IN THE COURT OF APPEALS OF TENNESSEE

AT MEMPHIS

October 10, 2000 Session

WILLS & WILLS, L.P. v. RAYMOND B. GILL, III

Direct Appeal from the Chancery Court for Shelby County

No. 99-0645-1 Walter L. Evans, Chancellor

No. W1999-01755-COA-R3-CV - Filed January 4, 2001

Owners of adjacent properties entered into negotiations and a subsequent agreement regarding issues

concerning their properties. Dispute between the parties arose after one owner began construction

of a Walgreens store in an area one party contended was other than that designated for the location

of future buildings on the plat configuring the parties’ properties. The other party alleged that the

parties did not have an agreement between them concerning the location of future buildings on the

adjacent properties. The trial court determined that the parties only had a meeting of the minds as

to drainage improvements and further determined that the agreement was a contract only for drainage

in that the agreement did not contain specific, written restrictive covenants as to the location for

future buildings. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed; and

Remanded

DAVID R.FARMER,J., delivered the opinion of the court, in which W. FRANK CRAWFORD, P.J.,W.S.

and HOLLY K. LILLARD, J., joined.

Richard M. Carter and Curt R. Soefker, Memphis, Tennessee, for the appellants, Wills & Wills, L.P.

James W. Surprise, Memphis, Tennessee, for the appellee, Raymond B. Gill, III.

OPINION

Raymond Gill, III (Gill) owns real estate in Memphis known as the Kirby Gate Shopping

Center (Kirby Gate). Walter Wills, III (Wills) owns the property adjoining Kirby Gate to the north

as well as the property south of Kirby Gate, which is located across the street from the shopping

center. In the fall of 1986, the parties entered into negotiations regarding the development of their

adjacent properties. The parties’ discussions focused mainly on the placement of buildings and the

drainage of the property. Before Mr. Wills would agree to allow Mr. Gill to divert water onto his

property, Mr. Wills wanted assurances from Mr. Gill regarding the coordinated development of the

properties. In order to satisfy Mr. Wills’ concerns, Mr. Gill had his architect prepare sketches of the
1

It should be noted here that, at the time of the parties’ agreement in November of 1986, the property making

up the proposed W algreens site was owned in part by Mr. Gill and in part by Dr. P inkerton , who is no t a party to th is

action. At that time , Mr. Gill d id not hav e a contra ct to purchase the “Pink erton lot” n or did he have an y legal righ t to

obtain po ssession of it from D r. Pinkerto n. Mr. G ill did, in fact, pu rchase the Pinkerto n lot in Au gust of 19 87. 

-2-

site which detailed the proposed development of the site and the proposed drainage plan. An

agreement between the parties was reduced to writing on the face of a proposed drainage

improvements plan and was signed by the parties on November 4, 1986. The writing stated:

The undersigned, owners of Kirby Gate Shopping Center, also known as Kirby Quince

Shopping Center, their successors and assigns, approve this plan and agree to implement the

improvements shown hereon. Walter D. Wills, III agrees to provide easements necessary for

the implementation of the improvements. If the improvements are not completed within one

year, then easements shall be granted to the extent such easements do no interfere with the

normal operation of Walter D. Wills, III property.

In 1998, Mr. Wills discovered that Mr. Gill planned to build a free-standing Walgreens store

at Kirby Gate which he believed would interfere with his property.1 Mr. Wills believed that the

Walgreens should be built only in the areas designated “future addition” or “future building” on the

proposed drainage improvement plat. Mr. Wills filed a complaint seeking a declaration of the

parties’ respective rights under the agreement and a permanent injunction. The trial court entered

a temporary restraining order against Mr. Gill, preventing him from further construction on the

Walgreens building. A preliminary injunction hearing was held at which time the court granted the

injunction dependent upon Mr. Wills’ posting of an injunction bond. The trial court found that the

agreement between the parties related only to drainage and that the agreement was not a contract for

any other purpose. Further, the trial court held that Mr. Gill was allowed to go forward with the

construction of the Walgreens store as long as he remained in compliance with the drainage

agreement. Upon subsequent motion, the trial court ordered Mr. Wills to pay $3,000 of Mr. Gill’s

discretionary costs. 

On appeal, Mr. Wills raises the following issues, as we perceive them, for this court’s review:

1. Whether the trial court erred in finding that the agreement between the parties related

only to drainage and was not a contract for any other purpose.

2. Whether the trial court erred in holding that Mr. Gill was not precluded by the

agreement from undertaking construction on his property.

3. Whether the trial court erred in holding that Mr. Gill could construct the Walgreens

store as proposed as long as he remains in compliance with the drainage requirements

in the agreement.
-3-

4. Whether the trial court erred in granting Mr. Gill’s motion for allowance of

discretionary costs.

The interpretation of a written agreement is a matter of law and not of fact. Therefore, our

review is de novo on the record with no presumption of the correctness of the trial court’s

conclusions of law. See Union Planters Nat’l Bank v. American Home Assurance Co., 865

S.W.2d 907, 912 (Tenn. Ct. App. 1993). To the extent that the issues involve questions of fact,

however, our review of the trial court’s ruling is de novo with a presumption of correctness. See

Tenn. R. App. P. 13(d). Where the issues involve a determination of the credibility of witnesses, the

trial court is the best judge of credibility because it alone has the opportunity to observe the

appearance and demeanor of the witnesses. Thus, its findings of credibility are entitled to great

weight on appeal. See Tenn-Tex Properties v. Brownell-Electro, Inc., 778 S.W.2d 423, 426 (Tenn.

1989).

The cardinal rule for interpreting contracts is to ascertain the intention of the parties and to

give effect to that intention consistent with legal principles. See Winfree v. Educators Credit

Union, 900 S.W.2d 285, 289 (Tenn. Ct. App. 1995); Rainey v. Stansell, 836 S.W.2d 117, 118

(Tenn. Ct. App. 1992). To determine intent, the court may look to the facts and circumstances

surrounding the execution of the agreement as well as the parties’ admissions. See Frizzell Constr.

Co., Inc. v. Gatlinburg, L.L.C., 9 S.W.3d 79 (Tenn. 1999), cert. denied, 120 S. Ct. 2679 (2000).

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

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

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 seem harsh or unjust. See Heyer-Jordan &

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

In the case at hand, the dispute between these parties concerns what was meant by the

essential term “improvements.” Mr. Wills testified that the term “improvements” meant drainage

improvements, building location, circulation between the properties, and the locations of the drive

entrance and the truck court. To support this testimony, counsel for Mr. Wills introduced as Exhibit

1 the proposed drainage improvements plan. In addition to the agreement, the plan included the

following language:

NOTE:

To the extent shown hereon, existing curb/gutter along the north and west property lines to

be removed during future construction development on the north of the site to provide for

common ingress/egress. Future drive and related parking areas, to the extent shown, to be

constructed at the developer to the north expense to provide internal circulation across west

line of shopping center site to the property to the north. Exact location of said access drive

to be determined at a later date by future development plans. Land east of the centerline of

said drive to be maintained by shopping center owner; west of centerline of said drive by

developer to the north. Drainage swale to be provided in this area during future construction.
-4-

Cost for roads, drainage swale, removal of curbs and gutters, and all other work related to

this area to be borne by developer to the north.

Mr. Gill, on the other hand, testified that the term “improvements” in the context it is used on

Exhibit 1 refers solely to drainage improvements. Mr. Gill averred that the proposed drainage

improvements plan was merely a speculation on what could happen regarding building location.

Further, Mr. Gill testified that Exhibit 1 was only a drainage improvements plan, that he signed and

agreed only to a drainage plan, and that if he would have agreed to building placement, it would have

been on a site plan, not a drainage agreement. In summary, Mr. Wills intends the term

“improvements” to refer not only to drainage improvements, but to the location of buildings, curbs,

entrances, and the truck court, while Mr. Gill intends the term “improvements” to mean solely

drainage improvements. 

In order to have a binding contract, the parties to the contract must have a meeting of the

minds as to the essential terms. See Sweeten v. Trade Envelopes, Inc., 938 S.W.2d 383 (Tenn.

1996); State v. Clements, 925 S.W.2d 224 (Tenn. 1996). After reviewing the record, this court finds

that the only improvements the parties had a meeting of the minds on are drainage improvements.

Thus, the only improvements binding on both Mr. Wills and Mr. Gill are the drainage improvements.

The agreement, then, cannot be a contract for any purpose other than drainage as it lack the requisite

mutual assent to any other definition of the essential term “improvements.” The trial court was

correct in its determination that Exhibit 1 is not a contract for any purpose other than drainage.

Exhibit 1 is an architect’s schematic showing the intersection of Quince Road and Kirby

Road and depicting the location of the Kirby Gate Shopping Center. On this plat are the locations

of the existing buildings and parking lots. Additionally, the architect has included dashed lines

representing the proposed locations of future buildings and parking lots. What is noteworthy about

Exhibit 1, however, is that it is entitled “Proposed Drainage Improvements” and that the specific

notations on its face relate only to drainage. Additionally, there is no language of a covenant

restricting the construction of buildings only to that area proposed on Exhibit 1 anywhere on the face

of the parties’ agreement. Therefore, it is clear to this court that there is nothing on the document

binding either party to a particular location for constructing any future building that either party may

decide to erect on their property. Thus, the trial court did not err in concluding that Mr. Gill is not

precluded by the agreement from building the Walgreens store in a location other than that proposed

on Exhibit 1. Additionally, based upon the foregoing conclusion that Exhibit 1 embodies a formal

drainage agreement which is binding on both parties, the trial court did not err in determining that

Mr. Gill could construct the Walgreens store as he proposed provided he remains in compliance with

the drainage agreement.

Rule 54.04(2) of the Tennessee Rules of Civil Procedure provides courts with the discretion

to award costs for “reasonable and necessary court reporter expenses for depositions or trials,

reasonable and necessary expert witness fees for depositions or trials, and guardian ad litem fees[.]”

The trial court is vested with wide discretion in awarding these costs. See Perdue v. Green Branch

Mining Co., 837 S.W.2d 56, 60 (Tenn. 1992); Benson v. Tennessee Valley Elec. Coop., 868 S.W.2d
-5-

630, 644 (Tenn. Ct. App. 1993). In this case, the trial court awarded the prevailing party, Mr. Gill,

discretionary costs in the amount of $3,000 as reimbursement for costs incurred in this case. This

court is of the opinion that the trial court did not abuse its discretion in awarding said costs to Mr.

Gill.

Based on the foregoing, we affirm the trial court’s ruling in all respects. The costs of this

appeal are taxed to the appellant, Wills & Wills, L.P., and its surety, for which execution may issue

if necessary.

___________________________________ 

DAVID R. FARMER, JUDGE