Court Opinion

ID: 1055440
Source: CourtListenerOpinion
Date Created: 2013-10-08 20:57:34.071086+00
Date Added: 2024-06-11T08:40:04.891118
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                                 AT NASHVILLE
                                            May 6, 2004 Session

        FREDERICK TODD SMITH, ET AL. v. JIM CROSSMAN, ET AL.

                          Appeal from the Circuit Court for Davidson County
                               No. 02C-1308     Carol Soloman, Judge

                         No. M2003-01108-COA-R3-CV - Filed August 2, 2004

This appeal involves the interpretation of the attorney’s fee provision in a lease agreement. The trial
court awarded Landlord attorney’s fees, and Tenants appeal. We reverse the award of attorney’s
fees, finding no contractual basis exists for the award.

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

PATRICIA J. COTTRELL, J., delivered the opinion of the court, in which WILLIAM C. KOCH , JR., P.J.,
M.S., and WILLIAM B. CAIN , J., joined.

Barry L. Gardner, Brentwood, Tennessee, for the appellants Frederick Todd Smith, James E.
Newton, and Heritage Groceries, Inc.

Raymond G. Prince, Nashville, Tennessee, for the appellee, Jim Crossman, Individually, and d/b/a
Jim Crossman Realty.

                                          MEMORANDUM OPINION1

       Plaintiffs, Frederick T. Smith, James Newton, and Heritage Groceries, Inc. (“Tenants”)
operate a CB Food Store on premises leased in 1995 from defendant Jim Crossman and his realty
company (“Landlord”). The lease contained a protective covenant which stated:

       PROTECTIVE COVENANT. In order to induce Tenant to enter into this Lease,
       Landlord agrees for itself, its heirs, successors and assigns, that none of the foregoing

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           Tenn. R. Ct. App. 10 states:

       This Court, with the concurrence of all judges participating in the case, may affirm, reverse or
       modify the actions of the trial court by memorandum opinion when a formal opinion would have
       no precedential value. W hen a case is decided by memorandum opinion it shall be designated
       “MEMORANDUM OPINION,” shall not be published, and shall not be cited or relied on for any
       reason in any unrelated case.
         shall use, suffer, permit or consent to the use or occupancy as a supermarket or for
         the sale of food or food products intended for off-premises consumption of any of the
         following:

         (a) any other premises now or hereafter owned or controlled by Landlord or any of
         the above described parties adjacent to demised Premises, or

         (b) any premises now or hereafter owned or controlled by Landlord or any of the
         above described parties within a radius of one (1) mile of the perimeter of the
         Demised Premises.

        A Dollar General Store had been operating in the same strip mall since 1976. After 1995,
the Dollar General Store began carrying its own lines of food for sale in direct competition with
Tenants. Tenants filed suit against Landlord on the theory that Dollar General’s actions constituted
a breach of the protective covenant. In addition, Tenants named Dollar General and moved for an
injunction to prevent Dollar General from selling food for off-premises consumption. Dollar
General was later non-suited. Landlord answered and argued that Tenants knew or should have
known that Landlord had no power to restrain Dollar General from selling food. The Answer
contained a counter-claim for attorney’s fees as provided for in the lease provision that stated:

         ATTORNEY FEES. Tenant shall pay reasonable attorneys fees incurred by
         Landlord in the enforcement of any terms, covenants, or provisions of this lease, and
         the Landlord also agrees to reimburse tenant for reasonable attorney fees in the
         enforcement of any terms, covenants, or provisions of this lease.

        On the day of trial, Tenants non-suited the lawsuit.2 Several months later, the trial court held
a hearing on Landlord’s counterclaim for attorney’s fees incurred defending the first lawsuit and
found that Landlord was entitled to attorney’s fees in the amount of $14,320. The trial court found
that based on its interpretation of the lease, the award was for “attorney fees expended by counsel
for the Counter-plaintiff in the enforcement of the terms, covenants, and provisions of the lease
existing between the parties.”

        Tennessee follows the American Rule requiring litigants to pay their own attorney’s fees in
the absence of a statute or contractual provision otherwise. State v. Brown & Williamson Tobacco
Corp., 18 S.W.3d 186, 194 (Tenn. 2000) (citing John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d
528, 534 (Tenn. 1998)). Unless a statutory or contractual fee-shifting provision applies, such fees
are not recoverable. Morrow v. Bobbitt, 943 S.W.2d 384, 392 (Tenn. Ct. App. 1996); Pinney v.
Tarpley, 686 S.W.2d 574, 581 (Tenn. Ct. App. 1984).

         2
            Tenants re-filed the identical case a month later. Dollar General’s lease had expired during the pendency
of this litigation, and Landlord allegedly failed to put any kind of restrictive clause into the new lease it signed with
Dollar General.

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        Courts may enforce provisions in contracts that expressly allow a prevailing party, or
otherwise described party, to recover its attorney fees incurred in disputes over the contract. Pullman
Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985); Pinney, 686 S.W.2d at 581. The
award of fees, however, is limited to the situation agreed to by the parties as set out in the language
of the provision. Such provisions are subject to the usual rules of contract interpretation.

        Here, the lease agreement provided for reimbursement of attorney’s fees incurred by either
party “in the enforcement of any terms, covenants, or provisions of the lease.”(emphasis added).
The sole question at trial and here, then, is whether Landlord’s fees incurred in defending against
Tenants’ lawsuit was tantamount to an enforcement action covered by the parties’ lease agreement.

        Interpretation of contracts is a question of law. Guiliano v. CLEO, Inc., 995 S.W.2d 88, 95
(Tenn. 1999). Therefore, the trial court’s interpretation of the agreement herein is not entitled to a
presumption of correctness on appeal. Id.; Angus v. Western Heritage Ins. Co., 48 S.W.3d 728, 730
(Tenn. Ct. App. 2000). This court must review the document ourselves and make our own
determination regarding its meaning and legal import. Hillsboro Plaza Enters. v. Moon, 860 S.W.2d
45, 47 (Tenn. Ct. App. 1993).

        “The central tenet of contract construction is that the intent of the contracting parties at the
time of executing the agreement should govern.” Planters Gin Co. v. Fed. Compress & Warehouse
Co., Inc., 78 S.W.3d 885, 890 (Tenn. 2002). The purpose of interpreting a written contract is to
ascertain and give effect to the contracting parties’ intentions, and where the parties have reduced
their agreement to writing, their intentions are reflected in the contract itself. Id.; Frizzell Constr.
Co. v. Gatlinburg, L.L.C., 9 S.W.3d 79, 85 (Tenn. 1999). Therefore, the court’s role in resolving
disputes regarding the interpretation of a contract is to ascertain the intention of the parties based
upon the usual, natural, and ordinary meaning of the language used. Guiliano, 995 S.W.2d at 95;
Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth Inc., 521 S.W.2d 578, 580 (Tenn. 1975).

        The language of the fee provision determines whether fees can be awarded under the facts
present. See Pullman Standard, 693 S.W.2d at 338 (holding that fees are recoverable under an
express indemnity contract if the language is broad enough to cover such expenses). We have
reviewed a number of opinions involving fee-shifting contract provisions, and their terms vary,
sometimes making recovery available to a prevailing party or from a breaching party. Landlord and
Tenants herein could have agreed that the prevailing party in any dispute arising from the Lease was
entitled to attorney’s fees. They did not. Instead, they agreed to a provision only for fees incurred
in the enforcement of any terms of the Lease.

       Tenants brought an action for breach of the protective covenant seeking to enforce it.
Landlord defended on the basis it had no power, because of its lease with Dollar General, to prevent
Dollar General’s sale of food. Landlord also raised affirmative defenses of laches, waiver, estoppel,
comparative fault, and consent. In its counterclaim, Landlord merely invoked the attorney’s fees
provision and alleged that it was “incurring attorneys fees in the defense of this action. . . .” At no

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time did Landlord counter that Tenants were in breach of the lease or seek to enforce any term of the
agreement.

       Landlord did not attempt to enforce any term, covenant or provision of the lease.
Consequently, we reverse the decision of the trial court awarding attorney’s fees. Costs of this
appeal are taxed to the appellees, Jim Crossman and Jim Crossman Realty.

                                                      ___________________________________
                                                      PATRICIA J. COTTRELL, JUDGE

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