Desgranges v. Meyer, No. E2003-02006-COA-R3-CV (TN 5/11/2004)
| Decision Date | 11 May 2004 |
| Docket Number | No. E2003-02006-COA-R3-CV.,E2003-02006-COA-R3-CV. |
| Parties | STANLEY DESGRANGES DBA STANLEY'S EXCAVATING v. GORDON L. MEYER, ET AL. |
| Court | Tennessee Supreme Court |
Appeal from the Circuit Court for Knox County; No. 1-680-02; Dale C. Workman, Judge.
Judgment of the Circuit Court Reversed; Complaint Dismissed; Case Remanded.
W. Turner Boone, Knoxville, Tennessee, for the appellant, Stanley Desgranges dba Stanley's Excavating.
J. Ford Little and Stephanie K. Hunt, Knoxville, Tennessee, for the appellees, Gordon L. Meyer and Karen Renee Meyer.
Charles D. Susano, Jr., J., delivered the opinion of the court, in which Herschel P. Franks, P.J., E.S., and D. Michael Swiney, J., joined.
The primary and dispositive issue before us is one of first impression in Tennessee. We are asked to decide whether false statements made in a notice of lien duly served on the property owners, properly filed for recordation, and thereafter followed by the timely filing of a suit to enforce the lien, all pursuant to the provisions of Tenn. Code Ann. § 66-11-101, et seq., are absolutely privileged. We hold that, in such a case, the statements in the lien are made in the course of a judicial proceeding, are absolutely privileged, and, hence, cannot form the basis for a suit for damages on a libel of title theory. We reverse the judgment of the trial court holding to the contrary and dismiss the original defendants' counterclaim seeking damages for libel of title.
Gordon L. Meyer and his wife, Karen Renee Meyer (collectively "the Meyers"), owned a parcel of land in Knox County. The Meyers approached Stanley Desgranges, who did business as Stanley's Excavating ("the lienor"), and attempted to hire him to grade their property for a horseback riding arena. After the lienor declined the Meyers' request, the Meyers orally contracted with Paul Randall Satterfield to do the grading. After Satterfield completed the work, the Meyers refused to pay him because his work was, according to them, "poor" and "lousy." When the Meyers refused to pay Satterfield, the lienor, in his own name and acting on his own behalf, served a notice of contractor's lien on the Meyers and filed it for recordation in the Register of Deeds' Office. The lien is expressly related to a debt allegedly owed by the Meyers to the lienor. The recorded lien includes the following statements:
NOTICE IS HEREBY GIVEN, pursuant to the provisions of TENN. CODE ANN. §§ 66-11-101, et seq., that Stanley Desgranges d/b/a Stanley's Excavating ("Contractor"), whose principal place of business is at 2204 Diggs Road, Knoxville, Tennessee 37932, claims and holds a lien upon certain real property located in Knox County, Tennessee and owned by Gordon L. and Karen Renee Meyer ("Owner"), which real property is commonly identified as the property located at 2404 East Gallaher Ferry Road, Knoxville, Tennessee . . . .
Said lien is claimed to secure the payment of the sum of Four Thousand Eight Hundred Dollars ($4,800.00) for the supply of labor and/or materials by Contractor for the improvement of the Property pursuant to a direct contract with Owner, and also for the expenses of recording this lien in the Register's Office for Knox County, Tennessee. Said amount is due, owing and unpaid, after allowing all just credits and deductions. This notice is given and filed within the time prescribed by law.
(Capitalization in original). Sometime after the notice of contractor's lien was served on the property owners and placed of record in the Register of Deeds' Office, the lienor timely filed suit against the Meyers in chancery court seeking a writ of attachment, enforcement of his contractor's lien, and other relief. The lienor alleged in his complaint that (1) he had a contract with the Meyers and (2) that Satterfield was his subcontractor.
The Meyers responded to the complaint, denying that they had a contract with the lienor. They coupled their answer with a counterclaim for compensatory and punitive damages based upon fraud, abuse of process, and outrageous conduct.1 The Meyers also filed a motion for summary judgment along with a statement of material facts not in dispute. They then amended their counterclaim to allege a cause of action for libel of title. The chancery court ruled that the lienor did not have a contract to grade the Meyers' property and was not entitled to a lien against their property. The court granted the Meyers' motion for summary judgment, after which the lienor released the lien. At the behest of the lienor, the chancery court transferred the Meyers' counterclaim to circuit court ("the trial court"). The lienor then filed a motion for judgment on the pleadings on the ground that the statements in the notice of contractor's lien were "absolutely privileged" because, according to the lienor, they were made in the course of a judicial proceeding. The trial court reserved judgment on the lienor's motion and the matter proceeded to trial.
A bench trial was held on the Meyers' counterclaim. Mr. Meyer testified that he and his wife did not have a contract with the lienor. He also testified that the lienor did not perform any work on the Meyers' property and that the lienor did not bill the Meyers for any of the grading done by Satterfield. Mr. Meyer stated that he had incurred attorney's fees totaling over $6,500 as a result of the lienor's pursuit of his claimed lien rights.
After Mr. Meyer testified, his attorney read into evidence a portion of the lienor's deposition. In his deposition, the lienor testified that, when he realized he was not in a position to do the grading work himself, he introduced the Meyers to Satterfield and recommended to them that they hire his friend to do the job. The lienor stated that he did not expect to receive any monetary compensation directly from the work, but hoped that Satterfield would reciprocate by sending him work in the future. The lienor acknowledged that he did not keep records of Satterfield's hours at the Meyers' property; did not perform any of the work himself; and did not send an invoice to the Meyers.
The lienor testified in person at trial. He again admitted that he personally had not performed any work for the Meyers; however, he persisted in his claim that Satterfield was his subcontractor.2 The lienor also testified that he contacted Doug Campbell, an attorney and friend, who recommended that the lienor file a lien against the Meyers' property.3 The lienor did not call Campbell to testify. The reason that the lienor gave for filing the lien was that he "felt like [he] was responsible for [Satterfield] doing the work."
Satterfield testified that he was responsible for performing the grading services. He acknowledged that he and the lienor met with Attorney Campbell. Satterfield stated that Campbell advised the lienor to file the lien in the lienor's name because, according to Campbell, the lienor was the one who was ultimately responsible for the work.
Following the trial, the court held that the lienor was guilty of defaming the Meyers' title. It entered a judgment in their favor for $7,400. The trial court also filed a memorandum opinion, which contains the following findings:
The only disputed fact in this case is to the elements of this action for slander of title. Basically, everybody agrees, based upon the Chancellor's opinion in Chancery Court, every element exists without contest, except the only issue of contest here is whether that action was taken with malice. Malice may be inferred or direct proof. As the cases indicate, malice may be taken from not an actual malice against the person but a substantial disregard and recklessness in dealing with the title or ownership of another piece of property or their right to ownership.
. . . I can understand how the [lienor] and the defendant now sort of felt some responsibility, because he is saying he couldn't do this work, so he sent his friend up there to see this neighbor about doing some work. But I cannot escape the fact that he knew he did not do any of the work. He was not the contractor. He didn't negotiate the price or the amount of the work. He says he was trying to help out a friend. I have to take him at his word at that point. But he knew he wasn't the contractor. He knew he hadn't done any work on this property. Then he says, and that's the only proof before me, both he and Mr. Campbell—he and Mr. Satterfield—excuse me — went and saw Mr. Campbell and told him all of these facts this Court heard. And he says Mr. Campbell said to file a lien. That's the reason I raised the question I did.
Two wrongs do not make a right. One should not be able to shield themselves from behind the act an another. If Mr. Campbell told him that on these facts, the substantial question is raised about his culpability and liability for what happened. We did not hear from Mr. Campbell. That's the reason I raised the question with Mr. Boone, who is a partner in the same law firm, who filed the lien, defended the action in Chancery and is here today defending this, about where we stand if I find there is a validity of this claim for slander of title, not because of actual malice that [the lienor] has against Mr. Meyer, but for a reckless disregard for their title and ownership, considering the facts that he knew. And I find there was a reckless disregard. He knew he wasn't the contractor. He hadn't done any work. And he cannot — should have know[n] and I think he did know he couldn't file this lien.
The trial court subsequently reduced the Meyers' award from $7,400 to $4,600. The court also awarded the Meyers discretionary costs of $733.50, resulting in a total award to the Meyers of $5,333.50.
The lienor raises four issues for our review. As taken from his brief, the issues are as follows:
1. Whether a Notice of Contractor's Lien that is the subject of suit to enforce...
To continue reading
Request your trial