TWB ARCHITECTS, INC.
THE BRAXTON, LLC, ET AL.
Session November 8, 2017
from the Chancery Court for Cheatham County No. 14181 David
D. Wolfe, Chancellor No. M2017-00423-COA-R3-CV
the second appeal in a dispute over enforcement of a
mechanic's lien. An architect entered into an architect
agreement with the developer to build a condominium project
in Ashland City, Tennessee. The architect later entered into
a purchase agreement with the successor developer to receive
a penthouse as "consideration of design fees owed"
on the first contract. The architect never received payment
for its work and filed suit against the successor developer
and its surety to enforce its mechanic's lien for the
amount owed under the architect agreement. The trial court
held that the purchase agreement was a novation,
extinguishing the rights and obligations of the parties under
the architect agreement. In the first appeal, this Court
found a lack of intent for a novation and, therefore,
reversed the decision of the trial court and remanded the
case for further proceedings. On remand, after additional
discovery, the architect moved for summary judgment on its
claim. The trial court granted summary judgment in favor of
the architect. In this appeal, the developer argues that the
trial court erred in granting summary judgment on its defense
of novation and multiple other defenses. We affirm the
decision of the trial court.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
William Randall O'Bryan, Jr., and Kevin Clayton Baltz,
Nashville, Tennessee, for the appellants, Fidelity and
Deposit Company of Maryland and The Braxton, LLC.
N. Capparella and Timothy W. Burrow, Nashville, Tennessee,
for the appellee, TWB Architects, Inc.
D. Bennett, J., delivered the opinion of the Court, in which
Frank G. Clement, Jr., P.J., M.S., and Richard H. Dinkins,
D. BENNETT, JUDGE
and Procedural Background
underlying facts in this case are summarized in our previous
On February 17, 2005, Progress Capital Partners, LLC
(“Progress Capital") and TWB Architects, Inc.
(ATWB") entered into a contract entitled
AAIADocument B151-1997, Abbreviated Standard
Form of Agreement Between Owner and Architect"
(hereinafter “Architect Agreement") for TWB to
provide architectural and design services for a mid-rise
condominium project in Ashland City known as “The
Braxton." The Architect Agreement was signed by John
Rankin, Chief Manager of Progress Capital, and by Timothy
Burrow, President of TWB. The fifteen-page Architect
Agreement outlined, inter alia, the architect's
responsibilities, the scope of the services, the owner's
responsibilities, and the terms of compensation. Pursuant to
the Architect Agreement, TWB would be paid a fee of two
percent of construction costs or, if the project was not
constructed, TWB would be paid by the hour, plus expenses.
On February 9, 2006, The Braxton, LLC was formed with Mr.
Rankin as its Chief Manager. On February 16, 2006, Mr. Burrow
and The Braxton, LLC entered into a contract entitled
“Agreement for Sale of Residence the Braxton
Condominiums at Harpeth Shoals" (hereinafter
“Purchase Agreement"). In the Purchase Agreement,
The Braxton, LLC agreed to sell Mr. Burrow Penthouse P6 in
the Braxton Condominiums for A$0 in consideration of design
fees owed in the Contract for architectural design between
Progress Capital Partners, LLC and TWB Architects, Inc. dated
2/17/05." The Purchase Agreement was signed by Mr.
Burrow individually and by Mr. Rankin on behalf of The
Braxton, LLC. Construction began on the project in the summer
of 2006, and the condominiums were built according to the
architectural plans drawn by TWB. As construction progressed,
Mr. Burrow invested $39, 343.84 of his own money in upgrades
to Penthouse P6.
On January 8, 2007, Charles Elcan became a member of The
Braxton, LLC. On September 26, 2008, Mr. Rankin surrendered
his membership interest in The Braxton, LLC leaving Mr. Elcan
as the only member. On October 28, 2008, Mr. Rankin filed a
voluntary petition for Chapter 7 bankruptcy. Thereafter, Mr.
Burrow requested that The Braxton, LLC convey Penthouse P6 to
him. The Braxton, LLC filed a Notice of Completion of the
project on December 5, 2008 stating that the A[d]ate of
completion of the improvement" was “October 21,
2008." In December 2008, Mr. Burrow moved into the
In early 2009, TWB learned that the penthouse was encumbered
by a security interest held by Bank of America and that The
Braxton, LLC was unable to transfer it to Mr. Burrow free and
clear of the encumbrance. On May 8, 2009, the Chancery Court
of Davidson County gave a receiver the right of possession to
every condominium at the Braxton. Mr. Burrow moved out of the
penthouse in late 2009.
It is undisputed that The Braxton, LLC never deeded the
penthouse condominium to Mr. Burrow or paid anything to TWB
for its architectural services. On February 26, 2009, TWB
filed a mechanic's lien in the Register of Deeds Office
for Cheatham County. The Notice of Lien Claim stated:
Timothy W. Burrow, being first duly sworn, says that TWB
Architects, Inc., the Lien Claimant, performed certain work
or labor in furtherance of improvements to the real property
herein described, in pursuance of certain contract with
Owners, which owes Lien Claimant $882, 526.14 (which is over
and above all legal setoffs), for which amount Lien Claimant
claims a lien under T.C.A. '' 66-11-101, et
seq. on the real property.
On March 11, 2009, TWB filed a Complaint for Foreclosure of
Mechanic's Lien against The Braxton, LLC. The
complaint alleged a single cause of action to enforce its
mechanic's lien and sought to Abe awarded a judgment for
the amount stated in its Notice of Lien Claim . . . ."
On May 6, 2009, The Braxton, LLC filed a counterclaim and
argued that the Purchase Agreement served as a novation of
the Architect Agreement, extinguishing TWB's right to
assert any claims or remedies arising under the Architect
The Braxton, LLC filed a motion for summary judgment on
January 4, 2013, asserting that the Purchase Agreement
replaced or extinguished the Architect Agreement. On April
19, 2013, TWB filed its own motion for summary judgment. TWB
argued that it earned the two percent fee contemplated in the
Architect Agreement because The Braxton, LLC used the
architectural plans designed by TWB and failed to pay TWB as
required under the contract.
On July 11, 2013, the trial court held a hearing on the
motion, and by order entered November 18, 2014, the trial
court granted The Braxton, LLC's motion for summary
judgment. The court made the following pertinent findings:
(3) At the time of the Architect Agreement and the Purchase
Agreement, [Progress Capital], The Braxton and John Rankin
were in privity with and alter-egos of one another.
Similarly, TWB and Mr. Burrow were in privity with and
alter-egos of one another; . . .
(5) When interpreting the Purchase Agreement, the Court must
determine the intentions of the parties from the four corners
of the agreement, interpreting and enforcing it as written;
(6) The parol evidence rule restricts the Court from
considering prior oral agreement and/or communications that
contradict the unambiguous language of the Purchase
(7) If the language is unambiguous, the contract must be
interpreted as written, and the words expressing the parties=
intentions should be given the usual, natural, and ordinary
(8) The Purchase Agreement is clear and unambiguous;
(9) The Purchase Agreement expressly referenced the Architect
(10) The undisputed facts show that the Architect Agreement
had become unworkable and a substitute agreement was
necessary for the project to continue;
(11) The Purchase Agreement was entered into by the parties
to salvage a contract that was soon to be breached;
(12)At the time the Purchase Agreement was executed, the
parties were aware that [Progress Capital] could not pay the
architect fees owed under the Architect Agreement in cash;
(13) Accordingly, the Purchase Agreement was unquestionably a
novation, which was substituted for the Architect Agreement
and, under Tennessee law, extinguished all rights,
responsibilities and obligations of the parties under the
. . . .
Accordingly, as a result of these undisputed, material facts,
TWB has no rights under the Architect Agreement, and
therefore its Complaint, as amended, to Enforce a
Mechanic's Lien must be dismissed with prejudice.
Furthermore, in light of the foregoing findings, TWB's
motion for summary judgment seeking relief under the
Architect Agreement must be denied.
TWB Architects, Inc. v. The Braxton, LLC, No.
M2013-02740-COA-R3-CV, 2014 WL 5502401, at *1-3 (Tenn. Ct.
App. Oct. 30, 2014) (some footnotes omitted).
appealed from the trial court's grant of The
Braxton's motion for summary judgment. As will
be discussed more fully below, this Court found a lack of
intent for a novation, reversed the trial court's
decision, and remanded for further proceedings. Id.
remand, in April 2015, The Braxton filed amended answers
asserting additional affirmative defenses, including waiver,
merger, the parole evidence rule, substitution, fraud,
failure to perform, estoppel, detrimental reliance, unclean
hands, willful and gross exaggeration of the lien claim
amount, payment on the claim, and failure to join an
indispensable party. On March 1, 2016, after the parties had
engaged in additional discovery, TWB filed a motion for
summary judgment asserting that it was entitled to the
dismissal of The Braxton's affirmative defenses as a
matter of law. In support of this motion, TWB submitted a
statement of undisputed material facts and numerous exhibits,
including the following:
• Affidavit of Timothy Burrow dated April 19, 2013, with
• Excerpt of deposition of Charles Elcan dated August
• Affidavit of Timothy Burrow dated July 3, 2013, with
• Affidavit of John Rankin dated June 11, 2009, with
• Excerpts of deposition of John Rankin dated November
• Affidavit of Timothy Burrow dated February 22, 2016
• Affidavit of Timothy Burrow dated July 8, 2013
• Excerpt of deposition of Timothy Burrow dated November
Braxton opposed TWB's motion for summary judgment
asserting that there were material issues of fact in dispute.
According to The Braxton, novation was a question for the
jury because it was dependent upon the parties' intent.
It made a similar argument regarding the defenses of
substituted performance, waiver, estoppel, unclean hands,
exaggeration of the lien claim, and failure to join an
indispensable party. The
denied many of TWB's statements of material fact and
submitted voluminous exhibits, including the following:
• Deposition transcript of John Rankin dated March 23,
• Affidavit of Charles Elcan dated February 9, 2010
• Deposition transcript of Timothy Burrow dated November
• Deposition transcript of Timothy Burrow (as Tenn. R.
Civ. P. 30.02(6) corporate representative) dated October 19,
• Deposition transcript of John Rankin dated November
• Deposition transcript of Timothy Burrow dated November
• Affidavit Number 3 of Timothy Burrow dated October 2,
• Affidavit Number 2 of Timothy Burrow dated September
submitted a reply to The Braxton's response to its motion
for summary judgment reasserting its argument that The
Braxton could not meet its burden to establish the
affirmative defense of novation or any of the other
affirmative defenses claimed. In conjunction with its reply,
TWB submitted the July 3, 2016 affidavit of Mr. Burrow.
trial court held a hearing on TWB's motion for summary
judgment on July 8, 2016, and entered a memorandum opinion
including findings of fact and conclusions of law on
September 13, 2016. (We will summarize the trial court's
findings and conclusions as relevant to our discussion
below.) In its memorandum opinion, the trial court found that
there were no genuine issues of material fact as to any of
the defenses raised and that TWB's motion for summary
judgment should be granted. In an order entered on October
20, 2016, the trial court granted summary judgment in favor
of TWB and entered judgment "for the lien claimed in the
amount of $882, 526.14 against The Braxton, LLC and against
Fidelity and Deposit ...