Assigned on Briefs January 23, 2015
Appeal from the Chancery Court for Rhea County No. 10540 Jeffrey F. Stewart, Chancellor
J. Shannon Garrison, Dayton, Tennessee, for the appellant, Leisa Ellen Reed.
Carol Ann Barron, Dayton, Tennessee, for the appellee, Randell Thurman.
Rebecca L. Hicks, Dayton, Tennessee for appellee, Leroy Thurman.
Arnold B. Goldin, J., delivered the opinion of the Court, in which Brandon O. Gibson, J., and Kenny Armstrong, J., joined.
ARNOLD B. GOLDIN, JUDGE
Plaintiff/Appellant Leisa Reed ("Leisa") commenced this action seeking a declaration of her interest in a partnership she contends existed among herself, Defendant/Appellee Randell Thurman ("Randell"), and Randell's father, Defendant/Appellee Leroy Thurman ("Leroy"). Although many of the pertinent facts are undisputed, the parties disagree in several respects over the meaning that should be attributed to the events that occurred in this case. In the mid-1990s, Leisa and Randell began a romantic relationship. Notwithstanding the fact that the romantic aspect to their relationship apparently subsided after a few years, their friendship continued. In fact, the two began living together sometime around 2000 in Leisa's home in Spring City, Tennessee. Randell's father Leroy lived nearby with his wife Doris.
According to Leisa, she entered into a partnership with Randell and Leroy in 2002 to buy and sell cattle. Although no written document was created to memorialize the discussion, she claims the parties agreed to a 50/25/25 share of the business while sitting in Leroy's living room. Leroy, who was to supply the seed money, would get a 50 percent share of the business; Leisa and Randell would each get a 25 percent share. Randell and Leroy dispute that such a conversation ever occurred. Although they do not deny that a cattle raising venture was formed in the early 2000s, they dispute that it was ever a partnership involving Leisa.
In furtherance of her participation in the alleged partnership, Leisa claims she helped do the book work, in addition to paying bills and "keeping up with the bank account." She also stated that she helped care for Leroy's wife Doris who had cancer. When a bank account for the cattle venture was opened at SouthEast Bank & Trust on May 22, 2004, in the name of L&R Farm, Leisa was designated as an account owner and authorized signatory. It is undisputed that Leisa wrote checks on that account and made deposits into it as well. She also claims to have performed other routine tasks for the alleged partnership such as picking up supplies, feeding cattle, allowing some of the cattle to graze on her property, administering medicine to the cattle, and collecting hay. Although Randell and Leroy do not deny that Leisa assisted their efforts occasionally, they suggest her involvement was not as significant as she suggests. For instance, they claim that her presence on the L&R Farm bank account was only intended as a convenience. Because Leisa lived with Randell and was at home when the bills arrived, listing her as a signatory gave her the authority to write checks as bills became due. Moreover, when testifying at trial as to Leisa's involvement in the cattle business, Randell stated that Leisa never joined him and Leroy at cattle auctions and noted that Leisa worked full-time in a job that required her to travel out of town almost weekly. Randell further testified that although Leisa sometimes made purchases for the cattle business, she always reimbursed herself for the purchases. From Randell and Leroy's perspective, Leisa was simply never a partner in the cattle venture.
In 2006, Leroy withdrew from cattle farming. On August 5, 2006, he received a check for $7, 064.74. This check, which indicated that it was for "1/2 FARM, " represented half of the balance of the L&R Farm checking account. On the same day that this check was written, Leisa wrote a check on her personal bank account for $5, 000.00. The check indicated that it was for "7 COWS" and was made payable to Leroy. Leisa testified that she wrote the check to purchase cattle in furtherance of the alleged partnership; as Leroy had previously withdrawn, he owned certain cattle that he wanted to sell. Randell also wrote a personal check for $5, 000.00 on August 5, 2006. The check was made payable to Leroy and indicated that it was for "6 COWS". Although Leisa points to this as evidence that she and Randell were in a partnership, Randell disputes the notion. When asked at trial why Leisa bought seven cows from Leroy, Randell claimed ignorance.
The parties' interpretation of facts also differs with respect to another check written by Leisa on her personal bank account. At trial, evidence was introduced showing that Leisa wrote a $12, 000.00 check to Randell on January 29, 2008. The evidence shows that the day after this check was written, $12, 000.00 was deposited into the L&R Farm bank account. Leisa testified that the $12, 000.00 check was written in order to help buy equipment needed for the alleged partnership and stated that it was not written as a gift or in repayment for a loan obligation. Randell, on the other hand, denies that the $12, 000.00 was a capital infusion in furtherance of a partnership between him and Leisa. During his trial testimony, Randell stated that he gave Leisa $12, 000.00 worth of cash in exchange for the check she wrote out of her personal account. As he explained it, "I had cash saved up, and I needed money in the account, and she wrote me a check and kept the cash."
Although Leroy had withdrawn from the cattle venture in 2006, he later got back into the business. According to Randell's testimony, Leroy renewed his participation in the cattle project in 2008. Leroy's participation was brief, however, as he exited the cattle venture again at the beginning of 2009. When he exited the business, he received over $45, 000.00 out of the checking account of L&R Farm. The check was signed by Leisa and indicated that it was for "1/2 FARM". Randell testified that when his father left the business in 2009, there was over $91, 000.00 in the L&R Farm bank account. According to Leisa, she and Randell "were going in as 50/50 partners" after Leroy withdrew.
On February 1, 2009, Leisa wrote a check out to L&R Farm in the amount of $35, 000.00 using her own personal funds. At trial, she testified that she wrote the check after she and Randell decided to continue the alleged partnership following Leroy's withdrawal. She described the money as an investment into the partnership. Randell testified that he did not consider Leisa's monetary contributions to be in furtherance of a business partnership between them. Despite admitting that the two of them pooled their money together to buy cattle, he did not acknowledge them as partners. As he stated at trial, "We weren't partners. We just bought a herd of cattle together."
In January of 2010, Leisa decided that she no longer wanted to be associated with Randell. At trial, she testified that she wanted to end the alleged partnership upon learning of allegations that Leroy had molested her daughter. She further testified that the friendship between she and Randell ended when Randell refused to stop speaking with his father. When their friendship deteriorated, Randell and Leisa entered into an agreement that settled certain rights and obligations between the two. Dated January 31, 2010, this agreement reads as follows:
1. Randell Thurman will buy the house at 1432 Ideal Valley Road at $150, 000.00. He has given Leisa Reed a $20, 000.00 deposit. Randell Thurman will supply financing at his expense. Leisa Reed will continue to live in this home until March 31st, 2010. All furnishings belong to Leisa Reed. Leisa Reed has until May 31st to remove all of her personal property from this residence.
2. Farm-Randell Thurman has given Leisa Reed $53, 000.00 for her half of Beef Cattle.
3. Taxes-Leisa Reed to claim ½ of farm losses (approx. $35, 000.00) on her personal 2009 Tax Filing.
4. 2003 Chevrolet Black Dually Pickup Truck-Randell Thurman to pay back the loan to Leisa Reed $11, 270.93 for her interest in this vehicle before July 31, 2010.
5. Randell Thurman agrees to allow Leisa Reed to continue to charge to his Gastown account until March 31st, 2010, but not to exceed $160.00 per month.
Whereas Leisa argues this agreement was not a complete settlement between her and Randell, Randell argues strongly to the contrary.
The first point of contention regarding the agreement centers on the agreement's failure to divide any property used incident to the cattle venture. At trial, Randell testified that the agreement did not contain any provision pertaining to equipment because all of the equipment belonged to him; he claimed there was nothing to settle in this regard, and he indicated that Leisa had previously affirmed this. In contrast, Leisa testified that the parties had discussed settling their rights with respect to the equipment. According to Leisa, Randell had indicated that he would pay her for her share, but he never did.
Leisa and Randell also dispute whether the agreement settled their rights with respect to the L&R Farm bank account. The crux of their disagreement stems from their differing interpretations as to what the second provision in their agreement represented. According to Leisa, the $53, 000.00 payment she received was solely for her share of the value of the remaining cattle. In support of this position, she testified that she and Randell had over $100, 000.00 worth of cattle at the time the agreement was made. Because she claims that the $53, 000.00 payment did not include any portion ...