Boswell v. RFD-TV the Theater, LLC

• Decision Date: 18 March 2016
• Docket Number: No. M2015–00637–COA–R3–CV,M2015–00637–COA–R3–CV
• Citation: 498 S.W.3d 550
• Parties: Troy L. Boswell p/k/a Leroy Troy v. RFD–TV the Theater, LLC, et al.
• Court: Tennessee Court of Appeals

498 S.W.3d 550

Troy L. Boswell p/k/a Leroy Troy

v.RFD–TV the Theater, LLC, et al.

No. M2015–00637–COA–R3–CV

Court of Appeals of Tennessee, AT NASHVILLE.

February 17, 2016 Session

Filed March 18, 2016

Application for Permission to Appeal Denied by Supreme Court August 18, 2016

W. Scott Sims and David Gilbert Schuette, Nashville, Tennessee, for the appellant, RFD–TV The Theater, LLC.

Bruce H. Phillips and Sarah Kathryn Gritton, Brentwood, Tennessee, for the appellee, Troy L. Boswell.

Brandon O. Gibson, J., delivered the opinion of the court, in which Frank G. Clement, Jr., P.J., M.S. and W. Neal McBrayer

, J., joined.

OPINION

Brandon O. Gibson, J.

This appeal arises out of a breach of contract action filed by a musical performer after the defendant venue owner cancelled the show in which the plaintiff performed. The trial court found in favor of the plaintiff performer and ordered the defendant to pay $70,744 in damages for breach of contract, $59,864.18 in prejudgment interest, and $90,000 in attorney's fees. The defendant appeals, arguing that the awards of prejudgment interest and attorney's fees were erroneous according to Nebraska law, which the parties chose to govern their contract. For the following reasons, we reverse and remand for further proceedings.

I. Facts & Procedural History

Plaintiff Troy L. Boswell is a musical performer and a resident of Goodlettsville, Tennessee. He is professionally known as “Leroy Troy.” Defendant RFD–TV The Theater, LLC (the “Theater”) owns and operates a musical venue in Branson, Missouri. On February 5, 2007, the Theater entered into an entertainment services agreement (the “Contract”) with Boswell. Pursuant to the Contract, the Theater agreed to purchase from Boswell “[m]usical performances for the 2007 season,” with a starting date of March 1, 2007, and an ending date of October 31, 2007. The Contract listed 21 dates during that period when Boswell would be unavailable, due to previous bookings, and the parties agreed that a pro-rata amount of $715 per day would be deducted from Boswell's weekly fee for those absences. The Contract provided that Boswell's shows would last no more than 45 minutes, and he would perform no more than ten shows per week. However, the specific show dates and times were “[t]o be determined and mutually agreed upon by both parties.”

The Contract provided that from March 1 until the opening date of the venue, the Theater would pay Boswell $2,500 per week for rehearsals. Once the venue opened to the public, the Theater would pay Boswell $5,000 per week for the services provided. The Theater agreed to pay a $5,000 deposit to Boswell upon execution of the agreement, which would be applied to the payment for the final week of the contract term. The Contract also contained the following provisions:

BREACH OF CONTRACT. In the event of any action, suit or proceeding arising from or based on this agreement brought by either party hereto against the other, the prevailing party shall be entitled to recover from the other its reasonable attorney's fees in connection therewith in addition to the costs of that action, suit or proceeding.

GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Nebraska.¹

The parties agree that the Theater paid Boswell the $5,000 deposit as an advance payment for his final week of performances, and it also paid him $2,500 per week for rehearsals from March 1 until March 29, 2007, when the Theater opened to the public. Thereafter, Boswell performed a total of 60 shows at the Theater from its public opening on March 29 through June 28, 2007. The Theater paid Boswell $5,000 per week during that time. However, on July 1, 2007, the president of the Theater called a meeting with all staff and crew and announced that the show was cancelled.

On July 9, 2007, Boswell's attorney sent a letter to the Theater advising it that Boswell was ready, willing, and able to perform pursuant to the parties' Contract. The letter suggested that the Theater was “in material breach” of the Contract by terminating Boswell's weekly payments of $5,000 and indicating that it would no longer honor the Contract. The letter stated that Boswell was making every effort to mitigate his damages, but due to such late notice, he had not been successful in his efforts. Boswell claimed that he was entitled to $5,000 for the previous week's missed payment and “approximately $80,000 in additional compensation.” He requested that the Theater contact his attorney “to work out payment of damages,” but the Theater never responded to the letter or made payment to Boswell as requested in the letter.

On October 11, 2007, Boswell filed this lawsuit in Davidson County Circuit Court. He named as defendants the Theater and other separate but related entities. The complaint sought recovery based on breach of contract and/or promissory estoppel. The complaint alleged that the term of the Contract was from March 1, 2007, until October 31, 2007, and therefore, the Theater breached the Contract by cancelling the show on July 1, 2007, and discontinuing payments to Boswell. Boswell alleged that he was ready, willing, and able to perform under the Contract but was not allowed to do so. He sought damages for breach of contract in the amount of $82,140. Specifically, he sought $5,000 for each of the remaining weeks of the contract (equaling $90,000), minus the $5,000 deposit already paid, minus the pro rata fee of $715 for four days he would have missed during the remainder of the contract term, totaling $2,860. He also sought an award of prejudgment interest and an award of attorney's fees as provided in the parties' Contract.

The case remained pending for several years.² Throughout the proceedings, the parties agreed that Nebraska law applied to the substantive issues in the case, while Tennessee law governed procedural issues. The parties stipulated that the Theater had already paid Boswell a total of $77,500 pursuant to the Contract. However, the Theater asserted that it had no further obligation to pay Boswell after it cancelled the show on July 1, 2007, because the Contract provided that show dates and times were “[t]o be determined and mutually agreed upon by both parties.” The Theater claimed that this constituted an unenforceable “agreement to agree.”

The trial court held a bench trial from November 17 to November 19, 2014. On March 4, 2015, the court entered a final order entering a judgment in favor of Boswell. The trial court found the contract enforceable, valid, and unambiguous. The court concluded that the Contract was for a specific term—from March 1 through October 31, 2007. The court concluded that Boswell was obligated to be available to perform during that time, with specific dates and times to be determined on an ongoing basis, and it found that his payment was not conditioned on the number of his performances. The court found that the Theater materially breached the Contract by cancelling the show on July 1, 2007, due to no fault of Boswell, and by failing to pay him the weekly sum due under the Contract.

The trial court looked to the Contract to calculate Boswell's damages. It found that he was entitled to be paid $2,500 per week for the four-week period between March 1 and the opening of the Theater on March 30, 2007, for a total of $10,000, in addition to $5,000 per week for the remaining thirty-one weeks of the Contract term, for a total of $155,000. In sum, he was to be paid $165,000 during the term of the Contract. As noted above, the Theater paid Boswell $77,500 prior to cancellation of the show. The trial court found that the Theater was entitled to deduct from the amount owed the pro rata allowance for the 21 dates specified in the Contract for previously booked performances, at the rate of $715 per day, for a total deduction of $15,015. Finally, the trial court found that Boswell had a duty to mitigate his damages and did so by making reasonable attempts to find other work. The trial court found that he earned $1,741 from performances and merchandise sales, which the trial court deducted from the amount owed by the Theater. In sum, the trial court calculated Boswell's damages for breach of contract at $70,744.

The trial court granted Plaintiff's request for prejudgment interest pursuant to Nebraska Revised Statutes section 45–104

. Applying the statutory rate of 12%, and calculating the amount owed from October 31, 2007, through November 19, 2014, the trial court awarded Boswell $59,864.18 in prejudgment interest.

The trial court also awarded Boswell $90,000 in attorney's fees pursuant to the attorney's fee provision in the parties' Contract. The trial court acknowledged the parties' choice of law provision specifying that the law of Nebraska would apply to the Contract. Under Nebraska law, “[i]n the absence of a uniform course of procedure or authorization by statute, contractual agreements for attorney fees are against public policy and will not be judicially enforced.” Stewart v. Bennett, 273 Neb. 17, 727 N.W.2d 424, 426 (2007)

. However, the trial court predicted that a Tennessee appellate court would hold that attorney's fees are a matter of procedural law. Because the law of the forum state governs procedural issues, the trial court applied Tennessee law and found the parties' contractual attorney's fee provision enforceable.

The Theater timely filed a notice of appeal to this Court and now challenges the trial court's awards of prejudgment interest and attorney's fees under Nebraska law.

II. ISSUES PRESENTED

The Theater presents the following issues for review on appeal:

1. Whether the trial court erred in awarding prejudgment interest to Plaintiff under applicable Nebraska law; and

2. Whether the trial court erred in awarding attorney's fees to Plaintiff under applicable Nebraska law.

For the following reasons, we reverse and remand for further proceedings.

III. DISCUSSION

When deciding which state's law to apply to...