                                                                                       03/09/2017




               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                               January 25, 2017 Session

                  JOHN MERWIN ET AL. V. KEN DAVIS ET AL.

                  Appeal from the Circuit Court for Roane County
                  No. 14-CV-145     Michael S. Pemberton, Judge


                            No. E2016-00508-COA-R3-CV


This appeal arises from a dispute between neighbors regarding the construction of a sign
that precipitated the exchange of threats followed by the filing of a civil warrant and
criminal charges, a global settlement agreement, the alleged breach of the settlement
agreement, and the commencement of this action. After Ken and Martha Davis sued John
and Sharon Merwin in general sessions court on a variety of tort claims and filed criminal
charges against Mr. Merwin, the parties entered into a settlement agreement pursuant to
which Mr. Merwin agreed to remove the sign he erected and the Davises agreed to
dismiss the civil warrant and the criminal charges. The Davises promptly dismissed the
civil warrant but when the criminal case came on for hearing, the district attorney
declined to dismiss the criminal charges against Mr. Merwin and the case was continued
so Mr. Merwin could retain counsel. At the subsequent hearing, the criminal charges
were dismissed and, in the interim, Mr. Merwin removed the sign. Thereafter, the
Merwins commenced this action asserting a variety of tort claims, including a claim for
malicious prosecution, and a claim for breach of contract based on the Davises’ failure to
dismiss the criminal charges at the initial hearing. Upon the motion of the Davises, the
trial court summarily dismissed the tort claims on the grounds of res judicata because
they had been asserted in the civil warrant that was dismissed with prejudice. At the
conclusion of the trial on the remaining claims, the trial court granted the Davises’
motion for a directed verdict on the breach of contract claim upon the ground it was
legally impossible for the Davises to dismiss the criminal complaint and because the
Merwins could not establish that the Davises breached the settlement agreement. The
Merwins appeal. We affirm.

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

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which D.
MICHAEL SWINEY, C.J., and THOMAS R. FRIERSON, J., joined.
James William Friauf, Knoxville, Tennessee, for the appellants, John Merwin and Sharon
Merwin.

William J. Carver, Knoxville, Tennessee, for the appellees, Ken Davis and Martha Davis.

                                        OPINION

      In 2013, John and Sharon Merwin (“the Merwins”) moved into a home that sat on
a wooded lot on an undeveloped cul-de-sac. Across the cul-de-sac lived Ken and Martha
Davis (“the Davises”). Shortly thereafter, a series of disputes arose between the
neighbors, leading to a strained relationship.

        In 2014, Mr. Merwin began to experience declining health. Worried that first-
responders would be unable to locate his house should an emergency arise, Mr. Merwin
began to construct a sign (the “911 sign”) at the entrance to the cul-de-sac “to potentially
alert any ambulances [of] the fact that we were down below there . . . .” The property on
which the sign was constructed was owned by neither the Merwins nor the Davises, but
was near the entrance to the Davises’ property. The Davises claim that the sign blocked
access to parts of their property.

       On June 26, 2014, Mr. Merwin and his son were working to complete the sign
when they were approached by the Davises. A confrontation arose during which Mr.
Merwin claims that he was verbally accosted by the Davises and threatened with physical
violence. Conversely, the Davises contend that Mr. Merwin escalated the confrontation
and threatened them with a firearm.

       In August 2014, the Davises filed a lawsuit in the General Sessions Court for
Roane County against the Merwins for “restriction violations, right-of-way violations,
destruction of property, lost wages, [and] pain and suffering. . . .” The Davises also filed
criminal complaints against Mr. Merwin arising out of the June 2014 altercation.

       Prior to the civil trial, the parties reached a settlement agreement, which provided:

       [The Merwins] agree to remove the existing 911 sign on the undeveloped
       and unmaintained cul-da-sac. [The Merwins] to place the 911 sign on their
       property [sic]. Parties shall have no contact with one another. Contact
       includes any avenues of communication except through an attorney or
       appropriate law enforcement. No third parties not an attorney shall
       communicate with either part. [The Davises] agree to dismiss with
       prejudice this civil summons along with the two (2) criminal summons
       currently set in Roane County court on October 6, 2014 against [the
       Merwins]. Parties agree that no legal action shall be pursued against one


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      another that arise out of the operative facts in this matter. [The Davises]
      agree not to discriminate or discuss [Mr. Merwin’s] dementia.

       On September 12, 2014, the General Sessions Court dismissed the civil case with
prejudice. Thereafter, the Merwins began relocating the sign pursuant to the parties’
agreement; however, removal of the sign was not completed until November 2014.

        The criminal charges against Mr. Merwin came on for hearing in October 2014
and Mr. Merwin appeared without counsel because he was “fully expecting the [case] to
just be dismissed” pursuant to the settlement agreement. Despite Mr. Merwin’s
expectation, the criminal charges were not dismissed at this hearing and Mr. Merwin
blames Mr. Davis for this. Prior to that hearing, Mr. Merwin says he overheard Mr. Davis
tell the District Attorney that “he wanted [Mr. Merwin] to go to jail and pointed at [Mr.
Merwin].” Because Mr. Merwin was not represented by counsel, the case was reset until
January 2015. Mr. Merwin retained a lawyer to represent him and the criminal charges
were dismissed at the January 2015 hearing.

       On October 27, 2014, the Merwins initiated the present lawsuit in the Circuit
Court for Roane County asserting claims against the Davises for nuisance, trespass,
intentional infliction of emotional distress, assault, defamation, malicious prosecution,
invasion of privacy, civil conversion, and civil conspiracy. On February 18, 2015, the
Merwins filed an amended complaint which added a claim for breach of contract.
Specifically, the amended complaint alleged that the parties’ settlement agreement in the
prior civil action constituted a valid contract, which was breached by the Davises.

       In November 2015, the Davises filed a motion for summary judgment, alleging
that the events in the Merwins’ complaint occurred prior to the entry of judgment in the
prior civil action; thus, the Merwins’ claims should be barred by the doctrine of res
judicata. The trial court granted this motion and summarily dismissed all of the claims
which arose on or before September 12, 2014; however, the case proceeded to trial with
regard to the claims for malicious prosecution, civil conspiracy, and breach of contract.

       At the conclusion of the trial on the remaining claims, the Davises filed a motion
for a directed verdict. The trial court granted this motion with regard to the breach of
contract claim due to impossibility of performance of the contract—given that the
Davises had no power to dismiss the criminal charges—and because the criminal charges
were ultimately dismissed in January 2015. The trial court also held that, because the
underlying case did not result in a favorable termination to the Merwins, the tort of
malicious prosecution cannot stand and, consequently, neither can the tort of conspiracy
to commit malicious prosecution. Thus, the trial court granted a directed verdict with
regard to each of the Merwins’ remaining theories.



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       Thereafter, the Merwins initiated this appeal. Generally stated, they raise the
following issues: (1) whether the settlement agreement entered into between the parties
constituted an enforceable contract; (2) whether the trial court erred in its interpretation
of the contract by severing the express and unambiguous terms of the contract in favor of
the Davises; (3) whether the Davises breached the contract by encouraging the continued
prosecution of Mr. Merwin; (4) whether there was a mutual mistake between the parties
such that their contract should have been rescinded; and (5) whether the trial court erred
in granting summary judgment with regard to their claims which arose on or before
September 12, 2014.1

                                             ANALYSIS

                                     I. BREACH OF CONTRACT

      The Merwins contend the trial court erred by granting a directed verdict on their
breach of contract claim.

        To succeed on a claim for breach of contract, a plaintiff must establish (1) the
existence of an enforceable contract, (2) nonperformance that amounted to a breach of
contract, and (3) damages caused by the breach. ARC LifeMed, Inc. v. AMC-Tennessee,
Inc., 183 S.W.3d 1, 26 (Tenn. Ct. App. 2005). An enforceable contract is an agreement
that results from a meeting of the minds in mutual assent to the terms, is based upon
sufficient consideration, is free from fraud or undue influence, is not against public
policy, and is sufficiently definite to be enforced. See Thompson v. Hensley, 136 S.W.3d
925, 929-30 (Tenn. Ct. App. 2003) (citing Klosterman Dev. Corp. v. Outlaw Aircraft
Sales, Inc., 102 S.W.3d 621, 635 (Tenn. Ct. App. 2002)). A settlement agreement made
during the course of litigation may constitute an enforceable contract, subject to the
principles of contract law. Waddle v. Elrod, 367 S.W.3d 217, 222 (Tenn. 2012).

       In September 2014 the parties executed a written agreement to settle all matters in
dispute and to dismiss all court proceedings. In exchange for the Merwins’ promise to
have no contact with the Davises, to remove the existing 911 sign, and to initiate no
further lawsuits against the Davises, the Davises agreed to dismiss their general sessions
civil warrant, dismiss the criminal warrants against Mr. Merwin, refrain from discussing


       1
          As noted above, the trial court also granted a directed verdict on the claims for malicious
prosecution and civil conspiracy. Although the Merwins’ counsel briefly addressed this decision during
oral arguments, neither party raised this as an issue in their appellate briefs. Further, neither brief
addressed the merits of the trial court’s decision on the claims for malicious prosecution and civil
conspiracy. Therefore, this issue is waived. See Tenn. R. App. P. 13(b) (“Review generally will extend
only to those issues presented for review.”); Bean v. Bean, 40 S.W.3d 52, 56 (Tenn. Ct. App. 2000)
(“This Court is under no duty to . . . consider issues raised but not argued in the brief.”).


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Mr. Merwin’s mental health issues, have no contact with the Merwins, and to initiate no
further lawsuits against the Merwins.

       As agreed upon, the civil warrant was dismissed in September 2014 and no one
appealed the dismissal of the civil warrant. When the criminal case came on for hearing
in October 2014, the criminal charges were not dismissed and the Merwins contend this
constituted a breach of the contract by the Davises.2 We disagree.

       It is undisputed that the Davises were without authority to dismiss the criminal
charges against Mr. Merwin. Therefore, the trial court correctly held that the doctrine of
impossibility of performance precludes a finding of breach of contract in this case. See
Patterson v. Methodist Healthcare-Memphis Hospitals, No. W2008-02614-COA-R3-CV,
2010 WL 363314, at *7 (Tenn. Ct. App. Feb. 2, 2010) (“Where, at the time a contract is
made, a party’s performance under it is impracticable without his fault because of a fact
which he has no reason to know and the non-existence of which is a basic assumption on
which the contract is made, no duty to render that performance arises, unless the language
or circumstances indicate the contrary.”).

        Nevertheless, the Merwins contend the Davises breached the contract by
encouraging the district attorney to continue prosecuting Mr. Merwin by stating “he
wanted [Mr. Merwin] to go to jail.” However, even considering this evidence in the light
most favorable to the Merwins, we do not believe the evidence supports the conclusion
that the Davises breached the settlement agreement.

       Importantly, the settlement agreement did not specify a time period during which
performance of the parties’ respective obligations must occur. This is important because
“[t]here can be no recovery for damages on the theory of breach of contract by the party
who himself breached the contract.” United Brake Sys., Inc. v. Am. Envtl. Prot., Inc., 963
S.W.2d 749, 756 (Tenn. Ct. App. 1997)). The record indicates that, as of October 2014,
the Davises had partially performed their obligations by dismissing the civil warrant
while the Merwins had not fulfilled their contractual obligation to remove the 911 sign.
Thus, even if the Davises’ conduct amounted to a breach of contract, the Merwins cannot
prevail on their claim for breach of contract because they could not show that the Davises
were the first to materially breach the agreement.



        2
          In the alternative, the Merwins argue that there was a mutual mistake between the parties
negating the requisite “meeting of the minds” and, thus, the parties’ settlement agreement should be
rescinded. However, the Merwins failed to raise this argument in the trial court. It is well established that
“issues raised for the first time on appeal are waived.” Lee v. Eskridge, No. E2014-02555-COA-R3-CV,
2016 WL 758363, at *2 (Tenn. Ct. App. Feb. 26, 2016) (citing Black v. Blount, 938 S.W.2d 394, 403
(Tenn. 1996)). Therefore, this argument is waived on appeal.


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        For the foregoing reasons, we affirm the trial court’s decision to grant the motion
for a directed verdict with respect to the Merwins’ breach of contract claim.

                                     II. RES JUDICATA

       The Merwins contend the trial court erred by summarily dismissing their claims
that arose before September 12, 2014, on the basis of res judicata.

        “The doctrine of res judicata . . . bars a second suit between the same parties or
their privies on the same claim with respect to all issues which were, or could have been,
litigated in the former suit.” Jackson v. Smith, 287 S.W.3d 486, 491 (Tenn. 2012). To
successfully establish a res judicata defense, a party must show: (1) that the underlying
judgment was rendered by a court of competent jurisdiction; (2) that the same parties or
their privies were involved in both suits; (3) that the same claim or cause of action was
asserted in both suits; and (4) that the underlying judgment was final and on the merits.
Id. As discussed above, in order to be entitled to a summary judgment, the Davises must
demonstrate that the undisputed facts support a finding that each element of this defense
has been met. See Gerber v. Holcomb, 219 S.W.3d 914, 917 (Tenn. Ct. App. 2006).

      The Merwins do not dispute that elements (1), (2), and (3) have been met.
However, they contend that there was no final judgment on the merits because the
Davises failed to comply with the terms of the parties’ settlement agreement. We find this
argument unpersuasive.

        A judgment is final when it decides and disposes of the whole merits of the case
leaving nothing for the further judgment of the court. Creech v. Addington, 281 S.W.3d
363, 377 (Tenn. 2009) (citing Richardson v. Tenn. Bd. of Dentistry, 913 S.W.2d 446, 460
(Tenn. 1995)). “It is not necessary to have a trial for a judgment to be on the merits;
rather, if the parties had an opportunity to be heard, and there are no technical defects, the
judgment is on the merits, although there was no actual hearing or argument on the facts
of the case.” Roberts v. Vaughn, No. W2008-01126-COA-R3-CV, 2009 WL 1608981, at
*4 (Tenn. Ct. App. June 10, 2009) (internal quotations omitted). Thus, any dismissal of a
claim other than a dismissal for lack of jurisdiction, for lack of venue, or for lack of an
indispensable party “operates as an adjudication upon the merits,” unless the trial court
specifies otherwise in its order for dismissal.” Creech, 281 S.W.3d at 378 (citing Tenn. R.
Civ. P. 41.02(3)).

       Here, the Roane County General Sessions Court dismissed the prior civil action
with prejudice on September 12, 2014. This dismissal did not relate to the court’s
jurisdiction, the proper venue, or the lack of an indispensible party. Thus, because the
court did not specify to the contrary, the dismissal operated as a final judgment on the
merits. The Davises’ compliance, or lack thereof, with the parties’ settlement agreement
had no impact on the finality of this judgment.

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       Therefore, the undisputed facts establish that the Merwins’ claims, which arose
prior to September 12, 2014, are barred by the doctrine of res judicata. Accordingly, we
affirm the summary dismissal of these claims.

                                    IN CONCLUSION

       The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed against John and Sharon Merwin.


                                                 ________________________________
                                                 FRANK G. CLEMENT, JR., P.J., M.S.




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