Baker v. Mundaca Investment Corp. ( 1999 )

JANET K. BAKER, )
Plaintiff-Appellee,
)
) Appeal No. FILED
) 01A01-9809-CH-00498
)
June 29, 1999
v. )
) Davidson Chancery
Cecil Crowson, Jr.
MUNDACA INVESTMENT )
Appellate Court Clerk
CORPORATION, )
)
Defendant-Appellant, )
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEALED FROM THE CHANCERY COURT OF DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE CAROL L. McCOY, CHANCELLOR
ROBERT D. TUKE and W. EDWARD RAMAGE
TUKE YOPP & SWEENEY, PLC
414 Union Street, Suite 1100
Nashville, Tennessee 37219
Attorney for Plaintiff-Appellee
JEFFREY A. GREENE and G. MILLER HOGAN, II
CASTLEMAN & GREENE, PLLC
110 Glancy Street, Suite 109
Goodlettsville, Tennessee 37072
Attorney for Defendant-Appellant
AFFIRMED AND REMANDED
HERSCHEL P. FRANKS, JUDGE
CONCUR:
GODDARD, P.J.
CANTRELL, J.
OPINION
This action involves a d ispute over loan brok erage fee s. Defend ant-
appellant Mundaca Investment Corp. (“Mundaca”) purchased “loan packages” at
auction. A single package typically consisted of several individual loans secured by
real estate. M undaca h ired Plaintiff J anet Bak er to assist it in ob taining finan cing to
bid on these packages.
Under the parties’ initial agreement, Baker received a 1.5% commission
on all closed , funded lo ans. In De cember, 1 992, the pa rties orally modif ied this
agreement. According to Mundaca, the parties agreed that Baker would not receive a
new commission each time Mundaca paid down its indebtedness and re-borrowed on
the same line of credit. In exchange, Baker was to receive 1.5% of the entire amount
of the line o f credit at the b eginning, re gardless of the amou nt Mun daca actua lly
borrowed. Mundaca contends that the parties did not modify the portion of the
agreem ent requ iring the loans to be clos ed bef ore Ba ker earn ed her f ee.
According to Baker, the parties agreed that she would receive only one
commission on a given line of credit. In exchange, Mundaca would pay her
commiss ion whe n the lende r committe d to lend rath er than w hen the loa n actually
closed.
Baker helped Mundaca to obtain a $5,000,000.00 loan commitment
from SouthTrust Bank. A commitment agreement was signed on February 3, 1995,
but the loan never closed. Baker sought a $75,000.00 commission, which Mundaca
refu sed to pay.
This action resulted, and Baker initially bro ught fou r claims for u npaid
fees. Mundaca paid fees for two of the claims before trial and Baker moved for
summary judgment on the remaining claims. The Court granted summary judgment
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on the second claim but denied it on the first. The ca se was tried before a jury, wh ere
Baker asserted alternative claim s for breach of con tract or quantum meruit. The Trial
Court directed a verdict for Mundaca on the quantum meruit claim, and the jury
returne d a verd ict for B aker on the con tract claim for $7 5,000.0 0.
Mundaca contends that the Trial Court erred in admitting the testimony
of plaintiff’s two expert witnesses, and argues that the witnesses were not qualified
and did not sub stantially as sist the ju ry.
Questions regarding the admissibility, qualifications, relevancy and
competency of an expert’s testimony are generally left to the discretion of the trial
court. McD aniel v. C SX Tr ansp., In c., 955 S .W.2d 257 (T enn. 19 97), cert. denied, 118
S. Ct. 22 96 (19 98).
Mundaca contends that the plaintiff’s expert witnesses were not
qualifie d beca use the y lacked e xperien ce with the type o f loans involv ed in this case.
Specifically, neither had significant experience working with notes secured by real
estate mortgages rather than the real estate itself. Both witnesses, however, had
extensive experience in the mortgage banking and brokerage industry. The witnesses
testified that, in the ir opinion, the re was no differenc e betwee n the loans in volved in
this case and other types of loans with which they were experienced. They testified
that the u nderlying security w as the sa me in e ither insta nce.
The Trial Court has wide discretion in assessing the qualifications of
experts . We fin d no ab use of discretio n by the T rial Cou rt. See Otis v. Cambridge
Mut. Fire Ins. Co., 850 S.W.2d 43 9 (Tenn. 1992).
Mund aca also arg ues the exp erts’ testimony did not “substa ntially
assist” the jury. G enerally, the que stion of w hat will “sub stantially assist” the jur y is
for the t rial cour t to deter mine. Primm v. Wickes Lumber Co., 845 S.W.2d 768(Tenn.App. 1992). In this case, the Trial Court limited the content of the experts’
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testimony to the commo n practices in the industry, and did not allow any expert
testimony concerning how the parties set fees in this case, nor did it permit testimony
conce rning th e indus try standa rds of s etting a f ee.
The testimony concerning common practices in the industry was
relevant to the plaintiff’s quantum meruit claim. Altho ugh the T rial Court ultim ately
granted a directed verdict on that issue, the motion for directed verdict was not made
until after plaintiff had presented her experts. Thus, the quantum meruit claim was at
issue w hen the eviden ce wa s admitt ed. See Barr v. Plastic Sur gery Co nsultants, 760
S.W.2d 585 (Mo.Ct.App. 1988) (evidence relating to claim disposed of by directed
verdict was relevant and material at trial as issue was still viable). Moreover, Mundaca
was p ermitted to prese nt its ow n expe rt on the issue.
Mundaca also argues that despite the Trial Court’s limitation, one of the
plaintiff’s ex perts impro perly testified that p laintiff had e arned her f ee under th e facts
of this case. The Trial Court sustained Mundaca’s objection and issued a detailed
curative instruction to the jury. The jury is presumed to have followed this instruction.
State v. Smith, 893 S.W.2d 908 (Tenn. 1994). Taking into account other material
evidence in favor of plaintiff’s position, the brevity of the question and response and
the detailed c urative instruc tion, the Co urt did not err o n this issue. M oreover, the re is
other evidence to support plaintiff’s position, including her own testimony and
eviden ce con cerning the parti es’ cou rse of c onduc t.
Mundaca next contends the Trial Court erred in admitting evidence of
its financial co ndition. Spe cifically, the Trial Ju dge perm itted counse l for plaintiff to
question John Groomes, the Chairman of Mundaca, concerning the “created value” of
the company. According to the witness, “[c]reated value is an estimate of what is out
there to be c ollected . . .” Th e plaintiff arg ues that this ev idence w as importan t to
establish her quantum meruit claim, w hich w as still at iss ue at tha t point in the trial.
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Specifically, she argues that the information was necessary to show that Mundaca
benefitted from her services. Mundaca contends that this evidence was irrelevant
even to the quantum meruit claim because only the payment for the SouthTrust loan
was at issue.
In this case, the evidence concerning “created value” was introduced
only for th e years du ring w hich pla intiff pr ovided broker age ser vices fo r Mun daca.
No evidence was introduced concerning Mundaca’s actual value at or near the time of
trial. Additionally, the witness repeatedly explained that Mundaca’s “created value”
was d ifferen t from its actual v alue.
Assum ing, arguendo, that the Trial C ourt erred in a dmitting this
evidence, we find no reversible error. The T rial Court instructed the jury to disregard
all evidence concerning defendant’s financial condition and not to consider that the
plaintiff ’s contri bution was a s ubstan tial or sign ificant re ason f or Mu ndaca ’s succe ss.
Additionally, the Trial Court noted there were numerous other figures in evidence
substantially similar in magnitude to the “created value” numbers. Some of the loans
were f or millio ns of d ollars an d one lo an pac kage w as appr oxima tely $20,0 00,000 .00.
Finally, Mundaca argu es that the Trial Court erred in gra nting summary
judgment on plaintiff’s claim for a commission due on two loan renewals. The
plaintiff’s compensation for these loan renewals is not related to the modification of
the parti es’ oral c ontract.
In her Motion for Summary Judgment, plaintiff stated that she and
Mundaca agreed that she would receive a 1.5% f ee annually upon the renewal of these
two loans. She received a fee for January 1994 through December 1995, but not for
the 1996 r enewal. S he also stated that she had always receiv ed renew al fees direc tly
from Mundaca and that these fees were not related to the interest rates paid to the two
lenders. Th e record also contains the affidavit of one of the lenders, K .R. Stanfill,
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who stated that John Groomes informed him that plaintiff’s fee was “in addition to the
interest rate.”
In response to plaintiff’s motion, Mundaca included the affidavit of
John G roomes. G roomes sta ted that he d id not “believ e” that plaintiff was entitled to
a fee on these loan renewals. He further stated that because of an “apparent
miscommunication,” his company “believed” the renegotiated rate for 1996 included
the plaintiff’s fees. The affidavit fails to set forth specific facts contradicting
plaintiff’s affidavits. We therefore conclude that Mundaca’s counter-affidavit did not
establish a dispu ted ma terial fac t on the is sue. See Bain v. Wells, 936 S.W.2d 618,
622 (Tenn. 199 7).
We affirm the Trial Court’s judgment approving the jury verdict and the
granting of the summ ary judgmen t.
The cost of the appeal is assessed to the appellant and the cause
remanded.
________________________
Herschel P. Franks, J.
CONCUR:
___________________________
Houston M. Goddard, P.J.
___________________________
Ben H. Cantrell, J.
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