*1 regard liability. trial decision in determination, trial making this likelihood hav-
judge should consider the of
ing to the case under advisement for take
more consideration and whether detailed parties coming expense back hearing
for an can be additional avoided. present
A failure to evidence at the by judge
time shall be directed trial request
deemed a commu waiver
tation of benefits. request for com cases where no com
mutation of benefits is made made, waived,
plaint, or, employ if is statutory right apply
ee’s for commuta protected. recognized
tion motion is 59, TRCP,
A motion filed under Rule must change
show since the circumstances days
trial. A motion filed more than 30
after must show that commuta employee
tion is in the best interest of the arising circumstances discovered or af entry judgment.
ter the procedures may
These be enforced appellate judges publication
trial and after justice particular
unless the re- case
quires dispensation procedures. of these J.,
DROWOTA, Jr., LOSER, and JOE C.
Special Judge, concur.
The METROPOLITAN GOVERNMENT
OF NASHVILLE AND DAVIDSON
COUNTY, Plaintiff-Appellee, McKINNEY, Davis, Bobby D.
James R. Davis,
McKinney & a Tennessee Part
nership, Defendants-Appellants. Appeals Tennessee,
Court of Section,
Middle at Nashville.
Sept. 4, 1992.
Application Appeal Permission to by Supreme
Denied Court
April *2 early plans
In the 1980’s Metro initiated to construct a hotel and convention center complex in Downtown Nashville. Metro Properties, selected Nashville Hotel Limit- (NHP) ed developer project. as the composed partner- NHP was of six limited ships, and the Franklin Haney Company L.
(Haney) of Chattanooga initial managing general partner and of NHP. separate The partnerships comprising six permit NHP were part- established to each nership $10,000,000.00 to up receive industrial revenue bonds.
The construction of the hotel was funded part by Development a federal Urban (UDAG) Action Grant which had been ob- by tained Metro. The UDAG was to be provide partial public financing utilized to private investments so as to make the project financially feasible. The UDAG funds private were used to reimburse the developer developer expended after the private development funds for the project. designated Metro Metropoli- Development tan Housing Agency (MDHA) agency responsible as the administration of the UDAG. Cottrell, Law, Patricia J. Director of funding Additional for the hotel was ob- Charles, Deputy Law, James L. Director of by tained NHP from industrial revenue Murphy, III, James L. Metropolitan Atty., bonds issued Develop- Industrial Nashville, plaintiff-appellee. ment Metropolitan Board of the Govern- Bowen, Jay Anderson, Bass, S. Steven E. County ment of Nashville and Davidson Sims, Berry Nashville, & for defendants- (IDB). The defendants entered into a con- appellants. legal tract to serve as IDB counsel for the on the bond issues NHP. Defendants OPINION responsible reviewing all docu- LEWIS, Judge. ments issuing legal opinions regarding bonds issued the IDB for NHP. Defendants, McKinney, James R. Bobby Davis, D. McKinney Davis, & a Ten- The industrial revenue bonds issued nessee partnership, appealed have from the the IDB on of NHP behalf were issued trial awarding plaintiff, stages. two before the financial Metropolitan The Government of Nashville arrangements for the hotel had been com- County (Metro), and Davidson the sum of NHP, pleted by IDB issued a total of $38,000.00, after that defendant $37,000,000.00in industrial revenue bonds James had made fraudulent mis- partnerships comprising to the six NHP in representations regarding the amount of provisions order to avoid the sunset attorney’s fees that Metro had defen- federal tax laws. These bonds were de- dants for connection with nominated the Series 1983A bonds and the the issuance of industrial revenue bonds. closing for these bonds was held in New
The facts out of which this controversy York City on 31 December 1983. At the arose are as follows: closing, the defendants submitted their le- hotel/con- financing for the respect to issues of the six bond
gal opinions on each project. center vention NHP. 1983A $37,000,000.00 First, Series NHP agreements between loan they could so were remarketed bonds IDB, responsible agreed NHP to be and the Bradford & public by J.C. be sold legal fees payments of defendants’ *3 remarketing of the Series Company. The six series 1983A in connection with the essentially a restructur- 1983A bonds was bond issues. issue with new ing of the entire bond Hart, McKinney partner in William J. million in new terms; secondly, $17.6 and closing Davis, the the Series attended & additional costs to cover were issued bonds on 31 in New York issuance 1983A bond the hotel/convention in had arisen which the firm’s presented and December 1983 a total The IDB authorized project. center billing statements letter and legal opinion million new bonds than $23 of not more firm. De- rendered for the services However, million only $17.6 to issued. be $92,500.00 fee charged a total fendants were issued. in new bonds among the six limit- apportioned which was of these accomplish both In order to partnerships. ed transactions, Planters IDB and Union Planters Na- January Union On Trustee, Bank, executed as National Bank, as Trustee for tional which served Inden- supplemental restated and amended issuance, $35,000.00 defen- the bond Trust, The ture of dated December 1984, Haney paid legal July fees. In dants’ on the and worked defendants reviewed $57,500.00, McKinney Davis the sum of & supplemental Inden- amended restated remaining portion of the fee. IDB on its and advised the ture of Trust purchased The 1983A bonds were Series the execution of validity. Without Company, pro- and the supplemental J.C. Bradford & Inden- amended restated Na- ceeds invested Union Planters Trust, 1983Abonds could the Series ture Bank, tional the Trustee. The bonds were remarketed and sold to have been not public during not sold to the 1984 because 1984A bonds public and the new Series N.V., Rotterdam Bank the Amsterdam Defendants issued. could not have been branch, letter of New York withdrew the IDB in legal performed it had issued to the Trustee. remarketing credit of the Ser- connection with keep center order to the hotel/convention of the the issuance 1983A bonds and ies project during representatives bonds, including providing alive Series 1984A sought of NHP a number of amendments IDB of the which legal opinion on behalf agreements and and extensions to the loan transac- closing of the necessary to the prac- indentures of trust which had authorized their usual In accordance with tion. $2,500.00 of the 1983A bonds. per the issuance Series million charging tice of They appearances transactions, charge made numerous before defendants’ bond seeking $136,500.00, the IDB amendments and exten- services was and, time, sions each the defendants were million and money of for the new $17.6 present the IDB as required remarketing to be to advise of the $37 request. propriety developers’ million bonds. International, remark- closing of the Series 1983A Lloyd’s The Later in 1984 Bank Bank) new bonds oc- eting and the Series 1984A (Lloyds agreed to issue a Limited York. December 1984 New guarantee the Series curred on 31 letter of credit to McKinney nor Davis Neither defendants It therefore determined 1983Abonds. was closing finally to attend the because could were able that the Series 1983A bonds recovering from public. developer The defendant be marketed to the defendant Davis had needed to a heart attack and also decided that new funds were Therefore, closings. negotia- several other complete project. After much attend legal gave defendants’ tion, trans- defendant Davis separate two but simultaneous of J.C. Murray Mr. Hatcher opinion 1984 with actions occurred 31 December Company Bradford & with instructions that Davis wrote a letter to Murray Hatcher not confirming receipt be released until a check of these funds and pay legal had been issued to stating Haney defendants’ any- did not owe them fees for .they performed. thing the services assignment further. Neither the nor billing Defendant Davis also sent state- defendant Davis’ letter stated that the ac- $92,- ments to the ceptance amount of satisfied the ob- performed 500.00 for the services the firm ligation of toMetro insure that the remain- remarketing on the Series 1983A der of the fees owed to defendants for 000.00 for the services on the Series 1984A services on the hotel/convention cen- new issue. project paid. ter would be however, closing, plaintiff
At the early autho- McKinney learned that the rized the legal opinion defendants’ letter attorneys deferred fees of other who had *4 consulting be released without performed defendant in services connection with the legal Davis. Defendants’ fees project paid. prompted were not had been This de- paid at the closing. The fees de- McKinney Mayor fendant to call Fulton to ferred at the inquire instruction of the then Metro- about when the remainder of defen- politan Fulton, Mayor, Richard who attend- dants’ fees from the December 1984 clos- closing, along ed the ings paid. Mayor with Mr. Charles would be then Fulton Cardwell, the Director of Finance Nicely, for Met- contacted Gerald Di- Executive Some, all, lawyers ro. pres- MDHA, but not rector of and advised him of his agreed ent portion legal to defer a of their in deferring action the fees at the firms, fees. The fees of other Nicely law includ- and directed Mr. why to look into Binion, ing Butler and paid. bond counselor for defendants’ fees had not been developer, paid in full at the clos- Nicely began inquire Mr. to about ing. payment of the fees and some months la- closing, ter, 1987, Sometime after the September defendant in Bill Mayor then McKinney telephone received a again call from Nicely Boner called directed him Mayor the then Richard Fulton who told making to look into the situation. Prior to defendant McKinney that he had payment, Nicely deferred Mr. told Irene Krauland, defendants’ closing, Bank, fees at the representative Lloyds but assured defendant McKinney legal Welch, that representative defendants’ and Ted paid by fees partnerships, would be Metro. The defen- NHP that believed de- Mayor representa- dants relied on Fulton’s fendants had at least been some bringing tion to refrain from a lawsuit to amount for their services. legal
collect their fees. 1988, early Nicely Mr. called defen- 1986, Haney proposed In March McKinney the con- dant him that he and advised apartment struction of an investigated house to be lo- had the matter and had con- Nashville, cluded, counsel, cated in consulting legal Downtown and was after with seeking $38,000.00 approval from the IDB for the that MDHA had left from the issuance of bonds and a commitment from expenses UDAG funds to be used for for Company purchase Project J.C. Bradford & to pay and that he could that part those bonds. As a of his efforts to amount for defendants’ services. financing development, obtain for this Although McKinney defendant believed Haney requested Franklin that defendants $85,000.00 the defendants were still owed agree assign any they might to interest 1984, performed for services defendant project. have in the hotel/convention center McKinney agreed forego asserting to those exchange Haney’s agreement against accept to claims Metro and to defendants, pay to defendant in satisfaction of the debt agreed assignment Davis to Nicely execute an order to resolve the matter. Mr. assign “any affidavit, McKinney and all interests which sent defendant [defen- presently project” have in the attorney George drafted MDHA Bar- dants] rett, Haney. Haney’s request, stating At “McKinney defendant & Davis have misrepresented reasonably relied on the services in- payment not received fact; 6) plaintiff suffered material signed the affidavit voiced.” misrepresenta damage as a result of and, McKinney asked Nicely’s request, at American Nation tion. v. First billing Graham prepare defendant state- Davis 723, (Tenn.App. Bank, al 594 S.W.2d legal apportioning ments 1979) (citing Ins. v. Travelers Edwards among partnerships. fees the six (6th Cir.1977)). Co., F.2d 110-114 May Irene Krauland of On 5 argue court erred in Defendants the trial Lloyds Nicely indicating Bank wrote Mr. finding made out a claim that Metro had already that defendants had misrepresentation fraudulent because: Nicely Mr. 000.00. turned this information 1) against the the evidence Barrett, an ex- requested over to Mr. who finding trial court’s that defendant McKin- McKinney by let- planation from defendant statement of fact in his ney made a false May requested Metro ter dated 10 affidavit; 2) the trial court’s factual $38,000.00, that the defendants refund the McKinney’s intent does not on defendant and defendants refused to do so. legal conclusion of the court support the against 2On June Metro filed suit plaintiff proved a case of fraudulent alleged defendants and that defendants 3) misrepresentation; the evidence overpaid legal per- had been support conclusion that does not *5 specifically formed the IDB. for Plaintiff plaintiff reasonably upon relied defendant alleged grounds recovery as for that defen- McKinney’s to its detriment. It statements $38,000.00 paid dants had converted that Metro failed is defendants’ insistence them Metro and that defendant McKin- prove necessary of these ele- all three ney misrepresenta- had made fraudulent ments. tions to Metro. argue Defendants first that the evidence Following two-day a trial without the against the trial find- court’s jury, intervention of a the found trial court McKinney ing that defendant made a false McKinney that defendant had made a McKinney rep- representation. Defendant misrepresentation fraudulent to Metro and firm had not been resented that his law that Metro had in suffered a loss the affi- paid for the services invoiced. his $38,000.00plus pre-judgment amount of in- davit, firm of McKinney states that the law Sep- since terest October 1988. On 3 “as of this date have McKinney & Davis tember the court in entered in- payment for the services not received Metro, appeal favor of and this followed. the affidavit were voiced.” Attached to Defendants’ first issue is: the “Whether partnerships six NHP invoices for the supported evidence the trial conclu- $38,000.00. The invoices which totaled sion of law that Defendant James R. request of Mr. prepared at the Gerald McKinney misrepresen- made a fraudulent in his Nicely. McKinney does not state tation to Plaintiff.” firm had never re- affidavit that his law argues pre- Defendant the evidence any payment for rendered ceived services ponderates against finding the trial court’s closing. for the 1984 bond His affidavit representation that there was a false made simply states that the firm had not been McKinney. defendant $38,000.00 paid for the referenced affidavit. In order to sustain a cause of action misrepresentation, plain position for fraudulent the the that defendants Metro took 1) paid tiff must show that: the defendant made had been in full for all services fact; representation existing past a find Defen- of an or which Metro could invoices. 2) made; representation that its fees for the 1984 was false when dants testified 3) $100,000.00. This representation regard closing in in excess of was fact; 4) representation proof by plaintiff. Both material the false is uncontradicted firm’s fees knowingly was made either or without be- defendants testified that 5) plaintiff relating in truth 1984 were recklessly; lief its or to its services in (based million) “trial court’s per 000.00 Defendants insist that the $2500.00 in McKinney’s of fact on intent money” portion the “new of the bonds is- sued, making alleged misrepresentation is in- plus remarketing find consistent with its conclusion of law that of the Series 1983A bonds. We noth- ing misrepresentation had been in the record to contradict this testimo- fraudulent court, analyzing argues only The trial in defen- ny. Plaintiff that defendants made.” making rep- in McKinney’s in the services for dant intent had been full for his firm had not been invoices could be found. We find resentation that which invoiced, that defen- services held that defen- nothing in the record to show only or should dant “knew have dants’ services were worth have the fees of the defendants had or that the standard fee should known that $44,000.00. paid in full.” The trial only previously been court, upon relying part at least lawyer in- Hoops, D. another William plaintiff foregoing finding, held that closing, supports volved proved misrepresen- claim for fraudulent were owed defendants’ insistence tation. well in excess of performed Hoops, partner in 1984. Mr. that this find We are of Texas firm of Butler and Binion law support ing of intent does not the subse counsel, experienced bond testi- also quent legal that a fraudulent conclusion the 1984 fied that his fee for misrepresentation For such a occurred. $197,500.00. explained aggre- that the He valid, McKinney must claim to be have portion gate fee included a for the “new “1) knowingly, or representation made the money” the remainder of the issue and that truth, 3) 2) belief in its or reckless without performed for the work on the Series ly, careless whether it be true or false.” remarketing. 1983A Co., F.2d at Edwards v. Travelers Ins. *6 opinion thorough We are of the after a pre- review of this record that the evidence if contends that even the trial Metro ponderates in favor of defendants’ insis- erroneous, finding it was harm- court’s $136,500.00 for tence that their fee was the trial court also held less error “since they their 1984 services and that had not $38,- the that defendants had converted paid been in services 000.00.” attached to de- referenced invoices find that No in the record do we where McKinney’s fendant affidavit. finding. The trial court made such the Taking into account the one of noted that conversion was trial court defendants, payment the defendants sought re- upon which Metro the theories $51,500 would still be owed for their 1984 However, trial court relied covery. the services. The evidence misrepresentation as the upon fraudulent against the trial court’s that defen recovery. awarding for Metro a ground representation dant made a false that Metro We are had not when he stated that the defendants showing that it carry its failed to burden by paid the evidenced been alleged representa upon relied the false the attached invoices. is not The burden tions of the defendants. This case was tried to the court plain that the upon defendant to show the Therefore, jury. without a the trial rather, the burden negligent, tiff was but upon de finding of fact is reviewed novo that its reli upon plaintiff to show is record, accompanied by presumption may any defendants upon ance statements finding, of the correctness of the unless We are have made was reasonable. preponderance of the evidence is otherwise. any record shows that opinion that 13(d). Tenn.R.App.P. may had was not that Metro have reliance prior proof The shows pre- record reasonable. Our review of this shows to defen- being made Metro payment ponderance of the evidence is otherwise.
239
CANTRELL, Judge, dissenting.
dants,
Nicely had
told
Gerald
been
representative
Lloyds
repre-
Bank and a
majority
from the
respectfully
I
dissent
NHP
defendants had al-
sentative of
I believe the chancellor
opinion. Since
ready
paid
Nicely
that Mr.
been
and
result, I
right
would affirm
reached the
his control all
documentation
within
judgment.
lower court’s
necessary to
or not de-
determine whether
proper
my opinion,
resolution
paid.
should
are of the
fendants
be
We
dispute depends on a determination
this
plaintiffs
opinion that
reliance
Shwab
defendants were entitled to
whether the
Walters,
(1923),
42
147 Tenn.
S.W.
any
charge
fee in 1984 for
an additional
Shwab, defendant,
misplaced.
prin-
is
in connection with the Series 1983A
work
cipal
being
plaintiff,
in a business
sold to
The
is clear that the defen-
bonds.
record
compiled a list of debts which was inaccu-
paid the full amount of their
dants were
plaintiff’s
rate. The court found that the
initial work on the 1983 series.
fee for the
reliance was reasonable because defendant
$35,000
They
at
received
keep
did not
a record of liabilities or bills
$57,500
Haney
from the Franklin L.
Com-
payable and therefore the auditors where
9,1984.
July
equally
is
pany on
The record
“dependent on
for such
[the defendant]
they
full amount
clear that
642-43,
knowledge.” 147 Tenn. at
for the 1984A series. That
of their bill
S.W. at 43-44. The facts in the instant
invoice, sent to New York for the Decem-
inapposite
are
case
to the facts
Shwab.
$44,000
closing,
ber
amounted to
Here,
Nicely
investigation
Mr.
made an
$1,500
publishing
regarding
any
whether
further fee was due
26, 1986, the Franklin L.
costs. On March
representatives
defendants and was told
Haney Company paid the defendants
Lloyds
from both
Bank and NHP that de-
$1,500
or
more than their invoice. The
already
paid.
fendants had
Mr. Nice-
over-payment
explained
is not
in the rec-
ly
sought
further
the advice of
counsel
ord.
approximately
year
then waited
one
before
Thus,
the defendants were
the full
making payment.
Nicely
Mr.
admitted that
fees,
$2,500 per
at
amount of their
billed
the documents which were used to investi-
millionissue in 1983 and
million
$37
gate whether the defendants
owed
If
the 1984 issue of
million.
$17.6
$38,000.00payment
after the fact were
earned
anything
were due
else it had to be
possession
payment
in his
well before
the sale of the 1983A
in connection with
*7
made.
They
contend that
series in 1984.
now
v.
Solomon
First American Na
to an additional fee of
they were entitled
Nashville,
tional Bank
TODD, P.J., CANTRELL, $35,000 J., they only dissent. that had their services in connection with the 1983A
issue, they when fact had been Jerry Emily D. SALLEY and B. They they full amount. also indicated that Salley, Plaintiffs/Appellants, verify they could not received v. $57,500 Haney check from Franklin L. 11,1989,
Company August in 1984. On COMPANY, partner- THE PICKNEY defendants asserted for the first time that ship, Pickney Brothers Construction their total fees for the 1984 should Company, partnership, Robert J. $92,500 have been an additional for a re- Pickney Pickney, and Tom Defen- $45,500 plus fund of the 1983A series dants/Appellees. the issuance of the 1984A series. Tennessee, of Appeals Court why It is not clear from the'record Section, Middle at Nashville. they defendants contended entitled to an additional fee in connection with Oct. 1992. They any 1983A bonds. did not addi- issue Application Appeal for Permission to opinions tional and the bonds were not re- by Supreme Denied Court They simply funded or remarketed. March public not offered to the until after the 1984A issue. Since the defendants did not
submit invoice for that work and did not they any
contend were entitled to addition- later, years
al fees until four and one-half I correctly
think the chancellor concluded were not entitled to the additional
$38,000.
The defendants contend that the chancel- money
lor erred in that the
paid to the defendants based on a fraudu- misrepresentation. my judgment,
lent
however, rep- it is immaterial whether the
resentation that the defendants were still knowledge a fee
due was made with of its
falsity. From this record—which exhibits public’s
a lack of attention to the business
bordering on the shameful—it is conceiva- representation simply that the
ble peculiar
result But of mistake. it is the mistakes,
province
equity
rectify
Reid
House,
(1841),
plaintiffs relief their from own errors when injustice
that relief will not cause Rowland, Douglass
defendant. (Tenn.App.1976).
S.W.2d 252 judg-
I affirm the chancellor’s would
ment. Wheeler, Jr., Goodlettsville,
Robert G. plaintiffs/appellants. Haile, Nashville, Henry defen- dants/appellees.