John H. Fournier v. M. v. Tichenor and Bowling, Bowling, and Associates ( 1997 )


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  •         IN THE COURT OF APPEALS OF TENNESSEE, WESTERN SECTION
    AT JACKSON
    _______________________________________________________
    )
    JOHN H. FOURNIER,                   )     Shelby County Circuit Court
    )     No. 61433 T.D.
    Plaintiff/Appellant.             )
    )
    VS.                                 )     C. A. NO. 02A01-9602-CV-00032
    M. V. TICHENOR and
    BOWLING, BOWLING &
    )
    )
    )
    FILED
    ASSOCIATES,                         )
    Dec. 2, 1997
    )
    Cecil Crowson, Jr.
    Defendants/Appellees.            )              Appellate Court Clerk
    )
    ______________________________________________________________________________
    From the Circuit Court of Shelby County at Memphis.
    Honorable Robert A. Lanier, Judge
    John D. Horne,
    THE WINCHESTER LAW FIRM, Memphis, Tennessee
    Attorney for Plaintiff/Appellant.
    James L. Kirby,
    HARRIS, SHELTON, DUNLAP & COBB, Memphis, Tennessee
    Attorney for Defendants/Appellees.
    OPINION FILED:
    AFFIRMED AND REMANDED
    FARMER, J.
    HIGHERS, J. : (Concurs)
    LILLARD, J. : (Concurs)
    Plaintiff-Appellant, John H. Fournier (“Fournier), appeals the order of the trial court
    entering summary judgment in favor of Defendants-Appellees, M. V. Tichenor (“Tichenor”) and
    Bowling, Bowling & Associates (“Law Firm”), on Fournier’s claims for negligent misrepresentation
    and breach of contract.
    In March 1993, Fournier entered into a consignment agreement with Defendants’
    client, Michael Grollnek (“Grollnek”), whereby Grollnek agreed to sell items from Fournier’s
    Napoleonic art collection on a consignment basis. As a condition of entering into the consignment
    agreement, Fournier insisted that a UCC-1 financing statement be filed on his behalf in order to
    protect his property rights in the consigned items. Grollnek, therefore, asked his attorney, Tichenor,
    an associate of the Law Firm, to prepare a letter stating that a UCC-1 financing statement was being
    filed on Fournier’s behalf. In accordance with Grollnek’s request, on March 17, 1993, Tichenor
    faxed a letter on the Law Firm’s letterhead to Grollnek which stated that “[t]his letter will confirm
    that shortly, we will be filing a UCC-1 on behalf of John Fournier.” Grollnek, in turn, sent a copy
    of the letter to Fournier.
    In reliance upon Tichenor’s representation that a UCC-1 financing statement would
    be filed on his behalf, Fournier signed the consignment agreement and delivered the items from his
    collection to Grollnek. Subsequently, Tichenor prepared a UCC-1 financing statement, which
    Fournier signed and returned at Tichenor’s request. Tichenor also obtained Grollnek’s signature on
    the UCC-1, and he informed Grollnek that a filing fee of $242.04 would be required in order to file
    the financing statement.     Grollnek, however, failed to provide the required filing fee, and,
    consequently, Tichenor never filed the UCC-1 on behalf of Fournier.
    Grollnek placed the items from Fournier’s collection for sale in the Empire Gallery,
    which was located in the Peabody Hotel in Memphis.1 Grollnek then sold some of the items to
    members of the public who came into the gallery, but, by his own admission, Grollnek never paid
    Fournier for any of the items sold. In August 1993, upon learning of Grollnek’s possible breach of
    the consignment agreement, Fournier contacted Tichenor by telephone to verify that a UCC-1 had
    1
    The Empire Gallery was a subsidiary of Napoleonic Promotions, Inc., of which Grollnek
    was managing director.
    been filed on Fournier’s behalf. Tichenor responded by letter dated August 11, 1993, in which he
    informed Fournier that the UCC-1 had not been filed because the Law Firm never received a check
    for the filing fee from Grollnek.
    Fournier subsequently filed this lawsuit against Tichenor and the Law Firm asserting,
    inter alia, the theories of negligent misrepresentation and breach of contract. The gravamen of
    Fournier’s complaint was that he had suffered damages because, as a result of Tichenor’s failure to
    file the UCC-1 financing statement as promised, Fournier lost the ability to regain possession of the
    consigned items from third parties who had purchased the items from Grollnek. On appeal, Fournier
    contends that the trial court erred in granting Defendants’ motion for summary judgment, in light of
    the affidavits and depositions filed in this case, as well as the legal theories alleged in Fournier’s
    complaint.
    Summary judgment is appropriate “only when there is no genuine issue as to any
    material fact and the moving party is entitled to a judgment as a matter of law.” Byrd v. Hall, 
    847 S.W.2d 208
    , 214 (Tenn. 1993). Applying this standard, we affirm the trial court’s entry of summary
    judgment because the undisputed evidence in this case demonstrates that Fournier’s damages were
    not caused by Tichenor’s failure to file the UCC-1 financing statement. We reach this conclusion
    because, even if Tichenor had timely filed the UCC-1 financing statement on Fournier’s behalf,
    Fournier would not have had the right to regain possession of the items sold by Grollnek to third
    parties.
    Under the Uniform Commercial Code (UCC), a buyer in the ordinary course of
    business “takes free of a security interest created by his seller even though the security interest is
    perfected and even though the buyer knows of its existence.” T.C.A. § 47-9-307(1) (Supp. 1995).
    Section 47-1-201(9) of the UCC defines a buyer in the ordinary course as “a person who in good
    faith and without knowledge that the sale to him is in violation of the ownership rights or security
    interest of a third party in the goods buys in ordinary course from a person in the business of selling
    goods of that kind.” T.C.A. § 47-1-201(9) (Supp. 1995). Under the UCC, “[a]ny entrusting of
    possession of goods to a merchant who deals in goods of that kind gives [the merchant] power to
    transfer all rights of the entruster to a buyer in ordinary course of business.” T.C.A. § 47-2-403(2)
    (Supp. 1995). In an entrustment situation, therefore, “[a] buyer in the ordinary course of business
    takes good title to the goods even though the sale by the merchant violates his agreement with the
    true owner.” Mid-Tenn. Ford Truck Sales, Inc. v. Lease Plan USA, Inc., 
    1993 WL 266865
    , at *2
    (Tenn. App. 1993).
    In the present case, the evidence was undisputed that Fournier entrusted possession
    of the items in his Napoleonic collection to Grollnek. As the operator of a gallery which dealt in
    Napoleonic art, therefore, Grollnek had the power to transfer all rights of Fournier to buyers in the
    ordinary course of business. See T.C.A. § 47-2-403(2) (Supp. 1995). The record contains no
    evidence to contradict Grollnek’s testimony that the members of the public who purchased the items
    from the Empire Gallery were buyers in the ordinary course of business.2 Accordingly, even if
    Tichenor’s filing of the UCC-1 financing statement would have perfected Fournier’s security interest
    in the consigned items, Fournier would have no cause of action against the third parties to whom
    Grollnek sold the items because the third parties, as buyers in the ordinary course, took the items free
    of Fournier’s security interest.3 See Jernigan v. Ham, 
    691 S.W.2d 553
    , 556 (Tenn. App. 1984).
    The trial court’s order granting Defendants’ motion for summary judgment is
    affirmed.
    Costs of this appeal are taxed to Fournier, for which execution may issue if necessary.
    _____________________________________
    FARMER, J.
    2
    See Byrd v. Hall, 
    847 S.W.2d 208
    , 215 (Tenn. 1993) (“When the party seeking summary
    judgment makes a properly supported motion, the burden then shifts to the nonmoving party to
    set forth specific facts, not legal conclusions, by using affidavits or the discovery materials listed
    in Rule 56.03 [T.R.C.P.], establishing that there are indeed disputed, material facts creating a
    genuine issue that needs to be resolved by the trier of fact and that a trial is therefore necessary.
    The nonmoving party may not rely upon the allegations or denials of his pleadings in carrying out
    this burden as mandated by Rule 56.05.”).
    3
    Alternatively, affirmance of the trial court’s judgment appears to be required by the
    Supreme Court’s decision of Houghland v. Security Alarms & Services, 
    755 S.W.2d 769
     (Tenn.
    1988), wherein the Court stated that, “[w]hen a promise is made in good faith, with the
    expectation of carrying it out, the fact that it subsequently is broken gives rise to no cause of
    action, either for deceit, or for equitable relief.” Houghland, 755 S.W.2d at 774 (quoting W.
    Page Keeton et al., Prosser and Keeton on the Law of Torts § 109 (5th ed. 1984)).
    ______________________________
    HIGHERS, J. (Concurs)
    ______________________________
    LILLARD, J. (Concurs)
    

Document Info

Docket Number: 02A01-9602-CV-00032

Judges: Judge David R. Farmer

Filed Date: 12/2/1997

Precedential Status: Precedential

Modified Date: 10/30/2014