Court Opinion

ID: 1065623
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:21:16.187018+00
Date Added: 2024-06-11T15:26:26.650780
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                    January 9, 2003 Session

            SHARRON JOHNSON, ET AL. v. RODNEY LOCKHART

                      Appeal from the Circuit Court for Sumner County
                             No. 19073-C    C.L. Rogers, Judge

                  No. M2002-00623-COA-R3-CV - Filed September 5, 2003

Sharron Johnson brought suit against her former husband, Rodney Lockhart, alleging breach of an
oral contract to pay equal shares of the college expenses for their son, Paul G. Lockhart. The Circuit
Court of Sumner County entered judgment for Ms. Johnson, and Mr. Lockhart appeals. We affirm
the judgment of the trial court.

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

WILLIAM B. CAIN , J., delivered the opinion of the court, in which BEN H. CANTRELL, P.J., M.S., and
PATRICIA J. COTTRELL, J., joined.

L. Anthony Deas, Madison, Tennessee, for the appellant, Rodney Lockhart.

Philip C. Kelly, Gallatin, Tennessee, for the appellee, Sharron Johnson.

                                             OPINION

       After a ten year marriage, Sharron and Rodney Lockhart divorced in 1980. Born to the
marriage was one son, Paul G. Lockhart, also known as Greg. The decree of divorce provided that
Sharron Lockhart was the primary residential custodian of Greg, and she resided with Greg in
Hendersonville, Tennessee. Rodney Lockhart resided in Madison, Tennessee.

       Greg completed Hendersonville High School in December of 1996 and then enrolled in
Volunteer State Community College in Gallatin where he took freshman courses until May of 1997.
His expenses at Volunteer State Community College were paid in equal shares by his parents.

       Greg desired to go to a four year college or university that offered an international studies
major. He researched institutions that offered this major over the internet and found Stanford,
Princeton, the University of Virginia, the University of Miami and New College of South Florida
located in Sarasota. Greg and his mother considered the latter two institutions since they were the
most reasonably priced. They drove to Sarasota, Florida to tour the campus of the New College of
South Florida but, Greg did not like the small size of this school, which had a student population of
approximately 500. Greg also applied to the University of Miami and was accepted for admission
by letter dated April 23, 1997. He toured the campus with his mother on May 10, 1997, and his
mother (now Mrs. Johnson) left a $150 deposit in order to secure his place in the freshman class.
However, Mrs. Johnson cautioned that she would have to talk to Mr. Rodney Lockhart about
financial arrangements before Greg could commit to attending the University of Miami because of
the expense. Greg applied for financial aid from the University of Miami on forms provided by the
school.

       The foregoing facts are essentially undisputed and provide the backdrop for the ensuing
dispute. The Tennessee Rule of Appellate Procedure 24(c) statement of the evidence then provides:

               Ms. Johnson hosted a high school graduation party for Greg on May 23, 1997.
       Family and friends attended including Greg’s father, Mr. Lockhart. At this party Ms.
       Johnson testified that she heard Mr. Lockhart state how proud he was of Greg’s
       acceptance at the University of Miami and how this was a golden opportunity for
       Greg and how Greg was living out Mr. Lockhart’s dream. Ms. Johnson stated that
       Mr. Lockhart announced during the party that he and Sharron were about to send
       Greg off to The University of Miami. Ms. Johnson testified that on this occasion and
       at other times, Mr. Lockhart agreed to split Greg’s expenses at The University of
       Miami with her. In July of 1997, Ms. Johnson said she received a financial aid
       package from the University. Shortly thereafter Ms. Johnson said she sat down with
       Mr. Lockhart at her house to go over the total cost, as itemized in the package, of
       sending Greg to the University outside of available grants, financial aid or subsidized
       student loans. Ms. Johnson testified that Mr. Lockhart again told her at this meeting
       that he would pay one-half of these expenses as long as Greg made good grades. Ms.
       Johnson stated that Mr. Lockhart had suggested that they borrow the money from the
       bank each year. Mr. Lockhart denied saying this. Ms. Johnson said she told him that
       it would be more economical to take advantage of the University’s nine-month
       installment plan which had a 3% origination fee. Ms. Johnson stated that the
       Defendant and she had numerous meetings whenever she received correspondence
       from The University of Miami during this time and that they agreed to go on the
       University’s payment plan.
               In late August of 1997, Ms. Johnson, Mr. Lockhart and Greg set out together
       on a 14-hour long trip in Greg’s small car to move Greg in at the University of
       Miami. Ms. Johnson and Mr. Lockhart moved Greg into the dormitory on a Saturday
       and bought supplies for him. Before leaving the campus to return on a flight back to
       Tennessee, Ms. Johnson and Mr. Lockhart went to the register’s office at the
       University and enrolled in the nine-month college payment plan of $811.50 each
       month and made Greg’s first monthly payment. Ms. Johnson stated that at no time
       while the parties were on this extended trip or thereafter did Mr. Lockhart tell Greg
       or her that he only intended to pay his half of Greg’s college expenses for Greg’s first

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year of school. She said it was their goal that Greg graduate from the University.
She stated that Greg was able to obtain a Pell grant, a University grant and a
government loan and that she did not consider having Greg change schools or
discontinue his education there after his freshman year.
        For nine months after Ms. Johnson and Mr. Lockhart enrolled Greg at the
University of Miami, Mr. Lockhart routinely paid his one-half share of Greg’s
expenses in the amount of $811.50 by check made out to The University of Miami.
Mr. Lockhart either personally delivered his checks to Ms. Johnson’s house or mailed
them. One month Ms. Johnson testified that Mr. Lockhart asked her to go ahead and
pay the whole amount and he would reimburse her which he did three days later.
        By letters dated May 15, 1998, July 16, 1998, July 31, 1998, August 7, 1998,
and September 18, 1998 which were introduced into evidence, Ms. Johnson sent Mr.
Lockhart documentation of what Greg’s college expenses were. In these letters, Ms.
Johnson also stated the amount she had paid and requested to know when she would
receive payment of Mr. Lockhart’s one-half share. Ms. Johnson stated that Mr.
Lockhart neither responded to any of her letters nor did he give any indication at all
that he would not be making any future payments as he had in the past. Mr. Lockhart
stated that he did not feel obligated to make any future payments. . . .

       ....

        Greg Lockhart testified that he worked at the university’s swimming pool and
as a night security guard for extra money while he was a student. He said that had
his father not agreed to share the costs of his expenses at The University of Miami,
that he would have stayed on at Volunteer State Community College after his high
school graduation.
         Sarah Johnson, Sharron Johnson’s mother who lived with her, testified that
she was present in the room at the financial meeting between Mr. Lockhart and her
daughter when they were reviewing the costs of sending Greg to The University of
Miami and that she told them not to send Greg down there only to have him come
back prematurely due to financial reasons, and that they both indicated to her that
they would not do that.
         Rodney Lockhart testified that Ms. Johnson initiated the discussion about
Greg’s college expenses at the University of Miami and that he told her that he would
do all that he could do. He stated that he did not promise to pay one-half of Greg’s
expenses and that he never said that he would contribute for four years. Mr. Lockhart
testified that he did not remember having a conference with Ms. Johnson about
Greg’s college expenses before the parties left for Miami to move Greg in August of
1997 and that he did not know how much the cost would be prior to going to the
school’s comptroller’s office. Mr. Lockhart admitted that he made the monthly
$811.50 payments to Ms. Johnson voluntarily without any prompting from her and
that he never informed Ms. Johnson that he would not be making any more payments
after Greg’s first year at the University. Mr. Lockhart testified that he told Greg

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         throughout his freshman year that he needed to try and get scholarships because he
         could not afford it. Mr. Lockhart said that he last spoke with Greg in May of 1998
         and that Greg didn’t give him the chance to tell him he would no longer pay for his
         college expenses. Mr. Lockhart verified the fact that by deed dated August 14, 1998,
         he sold his home in Davidson County, Tennessee for $146,900 and by deed dated
         August 17, 1998 he purchased property in Wilson County, Tennessee for $210,000.

After Rodney Lockhart stopped paying one-half of Greg’s expenses at the University of Miami, Ms.
Johnson carried the entire financial responsibility for his education (beyond scholarship and college
loans) by cashing out her mutual fund account and liquidating her retirement portfolio.

        The trial court found that Sharron Johnson and Rodney Lockhart had entered into a bi-lateral
oral contract under which each would pay one-half of Greg’s college expenses until he graduated.
The trial court further found that Rodney Lockhart had breached the agreement and entered judgment
in favor of Sharron Johnson for $20,427.25, representing one-half of the expenses she had paid for
Paul G. Lockhart’s college expenses at the University of Miami. The court also awarded pre-
judgment interest in the amount of $3,398.18. Mr. Lockhart filed a timely appeal.1

         Appellant asserts the issues on appeal to be:

         I.       The doctrine of promissory estoppel is not applicable.

         II.      There was no enforceable contract creating liability between Rodney
                  Lockhart and Sharron Johnson.

         III.     If there was an enforceable contract between Rodney Lockhart and Paul G.
                  Lockhart, Paul was in breach of it by the end of his freshman year.

         IV.      Defendant had no duty to Plaintiff, Sharron Johnson, to reimburse her for
                  college expenses paid by her on behalf of the parties’ adult son.

         V.       Plaintiff, Sharron Johnson, failed to mitigate damages.

        The real issues on appeal might better be stated as:
1.      Does the evidence preponderate against the trial court’s finding that a bi-lateral contract
existed between Sharron Johnson and Rodney Lockhart whereby each would pay half of Greg’s net
expenses for four years at the University of Miami?
2.      Does part performance take the contract out of the statute of frauds?

         1
           This case originated in general sessions court by civil warrant with Sharron Johnson as Plaintiff and Rodney
Lockhart as Defendant. After appeal to circuit court, an Amended Complaint was filed joining Paul G. Lock hart as a
party-plaintiff. The trial court dismissed the Complaint of Paul G. Lockhart, and no appeal was taken from such action.

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3.     If the contract is not supported by consideration, does the doctrine of promissory estoppel
apply to estop Rodney Lockhart from relying on lack of consideration?

       The right of Ms. Johnson to maintain an action to enforce a contract made by her and Mr.
Lockhart for the benefit of Greg is unquestioned. See Moscheo v. Moscheo, 838 S.W.2d 226, 228
(Tenn.Ct.App.1992).

       Addressing first the existence of the contract, in the general sessions court warrant issued
December 3, 1998, Sharron Johnson alleged: “Breach of Contract re: College tuition, board and
books for Paul Lockhart.” After appeal to circuit court, the Complaint was amended on April 30,
1999. Ms. Johnson alleged an oral contract between her and Mr. Lockhart whereby they would share
equally the net costs of Greg Lockhart’s college expenses at the University of Miami for the entire
four year period. She further alleged that, in furtherance of this contract, Mr. Lockhart, in fact, paid
one-half of Greg’s college expenses at the University of Miami for two semesters. In answer to this
Amended Complaint, Mr. Lockhart denied an agreement of any sort but admitted making several
payments to the University of Miami during 1997 and 1998 on behalf of Greg.

         The case came on for trial, non-jury, on February 6, 2002. After hearing all of the evidence,
the trial court found:

                1.      The parties were divorced October 1980. The mother was the primary
        residential custodian of the one son. The final divorce decree did not include college
        expenses. The son graduated from high school December 1996 and enrolled in low
        cost public junior college in his home town. The son applied and received
        conditional acceptance at the University of Miami May 10, 1997. The son desired
        to pursue education in international studies. The mother and son needed the
        Defendant’s agreement to pay one-half of the college expense in order for the son,
        PAUL G. LOCKHART, to attend the University of Miami. Beginning May 23, 1997
        through July 1997 Plaintiff had several financial discussions with the Defendant,
        where the Defendant agreed to pay one-half of the college expenses for the son to
        attend the University of Miami. Relying upon the Defendant’s agreement, the
        Plaintiff signed and submitted the final acceptance documents to the University of
        Miami in August 199[7]. Plaintiff’s son then left the low cost public junior college.
        Plaintiff and Defendant moved the son in at the University of Miami. Plaintiff and
        Defendant met with the college financial office and established a loan payment plan
        for payment of the college expenses. The son thereafter attended the University of
        Miami. The Defendant paid his one-half of the college expenses during the son’s
        first year. The Defendant, in August of 1998, did unilaterally and without
        explanation or any communication with the Plaintiff, refuse to continue to pay
        college expenses. Plaintiff immediately brought action in December 1998 against the
        Defendant. The son graduated May 2001 from the University of Miami in
        international studies. The mother and son paid out a total of Forty Thousand Eight
        Hundred Fifty Four and 00/100 ($40,854.00) Dollars in college expenses for the last

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       three (3) years during this pending litigation. Defendant made no payments after
       August 1998.
               2.      The Court finds that promissory estoppel exists and the parties had an
       enforceable contract. Calabro v. Calabro, 873 15 S.W. 3 873 (Tn.Appeals 1999).
               3.      The Plaintiff, SHARRON JOHNSON, is entitled to a judgment for
       one-half of the college expenses totaling Twenty Thousand Four Hundred Twenty
       Seven and 25/100 ($20,427.25) Dollars against the Defendant, RODNEY
       LOCKHART. The Court further exercises discretion and awards Plaintiff pre-
       judgment interest from August 1998. The Defendant was continuously advised of
       the amounts due but chose not to pay or even communicate.

         In an appeal of a non-jury case that is predicated upon facts as established by disputed
testimony, an appellant is in an uphill climb. Under Tennessee Rule of Appellate Procedure 13(d),
an appellate court reviews the record de novo with a presumption of the correctness of the findings
of fact by the trial court. In such cases, the trial court has the opportunity to observe the manner and
demeanor of witnesses as they testify and may judge their credibility accordingly, and in such a case,
the rule on appellate review is well settled, as was stated by this Court in a comparable situation:

        The trial court apparently found the testimony of the defendants’ witnesses to be
        more persuasive on the issue of whether a duplicate key was maintained in the school
        vault. It is well settled that “[t]he weight, faith, and credit to be given any witness’s
        testimony lies in the first instance with the trier of fact who has the opportunity to
        observe the manner and demeanor of the witnesses as they testify.” Koch v. Koch,
        874 S.W.2d 571, 574 (Tenn.App.19093) (quoting Weaver v. Nelms, 750 S.W.2d 158,
        160 (Tenn.App.1987)). “The credibility accorded will be given great weight by the
        appellate court.” Id.

Doe A v. Coffee County Bd. of Educ., 925 S.W.2d 534, 537 (Tenn.Ct.App.1996).

         The evidence certainly does not preponderate against the finding of the trial court of a bi-
lateral oral contract to pay equally the net expenses of Greg Lockhart at the University of Miami for
four years. Inherent in the finding of the court is a determination that the contract was supported by
adequate consideration.

                The question of what constitutes consideration adequate or sufficient to
        support a contract has been addressed by a number of Tennessee courts. The court
        in University of Chattanooga v. Stansberry, 9 Tenn. App. 341, 343 (1928) defined
        consideration as “either a benefit to the maker of the promise or a detriment to, or
        obligation upon the promise.” (citing Foust v. Board of Education, 76 Tenn., (8
        Lea), 552). Courts have been willing to find a contract based on facts from which a
        jury could infer the requisite consideration.
                For there to be a consideration in a contract between parties to the
                contract it is not necessary that something concrete and tangible move

                                                  -6-
                   from one to the other. Any benefit to one and detriment to the other
                   may be a sufficient consideration. The jury may draw any reasonable
                   and natural inference from the proof and if by inference from the
                   proof a benefit to the promisor and detriment to the promisee might
                   be inferred this will constitute a valid consideration.

         Palmer v. Dehn, 29 Tenn.App. 597, 599, 198 S.W.2d 827, 828 (1946); see also
         Trailer Conditioners, Inc. v. Huddleston, 897 S.W.2d 728, 731 (Tenn.App.1995);
         Robinson v. Kenney, 526 S.W.2d 115, 118-19 (Tenn.App.1973).

Calabro v. Calabro, 15 S.W.3d 873, 876-77 (Tenn.Ct.App.1999).

        Sharron Johnson was under no more of an obligation to pay one-half of Greg Lockhart’s net
expenses at the University of Miami for four years than Rodney Lockhart. Both wished to help their
adult son to get a college education in international studies at the University if Miami rather than to
continue at a relatively inexpensive community college. The detriment to Ms. Johnson is that she
undertook, on the strength of the promises of Rodney Lockhart, to pay half of Greg’s net expenses
for four years when she was not otherwise obligated to do so. The contract was supported by
adequate consideration.

        While Mr. Lockhart does not raise the statute of frauds as a defense on appeal,2 it is obvious
that the oral contract could not be performed in one year, and the statute of frauds (T.C.A. 29-2-
101(a)(5)) would be applicable unless the contract, under the facts of the case, comes under a
recognized exception to the applicability of the statute of frauds. This statute provides that no action
shall be brought, “upon any agreement or contract which is not to be performed within the space of
one (1) year from the making of the agreement or contract; unless the promise or agreement, upon
which such action shall be brought, or some memorandum or note thereof, shall be in writing, and
signed by the party to be charged therewith, or some other person lawfully authorized by such party.”
T.C.A. 29-2-101(a)(5)(2000).

        It is long settled in Tennessee that part performance of a contract, otherwise invalid under
the statute of frauds, will render the statute inapplicable. In sustaining an oral contract on part
performance and overruling a defense based upon this same statute of frauds, the supreme court
stated:
                 “This doctrine of partial performance to take the verbal contract out of the
        operation of the Statute of Frauds is purely an equitable doctrine and is a judicial
        interpretation of the acts of the parties to prevent frauds. The acts of the appellant
        relied on as partial performance had been done by him in pursuance to the averred
        contract and agreement and are clearly referable thereto. ‘The plaintiff must be able
        to show such acts and conduct of the defendant as the court would hold to amount

         2
             It may we ll be that Appellant realized that if the four year contract was found by the court to exist as a matter
of fact, that it would be futile to deny part performance under this record.

                                                             -7-
        to a representation that he proposed to stand by his agreement and not avail himself
        of the statute to escape its performance; and also that the plaintiff, in reliance on this
        representation, has proceeded, either in performance or pursuance of his contract, so
        far to alter his position as to incur an unjust and unconscious injury and loss, in case
        the defendant is permitted after all to rely upon the statutory defense.’ 49 Am.Jur.,
        Sec. 427, page 733. We think this quotation fairly sums up the obligation of the
        complainant in the instant case and that by the averments of the bill the complainant
        has met these obligations.”

Blasingame v. American Materials, Inc., 654 S.W.2d 659, 663 (Tenn.1983) (quoting Buice v.
Scruggs Equip. Co., 250 S.W.2d 44, 48 (Tenn.1952)); see also Steelman v. Ford Motor Credit Co.,
911 S.W.2d 720 (Tenn.Ct.App.1995); Calabro, 15 S.W.3d 873.

         In this case, part performance by both parties is conclusively established, as both of them paid
their respective shares of the net expenses for Greg at the University of Miami through the first two
semesters. While it is true that such payment would be consistent with a mere voluntary payment
by both parties, which could be discontinued at any time, the trial court has made the factual
determination that the oral contract was a four year contract. The evidence does not preponderate
against that crucial finding of fact, as the payments by both parties are clearly in partial performance
of the four year contract. The statute of frauds is, thus, inapplicable under Blasingame, Steelman and
Calabro.

        While the doctrine of promissory estoppel is unnecessary in this case since the oral contract
was supported by adequate consideration, the trial court applied the doctrine as an alternative basis
for holding Mr. Lockhart liable, and the evidence does not preponderate against such holding. This
Court has held:

               We likewise hold that the trial court erred in dismissing EnGenius’s
        promissory estoppel claim. As with EnGenius’s implied contract claim, EnGenius’s
        claim of promissory estoppel is not dependent upon the existence of an express
        contract between the parties. Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d
69, 73-74 (2d Cir.1989); United Magazine Co. v. Prudential Ins. Co., 877 F. Supp.
1076, 1084-85 (S.D.Ohio 1995); Quake Constr., Inc. v. American Airlines, 141 Ill. 2d
281, 152 Ill. Dec. 308, 565 N.E.2d 990, 1004 (1990). Under the theory of promissory
        estoppel,
               [W]hen one . . . by his promise induces another to change his
               situation, a repudiation of the promise would amount to a fraud.
               Where one makes a promise which the promisor should reasonably
               expect to induce action or forbearance of a definite and substantial
               character on the part of the promisee, and where such promise does
               in fact induce such action or forbearance, it is binding if injustice can
               be avoided only by enforcement of the promise.

                                                   -8-
       Foster & Creighton Co. v. Wilson Contracting Co., 579 S.W.2d 422, 427
       (Tenn.App.1978) (citing 17 C.J.S. Contracts § 74); see also Restatement (Second)
       of Contracts § 90(1) (1979). This theory of recovery is sometimes referred to as
       “detrimental reliance” because, in addition to showing that the defendant made a
       promise upon which the plaintiff reasonably relied, the plaintiff must show that this
       reliance resulted in detriment to the plaintiff. Foster & Creighton Co., 579 S.W.2d
       at 427; Quake Constr., 152 Ill. Dec. 308, 565 N.E.2d at 1004.

EnGenius Entm’t, Inc. v. Herenton, 971 S.W.2d 12, 19-20 (Tenn.Ct.App.1997).

       Further, Promissory estoppel has been explained by this Court as:

       A promise which the promisor should reasonably expect to induce action or
       forbearance on the part of the promisee or a third person and which does induce such
       action or forbearance is binding if injustice can be avoided only by enforcement of
       the promise. The remedy granted for breach may be limited as justice requires.

Calabro, 15 S.W.3d at 878 (quoting Amacher v. Brown-Forman Corp., 826 S.W.2d 480, 482
(Tenn.Ct.App.1991)).

        The trial court held that the representations and the actions of Mr. Lockhart were adequate
to supply the necessary elements of inducement and reliance, and the evidence does not preponderate
against such finding.

        The judgment of the trial court is in all respects affirmed, and the case is remanded for such
further action as may be necessary. Costs of the cause are assessed Appellant.

                                                       ___________________________________
                                                       WILLIAM B. CAIN, JUDGE

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