November 30, 2007

Court disregards two licensed surveyors, two fences, and an iron boundary marker in boundary line dispute.

JAMES O. OVERTON, ET AL. v. TERRY L. DAVIS, ET AL. (Tenn.Ct.App. November 29, 2007).

Landowners brought action against adjacent neighbors to establish boundary line. Following a bench trial, the court held that each side is entitled to approximately half of the disputed area. Landowners appeal from the trial court’s resolution of the boundary dispute. The neighbors agree with landowners’ assertion that the evidence does not support the line found by the trial court. The judgment of the trial court is vacated. This case is remanded for further proceedings.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2007/overtonj_112907.pdf

"The construction of deeds and other instruments and documents and their legal effect as to boundaries is a question of law. What boundaries the grant or deed refers to is a question of law; where those boundaries are located on the face of the earth is a question of fact. If, therefore, the evidence concerning the location of the true boundary line between adjacent owners is conflicting, that issue is one of fact unless the legal construction of the deed or grant is such that the boundary is determined as a matter of law." Id. (citing 12 Am. Jur.2d Boundaries § 121 at 515 (1997) (footnotes omitted); see also Mitchell v. Chance, 149 S.W.3d 40, 45 (Tenn. Ct. App. 2004).

Testimony by plaintiff and expert helps case survive summary judgment for mold allegedly caused by runoff from construction site

HAROLD DENNIS HARDAWAY & wife, SONYA HARDAWAY, v. HAMILTON COUNTY, TENNESSEE BOARD OF EDUCATION, DERTHICK, HENLEY & WILKERSON, CONSTRUCTION & IMPROVEMENT SPECIALTY CO., and HBJ CORPORATION (Tenn.Ct.App. November 29, 2007).

In this action for damages allegedly due to water runoff from construction for a new school, the Trial Court granted defendants summary judgment. On appeal, we conclude there are disputed issues of material fact, and remand and vacate the summary judgment.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2007/hardawayh_112907.pdf

"Moreover, plaintiffs can offer their opinion of the cause of the mold growth. See Tenn. R. Evid. 701, and when plaintiffs’ testimony is coupled with the experts’ testimony, it is clear that an issue of disputed material fact has been established that precludes summary judgment. A causal connection may be established by expert opinion combined with lay testimony. White v. Werthan Industries, 824 S.W.2d 158 (Tenn. 1992)." Id.

November 20, 2007

Damages for construction defects and omissions is the cost of required repair, but plaintiff may argue diminution in value.

PEGGY J. COLEMAN v. DAYSTAR ENERGY, INC. (Tenn.Ct.App. November 19, 2007).

In this breach of construction contract suit, the Trial Court gave judgment in favor of plaintiff homeowner, and contractor defendant has appealed. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2007/colemanp_111907.pdf

"As a general rule, the measure of damages for defects and omissions in the performance of a construction contract is the reasonable cost of the required repairs. This is especially true when the structure involved is the owner’s home. However, in the event that the cost of repairs is disproportionate when compared with the difference in value of the structure actually constructed and the one contracted for, the diminution value may be used instead as a measure of damages. However, this rule is applicable only when proof has been offered on both factors. . . . We hold that the plaintiffs do not have the burden of offering alternative measures of damages. The burden is on the defendant to show that the cost of repairs is unreasonable when compared to the diminution of value due to the defects and omissions . . . ." Id. (quoting Hopper v. Moling, No. W2004-02410-COA-R3-CV, 2005 WL 2077650 at *7, (Tenn. Ct. App. Aug. 26, 2005)).

November 19, 2007

Proof of notice of substandard work before non-payment makes owner the "non-defaulting party" who may collect attorney fees under the contract

ROBERT G. O'NEAL, d/b/a R & R CONSTRUCTION CO. v. PAUL E. HENSON, ET AL (Tenn.Ct.App. November 16, 2007).

This is a construction contract dispute. The trial court entered judgment in favor of Defendants buyers/Counter-Plaintiffs in the amount of $72,418, less an offset in the amount of $48,713.15 for payments due to Plaintiff Builder; attorney's fees; and costs. Plaintiff Builder appeals. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2007/onealr_111607.pdf

"The trial court awarded attorney’s fees to the Hensons as the 'prevailing parties.' However, although we agree with Mr. O’Neal that he 'prevailed' on his claim, the determination of who is entitled to attorney’s fees under the plain language of the contract again requires a determination of which party 'defaulted' and which party was the 'non-defaulting' party." Id.

November 09, 2007

FAA preempts TUAA and trumps its separate-initial provision when materials used in new home construction are manufactured outside Tennessee

STATE FARM FIRE AND CASUALTY COMPANY, as subrogee of, GERALD SCOTT NEWELL, ET AL. v. EASYHEAT, INC., ET AL (Tenn.Ct.App. November 8, 2007).

The trial court denied Defendant Tennessee Heritage Enterprises's motion to compel arbitration under the Federal Arbitration Act notwithstanding the arbitration clause contained in the construction contract executed by Plaintiff homeowner and Defendant. The trial court denied arbitration on the basis of insufficient interstate commerce. Defendant appeals; we reverse and remand.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2007/easyheat_110807.pdf

"In this case, it is undisputed that a substantial number of the materials used by THE in the construction of the Newell home, including the roof shingles, lumber, windows, tile, carpet, insulation, appliances, mortar, HVAC units, wood trim, flooring, and the floor warming system at the center of this dispute, were manufactured outside of Tennessee. Further, although State Farm asserts these materials were purchased by THE after leaving the flow of commerce, the FAA clearly reaches beyond the “flow” of commerce and is applicable even where interstate commerce was not contemplated by the parties at the time the contract was executed. We are not insensitive to the trial court’s observation that virtually every modern construction contract falls within the purview of the FAA under the broad interpretation urged by THE. However, in light of the Supreme Court’s holdings in Allied-Bruce and Citizens Bank, we must agree that the contract here involves interstate commerce where a substantial amount of materials used in the Newell home were manufactured out of Tennessee by non-Tennessee entities. We agree with THE that the FAA is applicable in this case. " Id.

November 01, 2007

Damages equal the cost of having the job redone if defects in workmanship render the contract worthless.

JOHN KIRK TARVER, ET AL. v. GARRISON'S CUSTOM CABINETS, INC. (Tenn.Ct.App. October 31, 2007).

Based on a Special Master's report, the Circuit Court of Shelby County entered judgment against the appellant for damages for breach of a contract to install cabinets in the appellee's home. The appellant contends that the trial judge did not independently review the evidence in the record and that the damage award was not supported by the evidence. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2007/tarverj_103107.pdf

"[I]f the defects in workmanship are so substantial that the performance of the contract is worthless, the contractor must pay the other party the cost of having the job redone." Id.