IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

February 21, 2013 Session

WILLIAM D. STALKER AND STEPHEN L. YOUNG v.

DAVID R. NUTTER AND TAMARA D. NUTTER

Appeal from the Chancery Court for Sumner County

No. 2008C1 Tom E. Gray, Chancellor

No. M2012-00170-COA-R3-CV - Filed April 19, 2013

This appeal arises out of a breach of contract action. Following the presentation of the

plaintiffs’ proof, the court granted defendants’ motion to dismiss. We vacate the decision

of the trial court and remand the case for findings of fact required by Tenn. R. Civ. P.

41.02(2) and 52.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Vacated

and Remanded

RICHARD H. DINKINS,J., delivered the opinion of the court, in which PATRICIA J. COTTRELL,

P. J., M. S., and FRANK G. CLEMENT, JR., J., joined.

Stephen E. Grauberger and Derrick H. Green, Mt. Juliet, Tennessee, for the Appellants,

William D. Stalker and Stephen L. Young.

John D. Kitch, Nashville, Tennessee; and John Ray Phillips, Jr., Gallatin, Tennessee, for the

Appellees, David R. Nutter and Tamara D. Nutter.

MEMORANDUM OPINION

1

 Tenn. R. Ct. App. 10 states: 1

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be designated “MEMORANDUM OPINION”, shall not be published, and shall not be cited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.
I. Facts and Procedural History

William Stalker and Stephen Young (“Plaintiffs”) and David and Tamara Nutter

(“Defendants”) entered into a Purchase and Sale Agreement in April 2007 whereby

Defendants agreed to purchase a home which was under construction by Plaintiffs upon its

completion; the purchase price was $1,800,000. The contract provided that closing was to

occur by September 30, 2007, and that time was of the essence; the closing date could be

extended for a maximum of thirty days due to delays caused by Defendants or by agreement

of the parties. Defendants paid a $10,000 earnest money deposit. The parties did not close

on the sale by the closing date.

On January 3, 2008, Plaintiffsfiled suit alleging that Defendants breached the contract

by failing to remit payment for change orders which Defendants requested; by failing to

provide proof of financing; and by failing to close on the property in a timely manner.

Plaintiffs sought specific performance of the contract, damages, and attorney’s fees.

2

Defendants duly filed their answer.

3

Defendants filed a counter-complaint on May 26, 2011, alleging breach of contract

and anticipatory breach of contract and seeking damages for out-of-pocket expenditures they

made on the home, a refund of the earnest money deposit, attorneys’ fees, and discretionary

costs.

Trial was set for September 28 and November 16, 2011; Plaintiffs presented and

concluded their proof on September 28. On November 1, Defendants filed a motion to

dismiss which was heard on November 7. The court entered an order on November 16

granting Defendants’ motion, holding that Plaintiffs “did not establish a valid cause of action

for breach of contract against the original Defendants.”

Defendants subsequently filed a motion for discretionary costs. On December 22 the

court issued a Final Order and Judgment ordering a refund of Defendants’ $10,000 deposit

Defendants filed a motion for temporary injunction on January 15 seeking to enjoin Plaintiffsfrom 2

conveying or otherwise transferring ownership of the home. Plaintiffs responded by requesting that the

temporary injunction be denied. The record does not contain an order with respect to Defendants’ request

for a temporary injunction.

On June 18, 2010, Defendants moved to dismiss the case for failure to prosecute and because the 3

property at issue had been sold. Plaintiffs filed a response on June 25 and requested that the matter be set

for trial. No order on this motion is in the record. 

-2-
and entering a judgment awarding Defendants attorneys’ fees in the amount of $31,252.50.

4

On January 9, 2012, the court entered an order awarding Defendants discretionary costs in

the amount of $3,240.50. Plaintiffs filed a timely appeal.

5

Plaintiffs’ appeal, raising the following issues:

1. Whether the Trial Court erred in allowing Defendants to file a CounterComplaint more than three years after service of the complaint.

2. Whether the Trial Court erred in finding the Plaintiffs failed to prove a

breach of contract by the Defendants.

3. Whether the Trial Court erred in finding that Plaintiffs breached the

contract.

4. Whether the Trial Court erred in awarding Defendants discretionary costs

and attorney fees.

II. Discussion

With respect to Plaintiffs’ first issue, we address whether the court properly exercised

its discretion in allowing Defendants to amend their pleadings to assert a counterclaim.

Plaintiffs contend that trial court erred in granting Defendants’ motion because Defendants

did not state any facts justifying an amendment and because the Court did not state the basis

for its ruling in the order allowing filing of the counter-complaint.

Rule 13.06 of the Tennessee Rules of Civil Procedure provides that “[w]hen a pleader

fails to set up a counterclaim through oversight, inadvertence or excusable neglect, or when

justice requires, the pleader may by leave of court set up the counterclaim by amendment.”

Amendments to the pleadings are governed by Tenn. R. Civ. P. 15.01, which states that leave

to amend the pleadings “shall be freely given when justice so requires.” The determination

whether or not to grant a motion to amend a pleading lies within the sound discretion of the

trial court. Burton v. Carroll County, 60 S.W.3d 821, 832 (Tenn. Ct. App. 2001); State Dept.

of Human Servs. v. Hauck, 872 S.W.2d 916, 919 (Tenn. Ct. App. 1993); Merriman v. Smith,

599 S.W.2d 548 (Tenn. Ct. App. 1979). A trial court’s discretionary ruling on amendments

to pleadings will not be disturbed on appeal unless there is a showing of abuse of discretion.

At a hearing on December 14, Defendants reiterated the fact that in their supplemental trial brief 4

they waived all claims in their counter-complaint with the exception of attorney’s fees and the refund of the

earnest money deposit. 

All proceedings on appeal were stayed pursuant to a June 4 order of this court due to the fact that

5

bankruptcy petitions were pending on behalf of Plaintiffs. The record shows that Mr. Stalker received a

discharge in bankruptcy on August 27, 2012, and Mr. Young received a discharge on September 24, 2012. 

-3-
George v. Bldg. Materials Corp., 44 S.W.3d 481, 486 (Tenn. 2001); Harris v. St. Mary’s

Med. Ctr., Inc., 726 S.W.2d 902, 904 (Tenn. 1987). A court abuses its discretion when it

“applie[s] an incorrect legal standard, or reache[s] a decision which is against logic or

reasoning that cause[s] an injustice to the party complaining.” Eldridge v. Eldridge, 42

S.W.3d 82, 85 (Tenn. 2001).

We have examined Defendants’ motion to file the counter-complaint in light of the

standards stated above, the nature of this proceeding and the issues involved and hold that

the trial court did not abuse its discretion in granting the motion. The record shows that the

home sold while the case was pending and the relief sought by Defendants in the countercomplaint consisted of a refund of the earnest money deposit and amounts Defendants had

paid for interior design services; it was appropriate for Defendants to seek refund of these

amounts because they did not purchase the home. Moreover, Plaintiffs have failed to identify

any harm or prejudice occasioned by the allowance of the amendment.

With respect to their second issue, Plaintiffs contend that the trial court erred in

finding that Plaintiffs failed to prove a breach of contract by Defendants.

The order dismissing Plaintiffs’ case states in full:

This matter came before the Court on the 7th day of November, 2011

on Motion to Dismiss made by the original Defendants and Counter-Plaintiffs,

David R. Nutter and Tamara D. Nutter, with respect to claims made upon them

by the original Plaintiffs, William D. Stalker and Stephen L. Young, and it

appearing to the Court that the proof and evidence presented by the Plaintiffs

Stalker and Young on the day of trial conducted in this matter on September

28, 2011 did not establish a valid cause of action for breach of contract against

the original Defendants, David R. Nutter and Tamara D. Nutter,

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that

the Action of the original Plaintiffs, William D. Stalker and Stephen L. Young,

against the original Defendants, David R. Nutter and Tamara D. Nutter, is

DISMISSED WITH PREJUDICE.

Neither this order nor the Final Order and Judgment gives the basis of the court’s ruling.

Rule 41.02(2) of the Tennessee Rules of Civil Procedure, as amended effective July

1, 2010, provides as follows:

-4-
After the plaintiff in an action tried by the court without a jury has completed

the presentation of plaintiff’s evidence, the defendant . . . may move for

dismissal on the ground that upon the facts and the law the plaintiff has shown

no right to relief. . . . If the court grants the motion for involuntary dismissal,

the courtshall find the facts specially and shallstate separately its conclusions

of law and direct the entry of the appropriate judgment.

Tenn. R. Civ. P. 41.02(2) (emphasis added).

The Advisory Commission Comment regarding the amendment provides: “The final

sentence of Rule 41.02(2) deletes the requirement of a request for written findings of fact and

conclusions of law. Instead, in conformity with Rule 52.01, findings of fact and conclusions

of law are required without request.” Tenn. R. Civ. P. 52.01 mandates that trial courts are

to issue findings of fact and conclusions of law in all actions tried upon the facts without a

jury. Barnes v. Barnes, No. M2011-01824-COA-R3-CV, 2012 WL 5266382, at *8 (Tenn.

Ct. App. Oct. 24, 2012). In discussing the implications of this mandate for appellate review

with respect to Rule 52.01, this Court has stated:

This Court has previously held that the General Assembly’s decision to require

findings of fact and conclusions of law is “not a mere technicality.” Instead,

the requirementservesthe important purpose of “facilitat[ing] appellate review

and promoting the just and speedy resolution of appeals.” “Without such

findings and conclusions, this court is left to wonder on what basis the court

reached its ultimate decision.”

Heritage Operating, LP v. Henry Cnty. Propane Gas, Inc., No. W2011-01162-COA-R3-CV,

2012 WL 2989120, at *8 (Tenn. Ct. App. July 23, 2012) (quoting In re Estate of Thompson,

No. M2011-00411-COA-R3-CV, 2012 WL 912859, at *19 (Tenn. Ct. App. Mar. 14, 2012)

(Stafford, J., concurring)) (citations omitted).

The determination of whether the court erred in granting Defendant’s motion requires

that we review the trial court’s findings of fact; such review is not possible in this case.

Accordingly, we vacate the decision of the trial court and remand for detailed findings of fact

and conclusions of law.

6

In cases involving a court’s failure to make finding of fact as required by Tenn. R. Civ. P. 52.01, 6

this Court has vacated the decision of the trial court and remanded the case for entry of such findings. See

Pandey v. Shrivastava, No. W2012-00059-COA-R3-CV, 2013 WL 657799 (Tenn. Ct. App. Feb. 22, 2013);

Barnes, 2012 WL 5266382; Leo v. Gardner, No. M2010-02616-COA-R3-CV, 2012 WL 440720 (Tenn. Ct.

(continued...)

-5-
In their third and fourth issues, Plaintiffs contend that the trial court erred in finding

that they breached the contract and in awarding Defendants discretionary costs and attorneys

fees.

The trial resumed on December 14. After determining that neither party intended to

introduce additional proof, the court ruled: “In this matter, the court finds a breach of

contract by William B. Stalker and Steven L. Young.” This holding, however, was not

incorporated into the December 22 order that the earnest money be returned to Defendants;

neither did the order state the factual basis upon which the court made the determination.

The court’s order that the escrow funds be returned to Defendants and the award of

attorneys fees to Defendant is predicated upon its determination that Plaintiffs breached the

Purchase and Sale Agreement. As discussed above, Tenn. R. Civ. P. 52.01 requires the

7

court to enter findings of fact in cases tried without a jury; in the absence of such findings

it is necessary for us to vacate the December 22 order and remand the case for entry of same.

8

In Defendants’ motion to place this case on the active docket, Defendants stated that

the bankruptcy proceedings had been concluded with Mr. Stalker receiving a discharge on

August 27, 2012, and Mr. Young receiving a discharge on September 24, 2012. This is the

extent of this Court’s knowledge with respect to the bankruptcy proceedings of Plaintiffs.

9

“Discharge in bankruptcy operates to void a debtor’s personal liability for any

judgment obtained prior to the debtor’s bankruptcy filing.” Ford Consumer Fin. Co., Inc.

v. Clay, 984 S.W.2d 615 (Tenn. Ct. App. 1998). Based upon the provisions of 11 U.S.C.

524(a)(2), a creditor may not act to enforce a pre-petition debt that has been discharged as

a personal liability of the debtor. Id. In remanding the case for the entry of factual findings

(...continued)

6

App. Feb. 10, 2012); Lake v. Haynes, No. W2010-00294-COA-R3-CV, 2011 WL 2361563 (Tenn. Ct. App.

June 9, 2011); Clement Homes, Inc. v. Chilcutt, No. W2009-02277-COA-R3-CV, 2010 WL 2812574 (Tenn.

Ct. App. July 16, 2010); Cf. Wall v. Wall, No. W2010-01069-COA-R3-CV, 2011 WL 2732269 (Tenn. Ct.

App. July 14, 2011).

 Section 26 of the Purchase and Sale Agreement provides for disbursement of the earnest money 7

upon default of one of the parties. If the buyer defaults, the money isforfeited and paid to the seller as partial

liquidated damages; if the seller defaults, the deposit is returned to the buyer.

For the same reason, we vacate the January 9, 2012 order awarding Defendants discretionary costs 8

of $3,240.50. 

In their brief on appeal, Defendants state that they are “prohibited from any effort to attempt 9

collection” under 11 U.S.C. § 524(a)(1) and (2). 

-6-
in accordance with Tenn. R. Civ. P. 41 and 52 we do not preclude the trial court or the parties

from addressing the impact of Plaintiffs’ discharge in bankruptcy on the underlying claims.

III. Conclusion

The decision of the trial court is vacated and the cause is remanded for further

proceedings in accordance with this opinion.

___________________________________

RICHARD H. DINKINS, JUDGE

-7-