Court Opinion

ID: 1050782
Source: CourtListenerOpinion
Date Created: 2013-10-08 20:09:28.219911+00
Date Added: 2024-06-11T12:05:50.324721
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                                  AT JACKSON
                                          May 19, 2009 Session

                          THOMAS S. STARKS v. TROY D. WHITE

                     Direct Appeal from the Chancery Court for Henry County
                            No. 20107     Ron E. Harmon, Chancellor

                         No. W2007-02817-COA-R3-CV - Filed June 17, 2009

This is a breach of contract case. Purchaser/Appellant appeals the trial court’s finding that
Purchaser/Appellant is in breach of the contract for sale of real property, and entry of judgment in
favor of Seller/Appellee pursuant to the default provisions of the contract. Specifically, the trial
court found Purchaser/Appellant in breach on grounds of late payments, failure to list
Seller/Appellee as additional insured, and failure to provide proof of termite treatment. We modify
and affirm on the grounds of failure to list Seller/Appellee as an additional insured and on failure
to provide termite protection contract.

  Tenn. R. App. P.3. Appeal as of Right; Judgment of the Chancery Court Modified and
                                        Affirmed

J. STEVEN STAFFORD , J., delivered the opinion of the court, in which DAVID R. FARMER , J., and
HOLLY M. KIRBY , J., joined.

Richard L. Dunlap, III, Paris, Tennessee, for the Appellant

Terry J. Leonard, Camden, Tennessee, for the Appellee

                                       MEMORANDUM OPINION1

       On or about February 2, 2004, Appellee Thomas S. Starks and Appellant Troy D. White

       1
           Rule 10 of the Rules of the Court of Appeals of Tennessee provides:

       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. When a case is decided by memorandum opinion it shall be designated
       “MEM ORANDUM OPINION,” shall not be published, and shall not be cited or relied on for any
       reason in any unrelated case.
entered into a contract for the sale of real property located in Henry County, Tennessee. Pursuant
to the contract, Mr. White agreed to purchase the real property at issue from Mr. Starks for
$77,000.00.

       Mr. White allegedly failed to perform under the contract and, on July 24, 2005, Mr. Starks
sent Mr. White an “eviction notice.” Therein, Mr. Starks asserts that Mr. White is in breach of
contract in that he is two months behind in his payments, and has failed to properly care for the
property. Mr. Starks sent two subsequent letters (dated September 8, 2005 and October 17, 2005)
informing Mr. White that he was allegedly in breach of the contract for sale of real property.
Thereafter, on October 26, 2005, Mr. Starks filed suit against Mr. White in the Chancery Court of
Henry County. The complaint alleges, in relevant part, that:

               7. ...Defendant has breached Item One (1) of the contract as he has
               failed to pay the monthly installments as set out in the agreement.

               8. Plaintiff alleges the Defendant has breached Item Two (2) of the
               contract as he has made changes to the subject property without the
               express written permission of the seller.

               9. Plaintiff alleges the Defendant has breached Item Four (4) of the
               contract in failing to keep [the] property up....

        On November 23, 2005, Mr. White filed an answer denying the material allegations of the
complaint and a counterclaim alleging that Mr. Starks was in breach of the contract in failing to
remove certain items from the property. In his December 21, 2005 answer, Mr. Starks denies the
allegations made in the counterclaim.

        Following a rather protracted discovery period, the trial court convened to hear proof on July
17, 2007. However, no proof was actually adduced at that hearing; rather, the court and the attorneys
discussed the fact that this case hinges upon proof of Mr. White’s payment history. At this hearing,
Mr. Starks’s attorney indicates that he plans to proceed on breach of contract based not only upon
Mr. White’s alleged failure to make timely payments, but also upon Mr. White’s alleged failure to
list Mr. Starks as an additional insured, and upon Mr. White’s alleged failure to provide termite
protection on the property as required under the contract. Although these two grounds were not pled
in the original complaint, no objection was lodged by Mr. White’s attorney; consequently, we
conclude that these grounds were tried by consent of the parties as contemplated under Tenn. R. Civ.
P. 15.02. At the July 17, 2007 hearing, the parties agreed to submit the case on-briefs with the
necessary proof attached.

        As instructed by the court, the parties submitted briefs to the court. Attached to the briefs
are cancelled checks and receipts showing Mr. White’s payments. In addition, Mr. White provided
his proof of insurance, and proof of pest control. Based upon this evidence, on December 4, 2007,
the court entered its order, which reads, in pertinent part, as follows:

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                [T]he Court finds that the payments were more than ninety (90) days
                past due by January 8, 2007 and proper notice was given under the
                contract of the default.

                ...the Court finds that the contract was further breached by the failure
                of [Mr. White] to maintain insurance showing [Mr. Starks] as
                additional insured.

                ...the Court finds that [Mr. White] failed to maintain a termite
                contract as required by the contract.

                       IT IS FURTHER, ORDERED that [Mr. Starks] shall receive
                a judgment against [Mr. White] as per the default provisions of the
                contract and that said contract dated February 2, 2004 is deemed void
                and installments paid by [Mr. White] shall be deemed rent.

                      IT IS FURTHER, ORDERED that [Mr. White’s] counter
                complaint is hereby dismissed.

      On April 14, 2008, the trial court entered a subsequent order, which dismisses all pending
motions. Mr. White appeals and raises three issues for review as stated in his brief:

                1. Did the Chancellor err in holding that the payments were more
                than ninety (90) days past due by January 8, 2007, and proper notice
                was given under the contract of the default?

                2. Did the Chancellor err in holding that the contract was further
                breached by the failure of the purchaser/Defendant to maintain
                insurance showing the seller/Plaintiff as additional insured?

                3. Did the Chancellor err in finding that the Defendant failed to
                maintain a termite contract as required by the contract?

        Because this case was tried by the court sitting without a jury, we review the case de novo
upon the record with a presumption of correctness of the findings of fact by the trial court. Unless
the evidence preponderates against the findings, we must affirm, absent error of law. See Tenn. R.
App. P. 13(d).

       In resolving a dispute involving a contract, “our task is to ascertain the intention of the parties
based upon the usual, natural, and ordinary meaning of the contractual language.” Guiliano v. Cleo,
Inc., 995 S.W.2d 88, 95 (Tenn.1999). If the terms of the contract are unambiguous, the
determination of the parties' intent is a question of law for the court. Warren v. Metro. Gov't of
Nashville and Davidson County, 955 S.W.2d 618, 623 (Tenn.Ct.App.1997). Provisions in a contract

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“should be construed in harmony with each other, if possible, to promote consistency and to avoid
repugnancy between the various provisions of a single contract.” City of Cookeville v. Humphrey,
126 S.W.3d 897, 904 (Tenn.2004) (quoting Guiliano, 995 S.W.2d at 95). In so doing, courts should
read the contract in its entirety to determine if one provision modifies, limits, or explains another
provision. Associated Press v. WGNS, Inc., 348 S.W.2d 507, 512 (Tenn.Ct.App.1961).

       The relevant portions of the contract at issue in this case are as follows:

               1. Purchase Price. The purchase price for the Property shall be
               Seventy-Seven Thousand and No/100 ($77,000.00) Dollars, which
               sum shall be payable as follows:
                       (1) The purchase price of $77,000.00 shall be payable in
               monthly installments of $450.00, which began on August 8, 2003 and
               shall continue until said purchase price is paid in full.

               *                                  *                          *

                      4. Purchaser will, at their own expense, keep said property in
               as good a state of repair as it is at present, ordinary wear and tear and
               acts of God excepted. Purchaser will pay all taxes before they
               become delinquent, and will keep the buildings insured for at least the
               amount of the outstanding indebtedness due to Seller under this
               contract, and will deliver to the Seller a copy of said insurance policy
               with loss payable clause to the parties hereto, as their interests may
               appear. Purchaser shall also keep a termite contract on the above
               described real estate with a company that is agreeable to both parties.

               *                                       *                             *

                       7. Default. Should Purchaser default in the performance of
               this Contract, then the earnest money paid shall be retained by Seller
               as liquidated damages. If any installment as above stated shall be in
               default for ninety (90) days, then all succeeding installments then
               outstanding shall mature at once, without demand or notice, at the
               option of the lawful owner of this contract, and if the full
               consideration is not then paid within fifteen (15) days of the mailing
               of written notice to pay to the Purchaser’s last know post office
               address, then all sums paid to said date of default shall be treated as
               Purchaser’s reasonable rents for the use and occupancy of said
               property and shall be forfeited to the Seller for such rent and as
               damages for failure to carry out the terms of this contract and this
               contract shall stand at an end.

                                                 -4-
        As noted above, the record contains a series of cancelled checks and receipts dating from
2003 through 2007. Under section seven of the contract, see supra, Mr. White’s payments can be
up to ninety days late before he is actually in default. We have reviewed all of the checks and
receipts submitted in this case, from all of which it appears that Mr. White was consistently late with
his payments. But, again, the default period is ninety days under the contract. Although Mr. White’s
payments are late, none appear to be more than ninety days so. From the proof, Mr. White’s
November 8, 2006 payment was not made until January 12, 2007. His December 8, 2006 payment
was not made until January 30, 2007, and the January 8, 2007 payment was not made until February
20, 2007. Although these payments were as much as sixty-four days late, we cannot agree with the
trial court that more than ninety days elapsed between the payment and its due date so as to render
Mr. White in default under the contract. Consequently, we cannot find breach of contract on the
ground of late payment.

        Concerning the insurance, the proof in the record shows that Mr. Starks was never listed as
an additional insured under Mr. White’s policy. Although the record contains a “policy change
request” form, by which Mr. White purports to add Mr. Starks to the policy, we can find no date on
this change request. More importantly, however, we find no proof in record that this policy change
was ever actually made. Therefore, we conclude that Mr. White was, in fact, in breach for failure
to add Mr. Starks as an additional insured on the insurance policy as required under section four of
the contract.

        Turning to the required termite contract, we find no proof of its existence in the record.
Although the record contains evidence that Mr. White had the property treated for “general” pests,
a specific termite contract is simply not in this record. Therefore, we cannot conclude that the trial
court erred in reaching the conclusion that Mr. White breached the contract by failing to provide
proof of a termite protection contract.

         For the foregoing reasons, we reverse the trial court’s finding that the contract was breached
due to late payments by Mr. White. We affirm the order of the trial court on all other issues. Costs
of this appeal are assessed against the Appellant, Troy D. White and his surety.

                                                       ___________________________________
                                                       J. STEVEN STAFFORD, J.

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