Rhea v. Meadowview Elderly Apartments, Ltd.

676 S.W.2d 94, 1984 Tenn. App. LEXIS 2944
CourtCourt of Appeals of Tennessee
DecidedJune 12, 1984
StatusPublished
Cited by6 cases

This text of 676 S.W.2d 94 (Rhea v. Meadowview Elderly Apartments, Ltd.) 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
Rhea v. Meadowview Elderly Apartments, Ltd., 676 S.W.2d 94, 1984 Tenn. App. LEXIS 2944 (Tenn. Ct. App. 1984).

Opinion

CRAWFORD, Judge.

Exchange Mutual Insurance Company (hereinafter Exchange) appeals from the order of the trial court denying a motion filed pursuant to Rule 60.02, Tennessee Rules of Civil Procedure.

This case commenced March 2, 1981, on the complaint filed by Leslie Rhea, d/b/a Leslie Rhea’s Landscaping and Grading (hereinafter Rhea), a sub-contractor on a construction project, against the general contractor and Exchange, the surety on the general contractor’s payment bond in the amount of $172,561.25, and other defendants. The trial court rendered judgment against the defendants, including Ex[95]*95change, for $17,634.00 on June 1, 1981. The defendants appealed, and after reduction of the judgment by the Court of Appeals, the Supreme Court reinstated the order of the trial court and the judgment was made final on June 20, 1983. Rhea v. Marko Construction Co., 652 S.W.2d 332 (Tenn.1983). The 60.02 motion involved in this appeal was filed July 5, 1983. In that motion Exchange alleges in substance that: the limit of liability of Exchange on the payment bond sued upon is $172,561.25; prior to the instigation of this suit, other suits had been filed; and this suit was consolidated with another suit which “for all intents and purposes was then treated as a general creditor’s complaint and Exchange Mutual Insurance Company was ordered to pay the sum of $129,000 to the clerk and master” which was done. Exchange contends further that: it has paid out in excess of $186,937.00 under its payment bond which amount exceeds the contractual liability; because of the multiplicity of claims and suits and the consolidation thereof, Exchange by means of mistake, inadvertence or excusable neglect paid more than the contractual limits of the bond required; the mistake was not discovered until about June 15, 1983; and, in addition to the overpayment, Exchange is now obligated to Rhea because of the $17,634.00 judgment, although its liability under the payment bond has been discharged. Also Exchange asserts that Rhea made no effort to obtain any part of the funds paid into the clerk and master in the consolidated cases, and Exchange had every right and reason to rely upon Rhea so protecting himself in that cause.

Exchange avers that the judgment against it in this cause should be held void, because of inadvertence or mistake. Exchange asserts that they have satisfied the judgment by paying the limit of their bond and liability, and Rhea did nothing to protect his judgment when the trial court’s order of disbursement for the consolidated cases dispersed the money previously paid by Exchange into court.

Rhea, in response to Exchange’s motion, asserts that two separate and distinct bonds exist, one being a performance bond and the other being a payment bond. The total liability on each bond is $172,561.25. Although Exchange was ordered to pay the sum of $129,000.00 into the clerk and master for the consolidated cases for procedural convenience of the court, this payment did not constitute a limitation of Exchange’s liability, but resulted from a consent order involving claimants who had settled or compromised their claims at that particular time. Rhea further asserts that Exchange never pled the exhaustion of its limit of liability on the bond, and the failure to so timely plead the limit of liability constitutes a waiver of Exchange’s right, and he relies specifically upon Tenn.R.Civ.P. 8.03 and 12.08. Also, Rhea alleges that the limit of the liability had not been exhausted under the payment bond, and the 60.02 motion was not timely filed.

After a hearing on August 5, 1983, the court made written findings of fact and conclusions of law pursuant to Exchange’s request under Rule 52.01, Tenn.R.Civ.P.

Tenn.R.Civ.P. 60.02 permits the court to relieve a party from a final judgment due to a mistake, inadvertence, surprise or excusable neglect of the moving party. Tennessee State Bank v. Lay, 609 S.W.2d 525 (Tenn.App.1980).

In a Rule 60.02 motion, the burden of proof is cast on the movant, and he must prove the basis on which relief is sought. Trice v. Moyers, 561 S.W.2d 153 (Tenn.1978), Hopkins v. Hopkins, 572 S.W.2d 639 (Tenn.1978).

Since this motion was heard by the court sitting without a jury, we review the case de novo upon the record with a presumption of correctness of the findings of fact by the trial court. Unless the evidence preponderates against the findings, we must affirm, absent error of law. T.R.A.P. 13(d).

Any conflict in testimony requiring a determination of the credibility of witnesses rests in the first instance with the trial court and will be given great weight [96]*96by the appellate court, unless other real evidence compels a contrary conclusion. See State ex rel. Balsinger v. Town of Madisonville, 222 Tenn. 272, 282, 435 S.W.2d 803, 807 (1968); Linder v. Little, 490 S.W.2d 717, 723 (Tenn.App.1972).

Exchange has presented seven issues for review by this court. The first issue presented for review is:

Did Exchange satisfy in full its obligation under its payment bond by paying its funds into the Registry of the Court and paying other creditors the full extent of its bonded obligation under its payment bond.

Obviously, this issue is the threshold issue, because Exchange would not be entitled to relief for overpayment of its bond limit until it first proved that it had in fact paid more than the contractual limits of the bond required.

Although the court, as we stated, filed extensive findings of fact and discussed several issues, we do not find it necessary to prolong this opinion by an extensive recitation of all of the findings on all of the issues. However, in connection with this threshold issue, we quote the pertinent parts from the opinion of the trial court:

There were two bonds filed as exhibits in this cause. A Performance Bond-Dual Obligee, FHA Form No. 2452, was made by Marko Construction Company, a general partnership, as principal, and Exchange Mutual Insurance Company, a Tennessee corporation, as surety, who were bound unto Meadowview Elderly Apartments, Ltd., a limited partnership, and unto McNeill Mortgage and Investment Company, the lender, as their respective interests may appear, as obli-gees, is the sum of' $172,561.25.
A Payment Bond, FHA Form No. 2452-A, was also introduced. Under the terms of that bond, Marko Construction Company, principal, and Exchange Mutual Insurance Company, surety, were bound unto Meadowview Elderly Apartments, Ltd., as obligee, for the use and benefit of claimants as hereinafter defined, in the sum of $172,561.25. A claimant is defined in that bond as one having a direct contract with a principal or with a sub-contractor of the principal for labor, material, or both, used or reasonably required for the use in the performance of the contract.

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Bluebook (online)
676 S.W.2d 94, 1984 Tenn. App. LEXIS 2944, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rhea-v-meadowview-elderly-apartments-ltd-tennctapp-1984.