### IN THE CO URT OF APPEALS OF TE NNE SS EE AT NASHVILL E Octo be r 17 , 20 08 Ses si on

DAN STERN HOME S, INC. v . DESI GNER FLOO RS & HOME S, INC.,

E T A L


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Appeal f rom the Circ uit Court for Davidson County No. 07C-1128 Thom as Brothers, Judge

No. M2008- 00065-COA-R 3-CV - F iled Jun e 30, 2009

Appellants, a flooring company hired to install hardw ood flooring at a home being built by Appellee
, appea l the judgme nt of the trial court finding them liable for brea ch of contra ct and b re ac h of

war ranty and awa

rding damag es to Appellee

. Appellants wer e hired to install hardw ood flooring at

a home being built by Appellee

. After installation of the fl o o rs , problems develope d; Appellants tried to corr ect the problems on numerous occa sions to no avai l

. Ap p el l ee hired another subcontrac tor to ref

inish the ha

rdwood flooring and to r esolve the problems associate d there with. Appellee subsequently broug ht action aga inst Appellant to rec over a mounts paid to subcontrac tor and the trial court awa

rded Appellee full measure of damag es soug ht. We mo d i fy and aff irm the judgme nt of the trial cour t.

Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Circ uit Court Aff irm ed, as Modif ied

R I C H A R D H. D I N K I N S , J ., delivere d the opinion of the cour t, in whic h F R A N K G. C L E M E N T , J R

. and AN D Y D. B E N N E T T , J J . joined.

Thomas J

. Dra ke, Nashville, Tenne ssee, for the appellant, Desig ner Floors & Homes, I nc. a n d L ouise Fr ost d/b/a Desig ner F loors.

J oseph P. Rusnak, Nashville, Tenne ssee, f or the a ppellee, D an Stern Home s, I nc.

OP INION

I. BACKG ROUND

Appellants, Desig ner Floors & Homes, I nc. and L o u i s e Fr o st d/b/a Desig ner Floors (“D esig ner Floors” ), are a commerc ial flooring company , and Appellee
, Dan Ste rn Homes, I nc. (“D an Stern”), is a g ener al residential building contra ctor. I n May 2004, Dan Stern contra cted with its clients for the construction of their new home. This contra ct provided for the installation ofapproximately 4,120 square fee t of hardw ood flooring throug hout the house. Pursuant to a written

ag ree ment entitled “I nvoice” and dated J uly 21, 2004, Dan Stern hired Desig ner Floors to install and finish the hardw ood flooring . The only ag ree ment betwee n the par ties was this invoice.

I nitially
, Desig ner Floors was asked to provide common hickory flooring
, but the purcha ser of the home decide d on selec t hickory wood flooring instead. T h e s el ec t hickory flooring planks

wer e delivere d in September 2 004 and wer e installed soon there afte r, befor e the wood was fully

acc limated, acc ording to the testimony at trial. Desig ner Floors completed the work contemplated under the bid in November 2004; the buy ers of the hom e t o o k p o s s es s i on shortly there afte r. Dan Stern timely paid Desig ner Floors for all of the work completed by Desig ner Floors; final pay ment was made in Febr

uary 2005.

The purcha sers of the home wer e initially happy with the result; the floors wer e beautiful and the sand and finish job on the floor was well done. I n the first couple of months afte r the buy ers took possession of the home, howeve r, the floors in some rooms beg an to squeak, and there wer e sever al place s wher e the floors buckled toge ther, buckled off the subfloor, or separ ated, causing cracks betwee n the boards in the floor. Desig ner Homes was contac ted on sever al occa sions to come to the home and fix specific are as; howeve r, the problems rec urre d in other are as

. After two or three months the small scale fix es wer e no longe r able to addre ss the problem. Desig ner Floors returne d
to the home in April 2005 to repa ir additional problems; Desig ner Floors next returne d to the home in October 2005 to addre ss complaints which had a risen since the April visit. I n the cour se of the October visit, a repr esenta tive of Desig ner Floors met with repr esenta tives of Dan Stern and ag ree d
upon a plan to basica lly ref inish the entire floor while the hom eowne rs were away on a two-week

vacation.

During the first wee k of the homeowner s’ vaca tion, Desig ner Floors ref

inished the hardw ood flooring ; how ever , this re finish w as unsatisfac tory

. Desig ner Floors ag ree d to r efinish the floors a second time durin g t h e s ec o n d wee k of the homeowner s’ vacation, but Desig ner Floors failed to appea r at the proper

ty on the appointed date and time. Dan Stern contac ted Desig ner Floors about the failure t o ap p ear and informed Desig ner Floors t hat i t found another flooring subcontractor to ref inish the floor. This repla cemen t s u b co n t ractor was able to ref inish the floor in a satisfac tory

manner and to otherw ise corr ect the pr oblems with the hardwood f looring

.

After Desig ner Floors declined to reimburse Da n Stern for the costs associate d with ref inishing the floor, Dan Stern initiated this action in the Davidson County Gene ral Sessions Court, alleg ing brea ch of contract, neg lige nt installation and repa ir of the floor, and failure to honor the

war ranty ; Dan Stern soug ht damag es i n t h e am o u n t of $8,103.21, plus attorney s fee s. The court enter ed judgme nt in favor of Dan Stern for $5,594.04, which Desig ner Floors timely appea led to the Davidson County Circuit Court. At the conclusion of a bench trial, the court found in favor of Dan Stern on its brea ch of contra ct and brea ch of war ranty claims and awa

rded judgme nt in the amount of $8,103.21.

-2-Desig ner F loors appea ls, presentingthe following issues:

1. Whether [Dan Stern] car ried its burden of proof that [Designe r Floors] brea ched an implied war

ranty of fitness for

a par ticular purpose pursuant to [Tenn. Code Ann. §] 47-2-315 and brea ched an implied war ranty of merc hantability pursuant to [ Tenn. Code Ann. §] 47-2-2314. 2. Whether [Dan Stern] proved dama g es.

I n addition, Dan Stern a

rticulates the f

ollowing issue:

Whether the trial court proper ly g rante d judgme nt in favor of Dan Stern Homes for its cost to repa ir the defe ctive flooring as a result of Desig ner Floors ’ b re ac h of
contra ct.

II. ST ANDAR D OF REVIEW

This case was tried wi t h o u t a j u ry

. Thus, the t rial court’s finding s of fact are reviewed de

novo on the record with a presumption o f correc tness unless the prepondera nce of the evidence is otherwise. Tenn. R. App. P. 13(d), Union Carbide Corp. v. Huddleston
, 854 S.W .2d 87, 91 (Tenn. 1993). The trial court’s conclusions of l aw are revie wed de novo without any presumption of

corr ectne ss. Tenn. R. App. P

. 13(d), Biggs v. Reinsman Equestrian Prods., Inc.
, 169 S.W .3d 218, 221 (Tenn. Ct. App. 2004).

III. ANALYSIS

A. Im plied Warranty of Fitness for a Par ticular P urpose

The implied war

ranty of fitness for a particula r purpose is codified at Tenn. Code Ann. § 47-2- 315, in pertinent par

t, as follows:

Where the seller at the time of contra cting has rea son to know any particula r purpose for which the g oods are require d and that the buy er is rely ing on the s eller’ s skill or judgme nt to selec t or furnish suitable g ood s , t h er e is unless excluded or modified under the next section an implied war ranty that the g oods shall be fit for such purpose.

Id.

I n order to c rea te a war

ranty of fitness for a particula r purpose, the seller must ha ve rea son to know
t h e p u rp o s e and that the buy er is rely ing on the seller’ s skill or judgme nt to furnish the g oods. Alumax Aluminum Corp. v

. Armstrong Ceiling Systems, Inc., 744 S.W .2d 907, 910 (Tenn. Ct. App. 1987).

-3-I n i t s ruling the trial court found the following rela tive to the implied war

ranty of fi t n es s claim:

I think that the plaintiff has succe eded in proving by a preponde ranc e of the evidenc e there is a

. . . brea ch of implied war ranty of fitness for a particula r purpose. I t’s clea

r that this flooring was intended to be utiliz ed in an expensive residential projec t. The finish would be unacc eptable to any one, that the rea l issue boils down to the repe ated attempts to try

to corre ct it and why

this crew didn’ t show up there on the 28

. t h

This finding of the intended purpose of the flooring and the unacc eptability of the finish are supported by the pre pondera nce of the evidenc e. The rec ord is clea r t hat Designe r Floors knew, at
t h e t ime it submitt ed its bid, the purpose for which it sold Dan Stern the selec t hickory wood

– i n s t allation of hardw ood floors in the home that was being built. Dan Stern relied upon Desi gn er Floors’ experience and skill to proper ly install the wood floors. Dan Stern also relied upon Desig ner Floors’ skill and expertise to corr ect the problems later associate d with the installation of the flooring

.

We are not persua ded, howeve r, that the war ranty of fitness was brea ched in light of the proof that the problems assoc iated with the floor wer e due in substantial part to the fa ct that the floor did
not proper ly acc limate to the home prior to being installed. J ames Ralph, installation m an age r for Desig ner Floors with fiftee n y ear s’ ex p er i en ce in the flooring business, testified that the problems with the flooring wer e due to the fac t that the flooring was installed befor e the temperature control
sy stem in the home was in opera tion; there fore
, the wood was not exposed to the actua l environment
to which it would be ex posed and, conseque ntly
, could not acc limate - or equalize - to the environment. As a result, the floor cupped and cra cks formed betwee n the b o ar ds, in addition to various other issues, which require d ref inishing the floor. Mr. Ralph further testified that the normal period of acc limation is 72 hours and that Dan Stern deter mined when the installation took place

. Mr. Ralph’s testimony was uncontrove rted and there was no counter vailing proof that the condition was

cause d by the wood its elf; that the problems would have occur red had the wood been proper ly

acc limated; or, indeed, that the flooring was not fit for the intended purpose at the time it was installed.

Consequently
, the court’s holding that Desig ner Homes brea ched the war ranty of fitness for
a par ticular purpose is not supported by the pre pondera

nce of the evidenc e and is e rrone ous.

B. Im plied Warranty of Merchantability

The implied war

ranty of merc hantability is codified at Tenn. C o d e Ann. §47-2-314, which provides, in per

tinent part, as f

ollows:

(1) Unless excluded or modified (§ 47 -2 -3 1 6 ), a war ranty that the g oods shall be

merc hantable is implied i n a contract for their sale if the seller is a merc hant with
respe ct to g oods of that kind. . . . (2) Goods to be merc hantable must be a t least such as:

-4-(a) pass without objection in the trade under the contra ct desc ription; and (b) in the case of fung ible g oods, are of fa i r av er ag e quality within the descr iption; and (c) are fit for the or dinary purpose f

or which suc h g oods are used; and (d) run, within the varia tions permitted by the ag ree ment, of even kind, quality and quantity

within each unit and a

mong a ll units involved; and (e) are adeq u ately contained, packa g ed, and labeled as the ag ree ment may require ; and (f) confor m to the promi ses o r affirmations of fact m ade on the container or label, if a ny

. (3) Unless excluded or modified (§ 47-2-316) other imp l i ed warranties may arise from cour se of de aling or usag e of tra de.

Id. I n order to rec over under this war ranty , the purcha ser must show that the g oods did not measure up to the require ments of the war ranty at the time they wer e delivere d. Hollingswor th v. Quee n’s Carpet, Inc., 827 S.W .2d 306 (Tenn. Ct. App. 1991)

.

The trial court did not specific ally hold that Desig ner Floors violated the implied war ranty of

merc hantability

. However, we note that there is no proof in the rec ord that the flooring was not

merc hantable at the time it was delivere d. As with the war ranty of fitness for a particula r purpose, 1 the proof in this rec ord is that the problems with the floor r elated to the timing of its installation.

C. Breac h of

Contrac t

The essential elements of a brea ch o f contra ct claim are : 1) the exis tence of a contra ct; 2) nonperf ormanc e amounting to a brea ch of that contra ct; and 3) damag es cause d by the brea ch of that
contra ct. See Lifecare Ctrs. of Am., Inc. v. Charles Town Assocs. Ltd. P’ship, LPIMC, Inc.
, 79 F.3d 496, 514 (6 Cir. 1996). The parties acknow ledg e that the document ent i tled “I nvoice” dated J uly

t h 21, 2004, and signe d by the owner of Desig ner Floors, L ouise Fr ost, constitutes the contra ct at issue in this case

. Under the Ag ree ment, Desig ner Floors was to provide and install cer tain flooring at the home being built by Dan Stern
, fo r wh i ch i t would be paid. Desig ner Floors confirme d its understanding and interpre tation of the Ag ree ment by beg inning, and subsequently completing
, the work contemp l at ed there under and by acc epting pay ments from Dan Stern totaling approximately $26,461.20. Acc ording to the testimony of Ms. Fr ost, the policy of Desig ner Homes is “ try to f ix it and take car e o f it to the enth deg ree

. As long as they ’ll let me in the house, I ’m willing to do whateve r to make a

customer ha

ppy .”

Desig ner Floors contends that it did not brea ch t h e co ntrac t but, rathe r, was not allowed to complete the ref

inishing of the floor. I n acc ordanc e with its policy
, Desig ner Floors made sever al attempts to reme dy these problems, including the ref inish of the floor. When Desig ner Floors failed
to arr ive on the appointed day and time to ref inish the floor for a second time, Dan Stern Homes hired

T h e r e w a s n o p r o o f

o f a n y r e p r e s e n t a t i o n s o f

q u a l i t y m a d e b y D e s i g n e r F l o o r s ; r a t h e r t h e p r o o f w a s t h a t t h e 1

p u r c h a s e r o f t h e h o m e s e l e c t e d t h e f l o o r i n g i n c o n s u l t a t i o n w i t h D a n S t e r n

.

-5-a repla ceme nt subcontrac tor to reme dy the problems. Whil e there is conflicting testimony reg arding

the circ umstances leading to Dan Stern’s eng ag ement of another subcontrac tor to ref inish the floor, the evidenc e does not preponde rate ag ainst the t ri al co u rt’s finding that Desig ner Floors failed to complete the ref

inishing, there by brea ching the contra ct. Of note is the fac t that the ref inishing had 2
to be completed expeditious ly
, as the owner s wer e schedule d to return from their two wee k trip shortly and suff icient time had to be a llotted to complete the re finishing.

D. Dam ages

Be cause Desig ner Floors brea ched the contra ct, Dan Stern Homes i s enti tled to rec over damag es. The purpose of assessing damag es in a brea ch of contra ct action is to place the plaintiff in the position the plaintiff would have been in ha d the contra ct been proper ly perf ormed, as near ly as possible. GSB Contractors, Inc. v. H ess, 179 S.W .3d. 535, 541 (Tenn. Ct. App. 2005).

There is pr oof in the rec ord that, as a direc t and proxi mate result of Desig ner Floors’ brea ch of contra ct, Dan Stern Homes paid $5,337.29 for labor and materia ls to have the floors ref inished and
repa ired; $800.00 for touch-up painting; $450.00 for house clea ning; and $1,515.9 2 i n l abor to supervise the ref

inishing of the flooring
, touch-up painting, and house clea ning. The out-of-poc ket
expenses incurre d by Dan Stern is a proper measure of damag es inasmuch as those expenses would not have be en incur

red ha d Desig ner F loors completed its obliga tions. Acc ording ly
, the t rial cour t did not err in aw arding Dan Stern H omes judg ment in the amount of $8,103.21.

IV. CONCLUSION

For the fore g oing rea sons, the trial court’s decision is AFF I RMED, as modified. Costs of this

cause are taxed to Appellants, Desig ner Floors & Homes, I nc. and L ouise Fr ost d/b/a Desig ner Floors, for whic h execution may

issue if nec essar

y

.

____________________________________

RI CHARD H. DI

NKI NS

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