Opinion ID: 1057678
Heading Depth: 2
Heading Rank: 4

Heading: Direct Liability of Parker and Flowers

Text: Having resolved the issue of vicarious liability, we must determine whether there remain any existing claims of direct liability against Parker and Flowers for either breach of contract or fraudulent misrepresentation. [27] When asked about the direct liability claims at oral argument, counsel for the Plaintiffs responded that the Plaintiffs did allege direct liability of Parker and Flowers, but our judge limited what the jury could considerI believe wronglyto the statements made in Gatlinburg. Counsel for Parker and Flowers admitted that he honestly can't tell whether the direct liability issues are before the Court at this time. Because the parties have not briefed the issue of Parker and Flowers' direct liability, we must review the record to determine whether the Plaintiffs raised the issue of direct liability below, and, if so, whether they did so in a timely manner. If Plaintiffs failed to either present the issue or preserve it for appeal, the cause need not be remanded to the trial court for further consideration. In the second amended complaint, the Plaintiffs made allegations of direct liability against Parker and Flowers and also contended that Parker and Flowers were liable for the statements of Darby, Parker's employee. In paragraph 32, the Plaintiffs specifically alleged that they relied to their detriment on fraudulent misrepresentations by the defendants and the defendant's real estate agents. At the time of the amendment, Parker and Flowers were the only remaining defendants in the litigation. During the course of trial, the Plaintiffs presented evidence that Parker, Flowers or Darby had made false and misleading statements. A press release dated May 5, 1993, stating that Parker and Flowers have arranged long term leases with each casino operator, was submitted as Exhibit 8. Further, at least one of the Plaintiffs, Brent Chitwood, testified that the statements in the press release were false, and that he had relied upon them to his financial detriment. Darby, called by the Plaintiffs to testify as an adverse witness, [28] acknowledged that he had prepared the press release and then given it to the Links to use in marketing the Mhoon Landing development. Finally, when Plaintiff Joann Wolfe was asked about her meeting with Flowers and Darby in Tunica, she responded that just about everything that was said [at that meeting] was false, and she then proceeded to provide specifics. The Plaintiffs did, therefore, present some evidence in support of the direct liability claim against Parker and Flowers. Obviously, the Plaintiffs prevailed at the trial on the theory of vicarious liability. Perhaps because they considered that theory as their most viable ground for relief, the Plaintiffs did not preserve the direct liability issue for appellate purposes, despite the opportunity to do so. At the pretrial conference on April 21, 2006, the trial court sought to outline the questions to be considered in light of the Court of Appeals' opinion in Creech I. After considerable discussion, the following exchange took place: THE COURT: There's a lot of things you can introduce ... to show or prove your issues, and you may talk about contracts and talk about a lot of things, but as I understand it, the claimthe actionis not based upon breach of contract, as you've already told me, it's based upon the fraudulent misrepresentations that were made through the claimed agents. And to the extent that any statements were made directly by them, that may beif otherwise admissibleall. I don't see where you all areyou all are talking about the same thing here. MR. RHEA [Counsel for the Defendants]: I think we are, but I'm just trying to figure out if there's a breach of contract claim in here or not. THE COURT: He says there's not. MR. PARTON [Counsel for the Plaintiffs]: The gravamen of our complaint at this point is the misrepresentation. THE COURT: Right. He says there's not. That's why I say you all are in agreement. MR. RHEA: So we're back to the Court of Appeals issues? THE COURT: Basically. Basically. MR. RHEA: And the only other question is, again, setting aside the evidentiary issues .... our interpretation of the claim and our interpretation of Your Honor's jurisdictional rulings from six years ago, and the Court of Appeals' opinion, is that the claim has to arise from statements or torts or misrepresentations made in the state of Tennessee. THE COURT: Yes. We're clear on that. (Emphasis added.) There was no proof of any misrepresentations made in the state of Tennessee by Parker, Flowers or Darby. The only evidence of any misrepresentation made in this state was attributed to the Links. In context, the pre-trial conference appears to have limited the scope of the proceedings, excluding the breach of contract claims and any claims of direct liability against Parker and Flowers based upon any statements made in Tennessee. The Plaintiffs tacitly agreed that their claim was based upon misrepresentations by the Links. That conclusion is buttressed by other developments during the course of the trial. Just prior to closing arguments, the Plaintiffs failed to lodge an objection to either the special jury verdict form or the instruction proposed by the trial court on direct liability. The special verdict form made no reference to the direct liability of either Parker or Flowers. It asked only whether the Links were the agents of Parker and Flowers when they made their presentation in Gatlinburg on October 18, 1993, whether the Links intentionally made false and misleading statements of fact upon which the Plaintiffs relied to their detriment, and what, if any, damages resulted. See Keith v. Murfreesboro Livestock Mkt., Inc., 780 S.W.2d 751, 759 (Tenn.Ct.App.1989) (Counsel should object promptly to a proposed verdict form. If possible, they should object to the form before its submission to the jury. However, if unaware of the form's substance, they should object before the jury returns its verdict. Failure to make a timely objection to a verdict form constitutes a waiver of the objection. (citations omitted)). Moreover, during that same discussion, the trial judge informed the parties that he intended to instruct the jury only to consider any evidence of misrepresentations on the part of Parker and Flowers as follows: You have heard evidence of statements by Ellis Darby, Lloyd Link, D.C. Parker, and Richard Flowers and received documents made in the state of Mississippi. You may consider those statements and documents made in Mississippi only for the purpose of determining whether Mr. or Mrs. Link were the agents of the defendants in Tennessee, whether or not the defendants knew that the representations being made on their behalf in Tennessee by Mr. and Mrs. Link were false or misleading, or that the defendants ratified such alleged false or misleading representations. Although it is the duty of the trial court to provide accurate instructions to the jury, the Plaintiffs, after being made aware of the limitations on the jury's consideration of the evidence prior to closing arguments, neither objected nor made a special request for any alternative directive. [29] The Plaintiffs, therefore, waived appellate consideration of the liability of Parker and Flowers for any fraudulent misrepresentations made by them or Parker's employee, Darby, upon which the Plaintiffs may have relied.