# FILED January 28, 1998 Cecil W. Crowson Appellate Cou rt Clerk IN THE COURT OF AP PEALS OF TENNESSEE MIDDLE SECTION AT NASH VILLE SOMEDAY BABY, INC., ) ) Davidson Chancery Plaintiff/Appellee, ) No. 95-1389-II ) VS. ) ) Appeal No. ENTERTAINMENT INTERNATIONAL, ) 01A01-9705-CH-00228 ) Defendant/Appellant. )
APPEAL FROM

THE CHANCERY COURT OF DAVIDSON COUNTY AT NASHVILLE, TENNESSEE
HONORABLE CAROL McC OY, CHANCELLOR

Stanley M. Chernau, #2390 Linda Burnsed, #13734 CHERNAU, CHAFFIN & BURNSED 424 Church Street, Suite 1750 Nashville, TN 37219 ATTORNEYS FOR PLAINTIFF /APPELLEE William J. Shreffler, #17224 W. Gary Blackburn BLACKB URN, S LOBEY, FREEM AN & HA PPELL 2050 Natio

nsBank Pl

aza 414 Union Street Nashville, TN 37219 ATTORNEYS FOR DEFENDANT/APPELLEE

MODIFIED, AFFIRMED AND REMANDED.

HENRY F. TODD PRESIDING JUDGE, MIDDL E SECTION

CONCUR: BEN H. CANTRELL, JUDGE
CONCUR IN SEPARATE OPINION: WILLIA M C. KOCH, JR., JUDGE-2-

SOMEDAY BABY, INC., ) ) Davidson Chancery Plaintiff/Appellee, ) No. 95-1389-II ) VS. ) ) Appeal No. ENTERTAINMENT INTERNATIONAL, ) 01A01-9705-CH-00228 ) Defendant/Appellant. )



## O P I N I O N

The captioned defendant, En tertai nment International, Inc. has appealed from an unsatisfactory

judgment of the T

rial Co u rt. A detailed recitation of the background of the controversy

and proceeding

s therein is nece

ssary for a

n understanding

of the issues on app

eal.

The pres ent appeal involves a contract between the parties regarding the mar keting o f children’s toys which were manufactured by plaintiff, Someday Baby, I nc., or as to which Someday Ba

by held mark

eting rights.

Prior to the execution of the contract between the parties, plaintif

f sold to dealers, 70% of whi ch were sales were to sma ll retail stores, a

nd 30% were sale

s to large chain

stores at a lesser price be

cause the chain

s purchased larg

er quantities.
Defendant,

Ente rtain ment International, Inc., was engag ed in the “sales and marketing business”distributing cata logs offering

for sale the prod

ucts of many producers. It conducted a form of “mail order business.”

On August 16, 1994, th

e parties execute

d an agreemen

t consis t ing of a letter from defendant to plaintiff offering sales serviceswhich offer was accepted by plaintiff on the face of the letter. The letter is appende d to this opinion as exhibit A , and pertinent po

rtions thereof wi

ll be quoted herein.-3- On May 3, 1995, plaintiff filed this suit against defendant seeking a declar atory judgment interpreting the contract, de claring a brea

ch of the contrac

t, and all owing recession thereof, injunctive relief

and damages.

On May 4, 1995, defendant filed a separate suit against plaintiff for enforcement

of the same contract a

nd for damages
.

On May 4, 1995, the Trial Court consolidated the two suits under the caption of the original suit.

On August 23, 1995, plaintiff amended to s ue W. B radl ey Dan iel and Mic hael Duga y, officers of defendant, for fraud.

On February

16, 1996, defenda

nt amended its coun

tersuit to inclu

de Aar on Brown, president of plaintiff.
On August 21, 1995, the incumbent Trial Judge entered the following order:

This cause came to b e he ard on the 11th day of August, 1995, on Defendant’s Motion for Partial Summary Judgment, argument of co unsel and the entir

e record in this cause from all of

which the Court fin

ds: Defendant’s Motion should be and is here bydenied except for Plain tiff ’s request for attorney’s fees based upon Plaintiff’s pending original Complaint which the Court finds should be denied. Therefore, it is ORDERED, ADJUDGED and D ECRE ED that Defendant’s Motion for Partial Summary Judgmentin regard

to its assertion that a

ttorney’s f

ees should not be allo wed in the pending Complaint is hereby GRANTED. It is fu rther ORDERED, ADJUDGED and DECREED that D efen dant’s Motion for Partial Summary Judgmentrequesting dism is sal of Plaintiff’s breach of contract claim and its request for a declaratory jud gm ent is hereby DENIED, the Cour

t find ing that there exist genuine issues of material fact precluding summary judgment and that Plaintiff’s declaratory

judgment action i

s proper, both causes of action requir

ing a hearing

at trial.-4- On September 30, October 1, 2, 3 and7, 1996, a jury heard plaintiff’s evidence and were directed by the Trial Court to find for the defendants on al l c ounts, except fraud. At the conclusion of defendant’s evidence in respect to plaintiff’s suit, the jury were directed to find for the defendants on the count of fraud.

On October 8-9, 1996, the jury heard defendant’s ev

idence in support o

f its countersuit.
On October 10, 1996, the Trial Court e ntered a judgme

nt stating in part: The Jury was then

assembled in the courtroom and in the presence of the Court, the parties, and their counsel, the Courtwas handed

the interrogato ries and th e Jury’s findi ngs which the Court then rea d in the prese

nce of t he Jury, the parties, and thei

r counsel. Th e interrogatories and the Jury answers were as follows: 1. Did Some day Baby, I nc. and Entertainment Inte rnational,Inc. agree by the insertion of the word “appropriate” in the contract of August 16, 1994 to limit the placement

of the mini -catalogs to products sold to non-retail accounts? The Jury answered “yes”
. 2. Did Entertainment Internationa l, Inc. bre ach its contract with Someday Baby, I nc.? The Jury answered “yes”
. 3. If your

answer to questio

n No. 2 is “ye

s” did Someday Baby, Inc., suffer a

ny damages as a res

ultof Entertainment International, Inc.’s breach? The Jury answered “no”. The Court then confirmed with the Jury that they were unanimously

in agreement w

ith th e v erdict. The Court then announced

that the verdict was the judgment of the Co urt. It is a ccor din gly, ORDERED AND ADJUDG ED as follows: 1. Enter tainmen tInternational, Inc. agreed by the insertion of the word “appropriate” in the contract of August 16, 1994 with Someday Baby, I nc. to limit the pl ace ment of the mini-catalog

s to products sold to n

on-retail acco

unts.-5- 2. Entertainment

Internationa

l, Inc. breached its contract with Someday Baby, I nc. 3. Someday

Baby, Inc. did not suffer any damages as a result of Entertainment International, Inc.’s breach. The above, October 18, 1996, judgment, with its sequel overruling a motion to alter or amend, became the final judgment from which this appeal is prosecuted. All prior, interlocutory orde rs w ere superseded by this final judgment. TRAP Rule 3(a). TRCP Rule 56.05 is not deemed applicab

le to questions of la

w, but only to q

uestions of fact.
On appeal defen

dant presents the

following issues: 1. Whether

the Trial Court erred by not interpreting the contract between the parties as a ma tter of law. 2. Whether

the Trial Court erred by perm itt ing parol evidence to contradict the plain meaning of thecontract. 3. Whether

the Trial Court er

red by fail

ing to dismiss the breach of contract claim of Someday Baby , Inc. The applicable p

rovision of the con

tract was parag

raph 5, which rea

d as follows: 5. EII shall develop a mini-catalog with SDB’s cooperationto market existing and new SDB products. The mini-catalog will be packaged with a ll appropriate SDB productsthat it

con trols and EII p

roducts sold in orde

r to introduce other SDB/EI

I products to e

xis ting and/or new customers developed by

either party

through this

agreement. (Emphasis supplied)
Plaintiff insists that the emphasized word, “appropriate,” means “non retail accounts,” thereby prohibiting defendant from sending catalogs to plaintiff’s small customers and thereby disclosing to them that plaintiff’s prices to small customers were higher than those charged to large customers. Plainti

ff was permitted to pr

esent oral and wr

itten evidence su

pporting its insistence.-6- Defendant empha

tically den

ies the correct

ness of plaintiff’s insistence, and insists that the word “appropriate” does not limit or restrict the distribution of catalogs to “existing or new customers developed by either party through this agreement.”
Paragraph

3 of the contract requires plaintiff to develop and prov ide de fendant with “products at favorable prices.”
Paragraph

8 requires pla intiff to “provide access to all retail marketing information, consumer lists and mailing lists that defendant will accumulate.”
Paragraph 10 p

rovides: 10. Excludin g SDB’s current n ational accounts , SDB agrees to all ow EMI, with prior permission of SDB, to represent SDB’s proprietary product line to other national and worldwide accounts at a negotiated commission.
Where the interpretation of a written contract is necessary for the decision of a court, the general rule is that such interpretation is a matter of law, and not of fact. Park

Place Enterprise

s, Inc. v. Park

Place Mall Associates, L.P. , Tenn. App. 1992, 836 S.W.2d 113; APAC-Tennessee, Inc. v. J. M. Humphrie

s Co nstruction Co ., Tenn. App. 1986, 73 2 S.W.2d 601; Taylor v. U ni versal Tire Inc., Tenn. App. 1984, 67 2 S.W.2d 775; Ford v. Fisk Unive rsity , Tenn. App. 1988, 661 S.W. 883.

In the absence of fraud or mistake, a contract must be enforced as w ritten. Ballard v. North American Life & Casualty Co. , Tenn. App. 1983, 667 S.W.2d 79; E. O. Bailey & Co. v. Union Planters Title G

uaranty Co ., 33 Tenn. App. 439, 232 S.W.2d 309 (1949).

None of the exceptions to the foregoing rule are supported by the evidence in this case.-7- This Court f

inds that the above quoted paragraph 5 of the contract is clear a n d unambiguous and that the adjective, “appropriate” therein re fer s to and modifies the noun, “products” rath

er than the word,

“customers,” as

insisted by de

fendant.

The Trial Court there

fore erred in he

aring parol e

vidence as t

o the meaning of the contract which was clear and unambiguous, and the interpretation placed upon the contract by the jury and the Trial Court was incorrect. However, the finding of the jur y tha t So med ay Bab y, Inc. suffered no dama

ge from the bre

ach of contrac

t by Enterta

inment Intern

ational, Inc ., is conclusive of the suit of Someday Baby, I nc. against Entertainment International, Inc. whic h should be and is dismissed.

The judgment of the Trial Court doe s not appe ar to dispose of the counterclaim of Entertainment

Internationa

l for inj unc tio n an d da mage s fo r br each of co ntr act by So med ay Bab y, Inc. This appeal was therefore premature and subject to dismissal. TRCP Rule 5402, TRAP Rule 3(a). However, this Court has elected to resolve the issues presented and to remand for resolution of the is sues relating to the counterclai

m.

The judgment of the Trial Court that Someday Baby , Inc., suf fere d no damages is affirmed . Said judg

ment is mod

ified to di smiss the s

uit of Some

day Ba by, I nc. and to tax Someday Baby, Inc. with the co s ts of its suit. The cause is remanded to the Trial Court for further proceedings in conformity with this opinion.



### MODIFIED, AFFIRMED AND REMANDED

___________________________________ HENRY F. TODD PRESIDING JUDGE, MIDDL E SECTION-8-

CONCUR:

_______________________________ BEN H. CANTRELL, JUDGE

CONCUR IN SEPARATE OPINION: WILLIA M C. KOCH, JR., JUDGE