Red Ink Camel Company v. Myron Dowell

11/01/2018

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

August 21, 2018 Session

RED INK CAMEL COMPANY v. MYRON DOWELL, ET AL.

Appeal from the Circuit Court for Davidson County

No. 17C381 Kelvin D. Jones, Judge

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No. M2017-02260-COA-R3-CV

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Plaintiff real estate developer appeals the trial court’s decision granting summary

judgment to the defendants on claims of tortious interference with a contract, inducement

of breach of contract, and promissory fraud. Because the plaintiff failed to construct any

argument responsive to the stated basis for the trial court’s grant of summary judgment,

we affirm.

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

J. STEVEN STAFFORD, P.J., W.S, delivered the opinion of the court, in which BRANDON O.

GIBSON and KENNY ARMSTRONG, JJ., joined.

Kathy A. Leslie, Nashville, Tennessee, for the appellant, Red Ink Camel Company.

Jean Dyer Harrison, Nashville, Tennessee, for the appellees, Myron Dowell, and

Strategic Options International, LLC.

MEMORANDUM OPINION1

Background

1

Rule 10 of the Rules of the Court of Appeals of Tennessee provides:

This Court, with the concurrence of all judges participating in the case, may affirm,

reverse or modify the actions of the trial court by memorandum opinion when a formal

opinion would have no precedential value. When a case is decided by memorandum

opinion it shall be designated “MEMORANDUM OPINION”, shall not be published, and

shall not be cited or relied on for any reason in any unrelated case.

Plaintiff/Appellant Red Ink Camel Company (“Red Ink”) is a real estate developer

in Nashville, Tennessee. Kathy A. Leslie is Red Ink’s President.2 On February 17,

2017, Red Ink filed a complaint for damages against Defendants/Appellees Myron

Dowell, and his company Strategic Options International, LLC (“Strategic Options” and

together with Mr. Dowell, “Appellees”) alleging tortious interference with a contract,

inducement of breach of contract, and promissory fraud. In support of these claims, Red

Ink attached a number of emails and letters to the complaint.

In the complaint, Red Ink alleged that Appellees entered into an agreement with

Red Ink to finance the purchase of two properties for redevelopment, known by the

parties as the Dickerson Pike properties. According to Red Ink, at the time of this alleged

agreement, Red Ink had already bid on and won the right to purchase two groups of

properties on Dickerson Pike, both of which contained a finance contingency. Thereafter,

Red Ink alleged that Red Ink and Mr. Dowell, on behalf of Strategic Options, orally

agreed that Appellees would invest in the venture. In furtherance of the venture, Red Ink

informed Appellees of the properties under contract, as well as other properties that Red

Ink intended to purchase. When the time for purchase came closer, however, Ms. Leslie

became concerned that Appellees would not fulfill their alleged promises. Red Ink

thereafter obtained an extension on the closing date of the properties and also contacted

Appellees to obtain evidence of Appellees’ commitment to the venture. The new closing

date was set for June 27, 2014.

On May 21, 2014, Appellees responded with an offer to finance part of the

Dickerson Pike properties, with both parties being co-owners; Red Ink counter-offered by

email dated May 23, 2014. On May 27, 2014, Appellees rejected Red Ink’s counter-offer,

but stated that it would stand by the May 21, 2014 offer. No documents were included to

show that this offer was ever accepted by Red Ink.

On June 24, 2014, Mr. Dowell informed Red Ink that Appellees would no longer

pursue development of the properties with Red Ink due to the “risk of exposure.” Without

financing, Red Ink’s contracts expired when there was no closing on June 27, 2014.3 Red

Ink alleged, however, that Appellees had been negotiating with the seller to

independently purchase one of the Dickerson Pike parcels as early as the beginning of

June 2014. Thirty days following the expiration of Red Ink’s sales contracts,4 Appellees

allegedly purchased one of the Dickerson Pike properties for $50,000.00 more than

offered by Red Ink. Red Ink alleged that Appellees’ failure to follow through with their

alleged agreement to finance the Dickerson Pike property redevelopment caused Red Ink

2

Ms. Leslie is a licensed attorney and represented Red Ink both in the trial court and on this

appeal.

3

Red Ink had signed a document to obtain an extension on one group of properties that waived

the financial contingency. Nevertheless, there is no dispute that in light of the lack of financing, the

contracts expired and the seller sought no recourse against Red Ink over the failure of the sales contracts.

4

Red Ink alleged that Appellees’ offer caused the seller to refuse any additional extensions.

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to sustain damages in the form of lost profits. Red Ink also sought treble damages

pursuant to Tennessee Code Annotated section 47-50-109.5

Appellees filed an answer on May 5, 2017, denying the material allegations

contained in the complaint. In addition, Appellees raised as an affirmative defense that

Tennessee’s statute of frauds, Tennessee Code Annotated section 29-2-101,6 barred all of

Red Ink’s claims due to the lack of written agreement between Red Ink and Appellees to

enter into any joint venture concerning the real estate development. Thereafter, Appellees

filed a motion for summary judgment, arguing that Red Ink’s complaint and the

supporting documents attached thereto, failed to state claims for tortious interference with

a contract, inducement of breach of contract, and promissory fraud. Appellees attached to

their motion both a memorandum of law and a statement of undisputed material facts. In

addition to arguing that the documents showed that Red Ink could not prove essential

elements of each claim, Appellees asserted that each claim raised in the complaint was

barred by the statute of frauds, where there was no written contact evincing an agreement

between Red Ink and Appellees to enter into a joint venture for financing of the

Dickerson Pike properties. According to Appellees, the documents attached to Red Ink’s

complaint showed nothing more than negotiations that never came to fruition.

Red Ink filed no specific response to Appellees’ motion or memorandum of law,

but did respond to Appellees’ statement of undisputed material facts, as well as filed its

own statement of undisputed material facts. With regard to each fact alleged by Appellees

that Red Ink disputed, Red Ink cited only to a declaration made by Ms. Leslie, in her

capacity as Red Ink’s President, that was filed contemporaneously. Although the

declaration was ten pages long, Red Ink did not indicate which page or paragraph was

referenced with regard to any of its denials. Moreover, in its own responsive statement of

undisputed material facts, Red Ink indicated only in the introductory paragraph that the

facts were supported by Ms. Leslie’s declaration; none of the forty-six allegations were

supported by any specific reference to a supporting document, much less a page or

paragraph number. As a result, Appellees objected on the basis that Red Ink’s response

5

Section 47-50-109 provides:

It is unlawful for any person, by inducement, persuasion, misrepresentation, or other

means, to induce or procure the breach or violation, refusal or failure to perform any

lawful contract by any party thereto; and, in every case where a breach or violation of

such contract is so procured, the person so procuring or inducing the same shall be liable

in treble the amount of damages resulting from or incident to the breach of the contract.

The party injured by such breach may bring suit for the breach and for such damages.

6

Section 29-2-101(a) provides that “No action shall be brought . . . [u]pon any contract for the

sale of lands, tenements, or hereditaments, or the making of any lease thereof for a longer term than one

(1) year” unless the contract is evidenced by a writing signed by the party to be charged. The statute also

provides that the requirement of a written contract also applies “against a lender or creditor upon any

promise or commitment to lend money or to extend credit[.]” Tenn. Code Ann. 29-2-101(b).

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violated Rule 56.03 of the Tennessee Rules of Civil Procedure,7 as well as local rules

governing motion practice.

A hearing on the motion for summary judgment was held on October 6, 2017. No

court reporter was present. At the conclusion of the hearing, the trial court orally ruled

that it would grant summary judgment in favor of Appellees. Appellees thereafter

prepared an order, which was signed by the trial court and filed on October 18, 2017. In

the order, the trial court ruled that Red Ink’s response to the summary judgment motion

violated both the Tennessee Rules of Civil Procedure and the local rules. With regard to

Red Ink’s inducement to breach a contract, the order provided the following reasoning:

Red Ink itself had no legal right to rely on anything with Defendants

because the statute of frauds prevents the imposition of any legal duty on

any party relative to the transfer of interest in a property without a written

document. It is undisputed there was no written agreement between the

parties. T.C.A. § 29-2-101 (a) and (b) requires a written document for the

sale of a property or to bind someone to finance the purchase of the

property. Plaintiff's claim for inducement of breach of contract therefore

must be dismissed.

The trial court likewise relied on the statute of frauds as fatal to Red Ink’s tortious

interference and promissory fraud claims. From this order, Red Ink appeals.

Issues Presented

Red Ink raises two issues, which are taken from its appellate brief:

1. Whether the trial court erred in granting the Appellee’s motion for summary

judgment.

2. Whether the trial court erred in allowing Appellee to draft the summary judgment

order allowing them to make specific findings of facts not stated from the bench.

7

Rule 56.03 provides, in relevant part, that a party defending against summary judgment must

respond to the movant’s statement of undisputed facts by

[E]ither (i) agreeing that the fact is undisputed, (ii) agreeing that the fact is undisputed for

purposes of ruling on the motion for summary judgment only, or (iii) demonstrating that

the fact is disputed. Each disputed fact must be supported by specific citation to the

record. Such response shall be filed with the papers in opposition to the motion for

summary judgment.

(Emphasis added).

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Standard of Review

Summary judgment is appropriate where: (1) there is no genuine issue with regard

to the material facts relevant to the claim or defense contained in the motion and (2) the

moving party is entitled to judgment as a matter of law on the undisputed facts. Tenn. R.

Civ. P. 56.04. This Court reviews a trial court’s grant of summary judgment de novo with

no presumption of correctness. Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477

S.W.3d 235, 250 (Tenn. 2015). In reviewing the trial court’s decision, we must view all

of the evidence in the light most favorable to the nonmoving party and resolve all factual

inferences in the nonmoving party’s favor. Luther v. Compton, 5 S.W.3d 635, 639 (Tenn.

1999); Muhlheim v. Knox. Cnty. Bd. of Educ., 2 S.W.3d 927, 929 (Tenn. 1999). If the

undisputed facts support only one conclusion, then the court’s summary judgment will be

upheld because the moving party was entitled to judgment as a matter of law. See White

v. Lawrence, 975 S.W.2d 525, 529 (Tenn. 1998); McCall v. Wilder, 913 S.W.2d 150,

153 (Tenn. 1995).

Analysis

I.

We begin with Red Ink’s assertion that the trial court erred in allowing Appellee to

draft the order granting summary. According to Red Ink, the order is not reflective of the

trial court’s oral ruling. In Smith v. UHS of Lakeside, 439 S.W.3d 303 (Tenn. 2014), the

Tennessee Supreme Court held that the trial court’s judgment, in the context of granting

or denying a motion for summary judgment, must be “adequately explained and [] the

product of the trial court’s independent judgment[,]” whether through an order prepared

by the trial court or an oral ruling later memorialized by a party-prepared order. Id. at

314. Although judge-prepared orders are preferable, party-prepared orders are permitted

when two conditions are met: (1) “‘the findings and conclusions must accurately reflect

the decision of the trial court’”; and (2) “‘the record must not create doubt that the

decision represents the trial court’s own deliberations and decision.’” In re Matthew T.,

No. M2015-00486-COA-R3-PT, 2016 WL 1621076, at *5 (Tenn. Ct. App. Apr. 20,

2016). (quoting Smith, 439 S.W.3d at 316).

We must conclude, however, that the record on appeal is insufficient to cast doubt

as to whether the order at issue represents the trial court’s independent judgment. Here,

no court reporter was present for the summary judgment hearing in which the trial court

made its oral ruling. Red Ink thereafter submitted a statement of the evidence pursuant to

Rule 24(c) of the Tennessee Rules of Appellate Procedure. The trial court ruled that the

statement of evidence did not comply with Rule 24(c) by order of February 13, 2018.

Therein, the trial court ruled that the statement of evidence was not an accurate and

complete accounting of the summary judgment hearing. Generally, the trial court’s

rulings with regard to the completion of the record are conclusive absent extraordinary

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cause. See Tenn. R. App. P. 24(c) (“Absent extraordinary circumstances, the

determination of the trial court is conclusive.”). Red Ink has not designated as an issue,

nor argued in its brief, that the trial court erred in excluding the proffered statement of the

evidence.8 In the absence of a transcript or statement of the evidence or other proof to the

contrary, however, we must presume that the order at issue is reflective of the trial court’s

ruling.9 Cf. In re M.L.D., 182 S.W.3d 890, 895 (Tenn. Ct. App. 2005) (“In the absence of

a transcript or statement of the evidence, we conclusively presume that the findings of

fact made by the trial court are supported by the evidence and are correct.”).

Moreover, Red Ink has failed to specify what was included in the written order

that was not included in the trial court’s oral ruling in anything more than the most

general sense. Rather, Red Ink appears to take issue with the fact that the order is not a

“word for word” recitation of the trial court’s ruling, as Red Ink states that Appellees

suggest. From our review of the briefs, Appellees do not assert that the order is a

verbatim transcript of the trial court’s ruling, but rather a recitation of the trial court’s

ruling created from notes from the trial court’s oral decision. Moreover, Tennessee law

does not require that orders granting summary judgment be verbatim recitations of the

trial court’s oral rulings. Rather, a party-prepared order must only accurately reflect the

trial court’s ruling and be the product of the trial court’s independent judgment. Smith,

439 S.W.3d at 314. Red Ink has failed to show that either condition is absent in this case.

As such, this issue is without merit.10

8

The proffered statement of the evidence is not included in the record on appeal.

9

We are aware of authority that states that where a statement of the evidence is filed, the trial

court may not simply strike the statement, but must resolve any conflicts between the parties and the

proof presented. See Lacy v. HCA Tristar Hendersonville Hosp., No. M2015-02217-COA-R3-CV, 2016

WL 4497953, at **2–3 (Tenn. Ct. App. Aug. 25, 2016) (citing Bellamy v. Cracker Barrel Old Country

Store, Inc., 302 S.W.3d 278, 281 (Tenn. 2009)). As such, where “neither party has submitted a statement

of the evidence that, in the trial court’s opinion, represents a fair, accurate, and complete account of what

transpired in the trial court, the trial court may give the parties an opportunity to correct the accuracy of

their statements or the trial court may prepare its own statement of the evidence.” Id. at *3. In that case,

however, the trial court’s decision to strike the appellant’s statement of the evidence was raised on appeal

by the pro se appellant and followed a bench trial in which evidence was presented. Id. at *2 (“We are

able to determine that [the appellant] assigns error to the trial court’s failure to approve a statement of the

evidence.”). In contrast, because the hearing at issue here involved only a motion for summary judgment,

no evidence was actually presented at the hearing. Moreover, Red Ink, which is represented by counsel,

chose not to argue in any fashion that the trial court’s decision to strike her statement of the evidence was

an error on appeal. As such, any error by the trial court in failing to correct the deficiencies in Appellant’s

statement of the evidence is waived on appeal. See generally Tenn. R. App. P. 13(b) (“Review will

generally only extend to those issues presented for review.”).

10

In a different section of its brief, Red Ink also asserts that the trial court erred in granting

Appellees’ motion for summary judgment where the motion was not accompanied by an affidavit. Red

Ink cites no authority for this assertion, nor has our research revealed any. Rule 56.04 of the Tennessee

Rules of Civil Procedure specifically states that summary judgment should be granted 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.” (Emphasis added). The rule therefore makes clear that affidavits are not

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II.

Red Ink next contends that the trial court erred in granting summary judgment on

its claims for tortious interference with a contract, inducement of breach of contract, and

promissory fraud. In support of this argument, Red Ink cites three cases: one involving

the summary judgment standard, Estate v. Brown, 402 S.W.3d 193 (Tenn. 2013); one

detailing the elements of unlawful inducement to breach a contract, Quality Auto Parts

Co., Inc. v. Bluff City Buick Co., Inc., 876 S.W.2d 818 (Tenn. 1994); and one outlining

the elements of promissory fraud, Shahrdar v. Global Housing, Inc., 983 S.W.2d 230

(Tenn. Ct. App. 1998).

Red Ink’s argument, however, overlooks the actual basis of the trial court’s grant

of summary judgment: that Red Ink’s claims, based on an alleged oral agreement to

provide financing for a real estate development project, were barred by the statute of

frauds, Tennessee Code Annotated section 29-2-101. In other words, the trial court ruled

that Red Ink was simply not entitled to raise any claims predicated on Appellees’

purported agreement to finance the development project in the absence of a written

contract evidencing the agreement sufficient to satisfy the statute of frauds.11 As such, the

trial court’s ruling was not based upon its determination that Red Ink failed to provide

proof of the essential elements of its claims, but rather on its determination that an

affirmative defense had been shown that was fatal to Red Ink’s claims. See Waddle v.

Elrod, 367 S.W.3d 217, 223 (Tenn. 2012) (“[T]he Statute of Frauds is an affirmative

defense.”).12

Red Ink’s brief, however, contains no legal authority as to the question of whether

the statute of frauds is applicable to claims of tortious interference with a contract,

inducement of breach of contract, and promissory fraud, or whether the undisputed facts

required where the record contains other evidence to support summary judgment. Here, Appellees relied

on the documents that Red Ink attached to its complaint. Red Ink, of course, does not dispute the validity

of these documents. We therefore discern no error in Appellees’ summary judgment practice.

Red Ink also appears to assert that summary judgment was inappropriate where no discovery was

conducted. After our review of the record, however, Red Ink made no request that summary judgment

should be held in abeyance pending discovery. As such, this issue is waived. See Fayne v. Vincent, 301

S.W.3d 162, 171 (Tenn. 2009) (holding that waiver applies where a party raises an issue for the first time

on appeal); see also Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008) (stating that an

appropriate way to respond to a motion for summary judgment is by submitting an affidavit explaining

the necessity of additional discovery).

11

For example, Red Ink’s inducement to breach a contract claim is predicated on its allegation

that by entering into an agreement to provide financing for the development project and then refusing to

go forward with the agreement at such a late date as to prevent Red Ink from obtaining alternative

financing, Appellees induced Red Ink to breach its contract with the sellers of the property. Likewise, Red

Ink’s promissory fraud claim is predicated on its allegation that Appellees promised to provide financing

for the project with no intention to keep that promise.

12

As previously discussed, the statute of frauds was properly raised in Appellee’s answer to the

complaint.

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support application of the defense in this particular case. Rather, Red Ink’s brief merely

states that no written contract between Red Ink and Appellees was necessary to establish

the elements of its causes of action and that the documents in the record constitute a

written contract.13 See generally Shahrdar v. Global Housing, Inc., 983 S.W.2d 230, 238

(Tenn. Ct. App. 1998) (outlining the elements of a promissory fraud claim); Quality Auto

Parts Co., Inc. v. Bluff City Buick Co., Inc., 876 S.W.2d 818, 822–23 (Tenn. 1994)

(describing the elements of an inducement to breach a contract claim). These conclusory

assertions, unsupported by any legal authority concerning the application of the statute of

frauds, however, amount to nothing more than a skeletal argument on this issue.

Rule 27 of the Tennessee Rules of Civil Procedure provides that briefs to this

Court “shall contain” an argument that details “the contentions of the appellant with

respect to the issues presented, and the reasons therefor, including the reasons why the

contentions require appellate relief, with citations to the authorities and appropriate

references to the record (which may be quoted verbatim) relied on[.]” Tenn. R. App. P.

27(a)(7). Courts have routinely held that the failure to cite relevant authority in the

argument section of the brief as required by Rule 27(a)(7) constitutes a waiver of the

issue. See generally Forbess v. Forbess, 370 S.W.3d 347, 355 (Tenn. Ct. App. 2011)

(quoting Bean v. Bean, 40 S.W.3d 52, 55–56 (Tenn. Ct. App. 2000)). “It is not the role of

the courts, trial or appellate, to research or construct a litigant’s case or arguments for

him or her, and where a party fails to develop an argument in support of his or her

contention or merely constructs a skeletal argument, the issue is waived.” Sneed v. Bd. of

Prof’l Responsibility of Sup. Ct., 301 S.W.3d 603, 615 (Tenn. 2010); see also Branum v.

Akins, 978 S.W.2d 554, 557 n.2 (Tenn. Ct. App. 1998) (internal citations omitted)

(“Where a party makes no legal argument and cites no authority in support of a position,

such issue is deemed waived and will not be considered on appeal.”).

Here, Red Ink’s brief fails to develop any argument regarding the statute of frauds,

despite the fact that this doctrine was the foundation of the trial court’s ruling. In failing

to address the statute of frauds, Red Ink simply failed to address the dispositive questions

in this appeal, i.e., whether the statute of frauds was applicable and if so, whether its

requirements were met in this case. We have previously held that an appellant’s failure to

address in its brief the dispositive question on appeal results in a waiver. See Davis v.

Lewelling, No. M2016-00730-COA-R3-CV, 2016 WL 6311799, at *5 (Tenn. Ct. App.

13

In its reply brief, Red Ink briefly mentions the statute of frauds, noting that Appellees rely on

the statute in their brief. Red Ink asserts, however, that the purpose of such reliance “is not known.”

Respectfully such an assertion is disingenuous as the trial court clearly relied on the statute of frauds in its

order granting summary judgment. Moreover, reply briefs are not vehicles to correct deficiencies in initial

briefs. Cf. Adler v. Double Eagle Properties Holdings, LLC, No. W2014-01080-COA-R3-CV, 2015 WL

1543260, at *6 (Tenn. Ct. App. Apr. 2, 2015) (“[A] reply brief simply is not a substitute for an initial

brief to this Court.”).

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Oct. 27, 2016) (“In this case, Appellants have simply failed to draft any argument

regarding the dispositive issue in this appeal: whether the trial court erred in granting [the

movant’s] dispositive motions regarding the claim of assault.”). In the face of such a

skeletal argument, were this Court to conclude that the statute of frauds is inapplicable,

we would be required to largely construct Red Ink’s argument for it. We decline to do so

and instead rule that Red Ink waived any argument on this issue by its failure to develop

sufficient argument to that effect.14 Because the trial court ruled that all of Red Ink’s

claims were barred by the statute of frauds and any argument to the contrary is waived,

we affirm the decision of the trial court.15

III.

Finally, Appellees request an award of attorney’s fees incurred on appeal pursuant

to Tennessee Code Annotated section 27-1-122, which allows an award of attorney’s fees

when an appeal is frivolous or taken solely for delay. Appellees, however, did not

designate this request as an issue on appeal. As such, we decline to award frivolous

appeal damages in this case. See generally Forbess v. Forbess, 370 S.W.3d 347, 356

(Tenn. Ct. App. 2011) (holding an issue raised by the appellee was waived where it was

not designated as an issue on appeal).

Conclusion

The judgment of the Davidson County Circuit Court is affirmed and this cause is

remanded to the trial court for all further proceedings as are necessary and consistent with

this Opinion. Costs of this appeal are taxed to Appellant Red Ink Camel Company, for

which execution may issue if necessary.

_________________________________

J. STEVEN STAFFORD, JUDGE

14

Appellees also contend on appeal that Red Ink failed to comply with applicable rules of civil

procedure and local rules in responding to the motion for summary judgment. In light of our ruling herein,

any issue to that effect is pretermitted.

15

We express no opinion as to the applicability of the statute of frauds to the claims at issue in

this case.

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