FILED

March 1, 1996

Cecil Crowson, Jr.

Appellate Court Clerk

I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON

J AMES MI LLER ) MONROE COUNTY

) 03A01- 9504- CH- 00123

Pl a i ntif f - Appe lla nt )

)

)

v. ) HON. EARL H. HENLEY,

 ) CHANCELLOR

)

MI LLER BROTHERS FARMS, I NC. )

LARRY L. MI LLER, )

GARRY MI LLER a nd )

ALLEN MI LLER )

)

De f e nda nt s - Appe l l ees ) AFFI RMED AND REMANDED

 

J OHN W. CLEVELAND OF SWEETWATER FOR APPELLANT

J EFFREY L. CUNNI NGHAM OF ATHENS FOR APPELLEES

O P I N I O N

 Godda r d, P. J .

Thi s i s t he s e c ond a ppe a l i n a c ont i nui ng di s put e

be t we e n f our of t he s ons of Andr e w K. Mi l l e r , de c e a s e d; na me l y,

J a me s Mille r , La r r y L. Mille r , Ga r r y Mille r a nd Alle n Mille r .
2

The s ui t gi vi ng r i s e t o t he pr e s e nt a ppe a l wa s f i l e d by

J a me s Mille r a ga i ns t Mille r Br ot he r s Fa r ms , Inc . , a nd hi s thr e e

br ot he r s , La r r y L. , Ga r r y, a nd Alle n Mille r . The or i gi na l

c ompl a i nt c ont a i ne d t he f ol l owi ng t hr e e c ount s : Count One s ought

t o t e r mi na t e a cer t a i n l eas e ent e r e d i nt o be t ween Andr e w K.

Mille r a nd Mille r Br ot he r s Fa r ms , Inc . , pr e di c a t e d upon the

l e s s ee' s f a i l ur e t o pa y r e nt as r e qui r e d by t he l eas e . At t r i a l

a nd on a ppe a l f our ot he r de f i c i e nc i e s we r e a s s e r t e d: non- pa yme nt

of t a xe s , f a i l ur e t o ma i nt a i n r e pl aceme nt cos t i ns ur a nce, f a i l ur e

t o ma i nt a i n pr ope r t y, a nd f a i l ur e t o de l i ve r i ns ur a nc e pr oc e e ds

t o t he l e s s or . Count t wo s ought a pa r t i t i on of t he l a nds owne d

by Andr e w K. Mi l l e r whi c h we r e i nhe r i t e d by hi s s ons , t he

i ndi vi dua l pa r t i e s t o t hi s s ui t . Count t hr e e s ought a j udi c i a l

di s s ol ut i on of t he c or por a t i on be c a us e t he a c t i ons of t he

De f e nda nt di r e c t or s we r e " unl a wf ul , oppr e s s i ve a nd f r a udul e nt ,

a nd t ha t t he y we r e mi s a ppl yi ng or wa s t i ng t he c or por a t e a s s e t s . " 

The Cha ncel l or r e f us e d t o decl a r e a f or f e i t ur e of t he

l e a s e or a j udi c i a l di s s ol ut i on of t he c or por a t i on, r e s ul t i ng i n

t hi s a ppe a l by J a me s , i ns i s t i ng he wa s i n e r r or i n bot h r e s pe c t s .

At t he out s e t , t wo ma t t e r s ne e d t o be a ddr e s s e d.

Fi r s t , t he de c r e e i n t hi s c a us e i s not a f i na l one i n t ha t c ount

t wo ha s not be e n r e s ol ve d a nd r e ma i ns pe ndi ng. Howe ve r , be c a us e

t he va lidity of the le a s e is s i gni f i c a nt in de t e r mi ni ng the va l ue

of t he pr ope r t y i f s ol d f or a pa r t i t i on unde r c ount t wo, we de e m

i t a ppr opr i a t e t o t r e a t t hi s a ppe a l bot h a s t o c ount s one a nd
3

t hr e e a s a Rul e 9 I nt e r l oc ut or y Appe a l a nd s us pe nd a l l unc ompl i e d

wi t h r e qui r e me nt s ne c e s s a r y f or s uc h a n a ppe a l .

Se c ond, t hr e e mot i ons t o c ons i de r pos t - j udgme nt f a c t s

ha ve be e n f i l e d, one by J a me s Mi l l e r a nd t he ot he r t wo by t he

Admi ni s t r a t or , C. T. A. , f or the Es t a t e of Andr e w K. Mille r . Al l

t hr ee ar e de ni e d becaus e ei t he r t he y do not meet t he r e qui r e me nt s

of Rul e 14 of t he Te nne s s e e Rul e s of Appe l l a t e Pr oc e dur e f or s uc h

mot i ons , or do not a ddr e s s ma t t e r s ge r ma ne t o t he i s s ue s r a i s e d

i n t hi s a ppe a l .

As to the is s ue r e l a ting to f or f e itur e of the le a s e ,

t he pe r t i ne nt pr ovi s i ons t he r e of a r e a s f ol l ows :

1. . . . .

Shoul d a ny mont hl y i ns t a l l me nt r e ma i n i n de f a ul t t hi r t y

( 30) da ys , t he n a nd i n t ha t e ve nt t he Owne r ma y gi ve

t he Te na nt s a t hi r t y ( 30) da y wr i t t e n not i c e ma i l e d by

c e r tif i e d ma il to the i r la s t known a ddr e s s , d i r e c ting

t he Te na nt s t o c ur e t he de f i c i e nc y a nd br i ng t he

pa yme nt t o da t e wi t hi n t hi r t y ( 30) da ys of t he wr i t t e n

not i c e , a nd i n t he e ve nt t ha t t he y f a i l t o do s o t hi s

c ont r a c t or a ny ba l a nc e t he r e on, or a ny une xe r c i s e d

r i ght s t he r e unde r , s ha l l be f or f e i t e d a nd t he ba l a nc e

of t he c ont r a c t de c l a r e d nul l a nd voi d a t t he opt i on of

t he Owne r .

2. The Le s s ee agr ees :

 ( a ) Tha t it will pa y the s a i d r e nt a t the time s

a nd i n t he ma nne r a f or e s a i d.

 ( b) Dur i ng t he t e r m he r e of t he Le s s e e s ha l l pa y

a l l of t he r eal es t a t e t a xe s and i n t he eve nt t he y f a i l

t o do s o, t he Le s s or s ha l l pa y t he t a xe s a nd t he a mount

t hus pa i d s ha l l be a dde d a nd be pa i d a s a pa r t of t he

r e nt a l he r e i n pr ovi de d.

 ( c ) Tha t it will dur i ng the s a i d te r m ins ur e

a nd ke e p i ns ur e d i n t he na me of t he l e s s or a ny a nd a l l
4

bui l di ngs on t he pr e mi s e s f r om l os s a nd ke e p t he m

i ns ur e d i n t he na me of t he Le s s or f r om l os s or da ma ge

by f i r e i n at l eas t a s um equa l t o t he cos t t o r e pl ace

s a i d bui l di ngs i n i ns ur a nc e c ompa ni e s t o be a ppr ove d by

t he Le s s or , a nd tha t it will pa y a ll the pr e mi ums

ne c e s s a r y f or t hos e pur pos e s pr ompt l y a f t e r t he s a me

s ha l l be c ome due , a nd wi l l pr ompt l y de l i ve r t o t he

Le s s or t he pol i c i e s of i ns ur a nc e a nd t he r e c e i pt s f or

s uc h pr e mi ums : Pr ovi de d, t ha t i f t he Le s s e e s ha l l a t

a ny t i me f a i l t o i ns ur e or ke e p i ns ur e d a s a f or e s a i d,

t he Le s s or ma y do a l l t hi ngs ne c e s s a r y t o e f f e c t or

ma i nt a i n s uc h i ns ur a nc e , a nd a ny mone ys e xpe nde d t o hi m

f or t ha t pur c ha s e s ha l l be r e pa ya bl e by t he Le s s ee on

de ma nd, and ma y be r ecove r e d as r e nt i n ar r ear .

. . . .

( g) Tha t i t wi l l ke e p a l l bui l di ngs a nd pr e mi s e s ,

i nc l udi ng t he pl umbi ng a nd e l e c t r i c a l s ys t e ms , i n s uc h

r e pa i r as t he s a me ar e at t he comme nceme nt of t he s a i d

t e r m or ma y be put i n dur i ng t he c ont i nua nc e t he r e of ,

r eas ona bl e wear and t ear and da ma ge by f i r e or ot he r

una voi da bl e c a s ua l t y onl y e xpe c t e d [ s i c ] a nd wi l l

pr ompt l y r e pl a c e a l l gl a s s t he r e of br oke n dur i ng t he

s a i d t e r m by ot he r of t he s a me s i z e a nd qua l i t y.

. . . .

4. I f t he Le s s ee or i t s r e pr e s e nt a t i ve s or as s i gns

s ha l l ne gl e c t or f a i l t o pe r f or m a nd obs e r ve a ny

c ove na nt whi c h on t he Le s s e e ' s pa r t i s t o be pe r f or me d,

or i f hi s l e a s e hol d e s t a t e s ha l l be t a ke n on e xe c ut i on,

or i f t he Le s s e e s ha l l be de c l a r e d ba nkr upt or

i ns ol ve nt a c c or di ng t o l a w, or s ha l l ma ke a n a s s i gnme nt

f or t he be ne f i t of i t s c r e di t or s ot he r t ha n Swe e t wa t e r

Va l l e y Ba nk, t he n t he Le s s or ma y, i mme di a t e l y or at any

t i me t he r e a f t e r , but onl y wi t h not i c e or de ma nd t o a nd

t he expr e s s wr i t t e n cons e nt of Sweet wa t e r Va l l e y Ba nk,

e nt e r i nt o a nd upon t he pr e mi s e s or a ny pa r t t he r e of ,

a nd r e pos s e s s t he s a me as of t he i r f or me r es t a t e , and

e xpe l t he Le s s e e a nd t hos e c l a i mi ng unde r hi m a nd

r e move t he i r ef f ect s , f or c i bl y, i f necess a r y, wi t hout

be i ng t a ke n or de e me d t o be gui l t y of a ny ma nne r of

t r e s pa s s , a nd t he r e upon t hi s l e a s e s ha l l t e r mi na t e , but

wi t hout pr e j udi c e t o a ny r e me di e s whi c h mi ght ot he r wi s e

be us e d by t he Le s s or f or a r r e a r s of r e nt or a ny br e a c h

of t he Le s s ee' s cove na nt s .

5. I n cas e t he pr e mi s e s or any pa r t t he r e of s ha l l at

a ny t i me dur i ng t he s a i d t e r m be de s t r oye d or da ma ge d

by f i r e or ot he r una voi da bl e c a s ua l t y, t he Le s s or ma y

ke e p a ny i ns ur a nc e pr oc e e ds whi c h c ompe ns a t e f or s a i d

l os s , b ut thi s le a s e will c ontinue in f ull f or c e a nd
5

e f f e c t f or t he pr e mi s e s i n i t s da ma ge d or uni mpr ove d

c ondi t i on.

I t wi l l be not e d f r om t he f or e goi ng t ha t t he r e nt t o be

pa i d wa s t o be a gr e e d upon by t he pa r t i e s a nnua l l y. The pr oof

s howe d t ha t t he l e s s e e s pa i d $1000 pe r mont h pl us pa yme nt s on a

c e r t a i n i nde bt e dne s s pr e vi ous l y i nc ur r e d by Andr e w Mi l l e r , a s

we l l as i ns ur a nce and t a xe s . Af t e r t he deat h of Andr e w Mi l l e r

t he $1000 pe r mont h pa yme nt s we r e not ma de a nd r e ma i ne d unpa i d

unt i l t he he a r i ng be f or e t he Cha nc e l l or on Nove mbe r 17, 1994.

Af t e r t he hear i ng he or de r e d t ha t t he ar r ear a ge as t o t he mont hl y

pa yme nt s be ma de i mme di a t e l y t o t he Es t a t e of Andr e w Mi l l e r , and

a l s o t he e ns ui ng mont hl y pa yme nt s , whi c h he f i xe d a t $1000.

As to the f i r s t ins i s t e nc e r e l a tive to f a ilur e to pa y

r e nt , t he De f e nda nt s cont e nd t ha t becaus e t he l eas e r e qui r e d t he

r e nt a l a mount t o be de t e r mi ne d a nnua l l y, i t wa s not pa i d be c a us e

no s uc h de t e r mi na t i on ha d be e n ma de . We a gr e e wi t h t he

Cha nc e llor tha t it wa s a ppr opr i a t e , in light of the f a c t tha t

$1000 c a s h pl us ot he r pa yme nt s ha d be e n ma de i n t he pa s t , t hi s

woul d be a n a ppr opr i a t e a mount t o pa y pe ndi ng a de t e r mi na t i on of

t he annua l r e nt . Howe ve r t ha t ma y be , i t i s cl ear f r om t he l eas e

a gr eeme nt t ha t be f or e t he l eas e can be decl a r e d voi d f or f a i l ur e

t o pa y r e nt , not i c e mus t ha ve be e n gi ve n by t he l e s s or t o t he

l e s s e e . I n t he pr e s e nt c a s e no s uc h not i c e wa s gi ve n a nd t he

l e a s e ma y not be f or f e i t e d f or t hi s r e a s on.
1 Th e l e a s e us e s t h e wo r d " e xpe c t e d " r a t h e r t h a n " e x c e p t e d " ;

howe v e r , i t i s cl e a r f r o m t h e cont e x t t h a t t h i s i s a t ypogr a phi c a l er r o r .

6

As t o t he ne xt t wo i ns i s t e nc e s r e l a t i ve t o non- pa yme nt

of t a xe s a nd f a i l ur e t o obt a i n a ppr opr i a t e i ns ur a nc e , t he l e a s e

s peci f i cal l y pr ovi de s t he l e s s or ma y cur e any de f i c i e nc y and

c ha r ge t he s a me t o t he l e s s ee.

Becaus e t he s peci f i c r e l i e f accor de d by t he l eas e t o

t he le s s or , a s di s tingui s he d f r om the ge ne r a l r e lie f r e l a tive to

br e a c h of a ny c ove na nt s , a nd t he f a c t t ha t f or f e i t ur e s a r e not

f a vor e d unde r our j ur i s pr ude nc e , Hoot on v. Na c a r a t o GMC Tr uc k,

I nc . , 772 S. W. 2d 41 ( Te nn. App. 1989) ; Ha s de n v. Mc Gi nni s , 54

Te nn. App. 39, 387 S. W. 2d 631 ( 1964) , we a r e i nc l i ne d t o be l i e ve

t ha t t he l e s s or s ' r e me dy woul d be a s s pe c i f i c a l l y s e t out i n t he

l eas e r e l a t i ve t o t he s e t wo i t e ms , and t ha t t he Cha ncel l or wa s

c or r e c t i n r e f us i ng t o voi d t he l e a s e on t hos e gr ounds .

Wi t h r e ga r d t o t he f a i l ur e t o ma i nt a i n t he pr ope r t y,

t he pr i nc i pa l compl a i nt i s t ha t r e pa i r s we r e not ma de af t e r wi nd

s t or m da ma ge . It will be not e d, h owe ve r , tha t the le a s e

s peci f i cal l y except e d1 una voi da bl e c a s ua l t y.

As t o s e c t i on 5 of t he l e a s e r e ga r di ng i ns ur a nc e

pr oc e e ds , i t wi l l be not e d t ha t t he pr ovi s i on i s not l i s t e d unde r

c ove na nt s of t he l e s s e e a nd doe s not r e qui r e t he l e s s e e t o

de l i ve r i ns ur a nc e pr oc e e ds t o t he l e s s or . I t onl y gi ve s t he

l e s s or t he r i ght t o r e t a i n t he m, whi c h e nvi s i one d t he i r be i ng

pa i d t o t he l e s s or r a t he r t ha n t he l e s s e e . Cons e que nt l y, t he
7

l e s s e e di d not br e a c h t hi s pr ovi s i on. Mor e ove r , i t s houl d a l s o

be not e d t ha t Se c t i on 5 i s s e pa r a t e a nd a pa r t f r om Se c t i on 4,

gi vi ng t he l e s s or t he r i ght of r e - e nt r y f or f a i l ur e t o pe r f or m

t he c ove na nt s e nume r a t e d i n Se c t i on 2. Fi na l l y a s t o t hi s poi nt ,

we not e t ha t cer t a i n r e pa i r s we r e ma de by t he i ns ur a nce pr oceeds

r ecei ve d by t he l e s s ee and ot he r s we r e cont e mpl a t e d de pe ndi ng

upon a de t e r mi na t i on of t he e xt e nt of t he da ma ge t o a ba r n. 

As t o t he i s s ue s c onc e r ni ng di s s ol ut i on of t he

c or por a t i on, our r e vi e w of t he r e c or d pe r s ua de s us t ha t t hi s i s

a n a ppr opr i a t e c a s e f or a f f i r ma nc e unde r Rul e 10( a ) of t hi s

Cour t .

For t he f or e goi ng r e a s ons t he j udgme nt of t he Tr i a l

Cour t i s a f f i r me d a nd t he c a us e r e ma nde d f or c ol l e c t i on of c os t s

be l ow. Cos t s of a ppe a l a r e a dj udge d a ga i ns t t he Pl a i nt i f f a nd

hi s s ur e t y.

_______________________________

Hous t on M. Godda r d, P. J .

CONCUR:

________________________________

He r s c he l P. Fr a nks , J .

________________________________

Cha r l e s D. Sus a no, J r ., J .