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Perdue v. Kneedler

Court of Appeals of Tennessee, Nashville

September 17, 2019

BILLY PERDUE ET AL.
v.
GREG KNEEDLER ET AL.

          Session August 13, 2019

          Appeal from the Chancery Court for Sumner County No. 2015-CV-82 Louis W. Oliver, Chancellor

         This 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.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded

          Jason S. Mangrum, Brentwood, Tennessee, for the appellant, Michael Arthur, and Under the Sun Natural Foods [1].

          William Joseph Butler, Lafayette, Tennessee, for the appellees, Billy Perdue, and Jeremy Hammonds.

          Arnold B. Goldin, J., delivered the opinion of the Court, in which J. Steven Stafford, P.J., W.S., and Carma Dennis McGee, J., joined.

          OPINION

          ARNOLD B. GOLDIN, JUDGE

         Background and Procedural History

         On July 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")[2]. 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.

         At 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.[3]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).

         On 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.[4] 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 appealed.[5]

         Issues Presented

         As we 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 ...

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