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Philp v. Southeast Enterprises, LLC

Court of Appeals of Tennessee, Nashville

February 9, 2018


          Session June 6, 2017

         Appeal from the Chancery Court for Wilson County No. 2012-CV-403 Charles K. Smith, Chancellor

         The tenant of office building sued the landlord, a limited liability company, and its two owners for various causes of action arising out of his eviction. Following a nine-day trial the court held that the tenant had been wrongfully evicted and his property converted, and awarded the tenant nominal damages of $1.00 for the eviction, $23, 130.00 for conversion of his personal property located in the building, $5, 000.00 in punitive damages, costs of $2, 395.00 and pre-judgment interest of $6, 224.27. The tenant appeals the awards of damages and costs, and contends that interest should be 10 percent rather than the 5.5 percent awarded. The landlord contends that the holding that the tenant was wrongfully evicted should be reversed, that the tenant was not entitled to an award of damages for conversion, and that the individual owners should not be held liable for the damage awards. Upon a thorough review of the record, we modify the award of damages for conversion of the tenant's property and remand the case for the court to award interest from the date the property was converted; we affirm the decision to award punitive damages, vacate the amount of damages, and remand for the court to make specific findings of fact and conclusions of law relative to the appropriate factors and enter judgment accordingly; in all other respects, the judgment is affirmed.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Modified in Part, Vacated in Part and Affirmed in Part; Case Remanded

          P. Robert Philp, Nashville, Tennessee, Pro Se, appellant.

          Dean Robinson, Mt. Juliet, Tennessee, for the appellees, Southeast Enterprises, LLC; Thomas M. Davis, Individually; and Bobby Eastland, Jr., Individually, appellees.

          Richard H. Dinkins, J., delivered the opinion of the court, in which Frank G. Clement, Jr., P. J., M. S., and Andy D. Bennett, J., joined.



         I. Factual and Procedural Background

         On September 28, 2007, Robert Philp ("Plaintiff") entered into a lease agreement for space in an office building which was under construction in Mount Juliet, Tennessee, for the purpose of developing a professional office-services facility. Southeast Enterprises, LLC, was named in the lease as landlord; Thomas Davis and Bobby Eastland, the owners of Southeast, signed the lease as landlords (collectively "Defendants"). The lease agreement was for an initial five-year term, to begin on the date when all construction was completed; rent was to be $11, 038.50 per month. Plaintiff took possession on August 4, 2008, and installed a telecommunications system and decorated the office building with wall art, furniture, kitchen appliances, window blinds, and other office accessories.

         Plaintiff paid the rent for August, September, and October 2008; he failed to pay November 2008 rent on the due date and, after meeting with Defendants, received an extension until November 17. When Plaintiff failed to meet the extended date, Defendants' attorney sent Plaintiff a letter stating that he had to pay November and December rent by November 29, or the lease would terminate, and Defendants would demand that he pay the balance owed through the term of the lease. By December 6, 2008, Defendants had not received payment, whereupon they changed the locks on the doors and posted a notice on the building entrance stating that Plaintiff had been evicted.

         Plaintiff filed suit in Wilson County Chancery Court on January 5, 2009, seeking recovery of his personal property and damages; that case was non-suited on December 13, 2011. Plaintiff filed the instant suit on December 11, 2012, [1] asserting causes of action including breach of contract, conversion, intentional interference with business relations, fraudulent inducement, wrongful eviction, defamation, and intentional and negligent misrepresentation. Defendants answered and counter-claimed for damages for breach of the lease. Following a multitude of procedural and pre-trial motions, a nine-day, non-jury trial was held in May 2016.

         On May 25, 2016, the court made oral findings of fact and conclusions of law, which were incorporated into an order, entered July 5, 2016; following hearings on various post-trial motions, the court entered final judgment on September 13, 2016. The court found in favor of plaintiff on his claims for wrongful eviction, conversion of personal property, and punitive and exemplary damages; the court awarded Plaintiff a total of $36, 750.87 in damages, discretionary costs and prejudgment interest.[2]

         Plaintiff appeals, raising ten issues for resolution. With respect to damages, Plaintiff contends that the awards for wrongful eviction and punitive damages were inadequate; that the court did not award the full measure of allowable damages for conversion; and that the court erred in failing to award damages for fraudulent inducement, promissory fraud, intentional or negligent misrepresentation, detrimental reliance, and gross negligence. The remaining issues asserted by Plaintiff are that the court erred in granting Defendant's motion to remove the case from the jury docket; in not ruling on Plaintiff's claims for breach of the implied covenant of good faith and fair dealing, and tortious interference with business relationships; in not awarding him additional costs; in not awarding pre-judgment interest at a rate of 10%; and in using the incorrect starting date for calculating interest.

         While not raising specific issues for resolution, Defendants contend that the holdings against Defendants for wrongful eviction and conversion of personal property should be reversed. Defendants additionally argue that, should the court uphold the damages award, the individual defendants, Thomas Davis and Bobby Eastland, Jr., should not be held jointly and severally liable with Southeast Enterprises, LLC.

         II. Standard of Review

         Appellate review of non-jury cases is de novo upon the record, accompanied by a presumption of correctness of the trial court's findings unless the evidence preponderates against those findings. See Tenn. R. App. P. 13(d). Conclusions of law, however, are reviewed under a pure de novo standard, according no deference those made by the lower court. Jones v. Garrett, 92 S.W.3d 835, 838 (Tenn. 2002) (citing The Bank/First Citizens Bank v. Citizens & Assocs., 82 S.W.3d 259, 262 (Tenn. 2002)).

         III. Analysis

         A. Jury Trial

         Neither the complaint Plaintiff filed in December 2012 nor the amendment to the complaint he filed in July 2013 contained a jury demand. Plaintiff argues on appeal, as he did in the trial court, that a Notice of Jury Demand he filed on November 10, 2015, complied with the applicable rules. We disagree.

         We review a trial court's decision to deny a jury trial for an abuse of discretion. Caudill v. Mrs. Grissom's Salads, Inc., 541 S.W.2d 101, 105 (Tenn. 1976). An abuse of discretion occurs if a trial court causes an injustice to a party by "(1) applying an incorrect legal standard, (2) reaching an illogical or unreasonable decision, or (3) basing its decision on a clearly erroneous assessment of the evidence." Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010). "The abuse of discretion standard of review envisions a less rigorous review of the lower court's decision and a decreased likelihood that the decision will be reversed on appeal." Id. (citing Beard v. Bd. of Prof'l Responsibility, 288 S.W.3d 838, 860 (Tenn. 2009); State ex rel. Jones v. Looper, 86 S.W.3d 189, 193 (Tenn. Ct. App. 2000)). This standard of review "does not, however, immunize a lower court's decision from any meaningful appellate scrutiny." Lee Med., 312 S.W.3d at 524 (citing Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 211 (Tenn. Ct. App. 2002)).

         The right of trial by jury is a constitutional right. Tenn. Const. Art. I, § 6. The right in civil cases is not self-enforcing, rather "[a] party who desires a jury trial must file and serve a timely demand for a jury in accordance with Tenn. R. Civ. P. 38.02."[3] Nagarajan v. Terry, 151 S.W.3d 166, 174 (Tenn. Ct. App. 2003). "Parties who fail to comply with [Rule] 38 have not properly requested a jury trial and will be deemed to have waived their right to a jury trial. Id. (citing Tenn. R. Civ. P. 38.05; Gribble v. Buckner, 730 S.W.2d 630, 633 (Tenn. Ct. App. 1986).

         In his brief, Plaintiff states that "Plaintiff had timely filed the Notice of Jury Demand within 15 days of pleading (his Rule 7.02 Motion) raising a question of fact, as required by Tennessee Rule of Civil Procedure 38.02." Rule 7.02, however, only instructs that "[a]n application to the court for an order shall be by motion. . . ."; it is not a motion per se. In his brief, Plaintiff does not name or cite to a specific motion which he contends complies with either Rule 7.01 or Rule 38.02. In our review of the record, the only motion which was filed within 15 days prior to the Notice of Jury Demand was a motion filed on October 26, 2015, in which Plaintiff sought to enforce an order entered on August 29, 2014, requiring Defendants to return some of Plaintiff's personal property to him, for monetary sanctions, and for civil contempt; Plaintiff did not request or demand a jury in the motion. The motion was heard on November 3, and the court entered an order on November 23 granting the Plaintiff relief; the court reserved the monetary sanctions and civil contempt for trial.[4] Plaintiff filed another motion on November 23 seeking to enforce the ruling of November 3; this motion included the words "Jury Demand" in the caption.

         We also note from the record that the case had been set pursuant to Defendants' motion by order entered September 21, 2015. Plaintiff opposed the motion, citing inter alia, the anticipated large number of witnesses and suggesting that a two week trial would be appropriate; he made no mention of a jury. As suggested in Plaintiff's response, the court set aside two weeks for trial.

         On February 29, 2016, the court entered an order setting a pre-trial conference for the first day of trial "following jury selection and empanelment." Defendants filed their motion to remove the case from the jury docket on April 5; the order granting Defendants' motion was entered April 18. In the order granting the motion the court ruled:

That Plaintiff had originally made a proper jury demand in his verified complaint in his previous case filed January 5, 2009, and bearing Docket No. 09003, but a Voluntary Dismissal of that case was filed on December 7, 2011, and the Order dismissing the original case was filed on December 13, 2011.
That Plaintiff failed to demand a jury in the TRCP 7.01 pleadings in the present case, and the only jury demand filed by Plaintiff was a Notice of Jury (12) Demand filed on November 10, 2015.
That on November 23, 2015, Plaintiff filed Motions To Enforce Injunction For Return Of Personal Property, For Monetary Sanctions, And For Civil Contempt in the present case with Jury Demand (12) noted on the motions but those motion are not TRCP 7.01 pleadings, and even if construed as supplemental pleadings, Plaintiff would not be entitled to a jury trial pursuant to the authority of Hardeman County Bank v. Stallings, 917 S.W.2d 695 (1995).
That pursuant to TRCP 38.02 Plaintiff has failed to make a proper demand for a jury trial in this case.

         Neither the motion nor the Notice of Jury Demand is a pleading identified in Rule 7.01; consequently, Plaintiff did not satisfy the requirement of Rule 38.02.

         Plaintiff also argues that the Defendants have been "on notice" of a jury trial from the jury demand which was included in the complaint in the case filed in 2009. His argument in this regard is unavailing; the 2009 case was voluntarily dismissed. The entry of the order approving Plaintiff's voluntary dismissal meant that "the case [was], for all intents and purposes, over." Barnett v. Elite Sports Med., No. M2010-00619-COA-R3-CV, 2010 WL 5289669, at *2 (Tenn. Ct. App. Dec. 17, 2010). "If the action is refiled, it proceeds as a new action." Id. The case currently before the court was filed in 2012 and has proceeded as a new action; Plaintiff did not include a jury demand in the appropriate pleadings in this case. The court did not err in granting Defendant's motion to try the case on the non-jury docket.[5]

         B. Damages

         The standard of review we employ for damage awards in non-jury cases was set forth in Memphis Light, Gas & Water Div. v. Starkey:

In the appeal of a damages award, the appellate review of "[w]hether the trial court has utilized the proper measure of damages is a question of law that we review de novo." Beaty v. McGraw, 15 S.W.3d 819, 829 (Tenn. Ct. App. 1988); see also Taylor v. Fezell, 158 S.W.3d 352, 357 (Tenn. 2005). The amount of damages awarded, however, is a question of fact so long as the amount awarded is within the limits set by the law. Beaty, 15 S.W.3d at 829. Thus, in a non-jury case such as this, we review the amount of damages awarded by the trial court with a presumption of correctness, unless the preponderance of the evidence demonstrates otherwise. See Tenn. R. App. P. 13(d); Beaty, 15 S.W.3d at 829 (citing Armstrong v. Hickman County Highway Dep't, 743 S.W.2d 189, 195 (Tenn. Ct. App. 1987)). Great weight is given to factual findings that are based on the trial court's assessment of witness credibility. Smith v. Smith, 93 S.W.3d 871, 875 (Tenn. Ct. App. 2002). This is because the "trial judge as the trier of fact had the opportunity to observe the manner and demeanor of all of the witnesses as they testified from the witness stand." Whitaker v. Whitaker, 957 S.W.2d 834, 837 (Tenn. Ct. App. 1997); McCaleb v. Saturn Corp., 910 S.W.2d 412, 415 (Tenn. 1995).

244 S.W.3d 344, 352-53 (Tenn. Ct. App. 2007).

         1. Award For Wrongful Eviction

         Plaintiff argues that the award of $1.00 for wrongful eviction is inadequate because the eviction caused Plaintiff's business to shut down. Defendants contend that the holding that Defendants wrongfully evicted Plaintiff should be reversed because Plaintiff breached the lease agreement by not paying rent. Inasmuch as liability is a prerequisite to an award of damages, we address Defendant's contention first.

         In the Findings of Fact and Conclusions of Law, the trial court included the following paragraphs, which are pertinent to this claim:

32. So on December 6, 2008, Defendants posted a notice at the building site stating that Mr. Philp had been evicted, and they changed the locks on the door and locked him out, and stating that any tenants were to communicate with them.
** *
37. Plaintiff's position is that the method of eviction was illegal and improper and that none of his statutory and constitutional rights of notice or a day in court were provided. Defendants just came in and changed the locks, and Plaintiff thought that was illegal and improper.
** *
48. The commencement date for the lease was August of 2008. The Court finds that Plaintiff breached the contract by not paying his rent timely for the months of November and December, and the Court finds that Defendants had a right to terminate the lease. However, the Court finds that the method of termination was wrong. The Court finds that it was a wrongful eviction.

          Defendants do not contest the court's findings; citing rights available to them under paragraph 14 of the lease, [6] they argue that they "elected to meet the dilemma by pursuing a common-sense self-help approach to the serious problem created by Plaintiff's default." Upon our review, paragraph 14 does not allow the action Defendants pursued in this case of bypassing legal process, changing the locks on the door and locking Plaintiff out. We agree with the trial court's holding that Defendants' actions constituted wrongful eviction.

         Plaintiff has failed to cite in his brief any evidence or authority to support his claim that the damage award for wrongful eviction was inadequate; the only citations are to the Findings and Conclusions and the Final Judgment.[7] Plaintiff's proof of damages for this claim consisted primarily of the testimony of Mr. Don Cunningham.[8] With respect to the award of $1.00 for damages for wrongful eviction, the court held:

The Court gives nominal damages of $1 under the tort claim for damages. Plaintiff did not prove any damages for the tort claim of wrongful eviction. The Court did not accept Mr. Cunningham's (Plaintiff's expert's) opinion.

         As the trier of fact, the trial court's assessment of witness credibility is given great weight. Memphis Light, Gas & Water Div., 244 S.W.3d at 353 (Tenn. Ct. App. 2007); Whitaker v. Whitaker, 957 S.W.2d 834, 837 (Tenn. Ct. App. 1997) (holding the "trial judge as the trier of fact had the opportunity to observe the manner and demeanor of all of the witnesses as they testified from the witness stand"). The trial court stated it did not accept Plaintiff's expert's opinion. The court also noted Plaintiff's expert testified that the crash of the economy in 2008 was a contributing factor to the failure of Plaintiff's business. Moreover, Plaintiff has failed in his brief to specify the amount and nature of the damages sought for wrongful eviction. We afford the trial court's assessment of Mr. Cunningham's witness credibility great weight and, in the absence of any evidence to the contrary, affirm the award of $1.00 for wrongful eviction.

         2. Award For Conversion of Personal Property

         The trial court awarded $23, 130.00 to Plaintiff for Defendants' conversion of his personal property, which Plaintiff contends is inadequate. Although Defendants have not assigned specific error to the holding that they converted Plaintiff's personal property, in our discretion we address the sufficiency of the evidence to support the award. See Tennessee Rule of Appellate Procedure 13(b).

         Defendants contend that the holding that Defendants converted Plaintiff's personal property should be reversed because an Order entered prior to trial resolved the issue of the return of Plaintiff's personal property. Defendants also contend that they could have pursued their remedy under paragraph 16 of the Lease, which provided that if the tenant attempts to remove personal property from the building without having first paid the landlord all monies due, the landlord has the right to store or dispose of any of the tenant's personal property in the building, but that they "allowed their actions to be controlled by the Court during the proceedings."

         In the Findings of Fact and Conclusions of Law, the trial court included the following paragraphs pertinent to its holding that Defendants converted Plaintiff's property:

32. So on December 6, 2008, Defendants posted a notice at the building site stating that Mr. Philp had been evicted, and they changed the locks on the door and locked him out, and stating that any tenants were to communicate with them. * * *
34. By locking Plaintiff out, Defendants maintained possession of all of Plaintiff's property inside the building. While Plaintiff had possession of the property, it was referred to as Providence Business Center; after he was locked out, the building was referred to as Brookside Landing.
35. Trial Exhibit No. 129 is a list of all of Plaintiff's property that was locked inside the building when they changed the locks and converted his property. * * *
53. Defendants did commit conversion of Plaintiff's personalty. Trial Exhibit No. 160 was the Plaintiffs testimony as to the value of those items that were not returned and that are still in Defendants' building. Plaintiff sent a letter to Defendants telling them that he had items of property in the building and to secure them. Plaintiffs position is that his damages for conversion are the cost of his investment, rather than present-day value. Defendants have nothing to contradict this.[9]

         Defendants do not contest the findings or cite to evidence which they contends preponderates against it; they cite to an order entered on November 30, 2015, and argue that all issues of the return of Plaintiff's personal property were resolved. This argument is without merit. The order was entered on motions filed by Plaintiff to enforce an earlier judgment for the return of personal property, for sanctions, and for civil contempt; the order acknowledges that Plaintiff's property is still in the building and orders that Defendants should return certain items of Plaintiff's personal property. . . ." The order concludes by stating:

3. That the dispute and legal issue of the status of any other personal property that is attached to the building shall be resolved upon the trial of this cause.
4. That the issues of monetary sanctions and civil contempt should be reserved for trial.

         There is no indication in the order that it was intended to, or did, address Plaintiff's claim of conversion, and Defendants fail to cite any evidence in support of their argument that the order "finally resolv[ed] all issues related to Plaintiff's pursuit [of the return of his business property]."

         In like fashion Defendants' argument they could have pursued remedies under paragraph 16 of the lease but, rather, "allowed their actions to be controlled by the Court during the proceedings" is unavailing. Paragraph 16, entitled "Abandonment, " states:

If Tenant removes or attempts to remove personal property from the Property other than in the usual course of occupancy, without having first paid Landlord all monies due, the Property may be considered abandoned, and Landlord shall have the right, without notice, to store or dispose of any personal property remaining on the Property after the termination of this Lease. Any such personal property shall become Landlord's personal property.

         Defendant does not explain the manner by which this paragraph precludes a determination that Plaintiff's property was converted under the circumstances presented in this case, and we fail to discern such, particularly where, as here, the court found that Defendants bypassed legal process and changed the locks on the door.

Conversion has been defined as:
[T]he appropriation of another's property to one's own use and benefit, by the exercise of dominion over the property, in defiance of the owner's right to the property. A cause of action for conversion occurs when the alleged wrongdoer exercises dominion over the funds in "defiance of the owner's rights."

Ralston v. Hobbs, 306 S.W.3d 213, 221 (Tenn. Ct. App. 2009) (citations omitted; emphasis added in original).

         Defendants' actions of wrongfully evicting Plaintiff from the property allowed them to exercise dominion and maintain control over Plaintiff's personal property. Accordingly, we affirm the holding that Defendants converted Plaintiff's property and proceed to address the amount of the award of damages.

         The pertinent Findings of Fact and Conclusions of Law regarding damages for conversion were as follows[10]:

45. Plaintiff testified as to the value of the property that Defendants failed to return; however, the Court notes that this exceeded the value placed on the same items in his sworn bankruptcy petition. * * *
60. The Court is awarding damages for these items because there was a wrongful eviction and conversion of Plaintiffs property. There is nothing to indicate that Mr. Philp was lying and seemed to be supported in terms of the items listed in the bankruptcy petition, which was mostly synonymous with the items listed in Trial Exhibit No. 160 and also listed in Trial Exhibit No. 30, where Plaintiff had to list all of his property. This is some penalty for the improper method of removing a tenant. The Court is not awarding the cost of renewing the bond for the property.
61. The Court is awarding Plaintiff the total amount of the items listed against Defendants. Conversion is merely the assumption or control of property that is inconsistent with the rights of ownership. Conversion consists of use and enjoyment of personal property of another without the owner's consent. Defendants testified that they did use the blinds and various items of furniture and equipment, etc. Conversion allows for recovery of all injuries sustained as a natural and proximate result of Defendants' wrongdoing. Defendants are relieved of the obligation of returning these items, since they are ordered to pay for them.
62. The Court has awarded Plaintiff full value for the items that were converted and not returned. The Court is sorry Plaintiff lost his watercolor painting that was given on behalf of his father. The Court knows this is emotional ...

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