Linus Thornton v. James A. Massey

CourtCourt of Appeals of Tennessee
DecidedMay 30, 2014
DocketW2013-01022-COA-R3-CV
StatusPublished

This text of Linus Thornton v. James A. Massey (Linus Thornton v. James A. Massey) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Linus Thornton v. James A. Massey, (Tenn. Ct. App. 2014).

Opinion

IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON January 21, 2014 Session

LINUS THORNTON v. JAMES A. MASSEY

An Appeal from the Circuit Court for Hardin County No. 3891 C. Creed McGinley, Judge

No. W2013-01022-COA-R3-CV - Filed May 30, 2014

This is the second appeal in this breach of contract case. The defendant property owner leased his recreational farm on a yearly basis to the plaintiff lessee. Their agreement included a provision that, when the farm sold, the plaintiff would received a percentage of the proceeds of the sale. The defendant eventually divided the farm into several parcels and sold the parcels at auction to different purchasers. The plaintiff asserted his right to a percentage of the proceeds. Thereafter, for reasons that are disputed, none of the sales of the various parcels of the farm closed. The plaintiff filed this lawsuit against the defendant owner, asserting that he was entitled to a percentage of the total sale price that would have been realized had all of the sales closed. After a trial, the trial court held in favor of the plaintiff, and the defendant appealed. In the first appeal, the appellate court affirmed in part but vacated the judgment and remanded for the trial court to make a factual finding as to whether the sales failed to close because of the purposeful actions of the defendant. On remand, the trial court found that the closings on the sales failed to take place because of the defendant owner’s purposeful actions. The trial court found that the defendant prevented the sales from closing in order to avoid paying the plaintiff the percentage owed him under the parties’ lease agreement. The trial court reinstated the damage award in favor of the plaintiff and awarded prejudgment and post-judgment interest. The defendant now appeals. Discerning no error, we affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court is Affirmed

H OLLY M. K IRBY, J., delivered the opinion of the Court, in which D AVID R. F ARMER, J., and J. S TEVEN S TAFFORD, J., joined.

Dennis W. Plunk, Savannah, Tennessee, and Mary Stewart Nelson, Birmingham, Alabama, for the Defendant/Appellant, James A. Massey

Charles C. Drennon, III, Memphis, Tennessee, for the Plaintiff/Appellee, Linus Thornton OPINION

This is the second appeal in this case. See Thornton v. Massey, No. W2006-01417-COA- R3-CV, 2007 WL 1438766 (Tenn. Ct. App. May 17, 2007) (“Thornton I”). Plaintiff/Appellee Linus Thornton (“Mr. Thornton”) and Defendant/Appellant James A. Massey (“Mr. Massey”) became acquainted in 1991. Mr. Thornton was a cattleman and farmer, and Mr. Massey was a businessman/investor; together they engaged in a variety of business dealings.

Relevant to this appeal, in October 1998, Mr. Massey leased to Mr. Thornton real property known as Grandview Farm (“the farm”), an income-producing recreational farm in Hardin County, Tennessee. Initially, Mr. Thornton leased the farm from Mr. Massey for a one-year term, beginning October 1, 1998. The lease included an automatic renewal provision under which the lease would automatically renew unless it was canceled in writing 60 days prior to the original term.

At the same time they executed the lease, the parties entered into a “Memorandum of Agreement” that outlined both parties’ intentions. The memorandum of agreement stated that Mr. Thornton intended “to raise cattle on the Farm.” It also stated that Mr. Thornton agreed to “be responsible for maintaining and upgrading the Farm with the intention of turning it into a 1st class farming, ranching and recreational operation.” The parties understood that Mr. Thornton would live on the farm rent-free and earn money from income- producing activities on the farm. The memorandum of agreement stated the parties’ intent “to sell the Farm within 5 years for its highest and best price.” Id. at *3. Upon the anticipated sale of the farm, the agreement provided, Mr. Thornton was entitled to “a minimum of ten [percent] (10%) of the net closing proceeds from the sale of the Farm no matter what the sale price is, provided that the Lease is in effect and that Thornton shall not be in default thereunder. Payment shall be made at time of closing.” The lease and memorandum of agreement together comprise the full agreement of the parties. Id. at *4.

Grandview Farm did not sell within five years, as the parties originally anticipated. Years later, in 2004, Mr. Massey decided to sell the farm. To this end, Mr. Massey retained The Redfield Group to conduct an auction of the property. Mr. Massey advanced $50,000 to The Redfield Group for this purpose.

On June 26, 2004, the farm was sold at auction. For the sale, the property was divided into 40 different tracts. At the auction, the 40 tracts were sold to a total of 11 different groups of purchasers. The purchasers are: (1) Michael Guszak — tract 1; (2) Vernon Jackson and Joseph Densford — tracts 2 & 3; (3) Deborah and Thomas Campbell — tract 4; (4) Wesley and Jennifer Durbin — tract 5; (5) James Fitts — tract 13; (6) M.N. Brown and Jeff Wilkes

-2- — tracts 20-21, 24-33, & 40; (7) Mr. Thornton — tracts 17 & 18; (8) Ralph Nixon, DDS, MS (“Dr. Nixon”) — tracts 7-12; (9) Al Batson — tract 14; (10) Tina and Martin Haggard, Jr. — tracts 15 & 16; and (11) Jerry Odle — tracts 6, 22 & 23, 34-39.1 Mr. Thornton was aware of the auction and, as can be seen by the list of purchasers, was himself the successful bidder on two of the auctioned tracts.

All of the sales contracts provided that the closing would take place within 15 days after the completion of a land survey. Mr. Massey advanced $20,000 to Advantage Land Survey to perform the surveys.

On July 2, 2004, about a week after the sale, two unsuccessful auction bidders for tracts 25 and 26, Reed Jackson and Joe Densford, sent a demand letter to The Redfield Group, Mr. Massey, and closing attorney Neil Harkavy. Mr. Jackson and Mr. Densford claimed in the letter that they were the rightful winning bidders for the two lots. They also filed a complaint with the Tennessee Auctioneer Commission against The Redfield Group, alleging that it improperly ignored their winning bid at the auction.

In addition, on July 29, 2004, Mr. Jackson and Mr. Densford filed a lawsuit in the Shelby County Chancery Court against The Redfield Group, Mr. Massey, and Attorney Harkavy. The lawsuit asked the Chancery Court to declare Mr. Jackson and Mr. Densford the rightful purchasers of Lots 25 and 26. In the course of the ensuing Chancery Court proceedings, it was later determined that, unbeknownst to Mr. Massey, The Redfield Group was not licensed to perform auctions in Tennessee.

In September 2004, Mr. Thornton received a letter by regular mail from Mr. Massey. The letter was dated June 26, 2004, the same date as the auction of the farm. The letter purported to be a “formal notice of cancellation of the Lease Agreement . . . due to [Thornton’s] material breach and default of the terms and conditions of the Agreement.” In the letter, Mr. Massey stated that the cancellation of the farm lease was “effective immediately as of the date of this notice” and that Mr. Massey was “entitled to immediate possession of the leased premises.” Mr. Massey would later claim that the notice letter demonstrated Mr. Massey’s belief that, at the time of the auction, the farm lease to Mr. Thornton was no longer in effect.

On September 3, 2004, Mr. Thornton filed the lease and memorandum of agreement with the Hardin County Register for the purpose of protecting his leasehold rights and his right to the 10% commission under the memorandum of agreement. Mr. Thornton would later claim that the filing of these documents with the county register did not affect the auction sales because

1 This information is in accordance with trial Exhibit A, entered into evidence by stipulation of the parties.

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Bluebook (online)
Linus Thornton v. James A. Massey, Counsel Stack Legal Research, https://law.counselstack.com/opinion/linus-thornton-v-james-a-massey-tennctapp-2014.