Dan Lomax v. JMCGH

IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT JACKSON
DAN LOMAX, d/b/a COMMERCIAL )
CLEANING CONTRACTORS, )
)
Plaintiff/Appellee, ) Madison Chancery No. 51613
VS.
)
) Appeal No. 02A01-9706-CH-00116
FILED
)
JACKSON-MADISON COUNTY ) October 31, 1997
GENERAL HOSPITAL DISTRICT, )
) Cecil Crowson, Jr.
Appellate C ourt Clerk
Defendant/Appellant. )
APPEAL FROM THE CHANCERY COURT OF MADISON COUNTY
AT JACKSON, TENNESSEE
THE HONORABLE JOE C. MORRIS, CHANCELLOR
GREGORY D. JORDAN
JEFFERY G. FOSTER
RAINEY, KIZER, BUTLER, REVIERE & BELL, P.L.C.
Jackson, Tennessee
Attorneys for Appellant
EDWIN C. TOWNSEND
TOWNSEND AND TOWNSEND, ATTORNEYS
Parsons, Tennessee
Attorney for Appellee
REVERSED AND RENDERED
ALAN E. HIGHERS, J.
CONCUR:
W. FRANK CRAWFORD, P.J., W.S.
HOLLY KIRBY LILLARD, J.
In this breach of contract action, Defendant Jackson-Madison County General
Hospital District (Hospital) appeals the trial court’s order awarding a judgment of $35,390
to Plaintiff/Appellee Dan Lomax, d/b/a Commercial Cleaning Contracts. For the reasons
stated hereinafter, we reverse the trial court’s judgment and render a judgment in favor of
the Hospital.
In March 1996, Lomax sued the Hospital, claiming that the Hospital had breached
two contracts with Lomax for window washing services. The first such contract was
evidenced by a purchase order issued by the Hospital on December 8, 1994, and covering
a three-year period. The second contract, also evidenced by a Hospital purchase order,
was issued February 1, 1995, and purported to cover a three-year period. The purchase
orders were issued on forms prepared by the Hospital, and the orders contained lines for
the Hospital’s authorized signature; however, neither purchase order was signed by the
Hospital’s authorized representative.
Lomax’s complaint alleged that the Hospital unilaterally terminated both service
contracts prior to the termination of the three-year terms referenced therein and after
Lomax had performed substantial services thereunder. Lomax sought specific
performance of both contracts and, alternatively, a judgment in the amount of $35,390, the
balance allegedly due under the purchase orders.
In its amended answer, the Hospital raised, inter alia, the defense of the Statute of
Frauds. Both parties subsequently filed motions for summary judgment on the issue of the
enforceability of the contracts.
In its final order, the trial court awarded Lomax a judgment of $35,390, plus interest,
based on the court’s ruling that the undisputed facts brought this case within the partial
performance exception to the Statute of Frauds. This appeal followed.
Tennessee’s Statute of Frauds is codified at T.C.A. § 29-2-101, and provides that
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(a) No action shall be brought:
....
(5) Upon any agreement or contract which is not to
be performed within the space of one (1) year from the making
thereof;
unless the promise or agreement, upon which such action shall
be brought, or some memorandum or note thereof, shall be in
writing, and signed by the party to be charged therewith, or
some other person by him thereunto lawfully authorized.
T.C.A. § 29-2-101 (Supp. 1996).
In Trew v. Ogle, 767 S.W.2d 662 (Tenn. App. 1988), this court explained the effect
of the Statute of Frauds on the enforceability of contracts:
An agreement that falls within the Statute of Frauds is
not void but is voidable at the instance of either party.
Sneed v. Bradley, 36 Tenn. 301 (1856); 75 Am. Jur. 2d,
Statute of Frauds, § 513 (1974). Thus, if either party disaffirms
the oral contract, no action, either for specific performance or
for damages, can be maintained on the contract. 73 Am. Jur.
2d, supra, §§ 513, 517-18.
Trew v. Ogle, 767 S.W.2d at 664.
A commonly recognized exception to the Statute of Frauds may be found in the
doctrine of part performance. Under this doctrine, “an otherwise unenforceable oral
contract can be the basis of an action if one of the parties has performed.” Trew v. Ogle,
767 S.W.2d at 664. In the present case, the parties agree that the Statute of Frauds
applies, inasmuch as the contracts do not contain the Hospital’s authorized signature and
the services contracted for cover a period of three years. Trew v. Ogle, 767 S.W.2d at 664
(indicating that Statute of Frauds applied to contract in which performance would take
place over four-year period). The parties also agree that this case was appropriate for
summary judgment because the material facts are not in dispute. See Byrd v. Hall, 847
S.W.2d 208, 214-15 (Tenn. 1993). The issue in this case, therefore, is whether Lomax’s
partial performance of the contracts takes the parties’ agreements out of the Statute of
Frauds. See Buice v. Scruggs Equip. Co., 250 S.W.2d 44, 48 (Tenn. 1952).
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After a careful review of the record, we conclude that the doctrine of part
performance does not apply to this case and, thus, that the trial court erred in entering a
judgment in favor of Lomax on the contracts. To be applicable, the doctrine of part
performance does not require merely that the plaintiff performed services under the
contract sued upon. The doctrine additionally requires that the plaintiff, in performance or
pursuance of the contract, altered his position in such a way that it would be unjust and
unconscionable not to enforce the contract. Blasingame v. American Materials, Inc., 654
S.W.2d 659, 663 (Tenn. 1983); Buice v. Scruggs Equip. Co., 250 S.W.2d at 48; Trew v.
Ogle, 767 S.W.2d at 665; 73 Am. Jur. 2d Statute of Frauds § 408 (1974).
In this case, the record contains no evidence to support Lomax’s contention that he
unjustly altered his position in reliance on the contracts with the Hospital. Lomax asserts
that he altered his position by performing the contracts for more than a year and by holding
himself out as ready to perform the remainder of the contracts. This assertion fails to
explain, however, how Lomax’s performance so altered his position that equity entitles him
to specific performance of the contracts or damages. Lomax does not contend that he
performed services under the contracts for which he was not paid. Moreover, Lomax does
not contend that he made any expenditures in reliance on the contracts1 or that he was
unable to perform other jobs or services because of his contractual obligations to the
Hospital. See, e.g., Blasingame v. American Materials, Inc., 654 S.W.2d 659, 660, 663
(Tenn. 1983) (applying doctrine of part performance where evidence showed that
employee relocated to Tennessee in reliance upon future employer’s promise of corporate
stock); Foust v. Carney, 329 S.W.2d 826, 828 (Tenn. 1959) (applying doctrine of part
performance where evidence showed that, in reliance upon employer’s promise of raise
and corporate stock, employee rejected comparable job offer from employer’s competitor);
Allen v. Elliott Reynolds Motor Co., 230 S.W.2d 418, 420 (Tenn. App. 1950) (applying
doctrine of part performance where, in reliance on defendant’s promise of exclusive
automobile dealership, plaintiff incurred expenses in converting apartment house to
automobile sales room and garage).
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In his deposition, Lomax testified that he purchased one piece of equipment worth $400 or $500 for
the Hospital jobs. On appeal, however, Lomax does not co nte nd that this purchase res ulte d in unjus t inju ry.
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Inasmuch as the parties agree that the Statute of Frauds applies to the subject
contracts, and inasmuch as we have concluded that, under the undisputed facts, the
doctrine of part performance does not take the contracts out of the Statute of Frauds, the
trial court’s judgment is hereby reversed, and judgment is rendered in favor of the Hospital.
Costs of this appeal are taxed to Lomax, for which execution may issue if necessary.
HIGHERS, J.
CONCUR:
CRAWFORD, P.J., W.S.
LILLARD, J.
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