Shay Simpson v. National Fitness Center, Inc., E2017-00018-COA-R3-CV

Background

Shay and Brian Simpson signed a health-club membership in Oct. 2012; the written contract included a 10-day satisfaction/cancellation guarantee measured from the club opening (Jan. 15, 2014).
After dissatisfaction, Ms. Simpson spoke with National Fitness president Lee Sloan in mid-February 2014; Sloan orally told the Simpsons to "give it a couple of weeks" and he would "work with" their contract if they remained unsatisfied.
The Simpsons continued to use the club; Ms. Simpson called Sloan about cancellation roughly 23 days after the oral conversation and sent a letter to the board on March 13, 2014. National Fitness refused to accept the cancellation as untimely.
Trial court found National Fitness breached the modified (oral) satisfaction guarantee, held there was a negligent misrepresentation under the TCPA, cancelled the membership, ordered return of all monies, and awarded attorney’s fees to the Simpsons.
On appeal, the Court of Appeals affirmed the cancellation and refund but reversed the TCPA finding and the award of attorney’s fees, reasoning the parties’ mutual oral modification created an ambiguity (not deception) and the Simpsons’ cancellation was timely under a reasonable- time standard.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether National Fitness breached the membership by denying cancellation after the oral extension	Simpson: Sloan granted an extension of the satisfaction guarantee ("a couple of weeks"); Simpson timely exercised cancellation	National Fitness: "a couple of weeks" meant a hard two-week deadline; cancellation occurred after that	Held: Affirmed breach — oral modification extended the guarantee; under the facts "a couple of weeks" was not a rigid 14-day limit and Simpson timely cancelled
Whether National Fitness violated the Tennessee Consumer Protection Act (TCPA) by misrepresenting cancellation time	Simpson: Oral misrepresentation/ negligent misstatement about cancellation period was deceptive under TCPA	National Fitness: No deceptive conduct; parties mutually created an ambiguous oral modification	Held: Reversed — Court of Appeals: no deceptive act; ambiguity from a mutual oral modification is not TCPA deception
Whether plaintiffs are entitled to attorney’s fees under the TCPA	Simpson: TCPA violation permits award of attorney’s fees and costs	National Fitness: No TCPA violation, so no fees; also challenged timeliness	Held: Reversed — because TCPA finding vacated, attorney’s fees under TCPA were improperly awarded
Whether appellants/appellees are entitled to appeal attorney’s fees for TCPA claim incurred on appeal	Simpson: Seek fees on appeal tied to TCPA claim	National Fitness: No TCPA violation; thus no appellate fees	Held: Denied — no appellate TCPA fees because Court reversed TCPA violation

Key Cases Cited

Bogan v. Bogan, 60 S.W.3d 721 (Tenn. 2001) (standard of review for trial-court factual findings on appeal)
Tucker v. Sierra Builders, 180 S.W.3d 109 (Tenn. Ct. App. 2005) (definition and analysis of "deceptive" under the TCPA)
Miller v. United Automax, 166 S.W.3d 692 (Tenn. 2005) (attorney’s fees under TCPA are not punitive and may be awarded without finding willfulness)
Lancaster v. Ferrell Paving, Inc., 397 S.W.3d 606 (Tenn. Ct. App. 2011) (oral modification and reasonableness rule for time of performance)
Audio Visual Artistry v. Tanzer, 403 S.W.3d 789 (Tenn. Ct. App. 2012) (TCPA standards; courts decide whether representations are "unfair" or "deceptive" as a legal matter)
Cloud Nine, L.L.C. v. Whaley, 650 F. Supp. 2d 789 (E.D. Tenn. 2009) (TCPA requires proof that defendant’s conduct proximately caused ascertainable loss)