                                                                                          08/18/2017
                   IN THE COURT OF APPEALS OF TENNESSEE
                               AT NASHVILLE
                             March 8, 2017 Session

  FRANKLIN-MURRAY DEVELOPMENT COMPANY, L. P. v. SHUMACKER
                   THOMPSON, PC, ET AL.

                Appeal from the Circuit Court for Williamson County
                      No. 95790 Michael W. Binkley, Judge
                     ___________________________________

                           No. M2015-01968-COA-R3-CV
                       ___________________________________

This is a legal malpractice action in which the trial court granted partial summary
judgment to the defendants, a law firm and its owners, on the plaintiff’s claim for lost
profits and, in due course, granted summary judgment to the defendants on the remaining
claims. The underlying suit arose from a failed real estate transaction in which a
judgment for $200,000 for failure to perform a contract to purchase land for development
was entered against the plaintiff in this action. The plaintiff appeals, contending that the
court erred in various respects in granting the motions for summary judgment. Upon a
thorough review of the record, we affirm the judgment of the trial court in all respects.

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

RICHARD H. DINKINS, J., delivered the opinion of the court, in which W. NEAL
MCBRAYER and ARNOLD B. GOLDIN, JJ., joined.

Jeffrey A. Greene, Franklin, Tennessee, for the appellant, Franklin-Murray Development
Company, L.P.

Everett L. Hixson, Jr. and Everett L. Hixson, III, Chattanooga, Tennessee, for the
appellee, Shumacker & Thompson, P.C.

Jeffery V. Curry, Chattanooga, Tennessee, Pro Se.

Stephen P. Parish, Chattanooga, Tennessee, Pro Se.

W. Neil Thomas, III, Chattanooga, Tennessee, Pro Se.

Phillip E. Fleenor, Chattanooga, Tennessee, Pro Se.
                                              OPINION

I.      FACTUAL AND PROCEDURAL HISTORY1

       This is a legal malpractice action arising from a suit involving a failed real estate
transaction (the “underlying case”). On April 19, 1994, Franklin-Murray Development
Company (“FMD”), plaintiff in this case, contracted to purchase property in Williamson
County from First American Trust Company (“FATC”) to develop a residential
subdivision. FMD paid FATC $100,000 in earnest money, and the contract specified that
FMD would pay an additional $100,000 in nonrefundable earnest money “on the first
business day after the last day on which [FMD] has a right to terminate” the contract.

       In July, shortly before the closing date, FMD discovered that the property was
encumbered by federal estate tax lien; as a result of the discovery, the sale did not close.
FMD did not terminate the agreement in accordance with the termination provision, nor
did it seek a refund of the earnest money previously paid or pay FATC the additional
$100,000 in earnest money. Rather, FMD contacted FATC regarding the possibility of
setting a new closing date. Communication between the parties regarding the contract
continued through September.

       The underlying case began in October of 1994 when FATC sued FMD in
Williamson County Chancery Court for a declaratory judgment that the tax lien did not
prevent FATC from conveying good title, as well as a judgment for $200,000 in
liquidated damages for FMD’s failure to perform. FMD engaged Shumacker Thompson,
P.C. (“Law Firm”) to represent it in the suit. FMD filed an answer and a counterclaim,
asserting claims for breach of contract and fraud and seeking money damages, alleging
that FATC intentionally concealed the tax lien and was unwilling to remove the tax lien
in order to deliver marketable title to the property. Shortly after the counter complaint
was filed, FMD gave notice of a lien lis pendens in accordance with Tennessee Code
Annotated section 20-3-101.

      In due course, FATC moved to have the lien lis pendens removed on the ground
that FMD did not include a claim for specific performance in its counterclaim.2 On
December 12, 1994, a hearing was held on the motion, during which counsel for both
FMD and FATC stated that the parties were still willing to close the sale; as a result, the
motion was denied. In the Order denying the motion, the trial court reiterated the
statements counsel made at the hearing regarding the parties’ willingness to close the
1
 In its Order granting summary judgment to Defendants, the trial court included a lengthy recitation of
undisputed facts, which are summarized herein.
2
  According to FMD’s First Amended Complaint in the instant suit, it did not seek specific performance
because several of its investors withdrew their financial support of the transaction when the sale did not
close, and thus FMD lost its ability to perform the contract.
                                                    2
sale. This legal malpractice action is grounded in the circumstances surrounding the
assertion of the lien lis pendens and representations made by the Law Firm at the hearing
on FATC’s motion to have the lien removed.

      By March of 1995, FATC had made arrangements with the IRS to remove the tax
lien. On March 6, the court ordered FATC and FMD to appear in the office of the
Williamson Country Clerk and Master on March 28 to close the sale. FATC appeared,
but FMD failed to appear because it was not in a position to close. FATC subsequently
moved for summary judgment; the court granted the motion and awarded FATC
$200,000 in liquidated damages on June 7, 1995.

       FMD filed the instant action in the Circuit Court for Williamson County on
December 11, 1995, against the Law Firm and its owners, Jeffrey V. Curry, Phillip E.
Fleenor, W. Neil Thomas, III, and Stephen P. Parrish (along with the Law Firm,
collectively referred to as “Defendants”), for legal malpractice, fraud and
misrepresentation, and breach of fiduciary duty. FMD sought up to $20 million in
compensatory damages, prejudgment interest, punitive damages, and costs. Defendants
answered, denying that they were negligent or violated the standard of care.

        On January 8, 2008, Defendants moved to dismiss or, alternatively, for partial
summary judgment on FMD’s claim for consequential damages for lost profits. On
December 11, 2009, the trial court granted partial summary judgment to Defendants. The
court based its decision on the fact that FMD continued to negotiate with FATC after the
alleged breach; the court held that by continuing to negotiate, FMD waived any breach.
The court concluded that because FMD could not have prevailed on the breach of
contract claim in the underlying case, it was estopped from asserting the claim for lost
profits in the malpractice case.

      On April 8, 2015, the court granted summary judgment to Defendants on the
remaining claims. The trial court determined that FMD’s failure to offer expert proof as
to the essential element of proximate causation, which Defendants had successfully
negated, was fatal to its claims. FMD moved to alter or amend the judgment, and the
motion was denied on September 8, 2015. FMD appeals, stating the following issues:

      1. Whether the trial court erred in granting summary judgment dismissing
      this case on grounds that the [FMD] was required to have expert proof on
      causation in addition to such proof on the standard of care.

      2. Whether the trial court erred in granting partial summary judgment
      dismissing [FMD’s] claims for lost profits on grounds of the doctrine of
      election of remedies and/or waiver.


                                           3
The Defendants raise a third issue:

       3. A potential appellant must file its notice of appeal within thirty days after
       entry of final judgment. But certain post-trial motions will toll this thirty-
       day period, including motions to alter or amend. Under Tennessee law, a
       motion to reconsider does not toll the thirty-day period to file a notice of
       appeal. FMD timely filed a motion under Rule 59, which only requested
       that the trial court reconsider its previous order, and after that denial, filed
       its notice of appeal. Did FMD timely file its notice of appeal and does this
       Court have subject-matter jurisdiction over this appeal?

II.    SUBJECT MATTER JURISDICTION

        We first address Defendants’ argument that FMD’s Motion to Alter or Amend the
trial court’s grant of summary judgment to Defendants should be construed as a motion to
reconsider and that, because a motion to reconsider does not toll the time for filing a
notice of appeal, the notice of appeal was not timely filed; therefore, Defendants’ argue,
this Court lacks subject matter jurisdiction.3

      Defendants previously raised this issue in a motion to dismiss this appeal. In an
Order denying that motion, we stated:

       While the May 8, 2016 motion may not have stated grounds for relief under
       Tenn. R. Civ. P. 59.04, the court finds the motion should be considered a
       Tenn. R. Civ. P. 59.04 motion to alter or amend for the purposes of
       extending the time for filing a notice of appeal under Tenn. R. App. P. 4(b)
       and Tenn. R. Civ. P. 59.01.

We decline to disturb our ruling on Defendants’ motion to dismiss this appeal and
accordingly find that this appeal is properly before this Court.



3
  The time limit for filing a notice of appeal is jurisdictional in a civil case. Tenn. R. App. P 4(a);
First Nat’l Bank of Polk Cty. v. Goss, 912 S.W.2d 147, 148 (Tenn. Ct. App. 1995) (citing
Jefferson v. Pneumo Serv. Corp., 699 S.W.2d 181 (Tenn. Ct. App. 1985)). In an appeal as of
right, the notice of appeal is to be filed with the clerk of this Court within 30 days of the date of
entry of the judgment appealed. Tenn. R. App. P. 4(a). However, certain timely filed motions,
such as a motion to alter or amend a judgment made pursuant to Tennessee Rule of Civil
Procedure 59.04, toll the 30-day period, and in such cases, the 30-day period runs from the entry
of the order granting or denying the motion. Tenn. R. App. P. 4(b). A motion to reconsider is not
one which tolls the time for filing a notice of appeal. Tenn. Farmers Mut. Ins. Co. v. Farmer, 970
S.W.2d 453, 455 (Tenn. 1998); Tenn. R. Civ. P. 59.01.

                                                  4
III.    STANDARD OF REVIEW

       This case was resolved on motion for summary judgment. A party is entitled to
summary judgment only if the “pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits . . . show that there is no genuine issue as
to any material fact and that the moving party is entitled to judgment as a matter of law.”
Tenn. R. Civ. P. 56.04.4 The party seeking summary judgment “bears the burden of
demonstrating that no genuine issue of material fact exists and that it is entitled to
judgment as a matter of law.” Armoneit v. Elliot Crane Service, Inc., 65 S.W.3d 623, 627
(Tenn. Ct. App. 2001).

       When considering motions for summary judgment where the moving party does
not bear the burden of proof at trial, we apply the following standard5:

        [T]he moving party may make the required showing and shift the burden of
        production either “(1) by affirmatively negating an essential element of the
        nonmoving party’s claim or (2) by demonstrating that the nonmoving
        party’s evidence at the summary judgment stage is insufficient to establish
        the nonmoving party’s claim or defense.” Rye v. Women’s Care Ctr. of
        Memphis, MPLLC, [477] S.W.3d [235, 264], No. W2013-00804-SC-R11-
        CV, at *22 (Tenn. Oct. 26, 2015). . . .

        If the moving party does satisfy its initial burden of production, “the
        nonmoving party ‘may not rest upon the mere allegations or denials of [its]
        pleading,’ but must respond, and by affidavits or one of the other means
        provided in Tennessee Rule 56, ‘set forth specific facts’ at the summary
        judgment stage ‘showing that there is a genuine issue for trial.’” Rye, [477
        S.W.3d at 264]. The nonmoving party must demonstrate the existence of
        specific facts in the record that could lead a rational trier of fact to find in
        favor of the nonmoving party. Id. If adequate time for discovery has been

4
  Defendants’ Motion for Summary Judgment was supported by the following exhibits: (1) Plaintiff’s
Response To Interrogatories dated March 1, 2012, Expert Witness Disclosure; (2) Defendants’
Supplementary Response To Interrogatory No. 1 dated April 23, 2014 and Defendants’ Second
Supplementary Response To Interrogatory No. 1 dated July 9, 2014; (3) Affidavit of James W. Cameron,
III, Defendants’ expert witness; and (4) Excerpts from the October 30, 2014 deposition of Thomas T.
Pennington, FMD’s expert witness. Plaintiff filed a memorandum opposing summary judgment,
supported by its response to the Statement of Undisputed Facts.
5
 Prior to October 26, 2015, for cases filed before July 1, 2011, courts applied the standard set forth in
Hannan v. Alltel Publishing Co., 270 S.W.3d 1 (Tenn. 2008). On October 26, 2015, in Rye v. Women’s
Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 273 (Tenn. 2015), the Supreme Court overruled
Hannan and adopted a standard for cases filed prior to July 1, 2011, that is consistent with Federal Rule
of Civil Procedure 56. Because this case was filed December 11, 1995, we apply the standard set forth in
Rye.
                                                   5
        provided and the nonmoving party’s evidence at the summary judgment
        stage is insufficient to establish the existence of a genuine issue of material
        fact for trial, then the motion for summary judgment should be granted. Id.
        Thus, even where the determinative issue is ordinarily a question of fact for
        the jury, summary judgment is still appropriate if the evidence is
        uncontroverted and the facts and inferences to be drawn therefrom make it
        clear that reasonable persons must agree on the proper outcome or draw
        only one conclusion. White v. Lawrence, 975 S.W.2d 525, 529–30 (Tenn.
        1998).

Hall v. Gaylord Entm’t Co., No. M2014-02221-COA-R3-CV, 2015 WL 7281784, at *4-5
(Tenn. Ct. App. November 17, 2015) (emphasis in original) (footnotes omitted).

       We review the trial court’s rulings on a motion for summary judgment de novo
with no presumption of correctness, as the resolution of the motion is a matter of law.
Rye, 477 S.W.at 250. We view the evidence in favor of the non-moving party by
resolving all reasonable inferences in its favor and discarding all countervailing evidence.
Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003); Godfrey, 90 S.W.3d at 695.

IV.     ANALYSIS

      A. Summary Judgment

       As an initial matter, we address FMD’s argument that the trial court should have
ruled on FMD’s motion to exclude the testimony of James Cameron, the Law Firm’s
expert witness, prior to deciding Defendants’ Motion for Summary Judgment.6 FMD
does not give the specific basis of its objections to the opinions other than “the opinions
of Mr. Cameron are contrary to law” and does not raise the fact that the court did not rule
on the motion as a specific issue for which it seeks review. See Tenn. R. App. P. 13(b)
(“Review generally will extend only to those issues presented for review.”).

       “[Q]uestions regarding the admissibility, qualifications, relevancy and competency
of expert testimony are left to the discretion of the trial court.” McDaniel v. CSX Transp.,
Inc., 955 S.W.2d 257, 263 (Tenn. 1997). An abuse of discretion occurs if a trial court
causes an injustice to a party by “(1) applying an incorrect legal standard, (2) reaching an
illogical or unreasonable decision, or (3) basing its decision on a clearly erroneous
assessment of the evidence.” Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn.
2010). In its brief, FMD fails to articulate any basis upon which this Court could hold
that the trial court abused its discretion in either not ruling on the motion or considering

6
  While FMD refers to Mr. Cameron’s opinions as “testimony,” in the order granting summary judgment,
the trial court cited Mr. Cameron’s opinions as contained in his affidavit, and it is those we have
reviewed.
                                                 6
the affidavit of Mr. Cameron. As presented in the brief filed in this appeal, FMD
essentially challenges the weight to be given rather than the admissibility of Mr.
Cameron’s opinions. We find no basis upon the record to disregard Mr. Cameron’s
affidavit and will consider the opinions expressed therein in our resolution of this appeal.

       We now turn to FMD’s contention that the trial court erred in holding that expert
proof is required on the issue of proximate causation; that to the extent expert proof is
properly required, FMD provided such proof; and that “even if expert proof is required as
a general rule the question of proximate causation in this case was within the common
knowledge of the jury.”

        A plaintiff in a legal malpractice case must prove that the attorney’s conduct “fell
below the degree of care, skill, and diligence which is commonly possessed and exercised
by attorneys practicing in the same jurisdiction.”7 Sanjines v. Ortwein and Assoc., P.C.,
984 S.W.2d 907, 910 (Tenn. 1998) (citing Spalding v. Davis, 674 S.W.2d 710, 714
(Tenn. 1984), overruled on other grounds by Meadows v. State, 849 S.W.2d 748, 752
(Tenn. 1993)). “In addition, the plaintiff must demonstrate a nexus between the
negligence and the injury.” Id. (citing Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C.,
813 S.W.2d 400, 406 (Tenn. 1991)). Specifically, a plaintiff must prove (1) that the
defendant lawyer owed a duty to the plaintiff, (2) that the lawyer breached the duty, (3)
that the plaintiff was damaged, (4) that the lawyer’s conduct was the cause in fact of the
plaintiff’s damages, and (5) that the lawyer’s conduct was the proximate or legal cause of
the plaintiff’s damages. Gibson v. Trant, 58 S.W.3d 103, 108 (Tenn. 2001). Additionally,
the plaintiff must prove that s/he would have prevailed in the underlying action, but for
the attorney’s malpractice; as a result, the trial for a legal malpractice claim becomes a
“trial within a trial.” Shearon v. Seaman, 198 S.W.3d 209, 214 (Tenn. Ct. App. 2005).

        As noted in Cleckner v. Dale, in malpractice actions in Tennessee:

        Whether a lawyer’s conduct meets the applicable professional standards is
        generally believed to be beyond the common knowledge of laypersons.
        Thus, except in cases involving clear and palpable negligence, most courts
        considering the issue have held that cases of legal malpractice cannot be
        decided without expert proof regarding the applicable standard of care and
        whether the lawyer’s conduct complies with this standard.



7
  In Chapman v. Bearfield, the Supreme Court interpreted “jurisdiction” to mean the entire State of
Tenenssee, not just the specific locality in which the attorney practices: “There is only one standard of
care for attorneys practicing in Tennessee: a statewide standard. By extension, an expert who opines in a
legal malpractice case about an attorney’s adherence to our professional standard of care must be familiar
with the statewide professional standard of care.” 207 S.W.3d 736, 740 (Tenn. 2006).

                                                    7
719 S.W.2d 535, 540 (Tenn. Ct. App. 1986), abrogated on other grounds by Chapman v.
Bearfield, 207 S.W.3d 736 (Tenn. 2006) (citations omitted). The requirement of expert
testimony includes testimony on the issue of causation. Bursack v. Wilson, 982 S.W.2d
341, 343 (Tenn. Ct. App. 1998). If a defendant-attorney presents expert proof that he did
not cause the plaintiff’s injury, the plaintiff must counter with expert proof to the contrary
to show there is a genuine issue of material fact for trial. Strong v. Baker, No. M2007-
00339-COA-R3-CV, 2008 WL 859086, at *7 (Tenn. Ct. App. Mar. 31, 2008) (citing
Bursack, 982 S.W.2d at 343-45).

       In the Order granting summary judgment, the trial court made the following
findings pertinent to this issue:

       This case concerns a sophisticated Agreement, real property negotiations,
       and litigation. The negotiations were delayed because the Plaintiff and
       FATC disagreed on the question of whether the IRS lien prevented the
       closing of the transaction. The underlying litigation that comprises the
       “case within a case” concerned questions of whether the Plaintiff’s failure
       to terminate the Agreement meant that the Plaintiff breached the contract by
       failing to close on the transaction, whether the lien lis pendens was proper,
       and whether the IRS lien was an impediment to closing the transaction.
       Laymen are not familiar with sophisticated transactions for commercial
       property subject to a federal estate tax lien. Laymen are not familiar with
       the question of whether a lien lis pendens preserves a prospective
       purchaser’s rights when he has been brought to court for a declaratory
       judgment in a commercial property transaction that has failed to close.
       Furthermore, laymen are not familiar with what makes certain language in a
       court’s order dicta or the ruling itself. Only a sophisticated layman could
       answer these questions without expert testimony. This is not a case
       concerning “clear and palpable negligence,” such as failing to present
       evidence or file an appeal after a final judgment.

The undisputed evidence supports these findings; consequently, the court correctly held
that expert testimony as to proximate cause was an essential element of FMD’s claim of
legal malpractice.

       FMD argues that the affidavit of Mr. Cameron is insufficient to negate the element
of proximate cause. Specifically, FMD argues that Mr. Cameron’s opinion is conclusory
and contrary to Tennessee law. We disagree with this assertion.

      In a seven-page affidavit, Mr. Cameron opined at length regarding, inter alia, the
circumstances which led to the underlying lawsuit and the strategies involved in FMD’s
defense and prosecution of the counterclaim, which we summarize:

                                              8
     By the time the Law Firm was engaged to represent FMD, events such as FMD’s
      failure to terminate the agreement with FATC in accordance with the contract, the
      parties’ continued negotiations following FATC’s alleged breach, and FMD’s
      inability to perform its obligation under the contract, precluded FMD from
      successfully pursuing a claim against FATC; consequently, the statements
      regarding the parties’ willingness to complete the sale, which the court referred to
      in the Order entered following the December 12, 1994, hearing, were not the cause
      of FMD’s injury.
     The Law Firm did not cause any injury to FMD by filing the lien lis pendens; there
      was a legal basis for the lien; and filing the lien was consistent with the
      instructions and stated intent of the owners, which was for FMD to be a “spoiler”
      in the transaction and to keep the real property tied up as long as possible.
     To the extent the Law Firm failed to advise FMD that it could not prevail in its
      claim against FATC, the failure to give such advice did not cause any injury to
      FMD because FMD only paid the Law Firm $5,000 to pursue the claim against
      FATC, and whatever damages, if any, that FMD might be entitled to recover from
      the Law Firm must be offset by the value of the benefits that FMD received in
      filing its claim against FATC.
     FMD’s attorney who was overseeing the litigation told FMD that the underlying
      claim against FATC had considerable merit, and none of the other attorneys
      engaged by FMD after the Law Firm was not involved in the case advised FMD
      otherwise.
     FMD’s failure to terminate the contract following FATC’s alleged breach, not the
      actions of the Law Firm, caused FMD’s earnest money deposit to become non-
      refundable under the terms of the contract.

Mr. Cameron concluded that “[t]he actions, or failure to act, or advice given by the []
[L]aw [F]irm to [FMD] did not cause any damage or harm to FMD.” Mr. Cameron’s
opinions are sufficient to negate the essential element of proximate cause and shift the
burden to FMD to produce a countervailing affidavit setting forth specific facts showing
a genuine issue for trial or otherwise show that defendants were not entitled to summary
judgment as a matter of law.8 Thus, the burden shifted to FMD to respond by setting
forth expert proof establishing a genuine issue of fact for trial or otherwise demonstrate
that summary judgment was not appropriate.

       In response to the motion, FMD filed a memorandum of law opposing summary
judgment and a response to the Defendant’s Statement of Undisputed Facts. The only
fact which FMD disputed was that “FMD’s expert witness disclosures have provided no
proof or suggestion of proof regarding any causal connection between any alleged actions

8
 Contrary to FMD’s argument, Mr. Cameron’s affidavit is not conclusory; rather, his opinions are based
on facts found in the record, facts which are consistent with those found by the trial court in its ruling.

                                                    9
or inactions of Defendants and FMD’s alleged injuries.” In denying this statement at the
trial court, and in its brief on appeal, FMD contended that, to the extent expert proof was
required, it provided such proof in the Expert Witness Disclosure, which was contained
in its response to interrogatories that had been propounded by the Law Firm:9

       (1) Thomas T. Pennington . . . will provide mixed fact/expert testimony on
       various subject matters as follows:

       (A) The legal effect of the estate tax lien at issue in this case. Mr.
       Pennington will testify that the estate tax lien constituted an encumbrance
       on title to the property to be sold and prevented the seller from conveying
       title to the property as required by the purchase contract. Mr. Pennington
       will further explain that the provision of title insurance would not cure the
       title defect.

       (B) The ability of the seller to perform under the real estate purchase
       agreement at issue in this case. Mr. Pennington will testify that prior to
       January 18, 1995, the seller was not able to perform its obligations to
       deliver title as required in the purchase agreement, because it was only at
       that time the seller had obtained an adequate agreement to release the estate
       tax lien affecting the property. The conditional release agreement obtained
       with the IRS dated July 22, 1994, was not sufficient to remove the lien at
       closing because the closing contemplated by the purchase agreement would
       not have generated sufficient cash to meet the payment obligations of that
       agreement.

       (C) . . .

       (D) The decision to file the lien lis pendens. Mr. Pennington will testify
       that, in the absence of a desire on the part of the purchaser to seek specific
       performance and in the absence of physical improvements on the property,
       Tennessee law did not provide a basis for asserting a lien on the property as
       a “good faith improver” and the defendants violated the standard of care by
       advising plaintiffs to permit defendants to file the notice of lien.

9
  FMD’s answers to the Law Firm’s interrogatories were filed by the Law Firm in support of the motion.
In its memorandum filed in opposition to the summary judgment motion, FMD stated:

       The opinions to be offered in this case by FMD’s expert witness, Thomas T. Pennington,
       are set forth in Plaintiff’s Expert Disclosures. These opinions were confirmed by Mr.
       Pennington at his deposition on October 30, 2014. At that deposition, Mr. Pennington
       confirmed that Plaintiff’s Expert Disclosures set forth fully and accurately each and every
       opinion to which he would testify in the instant case[.]

                                                   10
          (E) The response to the seller’s motion to remove the notice of lien. Mr.
          Pennington will testify that, given the filing of the notice of lien, once the
          seller filed its motion to remove the lien, it was a violation of the standard
          of care to attempt to preserve the lien at all costs by making arguments that
          went beyond the “good faith improver” basis on which the lien had been
          filed, specifically by arguing to the Court that the plaintiffs were still
          interested in closing on the property, which was in direct violation of
          instructions from the plaintiffs.

          (F) The defendants’ response to the Court’s December 14, 1994, Order. Mr.
          Pennington will testify that upon receiving the Court’s December 14,1994,
          Order, the defendants violated the standard of care in various ways: (i) by
          failing to recognize (or by intentionally ignoring) the dangers implicit in the
          Court’s recitation that “counsel for both parties asserted during oral
          argument that they were still willing to close the contract if the other side
          was ready to perform all obligations” . . . (iii) by telling the plaintiffs that
          no corrective action need be taken because the statement in the Order was
          “dicta” when in fact it was essential to the ruling of the Court and therefore
          was not dicta; (iv) by failing to take corrective action within thirty (30)
          days of the order pursuant to Tenn. R. Civ. Proc. 59 or a “motion to
          reconsider” which although not expressly recognized by the Tennessee
          Rules of Civil Procedure is a common corrective motion employed by
          attorneys in such circumstances . . .

       In his disclosures Mr. Pennington opines as to why several of the Law Firm’s
actions constituted legal malpractice; contrary to the conclusion of Mr. Cameron that
“[t]he actions, or failure to act, or advice given by the [] [L]aw [F]irm to [FMD] did not
cause any damage or harm to FMD,” however, Mr. Pennington’s opinions do not address
the issue of proximate cause.10 FMD’s failure to contravene Mr. Cameron’s unrebutted
affidavit is fatal to its claim. See Montague v. Kellum, No. E2000-02732-COA-R3-CV,

10
     As noted by the Law Firm in its Memorandum in support of the motion filed in the trial court:

          Mr. Cameron’s affidavit tracks his opinions as stated in Defendants’ Expert Disclosures.
          Mr. Cameron’s opinions clearly establish that FMD’s alleged injuries were not the result
          of anything Defendants allegedly did or failed to do, nor were they in any way caused by
          Defendants. (Cameron Aff., Intro. Para.) Furthermore, Mr. Cameron opines that even
          had Defendants failed to comply with the standard of care, no departure from that
          standard, as alleged by FMD, caused FMD to suffer any harm or incur any damages.
          (Cameron Aff. ¶ 2, 4 and 5) Perhaps most importantly, Mr. Cameron establishes that
          FMD was precluded from the pursuit of a successful claim against FATC in the
          Underlying Litigation well before any involvement of Defendants. Thus, no act,
          failure to act or advice given by Defendants to FMD could have caused any damage
          to FMD. (Cameron Aff. ¶1)

                                                      11
2001 WL 523364, at *4 (Tenn. Ct. App. May 17, 2001). We accordingly find that FMD
has failed to show that there is a genuine issue for trial regarding proximate cause and,
absent such evidence, conclude that summary judgment was properly granted.

        FMD additionally argues that it asserted claims that would have succeeded even if
the Defendants successfully proved that FMD would have lost the underlying action.
Specifically, FMD asserts that because “defendants’ malpractice caused FMD to incur
significant expenses associated with actions undertaken to attempt to correct the errors of
the defendants at the December 12, 1994 hearing” and “defendants committed
malpractice by not advising FMD of this fact and advising FMD to accept the seller’s
offer to return FMD’s earnest money and terminate the contract,” the Law Firm’s advice
caused FMD to pursue hopeless litigation instead of a settlement to return earnest money.
To the extent this may be a viable theory, it is predicated on a determination that the Law
Firm committed legal malpractice—a determination we have held cannot be made on the
record presented. Thus, this argument is without merit, and the court’s grant of summary
judgment was not error.

      B. Partial Summary Judgment Regarding Lost Profits

       As noted previously in this opinion, the trial court granted partial summary
judgment to Defendants in December 2009, based on the fact that FMD continued to
negotiate with FATC after the alleged breach. The court held that by continuing to
negotiate, FMD waived any breach and could not have prevailed on the breach of
contract claim in the underlying case; accordingly, it was estopped from asserting the
claim for lost profits in the malpractice case. The Court held:

          . . . The evidence in this case clearly establishes that there were continuing
          negotiations after the alleged breach by FATC. Further, the law of this
          state, as expressed in Margrave, [v. Channabassappa, No. 87-159-II, 1987
          WL 19444, at (Tenn. Ct. App. Nov. 6, 1987)], is that where there are such
          continuing negotiations after a breach, each of the parties will be estopped
          to assert a breach of the contract based upon the failure to perform at the
          time for performance specified in the contract. Based upon that, the Inman
          [Akers & Inman v. Elk Cotton Mills, 92 S.W. 760 (Tenn. 1905)] case, and
          the reasoning and law of the ESPN [v. Commissioner of Baseball, 76 F.
          Supp.2d 383, 387-388 (S.D.N.Y. 1999)] case which the Court has found to
          be persuasive, the Court concludes that there is no genuine issue of fact
          with regard to the claim for lost profits and finds that Defendants are
          entitled to judgment as a matter of law dismissing the claim for lost profits.

This holding is consistent with Tennessee law and supported by the evidence.11

11
     FMD argues that the trial court “misapplied the law governing the doctrine of election of remedies” in
                                                     12
       “Waiver is commonly defined as the ‘voluntary relinquishment of a known right[,]
established by express declarations or acts manifesting an intent not to claim the right.’”
94th Aero Squadron of Memphis, Inc. v. Memphis-Shelby Cty. Airport Auth., 169 S.W.3d
627, 635 (Tenn. Ct. App. 2004) (quoting Tenn. Asphalt Co. v. Purcell Enter., Inc., 631
S.W.2d 439, 444 (Tenn. Ct. App. 1982)). Even though a contract may call for a time
certain for performance, if the parties continue negotiations after the time certain has
passed, either party is estopped to assert there was a breach of the contract for failure to
perform on the original date. Margrave v. Channabassappa, No. 87-159-II, 1987 WL
19444, at *4 (Tenn. Ct. App. Nov. 6, 1987) (citing Welch v. Dillon & Co., 7 Tenn. App.
430 (1928)). Where the parties to a contract permit the time fixed for performance to
pass without performance, the time for performance becomes indefinite; therefore, one
party cannot put the other party in default without notice of a reasonable time for
performance. Id. (citations omitted).



granting summary judgment on its claim for lost profits. In so doing, FMD misreads the order, wherein
the court states:

       The Court finds that there are no genuine issues of material fact with respect to
       Defendants’ arguments as to election of remedies and waiver. The Court has again
       reviewed ESPN v. Commissioner of Baseball, 76 F. Supp.2d 383, 387-388 (S.D.N.Y.
       1999). Although that case is not controlling authority, the Court does find the law set
       forth in that case to be persuasive and consistent with Tennessee law. While there are
       some differences between the ESPN case and the present case, the Court does consider
       ESPN in that context and specifically notes that the ESPN court rejected the so-called
       “reservation of rights” by the non-moving party in that case.

       The Court has also reviewed Inman, Akers & Inman v. Elk Cotton Mills, 116 Tenn. 141,
       92 S.W. 760 ([Tenn.] 1905) and Margrave v. Channabassappa, 1987 Tenn. App. LEXIS
       3036 (Tenn. Ct. App. Middle Section [Nov. 6, 1987]). In Margrave, the Court
       specifically held as follows:

       “Even though a contract may call for a time certain for performance, if the parties
       continue negotiations after the time certain has expired, either party will thereafter be
       estopped to assert there was a breach of the contract for failure to perform on the original
       date.” Welch v. Dillon & Co., 7 Tenn. App. 430 ([Tenn. Ct. App. Feb. 21, 1928).

       In the opinion of this Court, that holding is directly applicable to this case. Plaintiffs
       argue that this case does not present the situation which was present in ESPN where there
       was continued adherence to the contract or performance under the contract. Plaintiffs
       contend that the facts of this case simply present a situation in which there were
       settlement negotiations to resolve a prior breach of the agreement.

The foregoing shows that the court did not base the grant of summary judgment on the doctrine of
election of remedies but, rather, on its finding that FMD had waived its breach of contract claim by
continuing negotiations with FATC after the July 1994 closing date.

                                                   13
       Citing the following evidence, FMD contends that its negotiations with FATC
following the July 1994 closing date were “settlement negotiations,” not “adherence to
the contract”:

       • Direct unequivocal testimony from FMD’s representative that he did not
       intend to waive the breach, did not waive the breach and that the continued
       negotiations were “an effort to find a business solution to the dispute” (R-
       V, 618-21: Geringer Supp. Aff. at ¶¶ 2-8).[12]

       • A written statement from FMD’s representative confirming that FMD
       “would use whatever means necessary to pursue our rights” (R-V, 630:
       9/13/94 Geringer letter to Kirby at p. 1).

       • A written statement from the seller acknowledging the dispute, but
       confirming that the seller “is nevertheless willing to discuss the possibility
       of a mutually agreeable resolution of this issue” (R-V, 632: 9/14/94
       Woodruff letter to Geringer).

       • FMD’s express refusal to sign a termination letter and waiver requested
       by the seller (R-V, 620: Geringer Supp. Aff. at ¶ 7).

In addition to the evidence cited by FMD, there was substantial evidence that FMD
continued negotiations following the closing date, moving toward the goal of purchasing
the property.13 These findings are not disputed by FMD. This evidence equally supports
the determination that FMD waived its contract claim by engaging in continued
negotiations.


12
  Robert Geringer and Don Corliss were principals and lawyers in the law firm of Corliss and Geringer
and, along with Steve Moriss, were the primary organizers of FMD.
13
  Although not specifically directed toward this issue, much of this evidence was cited in the order
granting summary judgment:

       On August 15, 1994, the Plaintiff’s general partners issued a unanimous written consent
       authorizing and directing them to renegotiate the terms of the contract to purchase the
       property from FATC and to change any terms and conditions they deemed appropriate in
       light of the IRS lien. On August 24, 1994, Geringer sent a facsimile transmittal to Steve
       Walker, a representative of FATC, in which he stated, “[i]f we are not able to close this
       transaction prior to mid-September, we will have to delay the closing until March 1995.
       Please review the following proposal, I think it has advantages for all parties.

The court proceeded to quote from several facsimile transmittals and memoranda between Mr. Geringer,
Mr. Walker, Mr. Corliss, FATC representative Douglas Kirby, and FATC counsel Charles Trost, all of
which affirm FMD’s intention to proceed with the purchase of the property.
                                                  14
        Following the discovery of the tax lien, FMD permitted the July 1994 closing date
to pass without demanding performance or a refund of the earnest money, asserting its
right to terminate the contract, or otherwise pursuing remedies available under the
contract;14 rather, it continued negotiations. This conduct made the time for closing
indefinite. In August, FMD’s general partners authorized and directed renegotiation of
the contract terms to purchase the property from FATC, as well as “chang[ing] any terms
and conditions [] deemed appropriate in light of the IRS lien” (emphasis added). FMD’s
representative, Robert Geringer, then contacted FATC and expressed that FMD wished to
review the tax lien issue and “set a closing date.” On August 24, Mr. Geringer sent a fax
transmittal to FATC, stating, “If we are not able to close this transaction prior to mid-
September, we will have to delay the closing until March 1995.” Communication
between the parties regarding the contract continued through September, and FATC filed
suit in October.

       The acts taken by FMD indicate its intent not to exercise its options to terminate
the contract or to sue for breach; rather, FMD’s actions are consistent with an intent to
purchase the property and complete the development as planned. The evidence brought
the case squarely within the holding of Margrave that, in engaging in such conduct, FMD
would be estopped in the underlying case from pursuing a breach of contract claim and
the claim for lost profits could not be sustained in the malpractice action. Summary
judgment on the claim was proper.

V.         CONCLUSION

       For the foregoing reasons, the judgment of the trial court is affirmed in all
respects.




                                                            RICHARD H. DINKINS, JUDGE




14
     The contract of sale included the following provision regarding remedies available for breach:

           If this Agreement has not been terminated pursuant to the provisions of this Agreement
           and Seller fails to satisfy a condition for Closing which it is obligated to perform or is
           otherwise in default under this Agreement, and, as a result, the sale contemplated hereby
           does not close within the time specified herein, Purchaser, at its election, may (i) avail
           itself of the equitable remedy of specific performance, or (ii) terminate this Agreement by
           written notice to Seller, whereupon, all of the Earnest Money shall be refunded to
           Purchaser, and the parties shall be relieved of any further obligations hereunder.
                                                      15
