# FILED
October 16, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

### IN THE COURT OF APPEALS OF TENN ESSEE

AT NASHVILLE

LIFETIME BOOKS, INC., ) Successor in Interest to ) FELL PUBLISHERS, INC., ) ) Plaintiff/Appellant, ) ) Appeal No. ) 01-A-01-9708-CV-00399 VS. ) ) Davidson Circuit ) No. 94C-4151 THOMAS NELSON PUBLISHERS, ) INC., ) ) Defendant/Appellee. )
APPEALED FROM THE CIRC UIT COURT OF DAVIDSON C

OUNTY AT NASHVILLE, TENNESSEE THE HONORABLE HAMILTON GAYDEN, JUDGE

NORMAN GILLIS NORMAN GILLIS & ASSOCIATES 713 18th Avenue South Nashville, Tennessee 37203 Attorney for Plaintiff/Appellant JAY S. BOWEN TIMOTHY L. WARNOCK SARAH W. ANDERSON GREGORY S. REYNOLDS OWEN RILEY WARNOCK & JACOBSON, PLC 1906 West End Avenue Nashville, Tennessee 37203 Attorneys for Defendant/Appellee

AFFIRMED AND REMAN DED

BEN H. CANTRELL, JUDGE CONCUR: KOCH, J. CAIN, J. 

## O P I N I O N- 2 - This appeal involves an i nt erpre tation of a “first refusal” pro vision in a publi s hing contract. The Circuit C ourt of Davidson County dismissed an action claiming that the publi sher breach ed the provision. We affirm.

I.

In 1 9 91, Thomas Nelson Publishers, I nc. agreed to publish a thr ee volume book set entitl ed The Og Mandino Gift Set . The agreement to publish w as actuallybetween Thomas Nelson and Fell Publishers, Inc., whi ch h ad a separate publishing contract with Mandino . The agreement referred to Fell as the “Author” and contained the following provision with respect to Remainders or Overstock:

The Publisher may dispose o f b ooks or sheets which, in its discr eti on, it deems to be overstock or remainders in any

manner it may see fi t and will ha ve no obligation to pay roy

alties on copies so disposed of at or below Pub li sher’s production costs. Prior to disposal, Au th or shall be granted the ri ght of first refusal to purchase such overs

tock or remainder upon th ose terms and provisions offer

ed t o Publisher by any thi rd party which right

Author shall exercis

e or waive within ten (10) days receipt of Publisher’s writte n no tification of the proposed disposition date, or w ithin twen ty (20) days of the date of ma iling thereof,whichever shall occur first. In the ev e nt Author fails to reply to Publisher’s offer within suc h time, Author’s right of fir st refusal shall be de eme d waived. On all overstock and rema inder copies of the Work sold in excess of P ublisher’s cost of producti on, Author sh all receive a royalty equal to ten percent (10%) of the excess amount.

On March 6, 1992, Thomas Nelson wrote to Fell advising Fell that the Mandino Gift Setwould soon be out of print. The letter also contained the foll owing two paragraphs:

At the pre sent tim e we have approximately 5,500 copies in invent ory which w

e would like to off er t he author for $2.00 per set plus the cost of shipping the books. Please let me know by 17 Apri l 1992 if there is any interest in obtain ing any of the rema ining inven tory.- 3 - On March 12, 1992, Mr. Lessne of Lifetime Books (the successor to Fell Publishers) faxed a reply to the letter offering $1.50 for all the remaining books. Early in April Thomas Nelson contacted Mr. Mandino and of fered him the books at $2.00 per set. He ultimately ac cepted the offer, an d about two days later Mr. Lessne changed his mind and tried to exe rcise his company’s right to take the books. (However, the only

evidence of Lifetime’s attempt to exercise its right of first refusal is an August 5, 1992 re -fax of its $1.50 offer.) When Thomas Nelson refused to comply with Mr. L

essne’s request, this a

ction followed.

II.

Lifetime insists that a literal

reading of thepublishing contract required Thomas Nelson to find a buyer firs t and then to allow Lifetime to accept or reject the books at the same price. Since the letter of March 6, 1992 did not specifically say that Thomas Nelson had a buyer and that Li fetime had ten days to match it, Lifetime argues that the letter was of no effect whatever.

While we agree that the March 6, 1992 letter did not strictly fit the language of the publishing contract, we cannot agree that after r ecei ving the letter Lifetime could make a counter-off er and then wait for a second chance to purchase the books for $2.0 0 per set. Th e uncontradicted proof in the rec ord shows that the March 6 letter was Thomas Nelson’s good faith attempt to comply with the contr

act. If nothing else, the letter put Lifetime on notice that Thomas Nelson was goi ng to sell the books after the deadline set out in the letter. If Lif etime thoug ht that they could reject the offer and wait for another opening,they had a duty to put Thomas Nelson
on notice of that fact. Instead, they allowed Thomas Nelson to carry out their announced plan. We are satisfied that unde r these circumstances they are estopped to rely on the literal

words of the contract.- 4 - Estoppel is based on an equi tab le principle that prohibi ts a party from complain ing when his own acts have in duced another party to act t o his detriment. I f t he party’s action or i naction induces another party to change his position “ for the worse,”the first party

causing the change of positi on will lose the ri ghts of property or contract that he might otherwis e have enjoyed. Ch u rch of Christ v. McDonald , 171 S.W.2d 817 (Tenn. 1943). An estoppel may arise out of thesilence of one under a duty to speak. Lusk v. Consolidated Alum inum Corp. , 655 S.W.2d 917, 920 (Tenn. 1983).

After

inducing T homas Ne lson’s be lief tha t they h a d no interest in purchasing the remaining inventoryat $2.00 per volume , with the certain kn owledge thatThomas Nelso n intended to sell at that pri ce, Lifetime cannot complain whe n Thomas Nelson obligated itself to another buyer.

The judgment of the court below is affirmed and the cause is remanded to the Circuit Court of Da vidson County. Tax the costs on appeal to the appellant.

____________________________ BEN H. CANTRELL, JUDGE CONCUR:

_____________________________ WILLIAM C. KOCH, JR., JUDGE

_____________________________ WILLIAM B. CAIN, JUDGE