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Pickens v. Underwood

Court of Appeals of Tennessee, Knoxville

June 12, 2018


          Session April 19, 2018

          Appeal from the Circuit Court for Blount County No. L-17937 David Reed Duggan, Judge

         This appeal arises from a dispute over a construction contract between Clayton Pickens ("Pickens"), a general contractor, and John R. Underwood ("Underwood") and his wife Suzanne Curtin ("the Underwoods, " collectively).[1] Pickens sued Underwood initially in Chancery Court but later transferred to the Circuit Court for Blount County ("the Trial Court") for allegedly failing to pay him under a contract to build the Underwoods' home. Underwood filed counterclaims against Pickens alleging, among other things, fraud, cost overruns, violation of the Tennessee Consumer Protection Act, and entering into a construction contract in excess of the monetary limit on Pickens' contractor's license. This case was tried before a jury. The jury found the Underwoods breached the construction contract and awarded Pickens $147, 340.25. The jury also found that Pickens breached the contract through certain errors in construction and awarded the Underwoods $10, 740.00. The Trial Court entered its final judgment affirming the jury's verdict and awards of damages. The Underwoods appeal, arguing in part that Pickens should have been limited to his actual documented expenses because he entered the construction contract in excess of his contractor's license limit. We hold, inter alia, that under the law in effect at the time of the execution of the contract, Pickens was not limited in damages to his actual documented expenses. We affirm the judgment of the Trial Court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed;

         Case Remanded

          James S. MacDonald, Knoxville, Tennessee, for the appellants, John R. Underwood and Suzanne Curtin.

          J. William Coley and Bart C. Williams, Knoxville, Tennessee, for the appellees, Clayton Pickens and Jama Pickens.

          Brad A. Fraser and J. Matt Drake, Knoxville, Tennessee, for the appellees, Danny Miller, individually and d/b/a Miller's Appliances Sales and Service/HVAC, Inc. a/k/a Miller's Heating & Air, Inc.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which John W. McClarty and Thomas R. Frierson, II., JJ., joined.




         The Underwoods entered into a $572, 000 contract with Clayton Pickens on June 2, 2008 for the construction of a home on 25 acres of land. Pickens subcontracted Miller's Heating & Air, Inc. to install the HVAC system. On May 9, 2009, the final bill which totaled $679, 314.94 was presented by Pickens to Underwood. The construction contract provided that "[i]f proposed construction or under construction, it is understood that any additions or changes not included in the plans and specifications are to be agreed upon between the contracting parties and are to be confirmed in writing as the work progresses." Underwood objected to Pickens' figure and declined to pay him the amount he claimed was owed. On July 21, 2009, Pickens sued Underwood in Blount County Chancery Court, alleging breach of contract, unjust enrichment, promissory fraud and mechanics' and materialmens' lien. Underwood, meanwhile, learned that the monetary limit of Pickens' contractors' license at the time he signed the contract was $350, 000.

         Underwood filed an answer and counterclaim seeking a jury trial. A hearing was conducted by a Special Master in the case in February 2012. Counsel for Pickens stipulated at that stage that Pickens was an unlicensed contractor limited in damages to actual documented expenses. This case then was transferred to the Trial Court. In November 2012, Pickens filed several third party complaints against certain subcontractors. Pickens sued Suzanne Curtin in a separate complaint. All of these various cases were consolidated for trial.

         In April 2014, the Trial Court entered an order, contrary to counsel for Pickens' earlier stipulation, in which it determined Clayton Pickens was a licensed contractor, stating in part: "Clayton Pickens is hereby determined to be a licensed contractor for purposes of the Tennessee Contractor's Licensing Act of 1994 Tenn. Code Ann. §62-6-101, et seq. during the time period in question in this lawsuit even though the monetary limit of his license may have been less than the sum of the contract to construct the house of John R. Underwood." In May 2017, this case was tried before a jury.

         Several evidentiary rulings made by the Trial Court gave rise to a number of the issues the Underwoods raise on appeal. First, upon Miller's motion the Trial Court barred Gary Cobble ("Cobble"), an architect, from testifying for the Underwoods regarding alleged defects in the HVAC system. Cobble, articulating the basis of his views, stated in his deposition, in part:

Q. What was the reason for having Chancey & Reynolds [HVAC technicians] come out to the property?
A. Earlier I testified that when you have humidity problems inside a home or a building, it oftentimes is because - I don't want to say oftentimes - sometimes it's because the units are too large and they don't run long enough to pull all the moisture out of the building. Well, that's why I met Steve initially, Steve Chancey, so he could run the Manual J load letter on the home. The two pieces of equipment are sized properly, according to the Manual J letter. So the next step is, is the equipment installed correctly and cycling correctly, coming on and off correctly. And Ronnie Brock did those tests on February 1, and they are. So by process of elimination, we concluded that something in the zoning, in the configuration of the duct work was just off, somehow wrong, or just not functioning properly. So rather than redesigning the duct work, tearing it all out and trying to reconfigure it, the easiest solution to the problem was to add dehumidifiers, which ultimately was done.
Q. Is it fair to say that you relied on Chancey & Reynolds' expertise in HVAC systems to form the basis of your opinions, then?
A. Yes.
Q. You're saying you're not a licensed HVAC repairman.
A. No.
Q. You're not certified.
A. No. That's why I had to go to Chancey & Reynolds and hire them to do this work.
Q. Have you provided opinions in prior cases on HVAC issues?
A. Yes.
Q. Can you tell me which cases, or is that something you'd have to look at records?
A. Off the top of my head, I can't think of any, but oftentimes I have to look at the HVAC system, not very often, but along that line, humidity control, I've been involved with a lack of humidity control, I've been involved with many times over my career.
Q. And I'd like to narrow that down to lack of humidity control that, according to you, is caused by the HVAC system, or more specifically, the zoning. Have you dealt with that in prior cases or have you testified in prior cases concerning lack of humidity control by the HVAC system? A. Lack of humidity control, yes. Zoning, no. And I can't think of any specific cases. There hasn't been many times, but I'm just very familiar, with the line of work I do and being in construction for so many years, I've seen what lack of humidity control can do . . . .
Q. Now, he does mention here that there's no bypass damper on the zoning unit, and the owner may want to add one. Is that right?
A. It does say that. I don't recall that, but it does say that, no bypass damper.
Q. But he also mentions that wasn't creating any problems, correct?
A. That is correct.
Q. So is it fair to say, based on your testimony and based on this invoice that I have here, that the system was appropriate, the selection of the system was appropriate, and the only issue was the zoning of the central area of the house, correct?
A. That's what it boiled down to. And by process of elimination, that's where we landed.
Q. What is your understanding of the zoning of the central area of the house?
A. That somehow the zoning or lack of zoning or improper design of the duct work and zoning was not allowing the units to pull the humidity out of the central part of the house.
Q. You're talking to somebody that doesn't do HVAC work, and I don't think anyone else in here does, but tell me what zoning is.
A. In simple terms, a small, one-level house has one air-conditioning unit and one thermostat. It has one zone. If you put a second story on that house and put a separate air-conditioning system for the upstairs, you've got two zones. So every thermostat controls a zone. This house has three thermostats with two units. In my example that I gave you, you've got two systems with one thermostat each and two zones. This one is more complicated because you've got three thermostats and only two units, so it's split. It's got dampers in it to divert the conditioned air into different spaces. So that's where we finally concluded there's some kind of problem in the zoning, the way the thermostats and the configuration of the duct work was made up, and dampers. But the easiest way to solve the problem was just to add dehumidification, because that's really all we were after, anyway. We didn't have issues with rooms being cold in the winter, rooms being hot in the summer, that sort of thing. It was just we needed humidity control in the central part of the house.
Q. You said a couple of times that "we" reached that conclusion, so was it also Steve Chancey and Ronnie Brock's opinion that the central portion of the house was not zoned properly?
A. Well, I don't think Ronnie Brock so much, because he's a technical guy. Steve and I spoke about it later, and I don't want to put words into Steve's mouth, either, but ultimately, with talking with Steve and Ronnie, that was my decision or my analysis of the problem, that there's something going on with the zoning, because that's all that was left of the whole system. We knew the thermostats were working properly. They were sized properly. The equipment's operating properly except for a couple of little small items that Ronnie notes. That's all that's left to create the lack of humidity control.
Q. And that's basically just by process of elimination you got to that.
A. Exactly, by process of elimination, we got to that conclusion.
Chancey and Brock submitted affidavits stating that they had not rendered the opinions attributed to them. The Trial Court excluded Cobble's testimony as to the HVAC system.
In addition, the Trial Court overruled the Underwoods' motion in limine seeking to bar the testimony of appraiser Fred Metz ("Metz"). Metz testified regarding the quality of the construction and whether any alleged defects resulted in a diminution of value. The Underwoods contend that this testimony was irrelevant and prejudicial. Metz, opining on numerous aspects of the house, testified in part as follows:
Q. And, okay. Mr. Metz, in addition, did you, did you inspect an area in the master shower?
A. I did.
Q. What was your understanding of the complaint?
A. The complaint was that the water did not drain out of the master ...

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