William Davidson v. Richard Holtzman ( 2000 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
October 3, 2000 Session
WILLIAM DAVIDSON v. RICHARD HOLTZMAN, ET AL.
Appeal from the Chancery Court for Hamilton County
No. 98-1041 W. Frank Brown, III, Chancellor
FILED NOVEMBER 2, 2000
No. E2000-01091-COA-R3-CV
The jury awarded the plaintiff, William Davidson, damages for breach of two oral contracts between
Davidson and his former employer, the defendant Richard Holtzman, who, at the time the contracts
were made, was the sole shareholder of the defendant Engel Stadium Corporation (“the
Corporation”).1 Defendants2 appeal, arguing (1) that one of the agreements is barred by the Statute
of Frauds; (2) that the same agreement is too indefinite to be enforced; and (3) that the trial court
erred in admitting the testimony of another former employee of Holtzman. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which HERSCHEL P. FRANKS and
D. MICHAEL SWINEY , JJ., joined.
Michael E. Richardson, Chattanooga, Tennessee, for the appellants, Richard Holtzman and Engel
Stadium Corporation.
William H. Horton, Chattanooga, Tennessee, for the appellee, William Davidson.
OPINION
1
After the contract was made, Holtzman sold his shares of stock in the Corporation. At trial, the parties
stipulated that Holtzman and the Corporation would be jointly and severally liable for any judgment rendered in the
plaintiff’s favor. It was further stipulated that, pursuant to an indemnification agreement executed at the time of sale,
Holtzm an was o bligated to indem nify the C orporatio n for any resulting jud gmen t.
2
Both Holtzm an and th e Corpo ration we re represe nted by the same attorney a t trial. Both defendants filed a
notice of a ppeal; ho wever, th e appellate brief lists only Holtzm an as an a ppellant.
I. Facts
In 1984, Davidson was hired as general manager of the Midland Angels baseball team, a
minor league baseball franchise in Midland, Texas. Holtzman acquired the franchise in July, 1987.
In 1988, Davidson and Holtzman discussed Davidson’s future with the franchise. Davidson
expressed his goal of eventually owning and operating his own baseball team. He indicated that to
accomplish this goal, he needed to begin acquiring equity in the Midland franchise in order to “build
up some value.” In a letter to Holtzman dated September 23, 1988, Davidson indicated that for
1989, he wanted “to receive an ownership percentage of whichever club I may be affiliated with.”
In December, 1988, Davidson and Holtzman had a conversation regarding Davidson’s future
employment with the franchise. Davidson testified as follows:
A. During that conversation [Holtzman] said things to me like,
you know, you’re a valuable employee, I feel fortunate to have
someone of your caliber working for me. He indicated to me that I
could accomplish my objectives if I worked with him and that was his
goal, was to help me accomplish those objectives of being an
owner/operator of a minor league baseball team, and in that
conversation he offered me 5 percent of the Midland baseball
franchise at the price that he paid for it. He said it would be booked
at that value and that if he sold it at some time while I was still
employed with the team that I would receive 5 percent of the profits
from that sale.
He indicated to me that there were tax advantages for me if it was
done in that fashion, and that’s basically the summary of the
conversation.
Q And what did you understand him to mean when he said that
if it was done in that fashion?
* * *
A I understood that it would, mean that basically was the
agreement, that it was better for me if -- it was better for me if he
simply told me that I had this stock, or phantom stock or agreement
with him, that it was better for me financially if I took him at his
word and that he would pay me down the line if indeed he happened
to sell the team while I was employed with that team.
Q And did he issue you any stock at that time in the Midland --
-2-
A No. He did not issue me any stock, and from the conversation
I didn’t expect to receive any, because, you know, I took him at his
word that there would be tax advantages for me to do it in the fashion
that he outlined.
Q Did he make any offer as to any percentage of income on a
yearly basis?
A Yes. He also indicated that going forward I would receive 5
percent of the net profits, net operating profits of the franchise.
Previous to that I was under a different compensation arrangement
and he changed it to that.
Q Did you indicate that you’d be willing to stay under those
circumstances?
A Yes, I did.
In August, 1989, Holtzman offered Davidson the position of general manager of the
Chattanooga Lookouts, a franchise Holtzman had recently acquired for $1.1 million. The Lookouts
franchise was operated by Engel Stadium Corporation, of which Holtzman was the sole shareholder.
Holtzman promised Davidson that the parties’ understanding regarding his share of the net proceeds
from a sale of the franchise would “transfer” with Davidson to Chattanooga, meaning that if
Holtzman ever sold the Chattanooga franchise, Davidson would receive five percent of the difference
between the purchase price and the sales price of the franchise. Davidson agreed and moved to
Chattanooga in October, 1989. He was employed as the Lookouts’ general manager for the next six
years, receiving a salary plus five percent of any annual net operating profit of the franchise.
In 1992, the Corporation sued the City of Chattanooga and Hamilton County, which leased
the stadium facilities to the Corporation, alleging that the City and County had negligently failed to
maintain the baseball field in violation of the lease. Holtzman asked Davidson to assist the
Corporation’s attorney in the litigation. When Davidson complained that the time spent on the
litigation would interfere with his management of the team, Holtzman promised that Davidson would
receive five percent of any proceeds resulting from the lawsuit. Holtzman told Davidson that he
considered any proceeds received to be “operating income” of the Corporation. Davidson agreed
to this arrangement, and participated extensively in the litigation. The lawsuit proceeded to a jury
trial, in which the Corporation was awarded damages. On appeal, however, this Court vacated the
judgment and remanded for further proceedings.3
3
See Engel Stadium Corp. v. City of Chattanooga, C/A No. 03A01-9208-CH-00279, 1993 WL 188234 (Tenn.
Ct. App. E.S., filed June 2, 1993).
-3-
In January, 1995, Holtzman advised Davidson that he had agreed to sell the franchise4 for
$3.75 million. Holtzman stated that Davidson “would benefit substantially from the sale.” As part
of the sale, the lawsuit against the City and County was assigned to Holtzman, and he was
substituted as a party in that action. The sale was completed in April, 1995. Davidson continued
to work for the Corporation in his capacity as general manager. In May, 1995, he met with
Holtzman while at a baseball game in Davenport, Iowa, where Holtzman gave him a check for
$25,000 and “indicated that there would be substantially more from where that came from.”
Although Holtzman had been substituted as a party in the litigation against the City and
County, Davidson continued to assist with the litigation. The parties eventually reached a settlement
agreement in November, 1995, and Holtzman received $375,000 as a result of that litigation.
By January, 1996, Davidson had not received any additional proceeds, either from the sale
of the franchise or the lawsuit. He sent a letter to Holtzman dated January 3, 1996, seeking “to
finalize the arrangements regarding monies due from operations in Chattanooga. Specifically, the
sale of the franchise and the settlement with the City and County.” On January 8, 1996, Davidson
received a fax from Holtzman, stating, in pertinent part, as follows:
I’ve discussed the issue of the “benefits”. I’d like to pass on to you
with my accountants over the past months and hope to have some
concepts for your [sic] shortly. I too, have some financial issues I’m
focused on that coincide with Chattanooga.
On April 8, 1996, Davidson sent another letter to Holtzman, regarding the parties’ agreement and
asked for the balance5 of the monies owed him. Davidson received no response to this letter. He
continued to send correspondence to Holtzman over the next four months, seeking to finalize the
parties’ agreement. Finally, in a fax dated August 29, 1996, Holtzman responded, stating, in
pertinent part, as follows:
I have not ignored the main issue of your letter, Bill. I have given a
great deal of thought to it and still need to consult with some folks.
I’ve always tried to “do the right thing” regarding financial issues.
Please be patient.
Davidson sent Holtzman a letter in September, 1996, acknowledging Holtzman’s August
letter and thanking him for his “willingness to resolve the Midland and Chattanooga issues.” Several
months passed, however, without word from Holtzman. Davidson sent a memorandum to him dated
February 15, 1997, asking for any word on settling the parties’ “monetary issues.” Five days later,
4
The transaction was actually a stock purchase agreement of Holtzman’s shares of stock in the Corporation.
5
It was Davidson’s position at trial that the $25,000 payment he received in May, 1995, from Holtzman was
part of the p roceeds from th e sale of the f ranchise.
-4-
Davidson received a handwritten facsimile from Holtzman, indicating that the parties needed to talk
and asking Davidson to call him. Davidson called and left messages for Holtzman numerous times,
but received no response. Davidson sent more correspondence, by mail and facsimile, over the next
several months in an attempt to contact Holtzman, all without success.
II. Trial
Davidson filed this suit in October, 1998. Before trial, the defendants filed motions in limine,
seeking to exclude or limit the testimony of Michael Feder, whom Davidson planned to call as a
witness. Feder was employed by Holtzman as general manager of the Tucson, Arizona Toros,
another minor league baseball franchise owned by Holtzman. Feder had also filed a lawsuit against
Holtzman, claiming that Holtzman had promised to pay him five percent of the net profit derived
from the sale of the Tucson Toros. Defendants expected Feder to testify that Davidson had told him
that Davidson “felt he was owed money by...Holtzman.” They argued that such testimony would
be inadmissible hearsay. Defendants also expected Feder to testify that Holtzman had made an offer
to him that was similar to the one allegedly made to Davidson. Defendants argued that such
testimony would be irrelevant, hearsay, and otherwise inadmissible under the rules of evidence.
The case proceeded to trial, with no pre-trial rulings on the motions in limine. Plaintiff’s
proof consisted primarily of the testimony of Davidson and Feder and the correspondence Davidson
claimed to have sent to and received from Holtzman. Davidson was the first witness to testify. On
direct examination, he was asked, without objection, as follows:
Q Okay. Did you discuss your compensation arrangement with
Mr. -- a guy named Michael Feder?
A Yes.
Q Who is Michael Feder?
A He is general manager of the Tucson Toros baseball club. I
think he’s got a new title now, but he has functioned as general
manager of that team for almost ten years now.
* * *
Q Is Tucson a franchise owned by Mr. Holtzman or was owned
by Mr. Holtzman?
A It was owned by Mr. Holtzman. I’m not exactly sure when he
purchased it. I believe it was in 1988, and he sold it just a couple
years ago, in 1997, I believe.
-5-
On cross examination, Davidson was asked as follows:
Q And I take it when -- according to your testimony, Holtzman’s
going to fulfill this interest and offer you some equity, I assume you
were pretty excited about it?
A Yes. That’s a reasonable assumption.
Q But you never went home and told your wife about it, did
you?
A No, that’s not true. What I testified earlier [in deposition] is
that I didn’t recall if I did or didn’t tell her. I couldn’t recall
specifically about that. I assume that I -- I would assume that I
would, but I can’t recall a specific conversation with her about that.
* * *
Q Let me refer once back to your deposition, and again, you told
the truth in your deposition, I assume?
A Yes, sir.
Q Page 26, line 11, Question: Okay. Other than Mike Feder, did
you ever tell anyone else about Holtzman, about your agreement with
Holtzman regarding the percentage of the net profit? Your answer?
A My answer was, no.
Q Next question: Okay. Did you ever tell your wife, your ex-
6
wife?
A My answer was no. There’s additional.
Q Well, the next question ends, and why didn’t you tell her?
And that’s when you say?
A I don’t recall why I didn’t tell her. But if you go on just a
couple of pages, another page over, my answer was, I was thinking
in terms of business associates when you raised the question. I’m
6
Davidson and his wife divorced in 1996.
-6-
sorry, I was confused at that time. You were asking me, as you were
today, about the CPA and what people I shared that information with,
and I was thinking from a business standpoint and not a personal
standpoint.
Q Well, let me go back because maybe I didn’t read this well.
The question was: Other than Feder did you ever tell anyone? The
answer was no.
The next question, what was my question?
A Did you ever tell your wife, your ex-wife?
Q And what was your first answer?
A My first answer was no.
After Davidson testified, the trial court advised the jury that due to scheduling problems,
Davidson’s second witness, Feder, would testify after the defendants had presented their proof.
Defendants presented only one witness, Holtzman. He denied the existence of any oral
agreements with Davidson. As for the $25,000 payment, he stated that it was merely a bonus. He
testified that the “financial issues” referenced in his correspondence were related to compensation
for some consulting work Davidson had performed for Holtzman. Additionally, Holtzman
introduced three memoranda, which he claimed he had sent to Davidson regarding Davidson’s
claims. In the first memorandum dated April 29, 1996, Holtzman denies the existence of an oral
agreement. In the second memorandum dated March 12, 1997, Holtzman states that the parties
“simply differ on [Davidson’s] compensation” and that Holtzman “[did] not have an understanding
with any other G.M. [general manager] either.” In the third memorandum, dated August 20, 1997,
Holtzman calls Davidson’s claims “absurd fantasies” and refers to the $25,000 payment as a gift.
These memoranda were not produced during discovery, and Davidson denied receiving any of them.
On cross-examination, Holtzman was asked, without objection, as follows:
Q And did you have any arrangements with any other manager
in baseball to pay them a percentage of the difference in the purchase
price of a franchise and the sale price of a franchise?
A No, never.
At the beginning of the second day of trial, the trial court addressed for the first time
defendant’s motions in limine. The trial court held that it would permit Feder to testify as to
Davidson’s statements to him regarding Davidson’s arrangement with Holtzman, reasoning that “the
-7-
door has been opened to some extent by [defendants’ counsel] asking questions and making
statements to the jury in opening remarks.” The trial court opined that “it would be prejudicial under
the facts not to allow Mr. Feder to corroborate that.” The court further held that Feder would be
allowed to testify as to the similar deal he allegedly had with Holtzman. After Feder testified, the
trial court instructed the jury as follows:
Number one, there had been an issue made with regard to whether or
not Mr. Davidson had told anyone of his alleged agreement with Mr.
Holtzman. Mr. Feder’s name was mentioned and I thought it fair,
rightly or wrongly, to allow him to corroborate that.
Secondly, with regard to Mr. Feder’s claims, with regard to a contract
with Mr. Holtzman, that is not to be deemed evidence as to the truth
of the matter. Y’all are not trying the Arizona lawsuit.
And further, that is not to be considered as evidence, that because of
Mr. Feder’s allegations that therefore that makes Mr. Davidson’s
allegations true. You’re going to have a lot of evidence to consider.
You’re going to have to make some decisions, in part on credibility,
and we’ll charge you on that, but I just wanted to let you know that
that testimony was for the purpose of corroboration that Davidson
made the statement to Mr. Feder. Two, it was an attack on Mr.
Holtzman’s credibility. It’s impeachment, showing inconsistent
statements. And we allow testimony for that. But it can’t be
considered as proof or as evidence that a contract existed between
Davidson and Holtzman, as alleged.
As stated earlier, the jury returned a verdict in favor of Davidson. Specifically, the jury
found that Holtzman was liable under a breach of contract theory for the agreements regarding the
sale of the franchise and the lawsuit. The jury awarded Davidson damages of $116,423.80 for the
former agreement and $18,750 for the latter agreement. The jury further found that Davidson should
be awarded prejudgment interest for both amounts, which interest the court calculated to be $61,089.
Davidson was awarded a total judgment of $196,262.80.
Defendants filed a motion for a judgment notwithstanding the verdict, or in the alternative,
a new trial, which motion was denied. Defendants moved for remittitur, which also was denied.
This appeal followed.
III. Statute of Frauds
-8-
Defendants first argue that the alleged oral agreement regarding the sale of the franchise7 is
barred by the Statute of Frauds because, so the argument goes, the contract was not to be performed
within one year. Defendants contend that the parties had no expectation that Holtzman would sell
the franchise within one year.
The Statute of Frauds provides, in pertinent part, as follows:
No action shall be brought:
* * *
Upon any agreement or contract which is not to be performed within
the space of one (1) year from the making of the agreement or
contract; unless the promise or agreement, upon which such action
shall be brought, or some memorandum or note thereof, shall be in
writing, and signed by the party to be charged therewith, or some
other person lawfully authorized by such party.
T.C.A. § 29-2-101(a)(5) (Supp. 1999). Because courts generally try to uphold contracts rather than
defeat them, T.C.A. § 29-2-101(a)(5) is narrowly construed. Price v. Mercury Supply Co., 682
S.W.2d 924, 932 (Tenn. Ct. App. 1984). “Accordingly, our courts have declined to construe a
contract to require performance over more than one year if to do so would render the contract
unenforceable because of the statute of frauds.” Id. As this Court has held:
The question is not what the probable, expected, or actual
performance of the contract may be, but whether, according to the
reasonable interpretation of its terms, it requires that it should not be
performed within the year. Unless the court, looking at the contract
in view of the surroundings, can say that in no reasonable probability
can such agreement be performed within the year, it is its duty to
uphold the contract.
Boutwell v. Lewis Bros. Lumber Co., 27 Tenn. App. 460, 464, 182 S.W.2d 1, 3 (1944) (quoting 37
C.J.S. Frauds, Statute of, § 53, p. 561).
In the instant case, there is material evidence to support the jury’s finding that, in return for
Davidson’s continued employment with the franchise, Holtzman promised that should he sell the
franchise during Davidson’s employment, he would pay Davidson five percent of the difference
between the original purchase price paid by Holtzman and it sales price. Even though the parties
may not have contemplated a sale of the franchise within one year of the making of the contract, we
7
Defend ants do n ot raise the S tatute of Fra uds as to th e oral agre emen t regardin g the law suit.
-9-
cannot say “that in no reasonable probability can such agreement be performed within the year.” See
id. As Holtzman admitted, the franchise could have been sold within the year. We agree.
Accordingly, we find that the subject oral agreements do not run afoul of the Statute of Frauds.
Defendants’ argument on this issue is without merit.
IV. Definiteness of Parties’ Understandings
Next, defendants argue that the oral agreement regarding the sale of the franchise8 was too
indefinite to create an enforceable contract. Specifically, defendants charge that Davidson’s
testimony concerning the terms of the agreement was vague and that there was no evidence of
mutual assent between the parties.
An oral agreement is enforceable, but the party seeking to enforce it must prove (1) mutual
assent to the contract’s terms and (2) that the terms are sufficiently definite to be enforceable.
Castelli v. Lien, 910 S.W.2d 420, 426-27 (Tenn. Ct. App. 1995). As this Court stated in
Jamestowne on Signal, Inc. v. First Federal Savings & Loan Association, 807 S.W.2d 559, 564
(Tenn. Ct. App. 1990):
The contemplated mutual assent and meeting of the minds cannot be
accomplished by the unilateral action of one party, nor can it be
accomplished by an ambiguous course of dealing between the two
parties from which differing inferences regarding continuation or
modification of the original contract might reasonably be drawn. In
addition, a mere expression of intent or a general willingness to do
something does not amount to an “offer.”
Even though a manifestation of intention is intended to be understood
as an offer, it cannot be accepted so as to form a contract unless the
terms of the contract are reasonably certain.
The terms of a contract are reasonably certain if they provide a basis
for determining the existence of a breach and for giving an
appropriate remedy.
The fact that one or more terms of a proposed bargain are left open or
uncertain may show that a manifestation of intention is not intended
to be understood as an offer or as an acceptance.
Id. (quoting in part Restatement (Second) of Contracts § 33) (citations omitted).
8
Again, defendants raise this argument only as to the agreement regarding the sale of the franchise, not the
lawsuit.
-10-
We find that there is material evidence to support a finding of an oral contract by which
Holtzman promised to pay Davidson five percent of the difference between the purchase price and
the sales price of the Chattanooga franchise. Setting aside for the moment the issue of Feder’s
testimony -- which we will address separately -- the only evidence presented at trial regarding the
parties’ agreement was the testimony of the parties and their correspondence after the agreement was
allegedly made. Because the parties’ testimony was sharply conflicting, the jury was required to
assess the credibility of the witnesses. It is apparent from the verdict that the jury was not impressed
with Holtzman’s version of the parties’ dealings or his explanation that his responses to Davidson’s
correspondence were in regard to compensation owed for consultation. We are not in a position to
assess witness credibility. See Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 823 (Tenn.
1994).
The correspondence between the parties also supported the jury’s finding of an oral contract.
In his responses to Davidson’s repeated requests for payment, Holtzman acknowledges that
Davidson is owed some compensation; he refers to “the issue of the ‘benefits’” and states that he has
“always tried to ‘do the right thing’ regarding financial issues.” Although Holtzman introduced three
memoranda at trial in which he denies the existence of any agreement, the jury was free to disregard
them. The validity of these documents was highly questionable given that they were not produced
during discovery and that Davidson denied receiving any of them.
Defendants rely upon Jamestowne on Signal, Inc. v. First Federal Savings & Loan
Association, 807 S.W.2d 559 (Tenn. Ct. App. 1990) to argue that the terms of the parties’ agreement
are too indefinite to be enforceable. In Jamestowne, the alleged oral agreement involved the loaning
of a substantial amount of money in excess of the parties’ written loan agreement. Id. at 559, 564.
This Court held that the evidence regarding the parties’ dealings was too indefinite to create an
enforceable contract as a matter of law because there was no proof as to “the essential elements of
such a loan, such as the amount to be loaned, the duration of the loan, how it was to be repaid, the
rate of interest to be paid and when, what security, if any, was to be given.” Id. at 564-65.
Defendants argue that, like Jamestowne, the parties in the instant case were engaged in a loan
transaction that was too indefinite to be enforced. In arguing that the agreement was in fact a loan,
defendants cite Davidson’s April 8, 1996, letter to Holtzman, which states, in pertinent part, as
follows:
If my notes are accurate, I believe that in the fall of 1988 we agreed
that I would have an equity position with the Midland franchise of
5%. The money for this stock acquisition was loaned to me with
payment due upon sale of the franchise.
When I relocated to Chattanooga in the fall of 1989, the equity
position was transferred from the Midland franchise to the
Chattanooga franchise under the same terms.
-11-
(Emphasis added).
There is material evidence to support a finding that the parties’ agreement was not
contemplated as a loan; rather, it was an agreement that, upon the sale of the franchise, Davidson
would receive five percent of the net profit derived from the sale. Davidson admitted that his April,
1996, letter characterized the agreement as a loan; however, he explained that viewing it as a loan
was just one way that his five percent share of the net profit Holtzman received from the sale of the
franchise could be calculated. Viewing the transaction as a loan, Davidson would receive five
percent of the purchase price of $3.75 million, from which $55,000 -- the cost of five percent of the
stock at the price Holtzman originally paid for it -- would be deducted and “repaid” to Holtzman.
Under this analysis, Davidson would receive $132,500 for his five percent equity. Davidson testified
that his share could also be calculated simply by taking five percent of $2,650,000, the difference
between the original purchase price and the sales price, which also results in Davidson receiving
$132,500.
In sum, we find that the terms of the parties’ contract are sufficiently definite to be
enforceable. There is material evidence to support a finding of mutual assent. Defendants’
arguments on this issue are without merit.
V. Evidentiary Issues
Finally, defendants argue that the trial court erred in admitting certain testimony of Michael
Feder. Specifically, they object to Feder being allowed to testify regarding statements made to him
by Davidson about Davidson’s oral agreement with Holtzman. They also object to Feder testifying
that he too had an oral agreement with Holtzman that is similar in its terms to the agreement that
Holtzman allegedly had with Davidson. We will consider each of these arguments in turn.
A. Davidson’s Statements to Feder
We find no error in the trial court’s decision to allow Feder to testify regarding statements
made by Davidson to Feder about the former’s agreement with Holtzman. When a witness’
credibility is attacked by a suggestion that the witness’ testimony is fabricated or is a deliberate
falsehood, a prior consistent statement may be introduced for the sole purpose of corroborating the
witness’ testimony. State v. Hodge, 989 S.W.2d 717, 725 (Tenn. Crim. App. 1998); State v.
Robinson, 971 S.W.2d 30, 43 (Tenn. Crim. App. 1997). It appears from the trial court’s remarks
in ruling on defendants’ motions in limine that defendants’ counsel attacked Davidson’s credibility
in his opening statement to the jury and again on cross-examination by suggesting that Davidson had
not told anyone about his agreement with Holtzman. Because of this attack on Davidson’s
credibility, Feder’s testimony was admissible as a prior consistent statement for rehabilitative
purposes. See State v. Livingston, 907 S.W.2d 392, 398 (Tenn. 1995); Hodge, 989 S.W.2d at 725;
State v. Meeks, 867 S.W.2d 361, 374 (Tenn. Crim. App. 1993).
-12-
Even if the admission of Feder’s testimony regarding what Davidson told him was error, we
find that any such error was harmless. A final judgment shall not be set aside unless, “considering
the whole record, error involving a substantial right more probably than not affected the judgment
or would result in prejudice to the judicial process.” Tenn. R. App. P. 36(b). Accordingly, we will
not reverse on the basis of improper admission of evidence unless it affirmatively appears that the
error affected the result of the trial. Keith v. Murfreesboro Livestock Mkt., Inc., 780 S.W.2d 751,
758 (Tenn. Ct. App. 1989). Before Feder testified as to his conversation with Davidson, the jury had
already become aware that Davidson had told Feder about the details of Davidson’s arrangement
with Holtzman; this came out as a result of questions posed to Davidson by defendants’ counsel on
cross-examination. The following excerpt from the transcript starts with that counsel’s reference to
Davidson’s deposition testimony:
Q Page 26, line 11, Question: Okay. Other than Mike Feder, did
you ever tell anyone else about Holtzman, about your agreement with
Holtzman regarding the percentage of the net profit? Your answer?
A My answer was, no.
* * *
Q Well, let me go back because maybe I didn’t read this well.
The question was: Other than Feder did you ever tell anyone? The
answer was no.
The next question, what was my question?
A Did you ever tell your wife, your ex-wife?
Q And what was your first answer?
A My first answer was no.
(Emphasis added). The substance of what Feder later testified to was put before the jury by
defendants’ own counsel; accordingly, we find that the admission of Feder’s testimony on this point,
even if error, was harmless.
B. Feder’s Testimony Regarding His Deal With Holtzman
We also find that the trial court did not err in allowing Feder to testify as to the similar
arrangement he claimed to have with Holtzman. On cross-examination, Holtzman was asked,
without objection, whether he had any agreements with any other general managers to pay them a
percentage of the net profit derived from the sale of the franchise. Holtzman denied having any other
such arrangements. Generally, evidence of extrinsic transactions that have no connection with the
-13-
transaction at issue is inadmissible. Keith, 780 S.W.2d at 756. Defendants’ counsel, however, failed
to object to this line of questioning posed to his client by opposing counsel on cross-examination.
By failing to make a contemporaneous objection, defendants waived the issue of the admissibility
of this evidence. See State v. Rhoden, 739 S.W.2d 6, 11 (Tenn. Crim. App. 1987). Thus, the issue
of whether Holtzman had made similar arrangements with other employees was before the jury, and
Davidson sought to impeach Holtzman on this issue by introducing Feder’s testimony regarding his
alleged agreement with Holtzman. While evidence of such extrinsic transactions is normally
inadmissible, the evidence was admissible in this case by virtue of the fact that the initial testimony
was elicited without objection. Therefore, Holtzman’s alleged deal with Feder was properly
admitted in order to impeach him.
VI. Conclusion
The judgment of the trial court is affirmed. Costs on appeal are taxed to the appellants. This
case is remanded for enforcement of the judgment and collection of costs assessed below, all
pursuant to applicable law.
___________________________________
CHARLES D. SUSANO, JR., JUDGE
-14-