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I N W A TER, J R. ) CHANC ELLOR ) ) ) ) ) J ANI CECOLEd/ b/ a R I VERS I DE) AFFI R M ED I N PAR

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p p e l l ees )

R O BER TL. O G LE, J R. , S e v i e r v ille f o r A p p e lla n t . J EFFD. R

A D ER, O g l e , W y n n& R a d e r , S e v i e r v ille , for A p p e lle e s .

O PI N I O N

M c M u r r a y , J . Thi s c a s e or i g i n a t e d a s a n a c t i on t o e n f o r c e a l i e n f o r w o r k a n d m a t e r i a l s pur s u a n t t o T. C. A . § 6 6 - 1 1

- 1 2 6 . Th e p l a i n t i f f al l e g e dt h a t h e ha d f u r n i s h e d e qui p m e n t , l a bor a nd m a t e r i a l s w

h i c h w e r e us e d f o r i m p r ove m e n t s on t h e pr ope r t y w h i c h t h e de f e nda n t , Co l e oc c upi e d a s l e s s e e a nd t h e de f e n d a n t , O g l e , w a s ano w

n e r . Th e d e f e n d a n t , O g l e ,1 Theplaintiff also filed a motion for summary judgment inwhich he sought to

havethe counterclaim dismissed because the propertyfor whichcounter-plaintiff claimed damageswas owned by a third party who is not a party to this action. The summary judgmentwas by agreement submitted to the Special Master for disposition along with all other matters. The matter was resolved adverse to the plaintiff. The chancellor laterconfirmed the findings of the master overruling themotion for summary judgment. 

### 2 f ile da n a n s w

e r , ge n e r a l l y s t a t e d t h a t he ow n e d a n i n t e r e s t i n t h e s ubj ect pr ope r t y but w a s w i t hout s u f f i c i e n t know l e dge or i n f o r m

a t i o n t of o r m

a b e l i e f as t o t h e t r u t h of t h e a l l e g a t i ons s e t f o r t h i n t h e c o m p l a i n t . Ont h e o t h e r h a n d , d e f e n d a n t , Co l e , f i l e danan s w e r an dco u n t e r - c l a i m . I nh e r an s w

e r Co l e a d m

i t t e d t o h a v i n g a l eas e h o l di n t e r e s t i n t h e p r o p e r t y . Sh e f ur t h e r a d m i t t e d t h a t s h e h a dent e r e di n t o an a g r e e m e n t w i t ht h e p l a i n t i f f t o p r o v i d e cer t a i nl a b o r an dm a t e r i a l s t o r e p a i r t h e r o o f o f t h e b u i l di n g w h i c hs h e w

a s l e s s ee an dw

h i c hw a s o ccup i e db ya sub l e s s ee. Th e s ubl e s s e e oper a t e d a bus i n e s s on t h e p r e m i s e s know

n a s R i v e r s i d e G

i f t Shop.

I nh e r co u n t e r c l a i m , t h e d e f e nda n t , Co l e , a l l e g e d t h a t t h e p l a i n t i f f br e a c h e d t h e i r a g r e e m e n t a nd f a i l e d t o pe r f o r m t h e l a bor i n a g o o dw

o r km a n l i ke m

a nne r a nd t h a t a s a r e s u l t t h e i n t e r i o r a n d c ont e n t s o f t h e b u i l di n g w e r e d a m

a g e dan ds h e w

a s r e qui r e d t o pay f o r d a m a g e s s u s t a i n e d by her t e n a n t . Sh e s ought da m a g e s f r o m

t h e pl a i n t i f f i nth e a m

ount of $12, 000. 00. By a m e ndm e n t s h e i n c r e a s e d her de m a nd f o r d a m a g e s by $4, 000. 00.

Subs e que n t l y , th e case wa s r e f e r r e dt o a speci a l m a s t e r . 1 The s p eci a l m

a s t e r f ound t h a t t h e pl a i n t i f f ha d br e a c h e d hi s c ont r a c t b y f a i l ur e tof i ni s hth e w o r k a nd by negl i g e n t l y doi ng t h e w o r kan das a

### 3

r e s u l t t h e r e w

a s e x t e n s i v e da m a g e t o t h e bui l d i ng and i t s c ont e n t s . He f o u n dt h a t t h e p l a i n t i f f w a s n o t ent i t l e dto a j udgm e n t a n d r eco m m e n d e ddi s m

i s s a l o f th e c o m

p l a i n t . O

nt h e c ount e r c l a i m he f ound t h a t t h e co u n t e r - p l a i n t i f f h a ds u s t a i n e dt h e al l e g a t i ons o f h e r c o u n t e r c l a i m

a n dw

a s en t i t l e d t o dam a g e s i n t h e t o t a l a m ount of $10, 657. 21. Th e s p eci a l m a s t e r f ound t h a t t h e da m a g e s f o r r e p a i n t i n g a nd r e c a r p e t i ng t o t a l e d $4, 417. 75.

Ex c e p t i ons w

e r e f i l e d t o t h e m a s t e r ' s r e por t . The ch a n cel l o r at t h e h ear i n g o nt h e e x cep t i ons r e duc e d t h e da m a g e s f o r r e p a i n t i ng and r e c a r p e t i n g t o $ 8 8 3 . 5 5 . H e ent e r e da t o t a l j u d g m e n t f o r t h e co u n t e r - p l a i n t i f f i n t h e a m ount of $7, 123. 0 1 . Th e r e m a i n d e r o f t h e s p eci a l m a s t e r ' s r e p o r t w

a s co n f i r m

e d . Fr o m t h i s j udgm

e n t , t h e or i g i n a l pl a i n t i f f ha s a ppe a l e d pr e s e n t - i n g u s w

i t ht h e f o l l o w

i n g i s s u e s f o r r e v i e w: 1 . W h e t h e r t h e c our t e r r e d i n a d m i t t i ng evi d e n c e i n t h e r e c o r dof w

i t n e s s e s ( not t h e ow n e r s ) r e l a t i v e t o t h e v a l u e of t h e m

e r c h a ndi s e a nd dam a g e s t h e r e t o . 2 . W h e t h e r t h e c our t e r r e d i n not r e s t r i c tin g th e a m o u n t o f da m a g e s i n a c c o r d a n c e w i t h t h e pr oof of l o s s . 3 . W h e t h e r t h e co ur t er r e di nf i n di n g t h a t t h e r o o f w a s d e f ect i v e l ya ppl i e d a nd i n det e r m i n i ng dam

a g e s f o r b r e a c h of w

a r r a n t y . 4 . W h e t h e r th e c our t e r r e d i n a w a r d i ng dam

a g e s f o r m e r c h a ndi s e w

h e nt h e ap p e l l ee w a s not t h e ow

n e r of t h e m e r c h a ndi s e a nd had no c a u s e of a c t i on t h e r e f o r . 5 . W h e t h e r t h e c our t e r r e d i n f i ndi ng appe l l a n t l i a b l e f o r da m

a g e t o t h e i n t e r i o r of t h e bu ildi ng i n c l udi n g c a r p e t i ng, w

h i c hw a s t h e o b l i g a t i o nu n d e r th e sub l e a s e a g r e e m e n t o f t h e s ub l e s s ee, La r r yU t t a m , not a p a r t y t othi s litig a tio n .

### 4

We w ill f i r s t lo o ktoo ur s t a n d a r do f r e v i e w . O u r s t a nda r d of r e v i e w i nn o nj ur ycas e s i s co n t r o l l e db yR u l e 1 3 ( d ) , Te n n e s s ee R u l e s o f A p p e l l a t e Pr o c e dur e i . e . , "[ u ] n l e s s o t h e r w i s e r e qu i r e db ys t a t u t e , r e v i e w o f f i n di n g s o f f act b yt h e t r i a l co ur t i nci v i l act i o n s s h a l l b e d e n o v o up o nt h e r eco r do f t h e t r i a l c our t , a c c o m p a n i e d by a p r e s u m p t i o nof t h e co r r ect n e s s o f t h e f i n di n g , u n l e s s t h e p r e p o n d e r a n c e o f t h e ev i d e n ce i s o t h e r w i s e . " To t h e ex t e n t , h o w e v e r , t h a t t h e r e i s a c onc u r r e n t f i ndi ng of f a c t by t h e s p e c i a l m a s t e r a nd cha n c e l l o r , w e mu s t b e gui d e db yT. C. A . § 2 7 - 1

- 1 1 3 an dt h e cases co n s t r u i n g t h a t s t a t u t o r y e n a c t m

e n t . T. C. A . § 2 7 - 1

- 1 1 3 p r o v i d e s t h e p r o p e r s t a nda r d f o r t hi s Co ur t t o f o l l o w w h e nr e v i e w

i n g t h e f i n di n g s o f a m a s t e r i nw h i c ha c h a n cel l o r c onc u r s : " W h e r e t h e r e ha s be e n a c onc u r r e n t f i n di n g o f t h e m a s t e r an dch a n cel l o r , w h i c hu n d e r t h e pr i n c i p l e s now obt a i n i ng i s b i n di n g o nt h e ap p e l l a t e c our t s , t h e Cour t of A p p e a l s sh a l l not ha v e t h e r i ght t o di s t ur b s u c h f i ndi ng. " Th e c onc u r r e n t f i n di n g o f a m a s t e r a n da ch a n c e l l o r h a s t h e s a m e f o r c e a nd ef f e c t a s a j u r y v e r di c t a ppr ove d by t h e tr i a l j u d g e . Co a t e s v. Thom p s o n , 713 S . W . 2 d83 ( Te nn. A

pp. 1986) , c i t i ng S c hoe n v. J . C. Br a d f o r d & Co . , 642 S . W

. 2d 420( Te nn. A

pp. 1982) ; Fe r r e l l v . El r o d , 6 3 Te n n . A

p p . 1 2 9 , 4 6 9 S . W

. 2 d6 7 8 ( 1 9 7 1 ) . Su c ha co n c ur r e n c e i s co n c l u s i v e o nap p eal u n l e s s ( 1 ) t h e i s s u e i s one not p r o p e r f o r r e f e r e n ce t o a m a s t e r , ( 2 ) t h e co n c ur r e n ce i s b a s e do naner r o r o f l a w o r a m

i x e dq u e s t i on of l a w a n d f act , or ( 3 ) t h e c onc u r r e n c e i s not s uppor t e d by any m a t e r i a l ev i d e n ce. Co a t e s , s upr a . S e e a l s o , St a ggs v . H e r f f M o t o r Co . , 216 Te nn. 113, 390 S . W . 2d 245 ( 1965) . Thus , w e mu s t af f i r m

t h e C

h a n cel l o r u n l e s s o n e o f t h e s e t hr e e e x cep t i o n s ap p l i e s i nt h i s cas e . H a y n e s v . W

ils o n , ( Te nn. A

pp. O p i n i on f i l e d a t K noxvi l l e , D

e c e m b e r 28, 1994. )

U n d e r th e f a c t s i nt h i s cas e , w e f i n dt h a t t h e i s s u e s p r e s e n t e d d o not c o m

e w i t h i nanyo f t h e t hr ee ex cep t i o n s n o t e dab o v e an dw e r e p r o p e r i ssu e s t o r e f e r t o a Sp e c i a l M a s t e r . Th e r e f o r e , t h e c onc u r r e n t2 Thereis no mention of "concurrentfindings" inRule 13(d), Tennessee Rules of

AppellateProcedure. The ruledoes, however, contain a limiting provision, i.e., "[u]nlessotherwise required by statute." Concurrent findingsare controlled by T.C.A. §27-1-113. We also note that the Advisory Commission Comments, which specif ically refertoT.C.A. § 27-1-113, statethat "[t]his subdivision dealing with appellate review of findings of fact in civil actions, incorporates existing law." 

### 5 f i ndi ngs of t h e Sp e c i a l M a s t e r a nd cha n c e l l o r a r e s ubj e c t t o t h e " m a t e r i a l ev i d e n ce r u l e . " 2O ur r e v i e w

o f t h e r eco r dr e f l ect s t h a t t h e r e i s m

a t e r i a l ev i d e n c e t o s uppor t t h e co n c ur r e n t f i n di n g s o f f act c onc e r n i n g lia b i l i t y a nd t o s o m e da m a g e s . Th e onl y i s s u e s w h i c h w e w ill di s c u s s ar e t h o s e w h e r e t h e ch a n cel l o r di s a g r eedw i t ht h e s p eci a l m a s t e r o r w

h e r e t h e r e w

a s aner r o n e o u s ap p l i cat i o no f t h e l a w . Th e f i r s t i s s u e de a l s w i t h a pur e ques t i on of l a w . Th e ques t i o n p r e s e n t e di s w

h e t h e r a w

i t n e s s , w

ho i s not a n ow

n e r of pr ope r t y m a y t e s t i f y t o t h e va l u e of m e r c h a ndi s e a nd dam a g e s t o i t . " [ A ] w i t n e s s w

h o i s f a m

i l i a r w

ith t h e v a l u e o f p r o p e r t yo f t h e s a m e c h a r act e r m

a yt e s t i f yt o t h a t v a l u e . . . " W i l s on v. Br y a n t , 167 Te nn. 107, 67 S . W . 2d 133, 134 ( 1934) . A w i t n e s s , M

r . Ba i j uH

a r j a n i , t h e s ub l e s s ee’ s s h o p m a n a g e r , w

a s a l l o w e dt o t e s t i f yt o t h e v a l u e o f t h e d a m a g e dm

e r c h a n di s e o v e r p l a i n t i ff' s obj e c t i on. W e f i nd t h i s t e s t i m ony t o be e r r one ous l y a dm itte df o r t w

o r e a s ons . Fi r s tly , t h e w i t n e s s w

a s n e v e r qu a l i f i e das b e i n g f a m

i l i a r w

i t ht h e v a l u e o f p r o p e r t yo f t h e s a m e ch a r act e r . S e c ondl y , t h e m

e a s u r e of da m

a g e s us e d by t h e w i t n e s s does not c o m por t w ithe x i s tin g la w . I t i s a w

e l l

- a c c e p t e d pr i n c i p l e of la w inthi s s t a t e th a t d a m a g e s t ope r s ona l pr ope r t y m a y be m

e a s u r e d by ei t h e r t h e c o s t of r e p a i r or t h e r e d u c tio ni nf a i r m a r ke t v a l u e . Se e Co i n e r , " Te nne s s e e La w of

### 6

D a m a g e s , " S e c tio n6 - 3 . Th i s r u l e is f ur t h e r s e t f o r t hinth e c a s e o f A nde r s o nv . I nm

a n , 3 Te nn. A

pp. 195 ( 1 9 2 6 ) , w h i c hh a s b eeni n c o r p o r a t e d i n t o Te nne s s e e Pa t t e r n I n s t r u c t i ons , Ci v i l 14. 40 as f o l l o w s :

. . . if the d a m a g e s ha v e not be e n r e p a i r e d , or i f t h e p r o p e r t yis n o t cap a b l e o f r e p a i r s o as t o r e s t o r e t h e t hr e e f a c t o r s of f unc t i on, a ppe a r a n c e , a n dv a l u e as t h e yex i s t e d i m m e di a t e l ybe f o r e t h e [ i n c i d e n t ] , t h e n t h e m eas ur e o f d a m a g e s i s t h e di f f e r e n c e i n t h e f a i r m a r k e t va l u e of t h e p r o p e r t yi m

m e di a t e l yb e f o r e t h e [ i n c i d e n t ] an di m m e di a t e l y a f t e r t h e [ i n c i d e n t ] . Th e f o l l o w

i ng r u l e ha s a l s o bee n e nunci a t e d :

I nt h i s s t a t e , t h e or d i n a r y a nd bas i c m e a s u r e of d a m a g e s f o r i nj ur yt o p e r s o n a l p r o p e r t yi s t h e di f f e r e n c e b e t w eeni t s m

a r ke t v a l u e i m

m e di a t e l yb e f o r e an di m m e di a t e l y a f t e r t h e i n j u r y . I r v i n g Pu l p an dPa p e r , Lt d . v . D u nb a r Tr a n s f e r an dSt o r a g e Co . , 732 F. 2d 511 ( 6 t h C i r . 1984) ; Y a z o o a n dM

. V. R. Co . v . W illia m s , 182 Te nn. 241, 185 S . W . 2 d5 2 7 , 5 2 9 ( Te n n . 1 9 4 5 ) ; Te n n e s s ee J ur i s p r u d e n ce, D a m a g e s , § 18, pa g e 42.

N one of t h e pr ope r m e a s u r e s w

e r e e m p l oye d i n t h i s c a s e . Th e w itn e s s , M

r . Ba i j uH

a r j a n i, w

ho t e s t i f i e da s t o t h e d a m a g e s t o t h e m e r c h a n di s e , te s tif i e donl y a s t o t h e c o s t of t h e da m a g e d or d e s t r o y e d p r ope r t y . W

e h o l dt h a t t h e t e s t i m o n yo f M

r . H a r j a n i w

a s i m p r o p e r l y a dm itte dan df ur t h e r t h e t e s t i m o n yi f al l o w

e di s i n s u f f i c i e n t ev i d e n c e a s a m

a t t e r o f l a w

up o nw

h i c ha j u d g m

e n t f o r d a m

a g e s t o p e r s o n a l p r ope r t y c a n be ba s e d .

Th e a ppe l l a n t ne x t i n s i s t s t h a t t h e da m a g e s f o r p e r s o n a l p r o p e r t y s houl dbe r e s t r i c t e d t o t h e a m ount of l o s s a s s t a t e d i na s w o r n pr oof o f l o s s pr e p a r e d byt h e ap p e l l ee. W e ag r ee t h a t t h e p r o o f o f l o s s w a s

### 7

a d m i s s i b l e an dt h e r eco r dr e f l ect s t h a t i t w a s adm i t t e di n t o ev i d e n ce. A d m i s s i ons canb e u s e dn o t o n l yas s ub s t a n t i v e ev i d e n c e but al s o as e v i d e n c e t ouc h i ng t h e c r e d i b i lityo f t h e w i t n e s s . A

dm i s s i o n s ar e i n n o w a y c onc l u s i v e . Se e Te nne s s e e R u l e s of Ev i d e n c e , R u l e 803( 1 . 2 ) . W e f i n dn o m

e r i t i nt h i s i s s u e . As toth e t h i r di s s u e , t h e r e i s m a t e r i a l ev i d e n ce t o s uppor t t h e j udgm e n t o f t h e t r i a l co ur t an ds p eci a l m a s t e r . Thu s , ap p l y i ng t h e m a t e r i a l ev i d e n ce r u l e as w e h a v e di s c u s s e d s upr a , w e f i n dn o m

e r i t i n t hi s is s u e . I s s u e s f o ur an df i v e ar e int e r r e l a t e dan dw e w i l l co n s i d e r t h e m t o g e t h e r . U n d e r t h e s ubl e a s e a g r e e m e n t be t w

e e n c ount e r - p l a i n t i f f , Co l e , a n d t h e s ubl e s s e e , U

t t a m , w e f i nd t h e f o l l o w i ng pr ovi s i ons :

7 . M a i nt e na nc e andR

e pa i r . a . Sub l e sso r sh a l l m a ke a l l st r u c t u r a l r e p a i r s s u c h a s s uppor t s , r oof a nd t h e e x t e r i o r w a l l s of t h e bui l d i ng i n a t i m e l ym a n n e r dur i n g t h e t e r m o f t h i s l eas e . b . Subl e s s e e s h a l l , dur i ng t h e t e r m of t h i s a g r e e m

e n t a t hi s s o l e e xpe n s e , ot h e r w i s e m a i n t a i n bot h t h e i n t e r i o r a n d e x t e r i o r of t h e l e a s e d pr e m i s e s i n a s good or d e r a n d r e p a i r a s it is a t t h e c o m m e n c e m e n t of t h i s l e a s e , r e a s ona b l e w e a r a n dt e a r e x c e p t e d , nor w i l l t h e s ub l e s s ee s u f f e r o r pe r m

i t a n yw

a s t e or ne g l e c t of p r o p e r t yan dw i l l r e p a i r o r r e s t o r e t h e s a m e a s o f t e nas m

a yb e n eces s a r yi no r d e r t o keep t h e l eas e dp r e m i s e s i na g o o ds t a t e o f r e p a i r . * * * * *

### 8

Th e r e f o r e , u n d e r t h e e xpr e s s t e r m s of t h e c ont r a c t be t w e e n t h e s ub l e sso r a nd s ubl e s s e e , t h e s ubl e s s o r i s r e qui r e d t o m a i n t a i n t h e r oof i ng o o dr e p a i r . A f a i l ur e t o d o s o , ev e ni f t h e f a u l t o f an o t h e r , w oul dc ons t i t u t e a br e a c h of t h e s ub l eas e ag r eem e n t . I f t h e r e i s s u c h a b r eachan dt h e s ub l e s s ee s u f f e r s da m a g e s , he w

oul d be e n t i t l e d t o r eco v e r hi s l o sse s f r o m t h e s ub l e s s o r , i n c l u di n g d a m a g e s t o t h e ar eas w h e r e t h e s ub l e s s ee w a s r e s p o n s i b l e f o r m a i n t e n a n ce. “Th e pur pos e of a sse ssi n g d a m

a g e s i nb r eacho f co n t r act c a s e s i s t o pl a c e t h e pl a i n t i f f a s n ear l ya s p o ssi b l e i nt h e sa m e p o s i t i o nsh e w

o u l dh a v e b eeni nh a d t h e c ont r a c t be e n pe r f o r m e d , but t h e nonbr e a c h i ng par t y i s not t o be put ina ny bet t e r pos i t i on by r e c ove r y of da m a g e s f o r t h e br e a c h of t h e c o n t r act t h a nh e w o u l dh a v e b eeni f t h e co n t r act h a d b e e n f u l l y p e r f o r m

e d . A c t i o nA

d s , I n c . v . W

i l l i a m B. Ta n n e r Co . , 592 S . W . 2d 572 ( Te nn. A

p p . 1 9 7 9 ) . ” La m

m ons v . C

h a m b e r l a i n , 909 S . W

. 2d 795 ( Te nn. A

pp. 1993) .I t cann o t b e s e r i o u s l yar g u e dt h a t t h e s ub l e s s e e di dn o t s u f f e r d a m a g e s f r o m

d e f ect s i n t h e r o o f . U nde r t h e f a c t s of t h i s c a s e , t h e s ub l e s s e e w

i t hhe l d $10, 000. 0 0in r e n t f o r da m a g e s t o t h e i n t e r i o r of t h e bui l d i n g an dt h e m e r c h a n di s e l o cat e dt h e r e i n . Th e r eco r dd o e s not r e f l e c t w

h e t h e r a ny of t h e m oni e s w

i t hhe l d w

a s e v e r pa i d t o t h e s ub l e sso r . I nanyev e n t , t h e s ub l e s s e e co u l dh a v e m a i n t a i n e dana c t i o n a g a i n s t t h e s ubl e s s o r f o r d a m a g e s p r o x i m

a t e l yc a u s e d by t h e de f e c t i v e r oof , i n c l udi ng a r eas t h a t t h e s ub l e s s ee w a s o b l i g a t e dt o m a i n t a i n u n d e r t h e t e r m

s o f t h e l eas e p r o v i d e dt h e m a i n t e n a n ce co s t s w e r e i n c r e a s e d by t h e de f e c t i v e r oof .

### 9

We f i n dt h a t i s s u e s f o ur an df i v e ar e g o v e r n e dby t h e f o llo w i n g r u l e s o f la w

. A l t houghnot e xpr e s s l y s o denom i n a t e d i n t h e c o mp l a i n t , t h e gr a v a m e n of t h i s s u i t i s i nde m n i t y ; t h a t i s , t h e p l a i n t i f f is s eeki n g r e i m b ur s e m e n t o f d a m

a g e s h e exp ect s t o p a yt o a t h i r d par t y f o r da m a g e s s u f f e r e d by t h e t h i r dp a r t y a s a r e s u l t of de f e nda n t ' s de f e c t i v e pe r f o r m a n c e of a c o n t r a c t w

i t h pl a i n t i f f or de f e nda n t ' s br e a c h of w a r r a n t y i na s a l e t o p l a i n t i ff. Co n t r a c t s o f i n d e m n i f i cat i o nm

a yb e exp r e s s , o r m a y a r i s e by i m

p l i c a t i on f r o m

t h e r e l a t i ons h i p o f th e p a r tie s . H ous e boa t i ng Co r p . o f A m e r i ca v . M

a r s h a l l , Te nn. 1977, 553 S . W . 2d 588. A pe r s on w

ho, i n w

hol e o r i n par t , ha s di s c h a r g e d a dut yw h i c hi s o w

e db yhi m

b u t w h i c h , as be t w

e e n hi m

s e l f a n d a not h e r , s h o u l dh a v e b eendi s c h a r g e db yt h e o t h e r , i s e n title dt o i nde m n i t y f r o m

t h e ot h e r un l e s s b a r r e db yt h e w r ongf u l n a t ur e o f hi s o w nco n du c t . S out h e r n Co a l & Coke Co . v . BeechG

r ove M i n . Co . , 53 Te nn. A pp. 108, 381 S . W

. 2d 299 ( 1963) ; Ca r t e r v . E. T. & W . N . C. Tr a n s p . Co . , 35 Te nn. A pp. 196; 243 S . W

. 2d 505 ( 1951) . A c ont r a c t of i nde m n i t yne e d not be e xpr e s s ; i nde m n i t y ma yb e r e c ove r e di f t h e ev i d e n ce est a b l i s h e s ani m p l i e d c o n t r act . I n a ddi t i on, a r i ght toi n d e m n i t yex i s t s w

h e n e v e r one p a r t yis e xp o s e dtolia b ilityb yt h e act i o no f an o t h e r w ho, i nl a w

or i n e qui t y , s houl d m a k e good t h e l o s s of t h e o t h e r . Th e r i g ht o f i m p l i e di n d e m

n i t yi nco n t r act u a l cas e s i s b a s e dup o na b r eacho f co n t r act b yt h e p e r s on aga i n s t w hom i nde m n i t y i s s ought , . . . . Stiv e r M

k t g . , I n c . , v. Pe r f o r m a n c e Bu s . Fo r m

s , I n c . , 1991 Te nn. A pp. LEX I S 93 0 . Thi s c a s e m

a y be a n a l ogi z e d t o t h e a u t hor i t y s e t out a bove. Th e c o u n t e r c l a i m

di d not exp r e s s l yi n c l u d e a cl a i m s p eci f i cal l yd e s i g n a t e d a s a c l a i m

f o r i nde m

n i t yb u t i t d o e s i n c l u d e a cl a i m f o r d a m

a g e s p a i d out t o her t e n a n t .

### 10

We f i n dt h a t t h e c oun t e r-p l a i n t i ff is e n t i t l e dt o re c o v e r from t h e co u n t e r - d e f e n d a n t f o r d a m a g e s t o t h e m

e r c h a ndi s e o f t h e s ub l e s s e e a n dot h e r da m

a g e s f o r w

h i c h t h e s ubl e s s e e c oul d l ook t o t h e s ubl e s s o r f o r p a y m

e n t . Th e r e f o r e , w e f i n dn o m

e r i t i ni s s u e s f o ur an df i v e .

We a f f i r m

t h e j udgm

e n t of t h e t r i a l c our t on al l i s s u e s e x c e p t t h e f i r s t. W

e f i n dth a t t h e w r o n g m eas ur e o f d a m

a g e s w a s u t i l i zedin d e t e r m i n i n g da m

a g e s t o t h e s ub l e s s ee’ s m e r c h a ndi s e . A

c c o r d i ngl y , t h e j udgm e n t f o r d a m

a g e t o t h e m

e r c h a n di s e i s v acat e d . Th i s cas e m u s t r e m a n d e dtoth e tr i a l c o ur t f o r a r e t r i a l a n dr e c a l c u l a t i on of d a m a g e s t o t h e m

e r c h a ndi s e l o c a t e d w i t h i n t h e bui l d i ng i n ques t i on.

Th e ap p e l l ee i nh e r b r i e f h a s a s k e d t h i s c our t t o m odi f y t h e a w a r dt o her byi n c r e a s i ng i t by $2, 887. 50, w h i c h s h e c l a i m

s w oul d c o m p e n s a t e he r f o r t h e f u l l a m ount s h e w

a s r e qui r e d t o pay f o r r e p a i r s t ot h e r oof . Th e r e i s m a t e r i a l e v i d e n c e t o s uppor t t h e f i ndi ngs o f th e s p eci a l m

a s t e r an dt h e c o n c ur r e n t f i n di n g s o f t h e ch a n cel l o r . U n d e r t h e s e c i r c u m

s t a n c e s , a ppe l l e e ' s r e que s t m u s t be de n i e d .

Co s t s ar e t a x e dequ a l l ybe t w e e n t h e a ppe l l a n t , R i c h a r d G

a u s e and t h e a ppe l l e e , J a n i c e Co l e . Th i s c a s e i s r e m a nde d t o t h e t r i a l c our t f o r s u c hot h e r a c t i on as i s ne c e s s a r y i n a c c o r d a n c e w i t h t h i s opi n i on.

______________________________ D

on T. M

c M u r r a y , J udge

### 11

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e on t o b e h ear dup o nt h e r eco r df r o m t h e C h a n cer y Cour t of S e v i e r Count y , br i e f s a nd ar gum e n t of c ouns e l . U pon c ons i d e r a t i o nt h e r e o f , t h i s Cour t i s of t h e opi n i o nt h a t t h e r e w a s s o m e r e v e r s i b l e e r r o r inth e tr i a l c o ur t . We a f f i r m

t h e j udgm

e n t of t h e t r i a l c our t on al l i s s u e s e x c e p t d a m a g e s for m

e r c h a ndi s e . W

e f i nd t h a t t h e w r ong m e a s u r e of d a m

a g e s w a s u tiliz e di nd e t e r m i n i n g d a m

a g e s t o t h e s ub l e s s ee’ s m e r c h a n di s e . A c c o r d i ngl y , t h e j udgm e n t f o r da m

a g e t o t h e m

e r c h a ndi s e i s va c a t e d . Thi s c a s e i s r e m

a nde d t o t h e t r i a l c our t f o r a r e t r i a l an dr ecal c u l a - tio n o f da m

a g e s t o t h e m

e r c h a ndi s e l o c a t e d w i t h i n t h e bui l d i ng i n que s t i on. Co s t s a r e t a x e d e qua l l y bet w e e n t h e a ppe l l a n t , R i c h a r d G

a u s e and t h e a ppe l l e e , J a n i c e Co l e . Th i s c a s e i s r e m a nde d t o t h e t r i a l c our t f o r s u c hot h e r a c t i o na s i s ne c e s s a r y i n a c c o r d a n c e w i t h t h i s opi n i on.

### 13 PER

C UR I AM