Consulting and Financial Services, Inc v. John H. Friedmann, Sr. ( 2014 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
March 19, 2014 Session
CONSULTING AND FINANCIAL SERVICES, INC, ET AL. V. JOHN H.
FRIEDMANN, SR.
Appeal from the Chancery Court for Sumner County
No. 2008C205 Tom E. Gray, Chancellor
No. M2013-01416-COA-R3-CV - Filed April 24, 2014
This is the second appeal of this case, arising from the installation of tile
flooring. In Consulting and Financial Services, Inc. v. Friedmann, No. M2011-00093-
COA-R3-CV, 2012 WL 1390621(Tenn. Ct. App. April 19, 2012), we held that the trial
court’s measure of damages was correct, but remanded for re-calculation of the amount of
damages. The remand was necessary because the original judgment included damage
amounts that were based upon tile repairs to certain areas of the home, which repairs were
not raised by Appellees/homeowners within the one-year warranty period. We did not,
however, mandate the method by which the trial court could determine the adjusted amount.
Upon remand, the only evidence presented was from the original contractor, who relied upon
his original estimate. To arrive at the portions of the original estimate that were for the
excluded areas, the contractor had his tile subcontractor submit separate estimates for those
areas. The separate estimates were calculated using the current price-per-square-foot
applicable at the time of remand, which was less than the price-per-square-foot that was used
in the original estimate. To arrive at the adjusted damages amount, the trial court simply
subtracted the separate estimate amounts from the original estimate. Appellant/Contractor
appeals, arguing, inter alia, that the lower price-per-square-foot applicable at the time of
remand should apply to the entire judgment, or, in the alternative, that the excluded amounts
should be calculated using the same price as was used in the original estimate. The “law of
the case,” based upon our holding in the first appeal, was that the judgment would be
adjusted to exclude all costs associated with the excluded areas. Although we did not
mandate that the trial court re-try the issue of damages, we did not preclude that option in our
first opinion. However, it was implicit in our holding that, if the trial court chose to use the
original estimate (which it did), then the total costs for the excluded areas would be
calculated, at the same price used in the original estimate, and subtracted from the original
estimate. Because the trial court used new estimates for the excluded areas, which were not
calculated at the same rate as in the original estimate, the adjusted judgment did not remove
the full amount for repairs to the excluded areas that were contemplated in the original
estimate. Accordingly, the law of the case was not followed. Vacated and remanded with
instructions.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Vacated
and Remanded
J. S TEVEN S TAFFORD, J., delivered the opinion of the Court, in which D AVID R. F ARMER, J.,
and H OLLY M. K IRBY, J., joined.
Bruce N. Oldham, Gallatin, Tennessee, for the appellant, John H. Friedmann, Sr.
Russell E. Edwards and Michael W. Edwards, Hendersonville, Tennessee, for the appellees,
Consulting and Financial Services, Inc. and Paul G. Crenshaw.
OPINION
In Consulting and Financial Services, Inc. v. Friedmann, No. M2011-00093-COA-
R3-CV, 2012 WL 1390621(Tenn. Ct. App. April 19, 2012) (“Friedmann I”), the Contractor,
Appellant John H. Friedmann, Sr., appealed the trial court’s award of $106,103.92 in
damages, plus $4,252.00 in discretionary costs, to Appellee/homeowners. In Friedmann I,
we were asked to review the trial court’s finding of liability, and particularly whether the trial
court failed to apply the standard of performance contained in the contract and whether the
trial court erred in its calculation of damages. In Friedmann I, we determined that the trial
court applied an implied warranty of workmanship standard, as first enumerated in Dixon
v. Mountain City Const. Co., 632 S.W.2d 538 (Tenn.1982), rather than the contractual
standard. However, after a de novo review of the evidence, we modified the trial court’s
judgment to hold that the Mr. Friedmann had breached the contractual standard, and
remanded the case for a determination of the appropriate amount of damages. A full
recitation of the factual history of the case is set out in Friedmann I. In the interest of
continuity and judicial economy, we restate the relevant facts here:
On May 10, 2004, Consulting and Financial Services,
Inc. (“CFS”) contracted with John H. Friedmann, Sr., a licensed
general contractor, to construct a home in the Fairvue Plantation
subdivision in Gallatin, Tennessee. The “Building Contract”
(“the contract”) provided, among other things, as follows:
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1. That the Contractor will construct in a good,
workmanlike manner, and without delay, a
dwelling or other specified building in accordance
with the plan, drawings, and specifications
attached to and made part of this Contract on the
following described property. . . .
8. The Contractor shall correct any work that fails
to conform with the requirements of the contract
documents where such failure to conform appears
during the progress of the work, and shall remedy
any defects due to faulty materials, equipment or
workmanship which shall appear within a period
of one year from the date of the issuance of a Use
and Occupancy Permit. The provision of this
article apply [sic] to work done by subcontractors
as well as work done by direct employees of the
Contractor. Contractor warrants the fitness and
habitability of the work, and compliance with all
codes.
[The president of CFS,] Paul G. Crenshaw [together with
CFS, Appellees] . . . and Sherry Steffey, wife of Mr. Crenshaw
and vice president of CFS, took possession of the residence on
May 7, 2005. Approximately six months after moving into the
home, Ms. Steffey noticed cracked tile in the kitchen. She
notified Mr. Friedmann about the damaged tile; Mr. Friedmann
came to inspect the tile, but he did not repair it. Subsequently,
tile in the master bathroom, hallways, and foyer began to crack.
On August 8, 2008, CFS and Paul G. Crenshaw
(collectively referred to as [“Appellees”]) filed suit against Mr.
Friedmann. The complaint alleged that Mr. Friedmann “poorly
and negligently constructed” the home, which constituted a
“breach of warranty, breach of contract, and/or unjust
enrichment.” With respect to the allegations of breach of
contract and breach of warranty, [Appellees] specifically alleged
that Mr. Friedmann “failed to construct this dwelling in a
workmanlike manner, and thus, has breached the warranty
and/or contract with CFS.” [Appellees] requested damages
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equaling the cost of repair, cost of inspections, and attorney’s
fees.
A bench trial commenced on July 14, 2010. Mr.
Crenshaw and Ms. Steffey testified primarily regarding their
plans for construction of the home, their concerns about the
cracked tile, their interactions with Mr. Friedmann, and how the
condition of the tile worsened over time. Three consultants,
hired by [Appellees], testified regarding their inspections and
their reports relative to the condition of the tile and the structural
significance of the cracks. A real estate agent, an engineer, a
licensed contractor, and tile installation specialist testified on
behalf of Mr. Friedmann regarding the installation and
replacement of the tile.
The trial court entered an Order on October 15, 2010,
awarding judgment to [Appellees] in the amount of
$132,565.00; the court found that “the construction of the
residence at 836 Plantation Way, Gallatin, Sumner County,
Tennessee, by John H. Friedmann, Sr., failed to meet prevailing
standards in the Sumner County Community for residential
construction . . . .” In discussing the amount of the judgment, the
court stated, in relevant part:
[Appellees] present evidence of cost to repair to
be $159,790.00 and [Mr. Friedmann] has one tile
installer who gives an estimate of $12,432.00 and
another who makes a quote of $14,750.00. The
low estimates are to remove existing tile and
install new tile. To limit the damages to just tile
work is not just. More problems exist for
correction than just replace [sic] the tile flooring.
The estimated scope of work shown on Exhibit 26
made to the testimony of Gene Hughes is realistic.
The court awards a judgment in favor of
[Appellees] for $132,565.00 which is cost of
material and labor for estimated work at
$118,362.00 and profit at 12% of $14,203.00
($118,362.00 plus $14,203.00 = $132.565 [sic] ).
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On November 3, 2010, the trial court entered an Order awarding
$4,252.00 in discretionary costs to [Appellees].
On November 15, 2010, Mr. Friedmann filed a Motion to
Alter or Amend requesting that the court alter the amount of the
judgment by deducting the amount awarded for retiling the
basement. The court granted the motion and reduced the
judgment to $106,103.92.
Friedmann I, 2012 WL 1390621, at *1–2. As noted above, in Friedmann I, we first
determined that the trial court had, in fact, applied the correct measure of damages.
Specifically, we reasoned:
Mr. Friedmann argues that, because there has been no reduction
in the value of the Plaintiffs’ property, they are not entitled to an
award of damages. He also contends that the repair estimates are
“inflated” and “grossly disproportionate to any reduction in
value.”
Tennessee courts have discussed two methods of
measuring damages in actions for breach of a construction
contract—cost of repair and diminution in value. See Wilkes [v.
Shaw Enterprises, LLC, No. M2006-01014-COA-R3-CV,]
2008 WL 695882, at *10 [(Tenn. Ct. App. March 14, 2008)].
The distinction between the two measures has been summarized
by our Court thusly:
As a general rule, the measure of damages is the
cost of correcting the defects or completing the
omissions, rather than the difference in value
between what ought to have been done in the
performance of the contract and what has been
done, where the correction or completion would
not involve unreasonable destruction of the work
done by the contractor and the cost thereof would
not be grossly disproportionate to the results to be
obtained. On the other hand, the courts generally
adhere to the view that if a builder or contractor
has not fully performed the terms of the
construction agreement, but to repair the defects
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or omissions would require a substantial tearing
down and rebuilding of the structure, the measure
of damages is the difference in value between the
work if it had been performed in accordance with
the contract and that which was actually done, or
(as it sometimes said) the difference between the
value of the defective structure and that of the
structure if properly completed.
Id. (quoting Edenfield v. Woodlawn Manor, Inc., 462 S.W.2d
237, 241 (Tenn. Ct. App. 1970); see also Mize v. Consulo,
M2011-00455-COA-R3CV, 2011 WL 6152980 (Tenn. Ct. App.
Dec. 8, 2011). In sum, “[g]enerally, the measure of damages will
be the cost [of] repair unless the repairs are not feasible or the
cost is disproportionate to the [diminution] in value.” GSB
Contractors, 179 S.W.3d at 543 (quoting Radant v. Earwood,
No. 02A01-9802-CV-00029, 1999 WL 418339, at *8 (Tenn. Ct.
App. June 22, 1999)). Importantly, “[t]he burden is on the
defendant to show that the cost of repairs is unreasonable when
compared to the diminution in value due to the defects and
omissions.” Id. (citing Nutzell v. Godwin, 1989 WL 76306, at
*1 (Tenn. Ct. App. July 13, 1989)).
Thus, in order for the award of damages to be other than
the cost of repair, it was incumbent upon Mr. Friedmann to offer
proof showing diminution in value. See Nutzell, 1989 WL
76306, at *1–2 (affirming trial court’s use of cost of repair
measure where defendant failed to produce evidence of
diminution in value). The only proof Mr. Friedmann offered in
this regard was the testimony of Susan Maddox-Reed, a realtor
hired by [Appellees], who testified that the home was originally
listed for sale in June 2007 for $1,150,000.000, that the price
was subsequently reduced to $924,000.00, and that she was
unable to sell the home. We do not find Ms. Maddox–Reed’s
testimony to be probative evidence of diminution in value.
In determining the diminution in value, comment b to the
Restatement (Second) of Contracts § 347 provides the following
guidance:
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the loss in value caused by the breach is equal to
the difference between the value that the
performance would have had if there had been no
breach and the value of such performance as was
actually rendered. In principle, this requires a
determination of the values of those performances
to the injured party himself and not their values to
some hypothetical reasonable person or on some
market.
Restatement (Second) of Contracts § 347 cmt. b []. Ms.
Maddox-Reed testified regarding the listing price of the
property, but she did not give an appraisal or other competent
evidence of value or diminution in value. Moreover, in ruling
that the cost of repair was the most appropriate measure of
damages, the trial court implicitly held that the cost of repair
was not unreasonable. We find no error in the trial court’s use
of the cost of repair as the measure of damage in this case.
Friedmann I, 2012 WL 1390621, at *6-7 (footnote omitted).
Having concluded that the trial court used the appropriate measure of damages, we
then proceeded to address the question of whether the trial court erred in the computation of
damages. On this issue, we explained:
The court based its determination of damages on the
estimate of Gene Hughes, a licensed general contractor who
testified at trial and submitted a written estimate which was
made an exhibit to his testimony. Mr. Friedmann first contends
that the trial court erred in relying on the estimate of Mr. Hughes
because his testimony regarding repair costs was “excessive”
and “speculative.” Mr. Friedmann also asserts that Mr. Hughes’
estimate includes costs for repairs of items that were not
identified by [Appellees] within the one-year time frame
outlined in the contract and that the trial court erred in awarding
damage for such repairs. Specifically, it is Mr. Friedmann’s
contention that the trial court erroneously awarded damages for
repair of the deck.
We first consider Mr. Friedmann’s argument that Mr.
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Hughes' testimony was speculative and excessive. The trial court
stated the following regarding the written estimate and
testimony of Gene Hughes:
Gene Hughes testified that he has been a home
builder for thirty five (35) years in the company of
Hughes-Edwards Homes. From Exhibit 26 the
court finds the first paragraph leads to a
conclusion that the workmanship at 836
Plantation Way did not meet the workmanship
standards prevailing in the community. For repairs
Mr. Hughes estimated costs to repair to be
$159,790.00. His costs of repair reflected a 35%
profit margin and thorough work on all aspects of
repair. . . .
. . . The estimated scope of work shown on
Exhibit 26 made to the testimony of Gene Hughes
is realistic.
We find nothing in the record to preponderate against the
trial court’s finding that Mr. Hughes’ estimate is “realistic” and
“thorough.” Moreover, the trial court did not accept Mr.
Hughes’ estimate wholesale; rather, the court made
modifications to the amount of damages awarded by omitting
damages for repair to the basement of the home and changing
the profit margin to 12%. We find no error in the trial court’s
acceptance of Mr. Hughes’ estimate rather than the estimates
proffered by Mr. Friedmann. Mr. Hughes’ estimate also includes
costs of repair for the basement, and the trial court included cost
of repairing the basement in its original order; however, the trial
court eliminated damages awarded for basement repairs in
ruling on the motion to alter or amend.
Mr. Friedmann also contends that [Appellees] did not
notify him of some items included in the award of damages
within the time frame outlined in the contract, and that,
consequently, the award for those items was not available under
the contract.
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The trial court awarded damages in accordance with the
repair estimate of Mr. Hughes.1 We have reviewed Mr. Hughes’
estimate and note that the estimate includes repair costs for
problems with the decking, contrary to paragraph 8 of the
contract. For example, Mr. Hughes lists the “Estimated scope of
work” to include: removal of tile on both back porches, removal
of material under the tile, building up slope on porch floors,
applying water proofing mat on porch floors, and installing new
tile on porch floors. The portion of the estimate detailing the
monetary amount for repair does not delineate which line items
relate to problems with the deck.
There is undisputed evidence that [Appellees] notified
Mr. Friedmann regarding the cracked tile within one year of
their occupancy of the home. However, there was no evidence
indicating that either Mr. Crenshaw or Ms. Steffey noticed any
issue with the deck within the one-year time frame outlined in
the contract. In Bunch v. Cooper, buyers and sellers of a newly
constructed home entered into a contract that disclaimed “all
other warranties” and expressly warranted the materials and
workmanship of the construction for one year. Bunch v.
Cooper, No. 03A01-9705-CV-00154, 1997 WL 600150 (Tenn.
1
The itemized estimate provides as follows:
Crenshaw estimate: Cost
Move furniture 1200[sic]
R & R tile 1st floor 56,616
2nd floor 15874[sic]
Lumber 4,000
Carpenter 14,000
Electrical 850
Move cabinet base 1,000
Granite 4200[sic]
Trim Material & Labor 2250[sic]
Paint 1200[sic]
Protective Material 250
Dumpster 400
Misc. 5000[sic]
Rough clean up 3000[sic]
Final Clean up 850
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Ct. App. Sept. 30, 1997). Buyers discovered water problems
with their home more than one year after moving in and sued
sellers for recovery of damages. We held that the buyers could
not avoid the one-year express warranty and were therefore
unable to recover for the problems occurring outside of the
one-year time frame. Id. at *3. Likewise, we find that
[Appellees] in this case should be limited to recovery for the
cost of repairs they identified and complained of within the
one-year period outlined in the contract. Therefore, we must
vacate the judgment and remand the case for the trial court to
determine the amount of damages not including repair work on
the deck.
Friedmann I, 2012 WL 1390621, at *7–8 (footnote in original).
Upon remand from this Court, a hearing was held on February 1, 2013. The only
testimony given at the remand hearing was from Gene Hughes, the original contractor. As
discussed infra, Mr. Hughes relied upon his original estimate, but had his tile subcontractor
submit separate bids for the porch and deck areas that were specifically excluded, under
Friedmann I, from the damages. These separate estimates were calculated at the price
applicable at the time of remand, which was less than the price-per-square-foot that was used
to arrive at the original estimate. The trial court simply subtracted the separate estimates
from the original estimate to arrive at the adjusted judgment. On February 19, 2013, the trial
court entered its order, stating, in relevant part, that:
1. The remand hearing is for this Court to determine the
damages to the [Appellees’] home not including repair work on
the deck, according to the opinion from the Court of Appeals,
which the parties agree to mean the deck and screened-in porch.
2. Gene Hughes rendered an estimate for the total amount of
repairs needed to be done to the [Appellees’] home and he
testified as to this at the original trial on behalf of the
[Appellees]. Mr. Hughes was specifically found by this Court
to be credible, and the Court relied upon Mr. Hughes’s
testimony in rendering its judgment against [Mr. Friedmann] in
the amount of $106,103.92. The amount of damages as opined
by Mr. Hughes was upheld on appeal, with exception to the
removal of the decking from his estimate as set forth above.
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3. Mr. Hughes testified at the remand hearing as well regarding
the estimate he prepared for repairs to solely the deck and the
screened porch, and said repairs total $14,448.00. [Mr.
Friedmann] did not offer any expert testimony to refute this
amount.
4. The Court again finds Mr. Hughes to be credible in his
testimony and his estimate for repairs to the deck and screened
porch are found to be reasonable. The Court therefore deducts
the said $14,448.00 from the original judgment amount of
$106,103.92; thus leaving a judgment against [Mr. Friedmann]
in favor of [Appellees] in the amount of $91,655.92.
On March 21, 2013, Mr. Friedmann filed a motion to alter or amend the foregoing
judgment, or, in the alternative, for a new trial. Mr. Friedmann’s motion was denied by order
entered on May 15, 2013. Mr. Friedmann appeals; he raises one issue for review as stated
in his brief:
In the prior appeal, the award of damages was vacated, and the
case was remanded to the trial court to determine the cost of
repairs that the [Appellees] identified and complained of within
the one year period outlined in the contract. On remand, the
[Appellees’] expert testified that he was not asked to review his
previous estimate used at the prior hearing, he could not
delineate which portions of the line items listed on his previous
estimate were applicable to the damages complained of within
the one year time limit, and that the price per square foot for
replacement of tile on his new estimate was significantly lower
than the price used in his earlier estimate. Under these facts, did
the [Appellees] fail to prove their damages by a preponderance
of the evidence.
The purpose of assessing damages in a breach of contract action is to “place the
plaintiff, as nearly as possible, in the same position he would have had if the contract had
been performed.” Wilhite v. Brownsville Concrete Co., Inc., 798 S.W.2d 772, 775 (Tenn.
Ct. App. 1990). A trial court’s determination regarding the proper amount of damages is a
question of fact. GSB Contractors, Inc. v. Hess, 179 S.W.3d 535, 541 (Tenn. Ct. App.2005)
(citing Beaty v. McGraw, 15 S.W.3d 819, 827 (Tenn. Ct. App.1998)). However, it is well
settled that the amount of damages may not be exact in cases of breach of contract. As noted
in 24 Samuel Williston, Treatise on the Law of Contracts § 64:8 (4th ed.):
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[D]amages which are considered to be too remote and
speculative are not recoverable [in a breach of contract case].
"[W]here actual pecuniary damages are sought, there must be
evidence of their existence and extent, and some data from
which they may be computed.”
The amount of damages must be established with
reasonable, not absolute, certainty. The exact amount need not
be shown, since mathematical precision is not required. It is
sufficient if a reasonable basis for computation of damages is
afforded, even though the result will only be approximate.
Id. (footnotes omitted) (emphasis added).
Because this case was tried by the court, sitting without a jury, we review the factual
issue, concerning the proper amount of damages, de novo upon the record with a presumption
of correctness. Tenn. R. App. P. 13(d). Unless the evidence preponderates against the trial
court’s findings, we must affirm, absent error of law. Id. In order for the evidence to
preponderate against the trial court’s findings, it must support another finding of fact with
greater convincing effect. Walker v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 71 (Tenn.
Ct. App. 2000). In addition, and as set out in its order, supra, the trial court made specific
findings that both Mr. Hughes’ testimony, and his estimate, were credible. It is well settled
that when the resolution of the issues in a case depends upon the truthfulness of witnesses,
the trial judge who has the opportunity to observe the witnesses and their manner and
demeanor while testifying is in a far better position than this Court to decide those issues. See
McCaleb v. Saturn Corp., 910 S.W.2d 412, 415 (Tenn. 1995); Whitaker v. Whitaker, 957
S.W.2d 834, 837 (Tenn. Ct. App. 1997). The weight, faith, and credit to be given to any
witness’ testimony lies in the first instance with the trier of fact, and the credibility accorded
will be given great weight by the appellate court. Whitaker, 957 S.W.2d at 837; see also
Walton v. Young, 950 S.W.2d 956, 959 (Tenn. 1997).
We first noted that, during the remand hearing, an issue arose concerning the scope
of the trial court’s re-calculation of damages. As set out in full context above, in Friedmann
I, we held that: (1) there was “no error in the trial court’s acceptance of Mr. Hughes’ estimate
rather than the estimates proffered by Mr. Friedmann;” (2) the trial court correctly removed
Mr. Hughes’ estimate for costs of repair for the basement in its ruling on the motion to alter
or amend because Appellees had not complained of damage to the basement within the one-
year warranty; (3) the Appellee “should be limited to recovery for the cost of repairs they
identified and complained of within the one-year period outlined in the contract;” (4) the
Appellees did not complain of damages to the decks (which, according to the order appealed,
supra, the parties’ agreed included both the deck and the screened porch) within the one year
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warranty; (5) because Mr. Hughes’ estimate included, but did not delineate, those repairs
associated with the deck and porch, and we could not determine these amounts from Mr.
Hughes’ estimate, we vacated the judgment and remanded for re-calculation to exclude the
deck and porch areas.
As correctly noted in Appellees’ brief, the phrase “law of the case” refers to a legal
doctrine which generally prohibits reconsideration of issues that have already been decided
in a prior appeal of the same case. Memphis Publ’g Co. v. Tennessee Petroleum
Underground Storage Tank Bd., 975 S.W.2d 303, 306 (Tenn. 1998) (citations omitted).
Therefore, when an initial appeal results in a remand to the trial
court, the decision of the appellate court establishes the law of
the case which generally must be followed upon remand by the
trial court, and by an appellate court if a second appeal is taken
from the judgment of the trial court entered after remand. There
are limited circumstances which may justify reconsideration of
an issue which [] was decided in a prior appeal: (1) the evidence
offered at a trial or hearing after remand was substantially
different from the evidence in the initial proceeding; (2) the
prior ruling was clearly erroneous and would result in a manifest
injustice if allowed to stand; or (3) the prior decision is contrary
to a change in the controlling law which has occurred between
the first and second appeal.
Memphis Publ’g, 975 S.W.2d at 306 (citations omitted). In Friedmann I, we vacated the
original judgment and remanded for re-calculation of damages, excluding repairs to the porch
and deck. We did not, as Appellees contend, limit the trial court’s ability to entertain
additional, or different, evidence on this question. This is a point that the trial court
understood and noted in its statement from the bench that: “the court did not intend to stop
any testimony on the remand or any testimony put forward by [either party] relative to the
damages issue.” However, we did not, as Appellant contends, mandate that the trial court try
the issue of damages “from scratch,” nor did we require the damages for the excluded porch
and deck to be determined in any particular way. Although we did not take issue with Mr.
Hughes’ original testimony, or his original estimate, we could not determine what portions
of the estimate were for work to the excluded areas, so as to adjust the judgment to exclude
those costs.
At the remand hearing, Mr. Hughes was the only witness. As set out above, the trial
court made a specific finding that Mr. Hughes’ testimony at the remand hearing was credible,
and we give great weight to findings concerning a witness’ credibility. Whitaker, 957 S.W.2d
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at 837. In relevant part, Mr. Hughes testified as follows:
Q. Mr. Hughes, did I understand that when you were asked . .
. to prepare this new estimate that you did not go back and look
at your old estimate, you just came up with a new one–
A. That’s correct.
* * *
Q. So you don’t dispute that–and I can show you the estimate
you had at the trial before [i.e., the original estimate], for
instance, had $4 per square foot for tile as opposed to [$]3. Is
that because the market rates have changed . . . .
A. I didn’t go back and look at the other. I didn’t–typically we
do [$]3. I don’t know why we did that [i.e., original estimate]
[at] [$]4.
* * *
Q. And what is the reason that you’re now testifying to what
works out to about $13 a square foot for the tile on the decks?
Is it just because you’re using a different–
A. What is $13?
Q. Well, looking back at your . . . new estimate, you’ve got
demo tile at $2 a square foot, correct?
A. That’s correct.
Q. The tile labor is $8 a square foot?
A. That’s correct.
Q. And then tile at $3 a square foot, so that’s–
A. $13 a square foot.
Q. $13 a square foot, versus [$]22 a square foot. You had [$]18
plus [$]4–well, actually, it’s more than that because . . . you had
some charges for grout, Ditra mat, and things like that.
A. Setting materials, stuff like that.
* * *
Q. Okay. But do [you] agree that your earlier estimate [i.e., the
original estimate] was charging exactly the same amount per
square foot for the decks as it was for the living room and other
areas of the house, correct?
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A. Based on [this] bid, yes.
* * *
Q. And you have not gone back then and attempted to allocate
out of your earlier estimate how much of that earlier estimate
would have been for the main part of the house as opposed to
the decks?
A. No, I did not. This [i.e., the new estimates for the porch and
deck areas] is strictly a–you asked me to bid it and that’s what
I came up with as separate. I didn’t go back and refer to
anything or extract anything [from the original bid].
In addition, from Mr. Hughes’ testimony, it appears that there were additional costs
associated with the excluded areas that appeared in the original estimate, but which were not
excluded from the new estimates:
Q. Lumber, $4,000 [in the original bid], how much of that
lumber was strictly for the tile on the main floor?
A. I don’t recall.
Q. Okay. Carpentry, [$]14,000 [in the original bid], how much
of that was strictly for carpentry work for the tile on the main
floor?
A. I don’t recall. That’s—majority of it was for the tile on the
first floor . . . . The majority of it is the first floor.
Q. Okay. Well, some of it would have been for correcting the
slope on the porch [Mr. Hughes had previously testified that the
slope of the porch was not correct, causing water to pool]?
A. That’s correct.
* * *
Q. But you can’t tell us today how much of this original bid was
actually for lumber and carpentry on this part that had to be re-
tiled on the main floor, not including the porches?
* * *
A. I don’t know. I don’t have that broken down [].
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In his brief, Mr. Friedmann argues, inter alia, that the damages in this case should
have been calculated by taking the square footage of the main area of the house, which does
not include the excluded deck and porch, and multiplying this area by $13 per square foot:
It is not appropriate for the [Appellees] to use one price per
square foot when evaluating the repair costs at trial and use a
different amount when it benefits the [Appellees] to do so on
remand. The award of $91,655.92 awarded by this Court on
remand represents an average of $56.50 per square foot for the
1,622 square feet of tile . . . . The amount awarded to the
[Appellees] on remand for tile replacement, not including the
decks, should not exceed $13 per square foot based on the
current estimate, which would equal $21,086 (1,622 x $13 =
$21,085).
Thus, Mr. Friedmann assigns error to the fact that Mr. Hughes’ new estimate on the
porch and deck areas was calculated at a rate of $13 per square foot and not at the original
rate he used for his estimate in the first trial. Accordingly, Mr. Friedmann contends that the
amount excluded (from porch and deck areas) was less than it should have been based upon
the different cost-per-square-foot amounts used by Mr. Hughes in his original estimate and
in his estimate for just the porch and deck areas, or alternatively, that the price per square
foot for tile replacement in those areas included in the damages (i.e., the approximately 1,622
square feet inside the house) should be calculated at no more than $13 per square foot.
While the trial court was not under mandate to rely upon Mr. Hughes’ original
estimate in amending the judgment to exclude the porch and deck areas, having chosen to do
so, it seems axiomatic that in order to remove the excluded costs from the original estimate,
not only would the trial court need to identify those portions of the original estimate
chargeable to the excluded areas (including any extraneous items over-and-above the costs
of demolition, tile, and labor–items such as Ditra board, lumber, electrical, paint, and the
like), but it would also need to apply the same price-per-square-foot to the excluded areas as
was used in the original estimate. In this way, the court would have been within the “law of
the case,” because Appellees’ judgment would have been reduced by the full amount for the
excluded areas that were included in Mr. Hughes’ original estimate as contemplated in
Friedmann I.
However, had the trial court included, in the order appealed, its reasoning for
reducing the judgment at a lower price-per-square foot than was used in the original estimate,
we would perhaps have sufficient guidance to decide the case on the merits. Tennessee Rule
of Civil Procedure 52.01 provides, in relevant part, that: “In all actions tried upon the facts
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without a jury, the court shall find the facts specially and shall state separately its conclusions
of law and direct the entry of the appropriate judgment.” This Court has previously held that
the General Assembly’s decision to require findings of fact and conclusions of law is “not
a mere technicality.” In re K.H., No. W2008-01144-COA-R3-PT, 2009 WL 1362314, at *8
(Tenn. Ct. App. May 15, 2009). Instead, the requirement serves the important purpose of
“facilitat[ing] appellate review and promot[ing] the just and speedy resolution of appeals.”
Id.; White v. Moody, 171 S.W.3d 187, 191 (Tenn. Ct. App.2004); Bruce v. Bruce, 801
S.W.2d 102, 104 (Tenn. Ct. App.1990). “Without such findings and conclusions, this court
is left to wonder on what basis the court reached its ultimate decision.” In re K.H., 2009 WL
1362314, at *8 (quoting In re M.E. W., No. M2003-01739-COA-R3-PT, 2004 WL 865840,
at *19 (Tenn. Ct. App. April 21, 2004)). Without findings of fact, we cannot discern the basis
for the trial court's decision, “and we are unable to afford appropriate deference to the trial
court's decision.” In re Connor S.L., No. W2012-00587-COA-R3-JV, 2012 WL 5462839,
at *4 (Tenn. Ct. App. Nov. 8, 2012). Generally, the appropriate remedy when a trial court
fails to make appropriate findings of fact and conclusions of law is to “vacate the trial court’s
judgment and remand the cause to the trial court for written findings of fact and conclusions
of law.” Lake v. Haynes, No. W2010-00294-COA-R3-CV, 2011 WL 2361563, at *1 (Tenn.
Ct. App. June 9, 2011). However, this Court has indicated that we may “soldier on” with our
review despite the trial court’s failure to make sufficient findings of fact and conclusions of
law, in certain limited circumstances:
On occasion, when a trial judge fails to make findings of fact
and conclusions of law, the appellate court “may ‘soldier on’
when the case involves only a clear legal issue, or when the
court’s decision is ‘readily ascertainable.’” Hanson v. J.C.
Hobbs Co., Inc., No. W2011-02523-COA-R3-CV, 2012 WL
5873582, at *10 (Tenn. Ct. App. Nov. 21, 2012) (quoting
Simpson v. Fowler, No. W2011-02112-COA-R3-CV, 2012 WL
3675321, at *4 (Tenn. Ct. App. Aug. 28, 2012)).
Pandey v. Shrivastava, No. W2012-00059-COA-R3-CV, 2013 WL 657799, at *5 (Tenn.
Ct. App. Feb.22, 2013). Unfortunately, this is not one of those cases. Without some
explanation to justify the use of one price-per-square foot in the original estimate, and a
different price-per-square-foot in the new estimates for the deck and porch, it appears on its
face that this method of calculation results in a windfall to the Appellees. In its order, supra,
the trial court notes that “[Mr. Friedmann] did not offer any expert testimony to refute this
amount [i.e., the new estimates for the deck and porch].” In the first instance, it was not
incumbent upon Mr. Friedmann to do so as the burden of proof rested with Appellees to
prove damages. As noted in 17B C.J.S. Contracts § 947: “In an action to recover damages
for a breach of contract, it is incumbent on the plaintiff to prove the breach complained of
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and his or her right to recover therefor. A plaintiff also has the burden of proving that
damages arose from the breach, were caused by the breach, and the extent of those damages”
(footnotes omitted); see also Cole v. Clifton, 833 S.W.2d 75, 77 (Tenn. Ct. App. 1992).
However, Mr. Friedmann did, by Mr. Hughes’ own testimony on cross-examination,
establish that the calculations for the deck and porch in the original estimate and the
calculations for that work in the new estimates were not calculated at the same price-per-
square-foot. In addition, Mr. Hughes’ testimony establishes that not all of the extraneous
costs of repair to the excluded areas, which costs were included in the original estimate, were
included in the new estimates for these areas. In this regard, Mr. Hughes’ testimony was not
uncontested. From our review of the entire record, and in the absence of any Rule 52.01
explanation for the use of different prices-per-square-foot between the two estimates, we
conclude that the evidence preponderates against the trial court’s calculation for the deck and
porch repairs.
In addition, Mr. Friedmann also argues that some items listed in Mr. Hughes’ original
estimate for repairs to the kitchen area should not be allowed as part of the damages amount.
Specifically, he cites the $1,000 estimate to move a cabinet base, and the $4,200 estimate for
granite. In Friedmann I, we concluded that the Appellees “should be limited to recovery for
the cost of repairs they identified and complained of within the one-year period outlined in
the contract.” This, too, is the law of the case. Because we must remand this case for further
proceedings, the trial court may also, in its discretion, hear further proof concerning these
disputed items to determine: (1) whether the Appellees complained of these items/areas
within the one-year warranty period; (2) if so, whether they may recover damages; and (3)
the amount of such damages. Neither our holding in Friedmann I, nor our holding here
would preclude the trial court’s ability to allow the parties to argue these matters.2
We vacate on the ground that Friedmann I required (as the law of the case) that
Appellees not be awarded damages for any portion of the original estimate for areas they did
not complain about within the one-year warranty. So, although we stated in Friedmann I
that the trial court’s acceptance of Mr. Hughes’ original estimate was reasonable, we
2
Our holding herein, however, should not be interpreted as precluding the Appellees
from arguing that Mr. Friedmann’s argument on these issues is waived by either his failure to raise
these issues at trial and/or the failure to raise these issues in the first appeal. See Tenn. R. App. P.
13(b) (“Review generally will extend only to those issues presented for review.”); see also Simpson v.
Frontier Community Credit Union, 810 S.W.2d 147, 153 (Tenn.1991) (“[I]ssues not raised in the
trial court cannot be raised for the first time on appeal.”). We are unable to determine from the
record on appeal whether these issues were timely and properly raised by Mr. Friedmann. If Mr.
Friedmann failed to raise these issues at trial or in his first appeal, he may, nevertheless, be precluded
from arguing these issues on remand.
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anticipated that those portions for the porch and deck would be removed from that estimate
upon remand at the same rate that they were originally calculated, and that all extraneous
costs for these areas (e.g., repairing the sub-floor, profit and overhead, moving furniture,
painting, etc.) would also be removed from the original estimate at the same rate at which
these items were originally calculated. From Mr. Hughes’ testimony, this was not done.
Consequently, the trial court erred because it did not adhere to the law of the case. However,
in Friedmann I, we did not go so far as to mandate that the trial court use Mr. Hughes’
original estimate upon remand. Because it is clear that Mr. Friedmann did not get the benefit
of having all of the costs of the excluded areas removed from the original estimate, and
because the trial court did not explain (under Tennessee Rule of Civil Procedure 52.01) its
reasons for allowing the excluded areas to be calculated at a lower price-per-square-foot, we
conclude that the law of the case was not followed on remand. Consequently, we vacate
again with these general directions. Upon remand, the court: (1) may arrive at the same
judgment by using Mr. Hughes’ separate calculations; however, if it does so, it must explain
its reasons for allowing the calculations to made using two different prices-per-square-foot;
(2) may use Mr. Hughes’ original estimate, and instruct the parties to remove ALL costs for
the excluded areas from the original estimate, using the same price-per-square-foot used in
the original estimate; or (3) may allow the parties to re-try the issue of damages. In each of
these scenarios, Friedmann I dictates that the basement area, the porch, the deck, and any
items not complained of within the one year warranty should be determined and then
excluded from the judgment. In providing these parameters, we do not wish to precisely
dictate the method the trial court may use to calculate damages in this case. If, upon remand,
the trial court determines that an option, other than those enumerated herein, is warranted or
will serve the parties better, it is not precluded from applying that option so long as it does
not interfere with the law of the case as outlined herein, and in Friedmann I.
For the foregoing reasons we vacate the order of the trial court and remand for such
further proceedings as may be necessary and are consistent with this Opinion. Costs of the
appeal are assessed one-half to the Appellant, John H. Friedmann, Sr., and his surety, and one
half to Appellees, Consulting & Financial Services, Inc. and Paul Crenshaw, for all of which
execution may issue if necessary.
_________________________________
J. STEVEN STAFFORD, JUDGE
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