Thursday, March 25, 2010

Court reviews whether the TN Dealer Protection Act applies to the termination of a sales and service agreement between a distributor and a manufacturer

CONSTRUCTION CRANE AND TRACTOR, INC. v. WIRTGEN AMERICA, INC. (Tenn. Ct. App. March 25, 2010)

Distributor of road construction equipment sought an injunction and declaratory judgment against the manufacturer of such equipment following the manufacturer's termination of its sales and service agreement with the distributor without cause in accordance with the terms of the agreement. Distributor asserted that such termination violated the Tennessee Dealer Protection Act, Tenn. Code Ann. section 47-25-1301 et seq.

The trial court found that the statutory provision prohibiting manufacturers from terminating a dealer's relationship with the manufacturer without cause was inapplicable to the parties because the operative agreement between the parties pre-dated the 1999 amendments to the Tennessee Dealer Protection Act prohibiting such terminations. Distributor appeals. Finding no error, we affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/wirtgenamerica_032510.pdf

Friday, March 19, 2010

Court reviews validity of a service mark license agreement in a service mark case

GUESTHOUSE INTERNATIONAL, LLC v. SHONEY'S NORTH AMERICA CORPORATION AND SHOLAND, LLC (Tenn. Ct. App. March 19, 2010)

This appeal involves a licensing agreement for service marks protected under trademark laws. One of the defendants is the owner of the service marks, which are used at both restaurants and motels. This original owner of the service marks sold the motel business along with the service marks, but it retained the restaurant business. After using the service marks for many years, the owner of the motel business decided to convert its motels from the service mark brand to another brand. Eventually, the owner of the motel business sold its motels to the plaintiff, and it included in the sale its rights under the service mark license agreement. Soon after that, the owner of the service marks sold its restaurant business and its service marks to the other defendant herein. When the plaintiff motel business attempted to franchise new motels using the service mark name, the defendant new owner of the service marks objected and terminated the license agreement.

The plaintiff motel business filed this lawsuit, alleging breach of contract, tortious interference with contract, and violation of the Tennessee Consumer Protection Act. It sought declaratory relief, injunctive relief, and restitution. The new service mark owner asserted that the license agreement was unenforceable based on lack of consideration, waiver, and fraud. The parties filed cross- motions for summary judgment.

The trial court denied the plaintiff's motion for summary judgment and granted summary judgment in favor of the defendants. The trial court concluded, inter alia, that the service mark license agreement assigned to the plaintiff was invalid for lack of consideration and, alternatively, that the plaintiff waived its right to franchise new motels using the service mark name. The plaintiff's complaint was dismissed in its entirety. The plaintiff now appeals.

We reverse, finding, inter alia, that the license agreement was supported by consideration, that no valid basis existed on which to terminate the license agreement, and that the doctrine of waiver is not applicable under the facts in this case. Furthermore, we find that the dismissal of the request for restitution as a remedy for the defendant's breach of contract is premature at this juncture.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/guesthouse_031910.pdf

Thursday, March 11, 2010

Court reviews whether permit board had sufficient proof to revoke beer license

MALIK YAFAI d/b/a FAMILY MARKET v. METROPOLITAN BEER PERMIT BOARD OF METROPOLITAN GOVERNMENT OF NASHVILLE DAVIDSON COUNTY, TENNESSEE (Tenn. Ct. App. March 11, 2010)

The Metropolitan Nashville Beer Permit Board found that the owner of a grocery store had allowed illegal drugs to be sold on his premises, and it revoked his license to sell beer. The Chancery Court reversed the Board's action, finding that there was insufficient proof that the proprietor actually knew about the illegal activities. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/yafaim_031110.pdf

Friday, March 5, 2010

Court reviews reasonableness of law firm's claimed value in its operating agreement

SHUTTLEWORTH, WILLIAMS, HARPER, WARING & DERRICK, PLLC v. GARY K. SMITH, SMITH, SABBATINI & MCLEARY, PLLC (Tenn. Ct. App. March 5, 2010)

This dispute is between an attorney and his former firm. All parties to this suit appeal the trial court's interpretation of their operating agreement about how the fees and expenses generated by the withdrawing member's cases should be apportioned among them. The operating agreement gave the firm discretion to value the services provided by its other members, but the trial court correctly determined that the firm's claimed value was not reasonable.

We reverse the trial court's holding with regard to the withdrawing lawyer's interest in a member's share of the expenses he is obligated to pay the firm. The trial court is affirmed on the issue of sanctions and as to its refusal to make an award to nonparties.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/shuttleworth_030510.pdf

Wednesday, March 3, 2010

Court reviews whether death can trigger dissolution of a company pursuant to the company's operating agreement

MITZI BAYNE RUTH, ET AL. v. HOME HEALTH CARE OF MIDDLE TENNESSEE, LLC, ET AL. (Tenn. Ct. App. March 3, 2010)

Mitzi Bayne Ruth, executrix of the Estate of Fred W. Bayne ("Executrix"), the Estate of Fred W. Bayne ("the Estate"), and Home Health Care of East Tennessee, Inc. ("HHC East") sued Home Health Care of Middle Tennessee, LLC ("the Company") and B. Fred Allred, III ("Allred") seeking, among other things, a declaratory judgment that Fred W. Bayne's death was an event triggering dissolution of the Company. Both plaintiffs and defendants filed motions for partial summary judgment.

After a hearing, the Trial Court entered an order granting plaintiffs' motion for partial summary judgment finding and holding, inter alia, that Fred W. Bayne's death was a liquidating event triggering the dissolution of the Company pursuant to the Company's Operating Agreement, and that Allred did not have the right pursuant to the Operating Agreement to purchase Fred W. Bayne's membership interest and continue the Company business. The Company and Allred appeal to this Court. We hold that the Operating Agreement was ambiguous, vacate the award of partial summary judgment, and remand to the Trial Court for further proceedings consistent with this Opinion.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/ruthm_030310.pdf

Friday, February 26, 2010

Court reviews whether certain transactions were loans in order to determine whether defendants were responsible as alter egos of a defunct nonprofit corporation

CHRISTINA ALTICE v. NATS, INC. ET AL. (Tenn. Ct. App. February 26, 2010)

Judgment creditor sued defendants to collect a judgment against a defunct nonprofit corporation, claiming defendants were the alter egos of the defunct corporation. In a prior appeal, this court instructed the parties to focus on whether certain transactions were or were not loans. If they were loans, then the plaintiff could not prove her case to make the defendants responsible for the judgment against the defunct corporation. The trial court found that the transactions were loans. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/alticec_022610.pdf

Tuesday, February 23, 2010

Supreme Court Adopts Headquarters Test, Hampering Forum-Shopping Plaintiffs

High court defines 'headquarters' (February 23, 2010)

The U.S. Supreme Court may have made it more difficult for tort lawyers to bring lawsuits in plaintiff-friendly state courts with today's ruling that a company's principal place of business is typically its headquarters. The 9-0 ruling, authored by Justice Stephen G. Breyer, said a company should be considered a citizen of a state where its "nerve center" is located. The "nerve center" test will be used to establish diversity jurisdiction, allowing more lawsuits to be tried in federal rather than state courts.

Full story available at:
http://www.abajournal.com/news/article/supreme_court_adopts_headquarters_test_hampering_forum-shopping_plaintiffs/

Wednesday, February 3, 2010

Court reviews whether one party wrongfully dissociated from a partnership.

BEVERLY MORAN v. ELLIOT WILLENSKY (Tenn. Ct. App. February 3, 2010)

This case arises from a partnership gone bad. The trial court found that the Appellant wrongfully dissociated from the partnership. Pursuant to the Tennessee Uniform Partnership Act, Tenn. Code Ann. section 61-1-101 et seq., the trial court awarded Appellee project costs, and winding up costs, including attorney's fees. Appellant appeals. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/moranb_020310.pdf

Court reviews whether greenhouses are real property or personal property for taxation purposes

HERMANN HOLTKAMP GREENHOUSES, INC. v. METROPOLITAN NASHVILLE AND DAVIDSON COUNTY, TENNESSEE, JO ANN NORTH, Assessor of Property for Davidson County, and TENNESSEE STATE BOARD OF EQUALIZATION (Tenn. Ct. App. February 3, 2010)

This appeal concerns the classification of property for taxation purposes. The petitioner commercial business grows plants in large greenhouses erected on its land. The county assessor of property classified the greenhouses as real property, to be taxed as such. The petitioner taxpayer appealed the assessor's classification, contending that the greenhouses are personal property. An administrative law judge concluded that the greenhouses are personal property, taxed at a lower rate than real property. The assessor appealed to the state board of equalization. The state board of equalization reversed the ALJ's decision and concluded that the greenhouses are real property.

The petitioner taxpayer then filed a petition for judicial review of the state board's decision. On cross motions for summary judgment, the trial court concluded that the greenhouses are real property and dismissed the taxpayer's petition. The petitioner taxpayer now appeals. Utilizing the common law of fixtures, we find that the greenhouses are properly classified as real property. Thus, we affirm the decision of the trial court.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/holtkamph_020310.pdf

Wednesday, January 20, 2010

Court reviews the timeliness of a TN Consumers Protection Act claim filing.

CITICAPITAL COMMERCIAL CORPORATION v. CLIFFORD COLL (Tenn. Ct. App. January 20, 2010)

A finance company that owned a security interest in a Hyundai excavator appeals the award of a judgment against it in favor of a consumer for violations of the Tennessee Consumer Protection Act.

The consumer alleged in his complaint that the creditor and the equipment company that sold the excavator to the consumer had engaged in unfair and deceptive trade practices, because the excavator was defective when it was delivered, it never worked properly, and the defendants failed to make repairs and refused to permit him to trade for another excavator. The financing company denied any wrongdoing and asserted the one-year statute of limitations as an affirmative defense. The equipment company that sold the excavator went out of business and dissolved prior to trial. The only claim tried was the consumer's TCPA claim against the finance company.

The trial court denied the finance company's Tenn. R. Civ. P. 50.01 motion for a directed verdict on the statute of limitations defense, finding that the TCPA claim was timely filed within the five-year statute of repose. At the conclusion of the jury trial, the consumer prevailed on his TCPA claim and the trial court awarded treble damages and attorneys' fees based on a finding the finance company "willfully and knowingly" violated the TCPA. We have determined the TCPA claim was barred by the one-year statute of limitations; therefore, the trial court erred in denying the motion for a directed verdict, and the judgment of the trial court is reversed.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/citicapital_012010.pdf

Monday, December 28, 2009

Court reviews enforceability of non-compete provision of employment agreement

DAREL L. JONES, ET AL. v. UNITED PROPANE GAS, INC., ET AL. (Tenn. Ct. App. December 28, 2009)

Darel L. Jones, Donald A. Maples, Jr., and Heritage Operating, L.P., dba Hydratane of Athens (collectively "the Plaintiffs") commenced this litigation originally against United Propane Gas, Inc. ("UPG"), with a petition seeking a declaration that the Pricing, Confidentiality and Post- Employment Activities Agreement (referred to as "the Agreement," "the Jones Agreement," or "the Maples Agreement" as the context requires) signed by Jones and Maples in favor of their past employer, Ocoee River Propane Gas, Inc. ("ORP"), was unenforceable and that their new employer, Hydratane, had no liability for hiring them. The Plaintiffs later amended their petition to add ORP as a defendant. UPG and ORP (collectively "the Gas Companies") filed an answer asserting, among other things, (1) that they were independent entities and (2) that Jones and Maples were not UPG employees. ORP filed a counterclaim against Maples asking that he be held in breach of contract and enjoined from violating the Agreement as well as a counterclaim against Hydratane for tortuous interference with the Agreement.

After a bench trial, the court announced its findings in favor of the Plaintiffs from the bench and later signed and entered an order submitted by the Gas Companies that limited the effect of the court's ruling to "the non-compete provision" of the Agreement. The Plaintiffs filed a motion to alter or amend which the trial court granted, the effect of which was to hold that the Agreement in its entirety, rather than just the non-compete provision, was unenforceable. The Gas Companies appeal. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2009/jonesd_122809.pdf

Friday, December 18, 2009

Court reviews denial of motion to amend and dismissal of the complaint.

T.O.T.S. (TEMP. OWNED TEMPORARY SERVICE) v. WHIRLPOOL (Tenn. Ct. App. December 18, 2009)

This appeal involves a complaint for breach of contract filed by a corporation that had been administratively dissolved prior to the date of the contract. The defendants filed a motion to dismiss, claiming that the plaintiff-corporation lacked capacity and/or standing to bring the suit. The plaintiff then filed a motion to amend, seeking to have the corporation's founder substituted as the party plaintiff. The trial court denied the motion to amend and dismissed the complaint. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2009/tots_121809.pdf

Court reviews whether a property conveyance was fraudulent.

BRENDA STONE, individually and derivatively in her capacity as a director of Appalachian Caverns Foundation v. SCOTT SMILE, ET AL. (Tenn. Ct. App. December 18, 2009)

The plaintiff initiated this action on behalf of a foundation of which she was formerly a director. She sought to reinstate a deed of trust securing a note belonging to the foundation and to set aside a fraudulent conveyance of the property that was subject to the deed of trust. The trial court found that the release of the deed of trust was improper and that the conveyance was fraudulent and, thus, reinstated the deed of trust and set aside the conveyance of the property. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2009/stoneappalachiancaverns_121809.pdf

Wednesday, December 16, 2009

Court reviews whether an award of prejudgment interest was proper in a breach of partnership agreement case

GREGORY B. WOOTEN v. KENNETH BLACK (Tenn. Ct. App. December 16, 2009)

Plaintiff filed this action against his former partner alleging breach of their partnership agreement. The Special Master found that the defendant misappropriated profits of the partnership. Thereafter, the parties entered into an Agreed Order wherein the plaintiff was awarded a judgment of $38,750.00 against the defendant. The Agreed Order expressly reserved the issue of prejudgment interest for the trial court's determination. The trial court awarded prejudgment interest. Defendant appealed the award of prejudgment interest. Finding no error, we affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2009/wooteng_121609.pdf

Wednesday, December 9, 2009

Court reviews whether the trial court properly ordered enforcement of a subpoena to provide information to the Assessor of Property

METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY by and through THE OFFICE OF THE ASSESSOR OF PROPERTY v. LAMAR TENNESSEE, LLC d/b/a LAMAR ADVERTISING OF NASHVILLE (Tenn. Ct. App. December 9, 2009)

This case involves a subpoena issued by the Metropolitan Government of Nashville and Davidson County, on behalf of the Davidson County Assessor of Property, which required the appellant to provide information regarding its business operations. When the appellant did not comply with the subpoena, Metro filed a complaint seeking to enforce it. The trial court ruled that the appellant must provide the requested information. We reverse and remand for further proceedings.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2009/lamar_120909.pdf