### IN THE COURT OF APPEALS OF TENNESSEE AT MEMPHIS October 10, 2000 Se ssion WILLS & WILLS,

L.P. v. RAY

MOND 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 p

ropert ies 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 c ontended was other than that designated for the location of future buildings on

the plat configu

ring the partie

s’ properties. The other party alleged that the parties did nothave 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 furthe r determined tha t the agreemen t was a contr act only for drai nage inthat the agr eement 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; Judgmen

t of the Chancery

Court Affirmed;

and Remanded

D AVID R. F ARMER , J., delivered the opinion of the cour

t, in which W. F RANK C RAWFORD , P.J., W.S. and H OLLY K. L ILLARD , J., joined.

Richard M. Carter and

Curt R. Soefker, Me

mphis, Tennessee, for the appella nts, Wills & Wills, L.P. James W. Surprise, Memphis, Tennessee, for the appellee, Raymond B. Gill, III.

OPINION
Raymond Gill , II I (Gi ll) owns real estate in Memphis known as the Kirby Gate Shopping Center (Kirby Gat

e). Walter Wills,

III (Wills) owns the pro

perty adjoi

ning Kirby

Gate tothe north
as well as the property south o f Kirby Gate, which is located across the street from the shopping center. In the fall of 1986, the parties ente red into negotia

tions regarding

the development of

their adjacent properties. The

parties’ discussi

ons 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 pro pert y, Mr. Wills wanted assurances from Mr. Gill regarding the coordinated development of the properties. In order to sa

tisfy Mr. Wills’ concerns, Mr. Gill had his architect prepare sketches of the1 It should be note d here that , at the time of the

parties’ agreement in November of 1986, the prope

rty 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 w hich detailed the proposed development of the site and the proposed drainage plan. An agreement

between th

e partie s was reduced to writing o n the face of a proposed d rainage improvements plan and was signed by the parties on November 4, 1986. The writing stated:

The undersigned, owners of Kirby Gate Shopping Center, a lso known as Kirby Quince Shopping Center, their successors and assigns, approve this plan and agree to implement the improvements

shownhereon. Walter D. Wills, III agree s 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
nor mal ope rat ion of W alt er D. Wil ls, III pro pert y.

In1998, Mr. Wills discovered that Mr. Gill planned to build a free-standing Walgreens store at Kirby Gate which he

believ ed w oul d in ter fere wit h hi s pr ope rty. 1 Mr. Wills believed that the Walgreens should be built only in the areas designated “future addition” or “future building” on the proposed drainage impro

vement plat. Mr. Will

s filed a complain

t seek ing a declaration of the parties’ respective rights under the agreement and a permanent injunction. The trial court entered
a temporary

restraining or

der 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 par

ties related only

to drainage an

d that the agree

ment was not a

contract for any other purpose. Further, the trial court held that Mr. Gill was allowed to go forward with the constructionof the Walgreens store as long as he remained in compliance with the drain age agreement.Uponsubsequent motion, the trial court ordered Mr. Wills to pay $3,000 of Mr. Gill’s discretionary costs.

Onappeal, 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 rela ted only to drainage and was not a contract for any other purpose.

2. Whether

the tri a l court erred in holding that Mr. Gill was not precluded by the agre eme nt f

rom und ert aki ng co nst ruct ion on h is p rop ert y.
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 drainag e requirements in the agreeme

nt.-3-

4. Wh ether

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
co nclusions of law. See Union Planters Nat’l Bank v. American Home Assurance Co. , 86 5 S.W.2d 907, 912 (Tenn. Ct. App. 1993). To the extent that the issues involve ques ti ons of fact, however, our review of the trial court’s rul

ing is de novo wit

h a p resumption 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 appearanceand demeanor of the witnesses. Thus, its findings of credibility are entitled to great weight onappeal. See Tenn-Tex Properties v. Brownell-Electro, Inc. , 778 S.W.2d 423, 426 (Tenn. 1989).

The cardinal rule f or interpreting

contracts is

to ascertain

the intention of the

parties and to give effect to that intention consistent with legal principles. See Winfree v. Educ ators Credit Union , 900 S.W.2d 285, 289 (T enn. Ct. App. 1995) ; Rainey v. Stansel l , 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. SeeFrizzell Constr. Co., Inc. v. Gatlinburg, L. L.C. , 9 S.W.3d 79 (Tenn. 1999), cert. denied, 120 S. Ct. 26 79 (2000). Inconstruing cont

racts, the words

expressing the pa

rties’ intention sh

ould be given the

ir usual, natural, and ordinary meaning. See Taylor v. White Stores, Inc. , 707 S.W.2d 514, 516 (Tenn. Ct. App. 1 985). In the absence of fraud or mistake, a contract must be interpre ted and enforc ed a s written, even though it contains terms which may seem harsh or unjust. See Heyer-Jorda n & Assocs. v. Jordan , 801 S.W.2d 814, 821 (Tenn. Ct. App. 1990).

Inthe case at hand, the dispute between these parties concerns what was meant by the essential term “impr ovements. ” Mr. Will s testifie d that the t erm “improv ements” mea nt 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 E xhibit 1 the proposed drainage improvements plan. In addition to the agreement, the pla n i ncluded the following language:

NOTE: To the extent shown hereon, existing curb/gutter along the north and west pro

perty lines

to be removed during future con struction 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 interna

l circulation acr

oss west line of shopping cent

er 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 d rive to be maintained by shopping center owner; west of cente rline of said dri ve b y developer to the north. Drainage swale to be provided in this area during future construction.-4-

Cost for roads, drainage swale, removal of curb s and gutters, and all other work rela

ted to this area to be borne by developer to the north.

Mr. Gill, on the other han d, testified that the term “improvements” in the context it is used on Exhibit 1 refers solely

to drainage impr

ovements. Mr. Gill a

verred that t

he p roposed dra inage improvements

plan was merely a speculation o n wh at could happen regarding building location. Further, Mr. Gill

testified that Exhi bit 1 was on ly 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 be en on a site plan, not a drainage agreement. In summary , Mr. Wills intends the term “improvements”

to refer not only

to drainage impr

ovements, but to the

location of buildin

gs, curbs, entrances, and the truck cou

rt, while Mr. Gill in

tends t he term “impr ovements” to mean solely drainage improvements.

Inorde r 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 Envelope s, In c. , 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 min

ds on are draina

ge improvements

. Thus, the only impr

ovements binding

on both Mr. Wills and Mr . Gill are the drainag

e improvements. The agreement,

then, cannot

be a contract fo

r any purpose other than dra inage 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 Qui nce Road and Kirby Road and depicting the location of the Kirby Gate Shopping Center. On this

plat are the locations of the exi stin g buildings and parking lots. Additionally, the architect has included dashed lines representing

the proposed

locations of future bu ildings and parking lots. What is noteworthy about Ex hibit 1, however, is that it is entitled “Proposed Drainage Improvements” and that the speci fi c notations on its face rela te only to dra

inage. Additiona

lly, th e re is no language of a covenant restrictingthe constr uction of b uildings only to that area proposed on Exhibit 1 anywhere on the face of the parties’ ag

reement. There

fore, 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 e ither 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
onExhibit 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 determiningthat Mr. Gill could construct the Walgreens storeas he proposed provided he rema

ins in compliance w

ith the drainage a

greement.
Rule 54.04(2) of the Tennessee Rules of Civil Procedure provides courts with the discretion to awa rd costs f

or “reasonable

and necessary

court reporter

expenses for depo sitions or trials, reasonable

and necessary expert witness fees for depositions or trials, a nd guard ian ad lite m fees[.]” The trial court is vested with wide discretion in awarding these costs. SeePerdue v. Green Branch Mining Co. , 837 S.W.2d 56, 60 (Tenn. 1 992); Benson v. TennesseeValley Elec. Coop. , 868 S.W.2d-5-

630, 644 (Tenn. Ct. App . 19 93) . In t his case , th e tr ial cou rt a ward ed t he p reva ili ng pa rty, Mr. Gill, discretionary costs in the amount of $3,000 as reimbursement fo r 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.

Base d on the for egoing, we af firm the trial cou

rt’s ruling in all

respects. The c

osts of this appeal are taxed to the appellant, Wills & Wills, L.P., and its surety, for

which execution may issue if n eces sar y.

___________________________________ DAVID R. FARMER, JUDGE