IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

Assigned on Briefs, August 29, 2011

DOYLE SWEENEY, v. DAVID TENNEY

Appeal from the Circuit Court for Greene County

No. 10CV378-JKW Hon. John K. Wilson, Judge

No. E2011-00418-COA-R3-CV-FILED-SEPTEMBER 29, 2011

Plaintiff sued defendant, alleging defendant owed money on a loan. Defendant defended on

the ground that the contract was oral and the statute of frauds barred any collection. The

Trial Court awarded Judgment in favor of plaintiff in the amount of $4,500.00. On appeal,

we affirm the Trial Court.

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

HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the Court, in which D. MICHAEL

SWINEY, J., joined, and CHARLES D. SUSANO, JR., J., filed an opinion concurring in part and

dissenting in part.

Thomas C. Jessee, Johnson City, Tennessee, for the appellant, David Tenney.

Leroy Tipton, Jr., Greeneville, Tennessee, for the appellee, Doyle Sweeney.

OPINION

Background

Doyle Sweeney, plaintiff/appellee, filed a civil warrant in the General Sessions Court

of Greene County, Tennessee, against David Tenney, defendant/appellant, on November 16,

2009. The warrant indicates that Sweeney sought a judgment of $8,000.00 for a personal

loan he alleged he had made to Tenney. At a hearing in the General Sessions Court, the civil

warrant was dismissed “on defendant’s motion” that the affirmative defense of the statute of

frauds was applicable.
Sweeney timely appealed the General Sessions Court’s judgment to the Circuit Court,

and a bench trial was conducted by the Trial Judge. The Trial Court upon entertainment of

the affirmative defense of the statute of frauds made by Tenney, stated that the Statute of

Frauds provides that there must be “a writing, or some memorandum or note” evidencing the

agreement between the parties. The Trial Court concluded that the spread sheet prepared by

Tenney was sufficient to satisfy this requirement, and awarded a judgment in favor of

Sweeney in the amount of $4,500.00. Sweeney appealed.

A. Did the Trial Court err in failing to find that plaintiff’s/appellant’s claims were

barred by the statue of frauds?

B. Did the defendant/appellant waive the defense of the statute of frauds by

failing to specifically plead same as an affirmative defense in the Trial Court?

A trial court’s findings of fact in a non-jury trial are reviewed de novo upon the

record. The trial court is afforded a presumption of correctness unless the preponderance of

the evidence is otherwise. Tenn. R. App. P. 13 (d); Wright v. City of Knoxville, 898 S.W.2d

177, 181 (Tenn. 1995). We review credibility determinations made by the trial court with

great deference. Keaton v. Hancock County Bd. of Educ., 119 S.W.3d 218, 223 (Tenn. Ct.

App. 2003). The trial court is in the best position to resolve factual issues that hinge on

credibility and appellate courts will not re-evaluate a trial court’s assessment of a witness’s

credibility absent clear and convincing evidence to the contrary. Hopper v. Moling, No.

W2004-02410-COA-R3-CV, 2005 WL 2077650 at *7, (Tenn. Ct. App. Aug. 26, 2005).

The trial court’s conclusions of law are reviewed under a purely de novo standard with

no presumption of correctness. Taylor v. Fezell, 158 S.W.3d 352, 357 (Tenn. 2005), Union

Carbide Corp. v. Huddleston 854 S.W.2d 87, 91 (Tenn. 1993).

Tenney contended before the Circuit Court that there never was an agreement for

Sweeney to lend $8,000.00 to him and that Sweeney had provided the money to Tenney so

he could pay off the credit card debt incurred by Sweeney’s daughter who was then Tenney’s

wife. The Trial Court found the testimony of Sweeney more credible than that of Tenney as

it found that there was a loan agreement between the parties, although it had not been

reduced to a writing. This finding by the Trial Court has not been appealed. Tenney does

appeal the Trial Court’s conclusion that Sweeney’s claim based on the oral loan agreement

was not barred by the Statute of Frauds. There is no dispute that the agreement between the

parties was not in writing. The Tennessee Statute of Frauds, Tenn. Code Ann. § 29-2-101

provides in pertinent part:

(a) No action shall be brought:

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(5) Upon any agreement or contract which is not to be performed within the space of

one (1) year from the making of the agreement or contract; unless the promise or

agreement, upon which such action shall be brought, or some memorandum or note

thereof, shall be in writing, and signed by the party to be charged therewith, or some

other person lawfully authorized by such party. . . .

The Statute of Frauds requires that parties memorialize certain types of contracts in

writing for the contract to be enforceable. The statute has been construed to apply to

contracts where, by express understanding of the parties, it was agreed the contract would

not be performed within the year. Trew v. Ogle, 767 S.W.2d 662, 664 (Tenn. Ct. App. 1988).

There are, however, exceptions to this rule. The most commonly recognized exception to the

Statute of Frauds is the doctrine of part performance. Under it an otherwise unenforceable

oral contract can be the basis of an action if one of the parties has performed pursuant to the

contract. Trew at 664 (citing A. Corbin, Corbin on Contracts, § 420 (One Volume Ed.1952)).

Appellee contends the Statute of Frauds is not applicable because there was no

evidence that the agreement between the parties for Tenney to repay Sweeney was not to be

performed within one year of the making of the agreement. This argument is without merit

because the testimony of both parties established that there was no agreement regarding when

the loan was to be paid off in full.

However, the evidence does establish that Tenney partially performed under the

agreement as he made several payments to Sweeney. Tennessee courts have recognized a

part performance exception to the Statute of Frauds, which is applicable to oral contracts

other than for the sale of land. Blasingame v. American Materials, Inc., 654 S.W.2d 659, 663

(Tenn.1983); Foust v. Carney, 205 Tenn. 604, 329 S.W.2d 826, 829 (1959); Buice v.

Scruggs Equipment Co., 194 Tenn. 129, 250 S.W.2d 44, 47 (1952). The Tennessee Supreme

Court, in Buice v. Scruggs, explained the partial performance exception to the Statute of

Frauds:

The doctrine of partial performance to take the verbal contract out of the operation of

the Statute of Frauds is purely an equitable doctrine and is a judicial interpretation of

the acts of the parties to prevent fraud. The acts of the appellant relied on as partial

performance had been done by him in pursuance to the averred contract and

agreement and are clearly referable thereto. “The plaintiff must be able to show such

acts and conduct of the defendant as the court would hold to amount to a

representation that he proposed to stand by his agreement and not avail himself of the

statute to escape its performance; and also that the plaintiff, in reliance on this

representation, has proceeded, either in performance or pursuance of his contract, so

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far to alter his position as to incur an unjust and unconscionable injury and loss, in

case the defendant is permitted after all to rely upon the statutory defense.” Buice v.

Scruggs Equip. Co., 194 Tenn. 129, 137, 250 S.W.2d 44, 48 (1952)(citing 49 Am.

Juv., Sec. 427, page 733).

Buice at 47.

In this case, the evidence showed that Tenney made payments to Sweeney on the loan,

thus he partially performed under the loan agreement and the partial performance exception

is applicable. We affirm the Trial Court when it held that the oral agreement between the

parties was enforceable and awarded judgment in favor of Sweeney and against Tenney.

The appellee also raised an issue that Tenney waived the affirmative defense of the

Statute of Frauds by failing to specifically plead the same in the Trial Court.. However,

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our Supreme Court has addressed this issue recently, in Graham v. Caples, 325 S.W.3d 578,

583 (Tenn. 2010). Plaintiff had argued that the defendant waived the affirmative defense of

statute of limitations because, upon appeal to the Circuit Court from a General Sessions

Court judgment, defendant did not raise such defense in his initial pleading in that court. The

Supreme Court rejected this argument, stating that “[w]hile the Rules of Civil Procedure are

applicable where pertinent to cases appealed from the general sessions court to the circuit

court, ‘the Rules do not require the filing of written pleadings, issuance of new process, or

any other steps which have been completed prior to the appealing of the case to the circuit

court.’ Id. (emphasis supplied) (citing Vinson v. Mills, 530 S.W.2d 761, 765 (Tenn.1975)).

The Court noted that defendant's original motion to dismiss filed in the General Sessions

Court requested dismissal upon assertion that the statute of frauds had expired, and he was

not required to re-plead this defense in his initial pleading on appeal to the Circuit Court.

Accordingly, this issue is without merit.

The Judgment of the Circuit Court is affirmed and the cause remanded, with the costs

assessed to David Tenney.

 

_________________________________

HERSCHEL PICKENS FRANKS, P.J.

We elected to address this issue because the issue is recurring due to the fact that sessions court 1

pleadings are ore tenus.

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