BILLY PERDUE ET AL.
GREG KNEEDLER ET AL.
Session August 13, 2019
from the Chancery Court for Sumner County No. 2015-CV-82
Louis W. Oliver, Chancellor
appeal involves a breach of a lease agreement. At trial, both
defendants, operators of a natural foods business, admitted
that the lease had been breached. However, because only one
of the Defendants had signed the lease, the other argued that
he was not a party to and was therefore not responsible for
the obligations of the lease. The Defendant who had signed
the lease claimed he did so on behalf of and at the direction
of the other. Finding that both Defendants had combined their
efforts, skills, knowledge, and money for the purpose of
operating the business, the trial court concluded on several
bases that the Defendants were jointly liable for the
obligations of the lease. Only the non-signing Defendant
appeals. Because we agree with the trial court that the
Defendants had formed a joint venture and, thus, were jointly
liable, we affirm.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Affirmed and Remanded
S. Mangrum, Brentwood, Tennessee, for the appellant, Michael
Arthur, and Under the Sun Natural Foods .
William Joseph Butler, Lafayette, Tennessee, for the
appellees, Billy Perdue, and Jeremy Hammonds.
B. Goldin, J., delivered the opinion of the Court, in which
J. Steven Stafford, P.J., W.S., and Carma Dennis McGee, J.,
B. GOLDIN, JUDGE
and Procedural History
14, 2014, Billy Perdue and Jeremy Hammonds (together,
"Plaintiffs"), as lessors, entered into a lease
agreement (the "Lease") in which they leased their
property at 123B Fairfield Road in Sumner County, Tennessee
(the "Property") to Greg Kneedler and Michael
Arthur. The Property was to serve as a regional distribution
center and store outlet for Under the Sun Natural Foods
("Under the Sun"). The Lease was for a term of four
years, from August 1, 2014 to July 31, 2018. Additionally, as
a condition of the Lease, Plaintiffs were required to make
over $30, 000 in improvements to the Property. Payments were
made under the Lease until February 2015, at which point
payments ceased. Plaintiffs, on May 21, 2015, filed a
complaint against Messrs. Kneedler and Arthur and Under the
Sun (together, "Defendants") in the Sumner County
Chancery Court (the "trial court"). Plaintiffs
sought $69, 600.00 for all past and future unpaid rent and
$30, 000 for the amount they spent in improving the Property
to meet the needs of the Defendants, totaling $99, 600.
Plaintiffs also sought their attorney's fees, which were
provided for in the Lease.
trial, Defendants stipulated that the Lease had been breached
and submitted that the only issue for the trial court to
determine was who was responsible for the
breach.According to Plaintiffs, Defendants were
jointly and severally liable. Defendants, however, denied any
personal liability. Mr. Kneedler asserted that he had signed
the Lease on behalf of Mr. Arthur and Under the Sun, while
Mr. Arthur contended that neither he nor Under the Sun was a
named party to or signed the Lease and that Mr. Kneedler had
not signed it in any representative capacity. Additionally,
Mr. Arthur raised the Statute of Frauds as a defense pursuant
to Tennessee Code Annotated section 29-12-101(a).
March 23, 2018, the trial court entered its final order,
concluding that Messrs. Kneedler and Arthur were individually
and jointly liable to Plaintiffs in the sum of $49, 950.00
under the doctrines of joint venture, implied partnership,
agency, and partial performance. Additionally, the trial
court concluded that the doctrine of partial performance
served as an exception to the Statute of Frauds to the extent
that Mr. Arthur raised it as a defense to liability under the
Lease. Mr. Arthur (hereinafter, "Appellant") timely
perceive it, Appellant raises five issues for review, which
we rephrase as follows:
1. Whether the trial court erred in finding that Appellant
and Mr. Kneedler were engaged in a joint venture, permitting
a finding of liability on behalf of Appellant.
2. Whether the trial court erred in finding that Appellant
and Mr. Kneedler formed a partnership, permitting a finding
of liability on behalf of Appellant.
3. Whether the trial court erred in finding that Mr. Kneedler
signed the Lease in a representative capacity, thus
permitting a finding of liability on behalf of Appellant
under an agency theory.
4. Whether the trial court erred in finding that Appellant
partially performed under the Lease and thus permitted ...