                 IN THE COURT OF APPEALS OF TENNESSEE
                              AT JACKSON
                                       June 2000 Session

          TENNESSEE PINE COMPANY v. DAVID AND PATTY VIA

               A Direct Appeal from the Chancery Court for Madison County
                  No. 54937     The Honorable Joe C. Morris, Chancellor



                    No. W1999-00558-COA-R3-CV - Filed August 25, 2000


        A timber company filed a declaratory judgment suit to determine its rights and to declare its
contract with a landowner valid and enforceable. The trial court modified the contract and declared
the contract as modified valid and enforceable. The landowner has appealed and presents the sole
issue for review as whether the trial court erred in not holding the contract unenforceable because
of laches.

  Tenn.R.App.P. 3; Appeals as of Right; Judgment of the Chancery Court Affirmed and
                                      Remanded

W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and DAVID R. FARMER , J., joined.

Charles M. Agee, Jr., Dyersburg, For Appellants, David and Patty Via

Terry Abernathy, Selmer, For Appellee, Tennessee Pine Company

                                            OPINION

        Defendants, David Via and wife Patty Via (herein “the Vias”), appeal the judgment of the
trial court declaring the rights, status or other legal relations under a contract made between
themselves and plaintiff, Tennessee Pine Company, Inc. (herein “Tennessee Pine”).

        On July 6, 1998, Tennessee Pine filed a “Complaint seeking Declaratory Judgment” against
the Vias. The complaint alleges that the parties entered into a contract on February 26, 1987,
whereby Tennessee Pine would plant pine seedlings on approximately 400 acres of land belonging
to the Vias. According to the terms of the contract, Tennessee Pine was to execute the paper work
and administrative duties necessary to enroll the Vias in a conservation reserve program to receive
funding from the United States Department of Agriculture. It was further agreed that upon the
expiration of the period that the Vias’ land was enrolled in the program, the Vias would assign or
lease the land to Tennessee Pine for an additional fifteen year period, with the annual compensation
of approximately $53.00 per acre. The Vias were to pay Tennessee Pine one-half of the cost of
planting the pine seedlings, which they would receive from the U.S. Department of Agriculture as
part of the subsidy for the cost of planting the pine seedlings.

        The complaint avers that certain controversies, disputes and disagreements have arisen
between these parties concerning the construction, validity and/or application of the contract, and
that a declaratory judgment was needed to resolve such controversies. The complaint further avers
that the contract between the parties is valid and enforceable according to its terms and provisions,
and that the contract grants and establishes certain proprietary rights belonging to Tennessee Pine.
The complaint claims that the Vias now deny the validity of such contract, and have refused to
accept and perform the terms, provisions and obligations of said contract. Plaintiff seeks a
declaratory judgment with respect to the rights, status, and other legal relations of the parties under
the contract. The complaint further seeks that the court declare that the contract is valid, binding and
obligatory in all respects and should be enforced according to its terms.

        The Vias’ answer and counter complaint was filed on August 6, 1998. They admit that a
contract was made between the parties, and that a dispute has arisen between the parties. The Vias
deny that the contract is a valid and enforceable contract, and aver that Tennessee Pine has never
performed to its obligations under the contract. They aver that immediately after the execution of
the contract, Tennessee Pine materially breached its obligations under the contract, thereby relieving
the Vias of any duties or responsibilities. The Vias aver that Tennessee Pine materially breached its
obligation under the contract by failing to plant pine trees on their 400 acres of land. The Vias further
allege that they have performed each and every obligation required under the contract, unless they
were relieved of that requirement to perform by the material breach of Tennessee Pine. The counter-
complaint seeks a declaratory judgment that the contract is void, and for damages.

         In the non-jury trial held on April 23, 1999, Mr. Robert Smith, president of Tennessee Pine,
testified on its behalf. Smith stated that he had been contacted by David Via sometime in late 1986
or early 1987. Via told Smith that he had been approved to enroll in a ten year conservatory resource
program (herein “CRP”) for grass, but that he wanted to extend his enrollment to a twenty-five or
thirty year period, and convert to the program for the conservation of pine trees. Smith testified that
on February 26, 1987, Tennessee Pine Company Inc., entered into a contract with David and Patty
Via. Tennessee Pine began planting pine saplings on the Vias’ property in March of 1987, and
continued planting through April of that year. They discontinued planting on the Via’s property
because the planting season, as designated by the State, was terminated for 1987. When planting
ended, Tennessee Pine had completed only one hundred fifty acres of the four hundred acres
contracted to be planted. Smith stated that both parties knew that because they entered the contract
in February, they might not get all of the planting done in that planting season, which usually runs
from December thru March.

        After planting one hundred fifty acres, Smith took steps to get paid, following his regular
billing procedure with the Vias. He sent them an invoice dated April 28, 1987, reflecting the full
amount for planting approximately one hundred and fifty acres with 700 seedlings totaling


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$10,480.60. Smith testified that he provided the Vias with an invoice marked “paid in full” to
facilitate payment from the ASCAS office of one-half of the cost for planting. The Vias were to
show the invoice to the ASCAS office and would receive reimbursement for one-half of the cost,
which they were to pay to Tennessee Pine. Via told him that he had received payment from the
government. However, Smith never received payment from the Vias. Consequently, Tennessee Pine
did not return the following planting season to plant the remaining acreage. Smith testified that he
tried to reach Via by telephone several times, but that Via never responded.

        Smith testified that sometime in 1987, Via made it clear to him in a telephone conversation,
that he was not willing to pay Tennessee Pine for the planting that they had done, but denies that the
conversation was heated, and stated that there was never any discussion of the contract being over.
Smith denies that he ever threatened Via with a law suit, and states that he did not tell Via that he
would take his farm away. On February 1, 1988, he wrote to Via, again requesting payment.

        Smith states that he has more than $10,000.00 invested in the planting and maintenance of
the trees. Smith has made at least two trips a year to the site for the past ten years, which involves
traveling fifty miles. Smith testified that the Vias’ advantages under the contract included no initial
costs, the extension the conservation program, and no management expenses over the course of
twenty-five to thirty years. On the other hand, Tennessee Pine bears the risk of loss associated with
owning the pines, and will get no money out of the contract until the trees are harvested. Smith
indicated that the contract would cease when he cut the timber.

        Mr. Via testified that he did receive a check from the ASCS office in the amount of
$4,500.00, for one-half of what they approved for the planting. Via does not contest the fact that
under the contract, he was to give that money to Tennessee Pine, but explained that he did not pay
Tennessee Pine because he had doubts about them. Via stated that he owns another piece of land
in Carroll County, where Tennessee Pine was supposed to plant pine trees. The Tennessee Pine crew
was pulled off that land before the planting season was over, and sent to plant someone else’s land.
Via states that Tennessee Pine had more work than it could do. As to the telephone conversation
with Smith, Via testified that he voiced his displeasure with the way the planting was handled. He
complained that no trees were planted on his land in Carroll County, and that only a little over one-
third of the trees were planted per the contract at issue. Via testified that Smith then “give me a
cussing and told me he didn’t want nothing else to do with me.” Via claimed that Smith threatened
to sue him and sell his farm. Via states that he did not speak to Smith after that heated conversation,
and does not remember receiving a letter from him after the telephone conversation, but states that
if he had received a letter, he would have ignored it. Via testified that he did receive, but returned
a check from Tennessee Pine for $3,000.00 for a bonus payment, which seemed suspicious to him.
With regard to damages, Via testified that from 1987 through 1997, he received only $18,462.00,
in an annual CRP payment, instead of the $21,400.00 as stated in the contract as a result of
Tennessee Pine’s planting only one hundred fifty acres of trees. Via claims a loss of $3,000.00 per
year due to the unplanted acreage. In 1997, Via renewed his enrollment with the CRP and is
currently receiving $40.00 per acre for the planted acreage.



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       On cross-examination Via admitted to having filed bankruptcy in 1988 (around the same time
the Tennessee Pine’s counsel sent him the letter which he does not remember receiving).
Concerning the 400 acres at issue, Via stated that he enrolled in the CRP grass program as early as
March of 1986, before he met Smith. Via stated that he had no contact with Tennessee Pine from
about 1988 until the expiration of the CRP program in 1997.

       At the close of proof, counsel for Tennessee Pine explained that his client did not make any
claim to the $4,500.00 received by the Vias because he did not want to run afoul of bankruptcy
proceedings.

       The trial court made findings of fact and conclusions of law, which we quote:

                       That the Plaintiff, Tennessee Pine Company, Inc., and the
               Defendants, David Via and wife, Patty Via, freely, knowingly and
               voluntarily entered into a certain CONTRACT, dated February 26,
               1987, (Exhibit No. 1), and the Court finds that the CONTRACT is
               plain, unambiguous and speaks for itself.
                       The Court further finds that, pursuant to the CONTRACT, the
               Plaintiff planted one hundred fifty (150) acres of pine in the spring
               months of 1987 and that, in accordance with the required procedure,
               the Tennessee Department of Conservation, Division of Forestry,
               checked the planting and found that “the results are excellent.” (Trial
               Exhibit No. 2A).
                       The Court further finds that the remainder of the acreage was
               to be planted during the planting season of the following year (See
               again Trial Exhibit No. 2A), but because the Defendants refused to
               pay over to the Plaintiff the funds that the Defendants received from
               the ASCS Office for the planting of the one hundred fifty (150) acres,
               the Plaintiff did not plant the remaining acreage the following year,
               and the Court finds that the Plaintiff’s decision not to plant any
               additional acreage was justified in light of the Defendants’ refusal to
               pay, and the Court further finds that there is no creditable proof in this
               record that the failure to plant any additional acreage resulted in any
               cost, expense or damage whatsoever to the Defendants.
                       The Court makes no specific findings and declaration of the
               rights for the Plaintiff concerning the approximate Four Thousand
               Five Hundred ($4,500.00) Dollars that the Defendants should have
               paid over to the Plaintiff for the planting of the one hundred fifty
               (150) acres, because of the Plaintiff’s statements in Court concerning
               the uncertainty of whether or not this debt was discharged by the
               Defendants’ bankruptcy.
                       The Court further finds that, according to the CONTRACT
               between the parties, the involved land was required to “lay out” for


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ten (10) yeas, as prescribed by the CRP Program, and that during this
ten (10) year period, the Defendants received payments on their land
from the ASCS/CRP Program.
        The Court further finds that, upon the expiration of the initial
ten (10) year term of the CRP Program, the Plaintiff’s fifteen (15)
year lease on the one hundred fifty (150) acres of growing pine timber
would have commenced, and that the Plaintiff would have been
required to make the annual payment to the Defendants in the amount
of Eight Thousand Five Hundred (8,500.00) Dollars, (150 acres x
contract price of $53.70 per acre). However, it is undisputed that
upon the expiration of the initial CRP Program, the Defendant elected
to extend his land in the program, and it is undisputed that the
Defendants have continued to receive a CRP Program payment on
this entire farm, containing approximately four hundred (400) acres,
which includes the one hundred fifty (150) acres of growing pine
timber. The Court further finds that the per acre price now being
received by the Defendants is Forty Dollars and 80/100 ($40.80).
         THEREFORE, the Court finds and ORDERS that the
CONTRACT between these parties is valid and applicable and is
reformed to the extent that the Plaintiff’s leasehold interest is
restricted to the one hundred fifty (150) acres of growing pine timber,
and further finds and ORDERS that the Plaintiff’s initial fifteen (15)
year lease on this one hundred fifty (150) acres will commence
immediately upon the expiration/termination of the current CRP
Program.
         That, as acknowledged and as agreed in open Court, during
the extended term of the CRP Program, the Plaintiff shall pay to the
Defendants the difference in the per acre CRP payment of Forty
Dollars and 80/100 ($40.80), and the Contract price of Fifty Three
Dollars and 70/100 ($53.70), on the one hundred fifty (150) acres.
         That, so long as the Plaintiff pays to the Defendants the
ordered amount on an annual basis, the Plaintiff retains a proprietary
and lease hold interest in the one hundred fifty (150) acres of growing
pine timber, and has all of the rights and obligations imposed upon it
by the involved CONTRACT.
    That the Court does hereby, in accordance with Tennessee Code
Annotated § 29-14-101, find, declare and ORDER that the parties’
rights, status or other legal relations under the involved Contract are
as herein specified.
         That the Counterclaim filed by the Defendants against the
Plaintiff is dismissed, and the parties shall equally share the statutory
Court costs.



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        A Final Decree incorporating the above was entered June 24, 1999. The Vias have appealed,
and raise one issue, as stated in the brief:

               1. Whether the trial court erred in not declaring the contract
               unenforceable due to the fact that plaintiff took no action for over an
               eleven (11) year period and was thereby guilty of laches.

We will confine our discussion to the one issue presented. See Tenn.R.App.P. 13(b).

       Since this case was tried by the trial court sitting without a jury, we review the case de novo
upon the record with a presumption of correctness of the findings of fact by the trial court. Unless the
evidence preponderates against the findings, we must affirm, absent error of law. Tenn.R.App.P.
13(d).

        Unreasonable delay in pursuing rights calls the equitable doctrine of laches into play to prevent
assertion of stale claims. Nunley v. Nunley, 925 S.W.2d 538 (Tenn. Ct. App. 1996). In Nunley, the
Court said:

                       We note, however, that delay by itself is not sufficient to invoke
               the doctrine of laches. As this court said in the case of Brister v.
               Brubaker’s Estate, 336 S.W.2d 326, 332, 47 Tenn. App. 150, 162
               (1960), “[T]he determinative test as to laches, which may be available
               as a successful defense, is not the length of time that has elapsed, but
               whether, because of such lapse of time, the party relying on laches as
               a defense has been prejudiced by the delay.” See also Parker v. Bethel
               Hotel, 34 S.W. at 217, 96 Tenn. at 285.

Id. at 542.

       In John P. Saad & Sons, Inc. v. Nashville Thermal Transfer Corporation, 715 S.W.2d 41
(Tenn. 1986), our Supreme Court said:

                        As the Court of Appeals noted in American National
               Insurance Co. v. McPhetridge, 28 Tenn. App. 145, 187 S.W.2d 640,
               cert. denied (Tenn. 1945), “[t]he doctrine of laches was very aptly
               stated . . . in Evans v. Steele, 125 Tenn. 483, 494, 495, 145 S.W. 162,
               165, as follows:

                       ‘Relief is generally refused by courts of equity, because
                       of lapse of time, only in such cases where the loss of
                       evidence, death of witnesses or parties, and failure of
                       memory resulting in the obscuration of facts to the
                       prejudice of the defendant, render uncertain the
                       ascertainment of truth, and make it impossible for the

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                       court to pronounce a decree with confidence . . . The
                       Doctrine of laches . . . is not an arbitrary or technical
                       doctrine. No hard and fast rule for its applicable can be
                       formulated.’”

               187 S.W.2d at 643 (emphasis added). The application of the doctrine
               in the first instance lies within the discretion of the trial court and it will
               not be reversed except upon a showing of an abuse of discretion.
               Hannewald v. Fairfield Communities, Inc., 651 S.W.2d 222, 228
               (Tenn. Ct. App.), permission to appeal denied (Tenn. 1983).

Id. at 46.

        The record does not indicate that the Vias pled the doctrine of laches in defense of the
complaint. However, appellee’s counsel has stipulated in its brief that the day before trial, the Vias
amended their answer to add the defense of laches. Although we accept the stipulation that there was
a pleading of laches, our examination of the record reveals no evidence to support this defense. The
applicability of the doctrine of laches is dependent upon the facts of each case and lies within the
discretion of the trial court. Absent a showing of abuse, the trial court’s decision as to the application
of the doctrine of laches will not be reversed on appeal. Hardeman County Bank v. Stallings, 917
S.W.2d 695 (Tenn. Ct. App. 1995).

       We find no abuse of discretion by the trial court. Accordingly, the decree of the trial court is
affirmed, and this case is remanded to the trial court for such further proceedings as may be necessary.
Costs of appeal are assessed against the appellants, David and Patty Via and their surety.

                                                 __________________________________________
                                                 W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.




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