### IN THE CO URT OF APPEALS OF TE NNE SS EE

AT JACKSON

Ass ig ne d On Bri efs Apri l 1 2, 2 01 0

CLEMENT HOME S, INC. v . BETH CHIL CUTT, a /k /a BETH GORREL L

D i r e c t A p p e a l f

r o m t h e C h a n c e r y C o u r t f o r T i p t o n C o u n t y

N o

. 2 4 9 8 6 M a r t h a B

. B r a s f i e l d

, C h a n c e l l o r

N o

. W 2 0 0 9

- 0 2 2 7 7

- C O A

- R 3

- C V

- F i l e d J u l y 1 6

, 2 0 1 0

T h i s i s a b r e a c h o f c o n t r a c t c a s e

. T h e t r i a l c o u r t e n t e r e d a f i n a l j u d g m e n t i n f

a v o r o f t h e

p l a i n t i f f b u t d i d n o t i s s u e f

i n d i n g s o f f

a c t o r c o n c l u s i o n s o f l a w p u r s u a n t t o R u l e 5 2

. 0 1 o f t h e

T e n n e s s e e R u l e s o f C i v i l P r o c e d u r e

. B e c a u s e t h e t r i a l c o u r t f a i l e d t o c o m p l y w i t h t h e

m a n d a t o r y r e q u i r e m e n t s o f R u l e 5 2

. 0 1

, w e v a c a t e a n d r e m a n d

.

T e n n

. R

. A p p

. P

. 3 A p p e a l a s o f R i g h t ; J u d g m e n t o f t h e C h a n c e r y C o u r t V a c a t e d

a n d R e m a n d e d

D A V ID R

. F A R M E R

, J

. , d e l i v e r e d t h e o p i n i o n o f t h e C o u r t

, i n w h i c h H O LLY M

. K IR B Y

, J

. a n d

J

. S T E V E N S T A F F O R D

, J

. , j o i n e d

.

J

. B a r n e y W i t h e r i n g t o n

, I V

, C o v i n g t o n

, T e n n e s s e e

, f o r t h e a p p e l l a n t

, B e t h C h i l c u t t

.

T h o m a s D

. F o r r e s t e r

, C o v i n g t o n

, T e n n e s s e e

, f o r t h e a p p e l l e e

, C l e m e n t H o m e s

, I n c

.

M E M O R A N D U M O P I N I O N 1

T h e p l a i n t i f

f

, C l e m e n t H o m e s

, I n c

. ( “ B u i l d e r ” )

, f i l e d t h i s l a w s u i t t o r e c o v e r f o r a n

Rule 10 o f t he Ru le s of

th e Cou rt of

Appe al s of

T enn ess ee pro vides : 1

T his Cour t, wit h the con cur re nce of al l j udges par ti ci pat ing in the cas e, m ay af fi rm, re verse

or m odi fy the act ion s of the tr ia l cou rt by m emorand um opi nio n when a for m al opi nio n

woul d have no pre ced ent ia l value. Wh en a cas e is dec ide d by m emorand um opi nio n it sha ll

be des ignat ed “M EMORANDUM OPI NI ON”, sha ll not be publ is hed

, and sha ll not be ci te d

or re li ed o n f

or any re aso n i n an y unrel at ed c ase

.a l l e g e d b r e a c h o f c o n t r a c t

. I n i t s i n i t i a l c o m p l a i n t

, B u i l d e r a l l e g e d t h a t t h e d e f e n d a n t s

, E r i c 2

G o r r e l l a n d B e t h C h i l c u t t ( “ P u r c h a s e r s ” )

, e n t e r e d i n t o a c o n t r a c t w i t h t h e B u i l d e r t o c o n s t r u c t

a h o u s e i n A t o k a

, T e n n e s s e e f o r $ 3 3 3

, 2 0 0

. 0 0

. T h e c o m p l a i n t a l l e g e d t h a t t h e p a r t i e s

s u b s e q u e n t l y a g r e e d t o a m e n d t h e c o n t r a c t t o r e m o v e c e r t a i n i m p r o v e m e n t s a n d r e d u c e t h e

s a l e s p r i c e t o $ 2 9 2

, 9 0 0

. 0 0

. A c c o r d i n g t o B u i l d e r

, i t f u l l y p e r f o r m e d u n d e r t h e t e r m s o f t h e

c o n t r a c t

, b u t t h e d e f

e n d a n t s r e f

u s e d t o p a y a t l e a s t $ 2 2

, 5 1 5

. 0 0 o f t h e a g r e e d u p o n

c o m p e n s a t i o n

. B u i l d e r ’ s c o m p l a i n t s o u g h t j u d g m e n t f o r a s u m o f

n o t l e s s t h a n $ 2 2

, 5 1 5

. 0 0

p l u s i n t e r e s t

, a t t o r n e y ’ s f e e s

, a n d c o s t s

. A f

t e r B u i l d e r f

i l e d i t s c o m p l a i n t

, d e f

e n d a n t E r i c

G o r r e l l f i l e d f o r C h a p t e r 1 3 b a n k r u p t c y

, w h i c h p r e c l u d e d B u i l d e r f r o m f u r t h e r p r o c e e d i n g

a g a i n s t h i m i n t h e p r e s e n t a c t i o n

. S e e 1 1 U

. S

. C

. § 3 6 2 ( a ) ( 2 0 0 6 )

. B u i l d e r a c c o r d i n g l y

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

. G o r r e l l ’ s f i a n c é e a n d a l l e g e d c o

d e b t o r

, B e t h C h i l c u t t

. 3

O n F e b r u a r y 2

, 2 0 0 9

, M s

. C h i l c u t t f i l e d a m o t i o n f

o r s u m m a r y j u d g m e n t a r g u i n g t h a t

s h e d i d n o t e n t e r i n t o a n e n f o r c e a b l e c o n t r a c t w i t h B u i l d e r

. M s

. C h i l c u t t s u b m i t t e d t h a t s h e

w a s n o t a s i g n a t o r y t o t h e o r i g i n a l c o n t r a c t a n d d i d n o t i n i t i a l a n y o f i t s p r o v i s i o n s

. S h e

f u r t h e r s u b m i t t e d t h a t

, a l t h o u g h s h e s i g n e d t h e a m e n d m e n t t o t h e o r i g i n a l c o n t r a c t

, t h e

a m e n d m e n t d i d n o t i n c o r p o r a t e t h e o r i g i n a l c o n t r a c t b y r e f e r e n c e

. I n l i g h t o f t h e s e f a c t s

, M s

.

C h i l c u t t a r g u e d t h a t s h e w a s e n t i t l e d t o s u m m a r y j u d g m e n t a s a m a t t e r o f l a w b e c a u s e s h e

w a s n o t a p a r t y t o t h e o r i g i n a l c o n t r a c t

. F u r t h e r m o r e

, s h e a r g u e d t h a t t h e a m e n d m e n t d i d n o t

c r e a t e a s e p a r a t e l y e n f o r c e a b l e a g r e e m e n t b e c a u s e i t w a s n o t s u p p o r t e d b y a d e q u a t e

c o n s i d e r a t i o n

.

O n M a y 1 4

, 2 0 0 9

, t h e t r i a l c o u r t e n t e r e d a s c h e d u l i n g o r d e r s e t t i n g b o t h t h e h e a r i n g

o n M s

. C h i l c u t t ’ s m o t i o n f o r s u m m a r y j u d g m e n t a n d t h e f i n a l t r i a l f

o r J u l y 1 3

, 2 0 0 9

. O n t h e

d a t e o f t r i a l

, t h e c o u r t o r a l l y d e n i e d M s

. C h i l c u t t ’ s m o t i o n f o r s u m m a r y j u d g m e n t

, c o n c l u d i n g

t h a t g e n u i n e i s s u e s o f m a t e r i a l f a c t e x i s t e d

. T h e p a r t i e s t h e r e a f t e r p r o c e e d e d t o p r e s e n t t h e i r

p r o o f

, w h i c h i n c l u d e d l i v e t e s t i m o n y a n d e v i d e n t i a r y e x h i b i t s

. A t t h e c o n c l u s i o n o f t r i a l

, t h e

c o u r t i s s u e d a f

a i r l y e x t e n s i v e o r a l r u l i n g i n f a v o r o f B u i l d e r

. T h e c o u r t

, h o w e v e r

, d i d n o t

e n t e r a w r i t t e n o r d e r i n c o r p o r a t i n g i t s r u l i n g

. L a t e r

, t h e c o u r t e n t e r e d a n o r d e r a w a r d i n g

B u i l d e r a t t o r n e y ’ s f

e e s a n d a s s e s s i n g c o u r t c o s t s

, a n d M s

. C h i l c u t t a p p e a l e d

.

I n h e r b r i e f

, M s

. C h i l c u t t r a i s e d t h e f o l l o w i n g i s s u e s f

o r o u r r e v i e w : ( 1 ) w h e t h e r t h e

t r i a l c o u r t e r r e d w h e n i t f o u n d i n f

a v o r o f B u i l d e r

, h o l d i n g t h a t M s

. C h i l c u t t r a t i f i e d t h e

T he par ti es’ bri ef

s sugg est tha t Buil der has cha nged its name to ARC Cons tr uct ion

, I nc., whic h is 2

al so r ef le ct ed i n t he o rde r f

rom the Bankrup tc y Court di scu sse d he re in.

T he re cor d re fl ect s tha t Eri c Gorr el l and Be t h Chil cut t have si nce m ar ri ed. We wil l none the le ss 3

con ti nue to re fe r t o t he a ppe ll ant as Ms . Chi lc utt fo r t he p urp ose s of th is app eal

.

-2-p a r t i e s ’ o r i g i n a l c o n t r a c t ; ( 2 ) w h e t h e r t h e t r i a l c o u r t e r r e d w h e n i t a w a r d e d B u i l d e r a t t o r n e y ’ s

f e e s

. O u r r e v i e w o f t h e r e c o r d a n d t h e p a r t i e s ’ b r i e f s

, h o w e v e r

, g a v e r i s e t o s e v e r a l

u n a d d r e s s e d c o n c e r n s r e g a r d i n g t h e t r i a l c o u r t ’ s d e c i s i o n

. W e d i s c o v e r e d t h a t : ( 1 ) n o t h i n g

i n t h e r e c o r d a d d r e s s e d w h e t h e r M s

. C h i l c u t t

, a s a c o

- d e b t o r

, w a s e n t i t l e d t o t h e p r o t e c t i o n

o f a c o

- d e b t o r s t a y

, s e e 1 1 U

. S

. C

. § 1 3 0 1 ( 2 0 0 6 ) ; ( 2 ) t h e r e c o r d d i d n o t c o n t a i n w r i t t e n 4

o r d e r s g r a n t i n g a m e n d m e n t s t o e i t h e r t h e B u i l d e r ’ s c o m p l a i n t o r M s

. C h i l c u t t ’ s a n s w e r ; ( 3 )

t h e t r i a l c o u r t h a d n o t m e m o r i a l i z e d i t s o r a l r u l i n g i n a f i n a l j u d g m e n t ; ( 4 ) t h e n o t i c e o f

a p p e a l s u g g e s t e d t h a t M s

. C h i l c u t t h a d a p p e a l e d o n l y f r o m t h e o r d e r a w a r d i n g a t t o r n e y ’ s

Chap te r 1 3 of

th e Ba nkrupt cy Code p rovid es: 4

(a ) Exc ept as pro vided in sub sec ti ons (b) and (c ) of thi s sec ti on, af te r the ord er for re li ef

unde r thi s cha pte r, a cre dit or may no t act

, or comme nce or con ti nue any ci vi l act ion

, to

col le ct all or any par t of a con sume r deb t of the deb tor fr om any ind iv idu al tha t is li abl e on

suc h de bt wit h t he d

ebt or , or th at se cur ed s uch deb t, u nle ss

- -

(1) suc h ind ividu al bec ame l ia ble on or sec ure d suc h deb t in the or din ar y

cou rs e of suc h i ndi vidual ' s bu si nes s; or

(2) the cas e is cl ose d, dismiss ed, or con verte d to a cas e unde r cha pte r 7 or

11 o f t his ti tl e.

(b) A cr edi tor m ay pre sen t a negoti abl e ins tr um ent

, and m ay giv e not ic e of dis hono r of suc h

an i nst rument.

(c ) On re que st of a par ty in int er est and af te r not ic e and a hea ri ng, the cou rt sha ll grant re li ef

fr om the st ay pro vided by sub sec ti on (a ) of thi s sec ti on wit h re spe ct to a c r e d i t o r

, to the

ext ent th at

- -

(1) as bet ween the deb tor and the ind ividu al pro te ct ed unde r sub sec ti on (a )

of thi s sec ti on, suc h ind ividu al re cei ved the con si der at ion for the cl ai m hel d

by such cr edi tor ;

(2) th e pl an f

il ed b y the d ebt or pro pos es not to pay suc h cl ai m ; o r

(3) suc h cr edi tor ' s int er est woul d be ir re par abl y har m ed by con ti nua ti on of

suc h st ay.

(d) T went y days af

te r the fi li ng of a re que st unde r sub sec ti on (c )( 2) of thi s sec ti on for re li ef

fr om the st ay pro vided by sub sec ti on (a ) of thi s sec ti on, suc h st ay is te rminat ed wit h re spe ct

to the par ty in int er est m aking suc h re que st

, unl ess the deb tor or any ind ividu al tha t is li abl e

on suc h deb t wit h the deb tor fi le s and ser ves upon suc h par ty in int er est a wri tt en obj ect ion

to the ta king of t he p rop ose d ac ti on.

11 U.S. C. § 1 301 (e m

pha si s a dde d).

-3-f

e e s

. C o n s e q u e n t l y

, t h i s C o u r t o r d e r e d t h e p a r t i e s t o s u b m i t s u p p l e m e n t a l b r i e f s a d d r e s s i n g

t h e s e i s s u e s

.

I n r e s p o n s e t o t h i s C o u r t ’ s o r d e r

, t h e p a r t i e s f i l e d a j o i n t m o t i o n t o s u p p l e m e n t t h e

t e c h n i c a l r e c o r d

, w h i c h t h i s C o u r t g r a n t e d

, a l o n g w i t h t h e r e q u e s t e d s u p p l e m e n t a l b r i e f s

.

T h e s u p p l e m e n t a l m a t e r i a l s i n c l u d e d a w r i t t e n o r d e r g r a n t i n g t h e p a r t i e s ’ r e s p e c t i v e

a m e n d m e n t s a n d a w r i t t e n o r d e r m e m o r i a l i z i n g t h e t r i a l c o u r t ’ s f i n a l j u d g m e n t

. T h e

s u p p l e m e n t a l b r i e f

s b o t h i n c l u d e d i n t h e i r a p p e n d i c e s a n o r d e r f r o m t h e U n i t e d S t a t e s

B a n k r u p t c y C o u r t f

o r t h e W e s t e r n D i s t r i c t o f T e n n e s s e e l i f t i n g t h e c o

- d e b t o r s t a y a g a i n s t M s

.

C h i l c u t t

. O u r s u b s e q u e n t r e v i e w

, h o w e v e r

, r e v e a l e d a n a d d i t i o n a l d e f i c i e n c y i n t h e r e c o r d

a s s u p p l e m e n t e d

.

R u l e 5 2

. 0 1 o f t h e T e n n e s s e e R u l e s o f C i v i l P r o c e d u r e

, a s a m e n d e d

, r e q u i r e s t r i a l

c o u r t s t o i s s u e f

i n d i n g s o f f

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

w i t h o u t a j u r y

. T e n n

. R

. C i v

. P

. 5 2

. 0 1

. T h e a m e n d e d v e r s i o n o f R u l e 5 2

. 0 1

, w h i c h i s n o w

t i t l e d “ F i n d i n g s R e q u i r e d

, ” b e c a m e e f f e c t i v e J u l y 1

, 2 0 0 9

, s h o r t l y b e f o r e t h e c o u r t c o n d u c t e d

a b e n c h t r i a l i n t h i s c a s e

. T h e f i n a l j u d g m e n t e n t e r e d i n t h i s c a s e n e v e r t h e l e s s s t a t e s i n f u l l :

T H I S C A U S E c a m e t o b e h e a r d o n t h e 1 3 t h d a y o f J u l y

, 2 0 0 9

, b e f o r e

t h e H o n o r a b l e M a r t h a B r a s f i e l d

, C h a n c e l l o r o f t h e C h a n c e r y C o u r t o f T i p t o n

C o u n t y

, T e n n e s s e e o n t h e p l e a d i n g s f i l e d b y t h e p a r t i e s

, t h e i r r e s p e c t i v e

t e s t i m o n y a n d e x h i b i t s i n t h i s c a u s e ; a n d

I T I S H E R E B Y O R D E R E D

, A D J U D G E D

, A N D D E C R E E D t h a t :

P l a i n t i f f i s a w a r d e d a j u d g m e n t a g a i n s t t h e D e f e n d a n t

, B e t h C h i l c u t t a / k / a B e t h

G o r r e l l

, i n t h e a m o u n t o f $ 2 2

, 5 1 5

. 0 0 p l u s a t t o r n e y f e e s a n d e x p e n s e s i n t h e

a m o u n t o f $ 4

, 8 5 8

. 1 1 f

o r a t o t a l j u d g m e n t o f $ 2 7

, 3 7 3

. 1 1

.

I T I S F U R T H E R O R D E R E D

, A D J U D G E D

, A N D D E C R E E D t h a t

D e f e n d a n t i s r e s p o n s i b l e f

o r t h e c o u r t c o s t s i n t h i s c a u s e

.

A L L O F W H I C H I S H E R E B Y O R D E R E D

, A D J U D G E D

, A N D

D E C R E E D

.

B e c a u s e t h e r e c o r d d o e s n o t c o n t a i n a s e p a r a t e o r d e r i s s u i n g f i n d i n g s o f f

a c t a n d c o n c l u s i o n s

o f l a w

, w e c o n c l u d e t h a t t h e t r i a l c o u r t f a i l e d t o c o m p l y w i t h t h e m a n d a t o r y r e q u i r e m e n t s o f

R u l e 5 2

. 0 1

. W e a c c o r d i n g l y v a c a t e a n d r e m a n d

.

-4-C o n c l u s i o n

F o r t h e f o r e g o i n g r e a s o n s

, w e v a c a t e t h e t r i a l c o u r t ’ s j u d g m e n t a n d r e m a n d f o r t h e

e n t r y o f f i n a l j u d g m e n t p u r s u a n t t o R u l e 5 2

. 0 1

. C o s t s o f t h i s a p p e a l a r e t a x e d t o a p p e l l a n t

,

B e t h C h i l c u t t

, a n d h e r s u r e t y 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 a r y

.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ D A V I D R

. F A R M E R

, J U D G E

-5-