not September 2014.
Accordingly, the Court GRANTS Plaintiff’s Motion to Alter or Amend as to
the additional $5,000 monthly payment representing October 2014 and the
additional $45,000 representing the nine (9) months Plaintiff was not paid
based on the FHA Agreement. Plaintiff’s total damages award is hereby
revised from $75,000 to $125,000.00, against Defendants John R. Chilton,
Centennial Village Apartments, LLC, and Centennial Village Development,
LLC, for which execution may issue.
Regarding Plaintiff’s request for attorney fees under the 2008
Consulting Agreement, the Court finds the amounts are too speculative as to
which items apply to which claim and it is too difficult to ascertain a certain
amount Plaintiff prevailed on based on his Fee Applications submitted.
Plaintiff’s Motion to Alter or Amend as to attorney fees is DENIED.
(Some record citations omitted; footnote omitted). Appellants timely appealed to this
Court.
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Discussion
Although not stated exactly as such, Appellants raise the following issues on appeal:
1) whether the Trial Court erred in granting summary judgment to Pratt based on the
litigation privilege; 2) whether the Trial Court erred in dismissing Appellants’ slander of
title claim against Appellees; 3) whether the Trial Court erred in declining to award
damages to Appellants for loss of the use of $900,000.00 held in escrow since 2015; and
4) whether the Trial Court erred in awarding judgment to FWA notwithstanding the
dismissal of its claims with prejudice, FWA’s failure to demand said judgment and litigate
the propriety thereof, and evidence regarding notice of termination of the 2008 Agreement.
Appellees raise the separate issues of 1) whether Appellants waived any evidentiary issues
by failing to include them in their statement of issues; 2) whether the Trial Court erred in
ruling that judicial immunity did not apply to Appellants’ slander of title claim; 3) whether
the Trial Court erred in declining to award FWA its attorney’s fees and costs pursuant to
the 2008 Agreement; and 4) whether FWA should be awarded its attorney’s fees and costs
incurred on appeal.1 Finally, Pratt raises a separate issue of whether the Trial Court erred
in finding that he testified that the MOC was recorded as a lien.
Multiple standards of review are implicated in this matter. First, to the extent this
matter was resolved by a bench trial, our review is de novo upon the record, accompanied
by a presumption of correctness of the findings of fact of the trial court, unless the
preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); Bogan v. Bogan, 60
S.W.3d 721, 727 (Tenn. 2001). A trial court’s conclusions of law are subject to a de novo
review with no presumption of correctness. S. Constructors, Inc. v. Loudon Cnty. Bd. of
Educ., 58 S.W.3d 706, 710 (Tenn. 2001). With respect to credibility determinations, the
Tennessee Supreme Court has instructed:
When it comes to live, in-court witnesses, appellate courts should
afford trial courts considerable deference when reviewing issues that hinge
on the witnesses’ credibility because trial courts are “uniquely positioned to
observe the demeanor and conduct of witnesses.” State v. Binette, 33 S.W.3d
215, 217 (Tenn. 2000). “[A]ppellate courts will not re-evaluate a trial judge’s
assessment of witness credibility absent clear and convincing evidence to the
contrary.” Wells v. Tennessee Bd. of Regents, 9 S.W.3d 779, 783 (Tenn.
1999); see also Hughes v. Metro. Gov’t of Nashville & Davidson Cnty., 340
S.W.3d 352, 360 (Tenn. 2011). In order for evidence to be clear and
1
Appellees also filed a motion to strike Appellants’ reply brief on grounds that Appellants exceeded the
word count under Tenn. R. App. P. 30(e) and inappropriately tried to raise new issues. Appellants filed a
response in opposition, requesting leave to exceed the word count. We will not consider any new issues
raised in Appellants’ reply brief. With that restriction, we deny Appellees’ motion to strike and grant
Appellants leave to exceed the word count.
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convincing, it must eliminate any “serious or substantial doubt about the
correctness of the conclusions drawn from the evidence.” State v. Sexton,
368 S.W.3d 371, 404 (Tenn. 2012) (quoting Grindstaff v. State, 297 S.W.3d
208, 221 (Tenn. 2009)). Whether the evidence is clear and convincing is a
question of law that appellate courts review de novo without a presumption
of correctness. Reid ex rel. Martiniano v. State, 396 S.W.3d 478, 515 (Tenn.
2013), (citing In re Bernard I, 319 S.W.3d 586, 596-97 (Tenn. 2010)), cert.
denied, [571 U.S. 894], 134 S.Ct. 224, 187 L.Ed.2d 167 (2013).
Kelly v. Kelly, 445 S.W.3d 685, 692-93 (Tenn. 2014).
This matter was also partly decided by summary judgment. Regarding the standard
of review for cases disposed of by summary judgment, the Tennessee Supreme Court has
instructed:
Summary judgment is appropriate when “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.” Tenn.
R. Civ. P. 56.04. We review a trial court’s ruling on a motion for summary
judgment de novo, without a presumption of correctness. Bain v. Wells, 936
S.W.2d 618, 622 (Tenn. 1997); see also Abshure v. Methodist Healthcare–
Memphis Hosp., 325 S.W.3d 98, 103 (Tenn. 2010). In doing so, we make a
fresh determination of whether the requirements of Rule 56 of the Tennessee
Rules of Civil Procedure have been satisfied. Estate of Brown, 402 S.W.3d
193, 198 (Tenn. 2013) (citing Hughes v. New Life Dev. Corp., 387 S.W.3d
453, 471 (Tenn. 2012)).
***
[I]n Tennessee, as in the federal system, when the moving party does not bear
the burden of proof at trial, the moving party may satisfy its burden of
production either (1) by affirmatively negating an essential element of the
nonmoving party’s claim or (2) by demonstrating that the nonmoving party’s
evidence at the summary judgment stage is insufficient to establish the
nonmoving party’s claim or defense. We reiterate that a moving party
seeking summary judgment by attacking the nonmoving party’s evidence
must do more than make a conclusory assertion that summary judgment is
appropriate on this basis. Rather, Tennessee Rule 56.03 requires the moving
party to support its motion with “a separate concise statement of material
facts as to which the moving party contends there is no genuine issue for
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trial.” Tenn. R. Civ. P. 56.03. “Each fact is to be set forth in a separate,
numbered paragraph and supported by a specific citation to the record.” Id.
When such a motion is made, any party opposing summary judgment must
file a response to each fact set forth by the movant in the manner provided in
Tennessee Rule 56.03. “[W]hen a motion for summary judgment is made
[and] . . . supported as provided in [Tennessee Rule 56],” to survive summary
judgment, the nonmoving party “may not rest upon the mere allegations or
denials of [its] pleading,” but must respond, and by affidavits or one of the
other means provided in Tennessee Rule 56, “set forth specific facts” at the
summary judgment stage “showing that there is a genuine issue for trial.”
Tenn. R. Civ. P. 56.06. The nonmoving party “must do more than simply
show that there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. [v. Zenith Radio Corp.], 475 U.S. [574,] 586,
106 S.Ct. 1348 [89 L.Ed.2d 538 (1986)]. The nonmoving party must
demonstrate the existence of specific facts in the record which could lead a
rational trier of fact to find in favor of the nonmoving party. If a summary
judgment motion is filed before adequate time for discovery has been
provided, the nonmoving party may seek a continuance to engage in
additional discovery as provided in Tennessee Rule 56.07. However, after
adequate time for discovery has been provided, summary judgment should
be granted if the nonmoving party’s evidence at the summary judgment stage
is insufficient to establish the existence of a genuine issue of material fact for
trial. Tenn. R. Civ. P. 56.04, 56.06. The focus is on the evidence the
nonmoving party comes forward with at the summary judgment stage, not on
hypothetical evidence that theoretically could be adduced, despite the
passage of discovery deadlines, at a future trial.
Rye v. Women’s Care Cntr. of Memphis, MPLLC, 477 S.W.3d 235, 250, 264-65 (Tenn.
2015).
Certain issues on appeal implicate the abuse of discretion standard. In Lee Med.,
Inc. v. Beecher, 312 S.W.3d 515 (Tenn. 2010), the Tennessee Supreme Court discussed the
abuse of discretion standard at length, stating:
The abuse of discretion standard of review envisions a less rigorous
review of the lower court’s decision and a decreased likelihood that the
decision will be reversed on appeal. Beard v. Bd. of Prof’l Responsibility,
288 S.W.3d 838, 860 (Tenn. 2009); State ex rel. Jones v. Looper, 86 S.W.3d
189, 193 (Tenn. Ct. App. 2000). It reflects an awareness that the decision
being reviewed involved a choice among several acceptable alternatives.
Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 708 (Tenn. Ct. App. 1999). Thus,
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it does not permit reviewing courts to second-guess the court below, White
v. Vanderbilt Univ., 21 S.W.3d 215, 223 (Tenn. Ct. App. 1999), or to
substitute their discretion for the lower court’s, Henry v. Goins, 104 S.W.3d
475, 479 (Tenn. 2003); Myint v. Allstate Ins. Co., 970 S.W.2d 920, 927
(Tenn. 1998). The abuse of discretion standard of review does not, however,
immunize a lower court’s decision from any meaningful appellate scrutiny.
Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 211 (Tenn. Ct. App. 2002).
Discretionary decisions must take the applicable law and the relevant
facts into account. Konvalinka v. Chattanooga-Hamilton County Hosp.
Auth., 249 S.W.3d 346, 358 (Tenn. 2008); Ballard v. Herzke, 924 S.W.2d
652, 661 (Tenn. 1996). An abuse of discretion occurs when a court strays
beyond the applicable legal standards or when it fails to properly consider
the factors customarily used to guide the particular discretionary decision.
State v. Lewis, 235 S.W.3d 136, 141 (Tenn. 2007). A court abuses its
discretion when it causes an injustice to the party challenging the decision by
(1) applying an incorrect legal standard, (2) reaching an illogical or
unreasonable decision, or (3) basing its decision on a clearly erroneous
assessment of the evidence. State v. Ostein, 293 S.W.3d 519, 526 (Tenn.
2009); Konvalinka v. Chattanooga-Hamilton County Hosp. Auth., 249
S.W.3d at 358; Doe 1 ex rel. Doe 1 v. Roman Catholic Diocese of Nashville,
154 S.W.3d [22,] 42 [(Tenn. 2005)].
To avoid result-oriented decisions or seemingly irreconcilable
precedents, reviewing courts should review a lower court’s discretionary
decision to determine (1) whether the factual basis for the decision is
properly supported by evidence in the record, (2) whether the lower court
properly identified and applied the most appropriate legal principles
applicable to the decision, and (3) whether the lower court’s decision was
within the range of acceptable alternative dispositions. Flautt & Mann v.
Council of Memphis, 285 S.W.3d 856, 872-73 (Tenn. Ct. App. 2008)
(quoting BIF, a Div. of Gen. Signal Controls, Inc. v. Service Constr. Co., No.
87-136-II, 1988 WL 72409, at *3 (Tenn. Ct. App. July 13, 1988) (No Tenn.
R. App. P. 11 application filed)). When called upon to review a lower court’s
discretionary decision, the reviewing court should review the underlying
factual findings using the preponderance of the evidence standard contained
in Tenn. R. App. P. 13(d) and should review the lower court’s legal
determinations de novo without any presumption of correctness. Johnson v.
Nissan N. Am., Inc., 146 S.W.3d 600, 604 (Tenn. Ct. App. 2004); Boyd v.
Comdata Network, Inc., 88 S.W.3d at 212.
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Beecher, 312 S.W.3d at 524-25. A trial court’s decision on a motion to alter or amend is
reviewed for abuse of discretion. Stricklin v. Stricklin, 490 S.W.3d 8, 11 (Tenn. Ct. App.
2015).
We first address whether the Trial Court erred in granting summary judgment to
Pratt based on the litigation privilege. This Court has previously discussed the litigation
privilege as follows:
This state further recognizes that “statements made in the course of judicial
proceedings which are relevant and pertinent to the issues are absolutely
privileged and therefore cannot be used as a basis for a libel action for
damages.” Jones v. Trice [210 Tenn. 535], 360 S.W.2d 48, 50 (Tenn. 1962);
see also Myers v. Pickering Firm, Inc., 959 S.W.2d 152, 159 (Tenn. Ct. App.
1997). This is true even if the statements are “known to be false or even
malicious.” Jones, 360 S.W.2d at 50 (citing Hayslip v. Wellford [195 Tenn.
621], 263 S.W.2d 136 (Tenn. 1953)). The policy underlying this rule is
that access to the judicial process, freedom to institute an
action, or defend, or participate therein without fear of the
burden of being sued for defamation is so vital and necessary
to the integrity of our judicial system that it must be made
paramount to the right of an individual to a legal remedy where
he [or she] has been wronged thereby.
Jones, 360 S.W.2d at 51. Myers also expressly stands for the proposition
that “communications preliminary to proposed or pending litigation” are
absolutely privileged. Myers, 959 S.W.[2d] at 161 (quoting Restatement of
Torts § 587).
Phillips v. Woods, No. E2007-00697-COA-R3-CV, 2008 WL 836161, at *7-8 (Tenn. Ct.
App. March 31, 2008), no appl. perm. appeal filed. This Court has also discussed when
the litigation privilege applies:
[T]he litigation privilege in Tennessee applies to an attorney’s conduct prior
to the commencement of litigation if (1) the attorney was acting in the
capacity of counsel for a client or identifiable prospective client when the
conduct occurred, (2) the attorney was acting in good faith for the benefit of
and on behalf of the client or prospective client, not for the attorney’s self
interest, (3) the conduct was related to the subject matter of proposed
litigation that was under serious consideration by the attorney, and (4) there
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was a real nexus between the attorney’s conduct and litigation under
consideration.
Unarco Material Handling, Inc. v. Liberato, 317 S.W.3d 227, 238 (Tenn. Ct. App. 2010)
(footnote omitted).
In their brief, Appellants argue that the second element—that of good faith—is at
issue. Appellants assert that the Trial Court skipped this critical element of the litigation
privilege in its analysis. Beyond that, Appellants contend that they created a genuine issue
of material fact as to Pratt’s good faith or lack thereof. Appellants point to the Declaration
of Christopher W. Martin (“Martin”), an attorney with commercial and real estate
expertise, who opined among other things that “[a]ny attorney trained and licensed in the
issuance of title insurance, such as Greg Pratt, would recognize these key facts . . . that
would make this [MOC] a cloud on the title of the property described in the document.”
Martin stated further that “it was a breach of the standard of care for Mr. Pratt to execute
[the MOC] without attaching a written contract signed by the owner of the property, or to
facilitate the creation, execution, and/or recording of this document.”
Meanwhile, Pratt submitted an affidavit explaining his reasons for recording the
MOC, stating in relevant part:
19. I determined that F.W. White & Associates had a good faith claim
for breach of contract and/or quantum meruit against Centennial Village
Apartments, LLC, Centennial Village Development, LLC, and/or John R.
Chilton for services performed relative to the property subject to the
Memorandum of Contract and Right to Receive Payment (MOC), a copy of
which is attached hereto as Exhibit B.
20. I also determined that litigation over the breach of
contract/quantum meruit claim was substantially likely to ensue.
21. At the request of F.W. White & Associates, LLC, the MOC was
then prepared by Pratt Aycock.
***
25. The MOC was to be recorded for the purposes of protecting and
enforcing F.W. White & Associates, LLC’s rights and interest in the
property.
While the Trial Court did not explicitly use the term “good faith,” the Trial Court
did set out the Unarco elements and applied them to the facts of this case. It is sufficiently
clear from the Trial Court’s order that it considered each element of the analysis and found
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Pratt had acted in good faith. The undisputed material facts support this determination.
Appellants appear to conflate an erroneous or unsuccessful act by an attorney with bad
faith under the Unarco test. The Trial Court rejected FWA’s claim to $600,000.00 from
the sale of the property and restored to Chilton $900,000.00 in escrow. However, that the
MOC did not in the end withstand scrutiny does not automatically mean that Pratt recorded
it in bad faith. The rationale of the litigation privilege is to protect the “freedom to institute
an action, or defend, or participate therein . . . .” Phillips, 2008 WL 836161, at *8 (quoting
Jones v. Trice, 360 S.W.2d 48, 51 (Tenn. 1962)). The privilege is necessarily broad in
scope. It is not limited to legal undertakings that bring fully successful results. An
ultimately unsuccessful legal step taken by an attorney does not necessarily equate to bad
faith for purposes of the litigation privilege. According to Pratt’s affidavit, he consulted
with his client, assessed FWA’s potential claims against Appellants, and consequently
recorded the MOC. Nothing in Martin’s Declaration contradicts that. Martin’s opinion
that, from a professional standpoint, the MOC ought never have been executed does not
create a genuine issue of material fact as to Pratt’s good faith. On the contrary, Pratt’s
unrebutted explanation of his motives and actions in recording the MOC show that he acted
in good faith on behalf of his client. With respect to the other Unarco elements, Pratt was
acting in the capacity of counsel for his client when the conduct occurred; the conduct was
related to the subject matter of proposed litigation then under serious consideration by
Pratt; and there was a real nexus between Pratt’s conduct and the litigation under
consideration. Thus, Pratt was entitled to judgment as a matter of law based on the
litigation privilege. We affirm the Trial Court’s grant of summary judgment to Pratt.
For his part, Pratt raises a separate issue of whether the Trial Court erred in finding
that he testified the MOC was recorded as a lien. However, the Trial Court’s
characterization of Pratt’s testimony and the MOC was not essential to the Trial Court’s
judgment. Therefore, even if the Trial Court erred on this specific factual finding, it was
harmless error, as our considering the record as a whole shows that it did not “more
probably than not [affect] the judgment or . . . result in prejudice to the judicial process.”
Tenn. R. App. P. 36(b). We therefore decline Pratt’s request to reverse the Trial Court on
this individual factual finding.
We next address whether the Trial Court erred in dismissing Appellants’ slander of
title claim against Appellees. Regarding claims for slander of title, this Court explained in
Brooks v. Lambert:
Slander or libel of title was first recognized as a cause of action in Smith v.
Gernt, 2 Tenn. Civ.App. 65, 79-80 (1911). Harmon v. Shell, No. 01-A-01-
9211-CH-00451, 1994 WL 148663 (Tenn. App. M.S. Apr. 27, 1994). To
establish a successful claim for slander of title, a plaintiff must prove:
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(1) that it has an interest in the property, (2) that the defendant
published false statements about the title to the property, (3)
that the defendant was acting maliciously, and (4) that the false
statements proximately caused the plaintiff a pecuniary loss.
(citations omitted).
Id. at *4. Statements made with reckless disregard of the property owner’s
rights or with reckless disregard as to whether the statements are false may
be malicious within the scope of a libel of title action. Id. (citing Gernt, 2
Tenn. Civ. App. at 79-80). To assert this cause of action, the plaintiff must
allege “malice . . . in express terms or [by] any such showing of facts as
would give rise to a reasonable inference that [the defendant acted
maliciously.]” Waterhouse v. McPheeters, 176 Tenn. 666, 669, 145 S.W.2d
766, 767 (1940). A good faith, but erroneous, claim of title does not
constitute a cause of action for libel of title. Ezell v. Graves, 807 S.W.2d
700, 704 (Tenn. App. 1990).
Brooks v. Lambert, 15 S.W.3d 482, 484 (Tenn. Ct. App. 1999). “The question of whether
[the defendants] acted in good faith is a question of fact to be resolved by the fact finder
from the evidence adduced at trial.” Phillips, 2008 WL 836161, at *9.
Appellants argue that “[a]t a minimum, the evidence shows that Mr. White, on
behalf of FWA and with the aid of Mr. Pratt, exhibited reckless disregard as to whether the
statements in the MOC were true and knowing that the MOC would cloud the Defendant-
Appellants’ title.” Appellants cite Holland v. Sullivan, No. M2016-00538-COA-R3-CV,
2017 WL 3917142 (Tenn. Ct. App. Sept. 7, 2017), no appl. perm. appeal filed, in which
the Sullivans were found to have made the intentional decision “to deprive Mr. Holland of
his security interest in the vehicles after Mr. Holland attempted to possess the BMW. They
accomplished their goal by obtaining duplicate titles based on the false representations that
the titles were lost and then by using the duplicate titles to sell the BMW.” Id. at *11. In
Holland, as found by the trial court and affirmed by this Court, “Defendants acted
maliciously because they knew Plaintiff was attempting to gain possession of both vehicles.
The BMW was in their garage and was not revealed to the tow truck driver. After Mr. and
Mrs. Sullivan knew Mr. Holland was trying to get the vehicles back, they both went to
county court clerk and applied for duplicate titles.” Id. at *10. We affirmed the trial court’s
finding of slander of title. Id.
Appellants also refer to the expert testimony of Martin, who was slated to render an
opinion regarding malice at trial—namely, that recording the MOC was an improper act.
Appellees objected, the objection was sustained, and Appellants made an offer of proof.
Issues regarding admission of evidence in Tennessee are reviewed for abuse of discretion.
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Dickey v. McCord, 63 S.W.3d 714, 723 (Tenn. Ct. App. 2001). However, Appellants did
not identify any evidentiary issues in their principal brief’s statement of the issues.
Appellants say in a footnote that “the Trial Court’s evidentiary ruling was in error . . . .”
In response, Appellees argue that any evidentiary issues that Appellants attempt to raise
are waived. “Courts have consistently held that issues must be included in the Statement
of Issues Presented for Review required by Tennessee Rules of Appellate Procedure
27(a)(4). An issue not included is not properly before the Court of Appeals.” Hawkins v.
Hart, 86 S.W.3d 522, 531 (Tenn. Ct. App. 2001). Indeed, Appellants’ failure to include
any evidentiary issues in their statement of issues subjects their evidentiary arguments to
waiver. However, even considering the issue, Appellants fail to articulate how the Trial
Court abused its discretion in excluding the evidence. We find that the Trial Court’s
decision to exclude the evidence was properly supported by the evidence in the record; was
based on the most appropriate legal principles applicable to the decision; and was an
acceptable alternative disposition. We find no abuse of discretion in the Trial Court’s
exclusion of the evidence. Moreover, even if the evidence were admitted, it would not
affect the outcome. Respectfully, Martin’s opinion is not probative to White’s motivations
and the specific circumstances of White’s dealings with Chilton.
Regarding his motivations for having the MOC recorded, White testified below as
follows in part:
Q. How did this document come into existence?
A. It was something that my attorney at the time and I discussed.
Q. And who was your attorney at the time?
A. Greg Pratt.
Q. Okay. And did you ask him to record this in the registry?
A. Yes.
Q. And you knew that this was being recorded when it happened, did you
not?
A. Yes.
Q. Now, what was -- did you see it before it was recorded?
A. I think I saw a digital copy. I was out of town at the time.
Q. Okay. But you saw it. It was e-mailed to you or something?
A. I think so.
Q. And did you read it?
A. I’m sure I read it.
Q. Did you create any improvements to the real property that’s in the exhibit
to this document?
A. Yes.
Q. What improvements did you do?
A. Well, when I got involved with the property, it was a bare piece of ground.
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Q. Did you -- were you a general contractor?
A. No. I was a construction manager later on.
Q. Were you a subcontractor?
A. No.
Q. Are you licensed as a contractor?
A. No.
Q. Did you build anything?
A. No.
Q. Your purpose at the time you recorded this on the 29th day of -- oh, I
guess it was actually recorded on January 9th. Correct?
A. Whatever the day is that’s on there, I agree, whatever the date is.
Q. January 8th, 2015, you were aware that John Chilton had a contract for
the sale of that property.
A. No, not at that time.
Q. Wasn’t the purpose in recording this to make sure that everybody out there
who might buy this knew that you wanted --
A. Knew that he owed me money?
Q. -- $600,000?
A. Knew that he had an agreement with me? Yes.
Q. So your purpose was to publish this to the world?
A. Right.
Q. And tie it to the title on these apartments?
A. Yes. I mean, yes.
The question of whether White acted maliciously in having the MOC recorded was
a question of fact. The Trial Court had the opportunity to see and hear the witnesses testify.
The Trial Court was thus in a better position to assess the parties’ relative credibility. The
Trial Court clearly credited White’s testimony, and we extend considerable deference to a
trial court’s credibility assessments. There is no clear and convincing evidence that would
serve to overturn the Trial Court’s implicit credibility determination in this matter. As
found by the Trial Court, White believed that he was owed money by Appellants, including
money from the sale of the property at issue. The evidence does not preponderate against
the Trial Court’s finding that White did not act maliciously.2 We affirm on this issue.
2
Even though Appellees prevail on the issue of malice, they raise the doctrine of judicial immunity as an
additional defense. The Tennessee Supreme Court has stated the general rule that “statements made in the
course of judicial proceedings which are relevant and pertinent to the issues are absolutely privileged, and
therefore cannot be used as a basis for a libel action for damages.” Jones, 360 S.W.2d at 50. The Trial
Court declined to find judicial immunity, stating that the “the Lien was recorded in January 2015 and the
Complaint was filed six months later in June 2015. The two are connected in many ways, but they were
not filed in conjunction with one another.” Appellants say that Appellees waited too late to assert this
defense, only raising it at the end of trial. We agree, and we decline to find that judicial immunity applies.
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We next address whether the Trial Court erred in declining to award damages to
Appellants for the loss of use of $900,000.00 held in escrow account since 2015. At trial,
Chilton testified that he had done research on the service Zillow concerning certain
investment properties. He said that he could have invested in these properties had his
money not been tied up in escrow. Appellants also point to a remark the Trial Court made
that Chilton had lost some two or three million dollars because the money was tied up in
escrow. Appellees objected to the Zillow data below. The Trial Court sustained the
objection but allowed Appellants to make an offer of proof. Appellees again argue that
Appellants have waived any evidentiary issues for failure to raise them properly. Appellees
argue further that the Zillow evidence is too speculative, saying that Chilton never owned
these properties. Once more, Appellants failed to identify any evidentiary issues in their
statement of issues. In any event, even considering the issue, we agree with Appellees that
the evidence is highly speculative and unreliable. The Trial Court’s decision to exclude
the evidence was properly supported by the evidence in the record; was based on the most
appropriate legal principles applicable to the decision; and was an acceptable alternative
disposition. In short, the Trial Court did not abuse its discretion. As for the Trial Court’s
remarks about Chilton’s likely losses, these did not form part of the rationale for the Trial
Court’s judgment. They are immaterial. We affirm on this issue.
The final issue of Appellants we address is whether the Trial Court erred in awarding
judgment to FWA notwithstanding the dismissal of its claims with prejudice, FWA’s
failure to demand said judgment and litigate the propriety thereof, and evidence regarding
notice of termination of the 2008 Agreement. According to Appellants, FWA never pled
for the relief it obtained from the Trial Court, and in effect that Appellants were surprised
by the judgment. In support of their argument, Appellants cite the proposition that “the
rule is firmly established that irrespective of what may be proved a court cannot decree to
any plaintiff more than he claims in his bill or other pleadings.” Fidelity-Phenix Fire Ins.
Co. v. Jackson, 181 S.W.2d 625, 629 (Tenn. 1944). Appellants also cite Tenn. R. Civ. P.
54.03, which provides that a court shall not give a successful party relief where “the
opposing party had no opportunity to assert defenses to such relief.” In response, Appellees
point out that the complaint cited the $5,000 per month payments to FWA beginning in
2008, and that it sought to enforce “the agreements”—which would include the 2008
Agreement. Appellees argue in the alternative that the issue was tried by implied consent.
Regarding how detailed a complaint must be, our Supreme Court has stated that
“Tennessee follows a liberal notice pleading standard, which recognizes that the primary
purpose of pleadings is to provide notice of the issues presented to the opposing party and
court.” Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 422, 426 (Tenn.
2011) (citation omitted). As for when an issue may be found to have been tried by implied
consent, this Court has explained:
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Generally speaking, trial by implied consent will be found when the
party opposed to the amendment knew or reasonably should have known of
the evidence relating to the new issue, did not object to this evidence, and
was not prejudiced thereby. Id. As the Tennessee Supreme Court stated in
Zack Cheek Builders, Inc. v. McLeod [597 S.W.2d 888 (Tenn. 1980)]:
“Implied consent . . . is much more difficult to establish (than
express consent) and seems to depend on whether the parties
recognized that an issue not presented by the pleadings entered
the case at trial. A party who knowingly acquiesces in the
introduction of evidence relating to issues that are beyond the
pleadings is in no position to contest a motion to conform.
Thus, consent generally is found when evidence is introduced
without objection, or when the party opposing the motion to
amend himself produced evidence bearing on the new issue.”
Id. (quoting 6 Wright & Miller, Federal Practice and Procedure § 1493, at
462-63 (1971)). Trial by implied consent is not shown by the presentation
of evidence that is relevant to an unestablished issue when that evidence is
also relevant to the established issue. Hiller v. Hailey, 915 S.W.2d 800, 805
(Tenn. App. 1995) (citations omitted).
McLemore v. Powell, 968 S.W.2d 799, 803 (Tenn. Ct. App. 1997). A trial court’s
determination with respect to implied consent “must be upheld unless there has been an
abuse of discretion.” Hobbs v. Hobbs, 987 S.W.2d 844, 847 (Tenn. Ct. App. 1998).
With respect to whether FWA sufficiently pled breach of contract under the 2008
Agreement, the second amended complaint referred to the payments made under the 2008
Agreement and sought enforcement of “the agreements.” Under the liberal notice pleading
standard in Tennessee, we find this was sufficient to put Appellants on notice that the
enforcement of the 2008 Agreement would be at issue in this lawsuit. That is, Appellants
should not have been surprised that FWA would pursue missed payments under the 2008
Agreement. However, even if the issue was insufficiently pled, the Trial Court implicitly
found that the issue had been tried by implied consent, stating that “the 2008 Consulting
Agreement and its terms were thoroughly discussed at the trial in this case, and the
Defendant argued its enforceability, in fact for some time frame, insisted at the terms set
out in Trial Exhibit #10.” The 2008 Agreement was, in fact, invoked repeatedly at trial.
Indeed, the 2008 Agreement formed a basis for Appellants’ defense against FWA’s
quantum meruit claim. The contract clearly was front and center at trial. Thus, the Trial
Court’s finding that enforcement of the 2008 Agreement was tried by implied consent was
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properly supported by the evidence in the record; was based on the most appropriate legal
principles applicable to the decision; and was an acceptable alternative disposition. The
Trial Court did not abuse its discretion in finding implied consent.
Appellants argue further that attorney Paul Coleman’s delivery of an August 22,
2012 e-mail to White served as notice of termination of the 2008 Agreement, and that the
Trial Court erred in awarding White $125,000.00 for missed payments because Chilton
was not required to make monthly payments beyond November 2012. However, the
August 2012 exchanges between White and Chilton were inconclusive. The 2008
Agreement was not terminated until September 2014, when Appellants’ counsel sent White
a letter informing him of the termination. The Trial Court committed no reversible error
on this issue. We affirm the Trial Court’s award to FWA of judgment in the amount of
$125,000.00 against Appellants for missed payments under the 2008 Agreement.
We next address Appellees’ issues concerning attorney’s fees incurred below and
on appeal. “Under the American rule, a party in a civil action may recover attorney fees
only if: (1) a contractual or statutory provision creates a right to recover attorney fees; or
(2) some other recognized exception to the American rule applies, allowing for recovery
of such fees in a particular case.” Cracker Barrel Old Country Store, Inc. v. Epperson, 284
S.W.3d 303, 308 (Tenn. 2009). Generally speaking, “[t]he trial court is vested with wide
discretion in matters of the allowance of attorney’s fees, and this Court will not interfere
except upon a showing of an abuse of that discretion.” Threadgill v. Threadgill, 740
S.W.2d 419, 426 (Tenn. Ct. App. 1987). However, “our courts do not have discretion to
deny an award of fees mandated by a valid and enforceable agreement between the parties
. . . .” Eberbach v. Eberbach, 535 S.W.3d 467, 479 (Tenn. 2017).
The attorney’s fee provision in the 2008 Agreement reads: “In the event either party
breaches any obligation required to be performed under this Agreement, the breaching
party shall be liable for all costs incurred by the non-breaching party, including reasonable
attorney fees and court costs, in the enforcement of the obligations under this Agreement.”
The Trial Court denied FWA’s request for attorney’s fees under the 2008 Agreement on
grounds that “the amounts are too speculative as to which items apply to which claim and
it is too difficult to ascertain a certain amount Plaintiff prevailed on based on his Fee
Applications submitted.” This Court has previously addressed a scenario in which there
was a question about the divisibility of attorney’s fees when multiple claims were at issue:
[W]e consider Middleburg’s argument that Gresham Smith was not the
prevailing party because Middleburg was successful on the unjust
enrichment and Prompt Pay Act claims. To be a prevailing party in a lawsuit,
one “need not attain complete success on the merits.” Fannon v. City of
LaFollette, 329 S.W.3d 418, 431 (Tenn. 2010). Instead, “a prevailing party
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is one who has succeeded ‘on any significant issue in the litigation which
achieves some of the benefit the parties sought in bringing the lawsuit.’ ” Id.
(quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Here, Gresham
Smith succeeded on the merits of its breach of contract claim and was
awarded the remuneration it sought—payment of the invoices. We view this
as a success on the merits on a significant issue in the litigation.
***
Middleburg chiefly complained that Gresham Smith’s fees related to
the unjust enrichment and Prompt Pay Act claims should be excluded and
that other fees were duplicative or excessive. However, Middleburg did not
provide the trial court with the corresponding amount of fees it believed
should have been excluded from the award, and the trial court declined to
“sift through” Gresham Smith’s time entries and “guess at the basis for each
objection.” In determining that all of Gresham Smith’s fees were reasonable,
the trial court cited G.T. Issa Construction, LLC v. Blalock, E2020-00853-
COA-R3-CV, 2021 WL 5496593, at *8 (Tenn. Ct. App. Nov. 23, 2021). In
G.T. Issa Construction, the plaintiff pursued four causes of action arising out
of a purchase and sale agreement and prevailed on only two of the claims.
G.T. Issa Const., WL 5496593, at *8. Nevertheless, this Court noted that
there was a single contract at issue and determined that “[a]ll of [p]laintiff’s
claims were ‘based on or related to’ the Agreement, arose out of a common
core of facts, or were based on related legal theories” and that the plaintiff
was entitled to fees incurred in prosecuting all four claims. Id. at *9 (quoting
Crescent Sock Co. v. Yoe, No. E2015-00948-COA-R3-CV, 2016 WL
3619358, at *8 (Tenn. Ct. App. May 25, 2016)). The same is true here. All
three of Gresham Smith’s claims and all of Middleburg’s defenses arose out
of or were related to the Consultant Agreement the parties executed.
Likewise, the alternate legal theories Gresham Smith pursued were based on
a common core of facts, and the relief sought by Gresham Smith under all
three claims was co-extensive. The G.T. Issa Construction case is analogous
to the case before us, and we cannot say the trial court abused its discretion
in holding that, “[t]he time incurred relating to the alternate theories of relief
based on a common core of facts was reasonably expended and properly
included in GSP’s fee application.”
Gresham, Smith and Partners v. Middleburg Real Estate Partners, LLC, No. M2021-
01459-COA-R3-CV, 2023 WL 6210983, at *9, *11 (Tenn. Ct. App. Sept. 25, 2023), perm.
app. dismissed Feb. 12, 2024. In addition, Appellees cite Jones v. Reda Homebuilders,
Inc., No. M2020-00597-COA-R3-CV, 2021 WL 2375883, at *6 (Tenn. Ct. App. June 10,
-24-
2021), no appl. perm. appeal filed, a case in which the trial court denied the appellants’
motion for attorney’s fees on grounds the court’s judgment was for both breach of contract
and negligence, and that attorney’s fees were not supported by the facts as found and the
causes of action alleged. We disagreed with the trial court on appeal, stating that “[u]nder
the plain language of the parties’ contract, as the prevailing party in the lawsuit, Appellants
are entitled to their reasonable attorney’s fees and costs.” Id.
Under Eberbach, Tennessee courts lack discretion to deny a party attorney’s fees if
such fees are mandated by a valid and enforceable agreement. Here, the 2008 Agreement
is a valid and enforceable agreement with an attorney’s fee provision. FWA has, through
this litigation, successfully enforced the 2008 Agreement. In their reply brief, Appellants
argue that “FWA did not achieve any of the benefit it sought when it brought this lawsuit.”
We disagree. FWA obtained a judgment of $125,000.00. While the judgment is less than
what FWA sought, it still constitutes success on a significant issue in the litigation and is
at least a measure of the benefit FWA sought in bringing the lawsuit. Given that, FWA is
the prevailing party, and it is entitled to an award of attorney’s fees and costs pursuant to
the 2008 Agreement.
While FWA is entitled to an award of attorney’s fees, it was still incumbent upon
FWA to prove an amount. In its fee application, FWA acknowledged that it “found it
exceedingly difficult to provide any precise separation of the portions of fees incurred
based upon the 2008 Contract. . . .” FWA proposed assessing one-third of its fees incurred
in this action seeking to enforce its claims and one-half in defending the counterclaim and
third-party complaint. However, FWA still failed to show these fees were incurred relative
to the 2008 Agreement. The common core doctrine is of no help to FWA because its only
basis for an award of attorney’s fees and costs is the provision in the 2008 Agreement for
enforcement of that particular contract. Therefore, the Trial Court committed no reversible
error in denying FWA an award of attorney’s fees and costs when FWA simply failed to
prove the amount of damages. The Trial Court’s decision not to award FWA its attorney’s
fees and costs was properly supported by the evidence in the record; was based on the most
appropriate legal principles applicable to the decision; and was an acceptable alternative
disposition. We affirm the Trial Court’s denial of an award of attorney’s fees and costs to
FWA. Nevertheless, FWA has asked for an award of attorney’s fees and costs incurred on
appeal. As the prevailing party in enforcing the 2008 Agreement, FWA is entitled to an
award of attorney’s fees and costs incurred on appeal. On remand, the Trial Court is to
determine and award FWA its reasonable attorney’s fees and costs related to the
enforcement of the 2008 Agreement incurred on appeal, provided FWA can prove them.
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Conclusion
The judgment of the Trial Court is affirmed. This cause is remanded to the Trial
Court for collection of the costs below and further proceedings consistent with this
Opinion. The costs on appeal are assessed against the Appellants, John R. Chilton,
Centennial Village Apartments, LLC, and Centennial Village Development, LLC, and their
surety, if any.
s/ D. Michael Swiney_____________________
D. MICHAEL SWINEY, CHIEF JUDGE
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