                                          I N THE COURT OF APPEALS

                                                                                           FILED
                                                                                               June 5, 1997

                                                                                           Cecil Crowson, Jr.
RI CHARD GAUSE d / b / a ROOFWORKS                           )       SEVI ER CHANCERY  Appellate C ourt Clerk
OF TENNESSEE,                                                )       C. A. NO. 0 3 A0 1 - 9 7 0 7 - CH- 0 0 0 0 1
                                                             )
                  Pl a i n t i f f - Ap p e l l a n t        )
                                                             )
                                                             )
                                                             )
                                                             )
                                                             )
vs .                                                         )       HON. CHESTER R. RAI NWATER, J R.
                                                             )       CHANCELLOR
                                                             )
                                                             )
                                                             )
                                                             )
                                                             )
J ANI CE COLE d / b / a RI VERSI DE                          )       AFFI RMED I N PART, VACATED I N
SHOP a n d J ERRY OGLE,                                      )       PART, AND REM  ANDED.
                                                             )
                  De f e n d a n t s - Ap p e l l e e s      )




ROBERT L. OGLE, J R. ,                 Se v i e r v i l l e f o r Ap p e l l a n t .


J EFF D. RADER, Og l e , W n n & Ra d e r , Se v i e r v i l l e , f or Ap p e l l e e s .
                          y




                                                   O P I N I O N



                                                                                                      M M r r a y, J .
                                                                                                       c u



         Th i s c a s e o r i g i n a t e d a s a n a c t i o n t o e n f o r c e a l i e n f o r wo r k a n d

ma t e r i a l s p u r s u a n t t o T. C. A. § 6 6 - 1 1 - 1 2 6 .           Th e p l a i n t i f f a l l e g e d t h a t

h e h a d f u r n i s h e d e q u i p me n t ,          l a b o r a n d ma t e r i a l s wh i c h we r e u s e d f o r

i mp r o v e me n t s   o n t h e p r o p e r t y wh i c h t h e d e f e n d a n t ,          Co l e o c c u p i e d a s

l e s s e e a nd t he de f e nda nt ,            Og l e ,     wa s a n o wn e r .      Th e d e f e n d a n t ,   Og l e ,
f i l e d a n a n s we r ,           ge ne r a l l y s t a t e d t ha t         h e o wn e d a n i n t e r e s t         i n t he

s ubj e c t     p r o p e r t y b u t wa s wi t h o u t s u f f i c i e n t            k n o wl e d g e o r i n f o r ma t i o n

t o f or m a be l i e f a s t o t he t r ut h of t he a l l e ga t i ons s e t f or t h i n t he

c o mp l a i n t .



          On t h e o t h e r h a n d , d e f e n d a n t , Co l e , f i l e d a n a n s we r a n d c o u n t e r -

c l a i m.     I n h e r a n s we r Co l e a d mi t t e d t o h a v i n g a l e a s e h o l d i n t e r e s t i n

t he    pr ope r t y.          Sh e      f ur t he r      a d mi t t e d   t ha t     s he   ha d e nt e r e d i nt o a n

a g r e e me n t wi t h t h e p l a i n t i f f t o p r o v i d e c e r t a i n l a b o r a n d ma t e r i a l s t o

r e pa i r     t he r oof       of      t h e b u i l d i n g wh i c h s h e wa s l e s s e e a n d wh i c h wa s

oc c upi e d by a s u bl e s s e e .                  Th e s u b l e s s e e        oper a t e d a bus i ne s s on t he

p r e mi s e s k n o wn a s Ri v e r s i d e Gi f t Sh o p .



          In     he r    c o u n t e r c l a i m,       t he     de f e nda nt ,       Co l e ,    a l l e ge d   t ha t     t he

p l a i n t i f f b r e a c h e d t h e i r a g r e e me n t a n d f a i l e d t o p e r f o r m t h e l a b o r i n

a   good        wo r k ma n l i k e      ma n n e r     a nd    t ha t     as    a    r e s ul t   t he    i nt e r i or     a nd

c o n t e n t s o f t h e b u i l d i n g we r e d a ma g e d a n d s h e wa s r e q u i r e d t o p a y f o r

d a ma g e s s u s t a i n e d b y h e r t e n a n t . Sh e s o u g h t d a ma g e s f r o m t h e p l a i n t i f f

i n t h e a mo u n t o f $ 1 2 , 0 0 0 . 0 0 .           By a me n d me n t s h e i n c r e a s e d h e r d e ma n d f o r

d a ma g e s b y $ 4 , 0 0 0 . 0 0 .



                                                                                                                         1
          Su b s e q u e n t l y ,     t h e c a s e wa s r e f e r r e d t o a s p e c i a l             ma s t e r .       Th e

s p e c i a l ma s t e r f o u n d t h a t t h e p l a i n t i f f h a d b r e a c h e d h i s c o n t r a c t                by

f a i l u r e t o f i n i s h t h e wo r k a n d b y n e g l i g e n t l y d o i n g t h e wo r k a n d a s a



          1
        The plaintiff also filed a motion for summary judgment in which he sought to
have the counterclaim dismissed because the property for which counter-plaintiff claimed
damages was owned by a third party who is not a party to this action. The summary
judgment was by agreement submitted to the Special Master for disposition along with
all other matters. The matter was resolved adverse to the plaintiff. The chancellor
later confirmed the findings of the master overruling the motion for summary judgment.



                                                                  2
r e s ul t      t h e r e wa s e x t e n s i v e d a ma g e t o t h e b u i l d i n g a n d i t s c o n t e n t s .

He       f ound     t ha t    t he   pl a i nt i f f      wa s       not    e nt i t l e d    to     a    j u d g me n t    a nd

r e c o mme n d e d d i s mi s s a l o f t h e c o mp l a i n t .            On t h e c o u n t e r c l a i m h e f o u n d

t ha t       t he    c ount e r - pl a i nt i f f      ha d      s us t a i ne d    t he     a l l e ga t i ons      of     he r

c ount e r c l a i m a nd         wa s   e nt i t l e d       to     d a ma g e s   in     t he     t ot a l   a mo u n t    of

$10, 657. 21.            Th e s p e c i a l ma s t e r f o u n d t h a t t h e d a ma g e s f o r r e p a i n t i n g

a nd r e c a r pe t i ng t ot a l e d $4, 417. 75.



           Ex c e p t i o n s we r e f i l e d t o t h e ma s t e r ' s r e p o r t .              Th e c h a n c e l l o r a t

t h e h e a r i n g o n t h e e x c e p t i o n s r e d u c e d t h e d a ma g e s f o r r e p a i n t i n g a n d

r e c a r pe t i ng t o $883. 55.            He e n t e r e d a t o t a l j u d g me n t f o r t h e c o u n t e r -

p l a i n t i f f i n t h e a mo u n t      of $7, 123. 01.                 Th e r e ma i n d e r o f t h e s p e c i a l

ma s t e r ' s r e p o r t wa s c o n f i r me d .



           Fr o m t h i s j u d g me n t , t h e o r i g i n a l p l a i n t i f f h a s a p p e a l e d p r e s e n t -

i n g u s wi t h t h e f o l l o wi n g i s s u e s f o r r e v i e w:



           1.        W e t h e r t h e c o u r t e r r e d i n a d mi t t i n g e v i d e n c e i n t h e
                       h
                     r e c o r d o f wi t n e s s e s ( n o t t h e o wn e r s ) r e l a t i v e t o t h e
                     v a l u e o f t h e me r c h a n d i s e a n d d a ma g e s t h e r e t o .

           2.        W e t h e r t h e c o u r t e r r e d i n n o t r e s t r i c t i n g t h e a mo u n t
                       h
                     o f d a ma g e s i n a c c o r d a n c e wi t h t h e p r o o f o f l o s s .

           3.        W e t h e r t h e c o u r t e r r e d i n f i n d i n g t h a t t h e r o o f wa s
                       h
                     d e f e c t i v e l y a p p l i e d a n d i n d e t e r mi n i n g d a ma g e s f o r
                     b r e a c h o f wa r r a n t y .

           4.        W e t h e r t h e c o u r t e r r e d i n a wa r d i n g d a ma g e s f o r
                      h
                     me r c h a n d i s e wh e n t h e a p p e l l e e wa s n o t t h e o wn e r o f t h e
                     me r c h a n d i s e a n d h a d n o c a u s e o f a c t i o n t h e r e f o r .

           5.        W e t he r t he c our t e r r e d i n
                       h                                                  f i ndi ng appe l l a nt l i a bl e
                     f o r d a ma g e t o t h e i n t e r i o r         of t he bui l di ng i nc l udi ng
                     c a r p e t i n g , wh i c h wa s t h e o b l      i ga t i on unde r t he s ubl e a s e
                     a g r e e me n t o f t h e s u b l e s s e e ,       La r r y Ut t a m, n o t a p a r t y
                     t o t h i s l i t i ga t i o n .



                                                                 3
           W wi l l
            e            fi rst        l o o k t o o u r s t a n d a r d o f r e v i e w.        Ou r s t a n d a r d o f

r e v i e w i n n o n j u r y c a s e s i s c o n t r o l l e d b y Ru l e 1 3 ( d ) ,           Te n n e s s e e Ru l e s

o f Ap p e l l a t e Pr o c e d u r e i . e . , " [ u ] n l e s s o t h e r wi s e r e q u i r e d b y s t a t u t e ,

r e vi e w of f i ndi ngs of f a c t by t he t r i a l c our t i n c i vi l a c t i ons s ha l l

be    de     novo      upon     t he       r e c or d   of     t he    t r i al   c our t ,   a c c o mp a n i e d   by   a

p r e s u mp t i o n o f t h e c o r r e c t n e s s o f t h e f i n d i n g , u n l e s s t h e p r e p o n d e r a n c e

o f t h e e v i d e n c e i s o t h e r wi s e . "           To t h e e x t e n t , h o we v e r , t h a t t h e r e i s

a c o n c u r r e n t f i n d i n g o f f a c t b y t h e s p e c i a l ma s t e r a n d c h a n c e l l o r , we

mu s t     be     g u i d e d b y T. C. A.        § 27- 1- 113 a nd t he c a s e s               c ons t r ui ng t ha t

s t a t u t o r y e n a c t me n t .



                     T. C. A. § 2 7 - 1 - 1 1 3 p r o v i d e s t h e p r o p e r s t a n d a r d f o r
           t h i s Co u r t t o f o l l o w wh e n r e v i e wi n g t h e f i n d i n g s o f a ma s t e r
           i n wh i c h a c h a n c e l l o r c o n c u r s : " W e r e t h e r e h a s b e e n a
                                                                         h
           c o n c u r r e n t f i n d i n g o f t h e ma s t e r a n d c h a n c e l l o r , wh i c h u n d e r
           t he pr i nc i pl e s now obt a i ni ng i s bi ndi ng on t he a ppe l l a t e
           c o u r t s , t h e Co u r t o f Ap p e a l s s h a l l n o t h a v e t h e r i g h t t o
           d i s t u r b s u c h f i n d i n g . " Th e c o n c u r r e n t f i n d i n g o f a ma s t e r
           a n d a c h a n c e l l o r h a s t h e s a me f o r c e a n d e f f e c t a s a j u r y
           v e r d i c t a p p r o v e d b y t h e t r i a l j u d g e . Co a t e s v . Th o mp s o n, 7 1 3
           S. W 2 d 8 3 ( Te n n . Ap p . 1 9 8 6 ) , c i t i n g Sc h o e n v . J . C. Br a d f o r d
                 .
           & Co . , 6 4 2 S. W 2 d 4 2 0 ( Te n n . Ap p . 1 9 8 2 ) ; Fe r r e l l v . El r o d ,
                                     .
           6 3 Te n n . Ap p . 1 2 9 , 4 6 9 S. W 2 d 6 7 8 ( 1 9 7 1 ) . Su c h a c o n c u r r e n c e
                                                        .
           i s c onc l us i ve on a ppe a l unl e s s ( 1) t he i s s ue i s one not
           p r o p e r f o r r e f e r e n c e t o a ma s t e r , ( 2 ) t h e c o n c u r r e n c e i s
           b a s e d o n a n e r r o r o f l a w o r a mi x e d q u e s t i o n o f l a w a n d
           f a c t , or ( 3) t he c onc ur r e nc e i s not s uppor t e d by any
           ma t e r i a l e v i d e n c e . Co a t e s , s u p r a . Se e a l s o , St a g g s v . He r f f
           M t o r Co . , 2 1 6 Te n n . 1 1 3 , 3 9 0 S. W 2 d 2 4 5 ( 1 9 6 5 ) . Th u s , we
             o                                                        .
           mu s t a f f i r m t h e Ch a n c e l l o r u n l e s s o n e o f t h e s e t h r e e
           e xc e pt i ons a ppl i e s i n t hi s c a s e .

Ha y n e s v . W l s o n , ( Te n n . Ap p . Op i n i o n f i l e d a t Kn o x v i l l e , De c e mb e r 2 8 ,
                i
1994. )



           Un d e r t h e f a c t s i n t h i s c a s e ,           we f i n d t h a t t h e i s s u e s p r e s e n t e d

do not          c o me wi t h i n a n y o f t h e t h r e e e x c e p t i o n s n o t e d a b o v e a n d we r e

p r o p e r i s s u e s t o r e f e r t o a Sp e c i a l M s t e r . Th e r e f o r e , t h e c o n c u r r e n t
                                                          a


                                                                4
f i ndi ngs         of    t he     Sp e c i a l     M s t er
                                                     a               a nd      cha nc e l l or                ar e      s ubj e c t    to      t he

" ma t e r i a l     e vi de nc e r ul e . " 2           Ou r        r e vi e w of               t he r e c or d r e f l e c t s              t ha t

t h e r e i s ma t e r i a l e v i d e n c e t o s u p p o r t t h e c o n c u r r e n t f i n d i n g s o f f a c t

c o n c e r n i n g l i a b i l i t y a n d t o s o me d a ma g e s .                            Th e o n l y i s s u e s wh i c h we

wi l l d i s c u s s a r e t h o s e wh e r e t h e c h a n c e l l o r d i s a g r e e d wi t h t h e s p e c i a l

ma s t e r o r wh e r e t h e r e wa s a n e r r o n e o u s a p p l i c a t i o n o f t h e l a w.



          Th e f i r s t i s s u e d e a l s wi t h a p u r e q u e s t i o n o f l a w.                                     Th e q u e s t i o n

p r e s e n t e d i s wh e t h e r a wi t n e s s ,              wh o i s n o t                   a n o wn e r o f p r o p e r t y ma y

t e s t i f y t o t h e v a l u e o f me r c h a n d i s e a n d d a ma g e s t o i t .

" [ A] wi t n e s s wh o i s f a mi l i a r                  wi t h t h e v a l u e o f p r o p e r t y o f t h e s a me

c h a r a c t e r ma y t e s t i f y t o t h a t              va l ue          .     .     .     "        W l s on v.
                                                                                                           i                   Br y a n t ,    167

Te n n . 1 0 7 , 6 7 S. W 2 d 1 3 3 , 1 3 4 ( 1 9 3 4 ) .
                         .



          A wi t n e s s ,       M.
                                 r        Ba i j u Ha r j a n i ,         t h e s u b l e s s e e ’ s s h o p ma n a g e r ,                   wa s

a l l o we d       to    t es t i f y     to      t he   va l ue          of        t he        d a ma g e d         me r c h a n d i s e     ove r

pl a i nt i f f ' s      obj e c t i on.           We       f i nd     t hi s        t e s t i mo n y          to       be     e r r one ous l y

a d mi t t e d f o r t wo r e a s o n s .            Fi r s t l y , t h e wi t n e s s wa s n e v e r q u a l i f i e d a s

be i ng     f a mi l i a r       wi t h    t he     va l ue      of       pr ope r t y               of    t he       s a me     c ha r a c t e r .

Se c o n d l y , t h e me a s u r e o f d a ma g e s u s e d b y t h e wi t n e s s d o e s n o t c o mp o r t

wi t h e x i s t i n g l a w.



          I t i s a we l l - a c c e p t e d p r i n c i p l e o f l a w i n t h i s s t a t e t h a t d a ma g e s

t o p e r s o n a l p r o p e r t y ma y b e me a s u r e d b y e i t h e r t h e c o s t o f r e p a i r o r

t he    r e duc t i on i n f a i r             ma r k e t     va l ue .            Se e        Co i n e r ,     " Te n n e s s e e      La w o f


       2
         There is no mention of "concurrent findings" in Rule 13(d), Tennessee Rules of
Appellate Procedure.     The rule does, however, contain a limiting provision, i.e.,
"[u]nless otherwise required by statute." Concurrent findings are controlled by T.C.A.
§ 27-1-113. We also note that the Advisory Commission Comments, which specifically
refer to T.C.A. § 27-1-113, state that "[t]his subdivision dealing with appellate review
of findings of fact in civil actions, incorporates existing law."

                                                                      5
Da ma g e s , " Se c t i o n 6 - 3 . Th i s r u l e i s f u r t h e r s e t f o r t h i n t h e c a s e o f

An d e r s o n v . I n ma n , 3 Te n n . Ap p . 1 9 5 ( 1 9 2 6 ) , wh i c h h a s b e e n i n c o r p o r a t e d

i n t o Te n n e s s e e Pa t t e r n I n s t r u c t i o n s , Ci v i l 1 4 . 4 0 a s f o l l o ws :



          . . . i f t he d a ma g e s h a v e n o t b e e n r e p a i r e d , o r i f t h e
          pr ope r t y i s not c a pa bl e of r e pa i r s o a s t o r e s t or e t he t hr e e
          f a c t or s of f unc t i on, a ppe a r a nc e , a nd va l ue a s t he y e xi s t e d
          i mme d i a t e l y b e f o r e t h e [ i n c i d e n t ] , t h e n t h e me a s u r e o f
          d a ma g e s i s t h e d i f f e r e n c e i n t h e f a i r ma r k e t v a l u e o f t h e
          p r o p e r t y i mme d i a t e l y b e f o r e t h e [ i n c i d e n t ] a n d i mme d i a t e l y
          a f t e r t he [ i nc i de nt ] .



          Th e f o l l o wi n g r u l e h a s a l s o b e e n e n u n c i a t e d :



                    I n t h i s s t a t e , t h e o r d i n a r y a n d b a s i c me a s u r e o f
          d a ma g e s f o r i n j u r y t o p e r s o n a l p r o p e r t y i s t h e d i f f e r e n c e
          b e t we e n i t s ma r k e t v a l u e i mme d i a t e l y b e f o r e a n d i mme d i a t e l y
          a f t e r t h e i n j u r y . I r v i n g Pu l p a n d Pa p e r , Lt d . v . Du n b a r
          Tr a n s f e r a n d St o r a g e Co . , 7 3 2 F. 2 d 5 1 1 ( 6 t h Ci r . 1 9 8 4 ) ;
          Ya z o o a n d M V. R. Co . v . W l l i a ms , 1 8 2 Te n n . 2 4 1 , 1 8 5
                              .                            i
          S. W 2 d 5 2 7 , 5 2 9 ( Te n n . 1 9 4 5 ) ; Te n n e s s e e J u r i s p r u d e n c e ,
                .
          Da ma g e s , § 1 8 , p a g e 4 2 .



          No n e o f    t he pr ope r       me a s u r e s   we r e e mp l o y e d i n t h i s             cas e.      Th e

wi t n e s s ,   M.
                 r      Ba i j u Ha r j a n i ,   wh o t e s t i f i e d a s t o t h e d a ma g e s t o t h e

me r c h a n d i s e , t e s t i f i e d o n l y a s t o t h e c o s t o f t h e d a ma g e d o r d e s t r o y e d

pr ope r t y.     W hol d t ha t
                   e                      t h e t e s t i mo n y o f         M.
                                                                             r      Ha r j a n i   wa s    i mp r o p e r l y

a d mi t t e d a n d f u r t h e r t h e t e s t i mo n y i f a l l o we d i s i n s u f f i c i e n t e v i d e n c e

as    a   ma t t e r   of    l a w u p o n wh i c h a            j u d g me n t   f or   d a ma g e s     t o pe r s ona l

pr ope r t y c a n be ba s e d.



          Th e a p p e l l a n t n e x t i n s i s t s t h a t t h e d a ma g e s f o r p e r s o n a l p r o p e r t y

s h o u l d b e r e s t r i c t e d t o t h e a mo u n t o f l o s s a s s t a t e d i n a s wo r n p r o o f

of l os s pr e pa r e d by t he a ppe l l e e .              W a g r e e t h a t t h e p r o o f o f l o s s wa s
                                                              e



                                                             6
a d mi s s i b l e a n d t h e r e c o r d r e f l e c t s t h a t i t wa s a d mi t t e d i n t o e v i d e n c e .

Ad mi s s i o n s c a n b e u s e d n o t          onl y a s s ubs t a nt i ve e vi de nc e but               al so as

e v i d e n c e t o u c h i n g t h e c r e d i b i l i t y o f t h e wi t n e s s .         Ad mi s s i o n s a r e i n

n o wa y c o n c l u s i v e .        Se e Te n n e s s e e Ru l e s o f Ev i d e n c e ,         Ru l e 8 0 3 ( 1 . 2 ) .

W f i n d n o me r i t i n t h i s i s s u e .
 e



         As t o t h e t h i r d i s s u e , t h e r e i s ma t e r i a l e v i d e n c e t o s u p p o r t t h e

j u d g me n t   of t he t r i a l       c our t    a nd s pe c i a l       ma s t e r .   Th u s ,   a ppl yi ng t he

ma t e r i a l e v i d e n c e r u l e a s we h a v e d i s c u s s e d s u p r a , we f i n d n o me r i t i n

t hi s i s s ue .



         I s s u e s f o u r a n d f i v e a r e i n t e r r e l a t e d a n d we wi l l c o n s i d e r t h e m

t oge t he r .



         Un d e r t h e s u b l e a s e a g r e e me n t b e t we e n c o u n t e r - p l a i n t i f f , Co l e , a n d

t he s ubl e s s e e ,    Ut t a m,     we f i n d t h e f o l l o wi n g p r o v i s i o n s :



         7.         M i nt e na nc e a nd Re pa i r .
                     a

                 a.       Su b l e s s o r s h a l l ma k e a l l s t r u c t u r a l r e p a i r s s u c h
         a s s u p p o r t s , r o o f a n d t h e e x t e r i o r wa l l s o f t h e b u i l d i n g i n
         a t i me l y ma n n e r d u r i n g t h e t e r m o f t h i s l e a s e .

                   b . Su b l e s s e e s h a l l , d u r i n g t h e t e r m o f t h i s a g r e e me n t
         a t h i s s o l e e x p e n s e , o t h e r wi s e ma i n t a i n b o t h t h e i n t e r i o r
         a n d e x t e r i o r o f t h e l e a s e d p r e mi s e s i n a s g o o d o r d e r a n d
         r e p a i r a s i t i s a t t h e c o mme n c e me n t o f t h i s l e a s e , r e a s o n -
         a b l e we a r a n d t e a r e x c e p t e d , n o r wi l l t h e s u b l e s s e e s u f f e r
         o r p e r mi t a n y wa s t e o r n e g l e c t o f p r o p e r t y a n d wi l l r e p a i r
         o r r e s t o r e t h e s a me a s o f t e n a s ma y b e n e c e s s a r y i n o r d e r
         t o k e e p t h e l e a s e d p r e mi s e s i n a g o o d s t a t e o f r e p a i r .

                                        *          *         *          *           *




                                                            7
          Th e r e f o r e ,      u n d e r t h e e x p r e s s t e r ms o f t h e c o n t r a c t                    b e t we e n t h e

s u b l e s s o r a n d s u b l e s s e e , t h e s u b l e s s o r i s r e q u i r e d t o ma i n t a i n t h e r o o f

i n good r e pa i r .               A f a i l ur e t o do s o,                  e ve n i f      t he f a ul t         of      a not he r ,

wo u l d c o n s t i t u t e a b r e a c h o f t h e s u b l e a s e a g r e e me n t .                     I f t he r e i s s uc h

a b r e a c h a n d t h e s u b l e s s e e s u f f e r s d a ma g e s ,                      h e wo u l d b e e n t i t l e d t o

r e c o v e r h i s l o s s e s f r o m t h e s u b l e s s o r , i n c l u d i n g d a ma g e s t o t h e a r e a s

wh e r e t h e s u b l e s s e e wa s r e s p o n s i b l e f o r ma i n t e n a n c e .                     “ Th e p u r p o s e o f

a s s e s s i n g d a ma g e s i n b r e a c h o f c o n t r a c t c a s e s i s t o p l a c e t h e p l a i n t i f f

a s n e a r l y a s p o s s i b l e i n t h e s a me p o s i t i o n s h e wo u l d h a v e b e e n i n h a d

t h e c o n t r a c t b e e n p e r f o r me d ,             but t he nonbr e a c hi ng par t y i s not t o be

p u t i n a n y b e t t e r p o s i t i o n b y r e c o v e r y o f d a ma g e s f o r t h e b r e a c h o f t h e

c ont r a c t        t ha n    he     wo u l d       ha ve       be e n    if    t he      c ont r a c t    ha d       be e n     f ul l y

p e r f o r me d .     Ac t i o n Ad s ,          I nc .    v.    W l l i a m B.
                                                                   i                    Ta n n e r Co . ,     5 9 2 S. W 2 d 5 7 2
                                                                                                                        .

( Te n n . Ap p . 1 9 7 9 ) . ”            La mmo n s v . Ch a mb e r l a i n , 9 0 9 S. W 2 d 7 9 5 ( Te n n . Ap p .
                                                                                          .

1993) .



          I t c a nnot be s e r i ous l y a r gue d t ha t t he s ubl e s s e e di d not s uf f e r

d a ma g e s f r o m d e f e c t s i n t h e r o o f .                     Un d e r t h e f a c t s o f t h i s c a s e ,             t he

s u b l e s s e e wi t h h e l d $ 1 0 , 0 0 0 . 0 0 i n r e n t f o r d a ma g e s t o t h e i n t e r i o r o f

t h e b u i l d i n g a n d t h e me r c h a n d i s e l o c a t e d t h e r e i n .                   Th e r e c o r d d o e s n o t

r ef l ect      wh e t h e r        a ny     of      t he     mo n i e s     wi t h h e l d     wa s    e ve r       pa i d     to    t he

s ubl e s s or .        I n a n y e v e n t , t h e s u b l e s s e e c o u l d h a v e ma i n t a i n e d a n a c t i o n

a g a i n s t t h e s u b l e s s o r f o r d a ma g e s p r o x i ma t e l y c a u s e d b y t h e d e f e c t i v e

r oof ,    i nc l udi ng a r e a s             t ha t       t h e s u b l e s s e e wa s        o b l i g a t e d t o ma i n t a i n

unde r      t he       t e r ms     of      t he     l ease       pr ovi de d       t he      ma i n t e n a n c e     c os t s      we r e

i nc r e a s e d by t he de f e c t i ve r oof .




                                                                      8
        W f i n d t h a t i s s u e s f o u r a n d f i v e a r e g o v e r n e d b y t h e f o l l o wi n g
         e

r u l e s o f l a w.



                   Al t h o u g h n o t e x p r e s s l y s o d e n o mi n a t e d i n t h e c o m-
        p l a i n t , t h e g r a v a me n o f t h i s s u i t i s i n d e mn i t y ; t h a t i s , t h e
        p l a i n t i f f i s s e e k i n g r e i mb u r s e me n t o f d a ma g e s h e e x p e c t s t o
        p a y t o a t h i r d p a r t y f o r d a ma g e s s u f f e r e d b y t h e t h i r d p a r t y
        a s a r e s u l t o f d e f e n d a n t ' s d e f e c t i v e p e r f o r ma n c e o f a
        c o n t r a c t wi t h p l a i n t i f f o r d e f e n d a n t ' s b r e a c h o f wa r r a n t y
        i n a s a l e t o pl a i nt i f f .

                 Co n t r a c t s o f i n d e mn i f i c a t i o n ma y b e e x p r e s s , o r ma y
        a r i s e b y i mp l i c a t i o n f r o m t h e r e l a t i o n s h i p o f t h e p a r t i e s .
        Ho u s e b o a t i n g Co r p . o f Ame r i c a v . M r s h a l l , Te n n . 1 9 7 7 , 5 5 3
                                                                  a
        S. W 2 d 5 8 8 .
              .

                  A p e r s o n wh o , i n wh o l e o r i n p a r t , h a s d i s c h a r g e d a
        d u t y wh i c h i s o we d b y h i m b u t wh i c h , a s b e t we e n h i ms e l f a n d
        a not he r , s houl d ha ve be e n di s c ha r ge d by t he ot he r , i s
        e n t i t l e d t o i n d e mn i t y f r o m t h e o t h e r u n l e s s b a r r e d b y t h e
        wr o n g f u l n a t u r e o f h i s o wn c o n d u c t . So u t h e r n Co a l & Co k e Co .
        v . Be e c h Gr o v e M n . Co . , 5 3 Te n n . Ap p . 1 0 8 , 3 8 1 S. W 2 d 2 9 9
                                   i                                                        .
        ( 1 9 6 3 ) ; Ca r t e r v . E. T. & W N. C. Tr a n s p . Co . , 3 5 Te n n . Ap p .
                                                   .
        1 9 6 ; 2 4 3 S. W 2 d 5 0 5 ( 1 9 5 1 ) .
                             .

                   A c o n t r a c t o f i n d e mn i t y n e e d n o t b e e x p r e s s ; i n d e mn i t y
        ma y b e r e c o v e r e d i f t h e e v i d e n c e e s t a b l i s h e s a n i mp l i e d
        c o n t r a c t . I n a d d i t i o n , a r i g h t t o i n d e mn i t y e x i s t s wh e n e v e r
        one pa r t y i s e xpos e d t o l i a bi l i t y by t he a c t i on of a not he r
        wh o , i n l a w o r i n e q u i t y , s h o u l d ma k e g o o d t h e l o s s o f t h e
        o t h e r . Th e r i g h t o f i mp l i e d i n d e mn i t y i n c o n t r a c t u a l c a s e s
        i s ba s e d upon a br e a c h of c ont r a c t by t he pe r s on aga i ns t
        wh o m i n d e mn i t y i s s o u g h t , . . . .


St i v e r M t g . ,
            k          I nc . ,   v.   Pe r f o r ma n c e Bu s .   Fo r ms ,   I nc . ,   1 9 9 1 Te n n .    Ap p .
LEXI S 93 0 .



        Th i s c a s e ma y b e a n a l o g i z e d t o t h e a u t h o r i t y s e t o u t a b o v e .         Th e

c ount e r c l a i m di d not e xpr e s s l y i nc l ude a c l a i m s pe c i f i c a l l y de s i gna t e d

a s a c l a i m f o r i n d e mn i t y b u t i t d o e s i n c l u d e a c l a i m f o r d a ma g e s p a i d

out t o her t e na nt .




                                                         9
         W f i nd t ha t
          e                        t he c o u nt e r - pl a i nt i f f i s e nt i t l e d t o r e c ove r f r om

t h e c o u n t e r - d e f e n d a n t f o r d a ma g e s t o t h e me r c h a n d i s e o f t h e s u b l e s s e e

a n d o t h e r d a ma g e s f o r wh i c h t h e s u b l e s s e e c o u l d l o o k t o t h e s u b l e s s o r

f o r p a y me n t .       Th e r e f o r e , we f i n d n o me r i t i n i s s u e s f o u r a n d f i v e .



         W a f f i r m t h e j u d g me n t
          e                                           of t he t r i a l       c our t    on al l       i s s ue s e xc e pt

t he f i r s t .        W f i n d t h a t t h e wr o n g me a s u r e o f d a ma g e s wa s u t i l i z e d i n
                         e

d e t e r mi n i n g d a ma g e s t o t h e s u b l e s s e e ’ s me r c h a n d i s e .          Ac c o r d i n g l y , t h e

j u d g me n t   f or     d a ma g e t o t h e me r c h a n d i s e i s v a c a t e d .             Th i s c a s e mu s t

r e ma n d e d t o t h e t r i a l c o u r t f o r a r e t r i a l a n d r e c a l c u l a t i o n o f d a ma g e s

t o t h e me r c h a n d i s e l o c a t e d wi t h i n t h e b u i l d i n g i n q u e s t i o n .




         Th e a p p e l l e e i n h e r           br i e f    ha s   a s ke d t hi s      c our t     t o mo d i f y t h e

a wa r d t o h e r        by i nc r e a s i ng i t           by $2, 887. 50,         wh i c h s h e c l a i ms wo u l d

c o mp e n s a t e h e r f o r t h e f u l l a mo u n t s h e wa s r e q u i r e d t o p a y f o r r e p a i r s

t o t he r oof .         Th e r e i s ma t e r i a l e v i d e n c e t o s u p p o r t t h e f i n d i n g s o f t h e

s p e c i a l ma s t e r a n d t h e c o n c u r r e n t f i n d i n g s o f t h e c h a n c e l l o r .              Un d e r

t h e s e c i r c u ms t a n c e s ,   a p p e l l e e ' s r e q u e s t mu s t b e d e n i e d .



         Co s t s a r e t a x e d e q u a l l y b e t we e n t h e a p p e l l a n t , Ri c h a r d Ga u s e              and

t he a ppe l l e e ,       J a n i c e Co l e .      Th i s c a s e i s r e ma n d e d t o t h e t r i a l c o u r t

f o r s u c h o t h e r a c t i o n a s i s n e c e s s a r y i n a c c o r d a n c e wi t h t h i s o p i n i o n .




                                                                      _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _
                                                                 Do n T. M M r r a y , J u d g e
                                                                               c u




                                                               10
CONCUR:


_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
He r s c h e l P. Fr a n k s , J u d g e


_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Ch a r l e s D. Su s a n o , J u d g e




                                                               11
                                            I N THE COURT OF APPEALS




RI CHARD GAUSE d / b / a ROOFWORKS                             )   SEVI ER CHANCERY
OF TENNESSEE,                                                  )   C. A. NO. 0 3 A0 1 - 9 7 0 7 - CH- 0 0 0 0 1
                                                               )
                    Pl a i n t i f f - Ap p e l l a n t        )
                                                               )
                                                               )
                                                               )
                                                               )
vs .                                                           )   HON. CHESTER R. RAI NWATER, J R.
                                                               )   CHANCELLOR
                                                               )
                                                               )
                                                               )
                                                               )
J ANI CE COLE d / b / a RI VERSI DE                            )   AFFI RMED I N PART, VACATED I N
SHOP a n d J ERRY OGLE,                                        )      PART, AND REM  ANDED.
                                                               )
                    De f e n d a n t s - Ap p e l l e e s      )



                                                            J UDGMENT


           Th i s a p p e a l c a me o n t o b e h e a r d u p o n t h e r e c o r d f r o m t h e Ch a n c e r y

Co u r t     of      Se v i e r    Co u n t y ,       br i e f s    a nd     a r g u me n t    of    c ouns e l .          Up o n

c o n s i d e r a t i o n t h e r e o f , t h i s Co u r t i s o f t h e o p i n i o n t h a t t h e r e wa s s o me

r e ve r s i bl e e r r or i n t he t r i a l c our t .

           W a f f i r m t h e j u d g me n t
            e                                             of t he t r i a l        c our t    on al l      i s s ue s e xc e pt

d a ma g e s f o r me r c h a n d i s e .         W f i n d t h a t t h e wr o n g me a s u r e o f d a ma g e s wa s
                                                   e

ut i l i z e d     in     d e t e r mi n i n g      d a ma g e s     to     t he     s ubl e s s e e ’ s    me r c h a n d i s e .

Ac c o r d i n g l y ,   t h e j u d g me n t        f or   d a ma g e t o t h e me r c h a n d i s e i s v a c a t e d .

Th i s c a s e i s r e ma n d e d t o t h e t r i a l c o u r t f o r a r e t r i a l a n d r e c a l c u l a -

t i on of         d a ma g e s    t o t he        me r c h a n d i s e    l o c a t e d wi t h i n t h e     bui l di ng i n

que s t i on.

           Co s t s a r e t a x e d e q u a l l y b e t we e n t h e a p p e l l a n t , Ri c h a r d Ga u s e               and

t he a ppe l l e e ,       J a n i c e Co l e .         Th i s c a s e i s r e ma n d e d t o t h e t r i a l c o u r t

f o r s u c h o t h e r a c t i o n a s i s n e c e s s a r y i n a c c o r d a n c e wi t h t h i s o p i n i o n .
PER CURI AM




 13
