Bubis v. Blackman

• Decision Date: 24 April 1968
• Citation: 435 S.W.2d 492,58 Tenn.App. 619
• Parties: Alan BUBIS and Irvin Wolf, Appellees, v. William G. BLACKMAN, Appellant.
• Court: Tennessee Court of Appeals

Page 492

435 S.W.2d 492

58 Tenn.App. 619

Alan BUBIS and Irvin Wolf, Appellees, v. William G. BLACKMAN, Appellant.

Court of Appeals of Tennessee, Middle Section.

April 24, 1968 Certiorari Denied by Supreme Court Oct. 7, 1968.

Lawrence E. Levine, George H. Cate, Jr., Nashville, for appellees.

William J. Harbison, Trabue, Minick, Sturdivant & Harbison, Nashville, for appellant.

OPINION

SHRIVER, Judge.

This is a suit for specific performance of a contract to sell certain real estate belonging to defendant Blackman consisting of an apartment building constructed by defendant on land owned by him and located on White Bridge Road, Nashville, Davidson County, Tennessee, the contract price being $406,000.00.

This is the second appeal in the case, the first appeal being from the decree of the Chancellor ordering specific performance of the contract. In said first appeal this Court rendered an opinion and decree on December 10, 1966 in which the decree for specific performance was set aside and a decree for damages awarded. Our conclusions in the matter were stated as follows:

'We feel compelled to agree with the Chancellor that this experienced real estate man and builder signed the contract as it is shown in the record and should have known what he was doing, and the mere fact that his deal turned out to be unprofitable is not sufficient to defeat the rights of the complainants.

On the other hand, we think there is substantial evidence to indicate that the defendant either by oversight or for some reason not disclosed by the record, misunderstood the transaction with respect to the appliances, he being under the impression that the cost would be assumed by the buyers as was the case in a previous transaction handled by Wolf.

Taking into consideration all of these facts, we are persuaded to believe that the remedy of specific performance should not be enforced, but that justice can be accomplished by decreeing damages for breach of contract.

It, therefore, results that the findings of fact of the Chancellor are concurred in by this court and the judgment for complainants is affirmed insofar as it awards a decree for damages and provides a reference to the Master to determine the amount of damages sustained by reason of breach of contract, but the order for specific performance is denied.

Affirmed as modified, and remanded to the Trial Court for further proceedings consistent with this opinion.

/s/ Thos. A. Shriver'

There was no Petition for Certiorari to the Supreme Court and, on the remand after proof was taken as to damages on a reference to the Master, there was a decree awarding complainant Bubis damages in the amount of $77,507.50 and complainant Wolf a real estate commission of $20,300.00, from which decree the defendant Blackman duly perfected his appeal and has assigned errors.

ASSIGNMENTS OF ERROR

There are five assignments of error as follows:

1. The Chancellor erred in awarding damages based on an alleged difference between the contract price and market value of the apartments.

This item of damages was $69,000.00. It was awarded over defendant's exception which rested upon principles of estoppel as well as upon the preponderance of the proof. Both complainants were permitted to abandon their former position and assert a large loss of bargain to the purchaser, despite a lack of pleadings on the subject and their totally irreconcilable testimony to the contrary.

2. The Chancellor erred in awarding complainant Wolf a commission in view of his obvious effort to negotiate a contract prejudicial to one principal and favorable to the other.

3. The Chancellor erred in holding that Blackman's exception to Wolf's commission was a mere re-argument of his former contentions on the first trial.

4. The Chancellor erred in not dismissing the suit entirely in view of the dual agency of Wolf who obviously was undertaking to serve the interests of Bubis at Blackman's expense, Bubis being chargeable with the conduct and acts of his own agent in the transaction.

5. The Chancellor erred in not allowing Blackman credit against the prorated rents for his interest, taxes and costs of operating prior to December 1, 1964.

The questions presented by the record and the assignments may be simply stated as (1) What amount of damages is complainant Bubis entitled to recover by reason of Blackman's breach of contract; (2) Is Wolf entitled to his real estate broker's commission of $20,300.00 to be paid by defendant Blackman?

ON THE QUESTION OF DAMAGES

As is seen from the foregoing quotation of a part of this Court's opinion on the former appeal, the question of liability of the defendant for damages for breach of contract is foreclosed and not subject to attack on the present appeal.

On the other hand, the question of the amount of damages as fixed by the court on remand is subject to serious question here. It is insisted by counsel for defendant, appellant, who will be referred to hereinafter as defendant, that in the record of the first appeal and on pre-trial depositions, both complainant, Bubis, and complainant, Wolf, testified unequivocally that the contract price of $406,000.00 was a fair price in every respect and if they had been kept up in good condition the apartments had a fair value equal to the contract price. As stated in the brief and argument of counsel for defendant, 'This was their position deliberately taken when they were seeking specific performance.'

However, after specific performance had been denied by this Court, both complainants testified that the apartment buildings and land were worth far in excess of the contract price, and that Bubis the purchaser had been damaged to the extent of the difference between the contract price and the then market price.

Mr. Wolf started out in the transaction as defendant's agent and therefore occupied a fiduciary relationship toward him. In spite of this, however, his testimony on remand was to the effect that the property at the time of the breach of contract was worth some $70,000.00 more than the price he had helped his principal Blackman obtain for it. At this point it might be also remembered that, although he represented Blackman, he first brought a proposition to Blackman from Bubis of $5,600.00 per unit for the apartments, and when Blackman refused this he promptly came back with a $5,800.00 per unit offer which Blackman accepted, and it was revealed that Bubis had authorized the $5,800.00 in the first place.

For these reasons it is insisted by defendant that Wolf should not be allowed to recover a commission.

We will come back to this proposition later but will continue our consideration of the award of damages.

In the Brief and Argument of Counsel for defendant the following argument is made:

'We submit that an outrageous and shocking result has been reached in this case, and one never even remotely contemplated by this Court when it rendered its opinion on December 10, 1966. Both complainants should have been repelled in their attempt to claim a difference between market price and the contract price, and their proof on this question taken on the remand should be disallowed, since on the first record they had expressly disavowed any such difference in value and had urged that the contract price was fair, equitable and fully representative of the market value of the property.'

In our opinion on the first appeal we found that there had been a misunderstanding by defendant Blackman as to how the cost of appliances in the apartments were to be handled, since Blackman had thought that this cost would be assumed by the purchaser in the same manner as was done in a prior transaction involving an apartment building sold by him and handled by his agent Irvin Wolf. It was partly for this reason that this Court denied specific performance and remanded the cause for fixing of damages.

On remand the Clerk and Master was directed to consider the proof already on file, together with such additional proof as the parties desired to take on the question of damages. Thereupon, complainants took further depositions of both Bubis and Wolf, plus the deposition of an appraiser, Felix Treadway. The defendant offered the testimony of Homer B. Gibbs, Jr., an appraiser, and that of Mrs. Blackman.

On considering the proof, the Clerk and Master reported that the apartments had a value on the date of the breach of $475,000.00 as against the contract price of $406,000.00, and he found that half of the rents collected prior to the closing date amounted to $8,507.50 which, together with the $69,000.00 difference in actual value as against the contract price, was awarded Bubis as damages. Wolf was given a judgment for $20,300.00 commission.

It is pointed out that neither the Clerk and Master nor the Chancellor commented on the previous testimony of the complainants and the Clerk and Master properly stated that the question of judicial estoppel was one of law for the Court. However, the Chancellor did not comment on it in his opinion or his decree.

In is urged by counsel for defendant that, on the record existing when the case was remanded, the position deliberately taken by complainants in sworn testimony, confined their claim for damages to an accounting for the rents collected and any loss of rents by reason of diverting tenants from the apartments prior to the scheduled closing date, plus the real estate agent's commission.

It is further argued that there was neither pleading nor proof to support a claim for damages for loss by reason of a difference in the contract price and the market value of the property on the date of the breach. On his pre-trial deposition taken April 8, 1965, four months after the scheduled closing date of December 1, 1964, Bubis testified that at the time the contract to pay $406,000.00 for the apartments was set up he felt like it was a fair price for both parties, but when asked if they were not worth more at that time than at the time...