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Tennessee Farmers Cooperative v. Rains

Court of Appeals of Tennessee, Nashville

July 18, 2019


          Assigned on Briefs April 1, 2019

          Appeal from the Circuit Court for Perry County No. 2015-CV-17 Michael W. Binkley, Judge.

         Defendant in a debt collection case appeals the entry of judgment against him, contending that the court erred in setting the case for trial with only two days' notice, in granting a motion in limine on the day of trial, and in its award of attorney's fees to the Plaintiff. We modify the judgment to reduce the amount of attorney's fees awarded; in all other respects, we affirm the judgment.

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

          Leanne A. Thorne, Lexington, Tennessee, for the appellant, Ted D. Rains.

          John R. Cheadle, Jr., and Mary Barnard Cheadle, Nashville, Tennessee, for the appellee, Tennessee Farmers Cooperative.

          Richard H. Dinkins, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and Arnold B. Goldin, J., joined.



         I. Factual and Procedural History

         This appeal involves an attempt to collect a debt on an open credit account. In June 2001, Ted Rains, doing business as Ag Services ("Defendant"), completed an application for revolving credit and deferred payment with Tennessee Farmers Cooperative, doing business as Co-op Financial Solutions ("Plaintiff"), to purchase goods and products for his business. Over the next 14 years, Ag Services made charges on the account and purchased goods on a cash basis. On December 14, 2015, Plaintiff filed suit against Defendant to recover the balance due on the credit account of $104, 517.41; Plaintiff also sought 1.5 percent interest per month on the outstanding balance and attorney's fees incurred in collecting the account. Defendant answered, admitting that "certain amounts of money are owing to Plaintiff" but disputing the amount alleged in the complaint.

         Plaintiff filed a motion for summary judgment on March 14, 2016, accompanied by a statement of 16 material facts in accordance with Rule 56.03 of the Tennessee Rules of Civil Procedure; Defendant responded, disputing 8 of the statements. On July 11, the court entered an order granting partial summary judgment to Plaintiff, holding that Defendant owed a balance on the account but that the amount owed was a disputed material fact to be determined at trial.

         Plaintiff moved for summary judgment a second time on July 31, 2017, again seeking judgment in the amount of $104, 517.41; the motion was supported by a Rule 56.03 statement of undisputed material facts as well as an affidavit signed by Terry Skelton, Plaintiff's manager, which had been filed with the first summary judgment motion. In response, Defendant filed two affidavits of Mr. Rains and Defendant's responses to Plaintiff's various discovery requests. The court heard the motion on October 10 and entered an order denying the motion on November 14. Pertinent to this appeal, the court held that the case had been pending for two years, that the parties had ample time to complete discovery, and that the case would be tried before the end of the year.

         The parties were unable to agree on a trial date, and on November 21, 2017, the Plaintiff moved to set the case for trial; the court heard the motion on December 18 and set the trial for December 20. On December 19, the Defendant filed a pretrial memorandum, attaching copies of cancelled checks that had been drawn on Defendant's bank account between March 7, 2014, and August 6, 2015. The Defendant asserted in the memorandum that he paid Plaintiff $81, 423.57 that had not been credited to his account. At the December 20 hearing, the Plaintiff moved in limine to exclude the checks on the ground that they had not been produced previously; the court granted the motion, but allowed the Defendant to make the checks a part of the record by offer of proof.

         The court entered an order on March 7, 2018, granting Plaintiff a judgment in the amount of $144, 102.31 for the unpaid invoices and finance charges. On March 12, Plaintiff's counsel filed an affidavit requesting attorney's fees of $50, 000; the court awarded $48, 514.50 by order entered May 15.

         Defendant timely filed a notice of appeal. Defendant argues that the trial court erred in scheduling the trial on two days' notice, in hearing and granting the motion in limine in contravention of the Local Rules of Court, and in granting attorney's fees in the amount of $48, 514.50.

         II. Analysis

         Because this case was tried without a jury, the review of the trial court's factual findings is de novo upon the record, accompanied by a presumption of correctness, unless the preponderance of the evidence is otherwise. Tenn. R. Civ. P. 13 (d). Our review of the trial court's conclusions of law is de novo with no presumption of correctness. Tryon v. Saturn Corp., 254 S.W.3d 321, 327 (Tenn. 2008). Resolution of the appeal also requires that we apply the abuse of discretion standard of review, as set forth in Lee Medical, Inc. v. Beecher:

Discretionary decisions must take the applicable law and relevant facts into account. An abuse of discretion occurs when a court strays beyond the applicable legal standards or when it fails to properly consider the factors customarily used to guide the particular discretionary decision. A court abuses its discretion when it causes an injustice to the party challenging the decision 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.

312 S.W.3d 515, 524 (Tenn. 2010) (internal citations omitted).

         A. Setting of Trial Date

         We first address Defendant's contention that "setting the trial on two (2) days' notice when Local Rule requires at least fifteen (15) days served no judicial purpose, and worked to prejudice the Appellant, who could have produced definitive evidence to support his defense in advance of trial." In response, Plaintiff contends that the trial date was scheduled in accordance with the fifteen (15) day requirement in Rule 7.02 of the Rules of the Circuit and Chancery Courts for the Twenty-First Judicial District.[1]

         Plaintiff filed its motion to set the case for trial on November 27, with a hearing date of December 18; Defendant does not contend that he did not receive a copy of the motion or that he was not aware that the motion would be heard on December 18. The record does not show that Defendant filed a response or objection to the motion, and there is no transcript of the December 18 hearing or a statement of evidence from that hearing showing that Defendant opposed the motion when it was heard; on December 18, the court entered the order setting the case for trial on December 20. The case was set for trial more than fifteen days after the motion to set was filed, consistent with Local Rule 7.02.[2] The trial court did not abuse its discretion in setting the trial for December 20.

         B. The Motion in Limine

         Citing Local Rule 5.01, Defendant argues that the trial court abused its discretion in hearing Plaintiff's motion in limine on the morning of trial; the motion sought to exclude copies of checks from March 7, 2014, to August 6, 2015, from Defendant's business bank account that Defendant intended to offer into evidence.[3] With respect to this motion, the Statement of the Evidence approved by the trial court states:

In granting [Plaintiff's] motion in limine, the Court addressed the fact that [Defendant] had been given multiple opportunities to "put up or shut up." The Court noted that in denying [Plaintiff's] second motion for summary judgment, the Court allowed [Defendant] one last chance to get his proof together. The Court observed that the cancelled checks which [Defendant] only provided on the eve of trial were easily obtainable. [Defendant] should have been motivated to obtain this information since [Defendant] was aware that he was being charged finance charges during the pendency of this case. The Court questioned what it finally would take for someone to defend themselves by getting information that was so easy to obtain. The Court held that the Court had given [Defendant] ...

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