U.S. Supreme Court Tenn. Supreme Court

6th Circuit Court of Appeals

District Court Circuit / Chancery Court

General Sessions

Tennessee-dual trial level system

1. Circuit Court - by statute the two courts have concurrent 2. Chancery - jurisdiction, except that the circuit court has exclusive jurisdiction of tort cases ("unliquidated damages"). So, tort cases can not be tried in Chancery court over an objection. So, if the defendant fails to move to dismiss or object to the court then the Chancery court can try a tort case.

General Sessions - tries cases up to $10,000. If you lose in General Sessions (no jury trials) then you have an automatic appeal to Chancery court. "De novo" trial on appeal. The monetary cap is gone.

Court of Appeals - court of last resort in our state as a practical matter.

Tenn. Supreme Court - petition the court for an application for permission to appeal.

Chancery Court - jury trials allowed by statute but by and large they are not requested. Business type deals and state matters.

Circuit Court - deals with wrecks.

Probate court - part of Chancery Court

Statutes of limitations and repose limitations are limits on remedies. An obvious limitation on remedies is a statute of limitations. Another is a contractual limitation that you have agreed to. For example, insurance contracts. You can contractually limit the four year statute of limitations on the sale of goods to one year. Title 28 of the Tenn. Code Ann. covers statutes of limitations.

Statutes of Limitations:

A. 6 months - slander (when it occurs), bulk sales act-selling all inventory and fixtures, etc. Buyer is required to notify the general creditors of the seller (unsecured creditors). If you don't then creditors come after the buyers.

B. 1 year - 1. personal injury (even with Worker's Comp.) 2. wrongful death 3. medical malpractice 4. legal malpractice 5. accountant malpractice 6. libel (when you know about it) 7. malicious prosecution 8. false imprisonment 9. consumer protection act 10. sometimes federal civil rights actions - borrows states statutes of limitations 11. breach of a fiduciary duty (comes with a three year statute of repose).

Carrell v. Bottoms - when does the statute start running? When the malpractice is so bad that nothing can be done to correct it - an irremedial act. Carrell allows that statute to start running after an irremedial act has been committed and the client finds out about it.

C. 3 years - property damage, economic loss, conversion or detention, usury

D. 4 years - UCC sale of goods

E. 6 years - contracts generally (real estate, etc.), Detainer actions (thrown out of apartment)

F. 10 years - Demand note - payable on demand, runs from date of execution of the note. Judgments-renew every 91/2 years. Catchall-if no other statute fits then this is the default statute.

What if it is a combination? Personal Injury (1 year statute) and Breach of Warranty (Sale of goods) (4 year statute)

Gravamen-the gist of the cause of action. These situations come up also in construction cases- Property Damage v. Breach of Contract

When in doubt you can count on the court going with the shortest time.

McCroskey v. Bryant Air Condition - 524 SW2d 487

If you plead your case in warranty then you get the benefit of the longer statute - 4 years from the date of purchase v. 1 year personal injury statute.

Statutes of Repose:

The cause of action itself evaporates once the statute has run.

1. 3 year statute of repose for doctors

2. Products Liability - sometimes a 1 year statute of repose if you have a product that has a government expiration date (usually 10 years) Silicone - 25 years. Private airplanes - 18 year federal statute.

3. Construction lawsuits - improvements to real estate. The suit must be brought within 4 years after substantial completion of the project.

*Many states have stricken their statutes of repose -- TN upholds them under the theory that the legislators at least had a rational basis. (Ex. a Dr. could not get medical malpractice insurance)

4. Consumer Protection Act - 4 year statute of repose starts at the time of the deceitful act.

*If you nonsuit then you can come back in under the savings statute, T.C.A. § 28-1-105, as long as the dismissal was not on the merits. One year to recommence the suit. You get two free nonsuits.

*Don't use the nonsuit if you are suing the government under the Govt. Tort Liability Act because the savings statute doesn't apply.

Federal Civil Rights Cases- statute creates the cause of action.

Don't nonsuit! The savings statute won't apply.

X X . . . . X . . . . X . . . . X

File suit 1 yr. Nonsuit 1 yr. 2 yrs. later

statute Order Savings Another nonsuit

You only get 1 year savings period once. Must do it all within one year which is not likely to happen. The one year runs from the entry of the Order of Nonsuit. You can take two nonsuits but the third filing of the suit must be within one year of the date of the 1st nonsuit.

p. 13 Orloff

P wasn't allowed in Turf Club. Wanted an injunction as relief. Court allowed it even though it wasn't specifically in the statutes.

Hodges v. S.C. Toof and Co.

Hodges was called to jury duty. The Co. didn't like this and Hodges was demoted. TN has employment at will doctrine. P said that violated public policy--the P wasn't satisfied with statutory remedy. Jury agreed and awarded $200,000. Court held that the statutory remedy was not exclusive and allowed the P to rely upon tort remedies.

Previous opinion on savings statute (Bruce v. Hamilton) said that it is fatal to take a nonsuit when the statute of repose has run. However, the Tenn. Supreme Court reversed this decision in Cronin v. Howe, 20 T.A.M. 37-3. You may now safely take a nonsuit even though the statue of repose has run. The savings statute and the Med. Malpractice Act can be construed together. As long as you file your suit w/in the limitations period and the statute of repose period then you can go ahead and take a nonsuit.

Statutes of Repose and minors - cases say the minor can sue w/in one year of becoming 18. Braden v. Yoder, 592 S.W.2d 896.

The Code has a general tolling statute for minors.

Products Liability Act - allows actions to be brought w/in one year of reaching 18. T.C.A. § 29-28-103.

Construction Statute of Repose-repose period is four years after substantial completion. Provision in the statute that if you're injured during the 4th year then you have an extra year. Pigg v. Barge-Waggoner -case was over the design defect of a swimming pool. You don't get the benefit of the tolling statute for minors if the injury occurs after the 4 year statute of repose in the construction statute.

Worker's Compensation claims - statute will give rise to more retaliatory discharge actions. T.C.A. § 50-1-304: 1. if you blow the whistle on your employer's illegal (both criminal and civil illegal activity) and you're subsequently fired then you have a cause of action; 2. if you refuse to participate in illegal activity and you're fired then you also have a cause of action.

Corporate law - one year statute of limitations when suing a corporate officer for breach of a fiduciary duty. Repose statute also covers breach of a fiduciary duty. Repose period is three years from the date of the fiduciary duty.

Tennessee - handled in the court system rather than administratively. No tort action! Limited remedy. Non-jury cases.

The Code sets out various monetary remedies for each type of injury.

T.C.A. § 50-2-103 et seq. covers only work-related issues:

1. Permanent total disability

2. Permanent partial disability

3. Temporary partial disability

There's a difference b/w medical and occupational injuries:

1. Medical -AMA guide. The injury carries a 5% disability. Payments are made up until 65 years of age.

2. Occupational - vocational rehabilitation. Experts try to convince the court that the occupational disability is more than the medical disability. Payments are based on 2/3 of your average weekly wage.

"Multipliers" - general principle is that the occupational disability is capped at 2 1/2 times the medical disability. Unless, certain exceptions exist: If the person has no transferable job skills then the cap doesn't apply. If the person has no meaningful return to work for 7-8 years then the person can return to court and the 2 1/2 multiplier doesn't apply --it becomes a 6% cap.

*Multiplier caps only apply to the body as a whole.

Schedule members - disability only to the left arm

"Commutation to a lump sum" - do you want the client, the worker, to get at least part of the payment as a lump sum? Must show that it's in the client's best interest and the person won't waste it. Statute limits the atty's fee to 20% but you can get some of the atty's fees out of the lump sum.

Appeal - technically straight up to the Tenn. Supreme Court, but the Tenn. Supreme Court has set up a Worker's Compensation panel (2 retired justices and 1 sitting justice) who decide the case on review.

Note: the trial judge determines the occupational disability based upon the proof.

20 T.A.M. 29-5

20 T.A.M. 23-5 Bailey case

*Note: You must furnish a copy of any unreported cases to the opposing counsel and to the judge. Check to see what if any action the Tenn. Supreme Court has taken on the case and the date--write that information on the front of the case. Ex. For the Pigg case you would write on the front "no appl. perm. app." meaning no application for permission to appeal has been filed.

*p. 16, Note 3, Note 4 - Tenn. has abolished a cause of action for alienation of affections and criminal conversations.

p. 18 - Cowin Equipment

The court said that a franchisee can not cancel an order for heavy equipment. Can't ask for a recision of the order. The doctrine of unconscionability doesn't give you a tort cause of action. (Plaintiffs shouldn't rely on it.)

p. 19 - Title VII - 42 USC § 1981(a) - In 1991, Title VII was amended to give us a right to a jury trial and a right to damage remedies (but there are some caps -- the limit varies w/ the size of the employer):

Big employer (over 500 workers) - $300,000 cap

small employer (at least 15 workers) - $50,000 cap

Expert fees and atty's fees are recoverable since 1964. The Hudson case is being appealed to the 6th Circuit b/c the jury handled the case prior to 1991 amendments and the judge decided the case after 1991. Paine asks, "Can you legitimately argue that it's a $300, 000 cap per count?"

42 USC 1221 et seq. It ties in to Title VII b/c it sets out what constitutes discrimination to a disabled person. Then it sets out damages, reinstatement, back pay, atty.'s fees, expert fees.

State statutes-1. Tenn. Human Rights Act, § 4-21-301 et seq.

2. Tenn. Handicapped Discrimination Act, § 8-5-103

p. 20 Norris-LaGaurdia Act

Example of how sometimes by statute there's simply no remedy. Federal judges have no power to grant an injunction in this case.

p.21 Treister

Court says we won't give you the remedy of an injunction b/c you haven't shown "economic necessity" What happens to a doctor who isn't admitted to certain hospitals? Remedy sought= antitrust violation. Treble damages = multiply the jury's award by three.

p. 26 Pulliam

1983 case. Judge was requiring bail bonds of all claimants. Split opinion holds that judges are absolutely immune from injunctions, but you may get an injunction to prevent future injustices.

p. 30

1. Jury trial consequences -depending upon the remedy you seek you may or may not want a jury

2. Insurance coverage

3. Method of enforcement

p.31 Maryland Casualty

Suit to clean up environmental waste (injunctive relief) and to reimburse prior clean-ups. The insurance company did not want to pay for the injunctive relief awarded against its insured. Court says that the insurance policy only covers damages which do not include reimbursement of prior clean-up costs and injunctive relief for future clean-up costs. "Pollution exclusion" clause - almost every policy has such a clause.

One of the consequences of how you term your remedy is that you might not have insurance coverage.

p. 36, Note 3 -Bankruptcy issue- once the bankruptcy is filed then creditors must stay away. (The 6th Circuit is contra to this case from the 3rd circuit) U.S. v. Whizco, 841 F.2d 147 (6th Circuit).

p. 37 Brunecz

*No damage remedies then no jury trial in Ohio. This decision is contra to Tenn. law - we do allow plain old compensatory damages

Sasser v. Averitt Express, 17 T.A.M. at 217

The principle is that back pay (equitable remedy) or reinstatement should be decided by the jury.

p.39, Note 3 - jury trials in Title VII cases

Chancery court - principle is to right those wrongs where there's no common law cause of action.

Recall the two court systems in Tennessee today --by statute, either court can take any kind of case. But wreck cases and tort cases are not justiciable in Chancery court over an objection.

p.40 Criteria for Equity Jurisdiction -what must we show the Chancellor to get equity relief:

1. inadequacy of legal remedies - no common law remedy is adequate

2. irreparable harm

3. relative hardships -"balancing the equities"

4. practicality -would an injunction be practical?

5. public interest

6. tribunal integrity

p.41 Thurston

Damage to drive-in-theater. Should we let the P get equitable relief? Law court relief would be inadequate because of the repetition of the harm. Relief=past harm damages and an injunction will be issued for the future.

p.44 Wheelock

Noncontractual license to put rocks on a lot. Boulders are there. Affirmative injunction to make them take away the rocks rather than a refraining injunction.

Likelihood of repeated trespasses in the future satisfies the requirement that the legal remedy be inadequate. Coal v. Dych, 535 S.W.2d 315 (Tenn.)

*If you want to get equitable relief then argue hard inadequacy of legal remedy and irreparable harm.

p. 47 Compute-a-call, Inc.

Debt-you get a judgment at law then you execute on the property of the debtor. No equitable remedy given here b/c no irreparable harm is shown or inadequacy of legal remedy.

p.47 1. Equity jurisdiction -the term simply means the propriety of granting equitable relief.

p.48 K-Mart

Because of a mistake the builders followed plans which had been rejected. Other stores were being built right in front of the K-Mart. Court finds irreparable harm. Too difficult to speculate on the damages --what's the price of goodwill and irresistible impulse to shop b/c you can't see the sign?

p. 50 Muehlman

Lots of noise from diesel engines being charged. Judge carves out an equitable remedy--he tells them not to fire up the engine until 7:00 a.m. The irreparable harm = sleep deprivation.

p. 52, Note 1 - Compare the adequacies

Hasty, 641 SW2d 741, case on "covenants not to compete." A covenant not to compete is a restraint on trade.

Tenn.- yes, but if they're reasonable then they're valid. If they're legitimately reasonable then they're okay. Are there legitimate business reasons for them? I.e. trade secret cases

Central Adjustment Bureau v. Ingram

Problem - many times the covenant is not signed as a condition to employment. If you sign it as a condition to employment then there's consideration. No consideration for post-employment signing.

Court - keeping the person on the job is construed as a consideration substitute.

*Covenants not to compete must be reasonable as to the length of time that they run and the geographical limits.

Note: the Tenn. Chancellor has the power to revamp an unreasonable covenant.

p. 54 Triplett

Easement around an island. Causeway is built. To get a judge to "take a view" then videotape the location. Result= build a bridge where a boat can go under it.

p. 58 Galella v. Onassis

Balancing the privacy interest and the security interest v. the photographer's commercial interest and free speech interest.

Result=the court sets boundaries; the photographer must be 25 yds. away from the kids.

p. 62 Contempt of court - if you violate an injunction then you are haled into court for contempt.

p. 63 Rainbow Family

The U.S. is trying to shut down these people because it costs so much to clean up after them. Judge's decision = limited injunction as to health and sanitation. The point of this case is to show the conflict between a public interest and freedom of speech.

Adequate legal remedy=criminal sanctions

Note: the general proposition is that you don't enjoin crimes. Will the criminal sanctions be adequate? How many people will you have to enjoin?

p. 68 Boomer

Public interest in keeping the plant open because of jobs. Damage fines are sufficient - an injunction is not necessary.

See Note 4 on p. 72

See Note 2 on p. 74 - Welton case - If you build your 20 story building with the knowledge that there's a pending appeal of your victory in the trial court on the variance then you might lose on appeal. Court -- tear it down and build it right.

The court says, "I enjoin you to execute a deed (or take some other personal action)"

Factors in deciding whether to order specific performance:

1. Inadequacy of the legal remedy?

2. Will the P also perform?

3. Can the D perform if ordered to do so?

4. Balancing the equities

Entitlement:

1. Land and buildings by their nature are easy to get specific performance

2. Rarely get specific performance with services -- constitutional objection to ordering someone to perform services. But you can enjoin someone not to perform services. Ex. Covenant not to compete

*Mutuality of Remedies - Mutuality of Obligation

p. 79 Cost-Benefit Analysis

p.77 Walgreen Co.

"Exclusivity" clause in the lease -- the co. wants to be sure there's no other drug stores in the shopping center.

Walgreens asks the court to make the landlord kick out the other drug store. Court - injunctive remedy is the best relief; damage remedies are too difficult to assess.

p. 82 Van Wagner

Real estate lease - specific performance case

Result = the court leaves tenant to the tenant's damage remedies for breach of lease because they are found to be adequate.

p. 85 #1. Contracts for sale of land are proper for specific performance. Bush, 598 SW2d 777, the court has the power to judicially transfer the property because Ms. Caffee promised to sell the house.

#2. What if there's a 2nd contract with a 3rd party?

The general rule is to make the seller sell the house to the purchaser as promised.

Hudson v. Hardware Store, 666 SW2d 51

Predominate Factor Test-in cases where you have some services and some goods then look to see what is the predominate factor.

a. What law do we apply to the contract if it's predominately services? The common law

b. What law to the contract for sale of goods? The UCC

*You apply the applicable law to the entire contract.

p.86 Niagara

Services contract with a termination clause. You have to go to court to enforce the termination clause by specific performance. The goods also are supposed to be turned over under the termination clause.

Replevin - recovery of personal property. Argument that there's an adequate legal remedy.

Risk of multiplicity of lawsuits

Security agreement - what happens?

Risk of self-help

Thumbnail sketch of replevin doctrine and enforcement of security agreements under T.C.A. § 29-30-101 et seq.:

1. Petition or civil warrant (filed in General Sessions court) - Sworn pleading to persuade the court that there's a need for possession prior to the hearing.

2. Bond executed to cover the value of the property

3. Fiat signed by the judge

4. Judge gives the person a writ of repossession - enables the sheriff to take the property

5. The court must make provision for an expedited, prompt hearing

*General Sessions Court - usually limited to $10,000 but in replevin cases there's unlimited jurisdiction!

What happens if property is already destroyed? There's an alternative monetary remedy but it's limited to $25, 000.

p. 89 Henderson

"quasi specific performance" because one party is dead. People only perform care for 18 days but they still get the house

No Mutuality of Remedies - we don't grant specific performance to one party unless (if the case is reversed) we can grant specific performance to the other party.

Court says to view the contract at the time the complaint for specific performance was filed. Then there's no problem because we're not ordering someone to do personal services in violation of the 13th amendment.

*We can't order someone to perform personal services under the 13th Amendment!

Ledgeers v. Deloch - 140 Tenn. 259

Security Land Co. v. Touliatos - 716 SW2d 918 (most recent case)

721 at 250

Buyer and Seller in real estate deal. The problem is that the Seller only has the title to 2/3 of the land. Mutuality of Remedies argument from the Seller's side - an example of the defense of mutuality of remedies at work. . . .

Seller says to the judge, "I should not be commanded to turn over 2/3 of the property for 2/3 of the purchase price b/c under the Mutuality of Remedies doctrine I would not have the same remedy. . . you would not force the Buyer to take 2/3 of the land for 2/3 of the price."

Waters v. Holloway - similar case, 6 T.A.M. 47-3

"Perm. app. denied" goes on the front of your pleading. Denied C.R.O. (Concurring with the Result Only) with the date

No Mutuality of Remedies problem here because once the Buyer files suit he's tendering his own specific performance - thus, you never reach the specific performance question.

Can a Seller get specific performance of a buy-sell land contract? There's no rule against it. The Seller can ask the court to make the Buyer perform the sale. However, the damage remedy is adequate more often than not.

Quine - 597 SW2d 728

The Sellers are asking for specific performance to make the Buyers go ahead and buy the weird house (weird style and financing is difficult).

Court says that the damage remedy is not adequate (breach of contract) because it's too difficult to find somebody else to buy the house. The result is that specific performance is granted.

p. 96 Dover Shopping Center

p. 100 Wooster

Specific performance for a contract to buy a tv tower. Option to buy in the lease. Buyer says, "We're only leasing the tv tower right now so you can't force us to buy it."

Two types of land sales:

1. Sale of land by the acre

2. Sale of land in gross

Example - Paine says to sell me Lot #18 for $30,000 containing 2 acres. Caselaw says it's a sale in gross because the purchase price is for the whole parcel of land. Paine offers to sell me 2 acres of land for $15,000/acre then it's a sale by the acre.

Faithful v. Gardener, 799 SW2d 232

Sale in gross but it turned out that after the land was purchased and Buyer surveys it the land only contained 1 and 3/4 acres. No refund if it's a sale in gross. If it was a sale by the acre then you can get a refund.

Note: if the discrepancy is so great as to "shock the conscience of the court" then you might get a refund"

Specific performance-this remedy is usually acquired with real estate, but it does not normally exist where the dispute is over personal property. The remedy is also difficult to get for goods. Why? Goods are usually not unique.

Exceptions:

1. Exception to the general rule for "unique goods"

2. "Other proper circumstances"

p.112 Kaiser

Part of the Code says that you can get specific performance under "other proper circumstances"

p. 114 Ace Equipment

Case shows other proper circumstances. Paine says it's a questionable example.

p.117 Equitable defenses raised by the defendant in equity.

Equitable maxims-he or she who comes to equity must come with clean hands.

1. Equity will not let a wrong go unremedied

2.Equity regards substance rather than form

3. Equity follows the law

4. One who comes in to equity must come with clean hands

5. Equity aids the vigilant and not those who sleep on their rights

*The defendant raises the burden of proof, but it must be pleaded. Prove by including the facts.

Rule 8 - list of affirmative defenses. Review the list when drafting your answer.

Laches = equitable defense

p. 119 Cornetta

Lawsuit after the statute of limitations had run. Some cases where the P's claim of Equity will fail because of laches and not the statute of limitations. The statute may be 6 years but the case fails after 5 years.

p. 121 Court will consider:

1. How much delay?

2. Was the D prejudiced by the delay?

p. 121 Soldiers' and Sailors' Civil Relief Act - it essentially puts everything on hold. It tolls the statute of limitations while the P is in the armed forces. No case addressing what the Act does to statutes of repose. Cornetta v. U.S. - case where the Sailor's Act gave the guy some more time on the statute of limitations.

p. 123 Gruca

Court finds that the delay was inexcusable and the Defendant was prejudiced by it, thus, the claim was denied/dismissed under the theory of laches.

John P. Swad & Sons v. Nashville Thermal Transfer - 715 SW 2d 41

Waste oil used to heat hotels. Bad waste oil (goods) delivered.

Initial installment delivery did not conform to the contract, so nothing was delivered for about 5 years. John P. Swad files a suit within the statute of limitations but the court found that it was barred under the theory of laches. Prejudice was that the old records were lost or destroyed.

p. 126 Vanhorn

The U.S. sues a doctor saying it wants its scholarship money back. Under the statute, the U.S. is entitled to treble damages. Judge directed a verdict for the government. Generally, you do not get the defense of estoppel when the plaintiff is a government entity.

p. 129 Beacom v. EEOC

Lawyer closes his private practice to go to work for the EEOC. The court held that the govt. was estopped from raising the defense that there was no formal approval of his application.

Tenn. Board v. Eyear Corp. - 400 SW 2d 734

Faulkner

Doctoral dissertation case. Court says that they knew or should have known that no faculty member had the authority to tell them to plagiarize, so they were estopped from raising that defense.

*Can you use estoppel as a plaintiff to prevent a defendant from raising a particular defense? Yes. See John R. v. Oakland Unified School

p. 130 Young man was threatened with dire consequences for blowing the whistle on the abusive teacher

Baliles v. City Service Co. - 578 SW 2d 621

Baliles got an assignment from lot owner, so he could build his house. Statute of frauds under sale of real estate statute. Part performance exception to the real estate statute of frauds but Tenn. has never recognized the part performance exception to real estate statute. The statute says there's no fraud if there's part performance. Court says it's not fair to prevent Baliles from building his house. Court says to the company, "You are estopped from raising the defense of fraud."

p. 133 Senter - doctor decides to fraudulently convey property to his nurse to keep it out of his creditors hands. Doctor claims that she was holding the property in a constructive trust. Court says we don't provide relief to people with unclean hands.

Best - 773 SW 2d 260 (Tenn.)

p. 134 Byron v. Clay - Judge says that this guy doesn't want to work. The case was decided on the doctrine of unclean hands.

p. 137 The College Star's Secret - Ole Miss football player. Court says to the first team who formed the contract that the contract violates the NCAA rules so it's unenforceable.

p. 137 North Pacific Lumber Co.

*The unclean conduct must directly relate to the subject of the lawsuit. The Lumber Co. has unclean hands and moreover the uncleanliness directly relates to the employment relationship which is the subject of the lawsuit.

Hypothetical of divorce litigation. Statutory cause of action but it's considered equitable in nature. Can we possibly deny a person a divorce because they have such incredibly unclean hands? Important for alimony purposes. Rehabilitative alimony. Sometimes we have permanent alimony.

Inman v. Inman - 14 TAM 47-5

"affirmed and modified and reversed on other grounds" 811 SW2d 870

The husband claims under oath that the didn't commit adultery. Court is outraged by his lying in court so the court tells him to get out and denies his divorce.

Unclean hands = lying in deposition and in court

How can you get out of the defense? Tell the court or show the court that the other party's hands are even dirtier.

Goldberg v. Goldberg - 20 TAM

Mrs. Goldberg burglarized his house to get some of his financial documents. Court decides it's too harsh to dismiss her case altogether because Mr. Goldberg is a scumbag. The court only says that she can't use the documents.

Note: If your only defense is unconscionability then don't take the case. Courts have largely ignored the doctrine.

p. 141 Campbell Soup

Output contract for the sale of carrots--all the carrots they can grow! Court tells Campbell soup that its contract clause is so drafted in favor of the co. that it's unenforceable because it's unconscionable.

p. 144 Jones

Court finds the contract unconscionable. Paine says it's a ridiculous finding. He thinks that both Campbell Soup and Jones are bad decisions.

Unconscionability Doctrine outside the UCC

Uniform Residential Landlord & Tenant Act - URL&T Act

In counties where these Acts apply you can attack part of your lease as unconscionable.

p. 145 Two elements of unconscionability:

1. Was the contract unconscionable when it was made?

2. Unconscionability is an issue for the court alone

T.C.A. § 66-28-204 Landlord Tenant Act

Our state constitution has a class equal protection clause; you can find the state constitution in the first volume of T.C.A.

"The state shall not pass class legislation unless there is some rational basis."

Paine says, "The only attack on the Landlord Tenant Act that's going to be effective is an attack under the state constitution."

State v. Tester, 879 SW2d 823

Leading case attacking class legislation; work release law allowed DUI offenders to be put on work release. It used to apply only in counties with a metropolitan govt. or with a certain population. The problem is that Moore County is another metropolitan county. The Supreme Court said that there was no rational basis for this law being passed in 2 big counties and 1 small county. The law violates class legislation clause. The court said the legislators intended to apply the law only in certain counties, thus it was unconstitutional.

Show there's no rational basis for the law to be applied in only some counties. Next problem: under the doctrine of elision will you get the court to strike out the unconstitutional part of the law.

General contractors and some subcontractors have to have a license under this law: T.C.A. § 62-6-101. Thus, your contract has no remedy if you have no license. The problem is that it only applies to certain contractors and subcontractors.

Some confusion here-The majority rule is that there's no election of Remedies or the majority rule may be a modified version of that rule. Yes, we have the rule in Tennessee.

p.146 Do you affirm the contract and sue for damages? or Do you rescind the contract and ask for restitution of the price?

When do you elect your remedy?

1. Prejudicial-your acts before the suit

2. When you commence your lawsuit? When you file your complaint? No, because the Rules of Civil Procedure allow you to plead in the alternative

3. When judgment is entered?

4. When you satisfy the judgment?

*Most courts say the answer is when the judgment is entered.

*The UCC has expressly rejected this doctrine.

p. 153 Altom

Wife sues husband and a judgment is entered against him for conversion (converting furniture). But he doesn't have anything. Can she go back up and sue in replevin to try to get the furniture back? Why not res judicata? Because two different parties. Why not collateral estoppel? Not the same cause of action (Conversion in case #1 and replevin in case #2). In the jurisdiction in the book, she's able to proceed in the second case--no doctrine of election of remedies.

*On the bar exam-Tennessee adheres to the minority position that there's no collateral estoppel unless you have the same parties in case #1 and in case #2. Mutuality of parties is required.

Barnes v. Walker-191 T.A.M. 364

In Tennessee, the election of remedies is made at the time the judgment is entered.

Police officer case-Remedy of mandamus. Remedy of damages under the civil rights act. If you proceeded to judgment in the first case then you can't change your remedy.

Combination of Remedies

There's nothing wrong with combining remedies if they are consistent with each other.

Issaacs v. Bokor-566 SW2d 53

We will allow the Buyer to rescind the contract and get the rescission price of the contract. He also recovers the expenses thus far in building the mansion. The Supreme Court allowed the P all three remedies: Rescission, Restitution of purchase price, and punitive damages.

p. 151, Note 3 - You want to sue in tort because there's no $ limit on the monetary recovery as there is under Worker's Comp. If you go one route and make a mistake then you can sue in tort law.

Tort first-no good- then you can go to Worker's Compensation

Worker's Compensation first-no good-then you can go to Tort

*Tenn.-yes, you may go the other route if you're unsuccessful.

Election of Remedies problem: the Soldier's and Sailor's Civil Relief Act might prevent you from claiming an ADA injury. The likely scenario is that a successful Worker's Comp. claim will prevent you from recovering under the ADA.

Under the ADA, an employer must know what sort of ?'s they can ask about disabilities, etc.

Temporary Restraining Orders-sometimes you can get them ex parte if you can show dire irreparable harm. Brief duration.

Preliminary injunction-hearing with other side present. Hearing is very significant.

Substantive requirements:

1. Irreparable harm

2. Likelihood of success at trial

3. Balancing of the equities

4. Public interest

p. 165 Harding v. U.S. Figure Skating

Generally, courts do not interfere with the interworkings of private organizations. Preliminary injunction issue to give Tonya more time.

p. 173 Caribbean Marine Services

Court says no preliminary injunction because there's no irreparable harm. You have the burden of proof in the balancing of interests, and the public interest is not there. Good example of a case where the public interest is important.

Procedural Requirements

p. 183 A comparable State of Tenn. procedural rule is Rule 65.

Characteristics:

1. A restraining order is prohibitory in its effect-"I restrain you."

2. Short in duration

3. Typically ex parte

4. Typically without notice

5. Must be bonded - $ will be recovered from the surety if the tro is violated.

Procedure: Petition for the tro with an affidavit attached. In the affidavit you must allege that your client will suffer immediate irreparable injury. In federal court, certify to the court why you didn't give notice and what if any attempts were made to give notice. Always put on the tro application-"This is the first application for extraordinary relief." The D is bound at the moment of actual notice-you can call them on the phone. They must obey the tro upon notice and can be held in contempt of court.

Duration:

federal court - 10 days

Tenn. state court - 15 days unless it's a tro in a domestic relations case. Then it lasts until the hearing.

Order of Protection - domestic relations cases; duration of one year

Right to appeal - you cannot appeal a tro!

It must be bonded!

p. 232 UNW v. Bagwell

p. 185 Fengler - court held in error for issuing an injunction without a hearing. It's a nonjury hearing where the court makes findings of fact and conclusions of law.

Rule 52 and the injunction rule requires a hearing-some judges will borrow from the practitioner's proposed findings of fact.

p. 189 Carroll - you have a much heavier burden when you're trying to enjoin a person's free speech rights. Must provide notice to the people whom you are enjoining.

p. 192-93 Injunction Notes and Bonds are required. Conquina Oil - the appellant has no jurisdiction if no bond.

*The 6th Circuit is contra to the Conquina Oil decision. Roth, 583 F2d 527. The 6th Circuit says we do have jurisdiction, but we simply remand the case to the lower court to set the bond.

p. 194 Coyne-Delango Co. - What do you do if the tro is erroneous or misapplied? Go after the bonding company if the tro is wrong or misapplied. The tro halted the project and resulted in delay damages here.

Problems that can arise:

1. The tro/injunction must be specific and clear - p.211, Note 2

2. Was the D bound by the tro? Sometimes an unnamed party might be bound by the tro. Ex- an agent, privity (p. 211)

3. Does this person have the ability to comply with the tro? It's the ability that's important.

4. Is the contempt civil or criminal? If it's criminal then what procedural safeguards does the accused have?

Criminal Contempt - the public has an interest in upholding the power and dignity of the court. Two types of criminal contempt:

1. direct contempt - committed in the presence of the court. Rule 42 (a) Ex.-curse in front of the judge. Under Rule 42(a) you don't have many rights at all. . . .you can be punished summarily.

2. indirect contempt - outside the presence of the court. Procedural safeguards. Rule 42 (b)

p. 201 Walker v. City of Birmingham

Challenge the improper judicial order through the court system if the injunction is wrong. You can be criminally punished for violating an invalid or void injunction. You can't say that since it's void then you don't have to obey the order.

p. 205, Note, 2nd Paragraph- Rights under Criminal

-5th Amendment

-Burden of Proof

-Jury trial

-Notice

-Right to Counsel

-Right to Subpoena witnesses - Summary Process

-Double Jeopardy

-Right to Present a Defense

Note:If there's potential jail time over 6 months (6 mos. and 1 day) then it's no longer a petty offense and you have a right to a jury trial. No potential confinement or confinement less than 6 months - no help from the federal constitution. Look to the state constitution for help.

State v. Dusina - 764 SW2d 766

Look at the facts of this case. Right to a jury trial under state constitution. There's more protection under the state constitution.

Brown case - Can you throw people in jail under a statute which requires 6 mos. in jail for failure to pay child support? The Supreme Court will have to address this issue. The problem is if the right to a jury trial applies then does it apply in all these cases. The court system will be overloaded.

p. 206, Note - Criminal Contempt must be willful. "Mens rea" is required.

In Re Stewart

Outside the court's presence, the employer retaliates against the employee for serving as a juror. Judge mistakenly calls it civil contempt when the employer's actions were really criminal contempt.

p. 210 T.C.A. § 29-9-101 et seq.

p. 208 Definition of criminal contempt - if it's punitive in nature and there's no way to terminate your sentence (defined definite punishment) because of compliance. Separate proceeding with procedural requirements.

Civil contempt - you hold the keys to the jailhouse door. As soon as you comply you are freed from being in civil contempt.

p. 212 Ex parte Daniels

When the judge can't see the lady resisting is it in the presence of the court? If it's in the court's presence then the judge can summarily punish the person. In the court's presence if the judge saw or heard the contempt.

Indirect contempt - if the judge doesn't see or hear the contempt then all the procedural rights under 42 (b) apply.

State v. Creasy - 885 SW2d 829

Creasy tells the DA, the prosecutor, that she's a Communist and a Dictator. He could not summarily be held in contempt of court because the court was not in session. It was not in the presence of the court or so near there as to obstruct the administration of justice.

p. 223 U.S. v. UMW of A

Injunction issued by a federal court telling a Union that they can't strike. The court says "even if the federal court had had no jurisdiction then the court still has the power to issue something." You can not violate even a void injunction. Recall the Walker case.

p. 225 Civil Contempt and Coercive Civil Contempt

Coercive contempt - seeking to compel present and future compliance

Compensatory civil contempt - give $ to a person who's been harmed by the contemptuous conduct.

p. 226 Time-Share Systems- the D destroys the software despite the court's order not to do so. Example of Compensatory Civil Contempt. One of the requirements of any damage remedy is that they are proved with reasonable certainty.

p. 228, Note 3 - If you have compensatory civil contempt and a final judgment is entered then it's appealable. If coercive civil contempt then it's nonappealable. You cannot appeal because you must wait to the end of the case to appeal your contempt. What would your only remedy be in that case? Your remedy would be an interlocutory appeal--go to the court and the appellate court. For an extraordinary interlocutory appeal go directly to the appellate court.

p. 229 U.S. v. Darwin

Make the corporation pay so much money per day to hurt the corp.'s finances because you can't put the corp. in jail (corp. is not a person).

p. 232 UMW v. Bagwell

Court tells the Union it will fine them a lot if they continue to protest, picket, etc. They violate the injunction and the court fines them. Union says that was criminal contempt and therefore we're entitled to a trial by jury. (Union thinks some jurors would be sympathetic.)

Why was it criminal contempt?

1. There was a determinate punishment. Once you did the acts you couldn't purge yourself of the fines. Counter argument is that it was civil contempt because the Union was told in advance.

2. It was not in the presence of the court - (Paine says this doesn't matter.)

3. Widespread violations

p. 238 Latrobe Steel v. United Steel Workers

Labor dispute. Federal courts cannot enjoin labor disputes, so the injunction was void. Civil contempt for violating the injunction, but because it was void there was no civil contempt. Recall the Walker case--they were punished for violating an injunction that was void. . . .talking about criminal contempt, so they still had to obey the injunction. Can't ignore it.

"collateral bar"

Pro-choice movements-civil contempt sanctions that had to be paid to the abortion clinic.

Civil-no appellate jurisdiction until the entire underlying case is completed and appealable.

Criminal-separate trial, so you can appeal as soon as you're sanctioned.

18 USC § 248-establishes sanctions for both civil and criminal contempt. Commerce Clause attacks on this statute are frequent.

Madson v. Women's Health

Supreme Court decision. Failure to pay child support=contempt, so you don't have standing in court to appeal the amount of the payments. Statute allows you to get standing in court to attempt to modify future payments. Statute allows standing if your failure to pay back payments is not intentional.

Contempt power of the courts=ten days in jail and a $50 fine

Under the Tenn. constitution, a Tenn. judge has no power to fine more than $50 without a jury trial.

Profanity in court-Class C misdemeanor. 30 days in jail. $50 fine.

Walker v. Walker

Chancellor found 72 different contempts. He told Walker he had to spend 720 days (72 x 10) in jail. Can you tack together these time periods? Can you put somebody in jail for 6 months under a statute that says it's illegal not to pay child support? Paine says that the tacking together of time periods is probably illegal.

Civil contempt-you have the keys to the jailhouse door; you can comply anytime you want.

p. 245 Dr. Elizabeth Morgan's case. She had to remain in jail under civil contempt until she told the court where the child was. Special law was passed.

Contempt=the teeth in injunctive relief.

p. 246 Four Types of Modern Injunctions:

1. Preventive injunction - to prevent future wrongs

2. Restorative injunction - to undo a past wrong

3. Prophylactic -to minimize the risk of a future wrong (common in civil rights arena)

4. Structural - the court system takes over an administrative duty (or an executive duty like administering the jails)

p. 247 Vasquez - state right-to-work law. Restorative remedy because the remedy is reinstatement.

p. 250 Bundy - prophylactic injunction. Post notices and set up a procedure so that if there's a complaint you'll get immediate relief.

*Tenn. Small Schools Case-federal judges can exercise equitable powers to come up with flexible remedies.

p.255

Tenn. Small Schools cases-equalization also includes equalization of teachers' salaries.

p. 261 Hutto

Because the legislature and the executive department did not take care of the jail system the court system had to step in.

3 judge panel in Tenn.-Rural West Tenn. African American Affairs Council v. McWherter, 877 F. Supp. at 1096

Do we need apportionment with respect to state judicial elections? Do we need a racial balance with respect to the apportionment for voting for state judges? The answer is that we don't know.

Cousin v. McWherter-46 F.3d 568

p. 270 TVA v. Hill - at the time the law mandated an injunction to stop the dam from endangering the endangered species.

p. 278 Northern Cheyenne - no mandatory injunction because the law did not mandate it.

p. 284

1. Notice is important so you probably won't get a tro.

2. Heavy burden on the Plaintiff because the plaintiff is asking for a prior restraint

3. Injunction order must be specific so we only shut down speech that we absolutely must shut down.

p. 286 Willing - legal remedy is defamation and burden is too heavy to get an injunction.

p. 290 Mabe - it's difficult to shut down speech

p. 292 Pavilonis - the court's power to enjoin the professional plaintiff from filing frivolous lawsuits is upheld.

p. 294 Norcisa

Trying to stop potential future criminal prosecution - Injunction is invalid. Legal remedy is adequate here -- when the court prosecutes you for the crime of operating without a license then you can raise constitutional issues.

Younger v. Harris 401 U.S. 37

Abstention case. Once a state criminal prosecution has begun the federal courts should abstain even though some constitutional rights are being trampled. Why? Because habeas corpus review is possible as well as Supreme Court review. Federal courts should abstain from enjoining state criminal prosecutions.

Arkansas case over the Xmas tree lights-injunction issued to prevent the Xmas tree lights. U.S. Supreme Court denied certiorari.

Firing range to shoot at targets -- the suburbs shut down the firing range b/c they moved out there after the suburbs were already there.

How do you execute on the judgment procedurally?

p. 300 Harrison

Can the homeowners go into court and get an injunction to shut down the recycling plant? Courts say no not immediately; we won't shut down the plant. Remedy at law - the court says we'll give you the legal remedy of damages. Also, the zoning laws did not permit heavy industry in this part of town.

p. 306 Village of Wilsonville

On balancing the equities, the court decides it should shut down the plant. "Coming to the nuisance theory" - if somebody moves to an area where a nuisance already exists then the person doesn't have much of a claim. In Village, the houses were there first.

p. 312 Spur Industries

The "Coming to the nuisance" theory applies here. The cattlefeed lot is there first. The court says that the theory shouldn't always apply. Why not? The theory gives eminent domain power to a private person. After balancing the equities and deciding that the "coming to the nuisance" theory is not an absolute defense, the court decides to enjoin the feedlot to move further out of town but makes the development company pay.

T.C.A. § 39-17-316: the statute is where the theory works; if the firing ranges was there first and it operates under the ordinance then you can't shut it down.

Paduch case says that you can now enjoin a city or a county. But, at one time you couldn't enjoin a city or a county.

p. 319 Akau

Who has standing to sue for a right-of-way on the beach? Usually, the private person must show that he has an injury separate from the general public.

Can you get an injunction to prevent future crimes? No, because there's an adequate legal remedy. However, there's an exception in the Meyer case on p. 324. Rare case where the court thought that the criminal sanction was not adequate.

p. 327 Bates case - domestic abuse. T.r.o.s are common.

An Order of Protection is used with domestic abuse cases.

Note: If you're under an "Order of Protection" then it's a violation of a federal law to possess a weapon which affects commerce under 18 USC § 922g.

In domestic abuse cases, arrest is the preferred response unless there is a compelling reason not to arrest the person.

There's a new statute, 18 U.S.C. § 2261 et seq., which makes it a federal crime to cross the state line.

Stalking law - T.C.A. § 39-17-315 - The stalker no longer has to intend to put a person in fear. Would a reasonable person be put in fear?

Abuse of the elderly - T.C.A. § 71-6-119

p. 330 People v. Lim

A public nuisance can sometimes be enjoined because the legal remedy requires repeated prosecutions. Gambling casino.

p. 336 Bay Mills Indian Community

No injunctive remedy in the Assimilative Crimes Act.

Bad check law - drawer stops payment on the check. Some people think that if you stop payment on a check then you're not liable for the debt. Statute, T.C.A. § 47-29-101, says that if the person stopped payment on the check with fraudulent intent and the bank sends them a certified letter requiring payment within 30 days then treble damages up to $500 plus costs can be awarded.

Remedy of Reformation - equitable remedy. The Chancellor says we'll rewrite this instrument if it becomes obvious to the judge that the parties intended to do one thing.

There's no help in the Rules of Civil Procedure. F.R.C.P. 69 says that you did it the same way that you do it in the state court. Same method in state court as in the federal court.

If you have a case where land is in dispute:

"lien lis pendens" - a lien pending the outcome of the litigation. Take a copy of the complaint and register it with the Deed Book so that if anybody's checking title on Blackacre they'll see the lien. The P who filed the suit has the lien on the property. *Record your judgment in the Register of Deeds Office - judgment lien. It lasts for three years in the county where you filed the judgment (so file it in every county where there's property). It covers only real property.

Exemptions from Execution:

1. Homestead - $4,000 for a single person. $7,500 for a married couple. It doesn't amount to much.

2. You get to pick $4,000 worth of exemptions plus other items: school book, clothes, family portrait, etc. Claim your exemption before the judgment is entered. File them with the court clerk.

Garnishment of Wages:

*Execute by garnishing - the theory is that somebody might owe the debtor money. Ex. - banks or employers. Tell the employer to pay the judgment creditor instead of the debtor. Do it 30 days after the judgment is entered. Ask the court clerk to give you a writ of garnishment. Paine says you can go ahead and file the writ without waiting 30 days. The court will serve the garnishment on the garnishee (the bank). Establishes a garnishment lien which lasts 6 months. The lien must leave the debtor with 50% of their income. Garnishee is entitled to file an answer saying "We don't owe any $ to the debtor." Conditional judgment - tells the garnishee to pay attention. The garnishee will owe the $ themselves unless they show cause why they shouldn't.

Various Ways to Execute on the Judgment:

1. Garnishment

2. Discovery in Aid of Execution of the Judgment - see Rule 69. You can sit the judgment debtor down in a deposition and ask them questions about their credit, bank account, etc. They must reply to your Interrogatories. Bench warning - judge will tell a court officer to go out and find the debtor and bring them to the court for a bench warning if they're ignoring the requests for discovery.

3. Writ of Execution - "Fieri facias" - You seize the debtor's property and sell it in order to recover on the judgment. As a practical matter, you must locate the property. But, the deputy will enforce the writ. All that the writ of execution does is hand over the property to the State of Tennessee.

*Tenn. rule that you execute against personal property first and then real estate. More protective of real estate. Mandatory rule!

"Nulla bona" - no goods. The person has no personal property. File a "nulla bona" return which lets you then go against the real estate.

Levy - the sheriff exercises dominion and control over the property (personal or real estate). Make sure that you are secured/ perfected before the moment of levy. Tenn. law - a case says that you cannot levy on $ on the person of the judgment-debtor. Why not? It would be unseemly. It doesn't matter even if it's one million dollars. Carmack - 181 Tenn. 551

4. Judgment lien - 3 years long.

5. Execution lien - applies to personal property. At the moment of levy (it is a retroactive lien) the execution lien kicks in and goes backwards in time to the test date (the date that the clerk issued the writ of execution) Why? The judgment-creditor may have priority over the Buyer if the Debtor sold the personal property.

Keep Fresh Filters v. Reglui - 19 TAM 39-1; 888 SW2d 437

In Tenn., in order to execute in the D's equitable interest in real estate (most people don't own unencumbered real estate) you've got to file a second lawsuit in Chancery Court to ask that the Chancellor use his equitable powers to seize the real estate. Take the deed to the land to the deputy.

6. Paper Levy - Deputy says, "I levy on Blackacre" which brings Blackacre within the control of the State of Tennessee.

7. Bond=Indemnity Bond. Most judges will want you to post a bond in case the sheriff makes a mistake.

8. Sale - must be between 10 AM and 4 PM. It must be advertised 3 times. Serve notice on the landowner at least 20 days before the sale. (The third notice must be at least 20 days before the sale.) Post notice at 5 places in the county. Post notice in the most commonly travelled place in the D's neighborhood and at the courthouse. Certain notices must go to the governmental entities. Must notify the IRS at least 25 days before the sale. These requirements apply. Typically, the sale takes place at the courthouse door. The sale must be at least 50% of the fair market value.

Tenn. - slow pay statute. The debtor can ask the judge to let him pay in installments. The judge has the discretion to let him do that. But the payment schedule must be realistic.

Judgment Renewal - A judgment has a ten year statute of limitations, but you can renew it. Ask the court that a "scire facias" be served on the judgment debtor. It asks the debtor to show cause why the judgment should not be renewed for 10 more years. "Fiat" = an order from a judge to the court clerk. The court clerk will then issue the "Scire facias."

What is the measure of damages for a sale of goods contract, personal injury, etc.?

Measure of damages = coming up with a formula to determine what the damages are. Trying to achieve a remedy; attempts to put the innocent party in the same financial position had the contract been performed.

p. 341, 42 Model case: expectancy interest - what the franchisee expected to get out of the deal; lost profits (they must be proven with certainty). Reliance interest - the $ paid out in reliance. Ex.-$10,000 spent on advertising. Restitutionary interest - $25,000 franchise fee.

Buyer laid an extra $1,000 for an option on the land next door. Reliance interest = $500 for survey and $500 for loan fee.

Court says, "But you won't get reimbursed for the $500 because then double recovery because the expectancy interest of $20,000 is going to be paid. You would have had to pay the survey and loan fee to get the expectancy."

p. 342 Eastlake Construction Co.

Construction contract = services contract with some goods.

Court says, "If the contractor does it wrong then we won't order the contractor to specifically perform (tear it down and rebuild it correctly) because that's wasteful economically. The general rule is not to make the contractor redo the building. Instead, let's come up with damages to award the Plaintiff. How much was the value of the condo lowered by the defective condition? Award the ps the difference?

p. 347 Jacob & Youngs & Kent

Some judges think that this is strong medicine. The difference is awarded to the P.

Edenfield v. Woodlawn Manor - 462 SW2d 237

Residential construction contract. The specs called for rectangular a/c vents. The contractor installed the wrong a/c vents so it wasn't cooling properly. The court made the contractor redo the cooling system correctly. If residential property then you can probably make the contractor redo it. This decision is probably limited to residential contracts. The usual rule is that we don't require specific performance; we award the difference in value!

Process:

1. Register the judgment in the Register of Deeds Office to tie up the property.

2. Garnishment - Do you want to garnish wages? Is the debtor employed? **Before you can get a writ of execution or garnishment you must wait 30 days for the judgment to be final. If the debtor appeals the judgment then he must bond the amount of the judgment-- the debtor can beg to bond less, but most judges won't approve.

3. Take some discovery before you issue the writ of execution -- a request to produce document should probably be issued.

The writ of execution allows you to go against real property. Be sure to renew the writ every 9 years, so the statute of limitations doesn't run.

Statutes:

1. Wage assignment - T.C.A. § 36-5-501 - The way you actually get the money.

2. Uniform Reciprocal Support Act - T.C.A. § 36-5-201 - Interstate cases: If the supporting spouse is in a state different than the spouse-to-be then the issuing state . . . .

3. Uniform Foreign (as in another state) Judgment Act - T.C.A. § 26-6-103 applies to all judgments even domestic relations cases.

4. Uniform Fraudulent Conveyance Act - T.C.A. § 66-3-101

Note: If there's already a secured creditor on property then the judgment creditor is in a 2nd position to the 1st creditor.

Breach in a construction contract - an example is where the contractor walks off the job. Owner vs. Contractor lawsuit. It makes a difference as to when the breach occurred.

Breaches by the Builder:

1. Builder breaches at inception (before anything is done) - the general rule is that we ask what will it take to put the owner in the same place as where he would have been if the job were completed? The owner will get the additional amount it costs to build the house according to the specs. (it will usually amount to more).

2. Builder breaches halfway through the job. Owner recovers the additional amount to get it done.

3. Builder breaches at substantial completion. Owner must pay the contract price minus some amount - Owner gets to deduct either the diminution in value or the additional cost to complete.

Breaches by the Owner:

1. Owner breaches at inception - Give the builder lost profits.

2. Owner breaches in midstream - Give the builder the cost of labor and materials plus lost profits but no more than the contract price. Don't give the builder a windfall. The contract price = the ceiling.

3. Owner breaches at time of substantial completion. Give the builder the contract price minus either diminution or the actual cost of full completion.

p. 348 Gruber v. S-M News Co.

Why not a UCC case? B/c the Ds had promised to distribute the Xmas cards. Services contract. What's the net worth of the cards? Nobody cared much about old UN Xmas cards. Don't give Gruber the expectancy damages b/c evidence was not reasonably certain -- too speculative. Give Gruber his reliance damages.

p. 351 Campbell

Campbell is hired by somebody at TVA who doesn't have the authority to do so. The contract price is $30,200. Capbell sues TVA but there's no contract because the TVA official had no authority to contract. Quantum meruit/restitutionary basis of recovery. The court says, "Don't let Campbell have the contract price because there's no contract." But, the jury gives Campbell the contract price.

p. 356 The dissenter goes into orbit because the remedy is wrong.

Tenn. - employment at will doctrine. Employee can be fired for no reason. The usual rule is no contract damages. But, if I am fired because I refuse to do something which I was told to do because it would violate the law then I have a cause of action. Or, if I speak out against my employer. Even though there's no contract remedy there may be a tort remedy -- retaliatory discharge.

Note: the employee has a duty to mitigate damages by trying to find a 2nd job. Make the worker who walked off the job pay the extra amount it costs to hire somebody new.

List of Buyer's Damages and Seller's Remedies:

I. Rejection / Revocation of acceptance = most important Buyer's remedy

II. Contract damages for the Seller's nondelivery of goods or late delivery

III. Warranty breach damages - we get the goods but they're defective or not up to our expectations.

IV.

Specific performance (doesn't work well)

Exceptions:

p. 358 Wilson v. Hayes

1. Exception to the UCC Statute of Frauds = part performance exception.

Tenn. - No part-performance exception to the real estate statute of frauds. Yes, part-performance exception to the sale of goods statute of frauds.

To the extent performed, a contract for $500 or more will be enforced (even though it's not in writing). If we deliver 2/3 of the brick then we will make the Buyer pay 2/3 of the price.

2. Custom goods

3. Admission exception - if there's an admission during discovery that the contract existed then it's a valid contract. If one party admits in court testimony or a pleading or a deposition then you're stuck/bound by the admission. Roth Steel v. Sharon - 705 F2d 134

4. Merchant Buyer - must have an oral agreement. Merchant Seller doesn't sign anything. Buyer signs something. If Merchant Seller is silent for 10 days then it's a valid contract.

1. Wilson v. Hayes (cont.) - the innocent Buyer recovers the overpayment in the downpayment. What is the measure of damages to the innocent Buyer? The innocent Buyer is entitled to the high market price minus the low contract price = the measure of damages when the guilty Seller breaches the contract.

2. Alternative remedy is that the Buyer pays - What if the Buyer had to buy reasonable substitute goods (referred to as "cover"). You can go out and cover the problem. "Cover" means to go out and get reasonable goods in replace of the goods you contracted for. High cover price - low contract price = measure of damages.

Note: If the cover price isn't higher than the contract price then the Buyer doesn't get damages but does get restitutionary damages. Duty to mitigate when talking about lost profits. But, there's no duty to "cover."

Does the Buyer have to make cover? Is the Buyer obligated to cover? The general rule is no.

p. 362, Note 3 - Example of trying to mitigate by way of getting substitute workers. You must convince the court that you attempted to mitigate your damages; the Buyer must show an attempt to cover or otherwise if the Buyer wants consequential damages. In a goods contract, the breaching Seller must have had reason to know (an objective standard) that the Buyer would suffer consequences.

p. 362 Gerwin

Innocent Buyer elects to get the market value minus the K price. But the Buyer wants more; the Buyer wants consequential damages, but he can't get them because he didn't attempt to cover. He loses ultimately b/c the Seller had no reason to know at the time of execution that dire consequences would follow. Buyer's proof of lost profits was too speculative. You can ultimately recover lost profits, but it's difficult. Must prove damages with reasonable certainty.

Joy Floral Supplies - 563 SW2d 190

When is the time to look at market price? It's at the time that the Seller anticipatorily repudiates.

1. Is that the time when the Buyer learns of the anticipatory repudiation?

2.

3. 6th Circuit rule is in Roth Steel v. Sharon Steel, 705 F2d 134

When = when part performance is due. The question of when is a question for the trier of fact according to the court in Hurt, 539 SW2d 133.

p. 368 AM/PM Franchise

Class wants consequential damages = lost profits, loss of customer goodwill. Warranty case - you promised to make this gas of merchantible quality.

The Measure of Actual Damages = the value of these goods as warrantied (often the price; what the goods should be worth) - the value of the goods in their defective condition (bring in an expert to testify as to how much it would cost to repair).

Measure of Consequential Damages = put on statistical proof as to how much $ was lost by way of gas sales; loss of goodwill was attempted to be proved.

General Damages - necessarily, directly, and naturally flow from the breach (foreseeable damages)

Special Damages - must be proven as reasonably foreseeable

Exclusion of consequential damages - they may be excluded altogether by a contract written between the Buyer and the Seller prior to performance. Are these exclusions legal? It's legal unless it's unconcionable -- it's unconscionable typically in a personal injury case or death case in a consumer goods contract. "Prima facie" unconscionable in such cases. Rarely unconscionable in a commercial contract.

p. 377 Cannon

Restaurant owner v. customer. Customer finds a worm in a can of peas. Customer runs the owner out of business. Owner can't recover lost profits. Why not? Problem with causation - court says you have not proved that the customer shut down your business; you also have not proved lost profits.

p. 381, Note 4 - Generally, emotional distress damages are not allowed on a pure contract case. However, you can have disclaimers of warranty in a contract to limit any potential damages (but there are certain exceptions in consumer goods contracts).

p. 382 Aries

Consequential damages= 1. loss of use - measured by the rental value for that period of time and 2. cost of removing the mast

p. 385 Loss of use/rental value - some courts won't allow it, but Tenn. courts will allow it under the Marble v. Jackson Bros. Chevrolet, 8 TAM 4-4, case. Under this case, you can get loss of use in a breach of contract case.

(See handout)

1. Rejection - theory in Code that if all goods are delivered at once then the tender must be perfect (single delivery). Courts generally want to find a substantial defect. Seller has a right to cure the defect. As long as the Seller had reason to believe the goods conformed then the Seller has a commercially reasonable time to cure the defect. (This theory usually doesn't work.) Schroder - 20 TAM 17-9. *Don't forget about the Seller's right to cure.

In cases where you do reject the goods the procedure to follow is:

1. Reject within a reasonable time after tenure

2. Notify the Seller

3. Keep the goods - don't dispose of them

2. Revocation - there must be a substantial impairment.

Three situations:

1. Most common = where the defect isn't obvious

2. Where the Seller lied about conformity

3. Seller says he can cure the problem, but the

In situations where there's a substantial impairment, even though there's been an acceptance you can revoke it.

Procedure to follow:

1. Revoke within a reasonable time after discovery of the breach

2. Before there's been a change in the nature of the goods

3. Notify the Seller

4. Keep the goods for the Seller's instructions. Hold on to them and wait for the Seller's instructions -- you can't just stick them out on the sidewalk.

3. Recovery of Identifiable Goods

Situation where a Buyer makes installment payments -- the Buyer ought to be able to recover the goods. Under the Code, the Seller must become insolvent within ten days after the Seller received the first installment. The problem is that it's impossible to prove the date of insolvency.

Group IV on the handout:

6. Incidental Damages

latent defect - you can recover the cost of testing for the defect

Section 607 - just as important as statutes of limitations

Once the Buyer discovers a breach he must notify the Seller within a reasonable time of the discovery of that breach. Otherwise, the Buyer has no remedy. Immediately fire off a letter to the Seller.

Revocation of Acceptance: Buyer must revoke before he changes the goods in any way (I.e.- puts them in his product, etc.). If he does then the buyer may still have a remedy in breach of warranty.

UCC - where the Buyer accepts, he must do so within a reasonable amount of time to send notice to the Seller that a breach has occured or he'll be barred from any remedy forever.

Back to handout on Remedies:

#3 Buyer's side - disclaimer language in the contract that disclaims warranty will do away with damages (not disclaimers of fitness). This deals with disclaimers of implied warranty - merchantibility. The product must be good enough to be used for ordinary use, etc.

Under the UCC, if the Seller wants to get rid of this warranty then he must:

1. The clause must be conspicuous (larger print, difference in color, etc.)

2. Must be contemporaneous with the tender of goods, can't do it afterwards

3. Must use the word "merchantibility"

Code also says there are other ways to do it:

1. Conspicuous

2. Contemporaneous

3. Say that the Buyer accepts goods "as is" (This will not disclaim Consumer Protection Act remedy.)

*For breach of warranty in sales contracts, who has the burden or proof under the UCC, Article II? The breaching party has the burden of proof. Bradford Flying S Charlais Ranch Ltd. v. Wood - Tenn. is to the contrary - Tenn. case holds that the P has the burden.

Consumer Protection Act - T.C.A. § 47-18-101

Failure to inspect by buyer -- he doesn't notice or walks by an obvious defect -- Code says no warranty for this.

Code says that tissues, blood are not goods -- they are services so there's no claim for breach.

15 USC § 2301 - applies only to consumer goods sale. If the Seller makes an express warranty then the contract can not have a complete disclaimer of implied warranties. Merchantibility will still be there.

Exclusion of consequential damages:

-another part of the Code lets you exclude damages remedy altogether

-repair or replacement of parts only - is the only remedy enforceable

Effective unless the limited remedy fails its essential purpose --it doesn't fix the defect

Moore v. Howard Pontiac - Moore was entitled to sue for damages because they kept messing up other things when they tried to fix problems (never cured). T.C.A. § 55-24-201 "lemon law" applies to new vehicles. If you have taken the car in 4 times or it has been in the shop for a total of 30 days then it is presumed that the limited warranty is void.

p. 386 Sprague - case on the Seller's Remedies

2 remedies possible:

Contract price - market price = measure of damages

or

Contract price - resale price = measure of damages

The second measure available didn't work in Sprague because the Seller had a private resal instead of a public sale in which case there was a notice requirement. Must give the Buyer notice of intention to resale. In this case, the court awards the contract price - market price. Why can't the Seller get consequential damages -- the Code doesn't award them to Sellers.

p. 391 Notes. When will we ascertain market price? At the time and place of tender.

Contract execution tender two years later

What if the party changes its mind the day after execution? Then you must go with when the Seller learned of the repudiation because the trial comes before the date of tender.

Handout (cont.) #7 on Seller's side - Lost profits

p. 392 National Controls

Weighing scales. Break Sellers down into three categories:

1.Lost volume Seller - car dealership

2. Middleman Seller - gets commission

3. Manufacturer can get profits when there's a breach

Prospective profits are generally not recoverable by new businesses.

2nd category - Capital City Office Machines v. Nashville Board of Education - 632 SW2d 142 - Jobber got lost profits remedy.

p. 396 Note #2 - What do you have to do to mitigate damages? Busting up pool tables to sell for firewood--can't do this.

p. 397 Neumiller Farms, Inc.

Lost profits remedy = alternative to actual damages (#5 on our chart). Where regular damages remedy is inadequate you can use lost profits remedy.

p. 400 Note 2 - Trans World case = prevailing view is that you drop down to the lost profits remedy only when the Seller can not be adequately compensated by the regular remedy.

p. 402

This subject will be on the exam several times.

CR Daniels - sales contract so the UCC applies. Buyer accepts the goods and the Buyer accwepts the tender of delivery. But the Buyer then decides not to pay the Seller. What is the Seller's remedy? The price.

Section 607 - What causes the counterclaim to fail? The Buyer failed to give notice of the breach of warranty within a reasonable time of notice of the breach. Buyer claimed that the goods wre defective, thus breach of the warranty.

Section 709 of the Code outlines the price remedy.

Situations where price remedy is used:

1. #1 Situation = situation where goods are accepted

2. 2nd Situation = risk of loss situation with a consumer buyer. The risk of loss is casualty loss. The goods are broken, lost, destroyed by fire, etc. The risk of loss passes to the consumer when they pick up the goods. Ex - buy beer from Sam's party store.

Commercial Buyer - the risk passes at the moment of tender and not at the moment of actual delivery. Ex - Commercial buyer buys beer from Sam's Party Store and goes to pay for it and pick it up, but says I'll be back in 15 mins. and there's a casualty then the consumer buyer is responsible.

F.O.B. = "Free on Board"

Seller's place of business Buyer's place of business

Knoxville Nashville

F.O.B. Knoxville - all the Seller has to do is load the goods on a truck to Nashville. The risk of loss passes as soon as the Seller loads the truck. The Buyer should buy casualty insurance because the Buyer carries the loss during transportation.. Seller's remedy is the price remedy.

3. 3rd Situation = goods are custom-made or are not marketable then we force the Buyer to pay the price. An example is in the following case: Schroder - sale of custom-built hoist system (customized for the particular Buyer). What is the remedy we give to the Seller? Example of goods that cannot readily be resold on the market. The Seller gets the price.

Ace Industries v. Mastercraft - situation where the goods were shipped to the Buyer and the Buyer accepted them but refused to pay the Seller.

What happens when the Buyer goes bankrupt and can't pay off his creditors? And you have an unsecured Seller? The trustee generally has priority over the unsecured creditors such as the Seller. Remedy of reclammation - give notice of reclammation to the broke Buyer within ten days of the day that the Buyer received the goods. That gives the Seller priority over the bankruptcy trustee. If the Buyer had misrepresented its solvency within the past three months then there's no time limit on the notice. If the financial statement of the Buyer is false then you're not bound by the ten day notice requirement.

p. 401 Problem - give the price remedy - $30,000

give lost profits to the coins not yet manufactured - $8,000

give the cost to store the coins - $800

as incidental damages

Buyer - You can treat the repudiation of a contract as a breach so you don't have to continue to perform.

Right to demand assurances (on the essay portion of the bar exam) -Buyer hears rumors that the manufacturer is in bad financial shape. The party who has reason to believe that the other side may not be able to perform has a right to demand in writing assurances. Code gices you 30 days to respond with adequate assurances.

What is adequate? A letter from the company president might be deemed adequate. A letter from the co's banker might be adequate.

Issues: Did the demanding party have just reason to demand assurances? Was the assurance adequate? What if the assurance wasn't adequate? Then the demanding party can treat the matter as an anticipatory repudiation.

Bulk Sales Act -(they've asked about this Act in the essay portion of the last several bar exams) Issue of coverage - when does the Act apply? It applies where a Seller is in the business of selling inventory. Ex. - JC Penny makes a deal with Proffits to buy all of Proffits' inventory. Bulk transfer so the bulk Seller and the bulk Buyer have certain duties. Bulk Seller makes a list of all the inventory and draws a list of the names and addresses of its creditors. Bulk Buyer makes sure that each one of the unsecured creditors is sent a notice (at least 10 days before the date of the sale) that a bulk sale is going to take place. Bulk Buyer must see that the proceeds from the bulk sale are applied to the debts owed to the unpaid creditors. Sale is ineffective if the Act is not complied with - the unpaid creditors can claim the goods. General creditor must act fast (file suit within 6 months from the improper bulk sale or 6 months from discovery of the sale if it was concealed).

B.F.P. for value - Bona Fide Purchaser ("someone who has no clue")

If the Bulk Buyer makes a second sale to a B.F.P. then it's immunized. You can't touch that sale.

p. 404

Often referred to as agreed damages because they are often agreed to beforehand; contracting parties may stipulate a specified sum of $ that would be payable as damages to the nonbreaching party.

p. 405 Criteria:

1. You must have a contract situation where viewing matters at the time of inception actual damages would be difficult to ascertain.

2. On the other hand, you can't have a figure beyond the likely actual damages.

CEO has a deal. 1.6 milion dollars under the liquidated damages clause. But, he is able to get another good job. Court says that the actual damages are difficult to ascertain at the time of execution of the contract. Look at the potential damages at the time of execution of the contract. Don't consider that he got another good job. The actual potential damage to Mr. Boyle was high.

Code - deals with sureties. T.C.A. § 29-33-101 et seq. T.C.A. § 47-12-101. A surety is a co-signer. A bonding company or a guarantor. They sign only on the front of a promisory note or on the back of the note in order to lend their credit. They will have to pick up the tab. The essential thing is that the surety is the first person the creditor will sue when the debtor doesn't pay.

Statute - If the principal (person who got the loan proceeds) is about to become insolvent or about to migrate from the state then notify the creditor to put the case to suit. Must prove the service on the creditor by two witnesses. If the creditor fails to commence a lawsuit within 30 days of that notice then your client, the surety, is off the hook. The creditor's lawsuit can be either against the principal or the surety.

p. 411 Truck Rent-a-Center, Inc. V. Puritan

Good idea to put the parties' intentions in the contract. Put some facts in your contract to suggest that actual damages would be hard to ascertain at the outset. The court upholds the liquidated damages clause where the agreed remedy in the event of a breach was to pay 1/2 of the remaining payments.

p. 417 Lake River Corp.

Judge Posner decides not to uphold or enforce the liquidated damages clause.

1. No uncertainty

2. The amount wasn't closely related to any actual damages

*View both these criteria from the perspective of the date of execution. Know the criteria!

p. 415 Note 5 - two criteria tests are merged into one.

* If the liquidated damages clause is enforced then it's the exclusive remedy.

Liquidated = contractually agreed to damages

Statutory damages = statute determines the damages

Laws with references to liquidated damages:

1. The Code punishes anyone who knowingly obtains, discloses, or uses personal information from motor vehicle records. The court may award actual damages but not less than liquidated damages in the amount of $25,000.

2. Electronic law - if somebody illegally taps your line then you're entitled to $10,000 in damages.

6th Circuit - it's no excuse to be a part owner of the property. It's still a violation of the law to tap your own phone line. Exception if you're a party to the conversation.

p. 422

Two situations:

1. The general measure of damages where the Seller sues the Buyer is: high contract price

- low market value

measure of damages

2. The Buyer sues the Seller in a situation where the Buyer gets a good deal: high market value

- low contract price

measure of damages

Note: Consequential damages can be added to the measure of damages and any expenses saved are deducted. Ex - no closing costs.

Hypothetical: The closing date arrives and the Seller can't come up with marketable title -- the Seller doesn't have unfettered title to the land at the time of closing. Thus, the Seller breaches. What's the Buyer's remedy?

1. Majority "American rule" - the Buyer can get the expectancy interest. The benefit of the bargain is awarded.

2. Minority English rule - the Buyer only gets restitution of amounts paid on the contract plus reliance expenditures. No expectancy interest awarded unles there's bad faith.

Tenn. - expectancy interest will not be awarded.

p. 423 Southeastern Land Fund

Liquidated damages case - forfeiture. Usually liquidated damages clauses are enforceable.

p. 427 Vines v. Orchard

Contract said that liquidated damages would be 10% of the contract price. Court said that the clause was enforceable but they sent it back to see if the breaching Buyers could get some restitution - the value of the condo was increasing, so maybe the Buyers could get their downpayment back.

p. 431 Donovan

Case highlights the difference between the American rule and the Tenn. rule.

American rule - you get both the expectancy interest and the down payment.

Mason v. Lawing - 78 Tenn. 264 - The Buyer gets the purchase $ paid back with any interest.

Isaacs v. Bokor - 566 SW2d 532 - A more recent caes citing to Mason

p. 440, Note 4 - There's a difference between a sale in gross and a sale by the acre. Is there a lump sum for blackacre or is it so many dollars per acre? Look at how the land is priced.

Tenn. remedy - vendor's lien statute - T.C.A. § 66-10-101 et seq.

Deed of trust = mortgage. The vendor retains the land with one sentence in the deed. The vendor takes security saying I get the property back if you miss a payment. Enforced in Chancery Court - the court can order the land sold.

p. 422 Car wreck - what would be the damage remedies as to each item? Is it the cost to repair or the diminution in value? Do we give the student the fmv of each clothes item or the subjective value? For the stereo, is it the repair cost or the diminution in value? Handmade quilt - will we allow recovery for sentimental value?

1. Personal property damage rules

2. Real property damage rules

p. 442 Should the measure of damages be diminution in value or the cost to repair? Sometimes, the measure of damages is the same. Clothes are completely destroyed in this hypothetical - should the measure be the fmv of the clothes before the wreck or the value of the clothes? For the stereo, its the repair cost, but the problem is whether you can get repair costs even if they exceed the diminution in value. For the quilt, it's either the market value or the repair cost. Because it has sentimental value there's difficulty on pricing sentimental value.

p. 443 Long v. McAllister

What is the measure of damages for a totaled car? The measure of damages is the fmv of the car just before the wreck.

Note: The owner of property can testify as to the car's value. Can you get the rental cast even if you don't go out and rent a car during the interim? The modern view is yes, you can get in addition to the fmv before the wreck the lost use of the car (rental value).

Three situations:

1. Totaled car - remedy is the fmv just before the wreck plus lost use. Damaged so badly that the repair cost will exceed the fmv of the car.

2. Situation where repairs will restore the car - remedy is the cost to repair plus the rental value.

3. Repairs will not restore the car to it's prewreck situation - give the P the diminution in value plus lost use.

* Tenn. - the insurance carrier has the option to repair or replace in most insurance contracts.

Stoops v. First American Fire Ins. 160 Tenn. 239

Senter v. Tenn. Farmers 702 SW2d 175

The carrier gets the option only when the car can be restored to its prewreck value.

Tenn. statute - presumption that your repairs are necessary and that your costs are reasonable. Under T.C.A. § 24-5-114, you can attach the repair bills to your complaint or to the civil warrant (initial pleading in General Sessions court.) The statute only gives you the presumption up to $1,000.

p. 447 Irving Pulp

Storage roof collapsed and fell down on the pulp - six week delay getting the roof off the gulp. Declining market in wood pulp during the delay - will the P be able to take advantage of the declining market? The typical rule in a fluctuating market is that it's immaterial.

p. 449, Note 2 - situation where you have either stocks or futures commodities. The New York rule has been expressly adopted by Tenn. - the injured P gets the highest value between the date of conversion (or the date of discovery) and the outer end of the reasonable time within which you should have been able to replace the securities.

Hedges v. Burke - 147 Tenn. 247

p. 449 Lane

Used household goods go up in smoke (used clothes, furniture, jewelry). There's not a real market for used household goods. Flea markets, Second hand sales, yard sales, etc. Low value.

Most courts allow the P to recover the value to the owner (that doesn't mean sentimental value). You must prove replacement value minus depreciation.

p. 451 Campins

Jewelry is converted by a jewelry store. Thief sells the store the jewelry (wedding band, awards). The usual measure for jewelry is the market value at the time of loss - jewelry still has a market value. Most courts say that with unique jewelry (heirlooms, wedding rings, etc.) you should get sentimental value. However, in Tenn. we do not allow sentimental value. Royal v. Days Inns, 708 SW2d 411.

p. 457, Note 5 - Pets are considered to be chattels - an injury to the pet is diminution in value. If the poodle is killed then the owner gets market value just before death.

p. 458 Talifero

Judge Posner allowed half of the amount requested because there was no evidence on damages.

Admiralty law - you can have an admiralty case on the Tenn. river.

Pure comparative negligence - even if the P is 99% at fault then the P can still recover 1% from the D.

p. 461 King Fisher

Barge sinks. Tort remedy is the replacement value to get another similar barge.

p. 464 Hewlett

Barge wrecked had no market value.

p. 469

Ask yourself, do I have damage to the land itself, damage to trees, damage to growing crops, and/or damage to minerals?

p. 470 Miller

Consequences of the salt mining damage is that you can't grow big crops. The tort theory is a nuisance theory: ask whether the nuisance is permanent or temporary - this matters as to whether the statute of limitations applies.

Kerney - 20 TAM 6-13 Denial of permission to appeal with a qualification. If the nuisance is such that it could be eliminated, solved, or repaired by spending money and labor then it's temporary in nature. Otherwise, it's permanent in nature--presumed to continue indefinitely.

Permanent nuisance - three year statute of limitations runs at the time of the initial damage done by the nuisance.

Temporary nuisance - you can recover damages going back in time for the past three years.

p. 420 Miller

Measure of damages is the diminution of rental value. Proved by showing the lower market price for wheat than for corn. Proved by the difference in value between the two crops. P also gets the cost to repair.

Paduch v. Johnson City - 896 SW2d 767

No longer the law that you can not sue a government municipality (city or county) for nuisance.

p. 475 General Outdoor Advertising

Court says, "We'll give the building owner the cost to repair the damages -- temporary damages." Tenn. - you get the cost to repair temporary damages but there's a cap (you won't get anymore than exceeds diminution in value). Permanent destruction - you get fmv at the time of loss.

p. 479 Laube

Your damage measure for destruction of growing timber was the market value of the timber at the time.

p. 480 Kronlik

Special, ornamental trees. Remedy = market value at the time of destruction plus the aesthetic value. Removal of gravel.

Tenn. statute on timber - T.C.A. § 43-28-312 - the exclusive remedy for neglient cutting of timber is double the market value. However, with intentional and knowing cutting you get treble damages. Shade trees, shrubs in front of the house -- the usual measure is the diminution in value. But you might also recover some sort of special value - Pepper v. Gainesboro Telephone - 1 Tenn. 175 - Before and after diminution in value plus some special value for trees that provide shade or ornamental value.

Tenn. law on crops is confusing.

Ducktown Copper Co. v. Barnes - 600 SW2d 593, 607

Case where the fumes from copper mills killed crops. The value of the crops is the value of destruction.

L&N Railroad v. Channel - 2 Tenn. Cir. 154

Discussion of when the particular destruction took place - was it destruction of the seeds or destruction of the crop? Give the land owner the rental value of the land. Early in the season? Then owner gets labor, materials, and rental value for the season thus far. Middle of the season? Then owner gets the value of the crop at market minus any expenses he would have had (labor to get it to the market, fertilizer, etc.). The value at market is what the crop would have sold for. Trout v. Braham, 660 SW2d 502, a more recent case.

It makes a difference whether the trespass (or mining of another's land) was intentional:

1. a. If negligent - we'll give you market value minus what it cost the negligent trespasser to mine the land

b. Or we'll give you the (land owner) the royalty rate

2. If intentional - we'll give the injured landowner the market value

p. 491, Note 2 Clean Water Act - the correct cite is Title 33, 1251

Tenn. law on comparative fault.

McIntyre v. Balentine - 833 SW 2d 52

Conservative version of comparative fault. If the P is no more than 49% at fault and all other tortfeasors are at fault then the P can get a verdict. Concern among legislators because the Supreme Court had partially gutted the Uniform Contribution Tortfeasors Act. Under McIntyre, we only decide the relative fault of each tortfeasor. Special request for the judge to charge the jury on comparative fault. Jury found that it was more McIntyre's fault than Balentine's. A question presently before the Tenn. Supreme Court is where the P is the work employee and the employer is one of the tortfeasors does comparative fault apply? Hint is in the Volz case (med. mal. case) where the judge says it doesn't matter that one tortfeasor is insolvent. Likewise, it probably doesn't matter that one tortfeasor is immune. Recall that govt. entities have caps on the amount of damages.

"open and obvious" rule - a doctrine that used to be an absolute defense now just part of the mix of things for the jury to consider

Does McIntyre apply in an intentional tort? We don't know. Does it apply in a contract case? Probably in a quasi-contract case.

Two things the legislators did in response to McIntyre:

1. They passed a statute, T.C.A. § 20-1-119, which is a savings statute (not the one year savings statute after taking a nonsuit). Once the answer either names or identifies another tortfeasor the savings statute gives the P ninety days to add as a party the other tortfeasor.

2. Passed T.C.A. § 29-20-313 which addresses situations where there's some fault on the part of a city of county. Normally, a case against a city or county is not a jury trial. Statute says that where a city is brought in as an additional tortfeasor then you can have a jury trial against both Ds.

Persz v. McConkey - 872 SW 2d 897

Provision says that you must have 5 employees for the Comp. Act to apply. Ms. Perez sued her employer for a tort because she worked in a room that was very hot. She passed out. The defense was that she had assumed the risk. Court said that assumption of the risk is no longer a complete defense but is one factor for the court to consider when allocating the relative parties' fault. However, contractual express assumption of the risk is still an absolute bar, according to Prof. Paine.

There was a question raised after McIntyre as to whether comparative fault applied to strict liability cases. Certified questions to the Supreme Court of Tenn. in Whitehead v. Toyota, 897 Sw 2d 684. Whitehead claims that he wouldn't have been hurt as badly if Toyota's seatbelt had worked. Enhanced injury claim. Court says that, yes, the comparative fault rule applies to strict liablity.

$100,000 - total injuries

$50,000 - enhanced injury claim due to the seatbelt problem

Question: Will there be a comparative weighing of acusation?

Bervoets v. Harde Rawls Pontiac, 891 SW 2d 905

What about contribution? Cactus Jack's bar serves Jackson. Jackson is an underage driver. Bervoets is Jackson's passenger. Heaslthy settlement between Bervoets and Jackson for one million and a quarter. But Jackson wants some help from Cactus Jack's under the doctrine os contribution. Can you still get some contribution after McIntyre adopted comparative fault? Tell jurors to decide if they think the settlement amount was reasonable. If they think so then they decide the relative amount of fault between Jackson and Cactus Jack's. If the jurors think the settlement was too high then decide on a proper amount and allocate what amount each tortfeasor (Cactus Jack's and Jackson) must pay.

Eaton v. McLain - 891 SW2d 587

Grandmother was 40% at fault and the homeowners were 60% at fault. Supreme Court finds that there was no tort committed against the grandmother. Unless there's been a duty violated then don't worry about comparative fault. Court says that lots of other doctrines are consumed by comparative fault: sudden emergency doctrine, rescue doctrine, fault of minor, etc. Just take these things into consideration when allocating fault.

Volz v. Dr. Ledds - 895 Sw 2d 677

Wrongful death suit brought only against Dr. Ledds. Expert testimony shows that Volz had a 60% chance of living if Dr. Ledds had done the right thing when Volz made his first appointment with Ledds. Jury decides the following ratios:

Volz - 10% at fault for not following up with appointment

Ledds - 45% at fault

Lewis - 45% (not a named D)

Dr. Lewis was insolvent, so he wasn't named. Supreme Court said tough luck. What happens if you have a tortfeasor who's immune from suit? Ex. - employers are immune from suit because Worker's Comp. Act. Tortfeasor is protected by the 4 year statute of repose. Ex - restaurant ceiling falls on customer.

Right v. Knoxville - 898 Sw 2d 177

Comparative fault also applies where you have emergency vehicles. Right gets nothing because more than 50% at fault.

Atkinson v. Hemphill - 19 TAM 37-6

Another good situation . . . Suppose that the injured party is subjected to medical malpractice after a car wreck. Old doctrine was that the negligent doctor picks up the whole tab because it was a foreseeable risk. This case holds that you pick up the tab for the hospital's malpractice or negligence if you take the injured party to the hospital.

Ownes v. Truckstops of America

The injury occured prior to McIntyre. Truckstops claimed that it was also the fault of the stool manufacturer, but they weren't named. Can you use the savings statute (90 days) retroactively? Can the other tortfeasors rely upon the savings statute retroactively to bar the claim?

Acts:

1. Medical Malpractice Act - Volz case. T.C.A. § 29-26-115 et seq.

a. To prove your case you must have a doctor who's practiced either in Tenn. or in a neighboring state.

b. one-year statute of limitations

c. three-year statute of repose

d. You don't tell the jury how much you're suing for. . . .

e. statutory limit on atty's fees is 1/3