Opinion ID: 725246
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: 6 In a final judgment entered pursuant to a bench trial, we review the district court's findings of fact for clear error, deferring to the court's opportunity to judge the credibility of the witnesses. FED.R.CIV.P. 52(a); Anderson v. Bessemer City, 470 U.S. 564, 573-75 (1985). However, the district court's legal conclusions are reviewed de novo. Bessemer City, 470 U.S. at 573-74; Woolsey v. Hunt, 932 F.2d 555, 562-63 & n. 6 (6th Cir.), cert. denied, 502 U.S. 867 (1991). We review the denial of FED.R.CIV.P. 59(e) and 60(b) motions for an abuse of discretion. Columbia Gas Transmission, Corp. v. Limited Corp., 951 F.2d 110, 112 (6th Cir.1991) (regarding 59(e) motions); Browder v. Director, Dep't of Corrections of Illinois, 434 U.S. 257, 263 (1978) (regarding 60(b) motions). However, if either a 59(e) or 60(b) denial is based upon an erroneous legal doctrine, our standard of review is the same as in other cases of legal error. Huff v. Metropolitan Life Ins. Co., 675 F.2d 119, 122 n. 5 (6th Cir.1982). 7
8 It was well within the district court's fief to order rescission of the contract and restitution of Matlock's initial investment. In Tennessee, [t]he equitable remedy of rescission is not enforceable as a matter of right but is a matter resting in the sound discretion of the trial court. Vakil v. Idnani, 748 S.W.2d 196, 199-200 (Tenn.Ct.App.1987). Among the few grounds justifying rescission is fraud. See Birdsong v. Birdsong, 39 Tenn. (1 Head) 289 (Tenn.1859). Rescission is available as a remedy for fraud, since fraud vitiates all contracts into which it enters. Hunt v. Walker, 483 S.W.2d 732, 735 (Tenn.Ct.App.1971) (citing Harris v. Smith, 42 Tenn. (2 Cold.) 306, 308 (1865)); see also MAYO L. COINER, TENNESSEE LAW OF DAMAGES, § 7.4 (1988). Our review of the record in this case persuades us that the district court's findings of fact are not clearly erroneous, and that the district court properly exercised its discretion by ordering rescission. 9 Rescission, by definition, is purely a contractual remedy. See BLACK'S LAW DICTIONARY 1306 (6th ed. 1990). Rescission involves the avoidance or setting aside of a transaction.... It is intended to return the parties to the positions they were in before the transaction took place. Williamson v. Upchurch, 768 S.W.2d 265, 271 (Tenn.Ct.App.1988) (citing Lindsey-Davis Co. v. Siskin, 358 S.W.2d 331, 333 (Tenn.1962)). As a result, only parties to the contract are subject to the remedy of rescission. See Greeley Arcade, Inc. v. Rothenberg, 105 F.Supp. 489, 490 (D.Mass.1952) (holding that since defendant was not a party to the contract, an action for rescission cannot be maintained against him). Under Tennessee law, rescission in a case such as the one before us involves restitution of the original investment plus any other monies which the court deems would place the prevailing party in the position he was in when the contract was contemplated. See Lamons v. Chamberlain, 909 S.W.2d 795, 800 (Tenn.Ct.App.1993). 10 Robert Miller individually was never a party to the partnership agreement. Although he was an agent for Miller & Associates, Inc., which was a party to the contract, Miller can only be held liable for remedies in tort, not remedies in contract. See Brungard v. Caprice Records, Inc., 608 S.W.2d 585, 590 (Tenn.Ct.App.1980) (distinguishing between tort and contract liability of an agent). We therefore reverse the $50,000 award of restitution against Miller individually. We hold, however, that he remains individually liable for the punitive damages awarded on the tort claims. 11
12 After careful examination of the remaining issues raised by the parties on appeal and cross-appeal, we find them devoid of merit. Accordingly, we affirm the remainder of the district court's orders.