Court Opinion

ID: 1075680
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:15:52.217888+00
Date Added: 2024-06-11T12:36:29.970909
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                         AT NASHVILLE

                                                        FILED
MIKE DANIEL and                      )                    July 16, 1999
DENNY KNIGHT,                        )
                                     )                 Cecil Crowson, Jr.
       Plaintiffs/Appellants,        )                Appellate Court Clerk
                                     )      Appeal No.
                                     )      01-A-01-9811-CH-00599
VS.                                  )
                                     )      Davidson Chancery
                                     )      No. 96-3756-II
FLETCHER RIDGE, INC.,                )
                                     )
       Defendant/Appellee.           )

      APPEALED FROM THE CHANCERY COURT OF DAVIDSON COUNTY
                     AT NASHVILLE, TENNESSEE

              THE HONORABLE CAROL L. McCOY, CHANCELLOR

JORDAN S. KELLER
LASSITER, TIDWELL & HILDEBRAND, PLLC
213 Fifth Avenue, North
Nashville, Tennessee 37219
       Attorney for Plaintiffs/Appellants

SCOTT K. HAYNES
LUTHER WRIGHT, JR.
BOULT, CUMMINGS, CONNERS & BERRY, PLC
414 Union Street, Suite 1600
Nashville, Tennessee 37219
      Attorneys for Defendant/Appellee

                            AFFIRMED AND REMANDED

                                            BEN H. CANTRELL,
                                            PRESIDING JUDGE, M.S.

CONCUR:
KOCH, J.
COTTRELL, J.
                                OPINION
              The issues in this appeal are (1) whether the defendant preserved its

motion for a directed verdict by renewing it at the close of all the proof, and (2)

whether the court erred in granting a directed verdict in accordance with Rule 50.02,

Tenn. R. Civ. Proc. We find that the defendant did preserve its motion and that there

was no proof offered on which to base a verdict for the plaintiff. Therefore, we affirm.

                                           I.

              Mike Daniel owned LSI Recording Studio in Nashville and Denny Knight

was a recording engineer at the studio. They had recorded certain songs for artist

Eric Hamilton and had a claim against the masters for their services. Mr. Daniel also

had a management agreement with Eric Hamilton and Jeffery W illiams Younger,

along with a limited right to publish their compositions.

              As with many young artists seeking that first recording deal, the legal

affairs of Mr. Hamilton had become quite tangled. In 1994, Fletcher Ridge, Inc.,

through its principal officer, Mr. Fletcher, took an interest in the Eric Hamilton Band.

Fletcher Ridge decided to secure the right to manage the group and to pursue a

contract with a major record label. In order to proceed Fletcher Ridge had to clear up

the competing claims on the management rights and the right to publish the band’s

original material. As a first step, Fletcher Ridge, Inc. purchased an assignment from

Daniel and Knight of their interest in the master records. In the November 1994

agreement, Daniel also agreed to assign his management and publishing rights with

Hamilton and Younger to Fletcher Ridge. Paragraph four of the written agreement

between Daniel, Knight, and Fletcher Ridge, contains this provision:

                    In the event Daniel’s contractual rights in the
              Management Agreement and Publishing Agreements of
              Hamilton and Younger attached hereto as Exhibits “B”
              and “C” respectively are enforceable, and Fletcher Ridge
              is successful in enforcing such rights, Fletcher Ridge
              agrees to pay to Daniel the additional sum of Forty-two

                                         -2-
              Thousand, Five Hundred Dollars ($42,500.00) within one
              (1) year after date of execution of this Agreement, and
              Ten Thousand Dollars ($10,000.00) to Knight.

              Fletcher Ridge did obtain the record deal for the Eric Hamilton Band and

participates in its management. When they were not paid, Daniel and Knight sued

Fletcher Ridge for the $52,000 mentioned in paragraph four. The complaint also

contained a count alleging fraud in the negotiations over the assignment of the

management and publishing contracts to Fletcher Ridge. At the close of the plaintiffs’

proof Fletcher Ridge moved for a directed verdict. The court granted the motion as

to one of the plaintiffs’ claims but reserved ruling on the fraud count and the claim

related to paragraph four of the agreement. The court said: “As to the rest of the

motion to dismiss, the court will take it under advisement. And it can be renewed at

close of proof, but I would suggest to you, each of you, that you be prepared to have

this matter go to the jury.”

              At the close of all the proof counsel for Fletcher Ridge again addressed

the court on the motion for a directed verdict:

                     MR. WRIGHT: Very briefly. Your Honor, it’s my
              understanding, and, Mr. Keller, you can tell me if you
              have a different understanding, that you were reserving
              your ruling on the remainder of our motion for directed
              verdict until the jury gets back.

                      THE COURT: That’s correct.

                    MR. WRIGHT:         I wanted to make that clear.
              Thank you.

              The case went to the jury on the fraud count and the paragraph four

claim. The jury returned a verdict for the plaintiffs on paragraph four in the amount

of $42,500 for Mr. Daniel and $10,000 for Mr. Knight. The jury rejected any claim

based on fraud. After the jury returned its verdict the following exchange took place

between the court and counsel for Fletcher Ridge:

                                         -3-
                    MR. WRIGHT: Your Honor, at this point, I would
              move to be heard on my directed verdict motion. We
              move for a judgment on a directed verdict.

                     THE COURT: You want to do the direct verdict
              now?

                    MR. WRIGHT: Well, however, I just wanted to
              make sure. That motion hasn’t been ruled on and we
              would like an opportunity to be heard on that motion.

                    THE COURT: It’s my understanding that the
              motion for directed verdict would properly be presented
              before this matter was put in the hands of the jury. It
              would be appropriate for you to make a motion to alter or
              amend at this time, but you have to file it and be heard on
              a motion date.

                     MR. WRIGHT: I understand, Your Honor. I’m just
              simply saying my understanding is that you were going to
              reserve your ruling on the motion for directed verdict until
              after the jury rendered their verdict. That was my
              understanding.

                     THE COURT: Well, I anticipated that you would
              present it before this matter was given to the jury. I didn’t
              realize that you were not waiving it.

                    MR. WRIGHT: And, Your Honor, I just wanted to
              make sure for the record that you understand --

                     THE COURT: I do.

                     MR. WRIGHT: -- that that was my understanding.
              And we move for a judgment, obviously, on directed
              verdict and we’ll file the appropriate papers.

                     THE COURT: Thank you.

              Fletcher Ridge filed a Rule 50.02, Tenn. R. Civ. Proc., motion seeking

relief from the judgment in accordance with its motion for a directed verdict or, in the

alternative, for a new trial. The trial judge granted the motion for a directed verdict.

                                           II.

                                      a. Waiver

              The plaintiffs assert that Fletcher Ridge waived its motion for a directed

verdict by not renewing it at the close of all the proof. See Potter v. Tucker, 688

                                          -4-
S.W.2d 833 (Tenn. App. 1985); Johnson v. Woman’s Hospital, 527 S.W.2d 133

(Tenn. App. 1975). Based on the record we have quoted, however, we think the

defendant clearly preserved its motion. The court took the motion “under advisement”

at the close of the plaintiffs’ proof and defendant’s lawyer raised the issue again at the

end of the proof just before the court and the lawyers began to put the court’s charge

into its final form.

                               b. The Directed Verdict

               In order to direct a verdict the trial judge must take the strongest

legitimate view of the evidence in favor of the non-moving party, indulge all

reasonable inferences in favor of the non-moving party, and disregard any evidence

to the contrary. Hicks v. Sovran Bank/Chattanooga, 812 S.W.2d 296 (Tenn. App.

1991); Harrogate Corp. v. Systems Sales Corp., 915 S.W.2d 812 (Tenn. App. 1995).

               Paragraph four of the agreement promises to pay Daniel and Knight if

the management and publishing agreements with Hamilton and Younger are

enforceable and Fletcher Ridge is successful in enforcing them. The management

and publishing rights were obtained in a contract dated May 15, 1993. In that

agreement Hamilton agreed with Daniel and a third party, Ron Haffkine, to record

certain masters with Daniel and Haffkine serving as producers. Daniel and Haffkine

promised to pursue a recording contract for Hamilton with a major label. At the end

of the lengthy agreement, the parties added this paragraph: “It is further understood

that said producers shall retain management rights (25%) and all publishing rights on

original material.”

               The agreement between Hamilton, Daniel and Haffkine was for a period

of one year. In March of 1994 Mr. Hamilton filed a petition in bankruptcy listing the

                                          -5-
production agreement as an obligation for which he sought to be discharged. He

received a discharge in January of 1995.

              With respect to the management rights derived from the May 15, 1993

agreement, we think the proof clearly shows that at the time Mr. Daniel signed the

agreement with Fletcher Ridge in November of 1994 his rights to manage Mr.

Hamilton were non-existent. The one year term of the contract between Hamilton and

Daniel/Haffkine had expired and, for good measure, the parties were under the

automatic stay of the bankruptcy court. Therefore the first condition in the assignment

-- that Mr. Daniel have enforceable rights to manage Mr. Hamilton -- could not be met.

              The publishing rights present a different problem. The discharge did not

defeat the publishing rights Mr. Daniel acquired prior to Mr. Hamilton’s bankruptcy.

But, those publishing rights were owned by Daniel and Haffkine, not Daniel alone. In

addition, the uncontradicted proof shows that in August of 1993 Mr. Hamilton signed

a separate agreement with Mr. Haffkine covering exactly the same rights as those

contained in the May 1993 agreement with Daniel/Haffkine. Mr. Daniel acknowledged

that Mr. Haffkine claimed the exclusive publishing rights to Mr. Hamilton’s material,

and in working out a record deal for Mr. Hamilton, Fletcher Ridge had to purchase

those rights from Mr. Haffkine.

              The “Exhibit C” referred to in Daniel’s agreement with Fletcher Ridge

contained publishing agreements between Eric Hamilton and James Dowell. On the

face of the record, therefore, Mr. Daniel did not have any rights in those compositions.

Mr. Dowell and Mr. Daniel testified that these rights had been assigned to Mr. Daniel,

but the assignment had apparently been lost. The most critical failure of the proof is

the absence of any assignment of these contracts from Daniel to Fletcher Ridge.

                                         -6-
              Therefore, we find no proof in the record of any enforceable publishing

rights assigned to Fletcher Ridge by Daniel. The condition precedent to recovering

under their contract for publishing rights has not been met. The chancellor was

justified in granting the Rule 50.02 motion.

              We affirm the judgment of the trial court and remand the cause to the

Chancery Court of Davidson County for any further proceedings necessary. Tax the

costs on appeal to the appellants.

                                          _________________________________
                                          BEN H. CANTRELL,
                                          PRESIDING JUDGE, M.S.

CONCUR:

_____________________________
WILLIAM C. KOCH, JR., JUDGE

_____________________________
PATRICIA J. COTTRELL, JUDGE