I N THE COURT OF APPEALS OF TENNESSEE
EASTERN SECTI ON
ROY S. OAKES, ) C/ A NO. 03A01- 9609- CH- 00302 ) Pl a i nt i f f - Appe l l e e , ) HAMBLEN CHANCERY ) v. ) HON. W LLI AM L. J ENKI NS, I ) CHANCELLOR HARRY LANE NI SSAN, I NC. , ) ) AFFI RMED AND De f e nda nt - Appe l l a nt . ) REMANDED
LORI L. J ESSEE a nd HERBERT M BACON, BACON, J ESSEE, PERKI NS & . SWANSON, M r i s t own, f or Pl a i nt i f f - Appe l l e e . or
RODNEY A. FI ELDS, LEW S, KI NG, KRI EG, W I ALDROP & CATRON, P. C. , Kn o x v i l l e , f or De f e nda nt - Appe l l a nt .
O P I N I O N
Fr a nks . J .
I n t hi s a c t i on f or da ma ge s f or br e a c h of l e a s e , t h e
Tr i a l J udge a wa r de d da ma ge s i n t he a mount of $25, 000. 00 a nd d e f e nda nt h a s a ppe a l e d.
The i s s ue s r a i s e d by de f e nda nt e s s e nt i a l l y c a n be
d i s t i l l e d i nt o o ne i s s ue : di d t he Tr i a l Cour t e r r i n hi s
d e t e r mi na t i on o f t he da ma ge a wa r d?
Pl a i nt i f f Roy Oa ke s owns l a nd a nd a bui l di ng on
So u t h Cumbe r l a nd St r e e t i n M r i s t own Te nne s s e e . or The bui l di n g
wa s b u i l t i n 1947- 48 a nd Oa ke s r a n a c a r de a l e r s hi p a t t he
l o c a t i on unt i l 1989. At t ha t t i me , he l e a s e d t he pr ope r t y t o
De f e nd a nt Ha r r y La ne Ni s s a n, I nc . The l e a s e wa s f or a t e r m of
f i v e y e a r s , a t $1, 500. 00 r e nt pe r mont h.
The l e a s e a gr e e me nt i nc l ude d t he f ol l owi ng t e r ms :
4. Le s s e e s ha l l ma i nt a i n a nd ke e p i n a good s t a t e of r e pa i r bot h t he i nt e r i or a nd e xt e r i or of t he bui l di ngs upon t he l e a s e d pr e mi s e s .
7. Le s s e e a gr e e s , upon t he t e r mi na t i on of t he Le a s e , t o r e t ur n t he s a i d pr e mi s e s t o t he Le s s or i n a s g ood a c ondi t i on a s whe n Le s s e e t ook pos s e s s i on, r e a s ona bl e a nd or di na r y we a r a nd t e a r e xc e pt e d.
8. Thi s i s a ne t - ne t l e a s e wi t h Le s s e e pa yi ng al l t a xe s , i n s ur a nc e pr e mi ums a nd e xpe ns e s of al l ma i nt e na n c e a nd upke e p t o ma i nt a i n s a i d bui l di ng i n a good s t a t e of r e pa i r .
9. De f a ul t by t he Le s s e e i n t he pa yme nt of a ny r e nt a l whe n d ue , f a i l ur e t o pa y t a xe s i n a t i me l y ma nne r , or f a i l ur e t o ke e p t he pr e mi s e s i ns ur e d a s a gr e e d he r e i n a nd pa y t he pr e mi s e s , t he r e f or e , o r Le s s e e ’ s f a i l ur e t o ma i nt a i n a nd ke e p t he pr e mi s e s i n a good s t a t e of r e pa i r s ha l l , a t t he opt i on of t he Le s s or , c a us e t hi s l e a s e t o t e r mi na t e a nd be of no f ur t he r f or c e a nd e f f e c t , a nd t he Le s s or s ha l l be e nt i t l e d t o t he i mme di a t e pe a c e f ul pos s e s s i on of t he pr e mi s e d, pr o vi de d, howe ve r , Le s s or s ha l l r e ma i n l i a bl e f or a ny a nd a l l mone t a r y pa yme nt s t he n due unde r t he t e r ms of t hi s Le a s e or t o be c ome due i n t he f ut ur e , mi t i ga t e d onl y t o t he e xt e nt of t he ne t pr oc e e ds of a ny moni e s r e c e i ve d by Le s s or f r om t hi r d pa r t i e s who s ha l l oc c upy t he pr e mi s e s unde r a r e nt a l a gr e e me nt f or t he r e ma i ni ng t e r m of t hi s Le a s e . . . .
2 De f e nda nt oc c upi e d t he l e a s e d pr e mi s e s t hr ough 19 9 1 ,
o p e r a t i ng a Bui c k- Ol ds mobi l e de a l e r s hi p. At t he e nd of 1991 ,
t h e Bu i c k- Ol ds mobi l e f r a nc hi s e wa s move d a c r os s t own t o t he
s a me b ui l di ng us e d f or t he Ni s s a n f r a nc hi s e . Exc e pt f or t wo
s h o r t s ubl e a s e a gr e e me nt s a nd s ome s t or a ge by de f e nda nt , t h e
b u i l d i ng wa s va c a nt f or t he r e ma i nde r of t he l e a s e t e r m.
The r e i s muc h t e s t i mony a s t o t he s t a r k di f f e r e nc e
i n t h e c ondi t i on of t he pr ope r t y a t t he i nc e pt i on a nd a t t h e
e n d o f t he l e a s e . W t ne s s e s f or pl a i nt i f f t e s t i f i e d a s t o i
t h e we l l - ma i nt a i ne d a nd ne a t c ondi t i on of t he bui l di ng be f o r e
t he l e a s e . Thi s c ondi t i on wa s c r e di t e d i n pa r t t o a n ove r a l l
r e n o v a t i on/ r e de c or a t i on 3- 5 ye a r s be f or e t he l e a s e be ga n.
Te s t i mony a s t o t he c ondi t i on of t he pr ope r t y a f t e r t he l e a s e
e n d e d t ol d of r ugs ma r ke d wi t h gr e a s e , t he r e mova l of f i xt ur e s
f r o m t he r e s t r ooms , a n a l a r m s ys t e m whi c h ha d be e n di s ma nt l e d
a n d wa s be yond r e pa i r , t he di s a ppe a r a nc e of a n a wni ng, a nd
wa t e r da ma ge t o t he t i l e s , t h e wa l l s , t h e c e i l i ng, a nd t he
r oof .
Re vi e w o f d a ma ge a wa r ds by a t r i a l c our t i s de nov o
a c c o mp a ni e d by a pr e s umpt i on of t he c or r e c t ne s s of t he
f i nd i ngs . T. R. A. P. 1 3( d) ; Le e k v . Powe l l , 884 S. W 2d 118, 1 2 0 .
( Te n n . App. 1994) .
De f e nda nt a r gue s t ha t t he da ma ge s we r e not pr ove n
wi t h r e a s ona bl e c e r t a i nt y. He di s put e s t he s pe c i f i c i t y of t he
r e c e i p t s a nd a r gue s t ha t t he Tr i a l Cour t s houl d ha ve
c o n s i d e r e d de pr e c i a t i on of t he pr ope r t y whe n c a l c ul a t i ng
r e pl a c e me nt c os t s . He f ur t he r a r gue s t ha t pl a i nt i f f i s not
e n t i t l e d t o r e c ove r be c a us e he ha d a dut y t o mi t i ga t e t he
3 d a ma g e , whi c h he a l l e ge dl y kne w wa s oc c ur r i ng.
Re ga r di ng t he dut y t o mi t i ga t e , de f e nda nt a r gue s
t h a t whe n pl a i nt i f f not i c e d c e i l i ng l e a ks dur i ng a 1991 vi s i t
t o t h e pr ope r t y, he c oul d ha ve i nvoke d Se c t i on Ni ne of t he
l e a s e t o t a ke ba c k pos s e s s i on of t he pr ope r t y a nd mi ni mi z e t h e
d a ma ge a nd r e pa i r c os t s . De f e nda nt c l a i ms t ha t be c a us e
p l a i n t i f f i ns t e a d l e t t he pr obl e m c ont i nue f or s e ve r a l ye a r s ,
h e i s not e nt i t l e d t o t he hi ghe r c os t of r e pa i r a nd
r e pl a c e me nt t ha t wa s r e qui r e d a t t he e nd of t he l e a s e .
The s t a nda r d f or mi t i ga t i on of da ma ge s i s r e a s ona b l e
car e. Cummi ns v . Br odi e , 667 S. W 2d 759, 766 ( Te nn. App. .
1 9 8 3 ) ; al s o s e e Hai l e y v . Cunni ngham, 654 S. W 2d 392, 396 .
( Te n n . 1983) . He r e , t he Tr i a l Cour t f ound c r e di bl e
p l a i n t i f f ’ s a s s e r t i ons t ha t he ha d t ol d s e ve r a l me mbe r s of
d e f e n d a nt ’ s s t a f f on s e v e r a l oc c a s i ons a bout t he l e a ks a nd t h e
n e e d f or r e pa i r . Thi s f i ndi ng i s a c c ompa ni e d by a pr e s umpt i o n
o f c o r r e c t ne s s whi c h i s not ove r c ome by t he t e s t i mony i n t h e
r e c or d. The a c t i on of r e que s t i ng t he r oof be r e pa i r e d wa s
r e a s o n a bl e , c ons i de r i ng t ha t t he ot he r c ove na nt s of t he l e a s e
we r e b e i ng f ol l owe d a nd pl a i nt i f f c oul d f a i r l y a s s ume t ha t
d e f e n d a nt woul d c or r e c t t he pr obl e m. Gi ve n t he s e e f f or t s b y
p l a i n t i f f a nd t a ki ng i nt o c ons i de r a t i on t ha t t he Tr i a l Cour t
Free access — add to your briefcase to read the full text and ask questions with AI
I N THE COURT OF APPEALS OF TENNESSEE
EASTERN SECTI ON
ROY S. OAKES, ) C/ A NO. 03A01- 9609- CH- 00302 ) Pl a i nt i f f - Appe l l e e , ) HAMBLEN CHANCERY ) v. ) HON. W LLI AM L. J ENKI NS, I ) CHANCELLOR HARRY LANE NI SSAN, I NC. , ) ) AFFI RMED AND De f e nda nt - Appe l l a nt . ) REMANDED
LORI L. J ESSEE a nd HERBERT M BACON, BACON, J ESSEE, PERKI NS & . SWANSON, M r i s t own, f or Pl a i nt i f f - Appe l l e e . or
RODNEY A. FI ELDS, LEW S, KI NG, KRI EG, W I ALDROP & CATRON, P. C. , Kn o x v i l l e , f or De f e nda nt - Appe l l a nt .
O P I N I O N
Fr a nks . J .
I n t hi s a c t i on f or da ma ge s f or br e a c h of l e a s e , t h e
Tr i a l J udge a wa r de d da ma ge s i n t he a mount of $25, 000. 00 a nd d e f e nda nt h a s a ppe a l e d.
The i s s ue s r a i s e d by de f e nda nt e s s e nt i a l l y c a n be
d i s t i l l e d i nt o o ne i s s ue : di d t he Tr i a l Cour t e r r i n hi s
d e t e r mi na t i on o f t he da ma ge a wa r d?
Pl a i nt i f f Roy Oa ke s owns l a nd a nd a bui l di ng on
So u t h Cumbe r l a nd St r e e t i n M r i s t own Te nne s s e e . or The bui l di n g
wa s b u i l t i n 1947- 48 a nd Oa ke s r a n a c a r de a l e r s hi p a t t he
l o c a t i on unt i l 1989. At t ha t t i me , he l e a s e d t he pr ope r t y t o
De f e nd a nt Ha r r y La ne Ni s s a n, I nc . The l e a s e wa s f or a t e r m of
f i v e y e a r s , a t $1, 500. 00 r e nt pe r mont h.
The l e a s e a gr e e me nt i nc l ude d t he f ol l owi ng t e r ms :
4. Le s s e e s ha l l ma i nt a i n a nd ke e p i n a good s t a t e of r e pa i r bot h t he i nt e r i or a nd e xt e r i or of t he bui l di ngs upon t he l e a s e d pr e mi s e s .
7. Le s s e e a gr e e s , upon t he t e r mi na t i on of t he Le a s e , t o r e t ur n t he s a i d pr e mi s e s t o t he Le s s or i n a s g ood a c ondi t i on a s whe n Le s s e e t ook pos s e s s i on, r e a s ona bl e a nd or di na r y we a r a nd t e a r e xc e pt e d.
8. Thi s i s a ne t - ne t l e a s e wi t h Le s s e e pa yi ng al l t a xe s , i n s ur a nc e pr e mi ums a nd e xpe ns e s of al l ma i nt e na n c e a nd upke e p t o ma i nt a i n s a i d bui l di ng i n a good s t a t e of r e pa i r .
9. De f a ul t by t he Le s s e e i n t he pa yme nt of a ny r e nt a l whe n d ue , f a i l ur e t o pa y t a xe s i n a t i me l y ma nne r , or f a i l ur e t o ke e p t he pr e mi s e s i ns ur e d a s a gr e e d he r e i n a nd pa y t he pr e mi s e s , t he r e f or e , o r Le s s e e ’ s f a i l ur e t o ma i nt a i n a nd ke e p t he pr e mi s e s i n a good s t a t e of r e pa i r s ha l l , a t t he opt i on of t he Le s s or , c a us e t hi s l e a s e t o t e r mi na t e a nd be of no f ur t he r f or c e a nd e f f e c t , a nd t he Le s s or s ha l l be e nt i t l e d t o t he i mme di a t e pe a c e f ul pos s e s s i on of t he pr e mi s e d, pr o vi de d, howe ve r , Le s s or s ha l l r e ma i n l i a bl e f or a ny a nd a l l mone t a r y pa yme nt s t he n due unde r t he t e r ms of t hi s Le a s e or t o be c ome due i n t he f ut ur e , mi t i ga t e d onl y t o t he e xt e nt of t he ne t pr oc e e ds of a ny moni e s r e c e i ve d by Le s s or f r om t hi r d pa r t i e s who s ha l l oc c upy t he pr e mi s e s unde r a r e nt a l a gr e e me nt f or t he r e ma i ni ng t e r m of t hi s Le a s e . . . .
2 De f e nda nt oc c upi e d t he l e a s e d pr e mi s e s t hr ough 19 9 1 ,
o p e r a t i ng a Bui c k- Ol ds mobi l e de a l e r s hi p. At t he e nd of 1991 ,
t h e Bu i c k- Ol ds mobi l e f r a nc hi s e wa s move d a c r os s t own t o t he
s a me b ui l di ng us e d f or t he Ni s s a n f r a nc hi s e . Exc e pt f or t wo
s h o r t s ubl e a s e a gr e e me nt s a nd s ome s t or a ge by de f e nda nt , t h e
b u i l d i ng wa s va c a nt f or t he r e ma i nde r of t he l e a s e t e r m.
The r e i s muc h t e s t i mony a s t o t he s t a r k di f f e r e nc e
i n t h e c ondi t i on of t he pr ope r t y a t t he i nc e pt i on a nd a t t h e
e n d o f t he l e a s e . W t ne s s e s f or pl a i nt i f f t e s t i f i e d a s t o i
t h e we l l - ma i nt a i ne d a nd ne a t c ondi t i on of t he bui l di ng be f o r e
t he l e a s e . Thi s c ondi t i on wa s c r e di t e d i n pa r t t o a n ove r a l l
r e n o v a t i on/ r e de c or a t i on 3- 5 ye a r s be f or e t he l e a s e be ga n.
Te s t i mony a s t o t he c ondi t i on of t he pr ope r t y a f t e r t he l e a s e
e n d e d t ol d of r ugs ma r ke d wi t h gr e a s e , t he r e mova l of f i xt ur e s
f r o m t he r e s t r ooms , a n a l a r m s ys t e m whi c h ha d be e n di s ma nt l e d
a n d wa s be yond r e pa i r , t he di s a ppe a r a nc e of a n a wni ng, a nd
wa t e r da ma ge t o t he t i l e s , t h e wa l l s , t h e c e i l i ng, a nd t he
r oof .
Re vi e w o f d a ma ge a wa r ds by a t r i a l c our t i s de nov o
a c c o mp a ni e d by a pr e s umpt i on of t he c or r e c t ne s s of t he
f i nd i ngs . T. R. A. P. 1 3( d) ; Le e k v . Powe l l , 884 S. W 2d 118, 1 2 0 .
( Te n n . App. 1994) .
De f e nda nt a r gue s t ha t t he da ma ge s we r e not pr ove n
wi t h r e a s ona bl e c e r t a i nt y. He di s put e s t he s pe c i f i c i t y of t he
r e c e i p t s a nd a r gue s t ha t t he Tr i a l Cour t s houl d ha ve
c o n s i d e r e d de pr e c i a t i on of t he pr ope r t y whe n c a l c ul a t i ng
r e pl a c e me nt c os t s . He f ur t he r a r gue s t ha t pl a i nt i f f i s not
e n t i t l e d t o r e c ove r be c a us e he ha d a dut y t o mi t i ga t e t he
3 d a ma g e , whi c h he a l l e ge dl y kne w wa s oc c ur r i ng.
Re ga r di ng t he dut y t o mi t i ga t e , de f e nda nt a r gue s
t h a t whe n pl a i nt i f f not i c e d c e i l i ng l e a ks dur i ng a 1991 vi s i t
t o t h e pr ope r t y, he c oul d ha ve i nvoke d Se c t i on Ni ne of t he
l e a s e t o t a ke ba c k pos s e s s i on of t he pr ope r t y a nd mi ni mi z e t h e
d a ma ge a nd r e pa i r c os t s . De f e nda nt c l a i ms t ha t be c a us e
p l a i n t i f f i ns t e a d l e t t he pr obl e m c ont i nue f or s e ve r a l ye a r s ,
h e i s not e nt i t l e d t o t he hi ghe r c os t of r e pa i r a nd
r e pl a c e me nt t ha t wa s r e qui r e d a t t he e nd of t he l e a s e .
The s t a nda r d f or mi t i ga t i on of da ma ge s i s r e a s ona b l e
car e. Cummi ns v . Br odi e , 667 S. W 2d 759, 766 ( Te nn. App. .
1 9 8 3 ) ; al s o s e e Hai l e y v . Cunni ngham, 654 S. W 2d 392, 396 .
( Te n n . 1983) . He r e , t he Tr i a l Cour t f ound c r e di bl e
p l a i n t i f f ’ s a s s e r t i ons t ha t he ha d t ol d s e ve r a l me mbe r s of
d e f e n d a nt ’ s s t a f f on s e v e r a l oc c a s i ons a bout t he l e a ks a nd t h e
n e e d f or r e pa i r . Thi s f i ndi ng i s a c c ompa ni e d by a pr e s umpt i o n
o f c o r r e c t ne s s whi c h i s not ove r c ome by t he t e s t i mony i n t h e
r e c or d. The a c t i on of r e que s t i ng t he r oof be r e pa i r e d wa s
r e a s o n a bl e , c ons i de r i ng t ha t t he ot he r c ove na nt s of t he l e a s e
we r e b e i ng f ol l owe d a nd pl a i nt i f f c oul d f a i r l y a s s ume t ha t
d e f e n d a nt woul d c or r e c t t he pr obl e m. Gi ve n t he s e e f f or t s b y
p l a i n t i f f a nd t a ki ng i nt o c ons i de r a t i on t ha t t he Tr i a l Cour t
d i d a c knowl e dge t ha t t he dut y t o mi t i ga t e wa s a f a c t or i n hi s
d e t e r mi na t i on of da ma ge s , t he e vi de nc e doe s not pr e ponde r a t e
a ga i n s t t hi s a s pe c t o f t he Tr i a l Cour t ’ s a s s e s s me nt of
d a ma ge s .
As t o t he a mount da ma ge s a wa r de d, t he me a s ur e of
d a ma ge s f or a l e s s e e ’ s br e a c h of c ove na nt t o r e pa i r i s t he
4 r e a s o na bl e c os t of r e s t or i ng t he pr e mi s e s t o i t s pr i or
c o n d i t i on. Ve r t r e s s v . Te nne s s e e Aut o Cor por at i on, 5
Te n n . App. 140, 152 ( 1927) ; 22 Am. J ur . 2d Da ma ge s §420
( 1988) . The Tr i a l Cour t ut i l i z e d t he c os t of r e pa i r a s t he
me a s u r e of d a ma ge s , a nd s t a t e d t ha t he ha d t a ke n i nt o
c o n s i d e r a t i on de pr e c i a t i on a nd t he dut y t o mi t i ga t e i n
a s s e s s i ng t he $25, 000. 00 da ma ge s . The a wa r d r e f l e c t e d a
s i g n i f i c a nt de c r e a s e i n t he hour l y r a t e pa i d f or r e s t or a t i on
l a b o r by Ti m Oa ke s . The Tr i a l Cour t a l s o c ons i de r e d t he
r e ma i n i ng l i f e - s pa n of t he ol d r oof a nd a voi de d a wa r di ng a
wi n d f a l l f or t he i ns t a l l me nt of t he ne w r oof ma de of a
s t u r d i e r pr oduc t , by a wa r di ng t wo- f i f t hs of t he c os t s of t h e
n e w r o of a s da ma ge s . De pr e c i a t i on on t he mi s s i ng a wni ng
r e s u l t e d i n a n a wa r d of one - t hi r d of i t s c os t . Li ke wi s e , t h e
a s s e s s me nt f or pa i nt i ng t he i nt e r i or of t he bui l di ng wa s
s i gn i f i c a nt l y l e s s t ha n i t s t ot a l c os t .
W a f f i r m t he j udgme nt of t he Tr i a l Cour t ’ s a wa r d o f e
d a ma ge s , b e c a us e t he e vi de nc e doe s not p r e ponde r a t e a ga i ns t
t he a wa r d. T. R. A. P. Ru l e 13( d) .
The c a us e i s r e ma nde d wi t h t he c os t of t he a ppe a l
a s s e s s e d t o t he a ppe l l a nt .
________________________ He r s c he l P. Fr a nks , J .
CONCUR:
5 _ _ _ _ _ ______________________ Do n T. M M r a y, J . c ur
_ _ _ _ _ _ __________________ ___ W l l i a m H. I nma n, Sr . J . i