FILED

February 12, 1998

Cecil Crowson, Jr.

Appellate C ourt Clerk

IN THE COURT OF APPEALS OF TENNESSEE

WESTERN SECTION AT JACKSON

 ______________________________________________

ROBERT B. MARTIN, 

Plaintiff-Appellant,

Vs. C.A. No. 02A01-9708-CV-00179

Shelby Law No.: 84079

UNION PLANTERS CORPORATION;

AND UNION PLANTERS NATIONAL

BANK, 

Defendants-Appellees.

____________________________________________________________________________

FROM THE CIRCUIT COURT OF SHELBY COUNTY

THE HONORABLE ROBERT A. LANIER, JUDGE

Jef Feibelman, Susan M. Clark; Burch, Porter & Johnson

of Memphis, For Appellant

J. Richard Buchignani, Ross Higman; Wyatt, Tarrant & Combs

of Memphis, For Appellees

AFFIRMED AND REMANDED

Opinion filed:

W. FRANK CRAWFORD,

PRESIDING JUDGE, W.S.

CONCUR:

DAVID R. FARMER, JUDGE

HEWITT P. TOMLIN, JR., SENIOR JUDGE

This is basically a contract interpretation case. Although the complaint of plaintiff,

Robert D. Martin, against defendants, Union Planters National Bank (UPNB) and Union Planters
1The original complaint named only UPNB as the defendant, and by subsequent

amendment UPC was added as a party defendant. Plaintiff had contracts with both

defendants, which, except for the defendants’ names and the contractual amounts, were

identical.

2

Corporation (UPC)1

, has other theories of recovery, the primary focus of the suit is for a

declaration of rights and obligations under the contract between the parties and alternatively for

plaintiff’s recovery against the defendants on the theories of unjust enrichment or quantum

meruit.

In response to the complaint, defendants filed a motion to dismiss for failure to state a

claim upon which relief can be granted. Because the trial court considered matters outside the

pleadings, the motion was treated as a summary judgment motion. On May 6, 1997, the trial

court entered an order granting summary judgment to defendants, declaring that plaintiff

forfeited his rights under the contracts in question, and dismissing plaintiff’s action with

prejudice. Plaintiff has appealed and presents two issues for review, as stated in his brief: 

1. Whether the trial court erred in its interpretation of the parties’

contracts that Martin has forfeited his rights to receive deferred

compensation.

2. Whether the trial court erred in finding that the forfeiture

provision of paragraph 10 is enforceable against Martin and

denying Martin’s recovery on the basis of unjust enrichment or

quantum meruit.

The facts are undisputed. Martin, Chairman of the Board of Directors and Chief

Executive Officer of Proffitts, Inc., became a member of the Boards of Directors of both

defendants in December of 1985. As Director, Martin was offered the option of taking the

customary director’s fee or entering into a director’s deferred compensation plan sponsored by

each of the defendants. Under the plans, Martin could defer all or any portion of his annual

director’s fee in order to take advantage of pretax investment growth. The plan’s purposes and

objectiveswere explained to Martin in a document furnished by defendants titled, “Summary and

Conclusion,” which states in pertinent part as follows:

 The purpose of this program is to provide a more attractive

means of compensation for those executives and directors who

elect to defer their fees.

 The bank’s net cost to adopt the plan is designed to be the

same as paying current cash fees. This permits each executive or

director to elect between current and future income.
3

 The cash value of each insurance policy is an unrestricted asset

of the bank. The bank may borrow this cash value to generate

income for the bank.

* * *

On December 31, 1985, Martin entered into a Director’s Deferred Compensation

Agreement with both UPNB and UPC and the two agreements provided that Martin would be

paid a total of $1,404,820.00 in 120 equal monthly installments following his 65th birthday or

his death, provided Martin served at least five years as a director. Each agreement recites that

it is premised upon the bank’s recognition of the faithful efforts of the directors, that the bank

recognizes that the director’s future services are vital to the bank’s “continued growth and

profitability,” and that the bank desires to compensate the director and “retain his future

services.” The pertinent three paragraphs of the contracts which are involved in the dispute

before the Court are as follows: 

 7. During the period of receipt of monthly installment

payments from Union Planters, the Director shall not, directly or

indirectly, enter into, or any manner take part in any business,

profession or other endeavor, either as an employee, agent,

independent contractor, advisor, consultant, owner or otherwise

in the State of Tennessee, which, in the opinion of the Board of

Directors of Union Planters, shall be in competition with the

business of Union Planters. The opinion of the Board of

Directors of Union Planters shall be conclusive for the purposes

hereof.

* * *

 10. The Director shall forfeit all rights in and to any benefits

payable under the terms of this Agreement if (a) the Director dies

by suicide (whether sane or insane) within three years after the

execution hereof, (b) if the Director fails to observe any of the

terms of this Agreement and continues such observance failure

for a period of 20 days after Union Planters shall have requested

him to abide by the same, or (c) if the Director enters into any

business described in paragraph 7 above; then, and in such event,

no further payments shall be due or payable by Union Planters

hereunder to the Director, his Beneficiary or estate, and Union

Planters shall have no further liability hereunder.

* * *

 14. The Board of Directors of Union Planters may, in its

discretion, establish a committee of three (3) of its members who

are not parties to contracts similar to this Agreement and who

shall be responsible for construing the terms hereof, making the

determinations provided for herein. The Committee’s

construction and interruption [sic] of this Agreement shall be final

and binding on the parties hereto.
4

Martin served on both defendants’ Board of Directors from December, 1985, to April,

1994. In approximately October, 1994, Martin began serving as a director of First Tennessee

National Corporation, and was serving on that board at the time of the hearing in this matter.

Martin concedes that First Tennessee is Union Planters’s chief competitor.

In March, 1996, Martin wrote a letter to Kirk Walters, Treasurer of UPC, to inquire about

the agreements, in particular the beneficiary designation and the value of the benefits under the

deferred compensation plans. Martin’s attention to the agreements was precipitated at least in

part by his receipt of a statement regarding an insurance policy purchased by UP. In response

to Martin’s inquiry, Walters informed Martin that he had received the insurance policy statement

in error because as stated in the agreement the policy was owned by Union Planters. Walters

also advised Martin that pursuant to the terms of the agreement, Martin had forfeited his right

for deferred compensation under the agreements by becoming a director of First Tennessee. 

Martin thereupon filed the present suit, and after so doing, a special committee of UPNB

and UPC board members met on January 23, 1997, pursuant to Paragraph 14 of the agreement

to consider whether Martin had forfeited his rights under the agreements by becoming a First

Tennessee director. The committee determined that Martin had forfeited his rights and found,

among other things, as follows: 

. . . this Committee is of the opinion that R. Brad Martin’s present

membership on the board of directors of First Tennessee National

Corporation constitutes “enter[ing] into, or [in] any such manner

tak[ing] part in any business, profession or other endeavor . . .

which . . . shall be in competition with the business of” [Union

Planters], within the meaning of that phrase in numbered

paragraph 7 of the Agreement[s], which opinion, pursuant to

numbered paragraphs 14 and 7 of the Agreement[s], shall be

“conclusive” and “shall be final and binding on the parties

hereto” in connection with the construing and interpreting the

Agreement[s].

NOW, THEREFORE, BE IT RESOLVED that this Committee

has determined, pursuant to numbered paragraph 10 of the

Agreement[s], that R. Brad Martin has “forfeit[ed] all rights in

and to any benefits payable under the terms of” the Agreement[s];

and that pursuant to Paragraph 10(c) . . . “no further payments

shall be due or payable” under the Agreement[s] by [Union

Planters] to R. Brad Martin, his Beneficiary designated in the

Agreement[s], or his estate; and that [Union Planters] “shall have

no further liability” under the Agreement[s].

We will consider Martin’s first issue: The trial court, in granting summary judgment to

defendant, determined that there was no ambiguity in the contract, and that the express intention
5

of the parties is that if the “plaintiff goes into a business in competition with the defendant, he

forfeits his rights under the contract, whether benefits have become payable or not.” Martin

asserts that the trial court erred because the operative provision of the contract is Paragraph 10,

which specifically provides for forfeiture only when the Director “enters into any business

described in Paragraph 7,” and that the Director did not enter into any business. Martin argues

that the provisions of Paragraph 10 limit the forfeiture provision to entering into any business,

while the provisions of Paragraph 7 are much broader and include taking part in any business,

profession, or endeavor as an advisor, consultant or otherwise, and that Martin could not be in

violation of Paragraph 7 because that paragraph becomes operable only after the director begins

drawing benefits.

We agree with the trial court’s interpretation of the contract. The interpretation of a

written agreement is a matter of law and not of fact. APAC-Tennessee v. J. M. Humphries

Constr. Co., 732 S.W.2d 601, 604 (Tenn. App. 1986). The cardinal rule for interpretation of

contracts is to ascertain the intention of the parties from the contract as a whole and to give effect

to that intention consistent with legal principles. Winfree v. Educators Credit Union, 900

S.W.2d 285, 289 (Tenn. App. 1995); Rainey v. Stansell, 836 S.W.2d 117 (Tenn. App. 1992).

In construing contracts, the words expressing the parties’ intentions should be given their usual,

natural, and ordinary meaning. Taylor v. White Stores, Inc., 707 S.W.2d 514, 516 (Tenn. App.

1985). In the absence of fraud or mistake, a contract must be interpreted and enforced as written,

even though it contains terms which may seems harsh or unjust. Heyer-Jordan & Assocs. v.

Jordan, 801 S.W.2d 814, 821 (Tenn. App. 1990).

We, like the trial court, do not find any repugnancy between the provisions of Paragraph

7 and Paragraph 10 of the agreement. Paragraph 7 specifically deals with the time period when

the director is drawing benefits under the agreement and in and of itself does not contain a

forfeiture provision. Paragraph 10, on the other hand, provides for forfeiture of benefits if its

provisions are violated at any time during the existence of the agreement. Martin asserts that

Paragraph 10 explicitly requires that for forfeiture to occur, the director must “enter into” a

business, and that becoming a director of First Tennessee does not violate that provision. He

argues that Paragraph 7, which includes a broader range of prohibited activities than Paragraph

10, indicates the intent that Paragraph 10 should be strictly construed to require forfeiture only
6

upon the actual active entry by the director in a competing business.

We must respectfully disagree. Paragraph 10 provides that the director shall forfeit if he

“enters into any business described in Paragraph 7 above.” Considering the document as a

whole, we construe the incorporation provision of Paragraph 10 to prohibit the director from

engaging in any activity, practice or pursuit as described in Paragraph 7. Paragraph 7 does not

describe a “business” as an entity, but describes various activities the director is prohibited from

engaging in. It appears that the use of the term “business” in Paragraph 10 is intended and does

refer to the activities, practices and pursuits described in Paragraph 7. After all, the only

“business” described is anything in competition with UP and certainly being a director of another

bank fits that category.

We conclude, as did the trial court, that pursuant to the provisions of the agreements

between Martin and the defendant, Martin’s participation as a Director for First Tennessee is a

violation of the agreements and he has thus forfeited his rights thereunder. 

The second issue presented for review is whether the trial court erred in denying recovery

on the basis of unjust enrichment or quantum meruit.

Martin asserts that the forfeiture of compensation due him for services as a director and

deferred under the agreement is unjust and results in a windfall and unjust enrichment to UP. UP

asserts that Martin made an election to receive compensation as a director pursuant to the terms

of the contracts in question, and that he is bound by the provisions of the contract. 

“Actions brought upon theories of unjust enrichment, quasi contracts, contracts implied

in law, and quantum meruit are essentially the same. Courts frequently employ the various

terminology interchangeably to describe that class of implied obligations where, on the basis of

justice and equity, the law will impose a contractual relationship between the parties, regardless

of their assent thereto.” Paschall’s, Inc. v. Dozier, 219 Tenn. 45, 53-54, 407 S.W.2d 150, 154

(1966). Quantum meruit actions are equitable substitutes for contract claims and are based on

a legally implied promise to pay a reasonable amount for goods or services received. John J.

Heirigs Constr. Co. v. Exide, 709 S.W.2d 604, 607 (Tenn. App. 1986). Quasi-contractual

liability can be created where one person receives a benefit at the expense of another and it is

unjust or inequitable for him to retain this benefit. Jaffe v. Bolton, 817 S.W.2d 19, 26 (Tenn.

App. 1991)(citing 7 Tenn. Juris. Contracts § 103 (1983)). 
7

In the case at bar, Martin entered into an agreement with UP which specifically provided

for forfeiture under certain circumstances. The services which Martin claims he should be paid

for were rendered in the past, before there was any breach of the provisions of the contract. We

believe that this case is controlled by the decision of our Supreme Court in Robinson v. Durabilt

Mfg. Co., 195 Tenn. 452, 260 S.W.2d 174 (1953), where there was an action to recover on a

quantum meruit basis for expenses incurred under the terms of an oral contract. In Robinson,

an agent entered into a contract with the manufacturer for the distribution of the manufacturer’s

product and expressly assumed the sale expense. The manufacturer had the right to terminate

the contract at will, which he eventually did. The agent sued for sales expenses which enured

to the benefit of the manufacturer. In holding that the agent was not entitled to recover on the

basis of quantum meruit, the Court said:

That is, where the nature of the benefit received by the employer

is such that it cannot be abandoned by him upon his termination

of a contract which he has a right to terminate, then he will not be

required to pay for the receipt of such benefit.

Robinson, 260 S.W.2d at 175.

The words of the Court in Jaffe v. Bolton, 817 S.W.2d 19 (Tenn. App. 1991) are also

appropriate for the instant case:

Although the results in this case may be harsh, the “quasicontractual principle of unjust enrichment does not apply to an

agreement deliberately entered into by the parties, however harsh

the provisions of such contract may seem in the light of

subsequent happenings.” 17 C.J.S. Contracts § 6 (1963).

Jaffe, 817 S.W.2d at 26.

The trial court correctly denied recovery to plaintiff. The order granting summary

judgment is affirmed, and the case is remanded for such other proceedings as are necessary.

Costs of the appeal are assessed against appellant. 

We pretermit appellee’s issue concerning the trial court’s determination that the

provisions of the agreements pertaining to dispute resolution is unconscionable.

_________________________________

W. FRANK CRAWFORD, 

PRESIDING JUDGE, W.S.

CONCUR:

____________________________________

DAVID R. FARMER, JUDGE
8

____________________________________

HEWITT P. TOMLIN, JR.

SENIOR JUDGE