Court Opinion

ID: 1045228
Source: CourtListenerOpinion
Date Created: 2013-10-08 02:24:30.633974+00
Date Added: 2024-06-11T12:18:16.414815
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                February 22, 2013 Session

       REGINALD M. MUDD AND MARY ANNE MUDD, D/B/A MUDD
       PROPERTIES v. REXFORD L. GOOSTREE, JR. AND LIBERTY
                 CABINETS AND MILLWORK, INC.

                   Appeal from the Circuit Court for Sumner County
                       No. 2009CV1501      C. L. Rogers, Judge

                  No. M2012-00957-COA-R3-CV- Filed April 5, 2013

In suit to recover rent due and owing under a lease agreement in which a corporation was
named as tenant, trial court entered judgment in favor of landlord against individual who had
signed the lease in the space in the signature box designated “Tenant.” Individual appeals,
contending that his signature on the lease is not sufficient to bind him personally to the
obligations under the lease. Landlord appeals award of damages. We affirm the holding that
the individual’s signature on the lease renders him personally liable and remand the case for
a determination of whether the landlord is entitled to an award of prejudgment interest and
for an award of attorneys’ fees incurred on appeal.

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

R ICHARD H. D INKINS, J., delivered the opinion of the court, in which P ATRICIA J. C OTTRELL,
P. J., M. S., and A NDY D. B ENNETT, J., joined.

John Ray Phillips, Jr., Gallatin, Tennessee, for the Appellant, Rexford L. Goostree, Jr.

Russell E. Edwards, Hendersonville, Tennessee, for the Appellees, Reginald M. Mudd and
Mary Anne Mudd.

                                         OPINION

        Reginald and Mary Anne Mudd, doing business as Mudd Properties (“Appellees”),
are the owners of a building in Gallatin, Tennessee; on November 27, 2007, they entered into
a commercial lease agreement leasing the building for a period of twenty-four months
beginning January 1, 2008. Mudd Properties was named as “Landlord” and Liberty Cabinets
& Millworks, Inc. (“Liberty”) was named as “Tenant” in the lease. In the signature box at
the end of the lease, Rexford Goostree (“Appellant”), the owner of Liberty Cabinets &
Millworks, Inc., signed as follows:

                          TENANT:

                          REX GOOSTREE, JR.

                          By Rex Goostree, Jr.

(Italics where handwritten).

       On December 21, 2009, Appellees filed a Complaint for Damages against Liberty and
Appellant, seeking to recover $30,900.00 in back rent and reasonable attorney fees. On
January 28, 2010, Appellees filed a Motion for Default Judgment against both defendants.
On February 16 the court entered an order granting a default judgment against Liberty in the
amount of $30,900.00 plus $10,000.00 in attorney fees; the motion with respect to Appellant
was stricken. Trial was held on March 26, 2012.

        On April 3 the court entered an Order finding that Appellant had signed the
commercial lease as a tenant in his individual capacity and was therefore individually liable
for all monies due. The court entered judgment against Appellant for the unpaid rent,
stipulated to be $30,900.00, plus $3,060.00, which the court characterized as “interest owing
on said unpaid rent pursuant to the terms of the lease,”1 and attorneys fees in the amount of
$5,450.00.

        On appeal, Appellant contends that the trial court erred in holding him personally
liable on the commercial lease agreement because Liberty was named as the tenant in the
body of the lease agreement and the agreement contained no language indicating that
Appellant was guarantor. Appellees contend that the trial court erred in its calculation of late
fees under the terms of the lease and its calculation of interest.

                                               DISCUSSION

       Appellant contends that his signature on the line marked “Tenant” is insufficient to
establish his personal liability as a lessee; therefore, he is not personally liable on the lease
agreement.

       The interpretation of a written agreement is a matter of law, which we review de novo
with no presumption of correctness of the trial court’s conclusion of law. Dairy Gold, Inc.

        1
         The order stated that “[s]ince article III of the lease provides interest as a late charge at the rate of
10% to be assessed for each month’s rental amount, interest shall be in the amount of $3,060.00.”

                                                       -2-
v. Thomas, No. 03A01-9901-CH-00019, 1999 WL 1068701, at *3 (Tenn. Ct. App. Nov. 29,
1999) (citing Park Place Ctr. v. Park Place Mall, 836 S.W.2d 113, 116 (Tenn. Ct. App.
1992)). Accordingly, we will review the lease agreement de novo and reach our own
independent conclusions regarding its meaning and legal import. Guiliano v. Cleo, Inc., 995
S.W.2d 88, 95 (Tenn. 1999); Hillsboro Plaza Enters. v. Moon, 860 S.W.2d 45, 47 (Tenn. Ct.
App. 1993).

        Relying on the authority of In re: Estate of Gordon S. Dickerson, Jr., 600 S.W.2d 714
(Tenn. 1980), Appellant contends that a reversal of the trial court’s decision is required. In
Dickerson, a family-owned corporation was a party to a commercial lease agreement; the
agreement had been signed on behalf of the corporation by Buford Dickerson. Gordon
Dickerson, Buford’s brother, was not a party to or mentioned in the lease, but signed the
lease, apparently as a witness to his brother’s signature; Buford subsequently abandoned the
operation of the restaurant and the operation was assumed by Gordon’s estate. In due course
the lessor brought an action against Gordon’s estate to recover charges owed for repairs to
the premises; the lessor claimed that Gordon was personally liable under the lease and as a
guarantor. In holding that Gordon did not incur personal liability as a principal party on the
lease, the court stated:

        It is a general rule of interpretation of contracts that when the body of a
        contract purports to set out the names of the parties thereto and a person not
        named in the body of the contract signs the contract and nothing in the contract
        indicates that such person signed as a party, then such person is not bound as
        a party to the contract and is not liable thereunder.

Dickerson, 600 S.W.2d at 716.

       We do not find Dickerson to be controlling. Significant in Dickerson was the court’s
recognition that Gordon Dickerson was not named as a party in the lease. In the case before
us, however, in the space provided for Tenant’s name and signature, Appellant printed his
name and, on the line preceded by the word “By”, signed his name. This is a clear and
unambiguous designation of Appellant as the Tenant on the lease agreement. Only if a
contract is ambiguous does a court look beyond the four corners of the document and
consider evidence of the parties’ intentions. Cummings, Inc. v. Dorgan, 320 S.W.3d 316,
333 (Tenn. Ct. App. 2009). We hold that Appellant is obligated under the terms of the lease;
accordingly, we affirm the trial court’s ruling.2

        2
           The parties also address an issue relative to the trial court’s decision to admit parol evidence as
to the parties’ intentions at the time of the execution of the lease. Our holding pretermits our consideration
of this issue.

                                                     -3-
       We turn now to Appellees’ contention that the trial court erred by not awarding
prejudgment interest pursuant to Tenn. Code Ann. § 47-14-123.3 While the court held that
Appellees were entitled to the late charge set forth in the lease–which was computed at 10%
of the lease amount–through the term of the lease, the court did not award prejudgment
interest to Appellees. While a party who recovers a money judgment is not entitled to an
award of interest under the statute in all instances, the statute does contemplate that it is
within the court’s discretion to make such an award. In the present case, the court did not
give an explanation for the decision not to award interest on the judgment from and after the
expiration of the lease term. Accordingly, we remand this matter to the trial court to further
consider whether such an award is appropriate.

       Appellees lastly contend that they are entitled to attorneys’ fees on appeal, pursuant
to Article III of the lease agreement. We agree that pursuant to the terms of the lease
agreement Appellees are entitled to attorneys’ fees for this appeal, and we remand the case
for a determination of that award.

       For the foregoing reasons, we affirm the trial court’s decision holding Appellant liable
on the lease agreement; we remand the case for a determination of whether prejudgment
interest should be awarded to Appellees, and for a calculation and award of attorneys’ fees
incurred on appeal.

                                                  ___________________________________
                                                  RICHARD H. DINKINS, JUDGE

       3
           Tenn. Code Ann. § 47-14-123 provides the following:

       Prejudgment interest, i.e., interest as an element of, or in the nature of, damages, as
       permitted by the statutory and common laws of the state as of April 1, 1979, may be
       awarded by courts or juries in accordance with the principles of equity at any rate not in
       excess of a maximum effective rate of ten percent (10%) per annum; provided, that with
       respect to contracts subject to § 47-14-103, the maximum effective rates of prejudgment
       interest so awarded shall be the same as set by that section for the particular category of
       transaction involved. In addition, contracts may expressly provide for the imposition of the
       same or a different rate of interest to be paid after breach or default within the limits set by
       § 47-14-103.

                                                     -4-