IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

May 14, 2024 Session

DAVID HAYES v. EXTREME EXCAVATION, LLC

Appeal from the Circuit Court for Washington County 

No. 41516 Suzanne Cook, Judge

No. E2023-01435-COA-R3-CV

A property owner filed suit against a contractor, asserting that a driveway built by the 

contractor was defective. The contractor filed a counterclaim against the property owner, 

seeking compensation for the balance owed for the driveway and additional work the 

contractor had done on the property. Prior to trial, the contractor made a motion to enforce 

a purported settlement agreement between the parties. The trial court denied the motion. 

After a trial on the merits, the court awarded the property owner the cost of repairing the 

driveway and dismissed the contractor’s counterclaim. The contractor appealed the court’s 

order. Because we conclude that the trial court should have granted the contractor’s motion 

to enforce the parties’ settlement agreement, we reverse.

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

Case Remanded

KRISTI M. DAVIS, J., delivered the opinion of the Court, in which THOMAS R. FRIERSON,

II, J., joined. ANDY D. BENNETT, J., filed a separate dissenting opinion.

John S. Taylor, Jonesborough, Tennessee, for the appellant, Extreme Excavation, LLC.

Mark W. McFall, Johnson City, Tennessee, for the appellee, David Hayes.

OPINION

FACTUAL AND PROCEDURAL HISTORY

David Hayes moved to Tennessee in 2021 and purchased property in Jonesborough, 

where he planned to construct a house. The property was undeveloped, and the house’s 

planned location was to be over three hundred feet from the main road, so Mr. Hayes 

wished to build a driveway from the planned site to the road. In addition, Mr. Hayes wanted 

a parking area built near the house large enough to park a truck and camper. 

10/02/2024
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Mr. Hayes began searching online for driveway construction companies and found 

Extreme Excavation, LLC (“Extreme Excavation”). Around October 10, 2021, Mr. Hayes 

contacted Joe Layne, Extreme Excavation’s owner, to discuss hiring the company to 

construct the driveway and parking area. The next day, Mr. Layne came to the property. 

At this initial meeting, Mr. Hayes told Mr. Layne that he wanted a driveway made with a 

base of crushed shell compacted with a 26,000-pound roller topped with a mix of small 

gravel and rock dust commonly known as “crusher run.” Mr. Layne told Mr. Hayes that 

he estimated that the driveway would require about six inches of gravel. About four days 

later, Mr. Layne told Mr. Hayes that the job would cost $15,000 for materials, labor, and 

equipment rental and would take between seven and ten days to complete. After seeking 

other estimates and speaking to the contractor building his house, Mr. Hayes hired Extreme 

Excavation to construct the driveway. 

Extreme Excavation began work around October 21, 2021, and finished the job on 

December 8, 2021, taking longer than anticipated. Because of the design of the parking 

area, Extreme Excavation built multiple retaining walls to which the parties had not 

previously agreed. The retaining walls were needed because Extreme Excavation 

excavated topsoil near the home to make two separate level parking areas, with the area 

closer to the home being lower than the other. Extreme Excavation built one retaining wall 

between the two parking areas and another retaining wall that wrapped around the back 

corner of the upper parking area (opposite the house) and down the driveway towards the 

road. Upon seeing the finished parking area, Mr. Hayes expressed concern that the 

retaining walls surrounding the parking area and driveway were unfinished and made of 

bare dirt. In response to this concern, Mr. Layne replied that since the walls were made of 

red clay, they would not erode. During the driveway construction, Extreme Excavation 

also did other work on the property.

After completing the work in December, Mr. Layne gave Mr. Hayes an invoice 

backdated to October 25, 2021 that described the work as:

Finish Driveway 240 tons of shell 110 tons of Crusher & Run 

Dig Water Line & Electric Line Dig Pad for Camper

Cleaned out Footers ReDug Footers Poured Footers. Dug out and

Put 2” Rock at entrance. 

The invoice itemizes the first two lines as totaling $15,000 and the last two lines as totaling 

$1,500. Based on this itemization, the original work included constructing the driveway, 

digging the water and electric lines, and digging the pad for the camper. The additional 

work, therefore, included cleaning out the footers for the home, digging them deeper, and 

putting two inches of gravel at the driveway’s entrance from the road. The invoice also 

reflected that Mr. Hayes had previously paid $11,500, leaving a balance of $5,000.
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While Mr. Hayes acknowledged that Extreme Excavation had completed the work, 

he was unsatisfied with its quality and raised several issues with Mr. Layne. To rectify the 

problems, Mr. Layne agreed to bring five more truckloads of gravel and a larger roller to 

the property. Sometime after Mr. Layne agreed to complete the remedial work, but before 

the work began, Mr. Hayes’s homebuilder brought a concrete truck onto the property, 

damaging the driveway. Extreme Excavation then repaired the damaged area. Several 

days later, Mr. Hayes inquired when the remaining remedial work would begin. Mr. Layne 

replied that, before he started the work, Mr. Hayes would need to pay the remaining 

balance, a condition Mr. Hayes refused. After this, Mr. Layne never worked on the 

driveway again. Instead, Mr. Hayes hired three other contractors to continue the work.

On February 10, 2022, Mr. Hayes filed a civil summons in the General Sessions 

Court for Washington County against Extreme Excavation, seeking $15,000 in damages 

from hiring other contractors to repair the driveway and parking area. Under the section 

titled “reason for bringing this to court,” Mr. Hayes wrote: “He [Extreme Excavation] was 

hired to install a road. Road is failing, refuses to fix road without payment in full.” On 

February 28, 2022, Extreme Excavation filed a counterclaim against Mr. Hayes, seeking 

the remaining balance on the invoice and payment for additional work completed. On 

March 21, 2022, Mr. Hayes filed a motion to transfer the action to circuit court. The action 

was transferred by an agreed order to the Circuit Court for Washington County on April 

11, 2022. Extreme Excavation then filed a motion to amend its complaint to include claims

of unjust enrichment and quantum meruit.1

Subsequently, the parties engaged in settlement negotiations via their attorneys. By 

letter dated October 14, 2022, Mr. Hayes’s attorney made an offer of compromise, which 

included the following terms:

David Hayes would pay Extreme Excavation, LLC the total sum of Fifteen 

Thousand and No/100 Dollars ($15,000.00) in full and final settlement of all 

claims;

The parties would execute a Settlement Agreement containing mutual 

general releases and there would be no admission of liability; and

An Agreed Order of Dismissal With Prejudice would be signed by the 

parties’ attorneys and filed with the Court.

Extreme Excavation’s attorney replied by letter dated October 19, 2022 with the following 

rejection and counteroffer:

 

1 The record on appeal does not include an order granting this motion. Regardless of whether the trial 

court granted the motion, however, there is ample evidence that the counterclaims of unjust enrichment and 

quantum meruit were tried by consent. See Tenn. R. Civ. P. 15.02; McLemore v. Powell, 968 S.W.2d 799, 

803 (Tenn. Ct. App. 1997) (“Generally speaking, trial by implied consent will be found when the party 

opposed to the amendment knew or reasonably should have known of the evidence relating to the new 

issue, did not object to this evidence, and was not prejudiced thereby.”).
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Respectfully, we would reject the sum offered in settlement and would 

counter with twenty-five thousand dollars ($25,000), which is still 

significantly less than Extreme Excavation believes it provided in goods and 

services to your client.

The remainder of your offer of settlement is fine, though we believe 

your client should pay the Court Costs. (Each party could pay their own 

discretionary costs and attorneys fees.)

On October 22, Mr. Hayes’s attorney emailed Extreme Excavation’s attorney the 

following:

My client has instructed me to accept your counteroffer as stated in your 

letter dated October 19, 2022 and agrees to pay your client the sum of 

$25,000.00. I will not be back to my office until October 31, 2022 and we 

can finalize the settlement when I return. Thanks.

However, by letter dated November 4, 2022, Mr. Hayes’s attorney sent another letter to 

Extreme Excavation’s attorney stating that Mr. Hayes had withdrawn his acceptance of the 

counteroffer.

On November 18, 2022, Extreme Excavation filed a motion to enforce the 

settlement agreement, relying on the foregoing communications between counsel. The trial 

court held a hearing on the motion on November 30. In its order denying the motion, the 

court stated as follows: “The Court respectfully denies the Motion to Enforce Settlement 

Agreement on the basis that there was no ‘agreement’ for the Court to enforce until the 

‘Settlement Agreement’ in Plaintiff’s offer of October 14th, 2022, had been entered into by 

the parties. This was not done.” Subsquently, the case was tried, resulting in a bench 

verdict in favor of Mr. Hayes in the amount of $17,400.

Extreme Excavation timely appealed, presenting the following issues, which we 

have restated, for our review: (1) whether the trial court was correct in overruling the 

pre-trial motion of Extreme Excavation to enforce a settlement agreement between the 

parties; (2) whether the trial court was correct in awarding Mr. Hayes $17,400 in damages; 

and (3) whether the trial court erred in denying Extreme Excavation any amount on its 

counterclaim.

STANDARD OF REVIEW

We review the findings of fact by a trial court in civil actions de novo upon the 

record, with a presumption that the findings are correct, unless the preponderance of the 

evidence indicates otherwise. Tenn. R. App. P. 13(d); Lovlace v. Copley, 418 S.W.3d 1, 

16 (Tenn. 2013). The trial court’s conclusions of law are reviewed de novo, with no 
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presumption of correctness. Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 

(Tenn. 1993).

ANALYSIS

The first issue presented is whether the trial court erred by not enforcing the 

settlement agreement. It is well-settled in Tennessee that “[a] compromise and settlement 

agreement is merely a contract between parties to litigation and, as such, issues of 

enforceability of a settlement agreement are governed by contract law.” Env’t Abatement, 

Inc. v. Astrum R.E. Corp., 27 S.W.3d 530, 539 (Tenn. Ct. App. 2000). The requirements 

of a valid contract are also well-established:

While a contract may be either expressed or implied, or written or oral, it 

must result from a meeting of the minds of the parties in mutual assent to the 

terms, must be based upon a sufficient consideration, free from fraud or 

undue influence, not against public policy and sufficiently definite to be 

enforced. 

Johnson v. Central Nat’l Ins. Co. of Omaha, 356 S.W.2d 277, 281 (Tenn. 1962). Our 

courts “retain the inherent power to enforce agreements entered into in settlement of 

litigation pending before them,” and this power exists “even if the parties’ agreement has 

not been reduced to writing.” Anglo-Danish Fibre Inds., Ltd. v. Columbian Rope Co., No. 

01–2133 GV, 2002 WL 1784490, at *3 (W.D. Tenn. June 21, 2002). The determination 

as to whether the parties entered into an enforceable contract is a question of law, which 

we review de novo. Id.

Extreme Excavation contends on appeal that the communications between the 

parties’ attorneys contained all the material terms of the settlement, making the 

correspondence an enforceable contract. We agree. The October 14 letter from Mr. 

Hayes’s attorney was an offer. Extreme Excavation’s attorney’s response of October 19 

was a rejection and a counteroffer, which Mr. Hayes’s attorney accepted on October 22. 

Thus, a valid contract was formed on October 22, whereby the parties agreed that Mr. 

Hayes would pay Extreme Excavation $25,000; the parties would execute a written 

settlement agreement and release; each party would bear their own attorney fees and 

discretionary costs; and Mr. Hayes would pay court costs. 

In support of its argument, Extreme Excavation relies on Beaman Pontiac Co. v. 

Gill, No. M1999-00666-COA-R3-CV, 2000 WL 502822 (Tenn. Ct. App. Apr. 28, 2000), 

and the majority of this Court finds the case persuasive. In Beaman, Mr. Gill sold a car to 

Beaman Pontiac that had a salvaged title. Once this was discovered, Beaman sued Mr. 

Gill. Through their attorneys, the parties reached a settlement agreement that was reduced 

to writing, wherein Mr. Gill would pay a certain sum to Beaman. Beaman’s counsel 

prepared a written settlement agreement, which was forwarded to Mr. Gill’s counsel, who 
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approved the document. The settlement agreement was executed by Mr. Gill and returned 

to Beaman’s counsel with a check for the settlement amount. After Mr. Gill’s counsel 

mailed the document and check but before it had been received by Beaman’s counsel, Mr. 

Gill’s counsel faxed Beaman’s counsel a letter stating that Mr. Gill was “revoking” the 

settlement. This Court ultimately upheld the settlement agreement. Although this 

particular agreement had been reduced to writing, that was not material to our decision, 

and we determined that

the mailed “acceptance” of the settlement agreement between counsel 

represents the culmination of their bargaining by phone and letter. Counsel 

for both parties state in their affidavits that, following the communication of 

[counsel’s] final offer of settlement and prior to the mailing of the executed 

agreement, [opposing counsel] indicated the acceptability of the contract 

terms. Under the circumstances the effective acceptance occurred during 

these prior telephonic and written conversations, not in the mailing of the 

settlement form executed per these communications.... The agreement was 

in fact a valid contract for compromise and settlement enforceable by motion 

in the instant action. The document signed by the parties was merely a 

memorandum of their oral agreement.

Id. at *2. 

In the present case, the dissent contends that the parties did not reach a valid 

settlement agreement because there were still terms remaining to be decided, as evidenced 

by Mr. Hayes’s attorney’s comment that “we can finalize the settlement when I return.” It 

is well-settled that contracts must have terms of sufficient definiteness to allow courts to 

give them exact meanings. United Am. Bank of Memphis v. Walker, 1986 WL 11250, at 

*1 (Tenn. Ct. App. Oct. 10, 1986). Here, however, neither Mr. Hayes nor the dissent

adequately explains what terms remained to be decided. The parties agreed that Mr. Hayes 

would pay $25,000 to Extreme Excavation; all parties would dismiss their claims and 

execute releases; Mr. Hayes would pay court costs; and the parties would pay their own 

discretionary costs and attorney fees. Despite Mr. Hayes’s attorney’s statement about 

future finalization of the settlement, the essential terms were already finalized. The only 

step remaining was for the parties to put their agreement in writing and sign the agreement, 

a step that Beaman makes clear is not required for a determination that a contract had 

already been formed. Given that this was a straightforward breach of contract claim and 

counterclaim for monetary damages, there is simply nothing left for the parties to agree 

upon.

The majority’s decision on the motion to enforce settlement agreement is dispositive 

in this case. Accordingly, the remaining issues are pretermitted. 
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CONCLUSION

The judgment of the trial court is reversed. The case is remanded to the trial court 

for entry of an order consistent with this opinion. Costs of this appeal are assessed against

the appellee, David Hayes, for which execution may issue if necessary.

________________________________

 KRISTI M. DAVIS, JUDGE