Artistry v. Tanzer
| Decision Date | 26 December 2012 |
| Docket Number | No. W2012–00216–COA–R3–CV.,W2012–00216–COA–R3–CV. |
| Citation | 403 S.W.3d 789 |
| Parties | AUDIO VISUAL ARTISTRY v. Stephen TANZER. |
| Court | Tennessee Court of Appeals |
OPINION TEXT STARTS HERE
Edward M. Bearman, Memphis, Tennessee, for the appellant, Stephen Tanzer.
Randall J. Fishman and Richard S. Townley, Memphis, Tennessee, for the appellee, Audio Video Artistry.
J. STEVEN STAFFORD, J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and HOLLY M. KIRBY, J., joined.
This is a breach of contract case. Appellant/Homeowner contracted with Appellee for the installation of a “smart home” system. After myriad problems arose, Appellant fired Appellee, who filed the instant lawsuit to collect the unpaid balance for equipment and installation. The trial court determined that the primary purpose of the parties' agreement was the sale of goods and applied Article 2 of the Uniform Commercial Code. The court granted judgment in favor of Appellee, but allowed certain offsets for items rejected by Appellant. Appellant appeals, arguing that the trial court erred in applying the UCC, and in its calculation of damages. Appellant also appeals the trial court's determination that the Tennessee Consumer Protection Act does not apply. Discerning no error, we affirm.
On or about March 26, 2004, Appellant Stephen Tanzer and Appellee Audio Video Artistry (“AVA”) entered into discussions for the sale and installation of electronic and entertainment equipment in Mr. Tanzer's home. AVA is a residential entertainment and communications firm specializing in custom design projects. AVA is a general partnership; its partners, Chris Rogers and Brad Parsley, founded the firm in 1999 to offer state-of-the-art home theater, multi-room music and television, lighting control and phone/intercom systems. The sale, installation, and integration of these systems for the creation of a “smart home” (also known as “domotics”) is AVA's specialty.
In March 2004, Chris Rogers met with Mr. Tanzer to discuss Mr. Tanzer's desires for the home he was building. Based upon their discussion, AVA submitted a proposal to Mr. Tanzer for components, parts, and installation, totaling $78,567.13. The written proposal specifically provided for the following work:
• 6 “independent” zones of music consisting of 13 rooms and related equipment to switch, power, and control the music system;
• phone system throughout the house with door communications;
• lighting control system throughout the house to include 64 standard wattage (600w) loads;
• network wiring for television, phone, music, and computers throughout the home.
The systems pricing for this work (i.e., the total price of $78,567.13) was broken out in the original proposal as follows:
• Equipment: $56,375.00
• Labor/Programming: $9,880.00
• Cable: Misc. Parts: $5,660.00
• Total: $71,915.00
On September 22, 2004, AVA and Mr. Tanzer entered into a written contract, which incorporates the original proposal, adding an additional “seventh zone” for music, and also adding seven automated shades. These shades were included as a “purchase incentive” at no cost to Mr. Tanzer. The contract provides that, in the event the shades do not work in an acceptable fashion, Mr. Tanzer would receive an additional $8,400 credit. The contract further contemplates that Mr. Tanzer's needs and desires for the “smart system” would likely evolve during the course of the project; therefore, the contract specifically provides that “[v]erbal agreements throughout the life of the project may also be honored as part of this contract and will be documented by AVA.”
As originally contemplated, the contract called for a Concierge whole-house audio system. The audio/visual items were to be integrated via the Crestron system, which would allow Mr. Tanzer to play music in the seven, independently-controlled music “zones.” 1 Remote control “touch-panels” would control and integrate DVD, television, music, and other smart home functions. The contract further included a Lutron automated lighting system, which would be integrated into the Crestron system, along with an intercom/phone/whole house networking system.
At the time the parties entered their contract, construction had just commenced on Mr. Tanzer's home. The home is not a usual residence; rather, it is an approximately 15,000 square foot, $3.5 million dollar build. Because of the size and scope of the project, AVA was to install certain wiring and equipment during the construction process. Pre-wiring began on the house as the framing went in, but equipment installation and programming of the smart system did not begin in earnest until March, 2006. Mr. Tanzer and his family moved into the home in April, 2006.
During the project, and as contemplated in the contract, the original scope of work was changed and AVA performed additional work. One significant change was the decision to use an Escient music system in lieu of the Concierge music system. Mr. Rogers allegedly represented to Mr. Tanzer, after the job had begun, that the Escient system was better able to do what Mr. Tanzer wanted, i.e., stream music from his PC, which was not a function that the Concierge system offered. AVA agreed to sell and install the Escient system for the same price as the Concierge system. Later, an art frame and shade were also added to conceal the television in the sitting room. The “art shade” is a custom-painted, frame-mounted piece of artwork on canvas, which can be rolled down to conceal a television at the push of a button. Other changes related to the Crestron touch panels, which were changed from radio-frequency panels to Wi–Fi panels (Crestron came out with a Wi–Fi product before installation commenced). The Wi–Fi panels were changed at the same cost as that previously quoted for the radio-frequency panels. Another change was the switch in the music distribution equipment, which would allow for future expansion of the system. Further changes included equipment for the media room and five additional pairs of speakers. AVA also integrated the pool system, the alarm system, and the HVAC system with the Crestron control system.
Mr. Tanzer eventually became unsatisfied with AVA's work. Mr. Tanzer contends that, based upon Mr. Parsley's statements, he thought that the installation, programming, and debugging of the “smart home” system would take less than three months. However, Mr. Tanzer claims that, after fifteen months, he was still having significant problems with the functionality of the system. Specifically, Mr. Tanzer states, in his brief, that: (1) the punch list ebbed and flowed; (2) [t]he programming was unstable; (3) “[i]t seemed every time AVA would come out to resolve one problem, two or three new problems would crop up in its place;” (4) [t]hings that AVA fixed didn't stay fixed. As a result, Mr. Tanzer became “extremely frustrated and inconven[ienced].” To compound these alleged issues, in July, 2006, the basement of the house flooded, damaging the media room. A year later, in July of 2007, while AVA was allegedly still trying to “debug” the system, the home was struck by lightning. The power surge from the lightning caused damage to the Crestron processor and Ethernet card. Although the damaged components had no warranty against “Acts of God,” it is not disputed that AVA replaced them without additional charge. In August 2007, Mr. Tanzer fired AVA and requested a final billing.
Both the original equipment and work and the additional work, equipment, and changes were set out in Invoice # 3036, which was presented by AVA to Mr. Tanzer. This Invoice shows a total project cost of $119,402.15, and reflects an outstanding balance of $43,824.55. Mr. Tanzer disputed this balance and the instant lawsuit ensued.
On November 19, 2007, AVA filed suit against Mr. Tanzer for breach of contract. On December 31, 2007, Mr. Tanzer filed his answer, in which he denies any liability. Concurrent with the answer, Mr. Tanzer filed a counter-complaint against AVA, alleging that AVA breached the contract and seeking damages for the breach. AVA answered the counter-complaint, denying any liability.
After the lawsuit had commenced, in February or March of 2008, a second lightning strike to the house shut down the entire “smart home” system. Mr. Tanzer then hired Marquis Home Solutions (“Marquis”) to make repairs. Tom Brown, an employee of Marquis, testified that there were numerous problems with AVA's installation of the systems, including: (1) improper power source to the Lutron processor;(2) improper surge protection; (3) failure to install the Lutron processor in a proper recessed and covered enclosure; (4) failure to label wiring and improper wiring; (5) instability of the Wi–Fi handles for the Crestron system. Marquis charged Mr. Tanzer $67,587 for the repairs. Mr. Tanzer avers that the amount Marquis charged includes only the cost of repairs to the systems that AVA installed, and does not include the price of any upgrades.
The parties filed various trial briefs, which are incorrectly included in this record. Tenn. R.App. P. 24(b) (). Regardless, on May 19, 2011, the trial court entered its preliminary findings of fact and conclusions of law, which were based upon the parties' briefs. Therein, the court states, in relevant part, that:
[T]he Court finds that the parties' agreement in this matter involved the sale of consumer goods governed by the Uniform Commercial Code found at T.C.A. § 47–2–101 et seq. Although the parties' agreement involved some provision of labor and services, an examination of the entire transaction and application of the “predominant factor” test, leads the Court to the conclusion that this was simply an agreement for the sale and installation of electronic equipment. The labor and services provided under the terms of the parties' agreement was...
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