Thomas W. Harrison, Terry Harrison, and Brenda Harrison Kennamore v. Earl Laursen ( 1996 )

IN THE COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
_______________________________________________
FILED
THOMAS W. HARRISON, ) May 3, 1996
TERRY HARRISON, and )
BRENDA HARRISON KENNAMORE, ) Cecil W. Crowson
) Appellate Court Clerk
Plaintiffs/Appellees, ) Giles Chancery No. 7581
)
v. ) C.A. No. 01A01-9505-CH-00192
)
EARL LAURSEN, )
)
Defendant/Appellant. )
APPEAL FROM GILES COUNTY CHANCERY COURT
THE HONORABLE JIM T. HAMILTON, CHANCELLOR
Robert L. Holloway, Jr.
Columbia, Tennessee
Attorney for Appellant
M. Andrew Hoover
Jack B. Henry
Andrew Hoover & Attorneys
Pulaski, Tennessee
Attorneys for Appellees
REVERSED AND REMANDED
OPINION FILED: ____________________________
WILLIAM H. WILLIAMS, SENIOR JUDGE
CONCUR:
CRAWFORD, P.J., W.S.
FARMER, J.
PRELIMINARY STATEMENT
This is an appeal of a nonjury action in chancery form originally brought to rescind a contract
for the sale of real estate and for damages to real property. The complaint was filed on January 22,
1991. Four separate hearings have been held in this cause. The first hearing was held without
intervention of a jury. The second and third hearings were heard in the presence of a jury, and the
fourth hearing in this cause was held without a jury. Following the fourth trial in the Chancery Court
of Giles County, Tennessee, the chancellor entered a judgment against appellant for $22,279.59. The
defendant, Earl Laursen, timely filed a notice of appeal from the final order entered January 9, 1995.
The defendant, Delorita Laursen, did not perfect her appeal by filing a notice of appeal and is not
before this Court. See, e.g., Town of Carthage, Tennessee, et al. v. Smith County, Tennessee, No.
01-A-01-9308-CH-00391 (Tenn. App., March 8, 1995). The appeal by the defendant/appellant, Earl
Laursen, has been perfected and is properly before this Court. The appellant contends that the trial
court erred in not having a jury hear the fourth case and in assessing damages to the real property.
We reverse and remand for reasons that will hereinafter be shown.
ISSUES
The issues of the appellant are as follows:
1. Whether the trial court committed error in granting appellees’ motion to allow the trial
court to determine the issues without the intervention of a jury.
2. Whether the evidence presented was sufficient to warrant the award of damages granted
by the trial court for the diminution of value to the property and the loss of rental value of the
pastures.
STATEMENT OF FACTS
Plaintiffs/Appellees, Terry William Harrison, Thomas W. Harrison, and Brenda Harrison
Kennamore, (hereinafter “appellees”), owned 128 acres of real property in Giles County, Tennessee.
The property included 85 acres of pasture land, fences, and a two-story, seven-room farmhouse. The
defendant/appellant, Earl Laursen (hereinafter “appellant”), purchased the property from appellees
in January, 1988. The appellant purchased the property for $1,000 per acre for a total purchase price
of $128,000. The purchase price was to be paid as follows: $5,500 as earnest money was to be
applied to the purchase price, appellant was to assume the $86,797.67 mortgage loan, and the
remaining balance of $35,702.32 was to be paid to appellees with eight percent (8%) interest. The
appellant took possession of the land in March, 1988. After having made regular payments for over
two years, appellant stopped making payments in August, 1990. On November 7, 1990, appellees
declared the contract breached and entered and took possession.
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Appellees filed a complaint in the Chancery Court of Giles County on January 22, 1991
requesting that the January, 1988 contract between the parties be rescinded, that all mortgage
payments made by appellant be forfeited, and that appellant be required to pay for damages to the
land. The appellant and spouse filed an answer and counter-complaint in which they demanded,
inter alia, a jury trial. A trial was held without a jury on April 11, 1991 (hereinafter “first trial”).
The trial court ordered the contract rescinded, all monies paid by appellant were forfeited, and
damages were awarded to appellees. On appeal, this Court modified the chancellor’s determination
and remanded the cause by order and opinion entered October 23, 1992. Specifically, this Court held
that the appellant was entitled to recover for amounts paid on the purchase price plus taxes.
Appellees were entitled to be compensated for the use of the land while it was in the appellant’s
possession. Also, if the land appreciated in value, appellant was entitled to the increase, and if the
land depreciated, appellees were entitled to the decrease. The cause was remanded to the trial court.
In December, 1992, appellant moved for and was granted a jury trial on the remaining issues
in the cause. On May 17 and 18, 1993, appellant tried the case, pro se, before a jury (hereinafter
“second trial”). The jury returned a verdict which awarded appellant a judgment against appellees
for $10,558.46. Appellees filed a motion for additur to the value found by the jury of the decrease
of the land and for alternative relief. The trial court granted appellees’ motion and entered an order
granting additur in the amount of $24,000. Appellant objected to the additur, and the trial court
granted the request for a new trial in August, 1993. On May 4, 1994, another jury trial was
conducted (hereinafter “third trial”). The jury returned a verdict which awarded appellant a
judgment against appellees of $11,934.46. On June 2, 1994, appellees filed a motion for judgment
NOV (non obstante veredicto). In response, appellant filed on June 27, 1994 a motion for new trial
and for remittitur. On August 5, 1994, the trial court denied both motions but granted appellees a
new trial.
On October 26, 1994, appellees, relying upon this Court’s prior opinion in the cause, filed
a motion seeking to have the trial court determine the issues without a jury. In our October 23, 1992
opinion, this Court stated, “Since the cause must be remanded, we think the trial judge should
determine this issue after giving each party a chance to offer proof.” On November 30, 1994, the
chancellor entered an order stating, “It is clear that the Court of Appeals intended for the trial court
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to determine the issues without a jury.”
The cause came on to be heard without a jury on December 5 and 6, 1994 (hereinafter “fourth
trial”). Appellant and spouse were not present at trial due to their being in California at the time, but
were ably represented by counsel at the hearing. The trial court found that appellant had complete
control of the property for 32 months, and during that time, the property depreciated in value
$40,000, that the loss in rental value for the farmhouse for that period was $8,800, and the total
rental value for the pastures for that time was $5,757.34. The trial court determined that appellees
were entitled to damages of $54,557.34. This amount was offset by the $32,277.75 that this Court
previously held that appellees owed appellant for the amounts paid on the purchase price plus taxes.
Therefore, after being given credit for mortgage payments and taxes, the trial court determined that
appellant owed appellees $22,279.59 plus costs for damages to the property. The trial court entered
the final order in this cause on January 9, 1995 and the appellant timely filed his notice of appeal on
February 8, 1995.
This action was held without the intervention of a jury. Rule 13(d), T.R.A.P., requires this
Court to review the findings of fact by the trial court de novo upon the record, accompanied by a
presumption of the correctness of the findings. Unless the preponderance of the evidence is
otherwise, we must affirm the trial court absent error of law. At the conclusion of the trial, the
chancellor stated he was going to take the case under advisement and would notify the parties upon
entry of the judgment. The trial court in this case included its findings of fact and conclusions of
law in its final order. Thus, on appeal, this Court has been presented with the transcript of the
evidence, the technical record, exhibits, and the trial court’s final order entered in the cause.
JURY TRIAL
Appellant asserts that the trial court erred in granting appellees’ motion to hear the case
without the intervention of a jury. Appellant prayed for a jury in his answer to the complaint filed
on March 23, 1991. Apparently, the request for a jury was waived because the first trial was heard
in November, 1991 without a jury. The trial court’s ruling was appealed to the Middle Section of
this Court which issued an opinion on October 23, 1992. In remanding the cause on the issue of
damages, the Court stated, “Since the cause must be remanded, we think the trial judge should
determine this issue after giving each party a chance to offer proof.” The Court also stated in its
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opinion, “However, since the cause is to be remanded we leave the question of a lien to the trial
judge after his finding as to the amounts owed by the respective parties.” On December 22, 1992,
two months after the cause had been remanded, the appellant filed his motion for jury trial in the trial
court. Although the motion was filed more than 15 days after the issuance of the mandate by this
Court, the trial court in its discretion granted the motion on February 17, 1993.
The second trial was held in May, 1993 before a jury. After determining damages and
offsets, the jury returned a verdict in favor of the appellant. The trial court granted appellees’ motion
for additur and alternative relief, and subsequently, on August 26, 1993, the trial court granted
appellant a new trial. The third trial was held before a jury in May, 1994. The jury again returned
a verdict in favor of the appellant. Appellees filed a motion for judgment NOV, and appellant
moved for a new trial. On August 5, 1994, the trial court denied both motions, but granted appellees
a new trial because the jury had disregarded instructions in determining the decrease in value of the
land while in appellant’s possession.
On October 26, 1994, appellees filed a motion in the trial court requesting that the trial court
determine the issues without the intervention of a jury. In support of their motion, appellees cited
the statements made by this Court in its October 23, 1992 opinion remanding the cause to the trial
court. Appellant did not consent, but filed no objection, and the trial court granted the motion by
order entered November 30, 1994. Thereafter, a hearing was conducted on December 5 and 6, 1994
without the intervention of a jury.
The Tennessee Constitution does not guarantee the right of trial by jury in suits of an
equitable nature as there was no right to trial by jury in these cases in 1796. The Tennessee
Constitution Art. 1, § 6 preserves the right to a jury trial as it existed at the common law. State v.
Hartley, 790 S.W.2d 276, 277-78 (Tenn. 1990); Harbison v. Briggs Bros. Paint Mfg. Co., 354
S.W.2d 464, 467 (Tenn. 1962). Thus, there is no right to trial by jury in essentially equitable actions
unless the cause was triable by a jury when the Constitution of 1796 was adopted. Town of Smyrna
v. Ridley, 730 S.W.2d 318, 321 (Tenn. 1987). See also Sasser v. Averitt Express, Inc., 839 S.W.2d
422, 434 (Tenn. App. 1992). However, the right to a jury trial may be granted by statutes which
supplement the Constitutional right. Specifically, T.C.A. § 21-1-103 (1976) expressly states:
Right to trial by jury. -- Either party to a suit in chancery is entitled,
upon application, to a jury to try and determine any material fact in
dispute, save in cases involving complicated accounting, as to such
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accounting, and those elsewhere excepted by law or by provision of
this Code, and all the issues of fact in any proper cases shall be
submitted to one (1) jury. T.C.A. § 21-1-103 (1976).
The statutory right to a jury trial in Chancery Court is a long-standing tradition in Tennessee.
Except for a four-year period (1972-1976), the right continuously has been guaranteed by statute
since 1846. Smith Co. Educ. Ass’n. v. Anderson, 676 S.W.2d 328, 336 (Tenn. 1984); T.C.A. §
10574-80 (Williams 1934). The current statute as passed in 1976 is a verbatim reenactment of the
prior law. The legislature intended to restore the law as it existed prior to the enactment of the
present Rules of Civil Procedure. Senator Oehmig, the sponsor of the senate bill which became
Chapter 436 of the Public Acts of 1976, made the following remarks when the bill was before the
Senate on its third and final reading:
In 1972 when we adopted Rules of Civil Procedure, there were
certain code sections that were repealed and this was one of them and
it was felt that the present rules do not cover this situation of jury
trials in Chancery and this just puts back the old law into effect.
(emphasis added).
See, e.g., Smith Co. Educ. Ass’n. v. Anderson, 676 S.W.2d 328, 337 (Tenn. 1984).
The legislature clearly intended to reestablish the previous law and give it broad right to trial by jury
in Chancery Court actions.
In the instant case, appellant filed the Rule 38.02, T.R.C.P., motion for a jury trial on
December 22, 1992 which was clearly more than 15 days after entry of this Court’s October 23, 1992
mandate remanding the cause to the trial court. While the trial court was under no obligation to grant
the defaulting party’s motion since it was late filed, it nevertheless exercised its discretion under
Rule 39, T.R.A.P., and granted the motion for jury trial. Once the trial court granted the motion, the
right to jury trial vested. See, e.g., Silcox v. Smith Co., 487 S.W.2d 652, 658 (Tenn. App. 1972).
While Rule 39.02, T.R.A.P., gives the trial court discretionary power to allow a trial by jury
regardless of previous default in demand for jury, the defaulting party does not have the right to a
jury trial after failure to make timely demand (emphasis ours). Likewise, the other party is not
entitled to a nonjury trial if the trial court exercises its discretion and allows a jury trial. Id. at 658.
As previously noted, either party to an action in Chancery Court is entitled, upon timely
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application, to a trial by jury to determine material facts in dispute, except in cases involving
complicated accounts and in other cases expressly accepted by law or statute. T.C.A. § 21-1-103
(1976); Town of Smyrna v. Ridley, supra (jury trial was properly denied as to question of amount
of forfeiture incurred, as this question involved a complicated accounting). Those cases in which
the right to a nonjury trial have been upheld have been limited to narrow exceptions. As noted in
Greene County Union Bank v. Miller, 75 S.W.2d 49, 52 (Tenn. App. 1934):
. . . The question as to the absolute right of a party to a trial by jury is
for the chancellor to determine from the pleadings, whether or not the
case involves a complicated accounting. If it is a case for
complicated accounting, such party has no right to demand or have
a trial by jury. . . . No hard and fast rule can be laid down as to what
constitutes such a complexity of accounts as to authorize a court of
equity to assume jurisdiction; each case seems to stand upon its own
facts. Id. at 52.
See also Southmoor, Inc. v. Baptist Mem. Hosp., 444 S.W.2d 716, 719 (Tenn. App. 1969).
In Moore v. Mitchell, 329 S.W.2d 821 (Tenn. 1959), the Tennessee Supreme Court found
that the Code provisions declare that either party in chancery is entitled to a jury except in cases of
complicated accounts and “. . . those elsewhere excepted by law or by provisions of this Code. . . .”
T.C.A. § 21-1-103 (1976). Therefore, the limitation on the right to a jury trial applies only to those
cases expressly excepted by the Code, to those statutory exceptions not found in the Code, and to
those cases which by their very nature are inappropriate for submission to a jury. Moore, 329
S.W.2d at 823-24.
It would appear that the recent cases interpreting T.C.A. § 21-1-103 have limited the
exceptions to the right to a jury trial and have expanded those situations in which a jury trial may
be had in chancery. The statute has been interpreted so as to authorize a trial by jury in matters of
an inherently equitable nature as well as in matters within the Chancery Court’s auxiliary
jurisdiction. Moore v. Mitchell, supra; Smith Co. Educ. Ass’n. v. Anderson, supra (the statutory
right to a jury trial in Chancery Court applies to matters of an inherently equitable nature, and the
jury’s verdict is not merely advisory).
Examination of the pleadings reveals that the underlying case is not of such an inherently
equitable nature nor does it require an accounting as contemplated by the Code such that the right
to a jury trial should be denied under T.C.A. § 21-1-103.
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We are of the opinion that the instant appeal does not involve the complexity of accounts and
transactions that the Court contemplated in Greene nor does it involve “. . . myriad and complicated
day-by-day transactions . . . over a seven-year period . . .” as was the case in Arrants v. Sweetwater
Bank & Trust Co., 404 S.W.2d 253, 256 (Tenn. App. 1965). We note with increasing interest
regarding the instant case that after hearing the evidence presented, the juries in the second and third
trials returned the same verdict and awarded damages within $1,376.00 of one another. Thus, we
find that this case does not fall into the exceptions of T.C.A. § 21-1-103 and that the appellant is
entitled to a trial by jury upon remand.
Appellees insist that this Court’s prior opinion in this cause directed the trial judge to make
certain determinations; therefore, the trial court was correct in denying appellant a jury trial.
Appellees’ argument is baseless. This Court’s opinion may not be read so narrowly as to justify the
denial of the appellant’s right to a jury trial for such was not contemplated. This Court does not
contemplate, anticipate, or speculate as to what procedural rights the party litigants will elect to
exercise upon remand of the cause to the trial court for other or additional proceedings. Those
matters address themselves to the discretion of the trial judge but are reviewable by this Court.
A fortiorari, it is the duty, and indeed, the responsibility of this Court to furnish directions
to the trial judge and the parties as to what we hold must be determined upon remand of the cause
in order to obtain equity and justice. In so doing, this Court must be governed by the record before
the Court. The record on appeal in this case at that time shows that the trial was conducted by the
trial judge without a jury. As such, this Court, pro forma, directed the trial judge to make certain
findings upon remand. No issue of the right of trial by jury was before the Court. The transcript in
the instant appeal reveals that the trial court, by written order, granted the appellant’s demand for
jury trial after the remand by this Court. Once the trial court granted appellant’s motion, the right
to a jury trial vested and could only be waived by consent of the parties. See Rule 38.05, T.R.A.P.
This record does not reveal that the appellant consented to waive the trial by jury at any time.
Nevertheless, subsequently, the appellees moved the trial court to conduct the hearing without a jury,
pointing to the language of the Court in its opinion directing the trial judge to make certain
determinations. The trial court was so persuaded and thereupon entered an order to hear the cause
as a nonjury matter. While the appellant did not object to the appellees’ motion for determination
of the issues without intervention of the jury, under Tennessee case law, this omission is insufficient
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to warrant consent to withdraw the demand for jury trial. Those cases which have addressed waiver
of a jury demand and which have declared there to be no right to a jury have all involved instances
in which the parties failed to object prior to entry of the final judgment (emphasis ours). Taylor v.
Wells, 69 S.W. 266 (Tenn. 1902); American Nat’l Bank v. Bradford, 188 S.W.2d 971, 978 (Tenn.
App. 1945); Potts v. Knox-Tenn. Rental, Inc., 467 S.W.2d 796, 798-99 (Tenn. App. 1970); Albin
v. Union Planters Nat’l Bank, 660 S.W.2d 784, 785 (Tenn. App. 1983). Such is not the case in the
instant matter. Appellant’s counsel made it plain to the trial court at the beginning of the trial when
he stated into the record:
MR. BROCKMAN: I’ve got one more motion briefly, Judge. Judge,
in respect to the jury trial, I know that Mr. Henry filed a motion to
hear this without a jury trial. The Court has considered the opinion
of the Court of Appeals and has read that. Now I came into this case
late. There was a lawyer before me, but at least it appears to me -- I
could be wrong. If I am I leave it to Mr. Henry and the Court to point
it out. But sometime after that decision it would appear that my
clients moved for a jury trial and it was granted, and now it’s being
rescinded, and based upon that I think my clients have asked for and
were granted a jury and were entitled to it. I’m asking the Court to
give us a jury.
****
THE COURT: Well, I want this on the record, the Court was in error
when I granted them a jury trial. That was a mistake on my part. I
should have followed the direction of the Court of Appeals. I should
have denied that request and decided the case as I was instructed. I
correct that error. I’m going to overrule your motion. . . .
It is apparent that the appellant, through proper counsel, did not consent to withdraw or waive its
right to a jury trial.
Under the particular facts and circumstances of this case, as heretofore pointed out, we are
constrained to reaffirm that which we said in Arrants v. Sweetwater Bank & Trust Co., supra, at 256,
regarding T.C.A. § 21-1-103, then T.C.A. § 21-1011:
It is recognized that, under the above statute, ‘the Chancellor may
refuse to submit issues that are of a complicated and intricate nature,
that is, such as the Chancellor himself, because of peculiar equitable
rules or other requirements, may determine. He may submit some
issues and reserve others. But this action is subject to review. He
must not thereby deprive a litigant of the right to have the substantial
disputes as to matters of fact passed upon by the jury.’ (emphasis
ours).
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Accordingly, we reverse the chancellor’s determination that the cause be heard without a jury
and remand the cause to the trial court for a hearing before a jury consistent with this Court’s opinion
of October 23, 1992. Because this cause is remanded for jury trial, it is not necessary that the Court
address appellant’s remaining issues. Costs on appeal are taxed to appellees for which let execution
issue, if necessary.
_____________________________________________
WILLIAM H. WILLIAMS, SENIOR JUDGE
CONCUR:
___________________________________
W. FRANK CRAWFORD, P.J., W.S.
___________________________________
DAVID R. FARMER, J.
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