Marshalls of Nashville, Tenn., Inc. v. Harding Mall Associates, Ltd., 89-368-II

• Decision Date: 08 June 1990
• Docket Number: No. 89-368-II,89-368-II
• Citation: 799 S.W.2d 239
• Court: Tennessee Court of Appeals
• Parties: MARSHALLS OF NASHVILLE, TENNESSEE, INC., Plaintiff/Appellant, v. HARDING MALL ASSOCIATES, LTD., Defendant/Appellee. 799 S.W.2d 239

Page 239

799 S.W.2d 239

MARSHALLS OF NASHVILLE, TENNESSEE, INC., Plaintiff/Appellant, v. HARDING MALL ASSOCIATES, LTD., Defendant/Appellee.

No. 89-368-II.

799 S.W.2d 239

Court of Appeals of Tennessee,

Western Section,

at

Nashville.

June 8, 1990.

Application for Permission to Appeal

Denied by Supreme Court

Oct. 1, 1990.

Lew Conner Boult, Cummings, Conners & Berry, George E. Copple, Jr., Nashville, for plaintiff/appellant.

Barry L. Howard and Alan M. Sowell, Gracey, Ruth, Howard, Tate & Sowell, Nashville, for defendant/appellee.

TOMLIN, Presiding Judge, (W.S.)

Marshalls of Nashville, Tennessee, Inc. (hereafter "Plaintiff") filed suit in the Chancery Court for Davidson County against Harding Mall Associates (hereafter "Defendant") for damages resulting to Plaintiff's premises and merchandise. Plaintiff leased its premises from Defendant and contends that the damages it sustained resulted from Defendant's alleged breach of lease and tortious conduct. Following a bench trial, the chancellor found for Defendant and dismissed Plaintiff's complaint. Plaintiff contends on appeal that the chancellor erred in dismissing its complaint. We find no error and affirm.

Plaintiff became a tenant in the Harding Mall Shopping Center owned by Defendant in 1983 when it took over the space occupied by Service Merchandise, assuming its lease. The lease was duly assigned to Plaintiff with the consent of Defendant. Plaintiff began to experience roof leaks almost immediately after it became Defendant's tenant. These leaks continued over a two-year period. Defendant undertook to repair the roof in certain areas from time to time. In addition, Defendant installed a system of channels between the structural roof and the suspended ceiling in Plaintiff's store in order to catch the water as it leaked through the roof. This water was diverted into a catch basin and ultimately removed.

Plaintiff initially filed suit against Defendant in December, 1985, alleging a breach of Article 16, the "Quiet Enjoyment" provision of the lease, contending that Defendant had failed to keep the roof in good repair as required by Article 4 of said lease. In addition, Plaintiff sought a declaratory judgment against Defendant that would require Defendant to replace the roof. At the same time, Plaintiff began paying its rent owed to Defendant under the lease into the Registry of the Chancery Court. Defendant counter-claimed for damages, alleging that any defects or deficiencies in the roof were caused by the Plaintiff's negligent installation of two roof-top air conditioning units. Plaintiff filed a supplemental complaint alleging that it had suffered additional damages from continuing roof leaks.

In April, 1986, Defendant filed a motion seeking to have the funds on deposit with the court released or a limitation placed on the funds deposited in the court. Before a hearing could be held on the motion, the parties entered into a settlement agreement referred to as the "Mutual Release Agreement" (hereafter "MRA") on June 18, 1986. The MRA provided that the parties agreed to release each other from any and all claims, liabilities and causes of action alleged by either party in the original action filed by Plaintiff. Defendant was committed to replacing the roof according to specifications set forth in a proposal by ENCON Roofing Consultants "by contract with a licensed, bonded, and responsible roofer chosen by defendant but acceptable to plaintiff." Under the terms of the MRA, Plaintiff and Defendant were to share the cost of replacing the roof, with Defendant paying sixty percent and Plaintiff forty percent. The MRA provided that Plaintiff was to recover its forty-percent contribution toward the replacement of the roof when Harding Mall was sold by Defendant or its successor.

Defendant recommended to Plaintiff that Richard Boyanton, d/b/a RGM Enterprises (hereafter "Boyanton"), a roofing contractor, be employed to replace the roof. Defendant's attorney, Joel Leeman, contacted Lee Davies, Plaintiff's attorney, for the purpose of obtaining Plaintiff's approval of Boyanton. Leeman advised Davies that Boyanton had performed satisfactory work for Defendant in the past. Davies passed this information on to Plaintiff. Without checking his available references, Plaintiff approved Boyanton as the roofing contractor. Although not clearly stated in the record, it appears that the requirement that Boyanton be bonded was waived. Defendant thereupon entered into a contract with Boyanton to replace the roof. As such, Boyanton functioned as an independent contractor on the job. Plaintiff employed John Downs, d/b/a ENCON Roofing Consultants, (hereafter "Downs") to monitor Boyanton's work.

Replacement of the roof began on or about June 23, 1986. On that same day Downs visited the site and inspected Boyanton's work. He discovered that Boyanton was not installing the new roof in a workmanlike manner, nor was the installation being done in accordance with standard roofing practices. Downs' inspection revealed several deficiencies in Boyanton's work, which he reported to the appropriate parties, to-wit: (1) The loose gravel that had been removed from the roof was piled up in such a manner as to create the danger of a roof cave-in; (2) there was insufficient roofing equipment on the job site to carry out the work required; (3) the roofing material stored on the site was not stored in a proper fashion to protect it from moisture; (4) materials dumped on the ground created a safety hazard; (5) there was no firefighting equipment on the job site; (6) the roofing felts were installed in an unacceptable manner and did not conform to standard roofing procedures; (7) there was a failure to put asphalt coating on the felts installed; and (8) the tie-in of the new roof to the existing roof was inadequate and was not leak-proof. When questioned by Downs about the potential for leaks in the area under repair, Boyanton responded "don't worry about it, we'll take care of it." Downs immediately contacted Davies and advised him of the deficiencies. Davies in turn informed Leeman by telephone. According to Davies, the conversation with Leeman was to the effect that Plaintiff was overly concerned with the roofing project, and if there were any problems they would be corrected. Leeman, however, testified that he did not recall advising Davies that Plaintiff was over-reacting.

A rainstorm of some proportions occurred on the night of June 23, 1986. As a result, water entered Plaintiff's store through the portion of the roof that was being repaired by Boyanton, damaging the interior of Plaintiff's store, including its merchandise. Plaintiff subsequently filed a second supplemental complaint in January, 1987 for damages sustained as a result of the June 23rd incident. That complaint alleged that Defendant breached "Article 4 Repairs" of the lease by failing to keep the roof in good order and repair at its own cost and expense, and that such failure to keep the roof in good repair interrupted Plaintiff's quiet enjoyment of the leased premises in violation of "Article 16 Quiet Enjoyment." In addition, Plaintiff alleged that Defendant had made negligent misrepresentations as to Boyanton's abilities, that it was negligent in selecting an incompetent independent contractor, and was thus vicariously liable upon the theory that the work to be performed by Boyanton was inherently dangerous to Plaintiff.

In March, 1987, the chancellor entered an agreed order which referred to a second Mutual Release Agreement dated July 25, 1986. That order provided that certain claims had been compromised and settled, and that the causes of action alleged by Plaintiff in its initial complaint and the first supplemental complaint, and the causes of action set forth by Defendant in its counter-claim should be dismissed with prejudice. The order specifically provided that "[i]n accordance with the agreements between these parties, said dismissal shall in no way affect ... those causes of action asserted on behalf of the Plaintiff in its 'Second Supplemental Complaint'...."

At the conclusion of the trial below, the chancellor made the following oral findings from the bench:

I'm finding in favor of the Defendant, and I'll state my findings and conclusions.

The case begins, of course, with the lease. That's the contract that the parties executed and which they intended to and does govern the relationship in this case. The parties became embroiled in a dispute over the lease and the terms of the lease, and that dispute had to do with the claim on the part of the tenant, that the landlord was not living up to its obligation under the lease. They settled that dispute with what they called a mutual release agreement, and the work then proceeded under that agreement and the roofer was hired by the landlord under the agreement. The roof was, the work was performed negligently and the tenant has been damaged.

The lease does govern the relationship between the parties, but it's important to note that this work that was being done by the roofer was being done not pursuant to the lease, but pursuant to the mutual release agreement, and the mutual release agreement released the landlord from the liability under the lease. That's what a release is. The parties had a lawsuit, had a case in which the tenants said that the landlord was not living up to its obligations, and the landlord denied it and said that the tenants had caused the problem. And the parties settled it by substituting a new agreement and the new agreement provided for the work to be done by this independent contractor. And that's the contract that governs this matter, not the lease. There's no evidence of any negligence on the part of the landlord from selecting the roofer. No misrepresentations were made. The roofer is an independent contractor who performed the work pursuant to the release, mutual release agreement.

The case really seems to be an effort on...