Session: June 4, 2019
from the Chancery Court for Davidson County No. 17-805-III
Ellen Hobbs Lyle, Chancellor
appeal arises from a dispute over an unorthodox, two-page
contract pursuant to which the plaintiff sold his home to the
defendant and continued to reside in the home, in accordance
with a lease-back provision, for "up to five years"
with rent "not to exceed $950 a month." The
contract also included provisions for "equity
participation," including the option for the plaintiff
to buy the property back "at prevailing market
value." The plaintiff filed a complaint asserting,
inter alia, claims for violations of the Tennessee
Consumer Protection Act, quiet title, and breach of contract.
The defendant answered and asserted counterclaims, inter
alia, for breach of contract and to remove the plaintiff
from the property. Following a trial, the trial court
dismissed the complaint upon the principal findings that the
plaintiff lacked credibility and was the first to materially
breach the contract. The trial court also ruled that the
defendant owned the property and was entitled to immediate
possession but denied the defendant's claim to recover
his attorney's fees. Both parties appeal. We affirm the
dismissal of all of the plaintiff's claims and the trial
court's determination that the defendant owned the
property and was entitled to immediate possession. As for the
attorney's fees, we hold that the defendant was entitled
to recover his reasonable attorney's fees based on
Section 6 of the contract which provides that in the event
suit is filed to enforce the contract, "the prevailing
party shall be entitled to recover all cost of such
enforcement including reasonable attorney's fees as
approved by the Court."
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Affirmed in part, Reversed in part and
H. Johnston, Nashville, Tennessee, for the appellant, Gerald
Christopher B. Fowler, and Thomas V. White, Nashville,
Tennessee, for the appellee, Waddell Wright, individually and
d/b/a W. Wright & Co., LLC.
G. Clement Jr., P.J., M.S., delivered the opinion of the
Court, in which D. Michael Swiney, C.J., and Richard H.
Dinkins, J., joined.
G. CLEMENT JR., P.J., M.S.
years Gerald Brown ("Plaintiff") owned and resided
on real property located at 913 Lawrence Avenue in the 12th
South/Waverly Belmont neighborhood in Nashville (the
"Lawrence Avenue Property"). In 2013, Plaintiff got
behind on his mortgage payments and, in August 2016,
foreclosure proceedings began.
Wright ("Defendant") is a real estate developer who
buys, renovates, leases, and resells properties. After
Defendant saw a local publication of pending foreclosure
properties, including the Lawrence Avenue Property, he wrote
a letter to Plaintiff offering to purchase the property.
Defendant identified himself as a real estate professional in
the business of assisting property owners during the
foreclosure process and encouraged Plaintiff to waste no time
before reaching out. In response, Plaintiff called Defendant
and began to negotiate the sale of the property to halt
November 28, 2016, Plaintiff and Defendant signed a two-page
sales contract selling the Lawrence Avenue Property to
Defendant for $146, 000, which was to be paid to the mortgage
company to release the lien on the property, plus a cash
payment of $10, 000 to Plaintiff at closing, an "equity
participation" in the future sale of the property, and
additional payment of $50, 000 "on or before the end of
the 5yr lease period" or earlier if the parties agreed.
The most relevant contractual provisions are set forth in
Sections 6 through 9 of the contract, which read:
6. Default. Should Purchaser default at any time in the
performance of this Agreement, Seller shall retain any
Earnest Money paid as total and complete liquidated damages
and Purchaser shall have no further obligation to the Seller.
Should Seller default at any time in the performance of this
Agreement, any Earnest Money paid to Seller shall be returned
to the Purchaser and Purchaser shall have the right to sue
the Seller for specific performance and any other actions
permitted by law, including reasonable attorney's fees,
arising from said breach. In the event that either party
hereto shall file a law suite [sic] to enforce this
Agreement, the prevailing party shall be entitled to recover
all cost of such enforcement including reasonable
attorney's fees as approved by the Court.
7. Possession. On or before 60 months after day of deed.
8. Seller Lease Back. Seller to lease back the property for
up to 5 years after settlement date. Seller and purchaser
will agree to enter into a lease agreement not to exceed
$950.00 per month.
9. Equity Participation. Gerald Brown Sr. will receive $10,
000 at closing and $50, 000 on or before the end of the 5yr
lease period or if both parties agree to a sooner date. Or
Gerald Brown Sr. can purchase the property back from
purchaser at prevailing market value at the end of the 5-year
term. Gerald Brown Sr. will have to pay back any and all
funds purchaser advanced plus a return no less than 25%.
After that purchaser and seller at 50/50 partners.
sale closed on December 12, 2016, at which time Defendant
paid off the mortgage of approximately $146, 000 and remitted
a cash payment to Plaintiff of an additional $10, 000
pursuant to Section 9 of the sales contract. Additionally,
and as the "Equity Participation" provision
required, Defendant placed $50, 000 in an escrow account.
remained on the property as contemplated by the lease-back
provision in the contract. Three days after the closing,
Defendant delivered a proposed lease agreement to Plaintiff
for the Lawrence Avenue Property but received no response.
Defendant subsequently delivered two additional lease
proposals, still without a response from Plaintiff.
Nevertheless, Plaintiff has remitted a rent payment of $950
to Defendant each month since the closing, which Defendant
accepted, but the parties never executed a written lease
months following the closing, Plaintiff asked Defendant to
remodel the Lawrence Avenue Property so that Plaintiff's
daughter, Ms. Marion Bowers, could live there as well.
Because the Lawrence Avenue Property was located in a design
overlay district that mandated the preservation of the
historical appearances of the structures, Defendant
determined that an addition or remodel was not financially
Defendant offered another property, a duplex located on Kings
Lane in Nashville (the "Kings Lane Property") as an
alternative so that Plaintiff and his daughter could live
next door to one another. Plaintiff and his daughter
expressed interest in moving to the properties on Kings Lane
and met Defendant at the properties to view them. Believing
they had an agreement, Defendant remodeled the Kings Lane
duplex. Although Ms. Bowers moved to the Kings Lane Property,
Plaintiff did not.
interim, on March 9, 2017, in reliance on Plaintiff's
assurances that he intended to move to the Kings Lane
Property, Defendant signed a contract to sell the Lawrence
Avenue Property for $450, 000 to Province Builders, LLC, and
the parties closed on April 14, 2017. The sales contract
expressly stated that "title shall be marketable, free
and clear of all leasehold interest," and that Province
Builders would be entitled to possession three months after
the date of closing.
after the closing, Defendant informed Plaintiff of the sale
and that he would have to relocate by the end of July
2017. Plaintiff refused to move from the
property on Lawrence Avenue and repeatedly refused to sign
any of the lease agreements Defendant presented for either
the Kings Lane or Lawrence Avenue Properties. Between the
original sale of the Lawrence Avenue Property on December 12,
2016, until the end of July 2017, Defendant delivered several
different lease proposals, some for the Lawrence Avenue
Property and some for the Kings Lane Property, and without
any substantive reason from Plaintiff as to why, none were
26, 2017, Plaintiff asked Province Builders to honor the
five-year lease provided in the sales contract between
Plaintiff and Defendant; Province Builders did not respond.
Defendant then offered the $50, 000 to Plaintiff if he would
relocate, but Plaintiff refused the money as he desired to
remain in possession of the Lawrence Avenue Property.
August 1, 2017, Plaintiff filed the complaint against
Defendant and Province Builders, asserting claims for
violation of the Tennessee Consumer Protection Act (the
"TCPA"), commercial fraud, quiet title, and breach
of contract. Plaintiff alleged that Defendant violated the
TCPA by "misrepresenting to Plaintiff that he had an
enforceable five (5) year leasehold interest in the Lawrence
Property." He claimed Defendant perpetrated an unfair or
deceptive business act on a consumer over the age of 60 by
drafting an illusory contract, knowing Plaintiff did not
understand his rights and remedies under the contract.
Plaintiff also alleged that Defendant breached the contract
because he "did not execute a separate five (5) year
lease buy back agreement with Plaintiff as part of the
consideration required by the contract."
later amended his complaint to add a claim for specific
performance to enforce the five-year lease agreement he had
for the Lawrence Avenue Property and requested the court
direct Defendant to interplead the $50, 000 being held in
escrow as "a buyout of Plaintiff's five (5) year
leasehold interest in 913 Lawrence Avenue" pending the
final disposition of the case.
September 22, 2017, Defendant filed an answer and
counter-complaint against Plaintiff asserting claims for (1)
breach of contract; (2) promissory estoppel; and (3)
declaratory judgment. Defendant later amended the
counter-complaint to include a claim for (4) forcible entry
and detainer to remove Plaintiff from the Lawrence Avenue
Property. Defendant alleged that Plaintiff breached the
contract by refusing to sign any lease agreement with
Defendant. Defendant claimed he reasonably relied upon
representations that Plaintiff would move to the Kings Lane
Property. Additionally, Defendant prayed for a declaratory
judgment to determine the meaning, validity, and
enforceability of the terms within the contract, that the
$50, 000 in escrow be returned to Defendant, and that
Plaintiff specifically perform the contract. The
counter-complaint asked the court to declare that Defendant
was the legal owner and entitled to possession of the
property. Defendant also sought damages for the loss he
suffered after repurchasing the home from Province Builders
as well as his attorney's fees pursuant to Section 6 of
the sales contract.
interim, on September 18, 2017, Defendant repurchased the
Lawrence Avenue Property from Province Builders for $460,
200, and the parties subsequently entered into an agreed
order dismissing Province Builders as a co-defendant.
two-day bench trial was held May 22-23, 2018. In its final
order entered on July 13, 2019, the trial court found that
Plaintiff's testimony lacked credibility because
Plaintiff was evasive in his answers and was repeatedly
The proof established that the Plaintiff is nearly 80 years
old with medical issues of a pacemaker and diabetes.
Nevertheless, he is mentally alert and sharp and demonstrated
keen understanding and intelligence. The proof established
that the Plaintiff was not misled or deceived, nor was he a
The Court finds that the Defendant performed the Contract by:
paying the mortgage, paying judgments recorded against the
Lawrence Property, paying the Plaintiff $10, 000, and
delivering a lease to the Plaintiff three days after the
The Court finds that the Plaintiff was the first to breach by
not responding to the lease that was delivered either by
executing it or providing modifications.
The facts and the evidence did establish . . . that the
Plaintiff led the Defendant along that the Plaintiff was
interested in the Kings Lane property when the Plaintiff knew
he was not. This deception combined with the Plaintiff's
first and continuing breach of refusal to execute a lease on
the Lawrence Property deprive and preclude the Plaintiff from
recovery of the $50, 000 on deposit in the registry of the
Court, and the Clerk and Master shall disburse the $50, 000
to the Defendant.
trial court also held that Plaintiff's possessory
interest and Plaintiff's entitlement to the $50, 000 were
conditioned on the ...