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Tomlin v. Renal Care Group, Inc.

Court of Appeals of Tennessee, Nashville

November 30, 2017

MICHAEL TOMLIN, ET AL.
v.
RENAL CARE GROUP, INC. ET AL.

          Session August 16, 2017

         Appeal from the Chancery Court for Davidson County No. 10-1819-IV Russell T. Perkins, Chancellor

         A real estate consultant brought suit against a renal care company and related corporate affiliates alleging breach of contract for failing to pay real estate commissions. The commissions were allegedly owed based upon the consultant's work in negotiating one original lease for a dialysis clinic, and based upon several alleged renewals of leases that had originally been negotiated by the consultant. The parties' consulting agreement specified that the consultant was entitled to commissions upon execution of original leases, and at any subsequent renewals or extensions of the original leases. Because the order appealed is not final in that it fails to adjudicate at least six of the former consultant's claims, this Court lacks subject-matter jurisdiction over the appeal. Tenn. R. App. P. 3(a). Accordingly, the appeal is dismissed.

         Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed.

          Cavender C. Kimble, Birmingham, Alabama, for the appellants, Renal Care Group, Inc., and Nephrology Associates, P.C.

          Robert L. Delaney, Nashville, Tennessee, for the appellees, Michael Tomlin, and The Tomlin Company.

          Arnold B. Goldin, J., delivered the opinion of the Court, in which Brandon O. Gibson and Kenny Armstrong, JJ., joined.

          OPINION

          ARNOLD B. GOLDIN, JUDGE.

         Background and Procedural History

         This is an action for breach of consulting contracts. Nephrology Associates, P.C., [1]and Renal Care Group, Inc., ("Appellants") own and operate dialysis clinics across the country.[2] On November 12, 2010, Michael Tomlin ("Appellee") filed suit in the Chancery Court of Davidson County alleging that Appellants had failed to pay him real estate commissions owed under contracts entered into by Appellants' predecessors in interest. Specifically, Mr. Tomlin claimed that Appellants had failed to pay his commission for negotiating the original lease for a dialysis clinic located in East Orange, NJ, and additionally had failed to pay him commissions owed on renewals of original leases he negotiated for clinics at seventeen other locations.[3]

         Mr. Tomlin's claims arose from a business arrangement that he originally entered into with Dr. Jeffrey Hymes, Dr. Jerome Tannenbaum, and Mr. Steven Harrison. In the late 1990s, Dr. Hymes, Dr. Tannenbaum, and Mr. Harrison were in the process of starting a national renal care company, [4] and they hired Mr. Tomlin to assist in locating potential sites and negotiating leases for dialysis clinics. On November 20, 1997, Mr. Tomlin entered into a "Letter of Agreement" with Dr. Hymes, Dr. Tannenbaum, and Mr. Harrison.[5] Pursuant to the "Letter of Agreement, " Mr. Tomlin was responsible, inter alia, for locating sites and negotiating leases for dialysis clinics, for which he was to be compensated on a commission basis. On May 19, 1999, Mr. Tomlin entered into a second agreement labeled, "Consulting Agreement, " with the original renal care company's successor in interest, National Nephrology Associates, Inc. The "Consulting Agreement" contained, inter alia, the following provision:

2. Compensation; Reimbursement. In consideration of Consultant's consulting services set forth in Paragraph 1 above, the Company shall pay to Consultant or his assigns the following:
a. The Company shall pay Consultant a four percent (4%) commission on the gross rental payments of all leases upon signing of the lease and at the renewal or extension of such leases. This commission is based on the rental rate negotiated by Consultant only; however, the four percent (4%) commission shall also be paid on any amount the lessor agrees to pay toward renovation or other improvements.

         The parties made several joint stipulations before the case proceeded to a bench trial. The parties stipulated that, pursuant to the agreement, Mr. Tomlin negotiated the original leases for dialysis clinics at the following eighteen locations: Tullahoma, TN; Gallatin, TN; Springfield, TN; West Nashville, TN; East Nashville, TN; Franklin, TN; Madison, TN; Jasper, AL; Austin, TX; Round Rock, TX; Bastrop, TX; Marble Falls, TX; Harrison, NJ; Sarasota, FL; Pittsburgh, PA; University City, MO; Columbia, TN; and Fort Payne, AL. The parties further stipulated that Mr. Tomlin was paid his commissions on the original leases; however, Mr. Tomlin claimed he was entitled to a commission on the original East Orange, N.J. lease. Appellants denied that Mr. Tomlin negotiated the original East Orange, N.J. lease, and denied that he was entitled to a commission. The parties stipulated that the dialysis clinics located in Tullahoma, TN, Fort Payne, AL, and Columbia, TN have been vacated. However, the parties stipulated that the dialysis clinics at the remaining sixteen locations remain open, and that those clinics are currently operated by a direct subsidiary of Renal Care Group, Inc. Concerning the scope of Mr. Tomlin's claims, the parties stipulated in paragraph eighteen of the joint "Stipulations of Facts for Trial" that, "[p]laintiff [sought] to recover commissions that may be due under the lease documents in Joint Exhibit 3 other than the original leases; except that Plaintiff also seeks to recover a commission on [the] East Orange, N.J. original lease." Joint Exhibit 3 contains leases from seventeen locations.[6]

         After prolonged discovery and several continuances, on September 13, 2013, the case proceeded to a bench trial. On July 11, 2016, the trial judge issued a "Memorandum and Order." The trial court found the 1999 "Consulting Agreement" to be controlling because it superseded the earlier "Letter Agreement." After interpreting the "Consulting Agreement, " the trial court ruled on at least one of Mr. Tomlin's claims for commissions based upon leases for the following eleven locations: (1) Tullahoma, TN;[7] (2) Gallatin, TN;[8] (3) Springfield, TN;[9] (4) West Nashville, TN;[10] (5) East Nashville, TN;[11] (6) Franklin, TN;[12] (7) Jasper, AL;[13] (8) Round Rock, TX;[14] (9) Austin, TX;[15] (10) Harrison, NJ;[16] and (11) East Orange, NJ.[17] The trial court also entered a declaratory judgment in Mr. Tomlin's favor stating, "[t]he court hereby declares that Mr. Tomlin is entitled to receive future commissions of 4% of gross rental payments of all renewal or extension leases, based on the rental rate he negotiated, as well as on any amounts the lessor agrees to pay toward renovation or other improvements[.]"

         On August 5, 2016, the trial court issued a judgment in favor of Mr. Tomlin for $192, 298 for the commissions owed on the renewals or extensions for the following leases: Tullahoma, TN; Springfield, TN; West Nashville, TN; First Amendment to East Nashville, TN; Jasper, AL; Round Rock, TX; and the November 2000 and July 2002 modifications to the original Harrison, N.J. lease. The court ordered that no commissions were owed on the following locations: Gallatin, TN; the second Amendment to East Nashville, TN; Franklin, TN; Austin, TX; and the third Amendment to Harrison NJ. On September 6, 2016, Appellants filed a motion to alter, amend, or vacate the judgment. Also on September 6, 2016, Appellee filed a motion for an award of discretionary ...


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