                    IN THE COURT OF APPEALS OF TENNESSEE
                                AT NASHVILLE
                                           March 7, 2000 Session

R. G. BURNETT v. JAMES RAY SWAFFORD AND RHONDA SWAFFORD

                      An Appeal from the Chancery Court for Fentress County
                            No. 97-24 Billy Joe White, Chancellor



                         No. M1999-01648-COA-R3-CV - Filed April 17, 2001


        This appeal arises from an oral contract between a landlord and tenant. The plaintiff operated
a grocery and leased a grocery store to the defendant for a period of ten years, pursuant to a written
lease. The parties had a separate oral agreement in which the defendant agreed to buy the plaintiff's
business. When the defendant vacated the property at the end of the lease, the parties disagreed as
to whether the oral agreement included a purchase of the store equipment. The trial court found that
the plaintiff had converted certain items belonging to the defendant, and entered a judgment in favor
of the defendant for $5,000. We find that the trial court’s decision is based on its determinations of
credibility, and affirm.

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

HOLLY KIRBY LILLARD, J., delivered the opinion of the court, in which ALAN E. HIGHERS, J., and
DAVID R. FARMER , J., joined.

Phillips M. Smalling, Byrdstown, Tennessee, for the appellant, R. G. Burnett.

Joe M. Looney, Crossville, Tennessee, for the appellees, James Ray Swafford and Rhonda Swafford.

                                        MEMORANDUM OPINION1

        Plaintiff Glenn Burnett (“Burnett”) owned and operated a grocery business in Clarkrange,
Tennessee. On March 1, 1987, he entered into a written lease agreement whereby he agreed to lease
his store to James and Rhonda Swafford (the “Swaffords”) for a period of five years, with the option

       1
           Rule 10(b) of the R ules of the Court of Appe als of Tennessee states as follows:

                  Memorandum Opinio n. The Co urt, with the concurrence of all judges participating in the
                  case, may affirm, reverse or modify the actions of the trial court by memorandum opinion
                  when a formal opinion would have no precedential value. When a case is decided by
                  memorandum opinion it shall be designated "MEMORANDU M OPINION," shall not be
                  published, and shall not b e cited or re lied on for an y reason in a subsequent unrelated case.
of extending the lease for another five years. In 1992, the Swaffords extended the lease agreement
for another five years. In 1996, the Swaffords began construction on a new grocery store and made
plans to move out of the premises owned by Burnett. The last day that the Swaffords did business
on the leasehold property was February 26, 1997. The lease expired on February 28, 1997.

       In addition to the written lease, the parties entered into a separate oral agreement under which
the Swaffords agreed to pay Burnett $125,000 at the outset of the lease. Burnett contends that the
Swaffords orally agreed to buy only his inventory, not the equipment in the store. The Swaffords
contend that the payment under the oral agreement was for the store equipment as well as the
inventory. At the end of the lease, the Swaffords attempted to remove the equipment from the store,
but Burnett prevented them from doing so. Burnett brought suit to recover damages for the loss of
equipment that had already been removed and for damages to the property caused by the removal.
The Swaffords answered and filed a counter-complaint alleging that Burnett had converted their
equipment that remained in the store for his own commercial use.

        A one-day bench trial was held on December 8, 1998. At the trial, the parties and their
respective witnesses testified about the parties’ course of dealing regarding the equipment, the
maintenance, repair, and replacement of the equipment during the lease, and the value of the
equipment at issue. In particular, the testimony reflected that, during the course of the lease, the
Swaffords replaced some of the store equipment and, when they did so, returned the original
equipment to the Burnetts.

         At the conclusion of the trial, the trial judge made an oral ruling from the bench. The trial
judge found that Burnett did not agree to sell the store equipment to the Swaffords, because the
Swaffords’ return of the equipment to Burnett as they replaced it was not consistent with them
owning the equipment outright. The trial judge also found that the fact that the Swaffords purchased
new equipment, without an agreement from Burnett that he would reimburse them, demonstrated
that the Swaffords intended to buy the replacement equipment for themselves. Therefore, the trial
court concluded that the Swaffords were entitled to have the replacement equipment returned to
them, and awarded them damages for the equipment that Burnett had converted to his own use. The
trial judge issued a writ of possession to the Swaffords for particular items. He held that Burnett had
converted the remainder of the items. After weighing the testimony of the witnesses regarding the
value of the equipment at issue, and setting off the value of the equipment belonging to the
Swaffords against the value of the equipment owned by Burnett, the trial court held Burnett liable
to the Swaffords for $5,000. From this decision, Burnett appeals.

        In this appeal, Burnett argues that the evidence showed that the Swaffords were obligated to
maintain the store’s refrigeration equipment by the terms of the lease, and they did not do so; that
Burnett was entitled to return of the premises in operational condition, and the language of the lease
did not authorize the Swaffords’ removal of the equipment they had replaced; and that the judgment
against Burnett for $5,000 is not supported by the proof. The Swaffords maintain that the trial
court’s findings rest largely upon his determination of the credibility of the witnesses, and that those



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findings should not be disturbed on appeal unless they are contrary to a preponderance of the
evidence.

       An appeal from a bench trial is reviewed de novo upon the record, with a presumption of
correctness in the trial judge’s findings of fact. See Tenn. R. App. P. 13(d).

        In this case, the factual findings of the trial court hinge primarily on its determination of the
credibility of the witnesses. When the trial court resolves a conflict in testimony in favor of one
party over another, such a credibility determination is “binding on the appellate court unless from
other real evidence the appellate court is compelled to conclude to the contrary.” Reed v. Alamo
Rent-A-Car, Inc., 4 S.W.3d 677, 683 (Tenn. Ct. App. 1999) (citation omitted). The weight, faith,
and credit to be given to any witness’s testimony lies in the first instance with the trier of fact, and
the credibility accorded will be given great weight by the appellate court. See In re Estate of Walton
v. Young, 950 S.W.2d 956, 959 (Tenn. 1997).

        After reviewing the transcript of the evidence and the record as a whole, and according
appropriate deference to the trial court’s determinations of credibility, we find that the evidence does
not preponderate against the trial court’s conclusions regarding the terms of the parties’ oral
agreement regarding the equipment. Likewise, we find that the evidence does not preponderate
against the trial court’s findings regarding the value of the equipment at issue. Consequently, we
affirm the trial court’s award of damages to the Swaffords in the amount of $5,000.

       The decision of the trial court is affirmed. The costs of this appeal are to be taxed to the
Appellant, R.G. Burnett, and his surety, for which execution may issue if necessary.



                                                        ___________________________________
                                                        HOLLY KIRBY LILLARD, JUDGE




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