Beaty v. McGraw

• Decision Date: 10 December 1998
• Docket Number: 9701-CV-00046
• Citation: 15 S.W.3d 819
• Parties: GUY BEATY, PLAINTIFF/APPELLEE, v. BOBBY MCGRAW AND STEVE BROWN, DEFENDANTS/APPELLANTS. AppealTennessee Court of Appeals
• Court: Tennessee Court of Appeals

GUY BEATY, PLAINTIFF/APPELLEE v BOBBY MCGRAW AND STEVE BROWN, DEFENDANTS/APPELLANTS

Appeal No. 01A01-9701-CV-00046

Tennessee Court of Appeals

December 10, 1998

APPEAL FROM THE CIRCUIT COURT FOR FENTRESS COUNTY AT JAMESTOWN, TENNESSEE Fentress Circuit No. 6969 THE HONORABLE CONRAD E. TROUTMAN, JUDGE

For Plaintiff/Appellee: John D. Agee Cooley, Cooley & Agee Kingston, Tennessee For Defendants/Appellants: James P. Smith, Jr. Crossville, Tennessee Patrick T. Phillips Knoxville, Tennessee

AFFIRMED IN PART; VACATED IN PART AND REMANDED

The opinion of the court was delivered by: William C. Koch, Jr., Judge

OPINION

This appeal involves a dispute over the sale and repossession of a drilling rig. The seller filed suit against the purchasers in the Fentress County General Sessions Court seeking immediate possession of the rig and damages. Following the purchasers' de novo appeal, the Circuit Court for Fentress County awarded the seller possession of the rig but held that the purchasers could recover the rig by paying the seller the outstanding balance of the purchase price. On the purchasers' appeal, this court held that the seller was entitled to a judgment for the unpaid purchase price but that the seller had not been entitled to repossess the rig. Accordingly, this court remanded the case to determine the purchasers' damages for the seller's wrongful detention of the rig. The purchasers asserted on remand that the appropriate measure of their damages had already been determined in a similar Roane County proceeding between the same parties. The trial court disagreed and awarded the purchasers $26,021 for the seller's wrongful detention of the rig and $8,000 in attorney's fees under Tenn. Code Ann. §§ 29-30-110 (1980). All parties have appealed. The purchasers assert that the trial court should have used the same measure of damages used in the Roane County proceeding and that they should have been awarded exemplary damages under Tenn. Code Ann. §§ 29-30-210 (1980). The seller asserts that the evidence preponderates against the trial court's damage award and that the purchasers were not entitled to recover their attorney's fees. We have determined that the trial court correctly calculated the purchasers' damages but that the case must be remanded for further consideration of the award of attorney's fees to the purchasers.

I.

In January 1986, Three G's Drilling Company sold a 1978 Drilltech Type SME drilling rig to Bobby McGraw and Steve Brown for $50,000. Messrs. McGraw and Brown paid $25,000 down and agreed to pay the balance in four $6,250 installments due between April 1, 1986 and January 1, 1987. Messrs. McGraw and Brown took possession of the rig but failed to execute a written contract or to make any of their payments. On March 13, 1992, Guy Beaty, one of the partners in Three G's Drilling Company, filed suit in the Roane County General Sessions Court seeking immediate possession of the rig. The general sessions court awarded Mr. Beaty a writ of immediate possession, and sheriff's deputies took possession of the rig and turned it over to Mr. Beaty in March 1992.

Messrs. McGraw and Brown resisted the Roane County suit and, in March or April 1992, convinced the general sessions court to dismiss Mr. Beaty's suit for improper venue. For some reason not apparent in the record, the general sessions court overlooked ordering that the rig be returned as contemplated by Tenn. Code Ann. §§ 29-30-208 (1980). Messrs. McGraw and Brown perfected a de novo appeal to the Circuit Court for Roane County because the Roane County General Sessions Court had declined to order Mr. Beaty to return the rig when it dismissed his case.

On April 2, 1992, Mr. Beaty filed suit in the Fentress County General Sessions Court seeking possession of the rig and damages. His application of the writ of possession recited that Mr. Beaty already had possession of the rig but that he was "in need of an order conferring the right to possession." The Fentress County General Sessions Court issued a writ of possession on April 3, 1992. After the entry of an order in Mr. Beaty's favor on June 2, 1992, Messrs. McGraw and Brown perfected a de novo appeal to the Circuit Court for Fentress County.

Thus, by April 1992, the parties were pursuing similar issues in both the Circuit Court for Roane County and the Circuit Court for Fentress County. In the Roane County proceeding, Messrs. McGraw and Brown again moved to dismiss Mr. Beaty's suit for improper venue. On October 5, 1992, the Circuit Court for Roane County dismissed Mr. Beaty's suit but, to Messrs. McGraw's and Brown's consternation, made no ruling on which party was entitled to possession of the drilling rig and declined to consider their claim for exemplary damages because they were pursuing a claim for exemplary damages in the Fentress County proceeding. On February 24, 1993, the Circuit Court for Fentress County entered a final order finding that Mr. Beaty was entitled to possession of the drilling rig but that Messrs. McGraw and Brown could obtain possession of the rig by paying Mr. Beaty $25,000 within thirty days. The court did not award Messrs. McGraw and Brown exemplary damages.

Messrs. McGraw and Brown appealed both circuit court judgments. The Roane County case was the first to reach the Court of Appeals. A panel of Western Section Judges, sitting in Knoxville, held that Messrs. McGraw and Brown were entitled to damages for Mr. Beaty's wrongful taking of the drilling rig and remanded the case with directions to assess these damages once the circuit court determined that it had subject matter jurisdiction to decide the claim. ¹ See Beaty v. McGraw, No. 03A01-9211-CV-00417, 1993 WL 119799 (Tenn. Ct. App. Apr. 16, 1993) (No Tenn. R. App. P. 11 application filed). In the second decision, a panel of Middle Section Judges affirmed the Circuit Court for Fentress County's judgment awarding Mr. Beaty $25,000 plus prejudgment interest but also found that Mr. Beaty had wrongfully detained the drilling rig. Accordingly, the court remanded the case to the circuit court for the consideration of damages. See Beaty v. McGraw, No 01A01-9312-CV-00544, 1994 WL 440897 (Tenn. Ct. App. Aug. 17, 1994) (No Tenn. R. App. P. 11 application filed).

At this point, both the Roane County and the Fentress County actions had been remanded to their respective trial courts with instructions to determine the damages due to Messrs. McGraw and Brown for Mr. Beaty's wrongful detention of the drilling rig. In the Roane County proceeding, the circuit court was to assess the damages from March 13, 1992 through April 3, 1992 - the time that Mr. Beaty held the rig under the aegis of the writ of possession issued by the Roane County General Sessions Court. In the Fentress County proceeding, the circuit court was to assess the damages from April 3, 1992 through mid-August, 1994 - the time that Mr. Beaty held the rig under the writ of possession issued by the Fentress County General Sessions Court. ²

On October 28, 1994, the Circuit Court for Roane County entered an order finding that it had subject matter jurisdiction and awarding Messrs. McGraw and Brown $1,885 in damages for the wrongful detention of the drilling rig from March 13 to April 3, 1992. The circuit court based its award on the fair monthly rental value of the drilling rig. ³

During the hearing before the Circuit Court for Fentress County, Messrs. McGraw and Brown asserted that the court should calculate their damages using the same calculation that had been used in the Roane County proceedings. The circuit court chose instead to base its damage calculation on the actual income Messrs. McGraw and Brown earned from the drilling rig in 1991. ⁴ After determining that Mr. Beaty had wrongfully detained the drilling rig under the writ of possession issued by the Fentress County General Sessions Court for twenty-nine months, the circuit court awarded Messrs. McGraw and Brown $26,021 in damages plus $8,000 in attorney's fees under Tenn. Code Ann. §§ 29-30-110. Both Mr. Beaty and Messrs. McGraw and Brown have appealed from the Circuit Court for Fentress County's April 25, 1996 order. Thus, we consider this dispute for the third time.

II. The Collateral Estoppel Issue

We turn first to the collateral estoppel issue. Messrs. McGraw and Brown assert that Mr. Beaty is collaterally estopped to advance any measure of damages for his wrongful detention of the drilling rig other than the fair rental value of the rig during the time it was detained because that was the measure of damages adopted by the Circuit Court for Roane County. Mr. Beaty responds that Messrs. McGraw and Brown are impermissibly seeking to use the doctrine of collateral estoppel offensively. Both sides are mistaken.

A.

Collateral estoppel is an issue preclusion doctrine devised by the courts. See Dickerson v. Godfrey, 825 S.W.2d 692, 694 (Tenn. 1992); Goeke v. Woods, 777 S.W.2d 347, 349 (Tenn. 1989); Morris v. Esmark Apparel, Inc., 832 S.W.2d 563, 565 (Tenn. Ct. App. 1991). Like other preclusion doctrines, its purposes are to conserve judicial resources, to relieve litigants from the cost and vexation of multiple lawsuits, and to encourage reliance on judicial decisions by preventing inconsistent decisions. See Allen v. McCurry, 449 U.S. 90, 94, 101 S. Ct. 411, 414-15 (1980); Disimone v. Browner, 121 F.3d 1262, 1267 (9th Cir. 1997).

Judge Friendly succinctly explained issue preclusion when he observed over thirty years ago that "[w]here the litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again." Zdanok v. Glidden Co., 327 F.2d 944, 953 (2d Cir. 1964). Thus, as our courts have construed the collateral estoppel doctrine, it bars the same parties or their privies from relitigating in a second suit issues that were actually raised and determined in an earlier suit. See Massengill v. Scott, 738 S.W.2d 629, 631 ...