A&P Excavating & Materials, LLC v. Geiger

• Decision Date: 25 November 2020
• Docket Number: No. E2019-01712-COA-R3-CV,E2019-01712-COA-R3-CV
• Citation: 622 S.W.3d 237
• Parties: A & P EXCAVATING AND MATERIALS, LLC v. David GEIGER
• Court: Tennessee Court of Appeals

622 S.W.3d 237

A & P EXCAVATING AND MATERIALS, LLC

v.David GEIGER

No. E2019-01712-COA-R3-CV

Court of Appeals of Tennessee, Eastern Section, AT KNOXVILLE.

August 20, 2020 Session

FILED November 25, 2020

Permission to Appeal Denied by Supreme Court: March 17, 2021

Jeffrey A. Cobble, Greeneville, Tennessee, for the appellant, A & P Excavating and Materials, LLC.

C. Christopher Raines, Jr., Driggs, Idaho, for the appellee, David Geiger.

Thomas R. Frierson, II, J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.

Thomas R. Frierson, II, J.

In this contract action, the trial court entered a judgment dismissing the plaintiff logging company's complaint for breach of contract, determining that the defendant landowner had been within his rights to terminate the parties’ agreement because (1) the contract, which had been drafted by the owner of the logging company, was not sufficiently specific to be enforceable and (2) the logging company had violated what was an unambiguous section of the contract requiring that the logging company follow directions concerning the logging operation given by the landowner's property manager. The logging company has appealed. Having determined that the parties’ contract is enforceable, we reverse the trial court's first basis for dismissal of the logging company's breach of contract claim. However, we affirm the remainder of the trial court's judgment in its entirety.

I. Factual and Procedural Background

The plaintiff, A&P Excavating and Materials, LLC ("A&P"), with Anthony Price as its sole owner, entered into a contract ("the Contract") with the defendant, David Geiger, on August 22, 2014, to log timber on unimproved real property owned by Mr. Geiger with an address of Housewright Hollow in Rogersville, Tennessee ("the Property"). The Contract itself does not provide any further description of the Property, although it does set forth such details as hourly rates for various machines to be used on the project, market value of various types of timber, haul rates, cost allowances for roads to be built, and liability for employees’ injuries. It is undisputed that at the time of the Contract's initiation, Mr. Geiger owned approximately 487 acres at the Property site.

As relevant to the issues raised on appeal, the Contract includes the following provisions:

In case of death of the owner this contract will continue with owner[’]s spouse and/or heirs. Contract can only be terminated prior to work completion with the following resolutions:

1. Contract buy-out: terms of buy-out would be by using a percentage of the remaining trees left and according to the work that has been previously put into this project or an agreeable dollar amount and discussed and agreed upon by both parties.

2. Equipment buy-out will be determined by and according to which machines that are purchased for this job and attached to the end of the contract and signed by both parties and signed on an addendum.

a. At the purchase of this equipment, after signing contract, serial numbers will be attached and put to contract addendum.

Work on this project will be continuous as the weather permits and with agreement between both parties.

Any revisions to this contract must be agreed to in writing by both parties.

A&P Excavating and Materials will be building roads in compliance with any laws or procedures that are needed to preserve the land owner's property. This being said, because of such costs and erosion maintenance the land owner will be responsible for all EPA permits if needed. A&P Excavating and Materials will be responsible for the normal logging requirements of erosion control during this logging project such as water breaks and grass seeding. However, if the EPA requires any extraordinary erosion control, such as hydro-seeding, etc., the cost will be split between both parties.

NOTE: No outside logging or excavating equipment or contracts without prior written consent from A&P Excavating and Materials and property owner.

Logging will be accomplished in accordance with the directives of the property manager.

Logs will be 18 inches or bigger measured at 5 foot in height unless discussed with property owner.

Any tree smaller or damaged in any way will be taken for pulp. Any tree in the area of logging, deemed by the property manager to have no future potential future [sic] will be taken for pulp.

Reasonable effort will be given to prevent erosion, to include proper grading of roads, water breaks, and grass seeding.

Limb-wood will be gathered where it is reasonable to do so, and can be pushed into hollows when appropriate to assist with erosion control.

Once logging operations have been completed in an area, A&P Excavating and Materials shall have no further claim on any wood products income derived from that area. (Ex.: firewood, mulch, etc.).

On February 12, 2016, A&P filed a complaint, alleging that Mr. Geiger had breached the Contract by allowing other individuals to log the Property, failing to remit payment to A&P for its share of timber removed by Mr. Geiger or others, and "purposefully interfer[ing] with and undermin[ing]" A&P's ability to complete the Contract. A&P requested an award of damages in the amount of $600,000, which it asserted was the lowest estimated value of the timber on the Property; a lien lis pendens against the Property in the amount of $600,000; and attorney's fees and costs.

On May 3, 2016, Mr. Geiger filed an answer, denying all substantive allegations of breach. Mr. Geiger asserted that A&P had agreed that Mr. Geiger could harvest his own timber for construction of a log cabin on the Property. Mr. Geiger stated that no one else was allowed to harvest timber from the Property and that none of the timber he harvested was sold. Mr. Geiger therefore asserted that the lien lis pendens was improper and that no attorney's fees could be awarded to A&P because the Contract had not provided for attorney's fees.

Mr. Geiger concomitantly filed a counter-complaint, claiming that A&P had breached the Contract by failing to account and remit payment for all logs removed, failing to "follow best management practices and take necessary reasonable conservation measures required by the Tennessee Department of Environment and Conservation," refusing to complete the logging of an area and clean up that area before moving on to log another area, and removing its equipment from the Property without notice to Mr. Geiger prior to completion of the Contract. Mr. Geiger requested that the trial court "discharge [A&P] from the Contract as having breached the Contract" and require A&P to account for all timber it had removed from the Property. Mr. Geiger also requested an award of actual damages in the amount of $200,000 and an award of punitive damages in the amount of $200,000.

With his counter-complaint, Mr. Geiger attached copies of the Contract and of a letter he had received from the Tennessee Department of Environment and Conservation ("TDEC"), dated February 24, 2016, concerning the logging harvest's impact on the water quality of a creek that flowed through the Property, known as "Big Creek," which was receiving "discharges of sediment" from the Property. A&P filed an answer to the counter-complaint on May 16, 2016, denying all substantive allegations.

On February 28, 2017, Mr. Geiger filed a "Motion to Amend Answer and Add Necessary Party," asserting that A&P's owner, Mr. Price, was individually liable and requesting that the trial court join Mr. Price as a party defendant in the action pursuant to Tennessee Rule of Civil Procedure 19.01. Mr. Geiger asserted that Mr. Price had diverted three loads of timber and sold it for his own personal gain without accounting for the timber to Mr. Geiger. Mr. Geiger further asserted that Mr. Price personally made decisions that affected the contamination of Big Creek. Mr. Geiger simultaneously filed a motion to dismiss A&P's lien lis pendens , asserting that the lien failed to comply with Tennessee Code Annotated § 20-3-101 because ownership of the Property itself was not the subject of the underlying litigation. Mr. Geiger also noted in this motion that he owned the Property as a tenancy by the entirety with his wife, Kimberly Geiger, and that his wife had not been joined as a defendant to the complaint. Following a hearing conducted on April 11, 2017, the trial court entered two separate orders on May 3, 2017, respectively altering A&P's lien lis pendens to be limited to "all standing timber" on the Property and granting Mr. Geiger's motion by allowing him to file an amended answer and join Mr. Price individually to the lawsuit.¹

Nearly two years later, acting through newly retained counsel, A&P and Mr. Price (hereinafter, collectively, "A&P") filed a "Motion for Continuance, Motion to Add Additional Parties, and Motion to Amend Complaint" on March 20, 2019. In this motion, A&P acknowledged that the case was set for trial on March 29, 2019, but averred, inter alia , that A&P's former attorney had missed scheduling deadlines and failed to interview or depose multiple potential witnesses. A&P also asserted that it needed to add "additional parties" to the lawsuit but did not specify their identities. A&P requested a continuance and that it be allowed to amend its complaint to "add additional claims against both the original defendant as well as against additional third parties." On July 11, 2019, A&P filed an amended answer to the counterclaim, raising additional listed defenses of unclean hands, equitable estoppel, and frustration without any explanation of those defenses.²

Following a bench trial conducted on July 19, 2019, the trial court entered a judgment and incorporated written memorandum opinion on August 26, 2019. The trial court noted in its memorandum opinion that upon the parties’ agreement, the court had consented to try the case in a bifurcated manner with the question of liability heard before the issue of damages. In its...