616 S.W.3d 545
Tenn. Ct. App.2020Background
- In 2014 GCB and Neill and Diane MaGee signed a written construction contract for a custom home; the contract required the owner to notify the contractor in writing of defects and to permit the contractor a stated short period to repair (paragraph 10), and it contained a separate termination-for-default clause (paragraph 19).
- In late July 2015 MaGee sent a punch list; on July 31 Calfee inspected and agreed to return August 3 to make corrections.
- On August 3, 2015 MaGee told Calfee and his subcontractors they were not allowed back in the home; Calfee repeatedly offered to return (including an August 24 demand letter from counsel) but was excluded until MaGee’s counsel permissively invited corrections in November 2015.
- A partial settlement facilitated by a mutual friend resulted in payment to GCB with $25,418.51 retained by MaGee for flooring disputes; remaining disagreement about flooring led GCB to sue in March 2016 and MaGee to counterclaim for large damages for alleged defective work.
- The trial court initially denied, then later granted summary judgment to GCB, finding MaGee’s refusal to allow cure was a material breach; the court awarded GCB attorney’s fees (previously $62,844.96) and dismissed MaGee’s accounting request; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GCB was entitled to summary judgment based on MaGee’s refusal to allow cure | MaGee barred GCB from returning to cure punch-list items, so GCB is owed the unpaid balance | MaGee asserts defects were so severe or known to the contractor that notice and opportunity to cure were excused; factual disputes exist about who first materially breached | Court: Tennessee law and the contract require notice/opportunity to cure; MaGee’s unequivocal exclusion of GCB was a material breach; summary judgment for GCB affirmed |
| Whether MaGee’s later November 2015 allowance to have GCB return satisfied the opportunity-to-cure requirement | GCB says the August exclusion prevented any reasonable opportunity to cure; later invitation after three months was not timely | MaGee says he later permitted GCB to return so cure occurred | Court: November reversal came too late to constitute a reasonable opportunity to cure; initial exclusion was dispositive |
| Whether MaGee is entitled to an accounting of funds paid to GCB | GCB: parties settled non-floor issues; only flooring money remained in dispute | MaGee: no formal settlement; retained contractual rights to accounting | Court: record shows a partial settlement resolving non-floor claims; accounting unnecessary and dismissed |
| Whether GCB may recover additional attorney’s fees after the January 2019 fee award | GCB: contract provides attorney’s fees for breach; requests more fees incurred after January 2019 | MaGee: prior fee award was substantial and encompassed reasonable fees | Court: prior award was reasonable under the circumstances; no additional fees awarded |
Key Cases Cited
- Forrest Constr. Co., LLC v. Laughlin, 337 S.W.3d 211 (Tenn. Ct. App. 2009) (excusing notice/opportunity-to-cure where contractor abandoned job and was unresponsive)
- Carter v. Krueger, 916 S.W.2d 932 (Tenn. Ct. App. 1995) (notice and opportunity-to-cure principle in construction-defect context)
- United Brake Sys., Inc. v. Am. Envtl. Prot., Inc., 963 S.W.2d 749 (Tenn. Ct. App. 1997) (first material breach precludes recovery for subsequent breaches)
- McClain v. Kimbrough Constr. Co., Inc., 806 S.W.2d 194 (Tenn. Ct. App. 1990) (same rule regarding first breach)
- Madden Phillips Constr., Inc. v. GGAT Dev. Corp., 315 S.W.3d 800 (Tenn. Ct. App. 2009) (contractual remedies and breach sequencing)
- 84 Lumber Co. v. Smith, 356 S.W.3d 380 (Tenn. 2011) (contract interpretation is a question of law guided by the contract’s plain language)
- Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235 (Tenn. 2015) (summary-judgment standard and the nonmoving party’s burden)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (nonmoving party must present specific facts showing a genuine issue for trial)