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Nazi v. Jerry's Oil Co. Inc.

Court of Appeals of Tennessee, Jackson

June 24, 2015

HANNA (JOHN) NAZI, ET AL.
v.
JERRY'S OIL COMPANY INC.

Session June 10, 2015

Appeal from the Circuit Court for Madison County No. C12289 Nathan B. Pride, Judge

Robert T. Keeton, III, Huntingdon, Tennessee, for the appellant, Hanna (John) Nazi and Banham (Ben) Nazi.

Adam C. Crider and Brandon J. Stout, Jackson, Tennessee, for the appellee, Jerry's Oil Company, Inc.

Arnold B. Goldin, J., delivered the opinion of the Court, in which J. Steven Stafford, P.J., W.S., and Kenny Armstrong, J., joined.

MEMORANDUM OPINION [1]

ARNOLD B. GOLDIN, JUDGE

This is the second appeal in this contract dispute. The background facts and procedural history were set-forth comprehensively in Nazi v. Jerry's Oil Company, Inc., No. W2013–02638–COA–R3–CV, 2014 WL 3555984 (Tenn. Ct. App. July 18, 2014) ("Nazi I"), and it is unnecessary to repeat them in detail here. In Nazi I, we vacated the trial court's order dismissing Hanna (John) Nazi ("John Nazi") following a bench trial of a June 2012 breach of contract claim filed by Jerry's Oil, Inc., ("Jerry's Oil") against John Nazi and his brother, Banham (Ben) Nazi ("Ben Nazi").[2] We determined that the documents forming the parties' agreement were ambiguous with respect to whether John Nazi was acting as the owner/proprietor of the Handy Peddler, a sole proprietorship, when he executed the purchase contract, security agreement, fuel supply agreement, and promissory note that, together, formed the agreement between Jerry's Oil and the Handy Peddler. Nazi I, 2014 3555984, at *12. We observed that, although it was undisputed that John Nazi executed the documents under which Jerry's Oil supplied fuel to the Handy Peddler, the parties disputed whether John Nazi signed the documents "merely as its manager, " acting on behalf of Ben Nazi – who John Nazi asserts is, in fact, the proprietor of the Handy Peddler – or whether he was acting as its owner/proprietor. Id. We noted that the trial court made no findings with respect to the intent of the parties when the documents were executed in 2007, but "simply determined that John Nazi could not be liable because he was no longer involved with the Handy Peddler at the time the breaches occurred, which was an improper basis for the involuntary dismissal." Id. We determined that the evidence was contested and that resolution of the issue turned on a determination of facts. Id. Accordingly, we remanded the matter to the trial court for further consideration and to make findings of fact. Id.

On remand, the trial court heard arguments in the matter in August 2014. Upon consideration of the parties' arguments and review of the documents and the transcripts of the 2013 bench trial, the trial court entered judgment on September 10, 2014. The trial court determined that the testimony of the witnesses did not clarify the issue. The trial court found that, in light of the language of the documents executed by John Nazi and in view of the parties' course of dealing, John Nazi was the proprietor of the Handy Peddler when the agreement with Jerry's Oil was executed. Accordingly, it held John Nazi liable for the judgment in favor of Jerry's Oil. John Nazi filed a timely notice of appeal.

Discussion

The sole question for review is whether the trial court erred by determining that John Nazi was acting as the proprietor of the Handy Peddler when he executed the four documents comprising the agreement between Jerry's Oil and the Handy Peddler. We review the findings of fact by a trial court sitting without a jury de novo upon the record, with a presumption of correctness unless the evidence preponderates otherwise. Tenn. R. App. P. 13(d); e.g., Allstate Ins. Co. v. Tarrant, 363 S.W.3d 508, 515 (Tenn. 2012). Where the trial court's factual findings are based on its assessment of credibility of the witnesses, we will not reverse those findings unless there is clear and convincing evidence to the contrary. E.g., In Re: M.L.D., 182 S.W.3d 890, 894 (Tenn. Ct. App. 2005). We review the trial court's conclusions of law de novo with no presumption of correctness. E.g., Rogers v. Louisville Land Co., 367 S.W.3d 196, 204 (Tenn. 2012).

The four documents executed by John Nazi on behalf of the Handy Peddler in 2007 include a Purchase Contract, a Security Agreement, a Fuel Supply Agreement, and a Promissory Note. Ben Nazi did not sign any of the documents. The Fuel Supply Agreement defined Handy Peddler as the "Retailer." John Nazi signed the Agreement, but left the space designated for "Title" blank. The Agreement recited a term of 120 consecutive months with automatic renewal on a month-to-month basis until terminated with 30 days' notice. Paragraph 14 of the Agreement provided:

This Agreement shall not be transferred or assigned by Retailer in whole or in part, directly or indirectly, without the prior written consent of Supplier. Any granted request to assign may require that Retailer remain obligated to Supplier according to the terms of this Agreement. Supplier may assign this Agreement in whole or in part.

Paragraph 17 provided that notice required under the Agreement would be provided in writing to "Handy Peddler c/o John Nazi[.]" It further stated that a copy of any notice would be sent to "Handy Peddler C/O John Nazi[.]" We observe that the paragraph provided for notice to Jerry's Oil, with a copy to its legal counsel. Paragraph 32 of the Agreement provided that it constituted the entirety of the parties' agreement and further provided that it could not be modified except in a writing signed by the parties.

The Purchase Contract was signed by John Nazi as "Buyer's Representative Handy Peddler." The Promissory Note identified "John Nazi doing business as Handy Peddler (maker)" and was signed by John Nazi without any designation of title. John Nazi executed the Security Agreement as "Manager, " and we observe that Jerry's Oil recited ...


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