                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                 August 7, 2013 Session

            TENNESSEE ASPHALT COMPANY V. BRIAN FULTZ

                 Appeal from the Chancery Court for Knox County
                 No. 1811593 Hon. Michael W. Moyers, Chancellor




            No. E2013-00240-COA-R3-CV-FILED-SEPTEMBER 20, 2013


This is a breach of contract case in which Company sought to hold Defendant personally
liable for the amount remaining on a contract. During Company’s proof-in-chief, Defendant
used parol evidence attempting to show that while he signed the contract, the parties
understood that he was signing as a representative of his business. Following Company’s
presentation of its proof, Defendant moved for involuntary dismissal pursuant to Rule 41 of
the Tennessee Rules of Civil Procedure. The trial court granted Defendant’s motion, finding
that Company failed to establish that Defendant was personally liable. Company appeals.
We affirm the decision of the trial court.

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

J OHN W. M CC LARTY, J., delivered the opinion of the Court, in which C HARLES D. S USANO,
J R., P.J., and T HOMAS R. F RIERSON, II, J., joined.

Dale Bohannon, Cookeville, Tennessee, for the appellant, Tennessee Asphalt Company.

Edward J. Shultz, Knoxville, Tennessee, for the appellee, Brian Fultz.

                                        OPINION

                                   I. BACKGROUND

       Brian Fultz (“Defendant”), through his construction company Fultz Holdings, LLC
(“Fultz Holdings”), was building Briarcliff Subdivision (“Briarcliff”) in Harrogate,
Tennessee. Defendant contracted with Tennessee Asphalt Company (“Company”) to grade
and pave the roads and to install water and sewer lines for Briarcliff. The initial agreement
consisted of four estimates, which Defendant signed without any mention of Fultz Holdings.
The first estimate related to the grading of the property, the second and third estimates related
to the installation of water and sewer lines, and the fourth estimate related to the paving of
the property. The Company submitted five change orders and several applications for
payment. Each change order and application for payment was addressed to Fultz Holdings.
The site drawings for the project also listed Fultz Holdings as the owner of the property. As
the work progressed, Defendant became unhappy with the work and eventually refused to
submit the amount allegedly remaining on the contract, namely $40,125.

       Company filed suit, alleging that Defendant was personally liable for the amount
remaining on the contract, prejudgment interest, and attorney fees. Defendant admitted
signing the estimates but asserted that he was not personally liable because he intended to
contract with Company as Fultz Holdings. He alternatively asserted that neither he nor Fultz
Holdings were liable for any amount remaining pursuant to the contract because Company
“failed to correct defects in work it performed pursuant to the contract.”

        The case proceeded to trial, where several witnesses testified. Brad Cabbage, a
grading estimator for Company, testified that he was responsible for meeting with customers,
preparing bids, and billing. He stated that he met with Defendant to discuss grading the
roads and getting “everything ready for the installation of stone and asphalt and curb.” He
prepared an estimate that listed Defendant as the purchaser, referred to the site drawings, and
detailed the work that was to be performed and the price for the labor and materials. He
stated that in lieu of producing a separate contract, Company required customers to either
sign the estimate or generate a separate contract for attachment to the estimate. He claimed
that Defendant signed the estimate on August 21, 2007. He asserted that he continually met
with Defendant, who never mentioned the involvement of Fultz Holdings.

       Mr. Cabbage testified that Defendant also asked him to install the water and sewer
lines. He related that while Company did not normally provide those services, he hired a
separate company to complete the project. He prepared two additional estimates that listed
Defendant as the purchaser, referred to the site drawings, and detailed the work that was to
be performed and the price for the labor and materials. Defendant signed the estimates on
September 17, 2007. Approximately one month later, he met with Defendant to discuss
changes to the project. As a result of the meeting, someone in his office prepared a change
order. Further meetings with Defendant led to three additional change orders. Neither party
signed the four change orders, which listed Fultz Holdings as the owner and Company as the
contractor.

      Mr. Cabbage conceded that in preparing his estimates, he referred to Defendant’s site
drawings, which listed Fultz Holdings as owner and Defendant as the person to contact. He

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acknowledged that the applications for payment also listed Fultz Holdings as owner and that
Company never billed Defendant personally.

       Kelly McCartt, who was employed by Company as an estimator, testified that he
worked with Defendant regarding the base and paving of Briarcliff. He admitted that he
prepared an estimate that referred to the site plans and was signed by Defendant on August
22, 2007. He also altered the terms of the original estimate with a change order that was
addressed to “Fultz Holdings Inc.” and signed by Defendant as follows:

       /s/ Brian Fultz
       Brian Fultz, Fultz Holdings Inc.

Likewise, he sent three letters to Defendant that also referred to “Fultz Holdings Inc.” He
insisted that he “always dealt with” Defendant, but he conceded that the application for
payment, the work order, and the final invoice listed Fultz Holdings as owner of the property.

        Phil Brown, Vice President of Company, testified that he was responsible for
collecting “old receivables.” He identified the summary of open accounts prepared by his
office and admitted that according to the document, Fultz Holdings was liable for the amount
remaining on the contract.

       At the close of Company’s case, Defendant moved for involuntary dismissal, arguing
that Company had failed to prove that he was a party to the contract. He admitted that he
failed to indicate on the estimates that he was signing in his representative capacity but
asserted that the parol evidence rule did not prohibit the introduction of additional documents
to correctly identify the parties to the contract. The trial court agreed, finding that the
estimates did not constitute the entirety of the contract when the change orders altered the
terms and when the contract could not be fulfilled without referring to the site drawings,
which were specifically referenced in the estimates. The court found that the addition of the
change orders and the site drawings to the contract created an ambiguity as to the identify of
the party with whom Company had contracted. The court held that it was necessary to
consider additional documentation to ascertain the relationship between the parties and the
identity of those involved. In consideration of the additional evidence, the court stated, that

       the actual course of dealings and intent of the parties was that [Fultz Holdings]
       was the party with whom [Company] had contracted, and from whom
       [Company] expected to be paid.

The court dismissed the complaint against Defendant. This timely appeal followed.



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                                          II. ISSUE


       We consolidate and restate the issues raised on appeal as follows:

       Whether the trial court erred in holding that Defendant was not personally
       liable for the remaining amount due on the contract.


                              III. STANDARD OF REVIEW


       The Tennessee Rules of Civil Procedure provide for involuntary dismissal as follows:

       After the plaintiff in an action tried by the court without a jury has completed
       the presentation of plaintiff’s evidence, the defendant, without waiving the
       right to offer evidence in the event the motion is not granted, may move for
       dismissal on the ground that upon the facts and the law the plaintiff has shown
       no right to relief. The court shall reserve ruling until all parties alleging fault
       against any other party have presented their respective proof-in-chief. The
       court as trier of the facts may then determine them and render judgment
       against the plaintiff or may decline to render any judgment until the close of
       all the evidence. If the court grants the motion for involuntary dismissal, the
       court shall find the facts specially and shall state separately its conclusion of
       law and direct the entry of the appropriate judgment.

Tenn. R. Civ. P. 41.02(2). “When a motion to dismiss is made at the close of plaintiff’s
proof in a nonjury case, the trial court evaluates the case in the same manner as though the
trial court were making findings of fact at the conclusion of all evidence for both parties.”
Cole v. Clifton, 833 S.W.2d 75, 77 (Tenn. Ct. App. 1992) (citing City of Columbia v. C.F.W.
Const. Co., 557 S.W.2d 734, 740 (Tenn. 1977)). “If the plaintiff has failed to prove his [or
her] case by a preponderance of the evidence, the trial court may render a judgment on the
merits for [the] defendant.” Id. (citing Brewer v. Haynes, 681 S.W.2d 551, 552 (Tenn. Ct.
App. 1984)). On appeal, the court’s decision is subject to a de novo review, “with a
presumption of the correctness of the judgment unless the preponderance of the evidence is
otherwise.” Id. However, the interpretation of written agreements is a matter of law, which
this court reviews de novo without a presumption of correctness. See Guiliano v. Cleo, Inc.,
995 S.W.2d 88, 95 (Tenn. 1999).




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                                     IV. DISCUSSION

        Company contends that the trial court erred in dismissing the case after erroneously
finding that Defendant was not personally liable. Company asserts that the court erroneously
considered parol evidence because the estimates, which comprised the contract, were
“complete, unambiguous, and contain[ed] no reference that [Defendant’s] signature was
made in a representative capacity.” Company claims that the unsigned change orders merely
documented additional work that was to be performed pursuant to the original estimates,
which had been signed in Defendant’s individual capacity. Defendant responds that an
ambiguity concerning the identity of the party with whom Company contracted exists in the
contract, which consisted of the four estimates, the five change orders, and the site plans.
He claims that the trial court did not err in considering parol evidence to identify the parties
to the contract and in ultimately holding that he was not personally liable.

        A contract, either written or oral, “must result from a meeting of the minds of the
parties in mutual assent to the terms, must be based upon a sufficient consideration, free from
fraud or undue influence, not against public policy and sufficiently definite to be enforced.”
Higgins v. Oil, Chem. and Atomic Workers Int’l Union, 811 S.W.2d 875, 879 (Tenn. 1991)
(internal quotation and citation omitted). Generally, once a contract is formed it cannot be
modified without consent and additional consideration for the new terms. GuestHouse
Intern., LLC v. Shoney’s North America Corp., 330 S.W.3d 166, 190 (Tenn. Ct. App. 2010).
In this case, the five change orders were an agreed-upon modification of the estimates that
comprised the original contract. Likewise, the contract could not be completed without
reference to the site plans, which expanded upon the agreement reached between the parties
and delineated the work to be done by Company. The change orders, the site plans, and the
estimates must be construed together in attempting to ascertain and give effect to the
intention of the contracting parties.

         Indeed, the cardinal rule of contract interpretation is that the court must attempt to
ascertain and give effect to the intention of the parties. Christenberry v. Tipton, 160 S.W.3d
487, 494 (Tenn. 2005). In attempting to ascertain the intent of the parties, the court must
examine the language of the contract, giving each word its usual, natural, and ordinary
meaning. See Wilson v. Moore, 929 S.W.2d 367, 373 (Tenn. Ct. App. 1996). The court’s
initial task in construing the contract is to determine whether the language is ambiguous.
Planters Gin Co. v. Fed. Compress & Warehouse Co., 78 S.W.3d 885, 889-90 (Tenn. 2002).
A contract is ambiguous if its meaning is uncertain and is susceptible to more than one
reasonable interpretation. See Bonastia v. Berman Bros., 914 F.Supp. 1533, 1537 (W.D.
Tenn. 1995); Frank Rudy Heirs Assocs. v. Moore & Assocs., Inc., 919 S.W.2d 609, 613
(Tenn. Ct. App.1995); Gredig v. Tennessee Farmers Mut. Ins. Co., 891 S.W.2d 909, 912
(Tenn. Ct. App. 1994). If we determine that the language of a contract is ambiguous, we

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construe the ambiguity against the drafter of the contract. See Hanover Ins. Co. v. Haney,
425 S.W.2d 590, 592 (Tenn. 1968); Realty Shop, Inc. v. RR Westminster Holding, Inc., 7
S.W.3d 581, 598 (Tenn. Ct. App. 1999).

        Ordinarily, the parol evidence rule would prevent a party to a written contract from
contradicting the terms of the contract by seeking the admission of “extrinsic” evidence. See,
e.g., Maddox v. Webb Constr. Co., 562 S.W.2d 198, 201 (Tenn. 1978); Airline Constr., Inc.
v. Barr, 807 S.W.2d 247, 259 (Tenn. Ct. App. 1990). Parol evidence is inadmissible to add
to, vary, or contradict contract language. Stickley v. Carmichael, 850 S.W.2d 127, 132
(Tenn. 1992). “[I]t is generally agreed that the admissibility of parol evidence to prove the
intent of the signatory hinges on whether the instrument itself manifests some ambiguity.
Campora v. Ford, 1124 S.W.3d 624, 629 (Tenn. Ct. App. 2003) (citing United American
Bank v. First Citizens Nat’l Bank, 764 S.W.2d 555 (Tenn. Ct.App. 1988)). In general terms,
an ambiguity occurs where a word or phrase is capable of more than one meaning when
viewed in the context of the entire agreement by an objective and reasonable person. Id.
(citing Walk-in Medical Ctrs., Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir.
1987)).

        We agree with the trial court that an ambiguity exists regarding the identity of one of
the parties to the contract because some of the documents that comprised the contract
identified the parties as Company and Fultz Holdings without mention of Defendant, while
others identified the parties as Defendant and Company without mention of Fultz Holdings.
Accordingly, we hold that the trial court did not err in admitting extrinsic evidence regarding
the intent of the parties concerning which party was responsible to Company for fulfilling
the terms of the contract. Following our review of the extrinsic evidence, we further hold
that the trial court did not err in dismissing the complaint against Defendant when the
documents reflect that the parties intended to establish a contract between Company and
Fultz Holdings and that Company expected payment from Fultz Holdings, not Defendant.

                                    V. CONCLUSION

      The judgment of the trial court is affirmed, and the case is remanded for such further
proceedings as may be necessary. Costs of the appeal are taxed to the appellant, Tennessee
Asphalt Company.


                                           ______________________________________
                                           JOHN W. McCLARTY, JUDGE




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