Session Date July 9, 2014
Appeal from the Chancery Court for Knox County No. 182016-2 Daryl R. Fansler, Chancellor
Kenneth S. Christiansen and James Myers Morton, Knoxville, Tennessee, for the appellant, Centimark Corporation.
Darren V. Berg and John Tyler Roper, Knoxville, Tennessee, for the appellee, Maszera Company, LLC.
John W. McClarty, J., delivered the opinion of the Court, in which D. Michael Swiney and W. Neal McBrayer, JJ., joined.
JOHN W. McCLARTY, JUDGE
The plaintiff, Centimark Corporation ("Centimark") is a Pennsylvania corporation with principal offices located in Cannonsburg, Pennsylvania. It is engaged in the business of supplying roofing systems and components for commercial construction projects. The defendant, the Maszera Company, LLC ("Maszera") is a Tennessee limited liability company with offices in Toms River, New Jersey. Maszera is the owner of the property at issue in this case, Chapman Commons, located at 4512 Chapman Highway in Knoxville, Tennessee.
In late April 2011, Knoxville and surrounding areas experienced a severe hailstorm. On April 27, 2011, Travis Ivey, the Knoxville area service director for Centimark, was contacted by Maszera and asked to assess the damage at Chapman Commons. As noted by the trial court, Ivey inspected the flat "rubber" roof and described it "as having crater size holes in the roof membrane" and "[i]n some instances, hail had gone completely through the metal decking beneath the membrane."
The parties stipulated to the existence of a contract "to remove the old roof and install a new 'forty-five mil TPO membrane over the existing decking structure'" at a cost of $209, 530. The contract reflects a "15 year labor and material warranty" was to be issued and that "[a]ll Centimark Employees" were to be utilized. Removing the old roof involved taking it and the insulation board off down to the metal decking. The new roof was installed in June and July of 2011, over 38 working days, ending on August 1, 2011. The trial court noted, "[t]he particular membrane installed was manufactured by Versico. Centimark provides a fifteen year labor and material warranty on the roof. There is no manufacturer's warranty issued by Versico." After the installation of the new roof, Centimark performed a walkthrough with Charles Witt, Maszera's manager for the project, and a punch list was created, but Maszera asserts the roof has continued to leak since it was installed.
On January 12, 2012, Centimark brought this action because Maszera had only made partial payment and still owed $52, 382.50. According to Centimark, it had properly performed under the parties' contract. Maszera answered the lawsuit denying liability and filing a counter-complaint asserting that Centimark breached its obligations under the contract by failing to provide adequate materials and proper workmanship. Maszera also sought treble damages and attorney's fees under the Tennessee Consumer Protection Act, Tennessee Code Annotated section 47-18-101, et. seq. ("TCPA").
A. Testimony of Mike Hilton
Mike Hilton, Centimark's regional manager for Tennessee, Arkansas, and Mississippi, was the corporate representative at trial. He testified that Centimark does not use laborers who have not been through the company's training process and who are not experienced roofers. Hilton acknowledged that in the aftermath of the hailstorm, Centimark had acquired more business than normal, but claimed that despite the increase in work, Centimark never hired subcontractors or temporary workers. Hilton listed the following Centimark trained employees as the only laborers/workers who performed any work on the roof at issue: Tipton Amos (crew foreman); Brian Quakendal (crewman); Gary Parrish (field superintendent); David Bell (crewman); Shawn Fikes (crewman); Tony Byers (safety inspector); Dustin Abner (crewman); David Anderson (foreman); Drew Devins (service foreman); Ricky Evans (service foreman); Kenny Gibson (foreman); Danny Gibson (crewman); Robert Hartwell (crewman); Steven Humphreys (crewman); Mark Hunley (crewman); Ronnie Ivey (foreman); Paul Justice (service foreman); Patrick Klinger (crewman); Brian Messer (crewman); James Weaver (crewman); Benny Williams (crewman) and Wayne Duwhy (crewman). None of these individuals, however, testified at trial.
Hilton acknowledged that numerous leaks occurred after Centimark completed the installation of the roof. After rain events, representatives of Centimark would go to the roof and make repairs. Hilton admitted that from August 1, 2011, until the date this action was filed, either Maszera or Witt complained at least twenty separate times that the roof was leaking. Because of the numerous leaks, Maszera retained an independent roofing expert to investigate the cause of the problems. The expert's report ("the Weaver Report"), dated December 30, 2011, was forwarded by Maszera to Centimark. According to Hilton, Centimark thereafter responded to all of the concerns raised in it.
Hilton's activities on June 18, 2013, two days before the first day of trial, resulted immediately in a motion for sanctions from Maszera. The trial court heard argument on the motion the morning before trial commenced and found that Centimark had made no effort previously to inspect the roof and that "[t]here was a total lack of compliance with the Rules of Civil Procedure." The court excluded the use of any photographs taken by Hilton and precluded Centimark from offering "a last-minute explanation to exonerate itself. . . ."
At trial, Hilton explained that he received from Mr. Christiansen, Centimark's attorney, an email Mr. Berg, Maszera's counsel, had forwarded to Mr. Morton, Centimark's other attorney. The email noted the substantial leaks at Chapman Commons with attached photographs. Hilton admitted the original email was sent by Maszera's counsel to Mr. Morton and not to either Mr. Christiansen or himself; he further noted that the email did not state that Mr. Berg was on the roof of Chapman Commons. He claimed, however, that upon reading the email, he believed he "suddenly had permission to go by and inspect the property at . . . Chapman Commons":
Q: Which portion of that email gave you permission to go inspect the property that you're relying on – which portion?
A: The part, "So you may come by and inspect if you want, as I should be here all day, " is the part that I read and stood out to me.
Q: Sent from me, the attorney, at my office, to these lawyers at their office, and you took that to mean that you could go get on the roof of my client's building without permission?
A: That's how I interpreted it, yes, sir.
Hilton admitted that he went to Chapman Commons in a truck with a ladder and that he climbed on the roof. He acknowledged that once he got on the roof, Maszera's counsel was not there:
Q: Then why did you stay up on the roof?
A: I need you to understand that I didn't think I was doing anything out of context or illegal, or anything that was not allowed.
Q: The email that you just read you said created an invitation for you to go out there because it said, "I'm here." When you got there and I wasn't there, why did you think you had permission to climb on my client's roof, conduct an investigation, and obtain evidence? Did Mr. Maszera give you permission, sir?
A: "So you may come by and inspect if you want, as I should be here all day, " is really the words that stood out to me. And I hadn't been on this roof in months, and –
Q: You just thought in the middle of a case that was going to trial the next day, or two days, that you could go out there, without talking to me, without getting permission from Mr. Maszera, without getting permission from the general contractor, Mr. Witt, and you could just climb on the roof and do your own investigation; is that what you're telling this court?
A: That's exactly what I'm telling you. I have never been in a court case. I've never given a deposition in my life. I have never been on trial, and I have never given testimony in all the years I've been with Centimark. . . .
Q: You didn't really think I was at Chapman Commons, did you, sir?
A: I didn't know who was at Chapman Commons.
Q: Did you ask either of your lawyers if it was okay for you to go conduct your own investigation of the roof before you went to do it?
A: Never asked anybody anything.
Hilton acknowledged attending depositions and hearing the court instruct his lawyers two days prior that Centimark had failed to obtain evidence. He admitted taking numerous photographs while on the roof and performing an investigation with Zachary Perry, a Centimark tech representative he brought along with him. Hilton however denied that he vandalized the property by pulling the flashing apart while on the roof. His testimony continued as follows:
Q: Before the judge ruled this morning with regard to excluding your proposed testimony as to what the cause of the leaks were, you were prepared to come up with a third party who is responsible for the leaks; isn't that correct?
A: I wasn't coming up with a third party, period.
Q: Were you not prepared to come into Court today and testify that the cause of the leaks was somebody else other than Centimark?
A: What I was prepared to come in and say was that when we left the project, the EIFS work was incomplete and wrapped with yellow board. And when I inspected it that day, or got up on the roof, the yellow board had since been wrapped with EIFS, which is the external insulated finish system.
Q: Are you aware that your counsel told me it was the stucco guy's fault yesterday? Are you aware of that? Did he get that from you?
A: He would have got that from the email that I sent to Mr. Christiansen.
Q: Okay. So you were prepared to come and blame it on the stucco guy?
A: I was prepared to come in and say the reason the roof was leaking is because of the stucco work that was performed.
No evidence was ever presented by Centimark witnesses regarding personal knowledge of third party trades being present on the roof. Hilton observed that he had been on the roof a total of four or five times but was not on it once during the entire period of the work by Centimark. He also acknowledged that he did not actually know whether any member of the crew was smoking during the project period, explaining that he assumed they did not smoke based on the company's "zero tolerance no-smoking" policy. Hilton admitted that Witt was in a better position to "view the performance of [Centimark's] laborers" on the project because Witt was present on the roof during the project while Hilton was not.
Hilton admitted that Centimark did not obtain the required permits prior to beginning work on the project. He also acknowledged that Centimark did not file a Notice of Completion with Knox County and did not request a final inspection to be performed by the City of Knoxville. Hilton acknowledged that the contract did not require final payment until ten days after completion of the project.
Counsel for Centimark claimed Maszera's counsel had "opened the door" to allow questioning of what Hilton recently observed on the roof:
MR. MORTON: He talked about other contractors, and I'm entitled to ask him to this day what's making the roof leak. I think he's opened the door, if the Court please.
MR. BERG: You Honor, I only did it for the motion for sanctions, which we agreed to take up in the proof in this case. It only went to my motion for sanctions, all the stuff he did on the roof. Leaking to this day is part of our counter-claim against [Centimark]. I didn't open the door. With respect to his opinion as to the stucco man, that was to show the reason he trespassed onto that roof was to fraudulently manufacture evidence to defeat a valid counterclaim by blaming a third party the day before trial. I have not opened any door. That was submitted solely for that motion for sanctions.
MR. MORTON: If he uses the word fraud, we're entitled to fight that. That's a big word.
MR. BERG: Mr. Witt is about to come in here and tell this Court that the only person that was on that roof the last time [Mr. Witt] was up there until yesterday was [Hilton and Perry]. He's going to tell this Court that the flashing was removed, and that was the ability for them to blame the stucco guy. That's to defeat a valid claim, and that is fraud.
THE COURT: I'm not going to let you go into that, Mr. Morton. I explained this morning [in chambers] why I was not going to.
MR. MORTON: Yes, sir.
B. Testimony of Charles Witt
Witt testified that he was the project manager and general contractor in charge of repair of the roof at Chapman Commons "from start to finish." He related that he had been a general contractor for 36 years in the area of commercial construction and had been in charge of commercial roofing projects on "well over a hundred" previous occasions. He noted that his general contractor's license from the Tennessee Board of Licensing Contractors permitted him to perform commercial construction projects.
Witt recalled that two days before trial, he found Hilton taking photographs in one of the spaces at Chapman Commons. He later discovered Hilton had been on the roof after talking to the building superintendent who "had noticed a truck out back with a ladder up on the building, and . . . actually saw . . . two people coming off the roof." According to Witt, he did not give Hilton permission to be on the premises or take photographs, and did not take Hilton around the shopping center to show him the locations where the roof was leaking.
Witt testified that after Centimark's personnel left, he climbed onto the roof to inspect it. Prior to that occasion, he had last been on the roof some two months prior. To his knowledge, no one else had been given permission to be on the roof during the interim period. On that day, the roof was leaking in five separate units of Chapman Commons. He explained, however, that the roof was actually leaking in twelve different locations. Describing his inspection, Witt proclaimed that "there were several places where the coping had been pulled loose on top of the roof." He opined that this loose coping was what Hilton had intended to claim was the cause of the leaks. According to Witt, the loose coping was not the result of storm damage and had been intentionally pulled loose. With regard to the purported attempt to blame the stucco contractor for the leaks, Witt related that there were "termination flashings between the stucco and the TMO membrane that had been pulled loose as well." He explained that evidence of intentional damage to the roof existed in "probably about half a dozen" other places.
Witt recalled that because of the hailstorm, a great number of commercial roofing projects were occurring "all over town" during the summer of 2011. He explained: "everybody at the time was trying to lock down all the jobs they could. I mean, it was like the lottery, and everybody was grabbing for everything they could to get them under contract. So there was roofing companies and personnel literally from all over the country in here." He observed the result was that unqualified laborers were working roofing projects based on a lack of qualified personnel.
According to Witt, on most days Centimark "would have eight or nine roofers up there." He opined it was substandard performance to have nine inexperienced crewmen to be overseen by a single experienced roofer. He recalled a conversation he had with Centimark's foreman who said "himself and one other [Centimark] guy were the only people that had been on a roof before." Witt remarked this statement was consistent with his personal observations and conclusions: "[T]hey didn't know what they were doing." During the leak repair work, Witt once asked a Centimark employee why the roof was continuing to leak and why so many problems were occurring. According to Witt, the employee responded that, "[t]his crew was unqualified to do a job of this size."
Witt recalled numerous things he observed that were improper: "[W]e had issues about them smoking on the roof, which in the industry, due to the – you know, the damage that can [occur] with cigarette burn marks on the roof, that should never occur." He stated he personally asked the only Centimark foreman he ever saw on the project, Amos, to make the workers quit smoking on the roof. Additionally, Witt personally observed the Centimark crew do the following:
I guess one of the biggest things is as they were tearing the roof off, they were continually . . . they put the [new] roof down and then they were walking back across the [new] roof tearing the rest of the roof off. And I asked [them] several times about putting some protective barrier down on the roof because, obviously, they're dragging screws and insulation board and what have you. All their debris came back across the brand new roof they had just put on.
[T]hroughout the entire course of the roof, they were continually walking across the new roof they had put down with the debris torn off in another section. So you're continually dragging insulation and screws and fasteners, people walking across it. There's nails laying on the roof, people step on them.
Witt further related that all sorts of debris was left on the insulation board (i.e., screws, fasteners, etc.) that ended up covered underneath the membrane. Such items were "going to cause a leak at some point" if they have not already. He opined that this conduct in performing the contract ...