Kenneth Jarrett v. Harrison Epperly and Epperly Inc., F/k/a United Brake Systems, Inc.

However, the district because water. estab- sentencing range

departed from making a without by the Guidelines

lished defen- statement, the sentences

specific vacated are and Colwell Fitzwater

dants district remanded case is specific forth the to set the court

court for from Sentenc- departure for its

reasons

ing Guidelines. Plaintiff-Appellee, JARRETT,

Kenneth Inc., EPPERLY

Harrison Systems, Brake United f/k/a Defendants-Appellants. 88-5762.

No. Appeals, States

United

Sixth Circuit. 31, 1989. July

Argued 23, 1990.

Decided Feb. Rehearing En Banc

Rehearing 12, 1990. April

Denied Turk, (argued),

Alan Mark Turk Prince & Nashville, Tenn., George Hopper, Hop- W. Ind., Associates, per Indianapolis, & plaintiff-appellee. Boult, Dyer, Curry,

Mark H. Cum- Peter Nashville, Tenn., mings, Berry, Conners & Leeuw, (ar- Gene R. Dean T. Barnhard Rose, Wallack, Klineman, gued), Wolf & Ind., Indianapolis, defendant-appellant. he would of the branch if NELSON, percent owner WELLFORD Before continuously manage job it for TAYLOR, take District Judges; Circuit years. ten Judge.* offer, basing accepted this Jarrett TAYLOR, District DIGGS ANNA large part upon promise the acceptance in Judge. ownership. opened He the of eventual and of contract Tennessee breach This of 1976. spring in the branch Nashville on Defendant’s us case is before fraud was between the in Plain- verdict general jury of a appeal writing. parties later put into Both never dam- favor, compensatory awarding tiffs relationship had their been testified Hundred Seven of ages in the amount “like and son.” father ($700,- Dollars Hundred Seven Thousand open others and In an effort to induce Hun- 700.00) damages of One punitive and branches, Epperly made manage still more ($112,- Dollars Thousand Twelve dred several; promise the promise same claims 000.00). assert several Defendants ownership in forty-nine percent of eventual which have appeal, none of error of addition, he told several their branch. In merit. years, that he employees, his over of agreement with Jarrett such an oral AND I. FACTS and, years, of the ten over course next BELOW PROCEEDINGS that he continually Jarrett he reassured Epperly Harrison Defendant-Appellant forty-nine percent owner become would Kenneth Plaintiff-Appellee approached year anniversary arrived. his ten when Jarrett 1976 and asked April, Jarrett United, During decade with Jarrett his oper- Epperly, who him. work for come business positions and offered other was Indiana, Indianapolis, shop in a brake ated elsewhere, he all of opportunities Nashville, shop open a second sought to refused, opportunity to be- of this because Tennessee, Brake name of United Nashville part owner of United’s come a he, his Corporation, of which Systems period, the com- during this Also branch. the sole share- and his father spouse twenty-three two to pany grew from and con- president He was holders. branches, assisting in the with Jarrett of the cor- operations day-to-day trolled new management of several opening and approached Epperly At time poration. Indeed, responsibilities Jarrett’s branches. employed as Jarrett, happily Jarrett over decade. greatly increased Transport leases with of truck salesman anniversary his tenth or about the $9,000.00 On Nashville, salary at a Pool Epperly, approached employment, Jarrett an annum, and as commissions as well per prom- the oral requesting performance expense account. acknowledged promise Epperly ise. open and up, to set Epperly asked Jarrett would, by the informed Jarrett of United branch manage Nashville forty- his 1986, evidence of receive end $9,100 per annum Brake, him and offered oper- in the Nashville percent interest nine commissions, expense account an ation. When Jarrett automobile. of an use Unfortunately, on December present happy his that he was advised United, including assets of Epperly sold the offer Epperly made further position, operation, Nashville of the assets prof- all not that, branch were if the Nashville Million Echlin, for about Eleven months, closed to it would be six after itable Thousand Twenty Eight Hundred additional One given Jarrett ($11,- Forty Two Dollars Eight Hundred fi- pay. Epperly months severance six 128,842.00). forty-nine make Jarrett nally offered to * Division, sitting by designation. gan, Southern Taylor, Diggs United States The Honorable Anna Michi- Judge the Eastern District District sale, ap- II. DENIAL again after the OF APPELLANTS’

Even Jarrett who, Epperly January, proached MOTION FOR SUMMARY promised that he would receive JUDGMENT price corresponding to portion of the sales Appellants challenge trial forty-nine percent interest in the Nash- summary court’s denial of their motion for operation. payment No such was ever ville judgment. doing, they rely upon so fact, employee made. another when magistrate’s report, which recommended Jarrett, about his asked partial summary judgment in their favor. “Forty-nine percent of Epperly replied Any magistrate’s report issue as to the nothing?” what? Of however, is here the district mooted States filed suit United genuine court’s determination that de novo for the Middle District of District Court existed, precluding summary issues of fact seeking, complaint, in his first judgment requiring trial. United damages employment for of an oral breach Raddatz, 667, v. 447 100 States U.S. S.Ct. promissory contract and for fraud. Short- 2406, (1980); 65 L.Ed.2d 424 Mathews v. trial, ly Defendant moved for sum- before Weber, 261, 549, 423 U.S. 96 S.Ct. 46 mary judgment, magistrate and the recom- (1976). L.Ed.2d 483 partial summary judgment for De- mended refused, however, judge fendant. The trial a denial a motion for Whether summary judgment to rule on the motion summary judgment appealable following is Moreover, pre-tri- at the final at that time. jury ap verdict adverse to the movant conference, al were unable to in pears impression to be an issue of first order, agree pre-trial on a due to Jarrett’s appears this circuit. The better rule request that it include claims for fraud and recently adopted by have the Ninth been deceit, constructive fraud and fraudulent that and Federal Circuits and is such a concealment, he asserted be which properly denial is “not reviewable on an proven at trial. He also submitted judgment appeal from the final entered complaint included these amended Legal after trial.” v. Locricchio Services new theories. The district court chose (9th Cir.1987); Corp., 833 F.2d 1352 Glaros pending take the matter under advisement (Fed.Cir.1986), v. H.H. Robertson 797 F.2d 1564 of the evidence at trial. the close 1072, dismissed, t. 479 U.S. cer (1987); 107 94 L.Ed.2d 124 S.Ct. Sen trial, day charged the court After six Corp. Seiffhart, 803 F.2d 661 contract, fraud, za-Gel jury as to breach of (Fed.Cir.1986). agree We with the Ninth promissory fraudulent concealment and and Federal Circuits and here hold that fraud, request and refused Defendants’ summary judgment is denied and where jury given special interrogato- that the be addition, subsequently the movant loses after a full ries. In after trial the court de- merits, summary summary motion for trial on denial nied Defendants’ may judgment. appeal judgment appealed.1 This followed. not be recognize fully presented, after the 1. We that decisions in this circuit verdict evidence generally interlocutory merge orders appellate state on the basis of an court's review of judgment may presented into the final be pleadings and affidavits at the time whether the appeal judgment, of that final but we no find summary judgment demonstrated of the motion appeala- specifically case which deals with the a trial. After considerable re- the need for search, bility summary judgment after a of a denial of jury have no case in which a we found Hence, per we full trial on the merits. find summary judg- verdict was because overturned Locricchio, reasoning in su suasive the court’s hold, improperly ment had been denied. We sure, party moving pra at 1359 that: "To be therefore, that the denial of a motion for sum- summary judgment injustice suffers an if his mary judgment appeal is not reviewable on an improperly true even motion is denied. This is judgment a final entered after a full trial from injustice if the decides in his favor. The Northrop Holley on the merits.” See also greater goes arguably is against him. when the verdict Services, (11th F.2d Worldwide Aircraft However, we believe it would be Cir.1988). unjust deprive party even of a more reject argument We Defendants’ REVIEW OF OF III. STANDARD provisions above bar Plaintiffs claims. VERDICTS JURY The Nashville branch of United did not own Savings Bank v. National Gold in real estate when made the (6th 641 F.2d City Albany, forty-nine percent ownership acknowledged it Cir.1981), this Court Therefore, contract, Jarrett. when regard to suffi by state law with is bound made, did not concern real estate and thus diversity cases: ciency the evidence was not within Statute of Frauds. Tennessee, law with the rule of evidence, fact, There is no that real the suffi- respect appellate review of estate ever became embedded the con- is that all the evidence ciency of evidence tract, ownership which was for 49% party must taken as prevailing be putatively incorporated of an establishment Moreover, all inferenc- true. reasonable by Epperly. prevailing party must es favorable to complaint Plaintiff Jarrett’s does not al- countervailing evidence made and all lege that there was ever contract for the However, disregarded. it is also must be sale of real estate. What the under Tennessee law there clear that on, rather, suing is a contract for of an 49% evi- and material must be substantial operating consistently business identified jury have from which the could dence pleadings in opera- the as the “Nashville prevailing the side. a verdict for based tion.” It was understood that the Nash- omitted]. [Citations estate, operation ville included real to be case, jury find that as to all In this we sure, along inventory, equipment, with ac- Defendants, jury had the issues raised goodwill, counts receivable and but there on which material evidence substantial and understanding was no that the defendant its verdict for Jarrett. to base corporation had to own the real estate rath- leasing than it. If the had er business OF FRAUDS IV. STATUTE owning, leasing never switched from contend that the Statute Defendants plaintiff ground had no would have of the oral Frauds barred enforcement long the complaint as as he received 49% parties because agreement between these operation if business. And the Nashville agree in the real estate was “embedded” separately incorporated, with had been incap promises the ment and because taking through convey- his 49% year. one performance within able stock, the fact that no corporate ance of changed real estate hands have Frauds, Tenn. The Tennessee Statute of any in event. made no difference states: Ann. 29-2-101 Code § Writing for action—No action required disagree Appellants We also brought: shall be could not be assertion that the contract (4) the sale of Upon any contract for year. one In Price v. performed within hereditaments, lands, tenements, or or Mercury Supply 682 S.W.2d for a making any lease thereof the the found that (Tenn.Ct.App.1984), or, (1) year; one longer term than 29-2-101(5) should Ann. be Tenn.Code § held: (5) narrowly and further Upon any agreement or contract construed performed within the which is not to be the ... Mr. Price himself stated (1) making year from the space of one life would be for terms of this contract thereof; Thus, it he decided to retire. or until year one be- performed within agreement, upon could be promise unless the or died or could Price could have brought, cause Mr. such action shall be year after thereof, to retire within shall have elected memorandum or note some The fact made. alleged contract was signed by party writing, in be is not contingency occurred therewith, per- that neither charged or some other bring agreement within lawfully autho- sufficient by him thereunto son 29-2-101(5). Ann. Tenn.Code § rized. Thus, ample had basis port Pool. us that

It is clear the case before render it it the increased express terms of the contract to conclude as did If the Nash- year. one performable compensation upon within was based increased re- unprofitable after proved Indeed, ville branch compensation sponsibilities. months, closed only it would have been six higher, without might well have been even paid for the would have been and Jarrett ownership. promise of future pay for following months as severance six fundamentally, disagree More we contingency fact that this his efforts. The Blasingame Defendants’ assertion that is, Price, not sufficient did not occur as pay. hinged upon plaintiff’s decrease year the one bring within Rather, Blasingame our view of convinces of Frauds. proscription of the Statute that the its result on the us Court based that the We further conclude plaintiff’s giving up prior secure reasonably have found could situation, risky employment for a more under the agreement survived the Statute performance very sub- well as his full eq part performance and doctrines of enterprise to the there- stantial services estoppel. v. Ameri uitable after, prior to the defendant’s breach of (Tenn. Materials, Inc., 654 S.W.2d can promise. Those elements are 1983), remarkably an action similar to Accepting present in the instant case. em- us, plaintiff employee sued case before ployment with United was a risk for Jar- employment of an oral contract. for breach rett, the realization of which was evidenced to honor employer The defendant refused parties having provided for six company its to issue stock months severance if the Nashville branch having performed several despite plaintiff’s addition, profitable. not Jarrett’s employment in reliance thereon. years of responsibilities included for United sub- the detriment of Plaintiff had suffered travel, away him from stantial which took leaving prior employment for a secure family days a time. his at defendant, taking pay risky venture with so, working years cut to do and for several generally, More under Tennessee repeated that his efforts assurances law, wrongdoer permitted rely is not twenty-five percent net him of of defense. In In on the Statute Frauds Supreme The of company’s stock. Court Mercan Company Bry-Block terstate there held that had suf Tennessee Co., (W.D.Tenn.1928), tile 30 F.2d amounting uncon fered a detriment to an held that the Statute of Frauds Court by performing part his of the scionable loss purpose preventing “enacted for the of was bargain employer and that would be fraud, and shall not be made the instru estopped relying upon from the Statute aiding shielding, protecting, ment of Frauds defense. party upon perpetration it in the who relies distinguish Appellants’ attempt fraud, of a or in the consummation here, argued it is that Jarrett And in fraudulent scheme.” Baliles any Unit- did not suffer detriment because 621, 624 578 S.W.2d Cities Service ed started him at one hundred dollars more (Tenn.1979), deci citing the 1928 Interstate per year previous employer paid, than his along of earlier deci sion number salary gave regular and him increases sions, specif Supreme disagree. thereafter. Jarrett testified We equitable ically discussed the doctrine that, manager a district he was not estoppel and its effect on Statute managing simply responsible for the Nash- Frauds: branch, supervisory responsi- ville but had this rule The harshness of Atlanta, Tampa, Birming- [Statute bility for the and mitigated by appli- has been many more Frauds] ham branches. He worked estop- equitable doctrine of cation of the and was fre- previously hours that he had to enforce pel exceptional cases where away fami- quently required to be from his make it an short, the statute of frauds would ly. job, in not a routine This was hardship oppression, and Trans- instrument of responsibility, as he had held with verging on actual fraud. omit- instruction is not error where other [Citations instruc given by tions the Court adequately ted]. ad dress the same issue. Blackwell v. Sun jury We believe that the had substantial Corp., Electric 696 F.2d 1182-1183 on and material evidence which to conclude (6th Cir.1983); Corp, Xomox exceptional that Jarrett’s was one of these Mitroff v. (6th Cir.1986), F.2d Jones v. Con application cases in of the statute Corp., (6th solidated Rail 800 F.2d 590 injustice an and would work abet an actual Cir.1986). Here, parties’ because the finding fraud. We will not disturb their oral, undisputedly was detrimentally Epper- relied on issue was partial per whether Jarrett’s ly’s promises.2 formance agreement, and his re basic, however, Even more with re thereon, liance brought his contract claim gard inappli to the Statute of Frauds is its within exception to the Statute of (i.e. fraud) cability plaintiff's tort claims. Frauds. The trial court instructed the jury, having granted The punitive dam that, prevail claim, on his contract Jar ages, clearly found for Jarrett on tort rett had the burden proving “that claims, concluding Epperly’s conduct reliance of eventual owner intentional, was malicious and wanton. ship, he position altered his so far as to application of the Statute of Frauds to unjust incur an injury unconscionable misrepresentation the tort of fraudulent loss; and ... per his actions [t]hat specifically addressed the Tennes pursuant formed alleged promise to the Appeals in Haynes see Court of v. Cum part eventual ownership are refera Builders, berland 546 S.W.2d 228 promise, ble to that rather than to some There, (Tenn.Ct.App.1976). the Court held other reason such as compen increases in preclude the Statute did not a claim sation.” Because this instruction ade fraud, rejected appellant’s ar quately addressed the dispute factual be gument the contrary as “meritless”. Id. tween the relevant to the Defen p. 231. The Court reasoned that defense, dants’ Statute of Frauds the court applied only Statute of Frauds to contract refusing did not err in Defendants’ ten actions, and not to tort claims. We find dered instructions. meritless Defendants’ reliance on v.Webb Shultz, 184 Tenn. 198 S.W.2d 333 Moreover, if even the trial court’s (1946). This, as well as other cases cited instructions as to the Statute of Frauds Defendants, by involved claims for breach erroneous, any were such error was contract, and not tort claims for fraud. harmless, jury’s inasmuch as the verdict

The Webbdecision antedated the Tennessee claims, was also on based Jarrett’s fraud Supreme in Court’s decision subject which were not to the Statute of quarter century, more than a of a more Haynes, supra, p. Frauds defense. at 231. over, and the latter decision—which is strikingly close to the instant case on its We also conclude that the dis regardless facts—would control here correctly trict court declined to instruct the what said. Webb fraud, promissory that in a case of promisor legal right an has absolute to

V. JURY INSTRUCTIONS change presented his mind. The facts support charge. Defendant contends that the trial trial did not such a Defen rejecting court erred in apparently Epperly tendered instruc dant claims here that originally keep promise, tions on the Statute of Frauds. This Court intended to his but held that give changed has the failure to a tendered his mind after the ex- business citing support 2. Before the Interstate decision as Because the case at bar does not involve a land, applying equitable estoppel for doctrine in for the sale of there is no need contract Balites, Supreme the Tennessee Court noted that us the extent to which the harsh- for to consider rule, “part performance parol might mitigated by as a of a contract ness of this rule be case, equitable estoppel for the sale of land will not take the doctrine if this like Bal- ites, out of the statute of frauds." 578 S.W.2d at 624. had involved a contract for the sale of land. should and therefore trial, promise, keep his At expectations. his beyond panded to rescind prompt action taken have made that he ever however, Epperly denied contentions, these support To contract. never instance. He in the first made heavily on statements rely Appellants changed indeed had at trial that he claimed inferring that deposition, at his Jarrett requested though party’s mind. Even his filing years before or seven knew six he of the statement charge a correct is to fulfill intended Epperly never suit that in error held to be law, the trial court for however, ignore Appellants, promise. his only be it must not refusing charge, testimony. and trial affidavit Plaintiffs correct, applicable also but must legally summary judg- opposition affidavit v. his Strickland facts evidence. to the that the reference ment, averred Jarrett 611 S.W.2d Lawrenceburg, City of to when the “refers years seven six or occurred. No error (Tenn.Ct.App.1980). name stopped using the branch Nashville argu advance Defendants next of Tennessee” Systems Brake United pro plaintiff to by permitting ment that discovery Defendants any such as not to conceal of fraudulent the theories ceed on addition, testified that at trial he claim. al fraud, trial actual ment and entitled corporation learn that a he did not reject such a We by ambush”. “trial lowed Systems of Brake United prior for the reason contention promised, as up by Epperly, set never been pre-trial proceed as the as well pleadings, employment years of his ten after until defendants place ings, sufficient counsel, in- legal who he consulted when The evidence these notice of claims. testified he also Significantly, him. formed show Defendants the same. case remained approached at trial that when preparation their trial prejudice to no real neared, Epperly anniversary his tenth court com Accordingly, the district effort. represent- him certificates promised stock by allowing mitted no abuse discretion the stock forty-nine percent of ing claim jury. go to the these claims “[A] Therefore, Defendants’ branch. Nashville by the borne out surprise that is not affirmatively contention a mere facts, objection to technical supported by the not claims waived claim relief theory of the to the addition jury had substantial and the evidence based or it is facts on which or the to conclude from which evidence material typical the defense nature of change contrary. prejudice ly not entail sufficient will amend.” a motion to the denial of

warrant FORM VERDICT THE VII. GENERAL Miller, Practice Wright and Federal at a Procedure, pp. 478-79. Even § object to Finally, Defendants may parties proceedings, stage late jury. to the the submitted verdict form to the to conform pleadings their amend a to use argue it was error They findings of fact. Bran to the proofs and form, special a rather than general verdict 873, 464, 83 105 Holt, S.Ct. 469 U.S. don v. interrogatories. in the form verdict Moore, 3 (1985). also J. See L.Ed.2d 878 However, jury is within verdict the form (2d ¶ ed 15.13[2],p. 15-157 Practice Federal and is not judge, trial the discretion of the to 1984) (amendment conform evidence to Indus ordinarily Lummus reviewable. time); id., 15-168 any made at may be 862 F.2d 267 tries, Inc., Corp., E. v. &D.M long as allowed (Rule 15(b) “so amendment 49 (Fed.Cir.1988); see also Fed.R.Civ.P. prejudiced not been party opposing has the privi (“It appears that Commentaries case”). his presenting in a is not calling special a verdict lege by but parties right to be demanded

VI. WAIVER by judi determined a matter to be rather discretion.”) Burling Flanigan allege af cial that Jarrett Appellants Cir.1980) (8th Inc., F.2d 880 632 Northern claims because ton his firmatively waived denied, 101 S.Ct. 450 U.S. rt. in years advance discovered supposedly ce (“The (1981) decision 1370, 67 L.Ed.2d did not intend Epperly his lawsuit accompa- years. general employees to use a verdict Other whether described con- by special interrogatories ... is sim- versations nied in which Epperly ilarly acknowledged committed to the unreviewable dis- agreement. Jarrett quoting judge.”), of the trial prior employment cretion left his to take the Miller, Wright & Federal Practice and position pursue and declined to subse- (1971). Procedure, Civil at 522 quent employment § offers and business ventures in upon reliance Epperly’s compensatory pu- awarded promise. Although the dollar value of damages. punitive The award of nitive unclear, these other offers are [sic] damages supports the conclusion that the length of Jarrett’s suggests commitment species a fraud. found Adkins unjust agreement loss if the Company, v. Ford Motor 446 F.2d sure, breached. To be Epperly disputes (6th Cir.1971), held: this Court facts, these but these disputes factual Tennessee adheres to the rule that where can not be resolved a motion for sum- theory recovery more than one is sub- mary judgment. jury, mitted to the and there is evidence appears ... It that Jarrett version all, more, [sic] support one or but not agreement of the 1976 include a theories, general [sic] verdict should con- subsequent promise convey the real theory strued to be attributable to the estate on which UBSI’s Nashville branch supported by theories sufficient evidence course, was located. Of UBSI did not and submitted free from error. [Cita- acquire ownership of the real estate on tions omitted]. which its Nashville branch was located judge

The trial acted within his discretion However, until 1980. in deposition by submitting jury through case to testimony, clearly states that this general verdict form. real estate was to be embedded in the The decision of the district court is AF- agreement. FIRMED. STATUTE OF FRAUDS WELLFORD, Judge, Circuit An oral contract for sale of an in interest dissenting: land is not enforceable in Tennes majority I dissent from the view in this Materials, see. v. American case, and I would reverse and remand the (Tenn.1983); 654 S.W.2d 659 Baliles indicated. case for reasons v. Cities Service 578 S.W.2d 621 by plaintiff, alleged conceded As (Tenn.1979). rely upon It is error between the was not sixty-one year old district court decision documentary writing and there was no evi- (Interstate Bry-Block Mercantile Co. establishing precise dence its terms. I find Co., (W.D.Tenn.1928) 30 F.2d 172 “su- magistrate statement this percede” holding of the Tennessee Su succinctly: case to set forth the facts preme regard. Court in this in light the facts are construed [W]hen partial performance, re- The doctrine of Jarrett, required most favorable to upon by plaintiff, change lied does not summary consideration of this motion for rule on sale of real estate in Tennessee. Jarrett, by judgment, testimony his own 2; Baliles, Blasingame, supra, supra. n. testimony employees, and the of other specifically The court noted presented has sufficient facts to estab- real estate is the that a situation where agreement lish an oral between Jarrett agreement subject matter of an oral is dis- Epperly convey Epperly and for to a 49% in- tinguishable from a situation which operation in interest UBSI’s Nashville partial performance of a verbal volves the upon completion Jarrett’s successful of employment at 663. contract. 654 S.W.2d years employment Epperly 10 with and formally pleaded Plaintiff that real es- Epperly Jarrett testified that so UBSI. part alleged upon the contract

agreed gave subsequent in 1976 and as- tate was of following to he relied: surances Jarrett which

1022 regard defen- in that this claims the Plaintiff parties that by the It understood was representations in Epperly made false (49%)of the Nashville dant percent forty-nine above, with the equipment, agreement, discussed inventory, the operation, included plaintiff, be- to deceive at the outset receivable, payable, idea accounts accounts of expectation he “no reasonable and real estate. cause goodwill business Plaintiff promises.” those performing added). (emphasis 21 and 91 Appendix Joint therefore, “expected claims, defendant real suing for value of is the Plaintiff so, causing him and did induce reliance” to claims in 1980 acquired assets estate position,” and then change his “to real estate involved was no there that since plain- the oral “repudiated” agreement, oral made the in 1976 when he This claim “irreparable detriment.” tiff’s of Frauds. by the Statute not barred he is ac- alleged oral offer amounts however, escape, from cannot subsequent and the plaintiff ceptance by claiming an nevertheless is fact defendant-offeror part of on the failure unen on an in real estate based interest part of parol agreement, carry out To the extent agreement. oral forceable bargain. have majority and the the district claim should not promissory The fraud real value recovery for the of permitted Ten jury. The been submitted have estate, to the Tennessee Statute contrary expressly has not Supreme Court nessee by the Tennessee as construed of Frauds a tort in fraud as promissory recognized in they are Court, I am convinced Supreme yet found the It has not extent, least, Tennessee. I would at and to this error a doc apply such of facts “right” set redetermination a and remand reverse Happy v. Goodman Fowler real trine. excluding value of damages, of (Tenn.1978); Bo S.W.2d 496 Family, 575 if the case entirely. This would estate 318, Caballero, 417 Tenn. 220 v. lan deemed to be alleged oral contract were (1967). Su 538, The Tennessee 541 of S.W.2d plaintiff benefit giving severable nevertheless, has, expressly preme v. doubt Womble under very considerable remedy for judicial is no (1944), that there 246, 181 held 5 Walker, S.W.2d 181 Tenn. the stat within promise oral 1, of an Tenn.App. breach 25 Pipkin, Brockett v. promise “the even if [was of frauds ute (1941). 149 478 S.W.2d with complying of no intention made] majori then, from the sum, I dissent v. Development Co. States it.” Southern Frauds was holding that Statute ty’s (Tenn.Ct.App.1972), 777, 782 Robinson, 494 S.W.2d assets estate to the real inapplicable denied, (Tenn.1973) (quot t. cer entire basis by plaintiff. The claimed Shultz, 198 184 Tenn. v. ing Webb an oral con is breach claim plaintiffs (1946)). S.W.2d purportedly tract, agreement an oral is promise barred enforcement of When interest and involved 49% included Frauds, prom- a claim for Stat the Statute operation.” The “Nashville Epperly’s is like- on that same issory fraud applicable to is of Frauds ute decision, the In the Webb ad barred. wise contract claims breach stated: Supreme Court brief, Tennessee citing Haynes Cumber mits in his (Tenn. Builders, Tenn. it Hackney, S.W.2d land Hackney 11). La take (Appellee’s Brief will fraud which Ct.App.1976) that the held also Supreme Court cases of the statute operation ter from case prom- characterizes making Plaintiff clear. make this not fraud frauds is complaint complying and amended complaint intention of both no ise with contract” on “breach the reduction suing it; he is a fraud which but so prevented, writing claim. it to party be- complaining intending; FRAUD PROMISSORY it has been that to believe ing induced may perpetrated done, this fraud in his by Jarrett asserted claim The other pa- a false by signing ways in two fraud. complaint promissory is for amended —one

1023 inducing per, at the same time the belief extent he is entitled to damages recover for one, (not by the true and the other the oral contract involving estate), that it is real paper inducing plaintiff that cannot also claim recovery belief a for a signed remedy when in fact it had not. If promissory been fraud saying there reducing there no intention of the was never such an was because de- writing, if there were promise perform fendant never intended to it. See though in- knowledge there was an v. Dunham Fortner Furniture 1987 reducing writing, (Shelby it to that this 2/13/87, tention WL 6372 Law No. done, promise Tenn.Ct.App.).

had not been is void under the statute. appellate courts have not seen is, therefore, It clear that a false ... promissory fit to allow a recovery fraud promise sign an instrument type of claim made in this case. Brun any future to do act in the future] [or Records, Inc., gard Caprice 608 S.W.2d take not such fraud as will the case out (Tenn.Ct.App.1980), involved a claim operation of the statute of frauds. for rescission of a contract and for relief misrepresentation, 198 S.W.2d at 336. Webb thus distin- based on fraudulent guished fraud in the inducement— different between situation from the instant ease. having sign paper—

e.g., Appeals someone false The Tennessee Court of in Farm factum, from fraud such as the fraud ers & Petty, Merchants Bank v.

alleged alleges in this case in which Jarrett (Tenn.Ct.App.1983), recog S.W.2d complying Supreme had no intention of nized that the Court of Tennessee the time made it. promise adopted promissory with the at has not the doctrine of Fowler, While fraud in the inducement will take a fraud. the Supreme Court of away operation case from the Stat- Tennessee stated: allegedly ute of Frauds where there was no view, Although minority the rule es prom- complying intention of ever with the by tablished the cases in this state has ise, promise “the is void under the statute.” misrepresentation been that a of inten language quoted

Id. The Webb per tion or a without intent to approval by Ap- the Tennessee Court of legally form is support insufficient to peals in Southern States. See 494 S.W.2d damages. claim for rescission or This at 782. rule has been adhered to in a number of decisions, including fairly recent case years was decided five Southern States Bolan Caballero. Supreme the Tennessee Court dis- after cussed the theory promissory fraud Fowler, (citations 575 S.W.2d omit- Caballero, supra. though Even the Ten- ted). Appeals nessee Court was on notice of therefore, agree, magis- I concept promis- the consideration of the Haynes, trate William J. in this case Jr. sory Supreme fraud the Tennessee that the defendants’ of Frauds de- Statute Bolán, recognized Court in it nevertheless “any agreement fense was sound as to promises

that certain oral are not action- convey any interest UBSI-Nashville regardless of the intent. able maker’s realty,” promissory and that fraud guid- simply applicable The district should have been claim cannot stand under recognized ed those decisions and the facts of this case. Tennessee law and submitting promissory fraud claim to never fair considera- Jarrett was denied contrary would be to Tennessee during tion the time he worked for defen- magistrate law. Neither the nor the dis- dants. He testified that he was “well judge acknowledged trict even the exist- paid” during period this and was treated ence of the and the Webb Southern States fairly during employment relationship. decisions. plaintiff paid From the outset defendants go previously paid he had ever been has elected first to for- more than regular generous rais- ward to sue for a breach of contract and and he received equitable damages proven obtain for the breach. To the es. I find no basis for reliance defendants’ preclude estoppel Webb, supra; See Frauds. the Statute States, supra.

Southern then, the benefit

Giving plaintiff, agree- severability the oral

doubt about equitable application and about

ment situation, I reverse this estoppel in only for a the district

and remand damages compensatory

determination of the breach value personalty also reverse I would oral contract damages award en- punitive

set aside

tirely. TYRA, Plaintiff-Appellant,

Ronald M. & HUMAN HEALTH OF

SECRETARY Defendant-Appellee. SERVICES,

No. 89-1581. Appeals, States

United

Sixth Circuit. 1, 1990. Feb.

Submitted 23, 1990. Feb.

Decided

Case Details

Case Name: Kenneth Jarrett v. Harrison Epperly and Epperly Inc., F/k/a United Brake Systems, Inc.

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Apr 12, 1990

Citation: 896 F.2d 1013

Docket Number: 88-5762

Court Abbreviation: 6th Cir.