# F I L E D

A u g ust 12, 1998 C eci l C r o w son , Jr . A p p e l l a t e C o u r t C l e r k IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

______________________________________________ LINDA L. MIRES, Plaintiff-Appellee, Vs. Dresden Circuit No. 2893 C.A. No. 02A01-9707-CV-00172 DAVID CLAY AND BILL HAYES, ET AL, Defendants-Ap

pellants.

________________

___________________________________________________________ _ FROM THE DRESDEN COU NTY CIRCUIT COURT THE HONORABLE BILL ACREE, JUDGE

James H. Bradberry & Associtaes of Dresden

For Appellee H. Max Speight of Ma

rtin For Appellant, Bill Hayes

AFFIRMED AND REMANDED

Opinion filed:

W. FRANK CRAWFORD,

PRESIDING JUDGE, W.S.

CONCUR: ALAN E. HIGHERS, JUDGE HOLLY KIRBY LILLARD, JU DGE

This case involves the violation of the Tennessee Consumer Protection Act (TCPA) in connection with a breach of a residential construction contract. Defendant, Bill Ha yes, appeals the judgment of the trial court on a jury verdict awarding plaintiff, Linda Mires, $5,000.00 for1 Rufus and Linda Mires filed the original suit in April 1995 but took a voluntary

nonsuit. Mr. Mires d

ied after the suit

was refiled, so Mr

s. Mires amended t

he complaint to list herself as plaintiff, individually, and as the executrix of the estate of Rufus Mires. Since Mr. Mires was alive throughout the events that precipitated this suit, we use the plural “plaintiffs” throughout this opinion. 2 violation of TCPA and the trial court’s order awarding plaintiff $5,907.50 in attorney fees and expenses. Rufus and Linda Mires (plaintiffs 1 ) hired defen dant David Clay (Clay), an unlicensed construction contractor, to build their retirement home in Martin, Tennessee according to plans that they supplied. The total contract price was $111,000.00 , to be paid in installm ents, with 10% down, 30% when the house was “dried in,” 30% when the sheetrock was installed and the plumbing and electrical wiring roughed in, and the balance due upon completion. Since Clay

was unlicensed , and thus unable to secure a building permit, defendant Bill Hayes (Hayes), a licensedcontractor, applied for the requisite permit under the name Hayes Constructionusing his license number. Hayes testified that he agreed to app

ly for the permit a

fter Clay assure

d him that he was in the process of getting his license, that he had co mpleted almost a ll of the requirements

for his license, and that all he lacked was a recommendation letter from a code inspector. Hayes stated that his inte nt in applying for th

e permit was only to help speed up the permit process, that he never intende d f or Clay to work under his license and that there was never a principal/agent relationship between Clay and himself. On June 23, 1994, the City of Martin issued a permit for

the construction o

f the single family

residence, listing Hayes Construction as the contracto r. The p ermit was signed for by David Clay as “contractor or authorized agent.” To finance the project, Mr. and Mrs. Mires obtained a construction loan from Merchant’s StateBank, which later became Union Planters Bank. Clay had recommended that plainti ffs contact Steve Nowell, the bank’s assistant vice-president

, to discuss financing the construction. Construction began as schedul ed, but afte

r a f ew months plaintiff

s began to complain about the lack of progress being made and the quality of work that had been completed. Up to that point, the plaintiff

s had paid Clay a tot

al of $88,500.00 in

various che cks written both to Clay individually, and jointly to Clay an d Vowell & Sons,

Inc., the lumber company supplying materials for the job. Plaintiffs arranged a meeting with Clay to discuss their concerns, but Clay2 At trial, Hayes a rgued that plaintif

fs had not suffer

ed any actual da

mages because the home was worth much more than the contract price. In support of this contention, Hayes presented the testimony of two expert witnesses who testified that it would cost between $185,000 and $200,000 to build the home a ccording to the pla

ns supplied by plaint

iffs. 3 never showed up for the meeting. Subsequent attempt s to locate

Clay failed and the plaintiffs

were forced to find other contractors to complete construction. Upon investigation, the plaintiffs discovered

that Clay was not a licensed contractor but that the city had issued a building permit

on his signature. Linda Mires testified that she and her husband did not learn that Clay was unlicenseduntil after he walked off the job. In add

ition, they discove

red that Vowell &

Sons had notbeen paid by Clay, despite an agreement that materials were to be paid for before Clay received his share. Linda Mires testified tha

t after learning

that B ill Hayes’ name wa

s on the building per

mit, the plaintiffs soughthis help in completing construction. She testified that Hay es promised to help, but that his assistan ce was ne ver forthcoming. The plaintiffs ex

perienced diff

iculty in securing subcontractors to complete the work, but after expending a tota l of almost $189,000.00 2 , and some fifteen months, the home was completed. The plaintiffs initially filed suit against Clay, Hayes, Vowell & Sons, Inc., Merchant’s StateBank, and Steve Nowell, the bank’s assistant v ice-president.

Plaintiffs allege

d that Nowell assuredthem that

Clay was one of the best builders in Martin and that N owell promised to vi

sit the property every week to check on the progress of construction. Plaint iffs alleged that defendants

Nowell and Merchant’s State Bank owed the plaintiffs a fiduciary duty and that they “werein a position of superi or knowled ge concerning the honesty, integrity and building expertise” of defendant Cla y. Plaintiffs alleg

ed that defenda

nt Vowell & Sons bre ached its contract with plaintiffs by notapplying sufficient funds towards thebalance due on pl aintiffs’ account before allowing Clay to receive his share. Vowell & Sons was dismissed as a defendant and David Clay could not be located and thus was never served with proc ess. Nowe ll and Merchant’s State Bank were dismissed from the s uit after they settled with the plaintiffs for $10,000.00. During the subsequent jury trial, plaintiffs elected to take a non-suit. Plaintiffs refiled

the instant suit on May 24, 1996, seeking recovery from David Clay and Bill Hayes only. The complaint alleges that Clay was Hayes’s actual or apparent agent and that Hayes was thus liable for Clay’s breach of contract. In the alternative, plaintiffs allege tha t4

Hayes was negligent in

allowing Clay to use his contractor’s license to obtain the construction permit and that he knew, or s hould have kno wn, that Clay did not possess the experience or expertise to comp le te the job in accordance with the terms of the contract. Furthermore, the complaint alleges that Hayes’s unfair or deceptive acts were violations of the Tennessee Consumer

Protection Act (TCPA). Agai n, Clay was not locate d and was never s

erved with process. Defendant Hayes filed a motion to dismiss plaintiffs’ complaint for failure to join an indispensable

party, the City of Ma

rtin, which plainti

f fs allege w rongly issued the building permit. This motion was denied. Four days before trial, Hayes’ attorney located David Clay by telephone after contacting one of Clay’s relatives living in the area. Clay refused to testify on behalf of Hayes , but stated that he would give a depos

ition if it were takenoutside the state of Tennessee. On June 5, 1997, the date set for trial, Hayes filed a motion for a continuance to take the deposition of Clay. In support of this motion, Hayes attached Clay’s affidavit in which Clay asserted that the plaintiffs were aware that Clay was not a licensed contractor, that Hayes had no involvement

in the building of the house, and t hat Clay was never an agent for Hayes. The motion for continuanc e was denied and the matter proceeded to trial. In the trial court’s instructions to t he jury, the only theory of recovery presented to the jury involved the alleged violation of the Tennessee Consumer Protection Act. The jury awarded plaintiffs $5,000.00 and the trial court awarded $5,907.50 in attorney fees and costs under the Act. Hayes filed a post-judgment motion styled “Motion to Amend Judgment to Allow Credit for Funds Paid to Plaintiffs by Former Co-Defendants.” In this motion, Hayes asserted that he

was entitled to have the $1 0,000 .00 received by plaintiffs in settlement from Nowell and Merchant’s StateBank applied as a credit to off-set the adverse judgment and award of attorney fees. This motion was denied. Hayes appeals the judgment of the trial court and presents the following issues for review: 1. Whether the trial court erre d in failing to

grant the Motion of Defendant

to Amend Judgmentto Allow Credit for Funds Paid to Plaintiffs by Former

Co-defendants. 2. Whether the trial court erred in failing to g rant Defendant’s Motion to Di smiss the Complaint against him for failure of the Plaintiffs to join an indispensable party. 3. Whether

the trial court er

red in denying defendant’s motion for5 a continuance in order to take the deposition of David Clay. 4. Whether the trial court erred in failing to direct a verd ict fo r defendant based on the standards requir ed to find liability

under the Tennessee Co

nsumer Protection

Act. In his first issue, appellant Hayes asserts that the trial court erred

in failing to grant h

is post-judgmentmotion to allow cre dit for funds rece ived by the plaintiffs in settlement from former co-defendants. In support of his motion, Hayes attached a portion of the trial transcript in which counsel and the court, outside the presence of the jury, discussed whether the jury should be informed of the prior settlement and whether Hayes shou ld be credite

d with the amount of the settlement in the event the jury returned an adverse judgment. Plaintiffs’ counsel argued that the jury should nothear evidence of the prior settlement, but con

ceded that it would be appropriate to give Hayes credit for that amount “because that’s fair.” The court ruled that testimony regarding the pr ior settlement was

appropriate bec

ause it would aid the

jury in determining the actual losses suffe red by p laintiffs. On cross-examination of Linda Mires, defense counsel elicited testimony regarding the $10,000.00 settlement. When it came time to instruct the jury, the trial court, in summarizing the positions of the parties, stated the following: The defendant

also alleges that the plaintiff -- that the plaintiff has pr eviou sly claimed that the actions of Merchants State Bank, Martin, Tennessee, and Steve Nowell as then officer an d employee of sa

id Me rchants State Bank, now Union Planters Bank, was also the

proximate cause

of her damages. In its order denying H

ayes’ motion to ame

nd the judgment,

the trial court stated that “theprior set tlement

was properly submitted to the jury during the trial for their consideration du rin g deliberation.” Appellant cites no authority

which would permit

this Court to grant the requested relief, butinstead relies on the apparent agreement made between counsel during the trial of this matter. Indeed, we could find no Te nnessee case wh

erein credit wa

s so ugh t for funds previo usly paid under these circumstances. There are numerous cases wherein a party has sought credit for funds that the party had pr eviously paid to the plaintiff, or for funds paid to the plaintiff by an insurance company on it s b ehalf, but those cases typically involve claims for set-off or recoupment

which are inapplicable here. Upon review of the record, we are of the opinion that there is not

sufficient evidence of an express agreement between the parties to allow credit for funds paid in

the prior settlement. Plaintiffs’ counsel objected to the introduction of evidence3 We note that although no comparative fault instruction was given to the jury, no

objection has bee

n made to the char

ge. The jury was in

structed, howeve

r, that plaintiff is entitled only to ac

tual damages “ca

used by the defen

dant’s use of the u

nfair or decept

ive acts or practices.” 6 regarding the settlement and the concessions concerning credit we re apparen tly made on the premise that the jury w ould not hav e this information w hen assessing dama

ges caused to plaintiff. Furth ermore, to all ow such credit in the absence of an express agreement would be contrary to the principles of comparativefault. An action u nder the TCPA is an a

ction in tort, and as such, we must assume that the jury assessed damage s against Hayes in

proportion to his fault in causing the plaintiffs’ injury. 3 The denial of appellant’s motion to amend the judgment is affirmed. Appellant’s s e cond issue involves the trial court’s refusal to dismiss plaintiff’s complaint for failure to join an indispensable party. Appellant asserts that the City of Martin

was negligent in issuing the building permit on the signature of David Clay, and that the plaintiffs would not h ave been damaged if

the permit were n

ever issued. Furth

ermore, appella

nt argues that dismi

ssa l

was appropriate since the city could not have been joined as a party beca

use T.C.A. § 29-20-302 requires that notice of a claim be given to the governmental entity within 120 day

s after the caus

e of action accrues. First, we note that the statute a ppellant re lies upon regarding the 120 day notice requirement

was repealed in 1987. Second, appellant could haveimpleaded the city as a thirdpartydefendant. Third, appellant did not hesitate during trial to point the finger at the city, and it is apparent by the size of the judgment awarded that the jur y did n ot place all of the

blame upon the appellant. Finally, the City of Martin is not an indispensable party. Rule 19.01 of the Te

nnessee Rules of Ci

vil Procedure pro

vides in part: A p erso n who is subject to the jurisdiction of the court shallbe joined as a party if (1) in the person’s abse nce complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so sit uated that the disposition of the action in the person ’ s absence may (i) as a prac tical matte

r im pair or impede the person ’s ab ility to protect that interest, or (ii) leave any of the persons already parties subject to a s ub stantial risk of incurring double, multiple, or ot herw ise inconsistent obligations by reasons of the claimed interest. In this case, plaintiffs were free to sue the city. Appellant was free to “point the finger”7

at the city at trial. Moreover, appellant made no attempt to proceed against thecity pursuant to T.R.C.P. 14.01. We hold that the City of Martin is notan indispensable party and the trial court did not err in refusing to grant defendant’s motion to dismiss. In his third issue, Hayes asserts that the trial court erred in refusing to grant his motion for continuance to ta

ke the deposition of

David Clay. Hayes argu

es that the failur

e to grant the conti nuance deprived him of the opportunity to pres

ent evidence tha

t the plaintiffs kne

w all along that Clay was not a licensed contractor and that Hayes had not authorized Clay to sign for the building permit. Since appellant’s motion for continuance was not made until after the jury

was impaneled, and the alleged error was not cited in a motion for a new trial, we believe that the issue is preclu

ded pursuant to

T.R.A.P. 3(e). In any event, whether to grant a continuance is a matter tha t lies within th e sound discretion of the trial court, and its decision will not be disturbed on appeal absent a showin g that the court ab used its discretion

and that the party seeking a continuance has been prejudiced. Blake v. Plus Mark, Inc. , 952 S.W.2d 413 (Tenn. 1997). Although Hayes has arguably been prejudiced by not having the testimony of David Clay before the jury, we cannot say that the trial court abused its discretion in denying the motion for continuance. The motion filed by H ayes states only th

at his efforts to lo

cate Clay failed, and that

a private investigator retained by a former co-defend ant was also unsuccessful. There is no showing of due diligence, and Hayes bears some of the responsibility for his predicament. The trial court’s denial of the motion will not be disturbed on appeal. Appellant next asserts that the trial court erred in failing to direct a verdict in his favor

on the alleged violation of the Tennessee Consumer Protection Act, T.C.A. §§ 47-1 8-101 to 47- 18-5002 (1995). At trial, Hayes moved for a directed verdict at the close of plaintiffs’ proof, and renewed the motion af

ter resting his defense. However, Hayes did not file either a post-trial motion for judgment n.o.v . or a motion for a n ew trial. Appelle

e asserts that ap

pella t e review of the directed v

erdict issue is pre

cluded by Rule 3(e

) T.R.A.P. which pr

ovides: [ I]n all case tried by

a jury, no issue pre

sented for revie

w shall be predic

ate d upon error in the admis sion or exclusi on of evid ence, jury instructions granted or refused, misconduct of jurors, parties or counsel, or other action committed or occurring during the trial of the case, or other ground upon which a new trial

is sought, unl ess the same was spec ifically stated in

a motion for a new

trial; otherwise such issues will be treated as waived.8 This Court has previously addressed this issue in Cortez v. Alute ch, Inc. , 94 1 S.W.2d 891 (Tenn. App. 1996). In Cortez , we noted that when the alleged error is the failure of the trial court to grant a directed verdict, either a motion for a new trial or a post-trial motion seeking entry of judgment in accordance with a motion f or directed verdict made at trial (judgment n.o.v.) is sufficient to preservethe issue for appeal. Id . at 894-95. Failur e to file either of the

se post-trial motions, however, denies “th

e tria l judge the opportunity to consider or reconsider allegederrors committed during the course of trial” and precludes appellate review of that issue. Id

. at 895-96. The rationale for this holding is supported by Rule 36(a) T.R.A.P. which provides th at “[n]othing i n this rule shall be construed as requiring relief be granted to a party . . . who failedto take whatever action was reasonably available to prevent or nullify the harmful effect of an error.” The judg ment of the trial court is affirmed and the case is remanded for such further proceedings as necessary. Co sts of the app eal are assessed against the appellant. Appellees request for an award of attorney fees on appeal is denied.

_________________________________ W. FRANK CRAWFORD, PRESIDING JUDGE, W.S. CONCUR:

____________________________________ ALAN E. HIGHERS, JUDGE

____________________________________ HOLLY KIRBY LILLARD, JU DGE