Gary L. Key v. O.C. Renner Jr., E2016-01049-COA-R3-CV

Background

Key and Dr. O.C. Renner (via the Renner Trust) orally agreed to build a private road across adjoining properties, split costs, and grant reciprocal access; no writing was executed.
Key arranged construction (hired Four Seasons), substantially performed work, paid over $18,000, and arranged for a power line; Renner requested changes that increased scope and cost.
Renner later refused to pay his share (asserting he agreed to pay only 20%) and refused to execute a permanent easement; Key stopped further work and blocked Renner’s later power-line extension attempts; Renner barricaded the road.
Key sued for specific performance or damages; the trial court found an oral agreement allocating costs 80/20 (Key/Renner), awarded Key money for Renner’s share, and granted permanent easements to both parties; court found Renner equitably estopped from invoking the statute of frauds.
On appeal, defendants argued the statute of frauds bars enforcement, that Key materially breached first, and that the court lacked authority to grant an easement over nonparty Gwendolyn Renner’s land.
The Court of Appeals affirmed enforcement (applying equitable estoppel), found Renner was the first material breacher, upheld specific performance generally, but vacated provisions that expanded the parties’ agreement (gate, maintenance allocation) and any relief purporting to affect nonparty G. Renner’s property (though noting she conveyed the strip post-trial to Key).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the statute of frauds bars enforcement of an oral agreement creating permanent easements	Key: statute of frauds should not block enforcement because Key substantially performed and Renner’s conduct estops him from asserting the statute	Renner: oral agreement to grant permanent easement must be in writing under Tenn. Code §29-2-101(a)(4)	Court: statute of frauds barred ordinarily, but Renner is equitably estopped from asserting it here due to his conduct and Key’s substantial performance
Whether Key’s performance was barred because he was the first material breacher	Key: Renner breached first by refusing to pay and execute easement, so Key may stop performance and still recover	Renner: Key breached first by denying access to the power line, preventing Renner’s performance	Court: Renner was the first material breacher (denial of express easement was material); Key’s cessation did not bar recovery
Whether specific performance is an appropriate remedy for the oral agreement	Key: specific performance (including money judgment for Renner’s share and permanent easements) is appropriate	Renner: remedy inappropriate given statute of frauds and other defenses; also challenged court’s specific provisions	Court: specific performance appropriate but limited to enforcing the parties’ agreement; court abused scope where it added terms beyond agreement or affected nonparty property
Whether court could grant easement affecting nonparty Gwendolyn Renner’s land	Key: use of that strip was within the parties’ agreement; subsequent conveyance to Key moots joinder concerns	Renner: trial court lacked personal jurisdiction over nonparty and cannot grant relief affecting her property	Court: cannot affect nonparty’s rights; portions of decree purporting to bind G. Renner or impose gate/maintenance obligations were vacated (but remand unnecessary because she conveyed the strip post-trial)

Key Cases Cited

Baliles v. Cities Serv. Co., 578 S.W.2d 621 (Tenn. 1979) (discusses purpose of statute of frauds and equitable estoppel exceptions)
Buice v. Scruggs Equip. Co., 250 S.W.2d 44 (Tenn. 1952) (partial performance is an equitable doctrine but limited regarding real property)
Trew v. Ogle, 767 S.W.2d 662 (Tenn. Ct. App. 1988) (recognizes exceptions to strict statute of frauds application)
Nunnelly v. S. Iron Co., 29 S.W. 361 (Tenn. 1895) (express easements fall within statute of frauds)
Cellco P’ship v. Shelby Cty., 172 S.W.3d 574 (Tenn. Ct. App. 2005) (reiterates that rights over land must be in writing)
Osborne v. Mountain Life Ins. Co., 130 S.W.3d 769 (Tenn. 2004) (elements required to establish equitable estoppel)
McClain v. Kimbrough Constr. Co., 806 S.W.2d 194 (Tenn. Ct. App. 1990) (factors for determining material breach)
Gonsewski v. Gonsewski, 350 S.W.3d 99 (Tenn. 2011) (standard for abuse of discretion review in equitable remedies)
Turner v. Turner, 473 S.W.3d 257 (Tenn. 2015) (personal jurisdiction/need for proper service to bind nonparties)