                   IN THE COURT OF APPEALS OF TENNESSEE
                               AT NASHVILLE
                                          APRIL 2000 Session

       UNION PLANTERS BANK OF MIDDLE TENNESSEE v. CAROL
                        CHOATE, ET AL.

                  Direct Appeal from the Chancery Court for Davidson County
                  No. 97-1584-III; The Honorable Ellen Hobbs Lyle, Chancellor



                      No. M1999-01268-COA-R3-CV - Filed August 31, 2000


This appeal arises from a breach of contract case filed against Mickie Davis (“Davis”) by Carole
Choate (“Choate”). Choate alleged that Davis breached her contractual and fiduciary duties by
authorizing release of funds to Rochford Realty (“Rochford”) for a construction project. The trial
court granted Davis’ motion for summary judgment. Choate appeals.

     Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Affirmed

ALAN E. HIGHERS, J., delivered the opinion of the court, in which CRAWFORD, P.J., and FARMER , J.,
joined.

Robert A. Anderson, Nashville, for Appellant

Marcy S. Hardee, Franklin, for Appellee

                                                  OPINION

On July 7, 1995, Choate contracted with Rochford Realty to build a residence on property owned
by Choate. The construction agreement included a provision for parties to submit any contract
dispute to binding arbitration. Union Planters Bank (“Bank”) provided the construction loan
financing for the project.

        On December 17, 1996, Choate sent a letter to Rochford outlining construction deficiencies.
Pursuant to the letter, the parties reached a new agreement as evidenced by notations on the letter.1
As part of the agreement, parties decided to use the services of Mickie Davis, a local real estate
agent, to determine whether “punch-list” deficiencies were successfully completed. In addition, a
sum of thirteen thousand five hundred dollars ($13,500.00) was put into escrow at Bank. Under the

        1
         These additional terms and agreements were memorialized by hand-written notations on the original letter.
These notations included the following dates: January 6, January 7, January 20, and January 23.
agreement, Davis had the sole authority to approve completion of list item deficiencies and authorize
release of the money in escrow.2 These deficiencies were to be completed within thirty days of the
new agreement.3

       On March 18, 1997, Choate notified Bank that the terms of the new agreement had not been
met. On the same day, Davis sent a letter to Bank authorizing the release of most of the escrowed
money ($13,051.85) to Rochford; the letter stated that only four of the punch-list deficiencies were
not completed. Instead of releasing the funds to Rochford, Bank filed an interpleader action in the
Davidson County Chancery Court, naming both Choate and Rochford as defendants. Choate
responded by filing a cross complaint against Rochford and a third-party complaint against Davis.
Specifically, Choate claimed that Davis breached both a contractual and fiduciary duty by
authorizing partial release of the funds in escrow.

        Both Choate and Rochford submitted issues to binding arbitration as required under original
contract. On August 19, 1998, the arbitrator awarded Choate money damages in the amount of
twelve thousand nine hundred twenty-two dollars and fifty cents ($12,922.50). Arbitrator awarded
Rochford thirteen thousand five hundred twenty-six dollars and eighty five cents ($13,526.85) plus
interest. Pursuant to the award, Choate was ordered to pay Rochford six hundred four dollars and
thirty-five cents ($604.35) plus interest.

       The court below entered an order confirming arbitrator’s decision on November 6, 1998. The
order noted that it did not dispose of issues remaining between Choate and Davis. Choate filed a
motion for judgment on the pleadings or partial summary judgment on these issues which the court
denied. Davis filed a summary judgment motion alleging both that she had complied with the
contract requirements and that Choate was barred from action by virtue of the arbitrator’s award. The
court below granted Davis’ motion, holding that Choate had not been damaged by Davis’
authorization because the funds were not actually released. Choate appeals.

        On appeal, Choate asserts that the trial court erred in holding that the claims against Davis
were inconsistent with the arbitrator’s award and that the court erred in granting Davis’ summary
judgment motion. In addition, Choate asserts that the trial court erred in holding that Choate did not
sustain damages by Davis’ authorization of the fund’s release.


                                                      Analysis



         2
          This provision was hand-written and stated as follows: “Requires approval by Mickie Davis of work at
Coldwell-Banker. Money confirmed as escrowed at Union Planters Bank Mickie Davis only party required to authorize
release.” The provision contained additional terms that were marked through.
         3
           There is some disagreement over when the thirty day period began a s well as whether it was extended to forty-
five days. Regardless of which time period applied, the deficiencies were not comp leted until April 1, 1997, after more
than forty-five days had passed.

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         Although Choate asserts two issues on appeal, we find in necessary to address only whether
the trial court erred in granting Davis’ motion for summary judgment. Whether the trial court erred
in granting a Rule 56 Motion for Summary Judgment is purely a question of law. See TENN . R. CIV .
P. Rule 56.04.4 Therefore, on review, no presumption of correctness attaches to the trial court’s
judgment. Our task is limited to determining whether the requirements for summary judgment have
been met. Cowden v. Sovran Bank/Central South, 816 S.W.2d 741, 744 (Tenn.1991).

        In order to prevail on a motion for summary judgment, there must be no genuine issue with
regard to the material facts and the moving party must be entitled to judgment as a matter of law on
the undisputed facts. Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn.1993); Anderson v. Standard
Register Co., 857 S.W.2d 555, 559 (Tenn.1993). The movant has the burden of proving that its
motion satisfies these requirements.        Downen v. Allstate Ins. Co., 811 S.W.2d 523, 524
(Tenn.1991). To properly support its motion, the moving party must either affirmatively negate an
essential element of the non-moving party's claim or conclusively establish an affirmative defense.
If the moving party successfully negates a claimed basis for the action, the non-moving party may
not simply rest upon the pleadings, but must offer proof to establish the existence of the essential
elements of the claim. Staples v. CBL & Associates, Inc., No. E1997-00033-SC-R11CV, 2000 WL
291431, at *4 (Tenn. Mar. 20, 2000) citing McCarley v. West Quality Food Serv., 960 S.W.2d 585,
588 (Tenn.1998); Robinson v. Omer, 952 S.W.2d 423, 426 (Tenn.1997).

       The standards governing the assessment of evidence in the summary judgment context are
also well established. Courts must view the evidence in the light most favorable to the nonmoving
party and must also draw all reasonable inferences in the nonmoving party's favor. Byrd, 847
S.W.2d at 210-11. With the foregoing in mind, we now turn to the facts in this case.

         Neither party disputes the material facts relevant to this issue. Choate and Rochford
contracted for the construction of a home on Choate’s property. This contract was later modified
to extend the time period and to make the completed construction subject to Davis’ approval.
Although all the construction was not completed by the specified date, Davis’ authorized the release
of most of the escrowed funds. Based on the dispute between Choate and Rochford, Bank did not
release the funds. Thereafter, Choate and Rochford settled their claims in arbitration. Choate sought
recovery against Davis for breach of contract and breach of fiduciary duty. There is no genuine issue
as to the material facts in this case. Therefore, Davis has met the first prong of the two part summary
judgment standard. We now turn to the second prong: whether Davis is entitled to judgment as a
matter of law.

      Based on the positions of the parties, Davis may prevail only if she can negate an essential
element of Choate’s breach of contract and fiduciary duty claim. Proof of damages is an essential


         4
           T ENN. R. C IV. P Rule 56 .04 prov ides in relev ant part: “...the judgm ent soug ht shall be rend ered forth with if
the pleadings, depo sitions, answers to interroga tories, and adm issions on file , together w ith the affida vits, if any, show
that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of
law.”

                                                              -3-
element of both these causes of action. The court below found that Choate had not suffered damages
by virtue of Davis’ authorization of the release of the escrowed fund and that Choate could therefore
not prevail. On appeal, Choate argues that she did suffer damages because of the expense of dealing
with the interpleader suit brought by Bank. We do not agree.

         Choate bases her “damage” element on an implied indemnity theory, arguing that she
suffered by virtue of the interpleader suit filed by Bank. See Winter v. Smith, 914 S.W.2d 527, 541
(Tenn. Ct. App. 1995) citing Houseboating Corp. v. Marshall, 553 S.W.2d 588, 589 (Tenn. 1977)
(holding there is an implied obligation to indemnity when the obligation is a necessary element of
the parties’ relationship, or when justice and fairness demand the burden of paying for the loss be
shifted to the party whose fault or responsibility is qualitatively different from the other parties).
Choate asserts that Davis’ authorization of the release of the escrowed funds proximately caused the
Bank’s initiation of the interpleader action. From our review of the record, it seems certain that
Davis’ authorization did not cause the dispute that led to the interpleader suit. Rather, Davis’ act had
little or no effect on the parties’ position. Bank did not release the funds pursuant to Davis’
authorization. Bank filed the interpleader suit as a result of the on-going dispute between Choate
and Rochford, and in order to avoid liability for the escrowed funds.

        Based on the foregoing, we find that the trial court did not err in granting Davis’ motion for
summary judgment. Davis’ action did not directly or proximately cause any recoverable damage to
Choate. Therefore, Choate could not prevail on her claims against Davis. Accordingly, the action
of the trial court is hereby affirmed.

                                             Conclusion

       For the reasons set forth above, we hereby affirm the trial court’s grant of Davis’ Motion for
Summary Judgment. Costs on appeal are taxed to the appellant, Carol Choate, for which execution
may issue, if necessary.




                                                        ___________________________________
                                                        ALAN E. HIGHERS, JUDGE




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