Faye Maples Hall, Individually and As Personal Representative of The Estate of Alie Newman Maples v. Park Grill, LLC

05/26/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
February 24, 2021 Session
FAYE MAPLES HALL, INDIVIDUALLY AND AS PERSONAL REPRESENTATIVE OF
THE ESTATE OF ALIE NEWMAN MAPLES, DECEASED v. PARK GRILL, LLC
Appeal from the Chancery Court for Sevier County
No. 19-7-143 Telford E. Forgety, Jr., Chancellor
No. E2020-00993-COA-R3-CV
This case involves an alleged breach of a lease following the destruction of the building
on the leased premises by the November 2016 Gatlinburg wildfires. The original lessor
had entered into a lease in 2009 with the lessee, a company that had utilized the building
primarily as a storage facility for its restaurants during the lease term. The lessor died in
2017. Acting in her own capacity and as personal representative of her mother’s estate,
the lessor’s daughter filed a complaint in July 2019, alleging that the lessee had breached
the lease by failing to utilize fire insurance proceeds to restore the building. The plaintiff
requested that she be awarded a judgment for either the fair market value of the leased
premises or the amount of the fire insurance proceeds. Upon cross-motions for summary
judgment and following a hearing, the trial court found that the lease required the lessee
to utilize fire insurance proceeds to make repairs only in the event that those repairs could
be made within ten working days, which was undisputedly impossible following the fire.
The trial court also found that, pursuant to Tennessee Code Annotated § 66-7-102(b), the
lessee’s covenant to leave the leased premises in good repair did not obligate the lessee to
restore the building absent fault, negligence, or an express agreement to the contrary.
The plaintiff has appealed. Discerning no reversible error, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and KRISTI M. DAVIS, JJ., joined.
David H. Parton, Gatlinburg, Tennessee, for the appellant, Faye Maples Hall,
individually and as personal representative of the Estate of Alie Newman Maples,
deceased.
Tyler C. Huskey, Pigeon Forge, Tennessee, for the appellee, Park Grill, LLC.
OPINION
I. Factual and Procedural Background
On April 7, 2009, Alie Newman Maples, now deceased (“Decedent”), entered into
a commercial lease (“the Lease”) as the lessor with the defendant in this action, Park
Grill, LLC (“Park Grill”), as the lessee. Geoffrey A. Wolpert, Park Grill’s sole
proprietor, entered into the Lease on behalf of Park Grill. The leased premises (“the
Premises”) consisted of improved real property located on Savage Gardens Drive in the
City of Gatlinburg. The Lease provided for a ten-year term, expressly set to expire on
June 30, 2019, and Park Grill agreed to pay $3,500.00 in annual rent plus property taxes
on the Premises. Park Grill utilized the structure located on the Premises, described by
both parties as a house (“the House”), as a storage facility for the benefit of two
restaurants in Gatlinburg: The Park Grill, owned and operated by Park Grill, and The
Peddler, owned and operated by Steaks Sophisticated, LLC, for which Mr. Wolpert is
also the sole owner.
According to an affidavit executed by Mr. Wolpert and documents he submitted in
discovery, he had previously leased the Property from Decedent’s son beginning in 1994,
and Mr. Wolpert entered into the Lease with Decedent following the death of her son.
Mr. Wolpert stated in his affidavit that beginning in 1994, he had initially utilized the
House as a daycare center for employees’ children and then as a bakery for his
restaurants, spending “not less than $143,604.33” on improvements to the Premises over
the course of seven years from 1994 to 2002. However, Mr. Wolpert averred in his
affidavit that by the time of the Lease’s execution in 2009, he utilized the House solely as
a storage facility. In March of 2010, Park Grill had subleased the basement of the House
to Zipline Family Adventures, LLC (“Zipline”), for that company’s storage purposes.
Zipline, however, terminated the sublease three months later.
On November 28, 2016, the House was completely destroyed by the Gatlinburg
wildfires. Mr. Wolpert, acting through Steaks Sophisticated, Inc., had secured a fire
insurance policy covering the Premises with Berkley Southeast Insurance Group
(“Berkley”). According to Mr. Wolpert’s affidavit and documents submitted in
discovery, upon deeming the House a total loss, Berkley had paid proceeds in the amount
of $112,360.00 for the House and $20,000.00 for its contents, which were the values
claimed by Mr. Wolpert. Decedent passed away in July 2017 at the age of ninety-six.
The plaintiff, Faye Maples Hall, was named as the personal representative of Decedent’s
estate. It is undisputed that after the fire, neither party to the Lease terminated the Lease
prior to the end of the term and that Park Grill continued to pay its annual rent to Ms.
Hall after Decedent’s death. It is also undisputed that after the fire and during the term of
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the Lease, Park Grill cleaned the debris from the Premises and utilized temporary storage
containers on the Premises.
On April 23, 2019, Ms. Hall’s counsel sent a letter to Park Grill’s counsel,
demanding the fair market value of the destroyed House or, in the alternative, the amount
of the fire insurance proceeds. In a reply dated April 30, 2019, Park Grill’s counsel
stated that unless the parties could satisfactorily negotiate a new lease, Park Grill
“intend[ed] to retain the proceeds and to surrender the premises ‘as-is’ to [Ms. Hall] at
the termination of the term” on June 30, 2019. However, Park Grill had previously
tendered a check in the amount of $3,500.00 to Ms. Hall, accompanied by a note from
Mr. Wolpert stating that the check was “for the annual rent due on July 1, 2019 for the
lease on [the Premises] for the year July 1, 2019 through June 30, 2020.”
The instant action commenced on July 1, 2019, when Ms. Hall filed a complaint in
the Sevier County Chancery Court (“trial court”), alleging breach of the Lease and
averring that the probate of Decedent’s estate had been reopened in order to “enforc[e]
the terms of the recently discovered written lease upon which this action is based.” Ms.
Hall averred that despite attempts to obtain a copy of the Lease from Park Grill, she had
been unable to obtain the Lease until Decedent’s caregiver had recently found a copy. In
pertinent part, the Lease provides:
5. Insurance. Lessee shall have and maintain a fire and casualty
insurance policy on these leased premises. Lessee shall obtain and
keep in force a comprehensive general public liability policy in a
sum of at least $100,000.00 for these premises.
***
7. Maintenance. Lessee has examined these premises thoroughly and
accept[s] the premises “as is”. Lessee shall maintain the roof and
outside of the building. Lessee shall maintain the interior of the
building (including the doors and windows, the plumbing and light
fixtures, and the heating and air conditioning systems). Lessee shall
keep the interior of the leased premises in a clean and well-
maintained and well-repaired condition at its own expense
(including the doors and windows, the plumbing and light fixtures,
and the heating and air conditioning systems) and shall save the
Lessor harmless from all claims, injuries, damages, or expenses
incident to the same. Any light fixtures and light bulbs, floor and
wall coverings and fixtures attached in the windows and on the walls
that have been provided by Lessee shall become a part of the realty
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and may not be removed without Lessor’s written consent. Lessee
shall not make any major changes to these premises without first
obtaining the Lessor’s written consent. At the termination of this
lease, these premises shall be turned over to Lessor in a clean and
good condition, reasonable wear and tear excepted.
8. Fire Loss. In the event these premises are damaged by fire or other
insurable loss, and the premises can be reasonably repaired within
ten (10) working days, Lessee shall undertake to make these repairs
using the proceeds of the insurance policy. Rental shall not abate.
In the event these premises are damaged by fire or other loss and
cannot be reasonably repaired within ten (10) working days, either
party may elect to declare the lease terminated.
***
10. Default. In the event Lessee does not pay rent timely (i.e. in
advance on the 1st day of July each year), Lessor may declare this
lease in default and terminated if the rental is not received by Lessor
within seven (7) days after Lessee is given written termination
notice.
In the event Lessee breaches any other provisions of this
lease, Lessor may declare this lease in default and terminated if
Lessee does not remedy the breach within seven (7) days after
Lessee is given written notice of the breach.
11. Attorney Fees. In the event Lessor is required to employ an
attorney relative to Lessee’s breach, Lessee shall reimburse Lessor
for the reasonable attorney fees that Lessor incurs.
Ms. Hall asserted in her complaint, inter alia, that the “Lease was not ambiguous,
but clearly indicated that parties intended that if the building were destroyed by fire it
would be replaced at [Park Grill’s] expense, and required that [Park Grill] maintain a fire
and casualty insurance policy to provide the necessary funds that would enable [Park
Grill] to replace the improvements.” Ms. Hall requested an award either in the amount of
the fire insurance proceeds received by Park Grill or the replacement costs of the
improvements on the Premises, as well as reasonable attorney’s fees and costs. Ms. Hall
averred that Decedent had not been mentally competent to handle her affairs at the time
of the Gatlinburg wildfires. However, the complaint contained no allegation concerning
Decedent’s competency at the time of entering into the Lease.
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Park Grill filed an answer on August 23, 2019, acknowledging the validity of the
Lease while taking issue with Ms. Hall’s interpretation. Specifically, Park Grill averred
that “the terms of the Lease do not require [Park Grill] to rebuild the structure after its
destruction, to name the Landlord as an additional insured, or to turn the insurance
proceeds over to the Landlord.” Park Grill denied that it had ignored efforts by Ms. Hall
to obtain a copy of the lease, stating that upon Ms. Hall’s first request, Mr. Wolpert had
made a copy “readily available” for Ms. Hall to pick up at one of his restaurants.
Alleging that Ms. Hall had failed to state a claim upon which relief could be granted,
Park Grill also asserted the affirmative defenses of waiver, estoppel, and laches. Park
Grill requested that the trial court dismiss Ms. Hall’s complaint with prejudice and award
discretionary costs to Park Grill.
On May 5, 2020, Park Grill filed a motion for summary judgment, again
requesting that the trial court dismiss Ms. Hall’s complaint with prejudice. Park Grill
attached affidavits executed by Mr. Wolpert and Hugh Clabo, a contractor who opined
that the House could not have been rebuilt in ten working days following the fire.
Ms. Hall filed a response and a motion for summary judgment on May 22, 2020,
requesting that Park Grill’s motion be denied and that summary judgment be awarded to
her based on a theory of breach of the Lease. Ms. Hall attached four affidavits executed
respectively by Decedent’s caregiver, who was also by then Ms. Hall’s caregiver; Jerry
H. McCarter, an attorney who had drafted the Lease, stating in part that he remembered
drafting the Lease but did not remember any specific agreements between the parties;1
Shannon Akey, a contractor licensed in New York and working in the construction
industry in Tennessee, who opined that it would cost approximately $344,000.00 to
replace the building on the Premises; Darlene Derosia, a real estate broker in Gatlinburg
who opined that the rent agreed to in the Lease was “very low rental for any home in
Gatlinburg” and that an agreement that the tenant, inter alia, maintain all fire and
casualty insurance coverage would have contributed to aligning the rent with fair market
value in the area.
Ms. Hall also attached to her motion an assessor’s “Property Report Card” for the
2016 tax year, reflecting that the land on the Premises had been appraised at $61,300.00
and that the improvements had been appraised at $124,800.00 for a total appraised value
in the amount of $186,100.00. Ms. Hall requested an award of damages in the amount of
1
It is not clear from the record which party to the Lease was represented by Mr. McCarter when he
drafted the Lease. In his affidavit, Mr. McCarter stated in part: “My recollection is vague at best, but I
believe Geoffrey Wolpert from Park Grill called me with regard to preparing the lease . . . .” Throughout
the proceedings, Mr. Wolpert denied that Mr. McCarter had represented Park Grill or him personally, and
Ms. Hall disputed whether Mr. McCarter had represented Decedent.
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$344,000.00 as the replacement cost of the House; lost rental income in the amount of
$800.00 per month, to include “all insurance proceeds from the required insurance
coverage that were paid on account of this loss;” and reasonable attorney’s fees pursuant
to the Lease.
The parties subsequently filed respective responses and replies to the cross-
motions for summary judgment, as well as responses to discovery requests. Ms. Hall
filed a motion for leave to amend her complaint on June 19, 2020, seeking to add claims
of negligence and breach of contract due to Park Grill’s alleged “fail[ure] to purchase and
maintain adequate insurance coverage on the [P]remises,” which Ms. Hall claimed to
have discovered through documents produced in discovery. The trial court conducted a
hearing on June 24, 2020, concerning, inter alia, the summary judgment motions. The
transcript of the hearing reflects an oral ruling by the trial court that Ms. Hall’s motion to
amend the complaint was not timely to be considered in conjunction with the motions for
summary judgment.
The trial court entered an order on July 10, 2020, granting summary judgment in
favor of Park Grill and dismissing Ms. Hall’s complaint with prejudice. Incorporating its
memorandum opinion into the final order, the trial court found, inter alia, that the
language of the Lease unambiguously “included the duty to carry insurance and use the
insurance to repair the building if it could be repaired in ten days” but did not create “a
duty from the lessee to the lessor to do anything more than that.” Applying the canon of
statutory construction of expressio unius est exclusio alterius, “which holds that the
expression of one thing implies the exclusion of others,” see Rich v. Tenn. Bd. of Med.
Exam’rs, 350 S.W.3d 919, 927 (Tenn. 2011), the trial court found that the inclusion of
paragraph eight in the Lease, the “fire loss” provision, requiring Park Grill to make
repairs that could reasonably be made within ten days, implied the exclusion of a duty to
make repairs that could not reasonably be made within ten days. Ms. Hall timely
appealed.
II. Issues Presented
Ms. Hall presents two issues on appeal, which we have restated slightly as
follows:
1. Whether the trial court erred by improperly applying the maxim of
expressio unius est exclusio alterius in interpreting the Lease.
2. Whether the trial court erred by declining to find that Park Grill’s
purportedly unconditional covenant to make all major repairs to the
Premises during the term of the lease and agreement to “have and
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maintain a fire and casualty insurance policy” on the Premises were
sufficient to make Park Grill responsible for restoration of the
Premises after a fire loss.
III. Standard of Review
The grant or denial of a motion for summary judgment is a matter of law;
therefore, our standard of review is de novo with no presumption of correctness. See Rye
v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick
Broad. Co. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013) (citing
Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court must
“make a fresh determination of whether the requirements of Rule 56 of the Tennessee
Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250. As our Supreme
Court has explained concerning the requirements for a movant to prevail on a motion for
summary judgment pursuant to Tennessee Rule of Civil Procedure 56:
[W]hen the moving party does not bear the burden of proof at trial, the
moving party may satisfy its burden of production either (1) by
affirmatively negating an essential element of the nonmoving party’s claim
or (2) by demonstrating that the nonmoving party’s evidence at the
summary judgment stage is insufficient to establish the nonmoving party’s
claim or defense. We reiterate that a moving party seeking summary
judgment by attacking the nonmoving party’s evidence must do more than
make a conclusory assertion that summary judgment is appropriate on this
basis. Rather, Tennessee Rule 56.03 requires the moving party to support
its motion with “a separate concise statement of material facts as to which
the moving party contends there is no genuine issue for trial.” Tenn. R.
Civ. P. 56.03. “Each fact is to be set forth in a separate, numbered
paragraph and supported by a specific citation to the record.” Id. When
such a motion is made, any party opposing summary judgment must file a
response to each fact set forth by the movant in the manner provided in
Tennessee Rule 56.03. “[W]hen a motion for summary judgment is made
[and] . . . supported as provided in [Tennessee Rule 56],” to survive
summary judgment, the nonmoving party “may not rest upon the mere
allegations or denials of [its] pleading,” but must respond, and by affidavits
or one of the other means provided in Tennessee Rule 56, “set forth specific
facts” at the summary judgment stage “showing that there is a genuine issue
for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party “must do more
than simply show that there is some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co., 475 U.S. [574,] 586, 106 S. Ct. 1348,
[89 L.Ed.2d 538 (1986)]. The nonmoving party must demonstrate the
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existence of specific facts in the record which could lead a rational trier of
fact to find in favor of the nonmoving party. If a summary judgment
motion is filed before adequate time for discovery has been provided, the
nonmoving party may seek a continuance to engage in additional discovery
as provided in Tennessee Rule 56.07. However, after adequate time for
discovery has been provided, summary judgment should be granted if the
nonmoving party’s evidence at the summary judgment stage is insufficient
to establish the existence of a genuine issue of material fact for trial. Tenn.
R. Civ. P. 56.04, 56.06. The focus is on the evidence the nonmoving party
comes forward with at the summary judgment stage, not on hypothetical
evidence that theoretically could be adduced, despite the passage of
discovery deadlines, at a future trial.
Rye, 477 S.W.3d at 264-65. “Whether the nonmoving party is a plaintiff or a
defendant—and whether or not the nonmoving party bears the burden of proof at trial on
the challenged claim or defense—at the summary judgment stage, ‘[t]he nonmoving party
must demonstrate the existence of specific facts in the record which could lead a rational
trier of fact to find in favor of the nonmoving party.’” TWB Architects, Inc. v. The
Braxton, LLC, 578 S.W.3d 879, 889 (Tenn. 2019) (quoting Rye, 477 S.W.3d at 265).
Pursuant to Tennessee Rule of Civil Procedure 56.04, the trial court must “state the legal
grounds upon which the court denies or grants the motion” for summary judgment, and
our Supreme Court has instructed that the trial court must state these grounds “before it
invites or requests the prevailing party to draft a proposed order.” See Smith v. UHS of
Lakeside, Inc., 439 S.W.3d 303, 316 (Tenn. 2014).
“The legal effect of the terms of a lease are governed by the general rules of
contract construction.” Planters Gin Co. v. Fed. Compress & Warehouse Co., 78 S.W.3d
885, 889 (Tenn. 2002). A trial court’s interpretation of a contract is a matter of law,
which we review de novo with no presumption of correctness. See Ray Bell Constr. Co.
v. State, Tenn. Dep’t of Transp., 356 S.W.3d 384, 386 (Tenn. 2011); Dick Broad., 395
S.W.3d at 659. As this Court has previously explained:
In resolving a dispute concerning contract interpretation, our task is
to ascertain the intention of the parties based upon the usual, natural, and
ordinary meaning of the contract language. Planters Gin Co. v. Fed.
Compress & Warehouse Co., Inc., 78 S.W.3d 885, 889-90 (Tenn. 2002)
(citing Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999)). A
determination of the intention of the parties “is generally treated as a
question of law because the words of the contract are definite and
undisputed, and in deciding the legal effect of the words, there is no
genuine factual issue left for a jury to decide.” Planters Gin Co., 78
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S.W.3d at 890 (citing 5 Joseph M. Perillo, Corbin on Contracts, § 24.30
(rev. ed. 1998); Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191,
196 (Tenn. 2001)). The central tenet of contract construction is that the
intent of the contracting parties at the time of executing the agreement
should govern. Planters Gin Co., 78 S.W.3d at 890. The parties’ intent is
presumed to be that specifically expressed in the body of the contract. “In
other words, the object to be attained in construing a contract is to ascertain
the meaning and intent of the parties as expressed in the language used and
to give effect to such intent if it does not conflict with any rule of law, good
morals, or public policy.” Id. (quoting 17 Am. Jur. 2d, Contracts, § 245).
Kafozi v. Windward Cove, LLC, 184 S.W.3d 693, 698 (Tenn. Ct. App. 2005).
Resolution of the issues before us also depends in part on statutory interpretation,
which is a question of law that we review de novo with no presumption of correctness.
See In re Estate of Tanner, 295 S.W.3d 610, 613 (Tenn. 2009). Our Supreme Court has
summarized the principles involved in statutory construction as follows:
When dealing with statutory interpretation, well-defined precepts apply.
Our primary objective is to carry out legislative intent without broadening
or restricting the statute beyond its intended scope. Houghton v. Aramark
Educ. Res., Inc., 90 S.W.3d 676, 678 (Tenn. 2002). In construing
legislative enactments, we presume that every word in a statute has
meaning and purpose and should be given full effect if the obvious
intention of the General Assembly is not violated by so doing. In re
C.K.G., 173 S.W.3d 714, 722 (Tenn. 2005). When a statute is clear, we
apply the plain meaning without complicating the task. Eastman Chem.
Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). Our obligation is
simply to enforce the written language. Abels ex rel. Hunt v. Genie Indus.,
Inc., 202 S.W.3d 99, 102 (Tenn. 2006). It is only when a statute is
ambiguous that we may reference the broader statutory scheme, the history
of the legislation, or other sources. Parks v. Tenn. Mun. League Risk
Mgmt. Pool, 974 S.W.2d 677, 679 (Tenn. 1998). Further, the language of a
statute cannot be considered in a vacuum, but “should be construed, if
practicable, so that its component parts are consistent and reasonable.”
Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968). Any
interpretation of the statute that “would render one section of the act
repugnant to another” should be avoided. Tenn. Elec. Power Co. v. City of
Chattanooga, 172 Tenn. 505, 114 S.W.2d 441, 444 (1937). We also must
presume that the General Assembly was aware of any prior enactments at
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the time the legislation passed. Owens v. State, 908 S.W.2d 923, 926
(Tenn. 1995).
Id. at 613-14.
IV. Interpretation of the Lease
Ms. Hall contends that the trial court erred by granting summary judgment in favor
of Park Grill because the court erroneously interpreted the Lease as not requiring Park
Grill to utilize fire insurance proceeds to fund a complete replacement of the House. Ms.
Hall specifically argues that the trial court erred in its interpretation of the Lease by (1)
applying the maxim of expressio unius est exclusio alterius to the “fire loss” provision of
the Lease and (2) declining to find that the provisions in the Lease concerning repairs and
maintenance of fire and casualty insurance were sufficient to make Park Grill responsible
for full restoration of the Premises after a fire loss. Park Grill contends that in granting
summary judgment, the trial court properly interpreted the plain meaning of the Lease
together with the statutory provision contained in Tennessee Code Annotated § 66-7-
102(b) concerning the extent of a lessee’s covenant to leave or restore premises in good
repair.
In granting summary judgment in favor of Park Grill, the trial court specifically
found in pertinent part:
There’s no question here both sides agree the property could not –
the house could not reasonably be repaired within ten days. It’s totally
destroyed. Just couldn’t be reasonably repaired within ten days. Paragraph
eight contains no provision about – no other provision, let’s say, about total
destruction. And it contains no provision whatsoever about use of the fire
insurance proceeds in the event the house is totally destroyed. So add in
paragraph eight a provision that speaks specifically to the use of the
insurance proceeds, in the event the property is damaged, and can be
repaired within ten days, we have no provision as to the use of the
insurance proceeds in the event the property cannot be repaired within ten
days. Had no provision one way or the other.
***
In this case the parties specifically contracted for insurance and that the
insurance was to be used to repair the property if it could be repaired within
ten days. They specifically agreed for that. And they agreed for that in
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paragraph eight, the caption of which – of the lease, the caption of which is
fire loss.
It seems to the Court that if these parties had meant to contract for
use of the insurance proceeds in the event of total destruction, they would
have gone ahead and said so in paragraph eight, but they didn’t. They
didn’t say so. With respect – again, I go back to the doctrine of inclusio
unius or expressio unius. The expression of the one thing, the inclusion of
the one thing generally means the exclusion of all others. The parties chose
to include a provision about use of the insurance proceeds to repair the
property if it could be repaired within ten days. They excluded, did not
address use of the insurance proceeds in the event of total destruction.
Under the doctrine of expressio or inclusio unius that meant that everything
else as to use of the insurance proceeds was excluded. That is everything
other than repair of the building, if it could be repaired within ten days.
And once again, there is no other provision in this lease at all
whatsoever anywhere that specifically requires the tenant to rebuild in the
event of total destruction. There’s no provision in it whatsoever.
The parties have referred to Tennessee Code Annotated 66-7-102(b),
most particularly of the statute. Says a covenant or promise by the lessee to
leave or restore the premises in good repair, which we have here. That’s in
this lease. It’s in most every lease that you’ll ever see, isn’t it. Covenant or
promise by the lessee to leave or restore the premises in good repair shall
not have the effect to bind the lessee to erect or pay for such buildings as
may be so destroyed, unless in respect to the matter of loss or destruction.
There was neglect or fault on the lessee’s part. And there’s no question,
there was no negligence or fault on the part of the lessee. This is part of the
Gatlinburg wildfires that burnt this building down so that phrase has no
application here.
Or unless the lessee has expressly stipulated in writing to be so
bound. That phrase, unless the lessee has expressly stipulated in writing to
be bound, meaning what? To be bound to erect or pay for such buildings as
may be so destroyed. That’s what that very last phrase refers to. And
there’s nothing, again, in this lease that – where[by] the lessee expressly
stipulated in writing to be bound to erect or pay for such buildings as may
be so destroyed. Just not in the lease, once again.
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In this case, as in my – as in the previous case that I had, the
Johnson case. It was [Johnson Real Estate Ltd. P’ship v. Vacation Dev.
Corp., No. E2017-01774-COA-R3-CV, 2018 WL 2948421 (Tenn. Ct. App.
June 12, 2018)]. Either party here – both parties here, lessor or lessee had
an insurable interest in the premises. Here they either one could have
insured their respective interests in the event of total destruction. Here the
lessee – unlike the Johnson case, here the lessee did have a duty under the
lease to maintain fire and casualty insurance at least for the purpose of
repairing the building if it was possible to repair it within ten days. But the
lessee could have also, and did apparently also, go forward and insure its
own interest beyond that. But the Court holds that all the lessee owed the
lessor . . . under the lease was to keep fire insurance on it for the purpose of
repairing the premises if it could be done within ten days. Any insurance
the lessee carried beyond that was an insurance in the Court’s opinion, the
lessee carried for its own interest as the lease holder. The lessor could have
carried insurance, likewise to insure her interest in the event of total
destruction. But the Court simply cannot find here that there was a duty, or
an agreement between the parties for the lessee to carry insurance to cover
the rebuilding of the property in the event of a total destruction of it.
***
I do think this case is closer than the Johnson case was, and the Johnson
case that I remember there simply was no provision whatsoever about
insurance. Here at least you got a provision. But once again, the provision
is specific. And it included the duty to carry insurance and use the
insurance to repair the building if it could be repaired in ten days. It didn’t
create, in the Court’s opinion, a duty to do anything – a duty from the
lessee to the lessor to do anything more than that.
Again, if the parties had intended such a duty they would have said
so and they would have said so in paragraph eight. Under the paragraph of
the lease that – the caption of which reads fire loss. That’s where the
provision would have been. Should have been if there had been one, and
intended it would have been there.
The Court simply cannot go back and rewrite the lease, or rewrite
paragraph eight to include something that was not there by the parties[’]
agreement in the first place. Accordingly, the Court will grant summary
judgment to [Park Grill], and will overrule [Ms. Hall’s] Motion for
Summary Judgment.
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Upon careful review of the record and applicable authorities, we agree with the trial
court’s interpretation of the Lease. We will address each of Ms. Hall’s arguments in turn.
A. Application of Expressio Unius est Exclusio Alterius
Ms. Hall asserts that the trial court improperly applied the maxim of expressio
unius est exclusio alterius “to allow an ambiguous mention [of fire loss] in a later section
of a document [to] defeat a clear expression of the parties’ intent in entering the lease.”
We disagree. As this Court has explained within the context of contract interpretation:
It is also a well known rule of construction that where general and
specific clauses conflict, the specific clause governs the meaning of the
contract. 11 Williston on Contracts § 32:10 (4th ed.); City of Knoxville v.
Brown, 195 Tenn. 501, 260 S.W.2d 264, 268 (Tenn. 1953) (order on
petitions to rehear) (“The doctrine of Ejusdem Generis based on the maxim
expressio unius est exclusio alterius is: that, where general words are used,
followed by a designation of particular things or subject to be included or
excluded as the case may be, the inclusion or exclusion will be presumed to
be restricted to the particular thing or subject”) (quoting Ballentine’s Law
Dictionary, 2nd ed.); Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562,
571 (Tenn. 1933) (“There is no rule better established with reference to the
construction of written instruments than that the exception of particular
things from general words shows that the things excepted would have been
within the general language, had the exceptions not been made.”).
Richmond v. Frazier, No. E2008-01132-COA-R3-CV, 2009 WL 2382303, at *7 (Tenn.
Ct. App. Aug. 4, 2009). See S.M.R. Enters., Inc. v. S. Haircutters, Inc., 662 S.W.2d 944,
949 (Tenn. Ct. App. 1983) (explaining in the context of interpreting a contract that
expressio unius est exclusio alterius means that “the expression of one implies the
exclusion of the others” or “[s]tated differently, where a contract by its express terms
includes one or more things of a class it simultaneously implies the exclusion of the
balance of that class.”).
Ms. Hall’s argument is premised on her assertion that the Lease’s provision
entitled, “Fire Loss,” is ambiguous. The provision, which is paragraph eight of the
Lease, states in full:
In the event these premises are damaged by fire or other insurable loss, and
the premises can be reasonably repaired within ten (10) working days,
Lessee shall undertake to make these repairs using the proceeds of the
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insurance policy. Rental shall not abate. In the event these premises are
damaged by fire or other loss and cannot be reasonably repaired within ten
(10) working days, either party may elect to declare the lease terminated.
We do not find this provision to be ambiguous. It provides for two possible outcomes in
the event that the Premises are damaged by fire or other insurable loss. The first outcome
is that the lessee, Park Grill, “shall undertake to make these repairs using the proceeds of
the insurance policy.” We note that the coordinating conjunction, “and,” joins two
conditions for this first outcome: (1) that the Premises “are damaged by fire or other
insurable loss” and (2) that the Premises “can be reasonably repaired within ten (10)
working days.” See Mass. Mut. Life Ins. Co. v. Jefferson, 104 S.W.3d 13, 21 (Tenn. Ct.
App. 2002) (citing with approval the definition of “and” in BLACK’S LAW DICTIONARY
86 (6th ed. 1990) as a “conjunction connecting words or phrases expressing the idea that
the latter is to be added to or taken along with the first”). The second outcome provided
in paragraph eight of the Lease is that “either party may elect to declare the lease
terminated.” This outcome is also preceded by two clear conditions joined together: (1)
that the Premises “are damaged by fire or other loss” and that (2) the Premises “cannot be
reasonably repaired within ten (10) working days.”
As the trial court found, it is undisputed that the Premises could not be reasonably
repaired within ten working days. Therefore, the first outcome, that of Park Grill’s
utilizing fire insurance proceeds to make the repairs, was not applicable. Ms. Hall takes
some issue with the fact that Park Grill did not avail itself of the second outcome
provided in paragraph eight by electing to terminate the Lease immediately upon learning
that Berkley had deemed the House a total loss due to the fire. However, the second
outcome is a permissive one in that either party may elect to terminate the Lease in the
event that the damages cannot be repaired within ten working days. The provision does
not require either party to terminate the Lease. See Eberbach v. Eberbach, 535 S.W.3d
467, 474 n.3 (Tenn. 2017) (recognizing that a contractual provision “contain[ing] only
permissive language, such as ‘may award,’” is discretionary in nature); Huey v. King, 415
S.W.2d 136, 139 (Tenn. 1967) (“It is well settled that the term ‘may’ does not confer on a
person a mandatory duty; the term is permissive and operates to confer a discretion.”).
Additionally, the fire loss provision requires that “[r]ental shall not abate,” indicating that
Park Grill must continue to make rental payments in either situation until the Lease is
terminated. It is undisputed that Park Grill continued to make the $3,500.00 annual rental
payments due under the Lease through the end of the term.
Contrary to Ms. Hall’s argument, we do not find that the trial court utilized solely
the maxim of expressio unius est exclusio alterius in interpreting the plain language of
the Lease, ignored precedent, or applied the maxim improperly. Ms. Hall relies on two
Tennessee Supreme Court decisions urging caution in applying the maxim. See City of
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Knoxville v. Brown, 260 S.W.2d 264 (Tenn. 1953); Assoc. Indem. Corp. of San
Francisco, Cal. v. McAlexander, 79 S.W.2d 556 (Tenn. 1935). In Brown, our Supreme
Court applied the maxim of expressio unius est exclusio alterius, also known as the
doctrine of ejusdem generis, to the interpretation of a zoning ordinance, determining that
the defendant’s use of “his yard or lot in this neighborhood to assemble and put together
eight or nine automobiles” was in violation of the ordinance because it was not one of the
permissible uses “clearly designated” under the ordinance. Brown, 260 S.W.2d at 267.
Upon the defendant’s petition to rehear, the Brown Court explained the purpose of the
maxim further, stating in pertinent part:
The ‘doctrine of Ejusdem Generis’ is not a rule of law but is merely
an aid to the judicial mind in the interpretation of a statute or other writing.
‘The doctrine of Ejusdem Generis based on the maxim expressio unius est
exclusio alterius is: that, where general words are used, followed by a
designation of particular things or subject to be included or excluded as the
case may be, the inclusion or exclusion will be presumed to be restricted to
the particular thing or subject. Ballentine’s Law Dictionary, 2nd Edition,
Page 24. Literally translated, the phrase, expressio unius est exclusio
alterius, means: the expression of one thing is the exclusion of another (of
the same kind). Whilst the rule is more frequently applied to the
construction of statutes and wills, it equally is applicable to other
instruments of writing.
Id. at 268 (additional internal citations omitted). Noting again that the maxim “is not a
rule of law but a mere aid to our interpretation of what is meant by the ordinance,” the
High Court maintained that the doctrine was applicable to the ordinance at issue and
confirmed its original holding. Id. at 269.
Likewise, in its earlier Assoc. Indem. Corp. decision, our Supreme Court urged
caution in applying the maxim of expressio unius est exclusio alterius “lest it may be
used for the purpose of defeating rather than subserving the real intent of the parties.”
Assoc. Indem. Corp., 79 S.W.2d at 562 (quoting Gage v. Tirrell, 9 Allen 299, 305, 1864
WL 3477 (Mass. 1864)). In Assoc. Indem. Corp., the defendant insurance company
argued in relevant part that because the liability of a manufacturing company owning a
fleet of automobiles had been expressly preserved in the policy in the event of the
company’s bankruptcy or insolvency, the liability of an additional assured, specifically an
officer with the manufacturing company who had been driving a company vehicle when a
fatal accident occurred, was impliedly excluded. 79 S.W.2d at 562. Determining that the
clause relied upon by the defendant did not exclude the manufacturing company’s
liability, our High Court declined to apply the maxim of expressio unius est exclusio
alterius, concluding:
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If the previously assumed absolute and unconditional obligation to
pay any judgment rendered against the additional assured was intended to
be destroyed by this clause, the object easily could have been attained by
expressly so stating, and not leaving the question of such liability involved
in ambiguity and obscurity.
Id. In contrast, we determine that the trial court in the case at bar did not rely upon an
ambiguous or obscure provision in the Lease to defeat an express covenant. Instead, the
trial court found that a plain and unambiguous provision, expressly titled, “Fire Loss,”
applied to the parties’ agreement concerning how fire insurance proceeds should be
utilized.
The trial court analyzed the Lease as a whole and found that although paragraph
five required Park Grill to maintain a fire and casualty insurance policy on the Premises,
that paragraph included no requirement concerning the amount of such a policy or how
the proceeds were to be used. Paragraph five does require a specific amount of coverage,
$100,000.00, for liability insurance but states no such express amount for fire and
casualty. Instead, paragraph eight, “Fire Loss,” requires that Park Grill must use
insurance proceeds to repair the Premises in the event that those repairs could be
reasonably made “within ten (10) working days.” As the trial court noted, this specific
fire loss provision is the only provision in the Lease directing the parties’ actions in the
event of fire loss and the only provision directing Park Grill’s actions in utilizing the fire
insurance proceeds. The trial court examined the provision concerning fire loss in
paragraph eight to find that, taken together with the rest of the Lease, the express fire loss
terms implied the exclusion of any other requirement for the use of the fire insurance
policy. See S.M.R. Enters., 662 S.W.2d at 949. We discern no error in the trial court’s
application of the maxim to the plain language of the Lease.
B. Restoration of the House
Ms. Hall also asserts that the trial court erred by declining to find that the
provisions in the Lease for Park Grill to keep the Premises in good repair; “turn[] over”
the Premises “in a clean and good condition, reasonable wear and tear excepted”; and
“maintain a fire and casualty insurance policy” combined to render Park Grill responsible
for full restoration of the Premises after a fire loss. Park Grill argues that the trial court
properly found that, pursuant to Tennessee Code Annotated § 66-7-102(b), Park Grill’s
promise to return the Premises to the lessor in good condition did not bind Park Grill to
restore the destroyed House. Park Grill also argues that the trial court properly found that
under the plain meaning of the insurance and fire loss provisions in the Lease, Park Grill
was required to maintain fire insurance on the Premises only to the extent that it was
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required to make fire damage repairs that could reasonably be completed within ten
working days. Upon careful review, we agree with Park Grill and the trial court.
Tennessee Code Annotated § 66-7-102 (2015) provides:
(a) Where any building which is leased or occupied is destroyed or so
injured by the elements, or any other cause, as to be untenantable
and unfit for occupancy, and no express agreement to the contrary
has been made in writing, the lessee or occupant may, if the
destruction or injury occurred without fault or neglect by the lessee,
surrender possession of the premises, without liability to the lessor
or owner for rent for the time subsequent to the surrender.
(b) A covenant or promise by the lessee to leave or restore the premises
in good repair shall not have the effect to bind the lessee to erect or
pay for such buildings as may be so destroyed, unless in respect of
the matter of loss or destruction there was neglect or fault on the
lessee’s part, or unless the lessee has expressly stipulated in writing
to be so bound.
See EVCO Corp. v. Ross, 528 S.W.2d 20, 23 (Tenn. 1975) (recognizing that in enacting
an earlier version of this statute, the General Assembly had overruled a prior holding in
Zuccarello v. Clifton, 12 Tenn. App. 286, 292 (Tenn. Ct. App. 1930), that a tenant was
bound by a covenant to repair in the lease despite the destruction of the building by fire);
see also Johnson Real Estate Ltd. P’ship v. Vacation Dev. Corp., No. E2017-01774-
COA-R3-CV, 2018 WL 2948421, at *2 (Tenn. Ct. App. June 12, 2018), perm. app.
denied (Tenn. Oct. 10, 2018) (recognizing same).
Entitled, “Maintenance,” Paragraph seven of the Lease provides:
Lessee has examined these premises thoroughly and accept[s] the premises
“as is”. Lessee shall maintain the roof and outside of the building. Lessee
shall maintain the interior of the building (including the doors and
windows, the plumbing and light fixtures, and the heating and air
conditioning systems). Lessee shall keep the interior of the leased premises
in a clean and well-maintained and well-repaired condition at its own
expense (including the doors and windows, the plumbing and light fixtures,
and the heating and air conditioning systems) and shall save the Lessor
harmless from all claims, injuries, damages, or expenses incident to the
same. Any light fixtures and light bulbs, floor and wall coverings and
fixtures attached in the windows and on the walls that have been provided
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by Lessee shall become a part of the realty and may not be removed
without Lessor’s written consent. Lessee shall not make any major changes
to these premises without first obtaining the Lessor’s written consent. At
the termination of this lease, these premises shall be turned over to Lessor
in a clean and good condition, reasonable wear and tear excepted.
(Emphasis added.) The trial court found that the Lease contained a “covenant or promise
by the lessee to leave or restore the premises in good repair,” as described in Tennessee
Code Annotated § 66-7-102(b). We note that in the “Maintenance” provision, this is the
final sentence of the paragraph, as underlined above. Ms. Hall posits that in the provision
as a whole, Park Grill promised to perform all major repairs on the Premises during the
term of its leasehold and that such a covenant means that any repairs needed, including
the restoration of the destroyed House, would be included in Park Grill’s responsibilities
under the Lease. However, analyzing the plain language of the provision, we determine
that although Park Grill did promise at its own expense to “maintain the roof and outside”
of the House and to keep the interior “in a clean and well-maintained and well-repaired
condition,” the parties did not contemplate in this provision complete restoration of the
House following its total destruction. We determine that the closing sentence of the
“Maintenance” provision is Park Grill’s covenant “to leave or restore the premises in
good repair” and is therefore governed by Tennessee Code Annotated § 66-7-102(b).
Absent negligence or fault on the part of Park Grill in causing the fire or an
express stipulation in writing that Park Grill would be bound to restore the House in the
event of its destruction, Park Grill’s promise to turn over the Premises to the lessor, now
Ms. Hall, in “a clean and good condition” did not bind Park Grill to rebuild or restore the
House. See Tenn. Code Ann. § 66-7-102(b). As the trial court noted, it is undisputed that
Park Grill bore no fault, whether direct or through negligence, in the destruction of the
House by the Gatlinburg wildfires. Under the statute, the question then becomes whether
Park Grill expressly stipulated to a duty to restore the House upon the House’s total
destruction by fire. Ms. Hall argues that the maintenance provision in the Lease, coupled
with the agreement to obtain fire and casualty insurance, constitutes this express
stipulation. We disagree.
Paragraph five of the Lease, entitled, “Insurance,” provides:
Lessee shall have and maintain a fire and casualty insurance policy on these
leased premises. Lessee shall obtain and keep in force a comprehensive
general public liability policy in a sum of at least $100,000.00 for these
premises.
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(Emphasis added.) The underlined sentence pertains to fire and casualty insurance.
Unlike the corresponding provision for liability insurance, the original parties to the
Lease, Decedent and Park Grill, did not specify an amount for the fire and casualty
insurance coverage and did not specify in this paragraph the extent of the damage to be
covered by the policy. Moreover, as we have determined in the preceding section of this
opinion, the parties to the Lease did expressly agree in the subsequent “Fire Loss”
provision that Park Grill would use proceeds from the fire insurance to make repairs to
the Premises after a fire loss in the event that “the premises can be reasonably repaired
within ten (10) working days.” Ms. Hall does not dispute that the fire damage to the
House could not reasonably be repaired within ten working days.
The trial court, in its summary judgment order, noted similarities between the
instant action and this Court’s decision in Johnson, which was a previous case involving
the 2016 Gatlinburg wildfires that had come before the same trial court. See Johnson,
2018 WL 2948421, at *1. In Johnson, the plaintiff real estate company was the lessor,
having entered into a ground lease with the defendant development company, which had,
pursuant to the parties’ lease, constructed a motel on the leased premises. Id. Although
the Johnson parties’ lease included a provision for public liability insurance, it contained
no provision for property insurance. Id. The motel was destroyed by the Gatlinburg
wildfires, and at the time of the loss, the lessee had maintained an insurance policy for the
leased premises and another of its commercial properties with a policy limit of a little
over $8,000.00. Id. Upon notification that the lessee would not rebuild the motel unless
a new lease could be negotiated that included a property insurance provision, the lessor
filed a lawsuit alleging anticipatory breach of the agreement. Id. The lessee then
surrendered the leased premises and terminated the lease pursuant to Tennessee Code
Annotated § 66-7-102. Id. Upon the parties’ cross-motions for summary judgment, the
trial court granted summary judgment in favor of the lessee, and this Court affirmed,
concluding that “the plain language” of Tennessee Code Annotated § 66-7-102
“unambiguously removes any obligation to rebuild, unless the Parties contracted
otherwise.” Id. at *4.
The parties in the case at bar each point respectively to the following language in
the Johnson Court’s decision: “Our plain reading of the statute [§ 66-7-102] leads us to
conclude that the statute controls when the Parties did not contract to rebuild or insure the
Motel in the case of destruction by the elements.” See id. at *3 (emphasis added). Ms.
Hall asserts that the parties in this case did contract for Park Grill to insure the Premises
and to use the insurance proceeds to restore the House when it was destroyed by fire.
While acknowledging that the parties contracted for Park Grill to obtain a fire and
casualty insurance policy, Park Grill asserts that the extent to which Park Grill was
required to utilize the proceeds of that policy to make repairs to the House was limited by
agreement in the fire loss provision to repairs that could reasonably be made within ten
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working days. We agree with Park Grill. Although, as the trial court found, either Ms.
Hall or Park Grill was free to insure the Premises for a greater amount in order to protect
each party’s respective investment, under the plain and unambiguous language of the
Lease, Park Grill was only required by the Lease to utilize fire insurance proceeds to
repair the Premises if those repairs could reasonably be made within ten working days.
The parties did not contract to require Park Grill to restore or rebuild the House in the
event of destruction by fire. Furthermore, the Lease did not require Park Grill to name
the lessor as an additional insured and did not require a specific amount of fire insurance
coverage.
Ms. Hall also attempts to distinguish the instant action from the Johnson decision
because the Johnson lessee availed itself of the statutory remedy of surrendering the
leased premises and terminating the lease. See Johnson, 2018 WL 2948421, at *2. We
determine this to be a distinction without a substantive difference under the facts of the
case before us. In an earlier subsection of this opinion, we have noted the permissive
language in the subject Lease providing that “either party may elect to declare the lease
terminated” in the event that damages to the Premises from fire loss could not reasonably
be repaired within ten working days. Similarly, Tennessee Code Annotated § 66-7-
102(a) provides that a lessee may “surrender possession of the premises, without liability
to the lessor or owner for rent for the time subsequent to the surrender” when a leased
building “is destroyed or so injured by the elements, or any other cause, as to be
untenantable and unfit for occupancy” through no “fault or neglect by the lessee” and
when “no express agreement to the contrary has been made in writing.” However, under
the statute, the lessee is not required to surrender the premises provided that the lessee
continues to pay rent. See EVCO, 528 S.W.2d at 23-24 (explaining under a prior version
of the statute that the lessee’s “statutory right to surrender the premises and be relieved of
any further rental payments” is “an optional remedy of a tenant, and is not compulsory”).
It is undisputed that Park Grill continued to pay rent through the end of the Lease’s term.
The fact that Park Grill elected not to surrender the Premises and be relieved of the duty
to pay rent has no bearing on the parties’ agreement regarding fire loss and insurance.
In support of her position that Park Grill had covenanted to restore the House in
the event of destruction by fire, Ms. Hall relies heavily on our Supreme Court’s decision
in EVCO while also acknowledging the distinction that EVCO involved the commercial
lessors’ duty, rather than a lessee’s duty, to restore the leased premises following a fire
loss. See EVCO, 528 S.W.2d at 22. In EVCO, the intermediate appellate court had
affirmed the trial court’s finding that “the covenant of the lessors . . . to make major
repairs and to insure against any damage to the building by fire was only a limited or
special covenant, and not a general one, and that there was no duty to rebuild in the event
of total destruction.” Id. The High Court reversed, determining that the covenant was
not “special or limited” because “[i]t was an unconditional covenant to make all major
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repairs to the premises during the term of the lease coupled with an agreement on the part
of the lessors to procure fire insurance upon the building ‘for any damage thereto by
fire.’” Id.Apart from the inverted roles of the parties, we find the key distinctions between
the lease in EVCO and the Lease in this action to be that (1) the EVCO lessors had agreed
to “‘carry fire insurance upon the building structure for any damage thereto by fire’”
(emphasis added) and (2) had not entered into any provisions limiting or contradicting
this general duty. See id. at 21-24. Furthermore, the provisions in the EVCO lease
concerning repairs stated that the lessee would be responsible for “minor repairs” while
the lessors would “be responsible for all major repairs that may become necessary to the
building structure during the term of the lease . . . .” Id. at 21. Despite Ms. Hall’s
assertion that the “Maintenance” provision in the Lease at issue here covered all major
repairs, we do not find the provision as broad as the repair covenant in the EVCO lease.
The instant Lease lists specific items to be maintained, such as the roof and heating and
cooling systems, but does not include a term comparable to the “building structure” set
forth in the EVCO lease. Most importantly, however, the insurance provision in the
Lease in the instant action provides only that Park Grill would have and maintain fire and
casualty insurance, as contrasted to the EVCO lease’s provision for coverage of “any
damage” by fire, and the instant Lease includes an express “fire loss” provision limiting
the utilization of fire insurance proceeds to repairs that could reasonably be made within
ten working days. The EVCO parties agreed to no such limitation. We determine Ms.
Hall’s reliance on EVCO to be unavailing.
Ms. Hall also relies on this Court’s decision in St. Paul Surplus Lines Ins. Co. v.
Bishops Gate Ins. Co., 725 S.W.2d 948 (Tenn. Ct. App. 1986). In St. Paul, the lessee of
a commercial building had promised in the lease agreement to “‘repair, replace and
maintain . . . all buildings and any improvements . . . .’” See St. Paul Surplus Lines, 725
S.W.2d at 951 (emphasis supplied by St. Paul Court). The parties had also expressly
agreed that the lessee was required “‘to obtain and maintain at its expense fire
insurance.’” Id. Noting the “somewhat analogous situation in reverse” in EVCO, the St.
Paul Court determined that because the lessee in the case before it had “agreed to repair
or replace the building, and agreed to insure for fire,” the lessee “was obligated under the
lease to replace the building, and obviously the fund from the fire insurance policies were
to be used for that purpose.” Id. at 951-52 (citing EVCO, 528 S.W.2d at 22-24).
We find St. Paul to be highly factually distinguishable from the instant action
because the parties in St. Paul had expressly agreed that the lessee would “replace” “all
buildings and improvements” and because the St. Paul lease contained no provision
limiting the utilization of the fire insurance proceeds that the lessee was required to
maintain. See St. Paul Surplus Lines, 725 S.W.2d at 951-52. As Ms. Hall notes, the
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lessors in St. Paul were satisfied with the insurance funds that would have covered
replacement as a remedy and did not insist upon the lessees actually replacing the
building. See id. at 952. However, the central issue was whether the lessees had
obligated themselves in the lease to apply all of the fire insurance proceeds toward
replacement. Id. at 950. The St. Paul Court gave “the language in the lease agreement its
usual, natural, and ordinary meaning,” and we must likewise give the language in the
subject Lease before us its usual, natural, and ordinary meaning. See id. at 951. Park
Grill did not contract in the Lease to replace the House as the St. Paul lessee did, but Park
Grill did contract to limit its utilization of insurance proceeds from fire loss to the
Premises to repairs that could reasonably be made within ten working days.
We likewise determine Ms. Hall’s reliance on a nineteenth-century Tennessee
Supreme Court case, Hayes v. Ferguson, 83 Tenn. 1 (1885), to be unavailing. It is true
that in Hayes, after a leasehold was destroyed by fire and the insurance company
presented payment of the insurance proceeds to the lessees, the High Court determined
that the funds should be awarded to the lessors as the property owners. See Hayes, 83
Tenn. at 2. However, in Hayes, the insurance policy had been “taken out in the name of
[the property owners and their] children, and insured their property and interest, not the
leasehold interest of the [lessees].” Id. at *4. The Hayes Court determined that a clause
in the parties’ agreement stating, “Loss, if any, payable to [the lessees],” did not entitle
the lessees to retain the insurance proceeds because the lessees’ duty under the parties’
agreement was to “rebuild the gin-house and other property destroyed by fire, or to put up
buildings of the same character, suitable to carry on the operations of the plantations.”
Id. at *4-5. In the case at bar, pursuant to the Lease, the fire and casualty insurance
policy was taken out in the name of the lessee, Park Grill, and as previously determined,
the fire loss provision of the Lease limited Park Grill’s duty in utilizing the insurance
proceeds taken out in its own name to making repairs to the House in the event that those
repairs could reasonably be made within ten working days.
Ms. Hall attempts to draw a line between the issue presented here and precedent
involving an insurance carrier’s attempt to assert subrogation rights against a tenant who
negligently caused a fire when the insured was the tenant’s landlord. See Dattel Family
Ltd. P’ship v. Wintz, 250 S.W.3d 883 (Tenn. Ct. App. 2007), perm. app. denied (Tenn.
Feb. 25, 2008). Adopting what it termed the “Sutton approach,” see Sutton v. Jondahl,
532 P.2d 478, 482 (Okla. Civ. App. 1975), this Court held that “absent an express
agreement to the contrary, a tenant should be considered a co-insured under the
landlord’s property casualty insurance policy, and the insurance carrier should therefore
be precluded from asserting subrogation rights against the tenant,” Dattel, 250 S.W.3d at
892. Noting that the Dattel Court had cited with approval a federal district court decision
applying Tennessee law, see id., Ms. Hall relies on Tate v. Trialco Scrap, Inc., 745 F.
- 22 -
Supp. 458 (M.D. Tenn. 1989), to argue that under the instant Lease, Decedent enjoyed
status as a co-insured with Park Grill on the fire and casualty insurance.
In Tate, the district court was presented with the task of applying Tennessee law to
solve the question presented of “whether the provision requiring the lessor to purchase
insurance coverage for the building when viewed as part of the whole lease, relieves the
lessee from liability for the fire it negligently started.” Tate, 745 F. Supp. at 461.
Finding no Tennessee precedent directly on point, the district court reviewed several
authorities to conclude that “the Tennessee Supreme Court would adopt the modern rule
that an agreement for the lessor to purchase insurance will be presumed to be for the
mutual benefit of both parties unless there is a clear expression of contrary intent.” Id. at
475. Ms. Hall essentially asks this Court to extend the conclusion in Tate to the inverse
situation and hold that an agreement for the lessee to purchase insurance is presumed to
be for the mutual benefit of both parties. This we decline to do.
First, we recognize that although a federal district court’s decision may be
persuasive authority for this Court, it is not controlling. See Summers Hardware &
Supply Co. v. Steele, 794 S.W.2d 358, 362 (Tenn. Ct. App. 1990) (“Cases from other
jurisdictions, including federal cases, are always instructive, sometimes persuasive, but
never controlling in our decisions.”). Second, given the nature of the subrogation issue
presented in Tate, as well as the public policy arguments set forth to support a lessor’s
obligation, see Tate, 745 F. Supp. at 473, we find Tate to be highly distinguishable from
the case at bar. Finally, we emphasize again our previous determination that the parties
to the instant Lease expressly agreed to a limited application of the fire insurance
proceeds in the fire loss provision of the Lease, or what the Tate Court termed, “a clear
expression of contrary intent.” See id. at 475.
Given the plain and unambiguous language of the Lease and the clear application
of Tennessee Code Annotated § 66-7-102(b), we determine that the trial court did not err
in its interpretation of the Lease as binding Park Grill to utilize fire insurance proceeds to
make repairs to the House only if those repairs could reasonably be made within ten
working days. Determining also that no genuine issues of material fact existed that
would have precluded summary judgment, we conclude that the trial court properly
granted summary judgment in favor of Park Grill and denied summary judgment to Ms.
Hall, dismissing her complaint.
V. Attorney’s Fees
In the final sentence of the argument in her principal brief, Ms. Hall asserts that
she is entitled to attorney’s fees under the Lease due to Park Grill’s alleged breach.
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However, Ms. Hall did not raise an issue concerning attorney’s fees in her statement of
the issues. As our Supreme Court has explained:
Appellate review is generally limited to the issues that have been
presented for review. Tenn. R. App. P. 13(b); State v. Bledsoe, 226 S.W.3d
349, 353 (Tenn. 2007). Accordingly, the Advisory Commission on the
Rules of Practice and Procedure has emphasized that briefs should “be
oriented toward a statement of the issues presented in a case and the
arguments in support thereof.” Tenn. R. App. P. 27, advisory comm’n cmt.
Hodge v. Craig, 382 S.W.3d 325, 334 (Tenn. 2012); see also Forbess v. Forbess, 370
S.W.3d 347, 356 (Tenn. Ct. App. 2011) (“We may consider an issue waived where it is
argued in the brief but not designated as an issue.”). Therefore, we deem any issue
concerning attorney’s fees, whether at trial or on appeal, to be waived.
VI. Conclusion
For the foregoing reasons, we affirm the judgment of the trial court granting
summary judgment in favor of Park Grill, denying Ms. Hall’s motion for summary
judgment, and dismissing Ms. Hall’s complaint with prejudice. We remand this case to
the trial court for enforcement of the judgment and collection of costs below. Costs on
appeal are taxed to the appellant, Faye Maples Hall, individually and as personal
representative of the Estate of Alie Newman Maples.
s/ Thomas R. Frierson, II___________
THOMAS R. FRIERSON, II, JUDGE
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