Diane Worley v. White Tire of Tennessee, Inc. and Gazazbo, L.L.C.

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

May 9, 2005 Session

DIANE WORLEY v. WHITE TIRE OF TENNESSEE, INC., and

GAZAZBO, L.L.C.

Direct Appeal from The Law Court for Sullivan County

No. C11134 Hon. Richard E. Ladd, Judge

No. E2004-02025-COA-R3-CV - FILED JULY 22, 2005

The Trial Court entered Judgment for plaintiff for damages from destruction of road over easement

and reformed deed. On appeal, we affirm.

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

HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the court, in which CHARLES D. SUSANO ,

JR., J., and D. MICHAEL SWINEY , J., joined.

Russell W. Adkins, Kingsport, Tennessee, for appellant, Gazazbo, LLC.

Mark S. Dessauer, Kingsport, Tennessee, for appellant, White Tire of Tennessee, Inc.

Shelton B. Hillman, Jr., Bristol, Tennessee, for appellee.

OPINION

In this action, plaintiff alleged defendants White Tire of Tennessee, Inc.(“White”) and

Gazazbo, L.L.C., (“Gazazbo”) trespassed on her property or ignored her easement, and slandered her

title. Following trial, the Trial Court entered Judgment for plaintiff and all parties have appealed.

In the Complaint, plaintiff alleged that she had bought a 20 acre tract of land from

White Tire and alleged that in the deed White Tire retained the right to use a 50 foot right-of-way

to access their adjoining property. Further, that there was a 15 foot wide gravel road inside the

easement on the parcel of property that she purchased, and that she used the property from 1993 to

April 2000 as both a residence and a commercial trucking operation.

In October 1999, she alleged that White Tire sold the tract it had already sold to

plaintiff along with the tract it still owned to Gazazbo. Gazazbo informed plaintiff that it intended

to grade over the gravel road and terminate plaintiff’s use of the same, in the face of plaintiff’s

advices that she was entitled to use the roadway. Further, in April 2000, Gazazbo dug up the gravel

road and denied plaintiff access to her home and business.

Additionally, plaintiff alleged that White Tire had misrepresented the location of the

gravel road, and that the deliberate destruction of the road, amounted to a slander of title, and she

sought judgment for damages and an injunction. After defendants answered denying the allegations

of the Complaint, plaintiff amended her Complaint seeking a rescission of the purchase of the

property from White Tire, asking for her purchase price plus all cost of improvements.

Following a lengthy trial, the Trial Court entered a Judgment, finding that plaintiff

failed to carry her burden of proof regarding rescission, slander of title, or creation of an implied

easement. The Court did find that plaintiff was entitled to the reasonable rental value of her property

from Gazazbo, with the proper amount to be decided by a special master, and that plaintiff was also

entitled to damages of $12,000.00 from White Tire, plus prejudgment interest. The Court reformed

the deed to plaintiff from White Tire, to set the boundary line along the path of the old road.

In its Memorandum Opinion, the Trial Court found by clear, cogent, and convincing

evidence that there was a mutual mistake of fact with regard to the original deed to plaintiff, such

that both parties intended that plaintiff would own the road and not just the 50 foot strip. The Court

noted that defendants did not call anyone to refute that testimony, and that Bruce Cross, a part owner

of Gazazbo, which was in the business of property development, testified that he did not know where

the boundaries were. The Court ordered reformation of the deed from White Tire to Worley so that

the boundary would be with the road, and found that Gazazbo was not an innocent purchaser because

it was on notice that plaintiff claimed the road was the boundary, yet it proceeded to develop the

property at its own risk. Moreover, the development of the property occurred after this action was

filed, and after Gazazbo was on notice that this was an issue.

The Court’s Special Master determined that Gazazbo owed rental value to plaintiff

of $1,050.99, plus interest, which report was confirmed by the Court. A Final Judgment was entered

reflecting these values, and these appeals ensued.

Defendants argue that it was improper for the Trial Court to grant the remedy of

reformation when the plaintiff did not plead such in her Complaint.

Plaintiff’s Complaint repeatedly asserts that the gravel road was on her property, and

that the survey at the time she viewed the property showed the road being on her tract and that all

parties to the transaction acknowledged that the road was on her tract. Plaintiff then asked the Court

to require defendants to “prepare proper documents for recording recognizing Plaintiff’s ownership

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and/or implied easement in said graveled road”.

As we have held:

While we recognize that the adoption of the Tennessee Rules of Civil Procedure

greatly relaxed the requirements as to pleadings, pleading of some facts giving rise

to a claim for relief is still a necessary requirement. See W & O Constr. Co. v. City

of Smithville, 557 S.W.2d 920 (Tenn.1977). The adverse party is entitled to have

sufficient notice to inform him of the allegations he is called upon to answer.

Jasper Engine and Transmission Exchange v. Mills, 911 S.W.2d 719, 720 (Tenn. Ct. App. 1995).

In this case, the plaintiff pled facts giving rise to a claim for reformation, and she also

asked for that relief in her prayer, though not specifically by name. Given the standard for pleading

under the requirements of Tenn. R. Civ. P. 8, we conclude plaintiff’s Complaint is sufficient to state

a claim for reformation. See, e.g., Adams v. Carter County Mem. Hosp., 548 S.W.2d 307 (Tenn.

1977); Williamson County v. Twin Lawn Dev. Co., 498 S.W.2d 317 (Tenn. 1973); Lamons v.

Chamberlain, 909 S.W.2d 795 (Tenn. Ct. App. 1993).

Gazazbo additionally asserts that it was improper for the Trial Court to order

reformation where Gazazbo was an innocent purchaser of the property and was not a party to the

transaction between plaintiff and White Tire.

We have also previously stated that reformation of a deed for mutual mistake “is an

action in equity and will not lie if it affects intervening rights of third persons who actually and

justifiably rely upon recorded instruments.” Minton v. Long, 19 S.W.3d 231, 241 (Tenn. Ct. App.

1999).

In this case there is no proof that Gazazbo actually and justifiably relied on the

recorded instruments. In fact, Cross testified that he purchased the property having no idea where

the boundaries were, saw the road and plaintiff’s use of same, did not have a survey done until some

months after he had purchased the property, and only after the survey learned that the road crossed

the corner of his property. Where a party has notice of the mistake, or there are facts/circumstances

which would put a reasonable person on notice that a mistake has occurred such that inquiry would

be prudent, then that party is typically not considered an innocent purchaser and the deed may be

reformed as against that person. Johnson v. Johnson, 67 Tenn. 261 (1874); see also Smotherman

v. Blackwell, 261 S.W.2d 782 (Ark. 1953); Shelor v. Witt, 387 N.E.2d 18 (Ill. App. Ct. 1979);

Sargent v. Coolidge, 433 A.2d 738 (Me. 1981); Walters v. Tucker, 308 S.W.2d 673 (Mo. 1957);

Deubel v. Dearwester, 172 N.E. 640 (Ohio Ct. App. 1930); Zink v. Davis, 277 P.2d 1007 (Or. 1954).

With Cross’ admission that, at the time he purchased the property, he did not know

where the boundaries were, and observed the road and plaintiff’s use, and that it was the only way

in to plaintiff’s property, the Trial Court correctly concluded that Gazazbo was not an innocent

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purchaser and that reformation of the deed was appropriate. This issue is without merit.

Finally, Gazazbo argues that the facts do not support reformation, which requires

clear and convincing evidence. The proof was that plaintiff and her husband were both told by

White Tire’s agent that the roadway/driveway was included in the tract of land they were

purchasing.1 They were further shown survey flags which supported the idea that the driveway was

encompassed by their property, and the testimony of plaintiff’s daughter and former brother-in-law

bolstered this proof. More importantly, the attorney who was employed by White Tire to draw up

the deed with respect to this transaction testified that he was told by White Tire’s agent that the

roadway was completely within the plaintiff’s boundary, and thus there was no need to refer to it in

the deed because it was on the tract being conveyed to plaintiff. There is no contradiction of this

testimony by any agent/witness of White Tire. Given the state of the record, there was clear and

convincing evidence and uncontradicted proof that there was a mutual mistake in the drafting of the

subject deed. Therefore, the Trial Court properly granted plaintiff reformation of the deed to

comport with the parties’ intent.

Next, defendants argue that the Trial Court erred in admitting parol evidence to

contradict the terms of the deed. As our Supreme Court has previously explained:

The general rule is that parol evidence is not admissible to contradict a written

agreement . . . As said in Brown v. Brown, 45 Tenn. App. 78, 94, 320 S.W.2d 721,

the rule announced in many of our early Tennessee cases has been consistently

followed. One of these cases is Littlejohn v. Fowler, 45 Tenn. 284, where it was said

that parol evidence cannot be admitted to contradict or vary the terms or to enlarge

or diminish the obligation of a written instrument or deed, except on grounds of

fraud, accident or mistake. (Emphasis supplied).

Clayton v. Haury, 452 S.W.2d 865, at 867-8 (Tenn. 1970). Thus, defendants’ contention that parol

evidence is normally not allowed to contradict the terms of a written document is correct, except

where there is fraud or mistake, as here. In these situations, parol evidence is admissible. Id., see

also GRW Enterprises , Inc., v. Davis, 797 S.W.2d 606 (Tenn. Ct. App. 1990); Brown v. Brown, 320

S.W.2d 721 (Tenn. Ct. App. 1958). This issue is also without merit.

The Court assessed damages of $12,000.00 against White Tire, apparently based on

the estimate plaintiff received regarding the cost of building a new access road. The Court stated that

it found that “it was all White’s fault” and thus the Court assessed the damages for the building of

the road against White. The evidence does not preponderate against the Court’s award either in the

finding of White’s liability, or in the amount of damages assessed. The proof established that White

intended to convey the disputed property to plaintiff, but failed to do so, and it failed to rectify the

1

The tract plaintiff purchased was part of a larger tract owned by White Tire, of which it

retained a portion, so the tract plaintiff owns was not a separately-deeded tract before this

transaction.

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situation when it was brought to its attention. There was no proof to the contrary. Moreover, the

amount of damages was based upon an estimate plaintiff received regarding the cost to rebuild the

road, and this proof was undisputed by White.

White also argues the Trial Court should not have awarded damages in addition to

reformation, because plaintiff was made whole by the award of the disputed property. This argument

ignores the fact that plaintiff no longer has an access road to her property where one previously

existed, and another road will have to be built, which is an out-of-pocket expense to plaintiff which

she would not otherwise have incurred. Plaintiff was not made whole by the reformation alone, and

the road was destroyed through no fault of hers, which the Trial Court found to be the fault of White

Tire. This issue is without merit.

Plaintiff argues the Trial Court should have found defendants liable for slander of

title, and awarded damages accordingly. Brooks v. Lambert, 15 S.W.3d 482, 484 (Tenn. Ct. App.

1999), sets forth what a plaintiff is required to prove to establish a successful claim for slander of

title. In Brooks, we found that the unsuccessful defendant had a good faith basis for their assertion

of title and that they were conveyed the property in question by a purported owner who also owned

adjacent property. Id. We found that there was no malice shown when one acted on good faith claim

of title, even if the claim was determined to be erroneous. Id. In this case, Gazazbo relied upon the

deed given to it by White Tire and the subsequent survey, and while the circumstances should have

put Gazazbo on notice regarding the dispute about the roadway before it destroyed the same, the

evidence does not necessarily establish malice on Gazazbo’s part, since there was evidence of a good

faith basis for claiming the property. Likewise, there was no proof that White Tire acted maliciously.

The evidence does not support a claim for slander of title.

Further, plaintiff argues that the Trial Court erred in failing to find Gazazbo liable for

trespass or intentional destruction of the roadway, but cites no authority for this contention. As we

have recognized, “Failure to cite authority for propositions in arguments submitted on appeal

constitutes waiver of the issue.” Messer Griesheim Industries, Inc. v. Cryotech of Kingsport, Inc.,

131 S.W.3d 457, 474 (Tenn. Ct. App. 2003). The only case cited by plaintiff with regard to this

issue does not deal with trespass, but does state as follows:

In order for an issue to be considered on appeal, a party must, in his brief, develop

the theories or contain authority to support the averred position as required by

Tennessee Rules of Appellate Procedure 27(a). "Where a party makes no legal

argument and cites no authority in support of a position, such issue is deemed to be

waived and will not be considered on appeal."

Hawkins v. Hart, 86 S.W.3d 522, 531 (Tenn. Ct. App. 2001)(citations omitted). This issue was

waived by the plaintiff’s failure to cite authority or develop her argument in relation to such

authority.

Finally, plaintiff argues that an award of punitive damages was warranted in this case,

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and that the trial court erred in failing to do so. It is “established law that an award of punitive

damages lies within the discretion of the trier of facts.” Whittington v. Grand Valley Lakes, Inc.,

547 S.W.2d 241, 243 (Tenn. 1977).

The Trial Court in this case found no basis for punitive damages, and this finding is

appropriate, since there was no clear and convincing evidence that defendants’ conduct was

intentional, fraudulent, malicious or reckless. The Trial Court did not abuse its discretion in failing

to award punitive damages in this case. See also, Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn.

1992).

We affirm the Judgment of the Trial Court and remand, with the costs of the

appeal assessed one-half to plaintiff and one-half to the defendants White Tire of Tennessee, Inc.,

and Gazazbo, LLC., jointly.

______________________________

HERSCHEL PICKENS FRANKS, P.J.

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