Timothy Scott Marcum v. Haskel "Hack" Ayers

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

August 28, 2012 Session

TIMOTHY SCOTT MARCUM, ET AL. v. HASKEL “HACK” AYERS, ET AL.

Appeal from the Circuit Court for Campbell County

No. 14746 John D. McAfee, Judge

No. E2012-00721-COA-R3-CV-FILED-OCTOBER 15, 2012

Timothy Scott Marcum and Audrey L. Marcum (“Plaintiffs”) purchased real property

containing a house originally constructed by Haskel “Hack” Ayers and Tomi Ayers

(“Defendants”). After the purchase, Plaintiffs discovered problems with the house. Plaintiffs

and Defendants entered into a settlement agreement. Subsequently, Plaintiffs discovered

additional problems with the house. Plaintiffs sued Defendants. Defendants filed a motion

for summary judgment. After a hearing, the Trial Court granted Defendants summary

judgment after finding that the settlement agreement constituted an unambiguous release of

all claims past, present, and future. Plaintiffs appeal to this Court. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed;

Case Remanded

D. M ICHAEL S WINEY, J., delivered the opinion of the Court, in which H ERSCHEL P. F RANKS,

P.J., and J OHN W. M CC LARTY, J., joined.

Stephen A. Marcum, Huntsville, Tennessee, for the appellants, Timothy Scott Marcum and

Audrey L. Marcum.

Dudley W. Taylor, Knoxville, Tennessee, for the appellees, Haskel “Hack” Ayers and Tomi

Ayers.

OPINION

Background

In August of 2005 Plaintiffs and Defendants entered into a Contract For Sale

of Real Estate (“the Contract”) for Plaintiffs to purchase a house and approximately 15 acres

of real property known as Mountain Ayers from Defendants. The Contract provided, in

pertinent part:

No representations or warranties about the condition of the property has been

made unless stated herein. It is agreed that the purchaser is buying the

property on an “as-is” basis. It is the sole responsibility of the buyer to inspect

the above property prior to closing or possession, whichever comes first and

the buyer agrees that he has not relied upon any representation made by Ayers

Real Estate or its agent in describing the property.

In connection with the sale of the property, Defendants provided a Tennessee Residential

Property Condition Disclosure (“the Disclosure”). In the Disclosure, in response to the

question of whether the seller was aware of any landfill on the property, Defendants checked

the space for ‘no.’

After purchasing Mountain Ayers, Plaintiffs began to experience problems with

the house including problems with doors in the sun room. Plaintiffs contacted Defendants

about these problems. In June of 2006, Plaintiffs and defendant Hack Ayers executed a

settlement letter (“the Settlement Letter”) which provided:

From: Hack Ayers

To: Scott and Audrey Marcum

Re: Home known as Mountain Ayer

Mountain Ayer Lane, Jacksboro, TN 37757

The fifty-two hundred dollars ($5200) [sic] is accepted, in full, for damages

to Mountain Ayers. This will be the final settlement paid on this property.

Some time after executing the Settlement Letter, Plaintiffs experienced further

problems with the house and discovered, according to Plaintiffs, that it had been constructed

on fill dirt, which they alleged was not “adequately compacted or prepared.” Plaintiffs sued

Defendants.

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Defendants filed a motion for summary judgment. After a hearing, the Trial

Court entered its order on November 29, 2011 granting Defendants summary judgment after

finding that the Settlement Letter was not ambiguous and “constituted a full and complete

release of any and all claims growing out of the sale of Defendants’ residence to Plaintiffs,

whether past, present or future ….” Plaintiffs appeal to this Court.

Discussion

Although not stated exactly as such, Plaintiffs raise one issue on appeal:

whether the Trial Court erred in granting summary judgment to Defendants after finding that

the Settlement Letter constituted an unambiguous release of all claims.

Our Supreme Court reiterated the standard of review in summary judgment

cases as follows:

The scope of review of a grant of summary judgment is well

established. Because our inquiry involves a question of law, no presumption

of correctness attaches to the judgment, and our task is to review the record to

determine whether the requirements of Rule 56 of the Tennessee Rules of Civil

Procedure have been satisfied. Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn.

1997); Cowden v. Sovran Bank/Cent. S., 816 S.W.2d 741, 744 (Tenn. 1991).

A summary judgment may be granted only when there is no genuine

issue of material fact and the moving party is entitled to judgment as a matter

of law. Tenn. R. Civ. P. 56.04; Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn.

1993). The party seeking the summary judgment has the ultimate burden of

persuasion “that there are no disputed, material facts creating a genuine issue

for trial . . . and that he is entitled to judgment as a matter of law.” Id. at 215.

If that motion is properly supported, the burden to establish a genuine issue of

material fact shifts to the non-moving party. In order to shift the burden, the

movant must either affirmatively negate an essential element of the

nonmovant’s claim or demonstrate that the nonmoving party cannot establish

an essential element of his case. Id. at 215 n.5; Hannan v. Alltel Publ’g Co.,

270 S.W.3d 1, 8-9 (Tenn. 2008). “[C]onclusory assertion[s]” are not sufficient

to shift the burden to the non-moving party. Byrd, 847 S.W.2d at 215; see also

Blanchard v. Kellum, 975 S.W.2d 522, 525 (Tenn. 1998). Our state does not

apply the federal standard for summary judgment. The standard established

in McCarley v. West Quality Food Service, 960 S.W.2d 585, 588 (Tenn. 1998),

sets out, in the words of one authority, “a reasonable, predictable summary

judgment jurisprudence for our state.” Judy M. Cornett, The Legacy of Byrd

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v. Hall: Gossiping About Summary Judgment in Tennessee, 69 Tenn. L. Rev.

175, 220 (2001).

Courts must view the evidence and all reasonable inferences therefrom

in the light most favorable to the non-moving party. Robinson v. Omer, 952

S.W.2d 423, 426 (Tenn. 1997). A grant of summary judgment is appropriate

only when the facts and the reasonable inferences from those facts would

permit a reasonable person to reach only one conclusion. Staples v. CBL &

Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000). In making that assessment, this

Court must discard all countervailing evidence. Byrd, 847 S.W.2d at 210-11.

Recently, this Court confirmed these principles in Hannan.

Giggers v. Memphis Housing Authority, 277 S.W.3d 359, 363-64 (Tenn. 2009).

“Issues relating to the interpretation of written instruments involve legal rather

than factual issues. These essentially legal questions can be resolved using summary

judgment when relevant facts are not in dispute.” The Pointe, LLC v. Lake Management

Association, Inc., 50 S.W.3d 471, 474 (Tenn. Ct. App. 2000) (citations omitted).

In the case now before us, the Settlement Letter constituted a release.

“Because the release is a contract, rules of construction for interpreting a contract are used

in construing a release.” Jackson v. Miller, 776 S.W.2d 115, 117 (Tenn. Ct. App. 1989). As

this Court stated in Kafozi v. Windward:

In resolving a dispute concerning contract interpretation, our task is to

ascertain the intention of the parties based upon the usual, natural, and

ordinary meaning of the contract language. Planters Gin Co. v. Fed.

Compress & Warehouse Co., Inc., 78 S.W.3d 885, 889-90 (Tenn. 2002)(citing

Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999)). A determination of

the intention of the parties “is generally treated as a question of law because

the words of the contract are definite and undisputed, and in deciding the legal

effect of the words, there is no genuine factual issue left for a jury to decide.”

Planters Gin Co., 78 S.W.3d at 890 (citing 5 Joseph M. Perillo, Corbin on

Contracts, § 24.30 (rev. ed. 1998); Doe v. HCA Health Servs. of Tenn., Inc.,

46 S.W.3d 191, 196 (Tenn. 2001)). The central tenet of contract construction

is that the intent of the contracting parties at the time of executing the

agreement should govern. Planters Gin Co., 78 S.W.3d at 890. The parties’

intent is presumed to be that specifically expressed in the body of the contract.

"In other words, the object to be attained in construing a contract is to ascertain

the meaning and intent of the parties as expressed in the language used and to

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give effect to such intent if it does not conflict with any rule of law, good

morals, or public policy." Id. (quoting 17 Am. Jur. 2d, Contracts, § 245).

This Court's initial task in construing the Contract at issue is to

determine whether the language of the contract is ambiguous. Planters Gin

Co., 78 S.W.3d at 890. If the language is clear and unambiguous, the literal

meaning of the language controls the outcome of the dispute. Id. A contract

is ambiguous only when its meaning is uncertain and may fairly be understood

in more than one way. Id. (emphasis added). If the contract is found to be

ambiguous, we then apply established rules of construction to determine the

intent of the parties. Id. Only if ambiguity remains after applying the pertinent

rules of construction does the legal meaning of the contract become a question

of fact. Id.

Kafozi v. Windward Cove, LLC, 184 S.W.3d 693, 698-99 (Tenn. Ct. App. 2005).

The Trial Court found the Settlement Letter to be unambiguous. We agree.

The Settlement Letter provides: “The fifty-two hundred dollars ($5200) [sic] is accepted, in

full, for damages to Mountain Ayers. This will be the final settlement paid on this property.”

The plain, clear, and unambiguous terms of the Settlement Letter provide that the $5,200 was

accepted as the final settlement paid for damages related to Mountain Ayers.

In their brief on appeal Plaintiffs assert that the Settlement Letter is ambiguous,

in part, because the terms ‘home,’ ‘damages,’ and ‘this property’ are not defined within the

document, and because the document does not include the words ‘all’ or ‘release.’ To begin,

we note that the terms ‘home,’ ‘damages,’ and ‘this property’ may not fairly be understood

here in more than one way. No evidence was produced that any other parcel of real property

containing a house is known as Mountain Ayers. Furthermore, the address of Mountain

Ayers is provided in the Settlement Letter. As such, the term ‘home’ when paired with the

further information in the Settlement Letter clearly refers to the real property containing a

house sold by Defendants to Plaintiffs. Likewise, the term ‘this property’ is sufficiently

defined within the Settlement Letter to refer to the real property, including the house, sold

to Plaintiffs by Defendants. Although Plaintiffs assert that the term ‘this property’ could

mean “patio doors,” “water damaged floor,” “the structure plus the real property,” or

“something else,” ‘this property’ is not restricted in any manner within the Settlement Letter

and clearly refers to Mountain Ayers.

Plaintiffs assert in their brief on appeal that the term ‘damages’ could refer to

specific damages, damages to the structure, damages to the land, or “something else.” This

argument is simply disingenuous. The term ‘damages’ is not restricted to specific damages,

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nor is it restricted in any other manner. Damages means damages. It can not fairly be

understood here to be “something else.”

As for the fact that the Settlement Letter does not contain the terms ‘all’ or

‘release,’ this argument is without merit. A release need not contain these specific words in

order to constitute a valid release. The Settlement Letter identifies the parties to the release,

identifies the subject matter of the release, i.e., the real property, including the house, sold

to Plaintiffs by Defendants, and provides that the $5,200 is accepted “in full” and is “the final

settlement” for damages. The Settlement Letter clearly and unambiguously is a release even

though it does not contain the term ‘release,’ and it clearly and unambiguously defines the

scope of the release even though it does not contain the term ‘all.’

Plaintiffs cite to Richland Country Club, Inc. v. CRC Equities, Inc., 832 S.W.2d

554 (Tenn. Ct. App. 1991), and Cross v. Earls, 517 S.W.2d 751 (Tenn. 1974), in support of

their argument that the Settlement Letter is ambiguous because it allegedly does not define

the intended scope of the release. As discussed above, however, the Settlement Letter does

define the scope of the release. The Settlement Letter by its clear and unambiguous terms

is a release for damages to Mountain Ayers and constitutes the final settlement. The

Settlement Letter clearly and unambiguously sets forth the intent of the parties with regard

to the scope of the release.

In their brief on appeal Plaintiffs continue to assert that the Settlement Letter

is ambiguous and that other evidence tendered by the parties is in conflict and creates a

question of fact. We, however, agree with the Trial Court that the language of the Settlement

Letter is not ambiguous. Because the Settlement Letter is unambiguous, there was no need

for the Trial Court, and no need for this Court, to consider other extraneous evidence. The

literal meaning of the unambiguous language of this contract must control the outcome. The

Trial Court correctly held that consideration of evidence outside of the unambiguous

language of the Settlement Letter was unnecessary and would have been improper.

It is not the role of the courts to rewrite contracts for dissatisfied parties. “[I]t

is an often-cited principle in this jurisdiction that ‘[i]n the absence of mistake or fraud, the

courts will not create or rewrite a contract simply because its terms are harsh or because one

of the parties was unwise in agreeing to them.’” Towe Iron Works, Inc. v. Towe, 243 S.W.3d

562, 569 (Tenn. Ct. App. 2007) (quoting Dobbs v. Guenther, 846 S.W.2d 270, 276 (Tenn.

Ct. App. 1992)).

Plaintiffs also assert in their brief on appeal that Defendants were guilty of

fraud or misrepresentation and that because of this the Trial Court should not have relied

upon the Settlement Letter. Plaintiffs allege that Defendants committed fraud because

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Defendants allegedly were aware of the landfill when they sold Mountain Ayers to Plaintiffs.

Unfortunately for Plaintiffs, even if it were determined that Defendants had committed fraud

in this manner, such fraud was not committed in connection with inducing Plaintiffs to enter

into the Settlement Letter. Rather, such alleged fraud, and we make no assertion with regard

to whether these acts did or did not constitute fraud, would have been committed in

connection with Defendants’ sale of Mountain Ayers to Plaintiffs, which occurred well

before the parties entered into the Settlement Letter. Plaintiffs have shown no fraud which

would invalidate the contractual nature of the Settlement Letter.

The clear and unambiguous terms of the Settlement Letter release Defendants

from the claims made in this lawsuit. There are no genuine disputed issues of material fact

and Defendants are entitled to judgment as a matter of law. As such, the Trial Court

correctly granted Defendants summary judgment. We affirm the Trial Court’s November 29,

2011 order.

Conclusion

The judgment of the Trial Court is affirmed, and this cause is remanded to the

Trial Court for collection of the costs below. The costs on appeal are assessed against the

appellants, Timothy Scott Marcum and Audrey L. Marcum, and their surety.

_________________________________

D. MICHAEL SWINEY, JUDGE

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