Monday, December 20, 2010

Court Reviews Whether A Commercial Landlord Misrepresented the Estimated Operating Expenses to the Tenant-Plaintiff

SOLES4SOULS, INC. v. DONELSON CEDARSTONE ASSOCIATES, LP ET AL. (Tenn. Ct. App. December 20, 2010).

In a landlord-tenant dispute, the tenant plaintiff claims that before the parties entered into a lease for commercial property, the landlord defendants misrepresented estimated operating expenses that the plaintiff was expected to pay as part of its rent pursuant to the lease terms.

The plaintiff appeals the trial court's dismissal of its claims for fraud and violation of the Tennessee Consumer Protection Act. We find that the defendants misrepresented estimated operating expenses after entering into the initial lease with the plaintiff but before entering into an agreement for expansion space.

We therefore reverse the judgment of the trial court on the plaintiff's claims for fraud and violation of the TCPA and remand for determination of an appropriate remedy for damage the plaintiff suffered after agreeing to lease the expansion space.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/soles4souls_122010.pdf

Friday, December 17, 2010

TN Supreme Court Reviews Whether a Creditor May Bring a Direct Cause of Action Against an Insolvent Corporation’s Directors and Officers

MICHAEL SANFORD v. WAUGH & COMPANY, INC. ET AL. (Tenn. December 17, 2010)

The primary issue presented in this appeal is whether an individual creditor of an insolvent corporation may bring a direct cause of action for breach of fiduciary duty against the corporate directors and officers.

We hold that a creditor of an insolvent corporation may not bring a direct claim, only a derivative claim, against officers and directors for breach of the fiduciary duties they owe to the corporation.

We adopt the reasoning of the Delaware Supreme Court in North American Catholic Educational Programming Foundation, Inc. v. Gheewalla, 930 A.2d 92 (Del. 2007), observing that corporate creditors are adequately protected by existing law, and that recognizing a new direct cause of action is unnecessary and would impede corporate governance.

We further hold that the trial court properly excluded evidence of conspiracy to interfere with contract and dismissed the claim for punitive damages. The judgment of the Court of Appeals is reversed.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2010/sanfordm_121710.pdf

Wednesday, December 15, 2010

TN Supreme Court Reviews A Corporation’s Liability for the Payment of Use Tax

CAO HOLDINGS, INC. v. CHARLES A. TROST, COMMISSIONER OF REVENUE (Tenn. December 15, 2010).

This appeal involves a corporation's liability for the payment of use tax following its purchase of a business jet. After it received an assessment from the Tennessee Department of Revenue for over $700,000, the corporation paid the tax and filed suit in the Chancery Court for Davidson County seeking a refund on the ground that it qualified for the sale for resale exemption under Tenn. Code Ann. section 67-6-102(a) (28)(A) (Supp. 2004) because it had leased the aircraft to another corporation. Both the corporation and the Department filed motions for summary judgment.

The trial court granted the corporation's motion for summary judgment, and the Department appealed. A divided Court of Appeals panel affirmed the trial court. CAO Holdings, Inc. v. Chumley, No. M2008-01679-COA-R3-CV, 2009 WL 1492230 (Tenn. Ct. App. May 27, 2009). We granted the Department's application for permission to appeal.

We have now determined that neither party is entitled to a summary judgment because material disputes exist regarding the factual inferences or conclusions that can be drawn from the facts.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2010/caoholdings_121510.pdf
 
CORRECTION: on page 5, line 25 adds the word "no" between the words "conferred" and "real"
http://www.tba2.org/tba_files/TSC/2011/caoholdings_COR_011311.pdf

Tuesday, December 14, 2010

Court Reviews Contractual Obligations and Retaliatory Discharge Claims in a Breach of Contract Case

KARIM SKAAN v. FEDERAL EXPRESS CORPORATION, INC. (Tenn. Ct. App. December 14, 2010).

Plaintiff/Appellant filed an action alleging breach of contract and retaliatory discharge. Defendant moved for summary judgment on both claims, and asserted the action was barred by a contractual limitations provision in the application for employment.

The trial court awarded summary judgment to Defendant with respect to the retaliatory discharge claim, and denied summary judgment with respect to Defendant's assertion that the matter was timebarred. Plaintiff appealed.

We dismiss this appeal for failure to appeal a final judgment where the trial court has not entered an order adjudicating or otherwise disposing of Plaintiff's breach of contract claim, and Plaintiff has failed to show cause why this matter should not be dismissed.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/skaank_121410.pdf

Friday, December 10, 2010

Court Reviews Whether Plaintiff Proved the Existence of a Partnership for Profit Between the Partie

JOYCE VIA v. LARRY EDWARD OEHLERT, SR. (Tenn. Ct. App. December 10, 2010)

This appeal arises out of a complaint to dissolve a partnership. The plaintiff alleged that she and the defendant, an unmarried couple, acquired real property through joint efforts. She further alleged that she contributed to the improvement of the property and an increase in its value, giving rise to a partnership for profit and a right to a distribution of the partnership's assets following dissolution.

The defendant denied that a partnership existed and counterclaimed for damages and attorney's fees arising out of the plaintiff's refusal to vacate the property following their break-up. At the ensuing bench trial, the defendant moved for a directed verdict on the plaintiff's claims.

The trial court granted the motion and dismissed the plaintiff's claims, specifically finding that the plaintiff was unable to prove the existence of an express or implied partnership for profit between the parties. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/viaj_121010.pdf