Knox County, Tennessee was also a named party in this suit and in the inverse condemnation suit. Knox 1

County took a voluntary dismissal and is not involved in the appeal currently before this Court.

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

June 17, 2008 Session

STATE OF TENNESSEE, ET AL. v. GOOD TIMES, LTD., ET AL.

Appeal from the Circuit Court for Knox County

No. 1-403-04 Dale C. Workman, Judge

No. E2007-1172-COA-R3-CV - FILED SEPTEMBER 23, 2008

The State of Tennessee (“State”) sued Good Times, Ltd. (“Good Times”) and others with regard 1

to real property deeded to the State by Good Times after the State was sued for inverse

condemnation by Good Times’ lessee, Pun Wun Chan d/b/a #1 China Buffet (“China Buffet”). The

State claimed that it was entitled to indemnity from Good Times in the inverse condemnation action

under its warranty deed. The Trial Court consolidated the State’s case against Good Times with the

inverse condemnation action and then bifurcated the trial. The inverse condemnation case was tried

before a jury and China Buffet was awarded a judgment against the State. The Trial Court then

granted summary judgment to Good Times in the State’s case against Good Times and dismissed

the State’s case. The State appeals to this Court. We vacate the grant of summary judgment to Good

Times, grant the State summary judgment against Good Times, and remand this case to the Trial

Court for a determination of the amount of damages, and for further proceedings as necessary with

regard to all other parties and claims. 

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

Case Remanded

D.MICHAEL SWINEY,J., delivered the opinion ofthe court, in which HERSCHEL P.FRANKS,P.J., and

SHARON G. LEE, J., joined.

Robert E. Cooper, Attorney General and Reporter, and Cynthia L. Paduch, Senior Counsel for the

Appellant, State of Tennessee.

R. Louis Crossley, Jr., Knoxville, Tennessee for the Appellees, Good Times, Ltd., a Tennessee

Limited Partnership; and Nicholas Cazana.
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Michael J. King, Kevin N. Perkey, and Meghan H. Morgan, Knoxville, Tennessee for the Appellee,

Elizabeth James.

E. Jerome Melson, Knoxville, Tennessee for the Appellee, Knoxville Association of Realtors, Inc.

OPINION

Background

In 1998, China Buffet and Good Times entered into an agreement for China Buffet

to lease real property located at 6300 Papermill Road in Knoxville, Tennessee (“the Property”) from

Good Times for use as a restaurant. In early 2002, the State notified Nicholas Cazana, the general

partner of Good Times, that it would be taking a portion of the Property for road construction. In

lieu of condemnation proceedings, Good Times agreed to sell a portion of the Property to the State

for $222,000. Cazana executed an Agreement of Sale which contained a space for listing the name

of any lessee of any portion of the Property or any other party who had any interest in the Property.

This space was left blank. 

In October of 2002, Cazana executed a Warranty Deed (“Warranty Deed”) conveying

from Good Times to the State a portion of the Property in fee simple along with drainage, slope, and

construction easements. In pertinent part, the Warranty Deed provides:

The consideration mentioned herein includes payment for the property taken, also

payment for any and all incidental damages to the remainder compensable under

eminent domain.

* * *

This conveyance is made in consideration of Two Hundred Twenty-Two Thousand

and no/100 ($222,000.00) Dollars, cash in hand paid, the receipt of which is hereby

acknowledged.

TO HAVE AND TO HOLD said land, with the appurtenances, estate, title and

interest thereto Belonging to the said State of Tennessee. And it does covenant with

the said State of Tennessee that it is lawfully seized and possessed of said land in fee

simple, have a right to convey it and the same is unencumbered.

AND IT DOES FURTHER COVENANT and bind itself, its agents and

representatives, to Warrant and forever defend the title to said land to the said State

of Tennessee against the lawful claims of all persons whomsoever.

After road construction commenced, China Buffet sued the State for inverse

condemnation claiming that while the State had compensated the landlord, Good Times, it had not

compensated China Buffet for its loss of parking spaces and use of the front of the entrance to the
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restaurant. The State sought to add Good Times as a defendant to the inverse condemnation suit.

The Trial Court denied the motion to add Good Times as a defendant in that suit, but consolidated

the inverse condemnation suit with a separate suit filed by the State against Good Times and others.

The Trial Court then refused to grant a continuance but instead bifurcated the actions for trial. The

inverse condemnation action proceeded to trial before a jury. China Buffet obtained a judgment

against the State for $98,800, which was affirmed by this Court in Pun Wun Chan, d/b/a #1 China

Buffet v. State, No. E2005-01391-COA-R3-CV, 2006 Tenn. App. LEXIS 301 (Tenn. Ct. App. May

9, 2006), no appl. perm. appeal filed (“China Buffet”). 

In the suit filed by the State against Good Times and the individual defendants

seeking indemnity under the Warranty Deed, Good Times filed a Third Party Complaint against the

Knoxville Association of Realtors, Inc. who purchased the remainder of the Property from Good

Times after the conveyance to the State. The State filed a motion for summary judgment. Good

Times and Cazana also filed a motion for summary judgment. Defendant Elizabeth James, a limited

partner of Good Times, filed a motion to dismiss or for summary judgment alleging, in part, that she,

as a limited partner, could not be held liable for the obligations or debts of Good Times. After a

hearing on the motions, the Trial Court entered a Final Order April 30, 2007, inter alia, granting

Good Times summary judgment, denying the State summary judgment, and dismissing all of the

State’s claims against Good Times and the individual defendants. The third-party claims of Good

Times against the Knoxville Association of Realtors, Inc. were dismissed as moot. The State appeals

the April 30, 2007 order to this Court. 

Discussion

Although not stated exactly as such, the State raises two issues on appeal: 1) whether

the Trial Court erred in granting summary judgment to Good Times; and, 2) whether the Trial Court

erred in denying summary judgment to the State. Elizabeth James raises an issue on appeal

concerning whether she, as a limited partner of Good Times, can be held liable for debts of Good

Times. 

Our Supreme Court has described the process for reviewing a trial court’s grant of summary

judgment as follows:

The standards governing an appellate court’s review of a

motion for summary judgment are well settled. Since our inquiry

involves purely a question of law, no presumption of correctness

attaches to the lower court’s judgment, and our task is confined to

reviewing the record to determine whether the requirements of Tenn.

R. Civ. P. 56 have been met. See Hunter v. Brown, 955 S.W.2d 49,

50-51 (Tenn. 1997); Cowden v. Sovran Bank/Central South, 816

S.W.2d 741, 744 (Tenn. 1991). Tennessee Rule of Civil Procedure

56.04 provides that summary judgment is appropriate where: (1) there

is no genuine issue with regard to the material facts relevant to the

claim or defense contained in the motion, see Byrd v. Hall, 847
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S.W.2d 208, 210 (Tenn. 1993); and (2) the moving party is entitled

to a judgment as a matter of law on the undisputed facts. See

Anderson v. Standard Register Co., 857 S.W.2d 555, 559 (Tenn.

1993). The moving party has the burden of proving that its motion

satisfies these requirements. See Downen v. Allstate Ins. Co., 811

S.W.2d 523, 524 (Tenn. 1991). When the party seeking summary

judgment makes a properly supported motion, the burden shifts to the

nonmoving party to set forth specific facts establishing the existence

of disputed, material facts which must be resolved by the trier of fact.

See Byrd v. Hall, 847 S.W.2d at 215.

Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 88 (Tenn. 2000). 

We first address whether the Trial Court erred in granting summary judgment to

Good Times. An argument was raised that the decision in China Buffet collaterally estopped the

State from seeking indemnity from Good Times under the Warranty Deed. A “question of whether

collateral estoppel applies is a question of law, ....” Tareco Properties,Inc. v. Morriss, No. M2002-

02950-COA-R3-CV, 2004 Tenn. App. LEXIS 774, at *43 n.20 (Tenn. Ct. App. Nov. 18, 2004), no

appl. perm. appeal filed. 

In Beaty v. McGraw this Court discussed the doctrine of collateral estoppel at length

stating:

Collateral estoppel is an issue preclusion doctrine devised by

the courts. See Dickerson v. Godfrey, 825 S.W.2d 692, 694 (Tenn.

1992); Goeke v. Woods, 777 S.W.2d 347, 349 (Tenn. 1989); Morris

v. Esmark Apparel, Inc., 832 S.W.2d 563, 565 (Tenn. Ct. App. 1991).

Like other preclusion doctrines, its purposes are to conserve judicial

resources, to relieve litigants from the cost and vexation of multiple

lawsuits, and to encourage reliance on judicial decisions by

preventing inconsistent decisions. See Allen v. McCurry, 449 U.S.

90, 94, 101 S.Ct. 411, 414-15, 66 L.Ed.2d 308 (1980); Disimone v.

Browner, 121 F.3d 1262, 1267 (9th Cir. 1997).

* * *

The party seeking to rely on the doctrine of collateral estoppel

has the burden of proof. See Dickerson v. Godfrey, 825 S.W.2d at

695. To invoke the doctrine successfully, the party must

demonstrate:

1. that the issue sought to be precluded is identical to the

issue decided in the earlier suit;
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2. that the issue sought to be precluded was actually

litigated and decided on its merits in the earlier suit;

3. that the judgment in the earlier suit has become final;

4. that the party against whom collateral estoppel is

asserted was a party or is in privity with a party to the

earlier suit; and

5. that the party against whom collateral estoppel is

asserted had a full and fair opportunity in the earlier

suit to litigate the issue now sought to be precluded.

Beaty v. McGraw, 15 S.W.3d 819, 824-25 (Tenn. Ct. App. 1998) (footnotes omitted).

The issue of whether the State could seek indemnity from Good Times under the

Warranty Deed was not litigated in China Buffet. Rather, this issue was specifically reserved when

the two actions were bifurcated for trial. A careful and thorough review of the record on appeal

reveals that this issue was neither litigated nor decided in China Buffet. Given this, the State is not

collaterally estopped from seeking indemnity from Good Times under the Warranty Deed as a result

of the decision in China Buffet. 

Good Times argues on appeal that the State cannot seek indemnity against Good

Times under the Warranty Deed because the damages awarded in China Buffet were damages

suffered as a result of diminished value of the leasehold in the remaining property, not in the smaller

parcel conveyed to the State under the Warranty Deed. Good Times asserts that the warranties in

the Warranty Deed apply only to the small portion of real property deeded to the State and that China

Buffet was not awarded any damages with regard to this particular portion of the real property. In

its brief on appeal, Good Times asserts that China Buffet “never made any claim based upon the

value of his interest in the property conveyed to the State by Good Times.” (emphasis in original).

Good Times is mistaken. China Buffet had a leasehold interest in the entire property

including the portion deeded to the State. China Buffet claimed, and was awarded, incidental

damages to its interest in the entire property because “the fair market value of the property has been

affected by a significant and permanent loss of parking space, which has resulted in the loss of access

to and utility of the restaurant.” China Buffet, at ** 7-8. 

Good Times also argues that prior to the execution of the Warranty Deed, the State

represented to Cazana that the money being paid for the portion of the Property being deeded to the

State was all for the landlord. It is a well established substantive rule of law that prior

representations are deemed to have merged into the written contract or deed. Minor v. Belk, 360

S.W.2d 477, 483 (Tenn. Ct. App. 1962). Plus, the Agreement of Sale executed by Cazana on behalf

of Good Times provided a space for Good Times to disclose the names of lessees or any other party

who had any interest in the property being conveyed and that space was left blank. Cazana could
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have filled in this blank and taken this opportunity to inform the State that China Buffet had not been

compensated by Good Times for itsinterest in the Property. He did not. The Warranty Deed, again

executed by Cazana on behalf of Good Times, provides:

The consideration mentioned herein includes payment for the property taken, also

payment for any and all incidental damages to the remainder compensable under

eminent domain.

The deed clearly and unambiguously provides that the payment includes “any and all incidental

damages to the remainder ....” All means all and not some, or a part, or a portion, or a few. If any

other party in addition to Good Times had any compensable interests in the Property, the clear and

unambiguous language of the Warranty Deed provided that the payment made under the Warranty

Deed was in satisfaction of all of those interests. While Good Times and the State could not through

the Warranty Deed extinguish China Buffet’s interest in the property, Good Times could, and did,

make the warranties to the State contained in the Warranty Deed. 

Cazana also claims that the Agreement of Sale and the Warranty Deed were prepared

by the State, that he did not read these documents prior to executing them, and that these documents

are ambiguous and should be construed against the State as the maker. However, this Court has

stated that if a party who is not a victim of fraud “fails to read the contract or otherwise to learn its

contents, he signs the same at his peril and is estopped to deny his obligation, will be conclusively

presumed to know the contents of the contract, and must suffer the consequences of his own

negligence.” Giled v. Allstate Ins. Co., 871 S.W.2d 154, 156 (Tenn. Ct. App. 1993) (quoting Beasley

v. Metropolitan Life Ins. Co., 229 S.W.2d 146, 148 (Tenn. 1950)). The record is devoid of any

evidence showing that Cazana or Good Times was a victim of fraud. As such, they are presumed

to know the contents of the Warranty Deed and must suffer the consequences of their own

negligence. As discussed above, the Warranty Deed is not ambiguous and must be construed

according to its plain language. 

The State is not collaterally estopped from seeking indemnity under the Warranty

Deed and the State negated the claims made by Good Times that China Buffet was awarded damages

only as to real property not covered under the Warranty Deed; that prior representations made

regarding the payment controlled instead of the Warranty Deed; and that the Warranty Deed was

ambiguous and should be construed against the State. Good Times was not entitled to summary

judgment as a matter of law. We, therefore, vacate the grant of summary judgment to Good Times.

We next consider whether the Trial Court erred in denying summary judgment to the

State. As discussed, the Warranty Deed in this case clearly and unambiguously provides: 

TO HAVE AND TO HOLD said land, with the appurtenances, estate, title and

interest thereto Belonging to the said State of Tennessee. And it does covenant with

the said State of Tennessee that it is lawfully seized and possessed of said land in fee

simple, have a right to convey it and the same is unencumbered.
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AND IT DOES FURTHER COVENANT and bind itself, its agents and

representatives, to Warrant and forever defend the title to said land to the said State

of Tennessee against the lawful claims of all persons whomsoever.

As a matter of law, Good Times had duties to the State under the clear and

unambiguous language of the Warranty Deed. There are no genuine disputed issues of material fact

regarding Good Times’ breach of its duties to the State under the Warranty Deed. In addition, there

are no genuine disputed issues of material fact that the State suffered damages as a result of this

breach as China Buffet obtained judgment against the State in the amount of $98,800. As there is

no genuine issue as to any material fact and the State is entitled to a judgment as a matter of law, we

grant the State summary judgment against Good Times. Further, we remand this case to the Trial

Court for a determination of the amount of damages to be awarded the State with the starting point

being the judgment awarded against the State in favor of China Buffet.

As we have vacated the summary judgment granted to Good Times and granted the

State’s summary judgment, the dismissal of Good Times’ third party claim against the Knoxville

Association of Realtors, Inc. is vacated as well. 

From the record before us on appeal we are unable to address the issue raised by

James. Upon remand, the Trial Court is to conduct further proceedings as necessary with regard to

James and any and all other parties and claims. 

Conclusion

The judgment of the Trial Court granting summary judgment to Good Times is

vacated. The State is granted summary judgment against Good Times and this case is remanded to

the Trial Court for a determination of the amount of damages to be awarded the State against Good

Times, for further proceedings as necessary with regard to any and all other parties and claims, and

for collection of the costs below. The costs on appeal are assessed against the Appellees, Good

Times, Ltd., a Tennessee Limited Partnership, and Nicholas Cazana.

___________________________________ 

D. MICHAEL SWINEY, JUDGE