Dan Lomax v. JMCGH

• Court: Court of Appeals of Tennessee
• Decided: October 31, 1997
• Docket: 02A01-9706-CH-00116
• Status: Published

Opinion

IN THE COURT OF APPEALS OF TENNESSEE WESTERN SECTION AT JACKSON

DAN LOMAX, d/b/a COMMERCIAL ) CLEANING CONTRACTORS, ) ) Plaintiff/Appellee, ) Madison Chancery No. 51613

VS. ) ) Appeal No. 02A01-9706-CH-00116 FILED ) JACKSON-MADISON COUNTY ) October 31, 1997 GENERAL HOSPITAL DISTRICT, ) ) Cecil Crowson, Jr. Appellate C ourt Clerk Defendant/Appellant. )

APPEAL FROM THE CHANCERY COURT OF MADISON COUNTY AT JACKSON, TENNESSEE THE HONORABLE JOE C. MORRIS, CHANCELLOR

GREGORY D. JORDAN JEFFERY G. FOSTER RAINEY, KIZER, BUTLER, REVIERE & BELL, P.L.C. Jackson, Tennessee Attorneys for Appellant

EDWIN C. TOWNSEND TOWNSEND AND TOWNSEND, ATTORNEYS Parsons, Tennessee Attorney for Appellee

REVERSED AND RENDERED

ALAN E. HIGHERS, J.

CONCUR:

W. FRANK CRAWFORD, P.J., W.S.

HOLLY KIRBY LILLARD, J. In this breach of contract action, Defendant Jackson-Madison County General

Hospital District (Hospital) appeals the trial court’s order awarding a judgment of $35,390

to Plaintiff/Appellee Dan Lomax, d/b/a Commercial Cleaning Contracts. For the reasons

stated hereinafter, we reverse the trial court’s judgment and render a judgment in favor of

the Hospital.

In March 1996, Lomax sued the Hospital, claiming that the Hospital had breached

two contracts with Lomax for window washing services. The first such contract was

evidenced by a purchase order issued by the Hospital on December 8, 1994, and covering

a three-year period. The second contract, also evidenced by a Hospital purchase order,

was issued February 1, 1995, and purported to cover a three-year period. The purchase

orders were issued on forms prepared by the Hospital, and the orders contained lines for

the Hospital’s authorized signature; however, neither purchase order was signed by the

Hospital’s authorized representative.

Lomax’s complaint alleged that the Hospital unilaterally terminated both service

contracts prior to the termination of the three-year terms referenced therein and after

Lomax had performed substantial services thereunder. Lomax sought specific

performance of both contracts and, alternatively, a judgment in the amount of $35,390, the

balance allegedly due under the purchase orders.

In its amended answer, the Hospital raised, inter alia, the defense of the Statute of

Frauds. Both parties subsequently filed motions for summary judgment on the issue of the

enforceability of the contracts.

In its final order, the trial court awarded Lomax a judgment of $35,390, plus interest,

based on the court’s ruling that the undisputed facts brought this case within the partial

performance exception to the Statute of Frauds. This appeal followed.

Tennessee’s Statute of Frauds is codified at T.C.A. § 29-2-101, and provides that

2 (a) No action shall be brought:

....

(5) Upon any agreement or contract which is not to be performed within the space of one (1) year from the making thereof;

unless the promise or agreement, upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person by him thereunto lawfully authorized.

T.C.A. § 29-2-101 (Supp. 1996).

In Trew v. Ogle, 767 S.W.2d 662 (Tenn. App. 1988), this court explained the effect

of the Statute of Frauds on the enforceability of contracts:

An agreement that falls within the Statute of Frauds is not void but is voidable at the instance of either party. Sneed v. Bradley, 36 Tenn. 301 (1856); 75 Am. Jur. 2d, Statute of Frauds, § 513 (1974). Thus, if either party disaffirms the oral contract, no action, either for specific performance or for damages, can be maintained on the contract. 73 Am. Jur. 2d, supra, §§ 513, 517-18.

Trew v. Ogle, 767 S.W.2d at 664.

A commonly recognized exception to the Statute of Frauds may be found in the

doctrine of part performance. Under this doctrine, “an otherwise unenforceable oral

contract can be the basis of an action if one of the parties has performed.” Trew v. Ogle,

767 S.W.2d at 664. In the present case, the parties agree that the Statute of Frauds

applies, inasmuch as the contracts do not contain the Hospital’s authorized signature and

the services contracted for cover a period of three years. Trew v. Ogle, 767 S.W.2d at 664

(indicating that Statute of Frauds applied to contract in which performance would take

place over four-year period). The parties also agree that this case was appropriate for

summary judgment because the material facts are not in dispute. See Byrd v. Hall, 847

S.W.2d 208, 214-15 (Tenn. 1993). The issue in this case, therefore, is whether Lomax’s

partial performance of the contracts takes the parties’ agreements out of the Statute of

Frauds. See Buice v. Scruggs Equip. Co., 250 S.W.2d 44, 48 (Tenn. 1952).

3 After a careful review of the record, we conclude that the doctrine of part

performance does not apply to this case and, thus, that the trial court erred in entering a

judgment in favor of Lomax on the contracts. To be applicable, the doctrine of part

performance does not require merely that the plaintiff performed services under the

contract sued upon. The doctrine additionally requires that the plaintiff, in performance or

pursuance of the contract, altered his position in such a way that it would be unjust and

unconscionable not to enforce the contract. Blasingame v. American Materials, Inc., 654

S.W.2d 659, 663 (Tenn. 1983); Buice v. Scruggs Equip. Co., 250 S.W.2d at 48; Trew v.

Ogle, 767 S.W.2d at 665; 73 Am. Jur. 2d Statute of Frauds § 408 (1974).

In this case, the record contains no evidence to support Lomax’s contention that he

unjustly altered his position in reliance on the contracts with the Hospital. Lomax asserts

that he altered his position by performing the contracts for more than a year and by holding

himself out as ready to perform the remainder of the contracts. This assertion fails to

explain, however, how Lomax’s performance so altered his position that equity entitles him

to specific performance of the contracts or damages. Lomax does not contend that he

performed services under the contracts for which he was not paid. Moreover, Lomax does

not contend that he made any expenditures in reliance on the contracts1 or that he was

unable to perform other jobs or services because of his contractual obligations to the

Hospital. See, e.g., Blasingame v. American Materials, Inc., 654 S.W.2d 659, 660, 663

(Tenn. 1983) (applying doctrine of part performance where evidence showed that

employee relocated to Tennessee in reliance upon future employer’s promise of corporate

stock); Foust v. Carney, 329 S.W.2d 826, 828 (Tenn. 1959) (applying doctrine of part

performance where evidence showed that, in reliance upon employer’s promise of raise

and corporate stock, employee rejected comparable job offer from employer’s competitor);

Allen v. Elliott Reynolds Motor Co., 230 S.W.2d 418, 420 (Tenn. App. 1950) (applying

doctrine of part performance where, in reliance on defendant’s promise of exclusive

automobile dealership, plaintiff incurred expenses in converting apartment house to

automobile sales room and garage).

1 In his deposition, Lomax testified that he purchased one piece of equipment worth $400 or $500 for the Hospital jobs. On appeal, however, Lomax does not co nte nd that this purchase res ulte d in unjus t inju ry.

4 Inasmuch as the parties agree that the Statute of Frauds applies to the subject

contracts, and inasmuch as we have concluded that, under the undisputed facts, the

doctrine of part performance does not take the contracts out of the Statute of Frauds, the

trial court’s judgment is hereby reversed, and judgment is rendered in favor of the Hospital.

Costs of this appeal are taxed to Lomax, for which execution may issue if necessary.

HIGHERS, J.

CRAWFORD, P.J., W.S.

LILLARD, J.