### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON A pr il 22, 200 9 S es sio n WO OTE N TRACTOR CO., INC. v . ARCON OF TENNESSE E, L.L.C., ET AL 

### . Direc t Appeal from the Circ uit Court forTip ton County

No. 6350 Joe H. Walker, III, Judge

No. W2008-01650-C OA-R3-C V - Filed May 28, 2009

Th is a pp e a l ari se s o ut o f a tr a c tor le a se
. Af te r l e sse e fa ile d to make the re qu ir e d mo nth ly pa y me nts , lessor filed this ac tion alleg ing tha t lessee br eac hed seve ral diff ere nt contrac t provisions. The trial court g rante d summary

judgme nt and awa

rded lessor the unpaid renta ls. L essee appea ls arguing that the tr ia l c ourt

e rr on e ou sly

g ra nte d s umm ary

jud g me nt on g ro un ds wh ic h le sso r f a ile d to a lle g e in i ts mot ion fo r s umm ary

jud g me nt. We a ff

ir m. Tenn. R. App . P. 3 Appeal as of Right; Judgment of the Cir cuit Court Affir med
D AVI D R. F ARMER , J., delivere d the opinion of the court, in which A LA N E. H I G H ERS , P.J., W.S., and J. S TE VE N S TA FF O RD , joined.
Robertson Morrow L eathe rman, Memphis, Tenne ssee, f or the Appe llants, Arcon of Tenne ssee, L.L.C. and Whitney Slade

. C. Barry Ward and Whitney Meriwether Harmon, Memphis, Tenne ssee, for t he Appe llee, Woote n Trac tor Co., Inc.
OP IN ION Background /P roce dural Hi story
In August 2006, Appellants Arc on of Tenne ssee, L L C a nd Whit ney Slade (tog ether “Ar con” or “D efe ndants”) enter ed into a contra ct with Appellee Wooten Tractor Co., Inc. (“ Wooten Tractor ” or “Wooten”) to lease a trac tor for twelve months. The contra ct obligated Def endants to pay

Wooten $3,500.00 a month to lease the trac tor plus $341.25 per month in tax, with pay ment s t o t ali ng $4 6, 09 5. 00 ov e r t

he tw e lve -m on th l e ng th o f the c on tr a c t. Th e re nta l pe ri od c omm e nc e d o n Augus t 23, 2006 and ex pired on August 23, 2007. Arc on assumed the r isk of loss; agr eed to ke ep the tra ctor in good c ondition, in operating order, properly service d, repa ired a

nd maintained duringthe re ntal-2-

a g r e e m e n t ; an d w a s r e s p o n s i b l e f o r p ayi n g th e s e m a i n t e n an c e c o s t s
. T h e a g r e e m e n t p r o vid e d in Para g ra ph4 th a t [a]ll ri sk of los s, the ft , or dama g e to the Eq uip me nt is ass ume d by the L e sse e , unti l the Eq uip me nt i s r e tur

ne d to the L e sso r. I f t

he Eq uip me nt c an b e re pa ir e d for c os t le ss t ha n it s f a ir mark e t va lue , L e sse e wi ll r e pa ir th e Eq uip me nt at L e sse e ’s so le expense, but damag e to the Equipment shall not rele ase L es s ee f rom L essee ’s obligations hereunde r. I f the Equipment ca nnot be s o repa ired, or is lost, stol en, or de str oy e d, L e sse e wi ll , at its op tio n, e ith e r r e pla c e the Eq uip me nt at L e sse e ’s so le expense with equivalent e quipment of equa l or g reater va lue, as de t er m i n ed in the sole discre tion of th e L essor or L essor’s a ssigne e or pa y L essor the V alue of

the Equipment.
Th e c on tr a c t a lso sp e c if

ic a lly pro vid e s th a t th e le sso r, Woo te n h a s th e ri g ht t o te rm inate the le a se un de r a ny of the fo llo wi ngsix c on dit ion s: (a) L essee fails to pa

y when due any of L essee ’s obliga tions, or to perfor

m any other ob lig a tio n o f L e sse e in t he Agre e me nt o r i n a

ny re ne wa l or

re fi na nc ingof thi s Agre e me nt; ( b ) a L e s s e e d i e s , c e a s e s t o e x i s t , b e c o m e s i n s o l v e n t o r th e s u b j e c to f b an kr u p t c y, ins olv e nc y , o r l iqu idatio n p ro c e e din g s, a tte m p t s to a ssi g n th is A g re e me nt o r atte mpt s to remove, se ll, transfer , further encumbe r, par

t with possession of or sublet any Eq uip me nt; (c) any war ranty or re prese ntat i o n m ad e by L essee to induce L essor or L essor’s assig nee to e x tend cre dit to L essee , under this Ag ree ment or otherw ise, is false in any materi al re sp e c t w he n ma de or L e sse e fa ils to p e rf

or m any c ov e na nt u nd e r t his Agre e me nt; (d) L essee fails to maintain applicable require d insurance or fa ils to comply with the require ments nece ssary

to maintain any

such insuranc e; (e ) a ny oth e r e ve nt o c c ur s th a t c a us e s L e sso r o r L e sso r’ s a ssi g ne e , in g oo d f a ith , to consider that pay

ment or per formanc e of L essee ’s obligations [si c] is impaired or that the Equipment is at risk; or (f) the Equipment is impounded or confiscated by any fede ral, stat e, o r l o cal g overnme nt authority

. Additionally , the contra ct containe d the followingpurcha se option in Parag raph 3:

P ur c has e Opt ion
. Pr ov ide d th a t L e sse e is not in de fa ult un de r t his Agre e me nt, L essee may

elec t to purchase any

item of Equipment for its re spective Retail Value specifie d above at any

time during the Rental Term or upon the expiration thereof

. L essee may apply to such R etail Value 90% of a ll rentals paid with re spect to such item of Equipment under this Ag ree ment. I f L essee elec ts to purchase such item of Equipment, L essee shall (i) execute a purcha se order form provided by L ess o r andA v e rifie d c o m p la in t h a s th e f o r c e a n d e ff e c t o f a n a ff id a v it. M us e v. Fi r s t Peopl e’ s Bank of Te nn. , N o. 1 E 2 0 0 5 -02 8 6 9 -C O A -R 3 -C V , 20 0 7 W L 84 5 8 9 3 , at *7 (T en n
. C t

. A p p
. M ar. 21 , 20 0 7 ) ( no per m
. app
. f i l ed ); K ni gh t v. Ho s p
. C o r p
. o f A m. , N o . 0 1 A 0 1 -9 5 0 9 -C V -0 0 4 0 8 , 1 9 9 7 W L 5 1 6 1 , at * 4 n . 4 (T e n n . C t. A p p . Ja n . 8 , 1 9 9 7 ). -3- (ii) pay the re mainder of such Retail Value in c ash or in some other manner ag ree d to by L essor a nd L essee in a sig ned wr iting.
Th e pa rt ie s st ipu late d in the c on tr a c t that the re ta il va lue of the tr a c tor

wa s $ 62 ,5 00 .0 0. On

the same day that the parties signe d the contract, W hitney T. Slade (“ Slade”) , Arc on’s manag er, e x ecute d a
wr itt e n G ua

ra nte e of pay men t of th e c on tr a c t. T he tot a l amou nt o f S la de ’s ob lig a tio n a s st a te d in the Guar antee was $62,500.00.
After Arc on failed to make the requisite pay ments, Wooten Tr actor

initiated this breach of
c on tr a c t a c tio n. Woo te n att a c he d th e sw or n a ff ida vit of its mana g e r t o it s v e ri fi e d c omp la int

. B oth 1 the complaint and the a ffidavit stated tha t Arcon w as indebted to Wooten Tra ct o r pursuant to the le a se c on tr a c t f

or $4 9, 13 9. 00 plu s r e a so na

ble a tto rn e y fe e s and

c os ts. Woo te n T ra c tor

a dd iti on a lly alleg ed that Ar con owe d $2,526.82 for pa rts and ser

vices on the r ented e quipment.
On No v e mb e r

7 , 2 0 0 7 , Wo o te nT r a c to r mo v e d f o r s u mm ar y ju d g me n t. Init s s u

p p orting memorandum, Wooten asser ted that Arc on was in def

ault of the lease ag ree ment for f ailure to make all renta l pay

ments, failure to keep the e quipment in good wor king order , and failure to return the equipment at the e nd of the lea se per iod.

In respons e to Woot en Tra ctor’s motion for summar y judgme nt, Arcon submitted Slade’s af fi d av i t

. S l ad e s wo re t o th e f o l l o wi n g:
2. The tra ctor wa s not damag ed, by anyone fr om Arcon or

otherwise[.] 3. Daily maintenanc e wa s perf

ormed on the tra ctor whic h is the subject of this lawsuit. Neverthe less, in September or O ctober of 2007, while the tra ctor wa s beingused in co n n ec t i on with a construc tion project located at the inter section of Wal nut G ro ve and Ho us ton L e ve e ro a ds , whi te smo ke wa s com ingout of the e xha us t of the tra ctor. The o il filter was re moved and e x amined and me tal shaving s were found there in.
4. A me c ha

nic fr om Cummin s Mid -S outh a dv ise d that th e e ng ine ne e ds to be re paire d.

Arc on also responde d to Woot en’s Statement of Undisputed Fa cts. Arc on “[a]dmi tted that [i t] has not ma de all lease pay ments. [I t] asser

ts that the failure of the e ng ine notwithstanding pr oper maintenanc e entitled it to stop pay ments or, i n the alternative, ex cuses [ sic] its default. Arc on has made lease pay

ments. See, Complaint, ¶ 11.” Paragraph 11 of the complaint stat ed t h at “[ a] ft erT he cont r act al s o provi ded t hat 2

L es s ee w i l l keep t he E qu i pm ent i n good cond i t i on , i n op er at i ng order , and properl y s er vi ced, r epai r ed
a n d m a in ta in e d

. L e sse e w ill m a k e su re th a t th e m a n u fa c tu re r’ s w a rr a n ty re m a in s v a lid . L e sse e w ill p ay all t h e c o st s o f p erfo rm i n g t h ese o b l i g ati o n s. -4- providing all just credits to the Def endants, includingpay

m ents made, the amount due and ow ing by the Def endants to the Plaintiff is $49,139.00.” Arc on also admitted that the trac tor had not bee n returne d beca

use the e ng ine does not work. 2
The trial c ourt enter ed an order on Marc h 31, 2008, g ranting Wooten’s motion for summary judgme nt. The trial cour

t held that Arc on was in def ault of the contra ct and that Wooten was e ntitled to all unpaid renta l, p l us all rea sonable e x penses incur red. The trial court f

ound that Arc on owed Woo te n T ra c tor

$4 9, 13 9

. 0 0 f

o r r e nta l pa y me nts and ta x. Th e tr ia l c ourt

e xpla ine d th a t “ De fe nd ant[s ] [m aintain their] intent to purchase the equipment. Howe ver, paragraph 3 of t he agree ment provides that L essee may

elec t to purchase the equipment, providingthat L essee is not in default. L essee has lost the option t o purcha se beingin defa ult.”

De fe nd ants fi le d a Moti on to Alt e r or Am e nd wh ic h wa s den ie d. De fe nd ants fi le d a tim e ly
no tic e of a pp e a l.

Issues
Th e so le iss ue ra ise d b y

Ar c on and Sla de state s:
Di d th e tr ia l c ourt

e rr by g ra nti ngsumma

ry jud g me nt f

or Woo te n T ra c tor

on a ba sis not sought by

Wooten Tractor

in its m otion for summary judgme nt.

Stan dard of Revie w
We r e vie w a

tr ia l c ourt ’s re so lut ion

of a mot ion fo r s umm ary

jud g me nt d

e novo with no p resumpti on of cor

rec tness. Martin v. Norfolk S. Ry. Co. , 2 7 1 S

. W

. 3 d 7 6 , 8 4 ( T e n n
. 2 0 0 8 ). I t is ultimately

the moving pa

rty ’s burde n to persuade the court t h at t h er e are no g enuine issues of
m at er i al fact and that it is entitled to judgment as a matter of la

w. Id. (c i t i n g B

y rd v

. H all , 847 S.W .2d 208, 215 (Tenn. 1993) ). “Adisputed fac t is materia l if it must be decided in order to resolve the substantive claim or defe nse at whic h the motion is di rec ted.” Id. ( quoting By rd , 847 S.W .2d at 215). The moving par

ty may meet this burden by

producingevidenc e or r efe rringto the nonmoving party ’s pre viously

submitt ed evide nce that either (1) aff irmatively

neg ates a n essential ele ment of the nonmoving pa

rty ’s claim, or (2) shows that the nonmoving par ty cannot pr ove an e ssential element of

the claim at tria l. Id. (c i t i n g Hannan v. Alltell Publ’g Co. , 270 S.W .3d 1, 5 (Tenn. 2008) ). I f t he mov ingpa

rt y su sta ins its burd e n, the no nmo vin g pa rt y mus t pr od

uc e e vid e nc e of

sp e c if ic fa c ts that establish that g enuine issues of a materia l fac t exi st. Id. (c i t i n g By rd , 847 S.W .2d at 215). The nonmoving pa

rty can me et its burden by

1) po i n t i n g t o evidenc e esta blishing mater ial fac tualA r con al l ege s i n a f oot not e i n i t s M ot i on t o A l t er or A m end t hat had i t know n t o c hal l enge t he am ount of r ent 3 d u e , i t w o u ld h a v e sh o w n th a t it a lre a d y p a id $ 3 1 ,5 0 0 .0 0 . A rc o n , h o w e v e r, n e v e r su b m itt e d a n a ff id a v it to th is e ff e c t.

-5- dis p u te s th a t w e r e o v e r - lo o k e d o r ign o r e d b y th e mo v in g p arty ; 2 ) r e h a b il it a ti n g th e evidenc e att ac k ed by

the moving pa

rty ; 3) producingadditional evidenc e esta blishing the e x istence of a g enuine issue f

o r t ri al ; o r 4) submitting a n aff idavit expl aining the nec essity for f urther disc overy pursuant to T enn. R. Civ. P., Rule 56.06. McCarley v. W est Quality Food Serv

. , 960 S.W .2d 585, 588 (Tenn. 1998)

. Anal y sis On appe al, Arc on argues that the trial c ourt err ed by g rantingsummary

judgme nt on dif fe re nt gro un ds tha

n th os e up on

wh ic h Wo ote n T ra c tor

so ug ht r e lie f. Es se nti a lly , A rc on c la ims that Wooten sought summary judgme nt for $62,500.00, an a mount of damag es which A rcon alleg es would only

be applica

ble if Wooten had ele cted to purc hase the trac tor. Arc on, there fore , conclude s that Woot en’s motion for summary judgme nt was to enfor ce the purcha se option ag ainst it. Bec ause the trial court g rante d summary judgme nt on the basis that Arc on owed Wooten unpaid rental, Ar con cla ims that it had no notice that it shoul d challeng e the amount of renta ls that W ooten claimed that Arcon ow ed. 3

In support of its argument, Arc on relies he avily on the ca se of Bright v. Gue , No. E2007- 00127-COA-R3-CV, 2008 WL440457, at *9 (Te nn. Ct. App. Feb. 19, 2007) ( no perm. app. filed ). In th a t c a se , p la int if

f s ue d a ho sp ita l so le ly

a lle g ingthat it

ne g lig e ntl y

mis ha nd le d h is biopsy sample. Id. Pla int if

f s up po rt e d th is c on te nti on wi th t he de po sit ion

te sti mony

of him se lf and his wife. Id. The hospital filed a motion for summary

judgme nt on the g rounds that 1) it had complied with the standar d of ca re, 2) no act or

omission by

a hospital employ ee c aused plaintiff’s injury , and 3) that plaintiff’s claim wa s barr ed by the statute of limitations. Id. at *8. One of the base s upon which the trial c ourt g rante d the hospital’s motion for summary judgme nt w a s th a tp l a i n t i f

f h a d f a i l e d t o r e s p o n d

t o th e s u m m ar

y j u d g m e n tm o t i o nw i the x p e rtt e s t i m o n y, establishing a

g enuine issue of

materia l fac t. Id. In support of its motion, t he hospital prese nted the af fidavit of a nur se that stated that she was fa miliar with the rec og nized standard of hospital
c are in t he loc a l c omm

un ity and sh e op ine d th a t ho sp ita l e mpl oy e e s c omp lie d w iththat r e qu isi te standard of

car e and that the mishandled biopsy did not cause pla intiff’s injury

. Id. Th e nurs e attested that she ba sed her opinion on review of

plaintiff’s medica l rec ords which we re attached to her a ffidavit. Id. Although the hospital in Bright a sse rt e d th a t it

wa s e nti tle d to summa

ry jud g me nt b e c a

us e plaintiff fa iled to respond to the motion with ex pert testimony , this Court di sag ree d. Id. at *8–9. Upon re viewingplaintiff’s medica l rec ords, we de termined that the a lleg ed mishandling was not do c ume nte d in

the me dic a l r e c or ds , a

nd the ho sp ita l di d n ot o the rw ise a sse rt that th e a ff

iantnurse wa s awa

re of this alleg ed mishandling in rea chingher c onclusions. Id. at 9. We found, there fore , that it was improper f or the trial c ourt to g rant summary judgme nt on the g round that-6-

plaintiff neg lected to pr esent e x pert testimony to counter the hospital’s assertion that it did not brea ch the standa

rd of c are
. Id. This Court recognized that plaintiff would need to submit ex pert te sti mony to p re va il at tr ia l, b ut w e state d th a t [hospi tal] di d not, either in its motion for summary judgme nt or by

subsequent pleading , raise [plaintiff’s] failure to support this alleg ation with expert testimony
a s a g ro un d f or summa ry jud g me nt, and

we do no t a g re e that th e ob lig a tio n to prese nt such expert testimony was trig g ere d by

[hospi tal’s] mot ion for summary jud g me nt.
Id.
We note fore most that we simply cannot a g ree with Arcon’ s char acte rization of Woot en’s motion for summary

judgme nt. Upon thoroug h revie w of the r ecor d, we d o not find that Woot en soug ht to enforc e the lea se-pur chase ag ree ment; rather , Wooten Trac t or ar g ued that ther e wa s no g enuine issue of

materia l fac t that Arcon de faulted on the co n t ra ct an dthat Arc on was oblig ated, there fore , to pay

Wooten $62,500.00. Wooten listed five separ ate rea sons why Arc on defa

ulted on the contra ct. Among other things, Wooten c laimed that Arc on 1) failed to sta y curr ent on its rental pa y m e n t s , 2 ) h a d

e i th e r b e c o m e i n s o l v e n to r

h a d a t t e mp t e d

t o r e m o v e th e E qu i p m e n t , 3 ) f a i l e d to maintain the Equipment in g ood condition a nd repa ir and not pe rmitted its value to be impaired, 4) fa ile d to ma intain t

he re qu ir e d in sura

nc e . In it s a

rgume nt o n a

pp e a l, Arc on

fo c us e s a lmo st exclusively

on the fa ct that Wooten sought $62,500.00 in da mag es, claiming that “[t] he re tail value of the tra ctor is only

used in the eve nt defe ndants elec ted to purcha se the tra ct o r. ” W ooten expl ai n ed , on the other ha nd, that the $62,500.00 figure simply ref lected Arcon’ s max imum
o b li g a ti o n p ur s u an t to th e r e n ta l a g r e e me n t an d p e r s o n a l g u ar an te e
. We n o te th a t th e contr act provided that if the tr actor was lost, stolen, damag ed, or could not be repa ired, Ar con would either repla ce the trac tor with equivalent e quipment of equa l or g reater va lue or pay Wooten the va lue of the equipment. Ar con’s a rgument focuse s on the relief soug ht rather

than the basis for

relief , and
we sim ply c ann ot a g re e wi th Arc on that by sim ply us ing thi s $62 ,5 00 .0 0 figur e Woo te n sou g ht t o enfor ce the lease -purc hase option. We find no merit to Arc on’s arg ument that the trial cour t gr anted
s u m m a r y j u d g m e n t o n a b a s i s n o ts o u g h ti nW o o t e nT r a c t o r ’ s m o t i o nf o r s u m m ar y j u d g m e n t

. In
rea ding Wooten’s motion for summary judgme nt, we find that Ar con had mor e than suff icient notice that Woo te n w a s se e kin g dama g e s f or Ar c on ’s br e a c h o f c on tr a c t.
On that ba sis , w e thi nk

thi s c a se is d ist inguis ha

ble fr om Bright . In Bright , the cour t found that the trial court g rante d summary judgme nt on a g round that the movingparty had fa iled to raise. Ba sed upon our r eadingof Wooten’s motion for summary judgme nt, however , Plaintiff’s argument in this case is not that Woot en fa iled to assert its g rounds for r elief; Wooten clea rly stated t hat it was entitled to relief be cause Arc on brea ched the contra ct by failingto pay

the monthly

lease for the tr a c tor . Rathe r, we pe rc e ive Ar c on ’s re a l c on te nti on to be that Woo te n fa ile d to sp e c if y the pr e c ise amount of dama g es to which it is entitled for unpaid r entals. The only specific damag es that Wooten
asser ted in its mot ion for summary judgme nt was $62,500.00 for the value of

the trac t o r. Arc on,W oot en as s er t s i n t he ver i f i ed com pl ai nt t hat i t pr ovi ded al l j us t c r edi t s , i ncl udi ng paym ent s m ade , t o A r con 4 i n c al cul at i ng t hat A r con ow es $49, 139. 00.
-7- there fore , submitt ed an a ffidavit t h at the equipment wa s not “damag ed” so a s to create a que stion of mater ial fac t whether

Wooten was entitled under Par ag raph 4 to the f ull value of the tra ctor. A plaintiff who a lleg es bre ach o f contra ct must prove the f ollowing thre e ele ments: 1) the exis tence of an enforc eable contra ct, 2) nonpe rfor mance amounting to a

brea ch of the contra ct, and 3) dama g es ca

used by the bre ach of

contra ct. BankCorp South B ank, Inc. v . Hatchel , 223 S.W .3d 223, 227 (Tenn. Ct. App. 2006). A s we have alr eady stated, Wooten alleged in it s motion for summary judgme nt that Arcon br eac hed the c ontrac t by fa i l i n g to pay renta ls. W ooten pre sented
e vid e nce i n its v e ri fi e d c omp la int that A rc on

ow e d $ 49 ,1 39 .0 0 in

dama g e s und e r t

he c on tr a c t. 4 Be cause W o oten demonstrate d that there wer e no g enuine issues of material fa ct and that it was
e nti tle d to jud g me nt as a matte r of law, the burd e n s hif te d to Ar c on

to p re se nt e vid e nc e to e sta bli sh that g e nu ine iss ue s o f m a te ri a l f a c t e xiste d. Ar c on

a dmi tte d th a t it fai led to make a ll o f t he le a se pay ments and failed to submit any proof that it owed less than $49,139.00. We find, theref ore, that the there was no g enuine issue of materia l fac t t h at Ar co n had bre ache d the par ties’ contra ct by failingto make the requisite monthly pay ments. Nor did Arc on proper ly raise a ny g enuine issue of materia l fac t that it owed less than $49,130.00 for those pay ment s . We, theref

ore, a ffirm the tria l
c ourt ’s de c isi on

to gra nt Wo ote n’ s mo tio n f

or summa ry jud g me nt.
Conclu sion
For the fore g oing r easons, we aff irm the judg ment of the trial c ourt. Costs of this appea l are taxed to the Appellants, Arcon of Tenne ssee, L L C and Whit ney Slade.

___________________________________ DAVI D R. FARMER , JUDGE