Court Opinion

ID: 1079926
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:36:24.650322+00
Date Added: 2024-06-11T12:05:44.274307
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                   MIDDLE SECTION AT NASHVILLE

SOMEDAY BABY, INC.,          )
                             )      Davidson Chancery
    Plaintiff/Appellee,      )      No. 95-1389-II
                             )
VS.                          )
                             )      Appeal No.
ENTERTAINMENT INTERNATIONAL, )      01A01-9705-CH-00228
                             )
    Defendant/Appellant.     )
                                                  FILED
     APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY
                                              January 28, 1998
                   AT NASHVILLE, TENNESSEE
                                             Cecil W. Crowson
                                            Appellate Court Clerk
             HONORABLE CAROL McCOY, CHANCELLOR

Stanley M. Chernau, #2390
Linda Burnsed, #13734
CHERNAU, CHAFFIN & BURNSED
424 Church Street, Suite 1750
Nashville, TN 37219
ATTORNEYS FOR PLAINTIFF/APPELLEE

William J. Shreffler, #17224
W. Gary Blackburn
BLACKBURN, SLOBEY, FREEMAN & HAPPELL
2050 NationsBank Plaza
414 Union Street
Nashville, TN 37219
ATTORNEYS FOR DEFENDANT/APPELLEE

               MODIFIED, AFFIRMED AND REMANDED.

                               HENRY F. TODD
                               PRESIDING JUDGE, MIDDLE SECTION

CONCUR:
BEN H. CANTRELL, JUDGE

CONCUR IN SEPARATE OPINION:
WILLIAM C. KOCH, JR., JUDGE
SOMEDAY BABY, INC.,          )
                             )                         Davidson Chancery
    Plaintiff/Appellee,      )                         No. 95-1389-II
                             )
VS.                          )
                             )                         Appeal No.
ENTERTAINMENT INTERNATIONAL, )                         01A01-9705-CH-00228
                             )
    Defendant/Appellant.     )

                                      OPINION

       The captioned defendant, Entertainment International, Inc. has appealed from an

unsatisfactory judgment of the Trial Court. A detailed recitation of the background of the

controversy and proceedings therein is necessary for an understanding of the issues on appeal.

       The present appeal involves a contract between the parties regarding the marketing of

children’s toys which were manufactured by plaintiff, Someday Baby, Inc., or as to which

Someday Baby held marketing rights.

       Prior to the execution of the contract between the parties, plaintiff sold to dealers, 70%

of which were sales were to small retail stores, and 30% were sales to large chain stores at a

lesser price because the chains purchased larger quantities.

       Defendant, Entertainment International, Inc., was engaged in the “sales and marketing

business” distributing catalogs offering for sale the products of many producers. It conducted

a form of “mail order business.”

       On August 16, 1994, the parties executed an agreement consisting of a letter from

defendant to plaintiff offering sales services which offer was accepted by plaintiff on the face of

the letter. The letter is appended to this opinion as exhibit A, and pertinent portions thereof will

be quoted herein.

                                                -2-
        On May 3, 1995, plaintiff filed this suit against defendant seeking a declaratory judgment

interpreting the contract, declaring a breach of the contract, and allowing recession thereof,

injunctive relief and damages.

        On May 4, 1995, defendant filed a separate suit against plaintiff for enforcement of the

same contract and for damages.

        On May 4, 1995, the Trial Court consolidated the two suits under the caption of the

original suit.

        On August 23, 1995, plaintiff amended to sue W. Bradley Daniel and Michael Dugay,

officers of defendant, for fraud.

        On February 16, 1996, defendant amended its countersuit to include Aaron Brown,

president of plaintiff.

        On August 21, 1995, the incumbent Trial Judge entered the following order:

                        This cause came to be heard on the 11th day of
                 August, 1995, on Defendant’s Motion for Partial Summary
                 Judgment, argument of counsel and the entire record in this
                 cause from all of which the Court finds:

                         Defendant’s Motion should be and is hereby denied
                 except for Plaintiff’s request for attorney’s fees based upon
                 Plaintiff’s pending original Complaint which the Court finds
                 should be denied.

                         Therefore, it is ORDERED, ADJUDGED and
                 DECREED that Defendant’s Motion for Partial Summary
                 Judgment in regard to its assertion that attorney’s fees should
                 not be allowed in the pending Complaint is hereby
                 GRANTED. It is further ORDERED, ADJUDGED and
                 DECREED that Defendant’s Motion for Partial Summary
                 Judgment requesting dismissal of Plaintiff’s breach of
                 contract claim and its request for a declaratory judgment is
                 hereby DENIED, the Court finding that there exist genuine
                 issues of material fact precluding summary judgment and that
                 Plaintiff’s declaratory judgment action is proper, both causes
                 of action requiring a hearing at trial.

                                              -3-
        On September 30, October 1, 2, 3 and 7, 1996, a jury heard plaintiff’s evidence and were

directed by the Trial Court to find for the defendants on all counts, except fraud. At the

conclusion of defendant’s evidence in respect to plaintiff’s suit, the jury were directed to find for

the defendants on the count of fraud.

        On October 8-9, 1996, the jury heard defendant’s evidence in support of its countersuit.

        On October 10, 1996, the Trial Court entered a judgment stating in part:

                        The Jury was then assembled in the courtroom and in
                the presence of the Court, the parties, and their counsel, the
                Court was handed the interrogatories and the Jury’s findings
                which the Court then read in the presence of the Jury, the
                parties, and their counsel.

                       The interrogatories and the Jury answers were as
                follows:

                       1.      Did Someday Baby, Inc. and Entertainment
                International, Inc. agree by the insertion of the word
                “appropriate” in the contract of August 16, 1994 to limit the
                placement of the mini-catalogs to products sold to non-retail
                accounts?

                        The Jury answered “yes”.

                       2.      Did Entertainment International, Inc. breach its
                contract with Someday Baby, Inc.?

                        The Jury answered “yes”.

                       3.     If your answer to question No. 2 is “yes” did
                Someday Baby, Inc., suffer any damages as a result of
                Entertainment International, Inc.’s breach?

                        The Jury answered “no”.

                        The Court then confirmed with the Jury that they were
                unanimously in agreement with the verdict. The Court then
                announced that the verdict was the judgment of the Court. It
                is accordingly,

                        ORDERED AND ADJUDGED as follows:

                        1.      Entertainment International, Inc. agreed by the
                insertion of the word “appropriate” in the contract of August
                16, 1994 with Someday Baby, Inc. to limit the placement of
                the mini-catalogs to products sold to non-retail accounts.

                                              -4-
                      2.      Entertainment International, Inc. breached its
               contract with Someday Baby, Inc.

                       3.   Someday Baby, Inc. did not suffer any
               damages as a result of Entertainment International, Inc.’s
               breach.

       The above, October 18, 1996, judgment, with its sequel overruling a motion to alter or

amend, became the final judgment from which this appeal is prosecuted. All prior, interlocutory

orders were superseded by this final judgment. TRAP Rule 3(a). TRCP Rule 56.05 is not

deemed applicable to questions of law, but only to questions of fact.

       On appeal defendant presents the following issues:

                       1.      Whether the Trial Court erred by not
               interpreting the contract between the parties as a matter of
               law.

                       2.     Whether the Trial Court erred by permitting
               parol evidence to contradict the plain meaning of the contract.

                      3.      Whether the Trial Court erred by failing to
               dismiss the breach of contract claim of Someday Baby, Inc.

        The applicable provision of the contract was paragraph 5, which read as follows:

                      5.      EII shall develop a mini-catalog with SDB’s
               cooperation to market existing and new SDB products. The
               mini-catalog will be packaged with all appropriate SDB
               products that it controls and EII products sold in order to
               introduce other SDB/EII products to existing and/or new
               customers developed by either party through this agreement.
               (Emphasis supplied)

       Plaintiff insists that the emphasized word, “appropriate,” means “non retail accounts,”

thereby prohibiting defendant from sending catalogs to plaintiff’s small customers and thereby

disclosing to them that plaintiff’s prices to small customers were higher than those charged to

large customers. Plaintiff was permitted to present oral and written evidence supporting its

insistence.

                                              -5-
        Defendant emphatically denies the correctness of plaintiff’s insistence, and insists that

the word “appropriate” does not limit or restrict the distribution of catalogs to “existing or new

customers developed by either party through this agreement.”

        Paragraph 3 of the contract requires plaintiff to develop and provide defendant with

“products at favorable prices.”

        Paragraph 8 requires plaintiff to “provide access to all retail marketing information,

consumer lists and mailing lists that defendant will accumulate.”

        Paragraph 10 provides:

                       10.    Excluding SDB’s current national accounts,
                SDB agrees to allow EMI, with prior permission of SDB, to
                represent SDB’s proprietary product line to other national and
                worldwide accounts at a negotiated commission.

        Where the interpretation of a written contract is necessary for the decision of a court, the

general rule is that such interpretation is a matter of law, and not of fact. Park Place Enterprises,

Inc. v. Park Place Mall Associates, L.P., Tenn. App. 1992, 836 S.W.2d 113; APAC-Tennessee,

Inc. v. J. M. Humphries Construction Co., Tenn. App. 1986, 732 S.W.2d 601; Taylor v.

Universal Tire Inc., Tenn. App. 1984, 672 S.W.2d 775; Ford v. Fisk University, Tenn. App.

1988, 661 S.W. 883.

        In the absence of fraud or mistake, a contract must be enforced as written. Ballard v.

North American Life & Casualty Co., Tenn. App. 1983, 667 S.W.2d 79; E. O. Bailey & Co. v.

Union Planters Title Guaranty Co., 33 Tenn. App. 439, 232 S.W.2d 309 (1949).

        None of the exceptions to the foregoing rule are supported by the evidence in this case.

                                                -6-
       This Court finds that the above quoted paragraph 5 of the contract is clear and

unambiguous and that the adjective, “appropriate” therein refers to and modifies the noun,

“products” rather than the word, “customers,” as insisted by defendant.

       The Trial Court therefore erred in hearing parol evidence as to the meaning of the

contract which was clear and unambiguous, and the interpretation placed upon the contract by

the jury and the Trial Court was incorrect. However, the finding of the jury that Someday Baby,

Inc. suffered no damage from the breach of contract by Entertainment International, Inc., is

conclusive of the suit of Someday Baby, Inc. against Entertainment International, Inc. which

should be and is dismissed.

       The judgment of the Trial Court does not appear to dispose of the counterclaim of

Entertainment International for injunction and damages for breach of contract by Someday Baby,

Inc. This appeal was therefore premature and subject to dismissal. TRCP Rule 5402, TRAP

Rule 3(a). However, this Court has elected to resolve the issues presented and to remand for

resolution of the issues relating to the counterclaim.

       The judgment of the Trial Court that Someday Baby, Inc., suffered no damages is

affirmed. Said judgment is modified to dismiss the suit of Someday Baby, Inc. and to tax

Someday Baby, Inc. with the costs of its suit. The cause is remanded to the Trial Court for

further proceedings in conformity with this opinion.

                   MODIFIED, AFFIRMED AND REMANDED

                                       ___________________________________
                                       HENRY F. TODD
                                       PRESIDING JUDGE, MIDDLE SECTION

                                               -7-
CONCUR:

_______________________________
BEN H. CANTRELL, JUDGE

CONCUR IN SEPARATE OPINION:
WILLIAM C. KOCH, JR., JUDGE

                                  -8-