Justia Contracts Opinion Summaries

Vanessa Turner (formerly Vanessa Colley) and John S. Colley, III were divorced in 2012, with a marital dissolution agreement (MDA) and a permanent parenting plan incorporated into the final decree. Post-divorce, John filed a petition to terminate his transitional alimony obligation, alleging Vanessa was cohabiting with her fiancé. Vanessa defended the alimony award, and after extensive litigation, John nonsuited his petition before it was adjudicated on the merits.The Circuit Court for Davidson County awarded Vanessa $16,500 in attorney fees, finding it reasonably necessary for her to defend the alimony award. John appealed, and the Court of Appeals reversed, holding that neither party was a "prevailing party" under the MDA or Tennessee Code Annotated section 36-5-103(c) because the petition was nonsuited before a decision on the merits.The Supreme Court of Tennessee reviewed the case and held that Vanessa was the prevailing party under both the MDA and section 36-5-103(c). The Court reasoned that the MDA's language entitled Vanessa to attorney fees as the prevailing party because she successfully defended the alimony award, achieving her objective of maintaining the status quo. The Court also held that under section 36-5-103(c), a party defending against a petition to alter or modify an alimony award can be considered a prevailing party even if the petition is nonsuited before a decision on the merits.The Supreme Court reversed the Court of Appeals' decision, affirmed the trial court's award of attorney fees to Vanessa, and awarded her attorney fees on appeal. The case was remanded to the trial court to determine the amount of reasonable attorney fees for the appeals. View "Colley v. Colley" on Justia Law

In 2014, Emergency Medical Care Facilities, P.C. (EMCF) filed a putative class action against BlueCross BlueShield of Tennessee, Inc. (BCBST), alleging breach of contract due to a cap on certain payments for medical services. The trial court denied class certification, and the Court of Appeals affirmed. EMCF then voluntarily nonsuited its claims. After a favorable ruling in a separate lawsuit against TennCare, EMCF refiled its case against BCBST, again seeking class certification.The trial court held that collateral estoppel precluded relitigation of class certification, but the Court of Appeals reversed, stating that the prior class certification denial was not final for collateral estoppel purposes because the case had been voluntarily nonsuited.The Supreme Court of Tennessee reviewed the case to determine whether the prior denial of class certification, affirmed on appeal, was entitled to preclusive effect. The Court held that the trial court's and appellate court's decisions denying class certification in the earlier case were final and binding for purposes of collateral estoppel. The Court reasoned that the class certification issue had been fully litigated and decided, and the decision was subject to appeal, which EMCF did not pursue further. Therefore, EMCF was precluded from relitigating the class certification issue in the refiled case.The Supreme Court of Tennessee reversed the Court of Appeals' decision and remanded the case to the trial court, reinstating the order striking the class action allegations against BCBST and VSHP. The Court emphasized that the denial of class certification, affirmed on appeal, was sufficiently final to warrant preclusive effect, preventing EMCF from seeking a do-over on class certification. View "Emergency Medical Care Facilities, P.C. v. BlueCross BlueShield of Tennessee, Inc." on Justia Law

Pharma Conference Education, Inc. entered into an agreement with the University of Tennessee Health Science Center to produce pharmaceutical continuing education programs "as is feasible." The Health Science Center terminated the agreement before any programs were held. Pharma sued to enforce the agreement, but the State argued that the agreement lacked consideration and was not a valid contract. The key issue was whether the promise to produce programs "as is feasible" constituted consideration or was an illusory promise.The Tennessee Claims Commission granted summary judgment in favor of the State, concluding that the agreement lacked consideration because Pharma's promise was illusory. The Court of Appeals affirmed, agreeing that Pharma's promise gave it complete discretion and was therefore illusory. Both courts relied on the deposition testimony of Pharma's president, John W. Smith, to support their conclusions.The Supreme Court of Tennessee reviewed the case and held that Pharma's promise to produce as many programs "as is feasible" constitutes adequate consideration. The Court explained that the term "feasible" has an objective meaning and does not give Pharma unfettered discretion. The Court also noted that the statutory presumption of consideration under Tennessee Code Annotated section 47-50-103 applies, and the State failed to rebut this presumption. The Court reversed the Court of Appeals' decision and remanded the case to the Claims Commission for further proceedings, including consideration of the State's argument regarding mutual assent. View "Pharma Conference Education, Inc. v. State" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the conclusion of the trial court that Plaintiff failed to establish Defendant's requisite minimum contacts with Tennessee, and thus the court lacked personal jurisdiction over Defendant with respect to Plaintiff's suit, holding that the trial court correctly dismissed Plaintiff's complaint.Plaintiff, a Tennessee resident, hired Defendant, an Alabama corporation with its principal place of business in Alabama, to build a house on a parcel of land in Alabama. Upon becoming dissatisfied with the quality and expense of the construction work Plaintiff filed suit in the Davidson County Chancery Court. The trial court granted Defendant's motion to dismiss for lack of jurisdiction, concluding that Defendant's contacts with Tennessee were minor and attenuated. The court of appeals reversed. The Supreme Court reversed, holding that Plaintiff failed to establish a prima facie case of the minimum contacts necessary for a Tennessee court to exercise specific personal jurisdiction over Defendant. View "Baskin v. Pierce & Allred Construction, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals as to the applicability of the economic loss doctrine in this case, holding that the economic loss doctrine applies only in products liability cases and should not be expanded to apply outside the products liability context.In the underlying suit brought by a drywall subcontractor against a general contractor under theories of breach of contract and tort a jury awarded compensatory and punitive damages to the subcontractor. The court of appeals affirmed in part the award of compensatory damages for breach of contract, dismissed the tort claim, and reversed the award for punitive damages, holding that the economic loss doctrine applied outside the products liability context when the contract was negotiated between sophisticated commercial entities. The Supreme Court reversed, holding (1) the economic loss doctrine only applies in products liability cases and should not be extended to other claims; and (2) the economic loss doctrine did not bar the subcontractor's recovery of compensatory and punitive damages based on its tort claim. View "Commercial Painting Co. v. Weitz Co., LLC" on Justia Law

On appeal from the trial court's denial of a motion to compel arbitration in this wrongful death lawsuit brought against Defendant, a nursing home, the Supreme Court held that Defendant did not meet the requirements for limited statutory immunity from civil liability under either Tennessee's Durable Power of Attorney for Health Care Act, Tenn. Code Ann. 34-6-201 to -218, or the Health Care Decisions Act, Tenn. Code Ann. 68-11-1801 to -1815.After a resident of the nursing home died his estate brought the underlying wrongful death suit. Defendant moved to compel arbitration based on an arbitration agreement executed by Plaintiff on the decedent's behalf pursuant to a durable power of attorney for health care (POA) form. Plaintiff objected, arguing that the decedent did not have the mental capacity to appoint an agent when he executed the POA. The trial court concluded that the POA was invalid. The court of appeals reversed, concluding that the trial court erred in looking beyond the face of the POA to determine whether Defendant had the mental capacity to execute it. The Supreme Court reversed and affirmed the trial court, holding that the trial court did not err in considering evidence on whether the principal had the requisite mental capacity to execute the POA. View "Welch v. Oaktree Health & Rehabilitation Center LLC" on Justia Law

The Supreme Court reversed the decision of the court of appeals upholding that trial court's determination that the plaintiff homeowner's award of attorneys fees and costs under Tenn. Code Ann. 20-12-119(c) was limited to those incurred after the date the defendant contractor filed an amended countercomplaint, holding that the lower courts erred.Plaintiff and Defendant entered into a contract for the renovation of a residence. Plaintiff later filed a complaint alleging breach of contract and violation of the Tennessee Consumer Protection Act. Defendant filed an amended countercomplaint asserting breach of contract. The trial court dismissed all of Plaintiff's claims and then dismissed the countercomplaint. On appeal, Plaintiff challenged the attorney fee and costs award granted by the trial court. The court of appeals affirmed. The Supreme Court vacated the trial court's award of attorney fees and costs, holding that the fees and costs recoverable by Plaintiff in connection with the dismissal of Defendant’s breach of contract claim are not limited to those incurred after the amended countercomplaint was actually filed. View "Donovan v. Hastings" on Justia Law

The Supreme Court held that the economic loss doctrine applies when a fraud claim seeks recovery of only economic losses and is premised solely on nondisclosures or misrepresentations about the quality of goods that are the subject of a contract between sophisticated commercial parties.Plaintiff sued Defendants alleging breach of express and implied warranties, breach of contract, negligent misrepresentation, fraud, and a Tennessee Consumer Protection Act (TCPA) claim. The trial court granted Defendants summary judgment on the breach of contract, breach of warranty, and negligent misrepresentation claims. After a trial, the jury returned a verdict for Plaintiff on the fraud and TCPA claims and awarded compensatory and punitive damages. The trial court entered judgment on the jury's verdicts and awarded Plaintiff attorney's fees. On appeal, the court of appeals ruled in favor of Defendants and against Plaintiff, concluding that the economic loss doctrine barred the fraud claim and that the claim under the TCPA was barred as a matter of law. The Supreme Court set aside Plaintiff's award of attorney's fees and costs based on the TCPA and otherwise affirmed, holding that because Plaintiff's TCPA claim failed as a matter of law, the award of attorney's fees and costs under the TCPA could not stand. View "Milan Supply Chain Solutions, Inc. v. Navistar, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment dismissing Plaintiff's second lawsuit, holding that the doctrine of res judicata did not bar the lawsuit.Plaintiff originally filed suit against Defendant in the Circuit Court for Shelby County, but, unbeknownst to the parties, the trial court sua sponte dismissed the lawsuit for failure to prosecute. Ten months later, Plaintiff learned of the dismissal and filed a motion to set aside the dismissal. The trial court denied the motion but entered an order stating that the dismissal did not bar Plaintiff from refiling its lawsuit. When Plaintiff subsequently refiled its lawsuit, the trial court granted Defendant's motion to dismiss based on the doctrine of res judicata. The court of appeals affirmed. The Supreme Court reversed the decision of the court of appeals and vacated the judgment of the trial court, holding that the involuntary dismissal of the first suit for failure to prosecute did not operate as an adjudication on the merits, and therefore, the present lawsuit was not barred by the doctrine of res judicata. View "Regions Bank v. Prager" on Justia Law

In this case involving the correct interpretation of provisions in the Prompt Pay Act, Tenn. Code Ann. 66-34-101 to -704, relating to retainage withheld on construction projects, the Supreme Court held that the $300 per day penalty is assessed each day retaining is not deposited in a statutorily-compliant escrow account.The Act requires the party withholding retain age to deposit the funds into a separate, interest-bearing escrow account, and failure to do so results in a $300 per day penalty. Here, Subcontractor's retainage was not placed into an interest-bearing escrow account, and the retainage was not timely remitted to Contractor. Three years after completing its contractual duties, Subcontractor sued Contractor for unpaid retainage plus amounts due under the Act. Thereafter, Contractor tendered the retainage. At issue was the statutory penalty. The trial court concluded that Subcontractor's claim under the Act was barred by Tenn. Code Ann.'s one-year statute of limitations. The court of appeals affirmed. The Supreme Court reversed, holding that while Subcontractor's claim for the statutory penalty was subject to the one-year statute of limitations, if Subcontractor can establish that Contractor was required to deposit the retainage into an escrow account, Subcontractor was not precluded from recovering the penalty assessed each day during the period commencing one year before the complaint was filed. View "Snake Steel, Inc. v. Holladay Construction Group, LLC" on Justia Law