Court Opinion

ID: 1082465
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:58:54.912157+00
Date Added: 2024-06-11T12:06:23.205843
License: Public Domain

WILLIAM B. DEMONTBREUN,                )
                                       )
      Plaintiff/Appellant,             )
                                       )    Robertson Chancery
                                       )    No. 11799
VS.                                    )
                                       )    Appeal No.
                                       )    01-A-01-9411-CH-00550
FIRST CUMBERLAND BANK AND              )
G. WAYNE DETRING, Substitute Trustee, )

      Defendants/Appellees.
                                       )
                                       )
                                                                 FILED
                                                                     May 5, 1995
                  IN THE COURT OF APPEALS OF TENNESSEE           Cecil Crowson, Jr.
                                                                    Appellate Court Clerk
                       MIDDLE SECTION AT NASHVILLE

       APPEAL FROM THE CHANCERY COURT OF ROBERTSON COUNTY

                         AT SPRINGFIELD, TENNESSEE

                    HONORABLE JAMES E. WALTON, JUDGE

ALAN MARK TURK
200 Fourth Avenue, North
Suite 820
Nashville, Tennessee 37219
ATTORNEY FOR PLAINTIFF/APPELLANT

G. WAYNE DETRING
177 East Main Street
Hendersonville, Tennessee 37075
ATTORNEY FOR DEFENDANTS/APPELLEES

AFFIRMED AND REMANDED

                                       HENRY F. TODD
                                       PRESIDING JUDGE, MIDDLE SECTION

CONCUR:
BEN H. CANTRELL, JUDGE
CORNELIA A. CLARK, SPECIAL JUDGE
WILLIAM B. DEMONTBREUN,                )
                                       )
      Plaintiff/Appellant,             )
                                       )              Robertson Chancery
                                       )              No. 11799
VS.                                    )
                                       )              Appeal No.
                                       )              01-A-01-9411-CH-00550
FIRST CUMBERLAND BANK AND              )
G. WAYNE DETRING, Substitute Trustee, )
                                       )
      Defendants/Appellees.            )

                                         OPINION

       The captioned plaintiff has appealed from a jury verdict and judgment in his favor and

against the defendant, First Cumberland Bank for $4,600 as damages for breach of contract.

       No judgment was entered against the other defendant, G. Wayne Detring, who has no

interest in this appeal except as counsel of record for First Cumberland Bank, which will

hereafter be referred to as the defendant.

       Plaintiff presents for review the following issues:

               1. That the Trial Court erred in failing to instruct the jury that
               recklessness had to be proven by clear and convincing evidence
               and also erred in directing a verdict on the issue of punitive
               damages.

               2. That the Trial Court erred when it excluded admissible
               evidence as to recoverable compensatory damages.

       Plaintiff's brief contains no "Statement of the Case" as required by T.R.A.P. Rule

27(a)(5). This is understandable but not excusable when the technical record is composed of

four volumes containing 487 pages.

       On December 6, 1991, plaintiff filed his complaint alleging:

       1. On September 28, 1989, plaintiff executed a deed of trust to secure an "Equity

Line of Credit" extended to plaintiff by defendant.

                                              -2-
        2. During the following year, plaintiff paid more than the agreed installments due on

the debt.

        3. In November, 1990, the president of defendant promised that he would be allowed

the full term of 60 months for payment of the debt.

        4. Two days later, defendant began foreclosure by notice of a sale on December 12,

1990.

        5. Foreclosure was prevented by a bankruptcy petition which was dismissed in

September, 1991.

        6. On November 6, 1991, defendant caused the publication of a notice of foreclosure

sale on December 11, 1991.

        The complaint sought a restraining order, injunction, damages for wrongful initiation

of foreclosure "and its breach of its implied covenant and fair dealing," and a jury trial.

        The Trial Judge denied the requested restraining order, but ordered:

                 [T]hat the defendants may convey the property only to First
               Cumberland Bank, the beneficiary of the Deed of Trust, and the
               defendants shall not convey the property to any other party; it
               is, further,
                 Ordered that the property and any conveyance thereof,
               including to First Cumberland Bank, shall be subject to further
               orders of this Court or the final decision in this cause.

        The property was sold and conveyed to defendant.

        On July 15, 1992, the Trial Court entered an order excluding recovery of damages for

loss of reputation, embarrassment or humiliation, or for loss of contract to sell adjacent

property.

        On October 6, 1993, plaintiff was allowed to amend his complaint to assert reckless,

malicious and intentional acts of defendant in breach of contract and "covenant of good faith

and fair dealing" and to pray for compensatory and punitive damages.

                                               -3-
        On January 3, 1994, the Trial Judge entered an order bifurcating the trial of the case,

the first trial to be limited to the issue of plaintiff's default in payment of his debt to

defendant. At a trial on April 18 and 19, 1994, the jury found that plaintiff was not in

default. After completion of the second trial, the jury reported a verdict in favor of plaintiff

for "expenses related to bankruptcy, $2,800.00, loss of income $1,800.00." Judgment was

rendered for $4,600.00.

                                 -First Issue: Punitive Damages-

        Plaintiff filed no motion for a new trial. Accordingly, plaintiff's complaint of failure

to instruct the jury on punitive damages cannot be considered on appeal. T.R.A.P. Rule 3(e).

        The issue of granting a directed verdict may be considered on appeal despite the

failure to move for a new trial. T.R.C.P. Rule 50.05.

        An action for "breach of obligation of good faith" is not a tort action, but an action for

breach of contract. Solomon & Sands v. First American National Bank of Nashville, Tenn.

App. 1989, 774 S.W.2d 939.

        This Court agrees with the Trial Judge that this is essentially an action for breach of

contract. It is a general rule that punitive damages are not allowed in cases founded on

breach of contract. Bland v. Smith, 197 Tenn. 683, 277 S.W.2d 377, 49 A.L.R. 2d 1212

(1955); B.F. Myers & Son of Goodlettsville v. Evans, Tenn. App. 1980, 612 S.W.2d 912.

        No ground of reversal is found in plaintiff's first issue.

                              -Second Issue: Exclusion of Evidence-

        Plaintiff complains of an order entered on July 15, 1992, which contains the

following:

                                                 -4-
                ORDERED that pursuant to the statement and agreement of
               counsel for the plaintiff, the plaintiff's alleged damages do not
               include any damage or loss to his personal reputation or for
               embarrassment, humiliation, or similar personal loss, so that
               any facts or allegations regarding the plaintiff's personal
               reputation or embarrassment, humiliation, or similar personal
               loss or damage, are not relevant, and not subject to discovery,
               except to the extent that these facts or allegations may relate to
               any loss of income by the plaintiff; [emphasis added] and it is,
               therefore, ordered that the plaintiff's objection to defendant's
               interrogatory #7 is well taken, and the plaintiff shall not be
               required to respond to this interrogatory, except to state the
               details of any criminal convictions which would be admissible
               for impeachment purposes pursuant to the Rules of Evidence.
               (R. Vol. I, p.106)

       The second issue does not mention a protective order granted under T.R.C.P. Rule

26.03, but only the exclusion of evidence. No part of the record is cited or found where the

Trial Court excluded the evidence mentioned or where such evidence was tendered.

Moreover, exclusion of evidence is included in T.R.A.P. 3(e) which requires a motion for

new trial to obtain appellate review.

       Plaintiff complains of the refusal of the Trial Judge to instruct the jury on recoverable

damages as requested by plaintiff, and a requested interrogatory to the jury regarding

"expenses related to bankruptcy" and loss of income. Neither of these complaints can be

considered on appeal without a motion for new trial.

       Plaintiff complains of a pre-trial ruling denying plaintiff's motion to be allowed to

introduce evidence of various elements of damage. This is an "exclusion of evidence"

included in T.R.A.P. Rule 3(E), and cannot be considered on appeal without a motion for

new trial.

       It is regrettable that plaintiff's failure to preserve his exceptions by motion for new

trial has largely prevented review of his complaints. However, in the view of this Court,

justice has not been defeated.

                                               -5-
       From the allegations of the complaint, it is evident that plaintiff complains of two

distinct wrongs:

       1. The first notice of foreclosure which allegedly necessitated a petition for

bankruptcy causing the postponement of the foreclosure until the dismissal of the bankruptcy.

The evidence showed that there was a bona fide dispute as to whether the secured debt was in

default at the time of the first attempted foreclosure, but the jury resolved this issue in favor

of the plaintiff and awarded damages for this unjustified attempt to foreclose.

       2. The second foreclosure was initiated one year later during which additional

installments of the secured debt became due. Defendant's evidence showed that, on the date

of the second foreclosure notice, the secured debt was in default. The original complaint

alleges the renewed effort to foreclose, but does not deny that the debt was in default at that

time. The verbatim allegations of the original complaint in this regard are as follows:

               16. The wrongful actions of the Bank and through its agents
               have damaged DeMontbreun and now, because the Bank has
               again initiated foreclosure proceedings, DeMontbreun will
               suffer immediate and irreparable injury, loss or damage should
               the foreclosure sale not be enjoined. A copy of the Substitute
               Trustee's Notice of Sale is attached as Exhibit 5.

               17. Specifically, DeMontbreun alleges that the farm has the
               fair market value of $120,000. In support hereof,
               DeMontbreun, less than one month ago, was given a verbal
               offer of $40,000 for tracts 2 and 5 only. Upon information and
               belief, the total claim of the Bank, even including all of its
               foreclosure expenses and attorney's fees, including those
               associated with DeMontbreun's bankruptcy, to which
               DeMontbreun denies the Bank is entitled, does not exceed
               $45,000.

                18. For these reasons, DeMontbreun alleges that issuance of a
                temporary restraining order and, then, a temporary injunction
                enjoining the Bank from foreclosing on the farm will not cause
                undue inconvenience or loss to the Bank but will prevent
                irreparable injury, loss or damage to DeMontbreun, including
                the loss of his farm and the substantial equity in the same.

        In respect to the second foreclosure, the amended complaint restates the paragraphs of

the original complaint stated above and adds three new paragraphs, all of which read as

follows:

                                                -6-
               Amended Paragraph 16. The intentional, malicious, reckless
               and wrongful actions of the Bank and through its agents have
               damaged DeMontbreun and now, because the Bank has again
               initiated foreclosure proceedings, DeMontbreun will suffer
               immediate and irreparable injury, loss or damage should the
               foreclosure sale not be enjoined. A copy of the Substitute
               Trustee's Notice of Sale is attached as Exhibit 5.

               19. Since December 11, 1991, the Bank has continued its
               intentional, malicious, reckless and wrongful conduct toward
               DeMontbreun and has continued to breach its covenant of good
               faith and fair dealing in its contract and relationship with
               DeMontbreun by refusing to allow reasonable restrictive
               covenants to be placed on the farm so adjacent property could
               be sold and by refusing to allow him receipt of proceeds from a
               subsequent auction sale of his property. DeMontbreun alleges
               that these actions of the Bank, which began with the Bank's
               initial, wrongful attempt at foreclosure have caused further
               damage to DeMontbreun as below described.

               20. All of said actions of the Bank constitute an intentional,
               malicious, reckless and wrongful attempt by the Bank to
               wrongfully dispossess DeMontbreun of his farm and/or change
               its contract with him to his detriment and to its benefit.

               21. All of said actions of the Bank were done either
               intentionally, maliciously, or recklessly, and for such punitive
               damages should be awarded to plaintiff as the proof may
               dictate.

       In neither original nor amended complaint has plaintiff alleged that the second

foreclosure was initiated or carried out without a default in payment of the secured debt.

       The Statement of Facts in plaintiff's brief contains no allegation that the second

foreclosure was initiated or carried out without default. It must be presumed that no evidence

was introduced that the debt was not in default when the second foreclosure occurred, and

that there was no evidence to support a verdict to that effect.

       Accordingly, it must be concluded that the first issue presented to the jury and its first

verdict related only to the lack of default at the time of the first attempted foreclosure, for

which damages were assessed.

                                                -7-
       No evidence is cited or found to support a verdict of liability for the second,

completed, foreclosure.

       Thus, it appears that plaintiff has received his just desserts and deserves no more.

       Defendant's application for finding of frivolous appeal is denied.

       The judgment of the Trial Court is affirmed. Costs of this appeal are taxed against the

appellant. The cause is remanded to the Trial Court for any further proceedings which may

be necessary and appropriate.

       Affirmed and Remanded.

                                              _______________________________________
                                              HENRY F. TODD
                                              PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

_____________________________________
BEN H. CANTRELL, JUDGE

_____________________________________
CORNELIA A. CLARK, SPECIAL JUDGE

                                              -8-