Global Mall Partnership v. Shelmar Retail Partners, LLC, M2016-01383-COA-R3-CV

Background

Global Mall purchased Hickory Hollow Mall on October 30, 2012; six tenant leases (including City Gear’s) were assigned to Global Mall at closing. City Gear’s lease ran through June 30, 2015 and contained a “no oral modification” clause.
Prior to the sale, Hickory Hollow (through agent CBL) circulated draft lease-termination proposals to City Gear in May and September 2012; those drafts included bold disclaimers that they were not enforceable until executed, and City Gear did not sign them before the sale.
In June 2012 City Gear signed a new lease at The Courtyard and began preparations to relocate; CBL sent Global Mall’s counsel an email (Sept. 28, 2012) indicating City Gear would be relocating.
After closing, City Gear signed and delivered a termination agreement on December 20, 2012; Global Mall refused to sign and demanded rent. City Gear vacated and stopped paying rent.
Procedurally: third-party defendants (Hickory Hollow/CBL/Courtyard) obtained summary judgment rejecting City Gear’s promissory-estoppel/termination arguments; trial between Global Mall (landlord assignee) and City Gear proceeded as a bench trial where Global Mall rested after the landlord’s sole witness (Dr. Aggarwal).
At the close of Global Mall’s proof, City Gear moved for involuntary dismissal under Tenn. R. Civ. P. 41.02(2). The trial court granted the motion, finding an enforceable oral termination/agreement and breach by Global Mall; the Court of Appeals reversed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Global Mall presented sufficient evidence at trial to defeat a Tenn. R. Civ. P. 41.02(2) involuntary dismissal	Global Mall argued its proof showed no executed termination agreement existed at closing, Global Mall never agreed to terminate, and City Gear abandoned the leased premises and stopped paying rent without excuse	City Gear argued the parties had an enforceable (binding or binding-preliminary) oral agreement to terminate the lease pre-closing, City Gear partly performed (new lease, build-out), and assignee Global Mall inherited the landlord’s obligation to honor the termination	The Court of Appeals held the trial court erred: on a 41.02(2) motion the court could consider only the plaintiff’s proof, and that proof did not support the trial court’s factual findings. Reversed and remanded.
Whether the trial court properly relied on documents/facts from summary-judgment filings when ruling on the involuntary dismissal	Global Mall: the trial court was limited to evidence introduced in the plaintiff’s case-in-chief when deciding a 41.02(2) motion; material documents/order facts used by the court were not in the plaintiff’s proof	City Gear relied on the same pretrial summary-judgment record (draft termination proposals, Courtyard lease, emails) to support finding an oral agreement and part performance	Court held the trial court improperly considered extraneous documents/facts from the summary-judgment record that were not part of Global Mall’s proof. Excluding that material, the evidence preponderated against the trial court’s findings.
Whether part performance/binding preliminary agreement principles bound the assignee to a termination date despite lack of signed agreement	City Gear: partial performance (new lease, build-out) and prior negotiations created a binding preliminary commitment, obligating landlord (and assignee) to negotiate/recognize termination date	Global Mall: no signed agreement existed pre-closing; it had no knowledge of a binding termination obligation and was not asked to agree to early termination before assignment	Court found no evidentiary foundation in plaintiff’s proof supporting part-performance or an agreed termination date. Thus those equitable theories could not sustain involuntary dismissal based on the plaintiff’s proof.
Whether Global Mall’s dismissal should be reinstated and case remanded	Global Mall sought reinstatement and further proceedings	City Gear argued dismissal was proper and final	Court of Appeals reversed the involuntary dismissal and remanded for further proceedings.

Key Cases Cited

Gurley v. King, 183 S.W.3d 30 (Tenn. Ct. App. 2005) (distinguishes preliminary agreements and describes when a binding preliminary commitment can arise)
Burton v. Warren Farmers Co-op, 129 S.W.3d 513 (Tenn. Ct. App. 2002) (explains Tenn. R. Civ. P. 41.02(2) standards and that analysis rests on the plaintiff’s proof)
City of Columbia v. C.F.W. Constr. Co., 557 S.W.2d 734 (Tenn. 1977) (rules on involuntary dismissal and evidence the court may consider)
Thompson v. Adcox, 63 S.W.3d 783 (Tenn. Ct. App. 2001) (procedural guidance on weighing proof at close of plaintiff’s case)
Shore v. Maple Lane Farms, LLC, 411 S.W.3d 405 (Tenn. 2013) (appellate standard of review for factual findings)
Building Materials Corp. v. Britt, 211 S.W.3d 706 (Tenn. 2007) (appellate review principles for legal conclusions)