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Key v. Renner

Court of Appeals of Tennessee, Knoxville

November 30, 2017

GARY L. KEY
v.
O.C. RENNER JR. ET AL.

          Session February 28, 2017

         Appeal from the Chancery Court for Greene County No. 20080032 Douglas T. Jenkins, Chancellor

         Neighboring property owners disagree over the terms of an oral agreement for construction of a private road across their properties. After the road was completed, one property owner failed to pay his part of the construction costs or grant a permanent easement permitting use of the road. The other property owner filed a complaint for specific performance or, in the alternative, damages for breach of contract. The defendant admitted the parties had an agreement but disputed the terms and raised the defense of the statute of frauds. After a trial, the court ruled that the defendant was equitably estopped from asserting the statute of frauds and awarded specific performance. On appeal, the defendant argues that the plaintiff is not entitled to enforce the agreement because either the statute of frauds bars enforcement of the agreement or the plaintiff was the first party to breach. After a thorough review of the record, we affirm the judgment as modified.

         Tenn. R. App. P. 3 Appeal as of Right Judgment of the Chancery Court Affirmed as Modified

          Mark A. Cowan, Morristown, Tennessee, for the appellants, O.C. Renner Jr., and the Omer C. Renner Jr. M.D. Living Trust.

          William S. Nunnally, Greeneville, Tennessee, for the appellee, Gary L Key.

          W. Neal McBrayer, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.

          OPINION

          W. NEAL McBRAYER, JUDGE.

         I.

         A.

         The tracts of land relevant to this case lie within a bend of the Nolichucky River on the border edge of Greene County, Tennessee, and were originally part of a 200-acre farm owned by W.C. Scruggs. Over time, portions of the Scruggs farm were sold to various individuals, including the parties to this case, Gary Key and Dr. O.C. Renner. In 2005, Dr. Renner transferred all of his real property to the Omer C. Renner Jr. M.D. Living Trust (the "Renner Trust").[1]

         The properties in this area are, for the most part, undeveloped. The nearest county road is Fish Hatchery Road. The Scruggs family owns property on both sides of the county road. Gwendolyn Renner, Dr. Renner's sister-in-law, owns property that lies south of Fish Hatchery Road. The Renner Trust owns two nonadjacent tracts: one tract south of Gwendolyn Renner's property and a second one south of Mr. Key's property. Mr. Key's property is bordered on two sides by the Renner Trust properties and on two sides by the Nolichucky River.[2] Although neither the Key property nor the Renner Trust properties have direct access to the county road, both men can reach their properties using an old private road on the Scruggs property by virtue of express easements not at issue here.

         In 2005, Mr. Key began to explore his options for obtaining electricity to build a house on his land. He initially requested permission to attach onto the existing power line on property across the river, but the property owner refused. He was also refused permission to install power lines along his existing easement through the Scruggs property.

         Eventually, Mr. Key approached his neighbor, Dr. Renner, and proposed that the two men build a new private road, "split" the cost, and grant each other a "right of way." Mr. Key offered to arrange for the road construction and donate the necessary labor to remove trees and brush along the proposed route. He also wanted to install a power line along the new road and offered Dr. Renner access to the power line for the Renner Trust properties. Dr. Renner accepted the proposal. But their oral agreement was never memorialized in writing.

         Dr. Renner mistakenly believed that, in addition to the properties previously described, he also owned a thirty-foot strip of land running along the edge of his sister-in-law's property. If this had been the case, he would own land connecting the upper Renner Trust property to Fish Hatchery Road. Because he thought the private road he planned to construct with Mr. Key might require more land, Dr. Renner attempted to purchase an adjacent section of his sister-in-law's property before construction began, but Mrs. Renner refused. Mr. Key also approached Mrs. Renner about purchasing the land, but when she did not respond, he did not pursue it further. The men proceeded with their plans and tried to stay within the area that they believed Dr. Renner already owned alongside of his sister-in-law's property.[3] During the course of this litigation, however, Dr. Renner discovered that he did not own the thirty-foot strip but instead had an easement through Mrs. Renner's property.

         Mrs. Renner testified that, although she was aware that a road was being built on her property without her permission, she chose not to become involved. She never complained about the road or the power line and, at trial, voiced no objection to their continued use.

         In the spring of 2006, Mr. Key hired Four Seasons Ground Service ("Four Seasons") to construct the new road. The original plan envisioned a simple twelve-foot-wide access road beginning at Fish Hatchery Road, proceeding along Mrs. Renner's property line, and continuing down through the upper Renner Trust property and the Key property to the lower Renner Trust property. The estimated cost was approximately $5000.

         After Four Seasons began grading the new road, Dr. Renner suggested a location change for a portion of the road on the upper Renner Trust property to avoid a steep hill and an abrupt u-turn, and Mr. Key agreed. Dr. Renner also requested several more changes to improve future access to the lower Renner Trust property.[4] Again, Mr. Key did not object. So, the width of the proposed road was doubled to allow for two-way traffic. Also the construction quality was improved, and drainage tiles were added. Unsurprisingly, these changes increased the cost of the new road, and Mr. Key ultimately paid Four Seasons over $18, 000.

         Between March and June 2006, Four Seasons completed the basic grading and drainage for the new road. Subsequently, Mr. Key and Dr. Renner purchased and spread rock on the road bed and, in an effort to prevent erosion, sewed grass seed on either side. Dr. Renner also worked to improve water drainage issues on his property caused by the new road.

         Once the road was graded, Mr. Key arranged with Greeneville Light and Power System to install a power line beside the new road. Mr. Key removed more trees and overhanging branches, as required by the power company, and paid for the installation. The power line was above ground until it reached Mr. Key's property. To extend the line to the lower Renner Trust property, Dr. Renner was required to pay the power company's fee and dig a trench for ...


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