Audio Visual Artistry v. Stephen Tanzer
403 S.W.3d 789
Tenn. Ct. App.2012Background
- Homeowner Tanzer hired Audio Video Artistry (AVA) to sell, install, and integrate a comprehensive 'smart home' system for a 15,000 sq ft, $3.5M residence, with move-in in 2006.
- Contract blended sale of movable equipment with installation services; the written agreement incorporated AVA’s initial proposal totaling about $78,567 and later added a seventh zone and automated shades.
- Disputes arose over cost, performance defects, and several post-setup modifications; Tanzer contends substantial nonconformity and delays despite repeated AVA attempts to repair.
- Invoice #3036 showed total charges around $119,402.15; Tanzer disputed and ultimately paid less, leading to AVA’s breach-of-contract suit for the balance.
- Trial court held the transaction predominantly concerned the sale of goods, applying UCC Article 2, and offset several items (including Escient and phone systems) against the balance, while rejecting other damages including those from Marquis’s repairs.
- Tanzer’s TCPA claim was dismissed by the trial court; the judgment was amended to adjust an Escient credit from $14,098 to $2,500, increasing AVA’s total judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UCC Article 2 applies | Tanzer argues contract is for services, not goods, so common law should apply. | AVA argues the predominant purpose test shows goods dominate, triggering UCC Article 2. | UCC Article 2 applies; four Pass factors favor goods. |
| Whether AVA breached the contract | Tanzer asserts AVA failed to complete work and delivered defective items. | AVA contends it performed/installed equipment per contract; any defects were addressed or belong to warranty. | UCC framework governs damages; the court found no full contract breach by AVA given acceptances/offsets. |
| Damages and setoffs calculation | Tanzer seeks recovery or recoupment for nonconforming goods and consequential damages from upgrades. | AVA argues only warranty-based damages apply for accepted goods; rejected goods yield offsets; no recoverable consequential damages. | Damages and setoffs properly calculated under UCC; no recovery for rejected items beyond offsets; no warranty-based value difference shown. |
| TCPA applicability | Tanzer asserts AVA engaged in unfair/deceptive acts; claims should survive under TCPA. | AVA asserts no misrepresentations or deceptive practices; evidence insufficient. | TCPA claim rejected; trial court’s findings affirmed; no liability under TCPA. |
Key Cases Cited
- Bonebrake v. Cox, 499 F.2d 951 (8th Cir. 1974) (predominant factor test for mixed goods/services contracts)
- Hudson v. Town & Country True Value Hardware, Inc., 666 S.W.2d 51 (Tenn. 1984) (rejected divisible rule; adopts predominant purpose approach)
- RRX Indus., Inc. v. Lab-Con, Inc., 772 F.2d 543 (9th Cir. 1985) (examples of goods vs. services in mixed contracts under predominant purpose analysis)
- Triangle Underwriters, Inc. v. Honeywell, Inc., 604 F.2d 737 (2d Cir. 1979) (goods/services analysis in mixed contracts)