### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON Se pte m be r 21, 200 5 S es sio n JO HN ALLE N CONSTRUCTI ON, LLC v . JERO ME HANCOCK, SANDRA

HAN COC K, and C AR ROL L BA NK AN D T RU ST An Appeal f

romthe Chancer y Court for Benton County No. 00-195 Ron E. Harm on, Chan cellor

No. W2004-02920-C OA-R3-C V - F iled March 1, 2006

This is a construction ca se. The def endant homeowners e ntere d into an oral c ontrac t with the plaint if f c on tr a c tor to c on str

uc t a ho us e fo r the de fe nd a nts

. Af te r the c on tr a c tor had s ub st a nti a lly completed c onstruction of the house, the homeowner s discharg ed the c o n tr a c to r
. T h e contr actor then filed suit for unpaid c osts and fee s. The def endant homeow ners counter -sued, alleg ing brea ch of the orig inal contra ct. Afte r a tria l, the trial court e ntere d a fina l order g ranting a monetary awa rd to the contra ctor for

his unpaid fee s, minus several c redits awa rded to the de fendant hom eowne rs. The rec ord does not include any fac tual finding s or leg al conc lusions detailing the ba sis for the aw ard. The de fendant homeowner s appea l, asserting that the trial court err ed in admitting the te stimonyof an ex p ert witness and in its calculation of the a war d to the contra ctor. We af firm the trial c ourt’s admission of the expert testimony , but va cate the judgme nt and rema nd to the trial court f or fa ctual fi nd ing s a ndle g a l c on c lus ion s in or de r t o r e so lvethe re ma ini ng iss ue s o n a pp e a l. Tenn. R. App . P . 3; Judgme nt of th e Chancer y Court is Vacat ed and Rem anded
H OL L Y M. K I RBY , J. , d e li v e r e d th e o p in io n o f th e Co u r t, in w h ic h W. F RAN K C RAW FORD , P.J ., W.S ., and A L AN E. H I G H ERS , J ., joined.
Carthel L . Smit h, J r., L exington, Tenne ssee, f or appellants J erome Hanc ock and Sandra Hanc ock.
John W. Whi tw orth, Ca mde n, Te nn e sse e , f or app e lle e John Al le n Co ns truc tio n, LL C.
OP IN ION The pa rties enter ed into an ora l contrac t for the c onstruction o f a n ew home in B enton County , Tenne ssee. Unde r the terms of the contra ct, Plaintiff/Appellee John Al l en C onstruction, LL C (“John Allen C onstruction”), would build the hom e for Def endant/Appe llants J erome Hanc ock and Sandra

Hanc ock (c ollectively , “Ha ncocks” ). Pursuant t o the ora l ag ree ment, J ohn Allen Con str uc tio n w ou ld b e pa id o n a tim e a ndma te ri a ls b a sis , p lus a n e ig ht p e rc e nt p ro fi t.T he H anc ocks l at er amended t hei r coun t er
- com pl ai nt t o not e a dd i t i onal probl ems r el at ed t o John Al l en 1 C ons t r uct i on’ s cons t r uct i on of t he hous e. -2- I n Aug ust 1999, J ohn Allen Construction order ed the initial plans for the Hanc ocks’ home. Ultimately , sever al alter ations to the initial plans wer e re quested a nd made. At some point during the construc tion, one of the car penter s for J ohn Allen Construction w as ar rested. Subseque ntly , afte r construction of a

signific ant portion of the home had been completed, the H ancoc ks dismis sed John Allen Construction. The Ha ncocks a lleg e that John All en Construction was dismissed beca use of numerous structur al def

iciencie s in the construction of the home

. After the Hanc ocks seve red the ir relationship wit h J ohn Allen Construction, on Dec ember 5, 20 00 , Joh n A lle n Co ns truc tio n f ile d a la ws uit a g a ins t th e Hanc oc ks in the B ent on Cou nty Chance ry Court. The complaint alleg ed that J ohn Allen Construction w as not paid for a portion of the labor and materia ls furnished in its performance of the c ontrac t, and soug ht a monetary awa rd of da ma g e s in the a mou nt o f $ 71 ,0 92 .5 0, plu s in te re st.
On J anuary

12, 2001, the Hanc ocks filed their answe r and c ounter-c omplaint. The Hanc ocks asserted that the parties had agr eed upon a “ca p” or ma x imum on the price for constructing the home, and that John All en Construction had e x cee ded the a g ree d-upon c o n t ra ct price. The Hancocks contende d that J o h n Al l en Construction had perf ormed the w ork in a de fec tive manner , had perf ormed unnece ssary work, and had f ailed to complete the construction in a timely manner . The Hanc ocks denie d t h at J ohn Allen Construction was due the$71,092.50 in damag es soug ht in the c omp la int

. The Hancocks’ counter -complaint alleg ed that the parties had a g ree d that construction of the ho me wo uld no t exce e d $25 0, 00 0, a lth ou g h th e pa rt ie s late r a g re e d to a me ndthe orig ina l “ c ap” to a dda dd iti on a l f

e a tur e s to the ho me fo r a

pric e of $4 2, 00 0. Th e Ha nc oc ks a sse rt e d that, at th e tim e the Hanc oc ks dis c ha

rg e d Joh n A lle n Cons truc tio n f or br e a c hin g the c on tr a c t, the y ha d a lr e a dy

pa id J o h n A l l e n C o n s tru c t i o n $ 3 1 8 , 6 6 8

. 4 6 , e v e n t h o u g h t h e h o m e w a s n o tye tf i n i s h e d

. C o n s e q u e n t l y, the Ha nc oc ks c la ime d, the y we re fo rc e d to hir e thi rd -p art y c on tr a c tor s to c omp le te the pro ject. Alleg edly , these ne w contra ctors discove red a number of latent def ects in John All en Construction’s work. The Ha ncocks c laimed that they spent $181,333.00 to c orre ct the defe cts and c omplete the 1 home. I n the c o u n ter
- c omplaint, they soug ht monetary

damag es of $208,000, plus compe nsatory and c on se qu e nti a l dama g e s, a s w e ll a s in te re st.
I n the course of trial prepa ration, the trial court order ed the Hanc ocks to furnish John All en Construction with sit e-e valuation re ports and permitted J ohn Allen Construction’s eng ineering and construction ex perts to i nspect the pr emises. The pa rties propounde d discovery reque sts, including re qu e sts se e kin g the ide nti ty of e xpe rt wi tne sse s e xpe c te d to te sti fy a t tria l.
The trial wa s held on multipl e day s b et we en J anuary 14, 2004, and F ebrua

ry 25, 2004. Twenty -two witnesses testified, and over one hundred e x hibits were e ntere d into evidence

.D es pi t e t hi s exch ang e, t he H anc ocks ’ co un s el ass er t s t hat t he t r i al co ur t , wh i l e a ckn owl edgi ng t hat M i s hu was 2

a su rp rise w itne ss, “d id no t allo w C o u n se l f o r A p p e llan ts [H a n c o c k s] a n o p p o rtu n ity to re c e ss th e he a rin g o r g ra n t a c o n tinu a n c e o f t h e sa m e .” W e fi n d this a sse rtio n to b e w itho u t m e rit. -3- At the close of

the Hanc ocks’ pr oof, J ohn Allen Construction c alled an expert witness, John Mishu (“Mishu”) , to testify . Neither Mishu’s identitynor the substanc e of his testimony had bee n disclosed to the Hanc ocks during discovery . J ohn Allen Con s t ru cti on contende d that Mishu’s testimonywas ne cessa

ry to rebut the testimony

of on e o f t he Ha ncocks’ experts, David Evans, a technica l eng ineer

. Mishu’s qua lifications as an expert we re not disputed. The Hanc ocks, howe ver, ob je c te d to his te sti mon y , a sse rt ing that Mish u wa s a sur prise wi tne ss an d tha t th e y we re un able to adequately

prepa re f or his cross-e x amination.
The trial court permitted Mishu to testify for the limit ed purpose of rebutting the testimony of Da vid Evans. Towar d that end, Mi shu was not permitted to provide f actua l testimony , but was limit ed t o cr itiquing Evans’ testing pr ocedur es and the assumptions made from those tests. To addre ss the conce rn of the H ancoc ks’ counse l that he was unpr epar ed to cr oss-examine Mishu, the trial court of

fer ed to re cess the pr ocee dings and return on another day to allow time to prepa re f or the cr oss-examination:
T h e C o u r t : You have the opportuni ty to ta k e a r e c e s s if y o u w is h

. You un de rs ta ndthat? Mr . Sm ith : Ye s. The Court: The Court will rec ess; we’ ll come back another day if y ou need time.

I f y ou wi sh to d o th a t. Mr . Sm ith : We m ig ht o ug ht t o ta lk a bo ut that. The proc eeding s were adjourne d afte r this exchang e, and the trial proce eded w ithout any further ref ere nce to the trial court’s of fer of a c ontinuance. 2 Final judg ment was e ntere d on November 8, 2004. The orde r simply provided: [T]he Cou rt

fi nd s th a t th e Pla int if

f, John Al le n Co ns truc tio n, LL C, is du e a n u np a id bill from the Def

endants, Jerome Ha ncock and wife Sandr a Ha ncock, in the amount of $71,092.00. The Court further finds that profits adde d to said bill i n the amount of $5,680.00 and c redits for mone y s p en t b ythe Def endants in the a mount of $4 3, 80 0. 00 sh ou ld b e c re dit e d a g a ins t said d e bt.
Ba sed on the for eg o i n g, t h e t ri al court entere d a judg ment in favor of J ohn Allen Construction a g a ins t th e Hanc oc ks in the a mou nt o f $ 21 ,6 12 .0 0. Fro m th is o rd e r, the Hanc oc ks no w a pp e a l. On appe al, the Ha ncocks r aise seve ral issues for our re view. F irst, the Hanc ocks ar g ue that J ohn Allen Construction was license d to build homes only up to a cost of $110,000, and bey ond that amount could re cover

only documented e x penses. The Hanc ocks conte nd that t h er e was no c learT he m aterial br ea c h e s a nd st ruc t ura l d efec t s all eg ed at t rial an d arg ue d o n a p p ea l i nc l ud e, am o ng o t he rs, 3 d ef i ci enci es i n t he ho m e’ s fo o t i ng, wal l s, fo und at i o n, f l o o ri ng, cei l i ngs, and f

ram i ng.

-4- and convinc ing e videnc e at t rial of John Allen Const ruction’s a ctual expenses. Second, the Hanc oc ks arg ue that John Al le n Co ns truc tio n s ho uldnot hav e been a wa rd e d a ny da ma g e s, considering the numerous mate rial breache s and si g nificant struc tural def ects in the c onstruction of the Hanc ocks’ home. 3
The Hancocks a lso arg ue on appe al that the trial c ourt err ed in ca lculating the cre dits in t he judgme nt. I n support of t his arg ument, the Hancocks contend that the t rial court failed to aw ard the Hanc ocks: (1) the cost of necessary reme dial work; (2) the cost of completing the re sidence ; and (3) the cost of the work needed to i nsure the struc tural integ rity of the home. The Hanc ocks also asse rt on appea l that the trial court f ailed to consider

the fa ct that J ohn Allen Construction exceede d the a g re e d- up on “ c ap” on the c on tr a c t pri c e
. F ina lly , the Ha nc oc ks arg ue that th e tr ia l c ou rt abu se d it s d i s c r e t i o n i n a l l o w i n g t h e r e b u t t a l e x p e r tw i t n e s s , M i s h u , t o t e s t i f y.
J ohn Allen Construction contends that the tria l court improperly disallowed it profits in the amount of $5,680, and that the trial court err ed in allowing the Hanc ocks cr edit for r epair s after the Hanc oc ks pu rp orte dly de nie d J oh n Alle n Co ns truc tio n th e op po rtun ity to c ur e a ny

a lle g e d d e fe c ts.
We c onsider first the final issue raised by the Hanc ocks on appea l, namely , whether the trial court e rre d in permitting J ohn Allen C onstruction’s rebuttal expert witness, Mishu, to testify

. A trial court’s de cision to admit ex pert testimony is reviewe d under a def ere ntial abuse of disc retion standard. Me rc e r v . V

and e rb ilt Uni v e rsi ty , 134 S.W .3d 121, 133 (Tenn. 2004) . I n Tenne ssee, a n appellate court will not set aside a trial court’s discretionary decision unl ess t he trial c ourt has er red in apply ing the controlling leg al principles or has acte d contra ry to the overw helming weig ht of the evidenc e. Id. ; Whit

e v . V and e rb ilt Uni v e rsi ty , 21 S.W .3d 215, 223 (Tenn. Ct. App. 1999) ( citing Ove rstreet v. Shoney’s, Inc. , 4 S.W. 3d 69 4, 70 9 (T e nn . Ct. App . 1 99 9) ). F urthe rm or e , “ [a]p pe llate courts should p er m i t a discre tionary decision to stand if re asonable judicial minds can diffe r conce rning its soundness.” Whit e , 2 1 S. W.3 d at 22 3; se e als o Buc kne r v . Ha sse ll , 44 S.W .3d 78, 83 (Tenn. Ct. App. 2000).
The Hancocks a

rg ue that the tria l cour t ab u s ed it s discretion by allowing Mishu to testi fy despite the fa ct that neither his i d en t i t y n or the substanc e of his testimony was disclosed during discovery . T o s upport this arg ument, the Hanc ocks cite c ases in which the testimonyof such a n expert witness was excluded bec ause the witness had not bee n proper l yidentified during the discovery proce ss. Additionally , the Hanc ocks m aintain t hat M ishu was a surprise witness and that the Hanc ocks wer e unfairly prejudice d beca use they did not have the opportunityto properly prepa re for c ross-examination.-5-

Un de r the Te nn e sse e Rul e s o f C ivi l Pr oc e du re , pa rt ie s ha ve a du ty

to d isc los e , u po n r e qu e st, the identity

of expert witnesses e x pecte d to testify at trial, as we ll as t h e subst ance of the e x pert’s a nti c ipate d te sti mon y . In p e rt ine nt p art , Ru le 26 .0 2 p ro vid e s: A party may throug h interrog atories r equire any other pa rty to identify

eac h person whom the other pa

rty expects to call as an expert witness at trial, to state the subjec t matter on whic h the expert is expec t ed to testify , and to state the substanc e of the fac ts and opinions to which the expert is ex pecte d to testify and a summary

of the g rounds for e ach opinion.
Te nn . R. Civ . P. 26 .0 2( 4) (A )( i) . Liti g a nts ha ve a du ty to s e a so na

bly su pp le me nt the ir re sp on se s to interrog atories to inform an a dversa ry of any later de cision to use an expert at trial. Te nn. R. Civ. P. 2 6. 05 (1 ). Th e Te nn e sse e Rul e s o f Civi l Proc e du re do no t e xpre ssl y pr ov ide fo r s a nc tio ns a g a ins t a pa rty fo r the failu re to s e a so na bly su pp le me nt a n a ns we r t o a n in te rr og a tory se e kin g the ide nti ty of an ex p er t or the anticipated substance of his testimony

. Merce r , 1 34 S.W. 3da t 13 3; Lyle v

. Exxon C orp. , 746 S.W .2d 694, 699 (Tenn. 1988). Consequently , it r emains within the province of the trial court to fashion an a ppropriate reme dy

for suc h a failure to disclose. Merce r , 134 S.W .3d a t 13 3; Ly le , 7 4 6 S

. W

. 2 d at6 9 9 (c i t i n g Stric kla nd v . St ric kla nd , 6 18 S.W. 2d49 6, 50 1 ( Te nn . Ct

. App. 1981)).
When an expert witness has not been ide ntified during the discovery proce ss, the trial court may properly exclude the testimony

of that witness. See Ly le , 746 S.W .2d at 699. Howeve r, other sanctions may

be more appropriate when the fa ilure to identify the witness was ne ither knowing nor deliberate. Id

. The Ly le Court list ed a numbe r of f actor s to be consider ed in determining the appropriate sanc tion:
1. Th e e xpla natio n g ive n f or the failu re to n a me the wi tne ss[; ] 2. Th e imp orta nc e of

the te sti mon y

of the wi tne ss; 3. The ne ed for

time to prepar e to meet the te stimony ; and 4. The possibilityof a c ontinuance.
Id. Ul t i m at ely , the dec ision is i n the trial court’s sound discretion. Id

. (c i t i n g Brooks v. United Uniform Co. , 6 82 S.W. 2d91 3 ( Te nn . 1 98 4) ); Buckner , 44 S.W .3d at 83.
I n the instant case , the attorney for J ohn Allen C onstruction explained to the trial court that Mishu wa s discovere d less than one we ek bef ore the Fe bruary

14, 2005 hearing. Counsel f or John Allen Construction told the trial judge that he attempted to notify the Hanc ocks’ c ounsel of his intent to call Mi shu to testify

. Ultimately , Mishu was only permitted t o testify for the limit ed purpose of rebutting the testimony

of the Hancocks’ expert. More im p o rt antly , afte r re cog nizi ng the nee d of the Hanc ocks’ c ounsel for ex tra ti me t o prepa re, the trial court off

ere d to rec ess the proc eeding s and

“ c ome ba c k a no the r d a y ” if the Ha nc oc ks ’ c ou ns e l so de sir e d. I t is app are nt that th e Hanc oc ks did not acc ept the trial court’s offer of a continuance. Under these circumstance s, we find no a buse of discretion, and the ruling of the trial c ourt permitting Mishu to testify is affirme d.-6-

The Hancocks ne x t raise numer ous issues reg arding the cor rec tness of the trial c ourt’s aw ard of da ma g e s to J oh n Alle n Cons truc tio n, inc lud ing wh e the r John A lle n Co ns truc tio n w a s li mit e d to rec overing its documented expenses bec ause it was im proper ly licensed, whether the re w as cle ar and convincing evidenc e of John A l len Construction’s ac tual expenses, and the a mounts that the Hanc oc ks sh ou ld h a ve be e n c re dit e d f or e xpe ns e s to re me dy

a va ri e ty of a lle g e d d e fe c ts i n construction to complete the residenc e and to e nsure the struc tural integ rity of t he home. The Hanc ocks also conte nd that the trial court err ed in f ailing to c onsider the “ca

p” in the contra ct price to which the parties alleg edly ag ree d.
J ohn Allen Construction likewise d is p u te s th etr ia l c o u r t’ s awa rd of da mag es, conte nding that the trial court erre d in deny ing it prof its in t he am o u n t o f $ 5 , 6 80, and in allowing the Hanc ocks c re dit s f or re pa ir s w he n th e Ha nc oc ks a lle g e dly de nie d John Al le n Co ns truc tio n th e op po rtun ity to cure any purported de fec ts in the construction. As to all of these issues, on a ppeal, the f

actua l finding s of t he trial c ourt are revie wed de novo upon the record, accompa nied bya pre sumption of corre ctness, unless the e vidence preponde rate s otherwise. T enn. R. App. P. 13(d). The trial co urt’s leg al conc lusions are re viewed de novo , and are acc orded no presumption of cor rec tness. Carter v. Patrick , 163 S.W .3d 69, 74 (Tenn. Ct. App. 2004).
I n this case, the trial court’s f inal order states only that it f inds that John A llen Construction was “ due an unpaid bill” from the Hancocks “ in the amount of $71,092.00,” a dds profits of $5,680.00, and finds that “cre dits for money spent by the [Hancoc ks] i n the amount of $43,800.00 should be cre dited ag ainst said debt.” At or al ar gu m en t o n appea l, counsel for J ohn Allen Con str uc tio n in dic a te d that the tr ia l jud g e me t w ith c ou ns e l f or the pa rt ie s a nde xpla ine d th e ba sis for his r uling. Unfortunately , the rec ord on appea l doe s not r efle ct such a discussion. Neither the voluminous t ransc ript nor the tec hnical re cord inc lude any explanation of the trial court’s determinations of cre dibilit y , its fac tual finding s on the numerous a lleg ations of material brea ches or substantial defe cts in the construction, its fac tual finding s on the nec essity of re medial measur es or amounts expended to complete the construction or a ddress va rious al l ege d problems with the structura l integrity

of the home. There are no fac tual finding s on the issues reg arding the status of J ohn Allen Construction’s license or the ramifications of any such l icensing issues, and no fa ctual finding s reg arding the al l ege d “c ap” in the c ontrac t price to whic h the parties purportedly ag ree d. We note that the final orde r states that John Al l en C o n s t ru ct i on is “due a n unpaid bill” from the Hanc ocks “in the amount of $71,092.00,” and t h at t his amount corre lates with the amount soug ht by J ohn Allen Construction in its original complaint. Apa rt from that, it is not possibl e to discern the ba sis on wh ic h th e tr ia l c ou rt c a lc ulate d it s a wa

rdof da ma g e s.-7-

I n the intere st of judicial economy , the appe llate courts seek to re solve issues on appea l wi tho ut a re ma ndto the tr ia l c ou rt . In s ome c a se s, ho we ve r, su c h a rem and is nec e ssa ry , a ndis auth orize d u nd e r T e nn e sse e statut e s: The c ourt shall also, in all case s, wher e, in its opinion, complete justice c annot be ha d by rea son of some defe ct in the rec ord, want of proper parties, or oversig ht without c ulp able ne g lig e nc e , r e ma ndthe c a us e to the c ou rt be low fo r f

urthe r p ro c e e din g s, with proper dir ections to eff ectuate the objec ts of the orde r, and upon suc h terms as ma y be de e me d rig ht.
T. C.A . § 27 -3 -1 28 (2 00 0)

. Pur su a nt to this statut e , an app e llate c ou rt is p e rm itt e d to re ma ndthe c a se for pr oper f

indings whe n the trial court has failed to make adequate fac tual finding s nece ssary for the appe llate court to make a just determination of t he is sues on appe al. See Carver v. Crocker , 311 S

. W

. 2 d 3 1 6 , 3 2 2

– 2 4 ( T e n n
. C t

. A p p
. 1 9 5 7) ; Ha za rd v. Haza rd , 8 33 S.W. 2d91 1, 91 7 ( Te nn . Ct

. App. 1991).
I n the instant ca s e, we are left with littl e choic e but to vacate the money judgme nt and rema n d t h e ca s e to the trial court f or finding s of fa ct and c onclusions of law suff icient for the appellate court to a scertain the basis for the trial court’s calc ulation of its award and to resolve the issues raised on a

ppeal by both parties.
I n c on c lus ion , th e tr ia l c ou rt ’s ru lin g pe rm itt ing wi tne ss Mis hu to te sti fy is a ff ir me d. As to the oth e r i ssu e s r a ise d b y bo th part ie s, the jud g me nt is he re by va c a te d an d the c a us e is r e ma nd e d to the trial court for further proc eeding s consistent with this opi nion. The costs of this appea l are taxed equally ag ainst both the Plainti ff / Appellee J ohn Allen Construction and De fendant/Appellant H a n c o c k s , a n d t h e i r

s u r e t i e s , f

o r w h i c h e x e c u t i o n m a y i s s u e , i f n e c e s s ar y.

___________________________________ HOLL Y M. KI RBY, JUDGE