Open Lake Sporting Club v. Lauderdale Haywood Angling Club

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
June 9, 2015 Session
OPEN LAKE SPORTING CLUB v. LAUDERDALE HAYWOOD ANGLING
CLUB
Appeal from the Chancery Court for Lauderdale County
No. 14811 William C. Cole, Judge
________________________________
No. W2014-00436-COA-R3-CV – Filed August 25, 2015
_________________________________
At issue in this case is the interpretation of an agreement that, inter alia, provides for a
lease for the use of Open Lake in Lauderdale County by Lauderdale Haywood Angling
Club. Following summary judgment proceedings, the trial court determined that the
parties‟ agreement had terminated on two grounds. After declaring that all rights under
the agreement had ended, it later required one of the parties to post a bond in order to
continue using certain duck blinds for the remainder of the 2013-2014 duck hunting
season. Although we conclude that one of the grounds relied upon by the trial court in
declaring that the agreement was terminated was in error, we affirm the entry of summary
judgment on the other ground. We also affirm the propriety and amount of the bond
ordered by the trial court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
ARNOLD B. GOLDIN, J., delivered the opinion of the Court, in which J. STEVEN
STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J., joined.
William C. Sessions, III, Memphis, Tennessee, for the appellant, Lauderdale Haywood
Angling Club.
Clinton H. Scott, Jackson, Tennessee, and J. Brandon McWherter, Franklin, Tennessee,
for the appellee, Open Lake Sporting Club.
OPINION
Background and Procedural History
This appeal stems from a contentious and long-standing dispute between two
hunting clubs in West Tennessee, Open Lake Sporting Club (“Open Lake Club”) and
Lauderdale Haywood Angling Club (“LHAC”). The parties‟ dispute has generated
several appeals to this Court.1 Because the basic background facts are adequately
addressed in our prior opinions, we need not restate them all here. For the sake of clarity,
however, some context is appropriate.
In 1988, Open Lake Club filed suit against LHAC seeking to enjoin LHAC‟s
members from using the body of water known as Open Lake. Open Lake Sporting Club
v. Lauderdale Haywood Angling Club, No. W2009-02269-COA-R3-CV, 2011 WL
198624, at *1 (Tenn. Ct. App. Jan. 13, 2011). Although LHAC filed an answer opposing
the request for injunctive relief prayed for in Open Lake Club‟s complaint, it also filed a
counterclaim alleging that a dispute had arisen as to the location of a common boundary
line between the two clubs. Id. at *2. Following a trial, the trial judge ruled that LHAC
could not use the lake at issue except as permitted by Open Lake Club, but nevertheless,
he concluded that he could not rule on the boundary line issue until additional proof was
presented. Id. at *2˗3.
Despite the trial court‟s decision to defer ruling on the boundary line dispute, the
parties subsequently entered into a written settlement agreement. Id. at *3. This
agreement, which is dated October 25, 1992, reads as follows:
I. Open Lake Sporting Club (OLSC) shall grant Lauderdale Haywood
Angling Club (LHAC) sport fishing and pleasure boating privileges on the
waters of Open Lake and the portion of the Reach owned by OLSC in
exchange for the use and control of LHAC properties west and south of the
paved road leading to the parking lot at Open Lake, the LHAC parking lot
properties west of Gillespie cabin, and that portion of the Reach owned by
LHAC. OLSC shall pay LHAC $10.00 annually for the use of said
property.
II. OLSC shall lease to LHAC at a fee of $10.00 annually four
waterfowl blinds sites on the water of Open Lake in the prime waterfowl
hunting area between the Griggs blind and Mills Pocket. These sites, as
selected by LHAC, shall be the Griggs blind, the Maxwell blind, the
Buckhorn Point area, and the Brown Blind. OLSC shall also extend to
LHAC the use of other blind sites south of the Griggs blind along East
Bank, west of the Brown blind along Out of Bounds bank, in the Sand Lake
area and the Leroy Gillespie blind on Right Arm at no charge.
1
The first appeal generated by the parties‟ dispute was dismissed for the lack of a final judgment. Open
Lake Sporting Club v. Lauderdale Haywood Angling Club, No. W2009-02269-COA-R3-CV, 2011 WL
198624, at *3 (Tenn. Ct. App. Jan. 13, 2011). The other appeals before this Court concerned issues
relating to a boundary line dispute between the parties. See id. at *7; Open Lake Sporting Club v.
Lauderdale Haywood Angling Club, No. W2014-01574-COA-R3-CV, slip op. at 3 (Tenn. Ct. App. Aug.
18, 2015).
2
III. It is agreed by both parties that OLSC shall retain the exclusive use
of all properties to include Right Arm owned or leased of OLSC north and
east of Open Lake and the Reach except for the Leroy Gillespie blind on
Right Arm. It is understood and agreed that access to and from the Leroy
Gillespie blind shall not be across said OLSC leased properties, unless
written permission granted by lessor. Violation of this paragraph shall be
cause for termination of LHAC‟s Leroy Gillespie blind usage without
affecting other provisions of this agreement.
IV. LHAC hereby agrees to restrict LHAC shares to the present number
of 35 shares or less and shall provide OLSC with a current membership list
annually.
V. LHAC members shall be entitled to be accompanied by unlimited
guest(s) while sportfishing, pleasure boating and waterfowl hunting on the
water of Open Lake and the Reach. For the purpose of this agreement, a
LHAC member is defined as a shareholder, shareholder‟s spouse, or
shareholder‟s dependent children up to the age of 18 years old or, as long as
a dependent child continues as a full-time student at a two or four year
college or university, up to the age of 25 years old.
VI. A Sports Committee shall be appointed to establish reasonable rules
for sports fishing, pleasure boating, and waterfowl hunting on the water of
Open Lake and the Reach for both OLSC and LHAC. The committee shall
be a five person committee consisting of two shareholders of LHAC
appointed by LHAC, two shareholders or [sic] OLSC appointed by OLSC
and chaired by the President of OLSC or his designee who shall have
voting privileges only in the case of a tie vote. All decisions shall not be
unduely [sic] restrictive nor discriminatory towards either club.
VII. OLSC and LHAC agree to abide by all provisions of this agreement
and rules established by the Sports Committee. Failure of either party to
correct a violation of a provision of this agreement or a rule established by
the Sports Committee within 5 days after receiving written notice from the
other party shall be cause for termination of all privileges of the individual
share in violation. If either party refuses to act upon a violation after a 5
day written notice from the other party this agreement is subject to
termination.
VIII. The initial term of this agreement shall be for a period of ten years. It
is the intent of both clubs that this agreement settle once and for all the
lengthy controversy existing between the clubs. This agreement will end
3
all litigation between the clubs, will be made part of the final court order
and, as long as the parties abide by the agreement, will be renewed under
terms similar to those outlined in the agreement. As to the boundary line
dispute, it is understood that the findings of the third party surveyor
selected by the Court shall be final.
IV. [sic] In the event that OLSC should sell Open Lake, this agreement
shall terminate on the sale closing date if that date is before the end of the
term of this agreement. In the event that OLSC should sell Right Arm,
LHAC‟s usage of the Leroy Gillespie blind on Right Arm shall terminate
on the sales closing date without affecting other provisions of this
agreement.
On November 11, 1992, shortly after the agreement was executed, the trial court entered
a final decree incorporating the parties‟ agreement in its entirety.
The present appeal is directly concerned with whether the parties‟ agreement has
any continuing validity. On May 21, 2012, Open Lake Club filed a complaint in the
Lauderdale County Chancery Court asking the trial court to declare the rights and status
of the parties in relation to the agreement. In pertinent part, Open Lake Club asserted that
the trial court should declare that the parties‟ agreement would soon expire. According to
Open Lake Club, the terms of Paragraph VIII of the agreement dictated that the
agreement would expire at the end of one renewal term, an ending date twenty years from
the agreement‟s October 25, 1992 execution.
LHAC answered the complaint on August 7, 2012, and on March 28, 2013, Open
Lake Club filed a motion for summary judgment. In its motion for summary judgment,
Open Lake Club asserted that no genuine issues of material fact existed and that the trial
court should declare the parties‟ agreement to be expired as a matter of law. Open Lake
Club‟s motion was accompanied by a memorandum of law and a statement of undisputed
material facts. In seeking a declaration that the parties‟ agreement had expired on
October 25, 2012, Open Lake Club asserted that the agreement “clearly and
unambiguously states that it is for a term of ten (10) years with a renewal term of ten (10)
years.” On August 5, 2013, LHAC responded to Open Lake Club‟s motion for summary
judgment. Although LHAC admitted that the parties entered into a settlement agreement
on October 25, 1992, and agreed that its renewal terms were unambiguous, its
interpretation differed from that of Open Lake Club. Whereas Open Lake Club
contended that the agreement provided for only one ten-year renewal term, LHAC
maintained that such an interpretation twisted the meaning of the agreement into
“something that the parties did not contemplate, negotiate or set forth.” According to
LHAC, the agreement did not provide for a single renewal option, but rather, provided
that it would be renewed into the future as long as the parties abided by its terms.
4
A hearing on Open Lake Club‟s summary judgment motion took place on August
13, 2013. In addition to focusing on Open Lake Club‟s contention that the parties‟
agreement expired upon the passage of a second ten-year term, the hearing addressed the
relevancy of LHAC‟s continuing litigation with respect to the findings of a third-party
surveyor who had been appointed pursuant to the parties‟ agreement.2 On December 17,
2013, the trial court entered an order granting Open Lake Club‟s motion for summary
judgment. In granting the motion, the trial court declared that all relief afforded to
LHAC under the parties‟ agreement had ended. In part, the trial court‟s order stated as
follows:
2. The dispute between the parties is well-defined. OLSC contends that
the rights afforded LHAC in the Agreement expired on October 25, 2012,
which would include the initial ten year term referenced in the Agreement
and one renewal term. LHAC contends that the rights afforded LHAC in
the Agreement should be renewed and extended into perpetuity, as long as
the parties abide by the Agreement. In its Response in Opposition to
OLSC‟s Motion for Summary Judgment, LHAC agrees that the language in
question is clear and unambiguous, thus the interpretation of the contract is
a question of law for the Court.
3. In OLSC‟s Motion for Summary Judgment, OLSC requests that
judgment be rendered in its favor, with a finding that the Agreement
between OLSC and LHAC expired on October 25, 2012, and that all relief
afforded to LHAC under the Agreement ended on such date. The Court
agrees. Perpetual contracts are not favored under the law, and appellate
authority indicates that courts are loathe to infer a perpetual obligation.
Moreover, courts are reluctant to interpret contracts providing for a
perpetual or unlimited contractual right unless the contract clearly states
that is the intention of the parties. In this case, if the interpretation sought
by OLSC is correct, then the Agreement expired on October 25, 2012. On
the other hand, if the interpretation sought by LHAC were found to be
correct, then the Agreement could extend into perpetuity, which the law
disfavors.
4. The Court also notes that the litigation between the parties has not
ended, as evidenced by the boundary line dispute still in litigation today
under docket number 7191. By the Agreement‟s plain terms, a cessation of
the litigation was part of the consideration of the Agreement.
2
As we detailed in Open Lake Sporting Club v. Lauderdale Haywood Angling Club, No. W2009-02269-
COA-R3-CV, 2011 WL 198624, at *3 (Tenn. Ct. App. Jan. 13, 2011), the parties agreed that the findings
of a third-party surveyor selected by the trial court would be final with respect to their boundary dispute.
5
5. Upon consideration of the agreed facts, the applicable law, the
arguments of counsel, and the record as a whole, the Court finds that the
Agreement has expired, either because of the passage of the second
term of ten years on October 25, 2012 or because of the continuing
litigation between the two clubs, which would give OLSC the right to
terminate the Agreement.
(Emphasis added).
After entry of this order, Open Lake Club gave notice to LHAC that its members
should remove their possessions from Open Lake by December 29, 2013. In response to
this notice from Open Lake Club, LHAC filed a petition for injunctive relief and sought
to enjoin Open Lake Club from removing LHAC‟s members‟ possessions from certain
duck blinds on Open Lake. Although Open Lake Club filed a response in opposition to
LHAC‟s request for an injunction on January 8, 2014, it argued that LHAC should be
required to post a bond sufficient to protect Open Lake Club‟s interests should the trial
court decide to stay enforcement of its December 17, 2013 order granting summary
judgment. A hearing on these matters took place on January 9, 2014, at which time the
trial court issued an oral ruling that a stay would be granted upon the timely posting of a
bond by LHAC. Shortly thereafter, on January 16, 2014, LHAC filed a motion to alter or
amend the trial court‟s order granting summary judgment in favor of Open Lake Club.
On February 4, 2014, the trial court entered an order on the issues related to
LHAC‟s request for injunctive relief. Pursuant to the order, the trial court directed that
enforcement of its final decree should be stayed “until such time that the Final Decree is
appealed or becomes non-appealable due to the expiration of the time period to appeal.”
The stay, which was specifically conditioned upon the posting of a $20,000.00 bond, was
entered for the limited purpose of allowing LHAC to use a portion of the lake for the
remainder of the 2013-2014 duck hunting season. An order denying LHAC‟s motion to
alter or amend was later entered on March 31, 2014. This appeal followed.
Issues Presented
On appeal, LHAC raises several issues for our review, which we have condensed
and restated as follows:
1. Whether the trial court erred in ruling that the parties‟ agreement had
expired due to the passage of a second term.
2. Whether the trial court erred in ruling that Open Lake Club had the right
to terminate the agreement due to LHAC‟s continuing litigation.
3. Whether the trial court erred in ordering LHAC to post a bond to stay
execution of the trial court‟s order granting summary judgment.
6
Standard of Review
A motion for summary judgment may be granted only if “the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” Tenn. R. Civ. P. 56.04. “The
moving party has the ultimate burden of persuading the court that there are no genuine
issues of material fact and that the moving party is entitled to judgment as a matter of
law.” Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 83 (Tenn. 2008) (citation omitted).
Because resolving a motion for summary judgment is a matter of law, we review the trial
court‟s disposition on the issue de novo without a presumption of correctness. Id. at 84
(citation omitted). Moreover, “we are required to review the evidence in the light most
favorable to the nonmoving party and to draw all reasonable inferences favoring the
nonmoving party.” Id. (citation omitted).
Discussion
Although there is no dispute in this case that the parties entered into an agreement
on October 25, 1992 in order to settle the substantive differences between them, the
interpretation of that agreement remains a source of heated contention. When Open Lake
Club instituted this declaratory judgment action in May of 2012, it prayed for the trial
court to declare that the parties‟ agreement expired twenty years following its execution.
The same request accompanied Open Lake Club‟s March 2013 motion for summary
judgment. Although the trial court‟s order granting summary judgment ultimately
concluded that the parties‟ agreement had expired following one renewal term, as had
been prayed for by Open Lake Club, the trial court also declared that the agreement had
terminated due to LHAC‟s continuing litigation with regard to the parties‟ boundary line
dispute. In this appeal, we are tasked with determining whether summary judgment was
properly entered according to these grounds.
The outcome of the parties‟ dispute hinges on a contractual interpretation of their
agreement. When reviewing cases involving contract interpretation, “„our task is to
ascertain the intention of the parties based upon the usual, natural, and ordinary meaning
of the contractual language.‟” Planters Gin Co. v. Fed. Compress & Warehouse Co.,
Inc., 78 S.W.3d 885, 889˗90 (Tenn. 2002) (quoting Guiliano v. Cleo, Inc., 995 S.W.2d
88, 95 (Tenn. 1999)). “The intent of the parties is presumed to be that specifically
expressed in the body of the contract.” Id. at 890. If the language is clear and
unambiguous, then the literal meaning of the language is controlling. Id. When a
provision is susceptible to more than one reasonable interpretation, however, its terms are
rendered ambiguous, and “the intention of the parties cannot be determined by a literal
interpretation of the language[.]” Id. In instances where ambiguity arises in a contract
because of an uncertain meaning, the court must apply established rules of construction to
determine the intent of the parties. Allstate Ins. Co. v. Watson, 195 S.W.3d 609, 611˗12
7
(Tenn. 2006) (citation omitted). “The meaning of the contract becomes a question of fact
only if an ambiguity remains after we have applied the appropriate rules of construction.”
Dick Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 659 (Tenn. 2013)
(citation omitted).
We first turn our attention to the trial court‟s determination that the parties‟
agreement expired on October 25, 2012, due to the passage of a second ten-year term.
Specifically at issue between the parties is the interpretation of the agreement‟s renewal
provision. That provision, which is found at Paragraph VIII, reads as follows:
The initial term of this agreement shall be for a period of ten years. It
is the intent of both clubs that this agreement settle once and for all the
lengthy controversy existing between the clubs. This agreement will end
all litigation between the clubs, will be made part of the final court
order and, as long as the parties abide by the agreement, will be
renewed under terms similar to those outlined in the agreement. As to
the boundary line dispute, it is understood that the findings of the third
party surveyor selected by the Court shall be final.
(Emphasis added). At the summary judgment stage of litigation, the parties attributed
different meanings to the language in this provision. Whereas Open Lake Club
contended that the plain language of the agreement stated that it would expire on October
25, 2012, at the end of one renewal term, LHAC argued that the agreement would
continue to be renewed into the future as long as the two clubs abided by the agreement.
Incidentally, both clubs contended that their respective interpretations were supported by
“clear” and “unambiguous” contractual language.
As we perceive it, the essence of the parties‟ disagreement concerns whether their
rights and obligations under the agreement are subject to perpetual renewal.3 Under the
law, perpetual obligations are disfavored. Higgins v. Oil, Chem. & Atomic Workers Int’l
Union, Local # 3-677, 811 S.W.2d 875, 881 (Tenn. 1991) (citations omitted) (noting that
“the law does not favor perpetual contracts”); Collateral Plus, LLC v. MAX Well Med.,
Inc., No. M2010-00638-COA-R3-CV, 2011 WL 1167192, at *6 (Tenn. Ct. App. Mar. 29,
2011) (citations omitted) (stating that “[p]erpetual contracts are not favored under the
law”); Johnson v. Welch, No. M2002-00790-COA-R3-CV, 2004 WL 239756, at *10
(Tenn. Ct. App. Feb. 9, 2004) (stating that “courts are loathe to infer a perpetual
obligation”); Parker v. Union Planters Corp., 203 F. Supp. 2d 888, 901 (W.D. Tenn.
2002) (citation omitted) (noting that courts are reluctant to construe agreements as
3
By way of distinction, we note—as do both parties in their briefs—that the agreement does not provide
for perpetual, absolute rights. In addition to containing provisions pursuant to which the agreement may
be terminated for cause, the agreement contains a provision under which termination will occur if Open
Lake Club sells Open Lake.
8
providing for a perpetual right absent a clear intention in the agreement that such is the
intention of the parties). Here, we must determine the relevancy this principle has to the
renewal provision at issue. Having reviewed the parties‟ briefs, we observe that neither
club has presented us with Tennessee authority that specifically addresses the legal
standard required for establishing a perpetual renewal provision. In our research, we
have found one4 Tennessee decision that tangentially addresses the issue. In
Mecklenburg Real Estate Co. v. Kyoleum Co., 218 S.W. 821 (Tenn. 1920), the Tennessee
Supreme Court reviewed a dispute concerning several lease agreements. In the context of
its discussion, the court referenced other authority—without disaffirming it—stressing
that covenants for perpetual renewal must not rely on inference, but rather, must be
“clearly and certainly” made. Id. at 822.5 Although the specific level of scrutiny
invariably differs in some jurisdictions,6 this standard appears to be the prevailing rule.
Perpetual renewal provisions are not forbidden, but they will not be construed to exist
unless the parties plainly express their intent to establish them. Winslow v. Baltimore &
Ohio R.R. Co., 188 U.S. 646, 655 (1903) (“From the ordinary covenant to renew, a
perpetuity will not be regarded as created. There must be some peculiar and plain
language before it will be assumed that the parties intended to create it.”); Pults v. City of
Springdale, 745 S.W.2d 144, 146˗47 (Ark. Ct. App. 1988) (citations omitted) (noting
that although “the right to perpetual renewal of a lease is not forbidden by law,” a
provision “will not be construed as conferring a right to a perpetual renewal unless the
language is so plain as to admit of no doubt of the purpose to provide for perpetual
renewal”); Ginsberg v. Gamson, 141 Cal. Rptr. 3d 62, 77 (Cal. Ct. App. 2012) (holding
that an agreement “must clearly demonstrate the parties‟ intention” in order for it to be
construed as including a right to perpetual renewals); Carder, Inc. v. Cash, 97 P.3d 174,
181 (Colo. Ct. App. 2003) (citations omitted) (indicating that “[a] lease will not be
construed as conferring a right to perpetual renewals unless its language is so clear and
unequivocal that it leaves no doubt that such was the intention of the parties”); Vokins v.
4
Although it is clear that Tennessee law disfavors perpetual contractual obligations, the dearth of case
law specifically applying that principle to renewal provisions should be no surprise. As a California
judge once commented: “[O]pen-ended leases and options in perpetuity must be about as common as
polar bear sightings in Death Valley.” Shaver v. Clanton, 31 Cal. Rptr. 2d 595, 601 (Cal. Ct. App. 1994)
(Crosby, J., concurring).
5
We observe that the Supreme Court‟s opinion in Mecklenburg Real Estate Co. adopted a portion of an
order from the chancery court where the legal proceedings in that case had originated. It may be noted
that the chancery court language cited by our Supreme Court relied on a New York opinion, Rutgers v.
Hunter, 6 Johns. Ch. 215 (N.Y. Ch. 1822), to support the proposition that a covenant for a perpetual
renewal must be clearly made.
6
Compare Lattimore v. Fisher’s Food Shoppe, Inc., 329 S.E.2d 346, 349 (N.C. 1985) (holding that a right
to perpetual renewals will not be found to have been created unless the agreement “contains the terms
„forever‟, „for all time‟, „in perpetuity‟ or words unmistakably of the same import”), with Ginsberg v.
Gamson, 141 Cal. Rptr. 3d 62, 77 (Cal. Ct. App. 2012) (declining to hold that certain words be present to
establish the right to perpetual renewals, but nonetheless requiring that the parties‟ intent be clearly
demonstrated).
9
McGaughey, 266 S.W. 907, 908 (Ky. 1924) (citations omitted) (stating that perpetual
rights will not be construed to exist “unless the language employed clearly and
unambiguously indicates that it was the intention and purpose of the parties to do so”);
Lattimore v. Fisher’s Food Shoppe, Inc., 329 S.E.2d 346, 349 (N.C. 1985) (holding that
“covenants for perpetual renewals are not favored and shall not be enforced unless the
intent to create them is shown by clear and unequivocal terms in the lease agreement”);
Thaw v. Gaffney, 83 S.E. 983, 985 (W. Va. 1914) (citation omitted) (providing that the
language must be “so plain as to admit of no doubt of the purpose to provide for
perpetual renewal”).
Under the general rule, where an agreement provides in general terms for a
renewal, it shall be construed as providing for only a single renewal. E.g., Pults, 745
S.W.2d at 147 (citation omitted). Moreover, whenever there is any uncertainty as to
whether an agreement was intended to be renewable in perpetuity, it “will nevertheless be
construed as importing but one renewal[.]” Id. (citation omitted); see also Ginsberg, 141
Cal. Rptr. 3d at 79 (opining that this “longstanding rule” of construction is a “better
approach” than remanding the case to the trial court to allow it to consider extrinsic
evidence).
Having reviewed the renewal provision at issue between the parties, we cannot
conclude that its language plainly establishes the parties‟ intent to provide for perpetual
renewals. The provision simply provides that “as long as the parties abide by the
agreement, [the agreement] will be renewed under terms similar to those outlined in the
agreement.” There is no language signaling an unequivocal intention that the
“renewability” of the agreement is to carry past one renewal, much less that it is to
otherwise endure into perpetuity.7 Although the renewal provision provides that the
contemplated renewal is to be “under terms similar to those outlined in the agreement[,]”
such language does not evidence a clear intent that the parties intended the agreement to
be subject to perpetual renewal. See Winslow, 188 U.S. at 654 (“It is quite plain that a
lease containing a covenant to renew at its expiration with similar covenants, terms, and
conditions contained in the original lease is fully carried out by one renewal without the
insertion of another covenant to renew.”); see also Vokins, 266 S.W. at 908 (“[A]
covenant to renew a lease is satisfied by only one renewal, and that the renewal clause
does not become a part of the renewed lease.”).
7
For example, there is not even any language indicating that the agreement will be renewed for
“successive” terms, “every ten years”, or the like. Although several courts have concluded that such
language does not, by itself, establish the right to perpetual renewals, see, e.g., Carder, Inc., 97 P.3d at
182 (citations omitted), the inclusion of such language would certainly be more reflective of an intent to
create perpetual renewals than is the wording of the provision before us in this case. Without specifically
opining on what language would have been sufficient to establish a right to perpetual renewals, however,
we merely hold that the language agreed upon by the parties did not evidence the unequivocal intent that
is necessary.
10
Given the foregoing, we are compelled to conclude that the parties‟ agreement did,
in fact, expire on October 25, 2012. The agreement does not express an unequivocal
intention that it is to be renewed perpetually, and as such, it should be construed as
providing for only one renewal. We affirm the trial court‟s entry of summary judgment
on this ground.
Next, we address the trial court‟s determination that the parties‟ agreement had
expired due to continuing litigation between the two clubs. At the outset, we note that
this alternative ground for summary judgment was not placed into issue by Open Lake
Club. When Open Lake Club filed its complaint for declaratory judgment in May 2012,
it specifically sought a declaration that the parties‟ agreement would expire on October
25, 2012, due to the passage of one renewal term. Open Lake Club‟s request for relief in
its motion for summary judgment was similarly predicated. It was not until the hearing
of the summary judgment motion in this matter that the issue of LHAC‟s continuing
litigation vis-à-vis the parties‟ boundary line became a topic of discussion. Specifically,
following argument by LHAC‟s counsel that the agreement would be “renewed every ten
years provided the parties abide by the agreement[,]” the trial judge shared his opinion
that the parties were not abiding by the agreement. In pertinent part, he observed that
LHAC had moved to set aside a third-party survey that was produced in accordance with
the parties‟ agreement. The litigation relevant to LHAC‟s motion to set aside this survey
was previously discussed in two of our prior opinions. See Open Lake Sporting Club v.
Lauderdale Haywood Angling Club, No. W2009-02269-COA-R3-CV, 2011 WL 198624
(Tenn. Ct. App. Jan. 13, 2011); Open Lake Sporting Club v. Lauderdale Haywood
Angling Club, No. W2014-01574-COA-R3-CV (Tenn. Ct. App. Aug. 18, 2015). As we
discussed in those opinions, LHAC‟s motion to set the third-party surveyor‟s findings
aside was predicated on the belief that the third-party surveyor had not conducted an
independent survey of the disputed boundary areas. Open Lake Sporting Club, 2011 WL
198624, at *4; Open Lake Sporting Club, No. W2014-01574-COA-R3-CV, slip op. at 2.
In speaking from the bench at the August 13, 2013 summary judgment hearing,
the trial judge commented as follows concerning LHAC‟s continuing litigation with
regard to its motion to set the third-party survey aside:
Unfortunately, the litigation hasn‟t ceased, so we have an agreement that, I
think, is probably terminable by your client because the litigation hasn‟t
ceased. My thinking would be I could hold the ruling on this issue in
abeyance, we have the hearing on Mr. Wilson, and we go from there, or
y‟all can go back to the drawing board and see if y‟all can‟t reach an
agreement. But my inclination -- and I don‟t know if I can do this on
summary judgment or not, but it seems to me that the agreement is over
with at your election because of the fact that we have this continuous
litigation.
11
Immediately following these comments, counsel for Open Lake Club stated, “I‟m
obviously not prepared to make that decision standing here today.”
Although the trial court concluded that the parties‟ agreement had “expired . . .
because of the continuing litigation between the two clubs,” we are of the opinion that
LHAC‟s actions in filing its motion to set the third-party survey aside did not constitute a
breach of the parties‟ agreement. There is no dispute that the agreement expressed the
parties‟ “intent . . . [to] settle once and for all the lengthy controversy existing between
the clubs[,]” and there is no dispute that the agreement stated that it would “end all
litigation between the clubs[.]” With that said, however, there is simply nothing in the
agreement stating that the commencement of any future litigation between the clubs
would serve as a basis for terminating it. We will not read into the agreement a provision
that does not exist. Accordingly, we conclude that the trial court erred in declaring that
the agreement had ended due to the ongoing litigation with respect to the validity of the
third-party survey.
Assuming arguendo that this ongoing litigation afforded Open Lake Club with the
right to terminate the agreement, we still conclude that the trial court erred in granting
summary judgment on this basis. Having reviewed the record transmitted to us on
appeal, we note that there is nothing in the record indicating that Open Lake Club ever
elected to terminate the agreement because of LHAC‟s attempts to set the third-party
survey aside or asserted this point as a basis for summary judgment. In fact, as
previously mentioned, counsel for Open Lake Club expressly stated that he was “not
prepared to make that decision” when the trial court discussed a supposed right of
election at the August 13, 2013 summary judgment hearing.
LHAC‟s last issue on appeal challenges the propriety of the $20,000.00 bond
required by the trial court‟s February 4, 2014 order.8 As discussed previously, the trial
court‟s February 4 order stayed enforcement of its December 17, 2013 decree in order to
allow LHAC to use Open Lake for the completion of the 2013-2014 duck hunting season.
A trial court‟s decision concerning a request to stay enforcement of an order is subject to
an abuse of discretion standard of review. See Bunker v. Finks, No. E2001-01496-COA-
R3-CV, 2002 WL 924211, at *6 (Tenn. Ct. App. May 8, 2002) (citation omitted).
Having reviewed the arguments advanced in LHAC‟s brief, we observe that its
grievances concerning the bond are twofold. First, LHAC contends that the bond was
improperly imposed during the period of the initial stay provided by Rule 62.01 of the
Tennessee Rules of Civil Procedure. Second, LHAC maintains that the bond imposed
exceeded the parameters allowed by Rule 62. For the reasons discussed below, we reject
LHAC‟s assertions of error on this issue.
8
Although an order was not entered on the matter until February 4, we observe that the trial court had
previously ruled that a bond would be necessary to stay execution during the course of the January 9,
2014 hearing.
12
LHAC‟s first argument suggests that the trial court ran afoul of Rule 62.01 by
requiring the posting of a bond before the expiration of the thirty-day period following
the entry of the trial court‟s December 17, 2013 decree. Although it is true that Rule
62.01 generally prohibits parties from enforcing a judgment until the expiration of thirty
days after its entry, the rule also provides that “[i]n injunction and receivership actions . .
. an interlocutory or final judgment shall not be stayed after entry unless otherwise
ordered by the court and upon such terms as to bond or otherwise as it deems proper to
secure the other party.” Tenn. R. Civ. P. 62.01. As Open Lake Club explained in its
appellate brief, the relief afforded to it in this case was essentially injunctive in nature. It
originally brought suit for the trial court to declare that the parties‟ agreement had expired
and for other relief as the trial court deemed just and equitable. When the trial court
ultimately concluded that the agreement had expired, it also determined that LHAC‟s
right to use Open Lake had terminated. In light of the nature of relief provided by the
trial court‟s December 17 decree, we agree with Open Lake Club that enforcement of the
judgment would not have been stayed absent the order of the trial court. Because the
initial stay provided by Rule 62.01 was simply inapplicable, the trial court did not err in
conditioning a stay upon the posting of a proper bond.
Although LHAC also suggests that the bond imposed by the trial court exceeded
the parameters of Rule 62, we fail to discern any error on the part of the trial court in
ordering LHAC to post the bond that it did. In this case, the trial court determined that
LHAC no longer had rights to the use of Open Lake. LHAC‟s continued use of the lake
was only made possible by virtue of the trial court‟s imposition of a stay, and the trial
court correctly identified that LHAC‟s use of the lake had value that required security in
the form of a bond. As the chancery court elaborated in its February 4 order:
The Court notes that it has broad discretion regarding stays as
granted by Rule 62.07, which provides that “[n]othing in this Rule shall be
construed to limit the power of the court in exceptional cases to stay
proceedings on any other terms or conditions as the court deems proper.”
Considering all the circumstances, the Court agrees that a limited stay of
execution is appropriate but only upon LHAC‟s posting of a bond in an
amount necessary to secure and protect OLSC. In setting the amount of the
bond, the Court has considered the affidavits . . . filed by [Open Lake
Club], the statements of counsel at the hearing, the arguments of the parties,
and, to some extent, the agreement of the parties as announced at the
hearing.
Based on the statements of counsel and the record as a whole, it
appears to the Court that LHAC‟s primary use of Open Lake is for duck
hunting, fishing, and recreational use. At the hearing, LHAC agreed to
refrain from any use of Open Lake for fishing or other recreational use,
13
except for duck hunting through the end of the current duck hunting season
on January 26, 2014. Considering all of the circumstances and in light of
the agreement by LHAC concerning its limited use of Open Lake, the Court
finds that the appropriate amount for the bond is $20,000.00.
We find no error in the trial court‟s reasoning. As a matter of equity, it was only
appropriate that LHAC‟s continued use of the lake be conditioned upon the posting of a
bond. Although LHAC characterizes the bond as “rent disguised as a bond” and suggests
that the bond amount will automatically be remitted to Open Lake Club upon this Court‟s
affirmance of the trial court‟s summary judgment order, this is simply inaccurate. In its
February 4 order, the trial court stated as follows: “in the event the Court‟s Final Decree
is affirmed on appeal, then the Court shall set a hearing to determine the amount owed by
LHAC to [Open Lake Club] for LHAC‟s use of Open Lake during the pendency of the
limited stay granted herein, for which the bond shall act as security, whether in whole or
in part.” Contrary to the arguments advanced by LHAC, this language indicates that the
$20,000.00 bond is not a preordained payment that will pass to Open Lake Club
following our disposition in this appeal. Rather, as is the nature of a bond, it merely
secures potential payment for an amount that is to be determined at a later date.
Moreover, based on the affidavits signed by Open Lake Club members attesting to the
value that certain duck blinds had for the remainder of the 2013-2014 duck hunting
season, we cannot conclude that the trial court erred in requiring a bond in the amount of
$20,000.00.9
Conclusion
Although we conclude that the trial court erred in concluding that the parties‟
agreement had ended due to the ongoing litigation associated with LHAC‟s motion to set
aside the third-party survey, we affirm the trial court‟s conclusion that the parties‟
agreement expired following the end of one renewal term. The entry of summary
judgment was appropriate on that basis. Further, we conclude that the trial court did not
err in ordering LHAC to post a $20,000.00 bond to stay execution of its order granting
summary judgment. The costs of this appeal are assessed against the Appellant,
Lauderdale Haywood Angling Club, and its surety, for which execution may issue if
necessary. We hereby remand this case to the trial court for the collection of costs,
enforcement of the judgment, and for further proceedings as may be necessary and are
consistent with this Opinion.
_________________________________
ARNOLD B. GOLDIN, JUDGE
9
In their affidavits, Open Lake Club members explained that the leasing of duck blinds is a common
practice in West Tennessee. Based on the values attested to by its members, Open Lake Club sought to
have the trial court impose a bond in an amount over $50,000.00.
14