*1 Against X. Rule 11 Sanctions Quillen
Mr. SOUND, INC., ALLIED Plаintiff-Appellant, Quillen The chancellor ordered Mr. $5,000 pay Wright filing large Ms. “a repetitive unnecessary number of mo required tions have the court on re Johnny Eddie NEELY Jess W.
peated occasions to consider the same issues Davis, Defendants-Appellees. based similar if not identical facts where Tennessee, Appeals of Court of governing the law such circumstances has Section. Eastern changed.” We are satisfied that correct, chancellor’s conclusion is but we fail 1995. proof to find the record on which he origi based the amount of the The sanction. Denying Rehearing Order but nal motion for was filed on sanctions Granting Purpose for Limited specific 1993 and it referred to motions Correcting Decision June 1995. prior to that filed date. Counsel attached an Appeal Permission stating spent twenty affidavit that he had Denied Nov. responding allegedly hours frivolous normally motions. He charged stated he per hour.
$150.00 The chanсellor did not rule on the motion trial, just until after entry before the final any decree. We not find do further proof point. in the record on this 11, Tenn.R.Civ.Proc.,
Rule allows trial judges impose may sanctions “which in- an pay party
clude order to other or parties the amount reasonable ex-
penses including incurred ... a reasonable
attorney’s fee.” While the violation of the may case, rule be in this obvious a fee of $3,000 all supported by that is the record. judgment for sanctions the final de- should, therefore, $3,000.
crеe reduced to have We considered all the other issues parties raised and find them to be any alleged either immaterial or errors to be harmless. Quillen Mr. for vio-
lating $3,000. Rule is reduced to In all respects,
other the chancellor’s decree is af- firmed. The cause is remanded to the Cir- County
cuit Court of fur- Davidson proceedings may necessary. ther become appeal Quillen. to Mr. Tax costs TODD, P.J., CLARK, A. CORNELIA Special Judge, concur. *2 acting them while behalf of KRI negotiations regarding with Allied
purchase lighting instаllation equipment. granted court sound The trial summary judg- motion for defendants’ *3 ment, finding complaint the failed to upon claim relief could state a which granted; judg- that Allied recovered a had damages ment in an earlier suit for the same action; sought in this that Allied could proceed the because sued and recovered a had earlier against the principal, defendants’ for basically.” ap- set of Allied “the same facts peals grant summary the trial of сourt’s judgment. appro- We find that this is not an summary judgment. priate case for
I appeal, are four on this
There issues raised by appellant the first two the and the second by appellee: two the complaint allege a 1. Does the claim granted? which relief can be 2. Does the doctrine of collateral misrepresentation? bar Allied’s claim for by 3. Is barred T.C.A. 28-3-105, three-year § statute of limi- injuries applicable for tations to actions personal property? prior 4. Does Allied’s аction KRI George Morrison, Legg F. & Eric J. of present for breach contract bar ac- Hinds, P.C., Knoxville, & plaintiff- Stone for misrepresentation against tion for officers appellant. arising out and directors of KRI of the Stone, McCampbell Young, Robert S. & transaction? same
P.C., Knoxville, appellee Neely. for Eddie W. underlying basis The factual defendants’ Pratt, Baker, Donelson, P. Edward summary judgment consists of motion for Caldwell, Knoxville, Bearman appellee & for in following the record us: the com- before Johnny Jess Davis. plaint by filed 1988 Allied KRI for relief; breach of contract and other the trial findings of fact court’s and conclusions of law OPINION case; in that order and mem- earlier SUSANO, Judge. District orandum United States Court (Thomas misrepre- This is an action for the tort of for the Middle District of Tennessee J.) Sound, (Allied), Wiseman, Jr., sentation.1 Allied Inc. sued A. the related case of Davis, Sound, Century Neely Johnny Eddie W. Inc. v. Financial Jess Ser- (June Resorts, Ltd., Group, Kingdom officers and directors of No. 3:90-0714 viсes 1991). (KRI), alleged misrepresentations Inc. Allied counters with affidavit of time, Comment, popularly development At an earlier this tort see The Action Deceit Tennessee, (1963). known as the action deceit. For a discussion 30 Tenn.L.Rev. of the elements this tort and its historical Link, The defendants then told Allied Larry president of Allied. Also before available.” financing complete.” to the contract “that was available us are two documents related representations, both of which are In on these which between Allied reliance false, con- complaint. One is KRI’s writ- knew to be exhibits the defendants proposal. project. At the same acceptance ten of Allied’s The ac- tinued to work on the 4, 1988, time, 4, 1988, signed May by its ceptance May and is or about KRI is dated Davis, presi- signed pur- by president, Davis as its defendant for KRI the defendant document, lighting and to Allied order to Allied for “the dent. The other letter chase 4,1988, being signed equipment supplied and installed for KRI sound also dated capacity price contract is reflected his as vice [Allied].” defendant $725,000. Also on president. purchase Neither defendant submitted his in the order as *4 date, by vice-president, the the same KRI its affidavit. Neely, agreed in a letter to Allied defendant II paid it had to it for the interest reimburse complaint in the instant action was by The facilitate its money Allied to borrowed 2,1991. April starting point It is paid filed on to performanсe. The interest was analysis. [Century]” for our The facts that follow are by was when the loan “funded allegations of that document. taken from the closed. February or about Allied complaint charges
On that the defendants The “agreed misrepresen- into a contract” with KRI to intentionally fraudulently enter and equip- supply lighting and sound financing project and install had been that the of the ted intentionally KRI.2 The defendants convinced they ment for and “acquired”; system begin Allied to work on the before KRI fraudulently from Allied that concealed credit; of a written contract and before execution and had failed to obtain a letter agreed-to purchase price fraudulently payment intentionally of the con- they and financing of the representing to Allied that of credit Allied that the letter cealed from price acquired and that purchase Century’s “could be commitment. prerequisite to was a forthcoming.” payment would bе What false alleges that the The further knew, intentionally but did not defendants to the busi- representations were material Allied, financing commit- tell was that and dealings Allied and ness between Group, Century damage. Financial ment of Services upon by Allied to its were relied (Century) contingent “upon the fur- Ltd. was $725,000 compensa- in complaint seeks nishing Century] of a letter of credit from [to interest, and tory damages, prejudgment lending a institution.” $1,000,000 damages. punitive in attempts to a letter of сredit KRI’s secure this, Despite the defen-
were unsuccessful. Ill recklessly made “knowingly dants and/or has filed lawsuit Allied This is the third that financ- representations [Allied] false dealings negotiations and arising out of its complete in fact it ing place in and when was initially KRI alone KRI. It sued with not;” letter and continued to conceal the was 19, 1988, of contract. September for breach requirement. of credit found County Chancery Court The Sevier “valid 22, 1988, into a began that Allied and KRI had entered Alliеd On or about contract,” KRI ... and that binding delivering installing system “at the rely lack right on a effectively waived its upon the conceal- request of and in reliance (to negate financing the existence by defen- and false statements made ment contract) fi- regarding 4, 1988, representations May had about dants.” On or 4, 1988, meeting nancing made at the paid not been so it told still parties. of the representatives3 financing if was not between “would discontinue work alleges in the instant рlaintiff apparently opinion 3. The in the 2. The Chancellor’s memorandum repre- and Davis action KRI indicates breach of contract case that the defendants produc- system meeting. “the was to be used in that the at that sented KRI’s interests by” Play presented to be KRI. tion of the Passion damage, certainly portion fact that the a The court awarded Allied $725,000, issue, together fully, completely, tract with a lien on the the matter in improved lighting finally litigated previous land with the and sound action [the KRI], equipment. subsequently plaintiffs KRI filed for and that the here bankruptcy. judgment apparently alleged the amount of their have recovered unsatisfied. injuries damages. remains Additionally, opinion 3, 1990, the Court is Century July sued On proceed to allow this to Nashville, and finds alleging federal court breach of assuming contract, these defendants and misrepre- promissory estoppel and way plaintiffs in some would be Judge that the sentation. Federal Thomаs A. Wise- successful, man, Jr., granting judg- granted Century summary judg- would be two ment, basically. holding prove set of facts that Allied had failed to ments on same the existence of contract between Allied Century, prove any had failed to reliance V misrepresentations by Century offi- on or complaint obviously alleges a cials, and had failed to show reasonable reli- clearly It sets forth all of cause of action. promissory estoppel ance on Allied’s claim. misrepresentation; tort of the elements of the Finally, that court ruled that Allied’s suit was finding contrary, but the Chancellor *5 by also barred the doctrine of collateral es- sufficiency testing legal the was not toppel, [by finding “[t]he because Chancellor complaint as he would have done had he been against Rainwater in the KRI] earlier suit 12.02(6) pure mo faced with a Tenn.R.Civ.P. relied on KRI n reasonably repre- that Allied legal tion. The defendants’ various theories necessary chancery sentations was supporting rely, their motion all to some ruling estopped court’s KRI was from extent, complaint. on facts outside the Their challenging validity the of its contract with of collateral election of theories and (emphasis original); Allied” and that require arising remedies us to consider facts precluded relitigat- therefore Allied was prior against KRI and from Allied’s suit the ing the issue of reasonable reliance. In ef- resulting judgment in that case. Their stat fect, the federal court ruled that state theory premised upon ute of limitations is court determined that Allied relied on the language complaint found in Allied’s 1988 KRI, therefore, representations by made KRI, complaint rather than Allied’s (collateral by operation estoppel), of law in the current action. Since all of these permitted
would not be claim to reliance on rely upon theories matters outside the chal representatiоns promises by or Centu- lenged agree trial complaint, we with the ry- 12.02(6) court that the defendants’ motion summary should be evaluated as one for TV 12.024; judgment. See Tenn.R.Civ.P. Gon Because he had heard the earlier breach of Co., 42, zales v. Alman 857 44 Const. contract action Chancellor (Tenn.App.1993). Rainwater, Jr., designated Chester S. to by interchange. granting hear this case In provide The Rules Civil Procedure summary judgment, the defendants he stated summary judgment to that a motion for is genuine that there were no of material issues granted only pleadings, depositions, if “the fact, that Allied’s failed to state a interrogatories, answers to and admissions upon granted, claim which relief could be file, affidavits, together any, with if genuine is no issue as to show there moving party is Estoppel ... the Doctrine of is material fact and that the Collateral applicable by this to a as a matter of law.” to situation virtue entitled "If, summary judgment disposed asserting of as on a motion the defense num- as one for 56, (6) parties provided bered to dismiss failure a claim in Rule and all shall be for to state upon opportunity present granted, given all mate- which relief can be matters out- reasonable pertinent pleading presented Rule side the are to and not ex- rial made to such a motion court, cluded motion shall be treated 56.” Id. 820 subsequent litiga- law demonstrates conclusive them in
Tenn.R.Civ.P. 56.03. Case added) Brooks, considering (emphasis King is a mоtion for that when court tion.” also, strong- 422, (Tenn.1978); summary judgment, it “must take the Dick- see (Tenn. legitimate view of the evidence in favor of Godfrey, est erson v. 825 S.W.2d non-moving party, 1992); allow all reasonable Perry, Fourakre v. 667 S.W.2d party, inferences favor of that and discard Adoption (Tenn.App.1983); In re Hall, countervailing Byrd v. Johnson, all evidence.” (Tenn.App.1984); 678 S.W.2d (Tenn.1993). A mo- 210-11 Co., & Inc. v. Nashville C.O. Christian Sons summary judgment “clearly (Tenn. tion for not Hotel, Ltd., 765 S.W.2d P.S. designed trial to serve as substitute App.1988). genuine material factual matters.” attempt negate The defendants Id. at 210. essential element of reasonable reliance Generally speaking, a defendant mov They misrepresentation this case. stress may ing summary judgment avail itself of Judge in the federal Wiseman’s conclusions may negate one of avenues: it an essen two against Century that court action claim, nonmoving party’s tial element of the Link, testimony of Both the sworn defense, may or it establish an affirmative president, in the state court suit limitations, that such as the statute of defeats findings in that KRI and the Chancellor’s Byrd claim. at n. 5. The See only action establish that Allied relied attempt pursue defendants here both Century. representations of They argue first that the doctrine of routes. questions at issue this case— [T]wo to as estoppel, collateral sometimes referred completing per whom Allied relied on in preclusion, negates issue the elements of rea the reasonablеness of that formance and damages in Allied’s sonable reliance directly at issue in the reliance —were misrepresentation. The claim for fraudulent *6 chancery finding that court action. The defendants also assert two affirmative de on KRI n repre reasonably relied three-year stat fenses to Allied’s claim: the necessary chancery was sentations applicable ute of limitations to actions for estopped from ruling court’s that KRI was (on thеory injuries personal property to challenging validity of contract with its complaint in its that Allied referred earlier Allied, that Allied was therefore enti against KRI the existence of a contract to price KRI. tled to the contract Rea 1988,”) 10, February entered “on or about in two sonable reliance is a critical element (on theory that and election of remedies in this suit— of Allied’s causes of action against Allied’s current tort claim the defen prоmissory estop- misrepresentation and misrepresentation is re dants for fraudulent Therefore, law Cen pel. under Tennessee against KRI for pugnant to its earlier claim tury may properly invoke the doctrine of contract.) breach defensively prevent estoppel to collateral delving into the defendants’ Before relitigation of this issue. Allied’s negate of Allied’s efforts to two elements Sound, Inc. v. (Emphasis original). misrepresentation, first address claim for we Ltd., Group, Century Financial Services estoppel upon which doctrine of collateral 1991) (June 17, M.D.Tenn., at No. 3:90-0714 are based. Collateral those efforts *9. *6 and precludes re-litigation of individual issues Chancellor, in suit the earlier actually necessarily deter which were KRI that Allied and concluded in a former action between the named mined upon into a formal contract based parties privies a different cause of entered or their 4,1988, Scott, mеeting. He discussions at the Massengill v. 738 S.W.2d action. Saunders, actions (Tenn.1987); that its specifically v. 812 found Stacks meeting, May 4 “effective In and conduct at the (Tenn.App.1990). other rely upon lack of words, ly right to actually and waived its an issue has been “when financing” to the breach as a defense necessarily in a former action determined action; same actions contract these parties, that determination is between the KRI action pro- in the breach of сontract [Allied] and conduct “induced to further action. performance preclude of the contract.” the instant ceed with its does not appear argue to The defendants deciding, that the nec- Assuming, without findings, acknowledged Chancellor’s present in the instant case essary parties are Wiseman, representa- that KRI Judge made estoppel, trigger the doctrine of collateral to pre- and that Allied relied them tions prior litigated in the two nоne of the issues finding case that Allied clude the instant in a manner at lawsuits were resolved there upon misrepresentations by relied the defen- theory misrepresen- Allied’s variance with Neely dants and Davis. We find this tation the individual defendants argument. corporation A acts curious the instant case. through agents. agent An who is one or to undertakes to transact some business posed The first affirmative defense affair, manage by authority some for another the statute of limita by the defendants is latter, an and on account of the and to render provides § that ac tions. T.C.A. 28-3-105 Security account of it. Federal Sav. and property injuries personal or real tions Riviera, Ltd., Loan Ass’n v. (3) years within three “shall be commenced (Tenn.App.1992). We note that “an accruing of cause of action.” from the acts, escape liability agent cannot for tortious § case was T.C.A. 28-3-105. The instant including misrepresentation, against fraud or 1991. The defen commenced persons simply agent third because the original in its dants stress that Allied stated acting scope agency within or at complaint against KRI that it into a entered employer.” Brungard the direction of the February KRI “on or about contract with Records, Inc., Caprice argue 1988.” The defendants that Allied is (Tenn.App.1980). nothing There is inconsis- suing on a claim for fraudulent induce now misrepresentations charged tent between the contract, “inducement” to ment reprеsentations in the instant case and the predated logically contract must have found the earlier breach of contract ease. contract, that therefore existence of the fact, they totally In are consistent. If KRI § complaint 28- runs afoul T.C.A misrepresentations, some individual or 3-105. individuals had to make them for it. The litigation in this identifies those premise underlying the defendants’ individuals as the position factually incorrect. Allied’s com- Davis. alleges plaint in the сase at bar a number *7 misrepresentations made at dif- fraudulent attempt The defendants also times, some before it started work and ferent use the doctrine of collateral to ne clearly Allied has a cause of some after. gate damages the in cur element of misrepresen- act of action for fraudulent They argue rent claim. that “Allied has 2,1988; accruing but tation on or after alleged any damages additional ... for which inquiry. phase this of our this doеs not end Indeed, may compensated. president Allied has filed the affidavit its alleged damages the has identical contract at the firm in which he asserts no one already judg for which it has recovered a misrepresenta- any fraudulent was aware of ment.” While is true “care should be by the defendants until sometime after tions exercised to avoid double recoveries al fully equipment was lighting the and sound lowing damage the same twice under differ question May, in The then instаlled 1988. in the designations,” ent there is no evidence for did Allied’s cause of action becomes when record before us that Allied has ever recov misrepresentation ac- of fraudulent tort original judgment against KRI. ered crue, before us is con- 521, as far as the record Taylor, Ford Motor Co. v. 446 S.W.2d ac- statutory phrase “from the cerned? The only (Tenn.App.1969). It is a double 530 in cruing of the cause of action” found T.C.A. judg recovery damages successive —not § construed to mean 28-3-105 has been seeking single recovery a ments —that plaintiff knew or “from the time when the Judgments 47 barred. See Am.Jur.2d (1995). a reasonably have known that cause recovery judgment § should 1008 The 822 Hinds, sought in the v. 541 not inconsistent with the one
of action existed.” Stone 598, (Tenn.App.1976). Taking affirming contract. 599 earlier action true, president’s which we affidavit as raised are all found in favor of The issues teaching Byrd, must under the we con- grounds in Allied. None of the asserted clude that the record before us shows that summary judgment defendants’ motion for of action did not accrue until Allied’s cause preserved appeal warrant as issues on lighting sometime after installation of the summary judgment. Accordingly, this court completed May, equipment and sound was finds that the defendants are not entitled to us, Based on the record now before summary judgment. genuine are is- There three-year this suit filed limi- within the sues for trial. period. tations The of the lower court is vacated and final Thе defendants’ second for a trial on the and this cause is remanded affirmative asserts that Allied’s tort defense appeal of this are taxed to merits. The costs misrepresentation claim for fraudulent this appellees. repugnant action is to its earlier claim for breach of contract and is there FRANKS, GODDARD, P.J.(E.S.), J., fore of election of barred doctrine concur. applies remedies. That doctrine “where existing there are ‘two alternative remedial REHEAR OPINION ON PETITION TO rights, inconsistent and not reconcilable with petition ” The have filed a Walker, each other.’ Barnes v. 234 S.W.2d they misappre- that we rehear which state (Tenn.1950) (quoting Phillips 650 opinion. Spe- hended a material fact in our Rooker, Tenn. 184 13 S.W. cifically, they disagree with assertion our (1916)). plaintiff unequivocally must Rainwater, in suit that Chancellor the earlier remedy choose one and is thereafter es- misrep- “found that fraudulent remedy. topped to resort to the other Id. by KRI tо Allied at resentations were made purpose prevent of this doctrine is to May meeting.” claim The defendants single wrong. double redress for a Purcell not find that KRI the Chancellor did State, Enterprises, Inc. v. misrepresentations. (Tenn.App.1981). opin- again We have read Chancellor’s apply, For election of remedies per- reading ion the KRI lawsuit. Our truly sought the two remedies must be re found suades us that while the Chancellor Martin, pugnant to one another. Holder v. reрresentations that bound it that KRI made (1966). Tenn. address, Allied, to a contract with he did not action, In its first Allied sued KRI for breach other, way question of wheth- one or the bar, of contract. In the case at Allied sued misrepresentations. KRI made er intentional misrepresen Davis fraudulent petition is here- Accordingly, the defendants’ tation, species of tort. We note that correcting by granted purpose the sole inconsistency is no between different “[t]here *8 language fоllowing [Editor’s erroneous all which are based remedies Change incorporated publication Note: affirmance or disaffirmance of the contract.” purposes.] McQuiddy Printing Hirsig, Co. v. 23 Tenn. (1939). IT IS SO ORDERED. App. More over, appellate courts of this state have FRANKS, J., GODDARD, P.J.,
expressly of breach of stated that theories repugnant contract and fraud “are not or concur. Fox,
antagonistic to each other.” Tallent (1940); Tenn.App. Lowenstein, v. Perel & see also Sunderhaus (1965). 215 Tenn. not disavow the con The current action does sought lawsuit is remedy in this tract.