Tennessee Business Litigation Lawyers Blog

Legal Issues Regarding Lease Renewal Provisions In Tennessee

Published on: March 28, 2012 | by J. Ross Pepper

Commercial lease cases sometimes involve disputes about lease renewal provisions and/or the lessee’s (tenant’s) right to renew the lease for an additional period of time. There are some general rules which Tennessee courts follow in resolving lease cases where there are disputes about renewal.

First, if someone leases property and obtains, in the lease agreement, the right to renew the lease for an additional term after the original lease term expires, that right cannot be taken away by the lessor of the property (the landlord) unless there is also a contract provision allowing the lessor to do just that (which, typically, there would not be). Second, if the lessor (landlord) assigns a lease to another party or sells the property which is leased, the successor to the lessor will be subject to the obligation to honor the lessee’s (tenant’s) right to renew. (If the lease agreement states that, if the property is assigned or sold, the lessee (tenant) loses its right to renew, then, in that event, the general rule will not apply, and the lessee (tenant) will not have the right to renew).

Where a lease contains specific terms about the manner and time period by which the lessee (tenant) must give notice of its intent to renew the lease, then, absent a waiver of those provisions by the lessor (landlord), the lessee must give the renewal notice in the manner and within the time period set forth in the lease. There have been cases in Tennessee where tenants (lessees) have not complied with terms related to renewal, yet have been successful in having a court decide that the renewal was effective.

Tennessee Case Sheds Light On Bank Accounts And Rights Of Survivorship

Published on: March 22, 2012 | by J. Ross Pepper

Sometimes, a dispute will arise after someone passes away regarding who is entitled to receive monies held by that person in a bank account or other type of account like a 401(k) account, money market account, mutual fund account, CD, or the like. Some beneficiaries or family members may have expected that all, or part, of the money in the account would be distributed to them by virtue of the terms of the Will of the person who died. They may find out, after the death of the person who established the accounts, that another relative or person claims total ownership of the funds in the account by virtue of the right of survivorship status of the account, or because the bank, or other account institution, was directed to pay the funds in the account to a designated beneficiary on the death of the person who established the account or owned it.

In a recent undue influence case, the Tennessee Court of Appeals explained some basic Tennessee law that comes into play when a Will directs one thing as to the distribution of account funds, but someone claims that the funds in the account should go to them, irrespective of the terms of the Will, because the account had a right of survivorship in their favor. The case involves a mother (“Mother”), her son (“Son”) and the Son’s siblings (“Siblings”).

Mother’s Will provided that Son was to receive the real estate owned by Mother, and that the Siblings were to receive the rest of her monetary assets. At the time of Mother’s death, she owned two accounts: (1) a bank account at SunTrust Bank; and (2) a money market account. Son asserted that the funds in both accounts passed outside of Mother’s estate because they were survivorship accounts and not sole owner accounts. The Siblings asserted that the funds in the accounts should not pass outside of the estate.

Judge And Jury At Odds In Recent Will Contest And Undue Influence Case

Published on: February 29, 2012 | by J. Ross Pepper

In a recent will contest and undue influence case decided by the Tennessee Court of Appeals, the Court of Appeals sustained the decision of the trial judge to set aside the verdict of the jury and to grant a new trial. The opinion of the court of appeals, which characterized the case as a “classic will contest case,” discusses two of the grounds upon which wills are frequently contested: (1) Lack of competency of the person who executes the will; and (2) undue influence.

(A will can be held invalid if the person who executed it was competent, but, nevertheless, he or she executed it as the result of the undue influence of another person.) The case also discusses what Tennessee lawyers refer to as the “13th Juror Rule.”

Here are the facts of the case:

Breach Of Real Estate Contract Case Sheds Light On “As Is” Clause And More

Published on: January 20, 2012 | by J. Ross Pepper

A recent Tennessee case involving the breach of a real estate contract provides some straightforward and pragmatic analysis and discussion of two issues that arose from that contract. Those issues might easily arise in other real estate cases, construction cases, or breach of contract cases. Those two issues were: (1) Whether an “as is” clause in the real estate contract was effective; and (2) what damages the homebuyers (“Buyers”) could recover from the Sellers who had represented that the home in question was connected to the sewer when it was not.

Here are the facts that were before the trial court in the case:

• The Sellers provided the Buyers with a purchase and sale agreement which contained the statement: “The plumbing system is connected to the city sewer.”

Court Finds Vested Trust Created In Recent Will And Trust Case

Published on: December 31, 2011 | by J. Ross Pepper

In a recent case involving the interpretation of a will and a trust created in the will (a testamentary trust), the Tennessee Court of Appeals reversed the decision of a trial court that the corpus of the trust should be distributed to the brother of the deceased, and held that it should be distributed to the wife of the beneficiary of the trust. The case involved the will of a one Steve Woodward (the “Deceased”).

The Deceased’s Will provided that, at his death, a trust (the “Trust”) was to be created for the benefit of his son (the “Son”). Under the terms of the Trust, Son was to receive monthly payments of $1,000.00 per month until he reached the age of 50. When Son reached age 50, the trustee of the Trust was to distribute the corpus of the Trust to him. Son outlived his father, the Deceased, but died at the age of 33.

The brother of the Deceased (the “Brother”) was given all of the Deceased’s residual estate in the Will. (Residual estate refers to property of a testator (a person who makes a will) that is not specifically given to anyone else in a will). What the Deceased had apparently not planned for, and had definitely not specifically addressed in his Will, was what would happen to the property in the Trust if the Son did not live to be 50.

Claims Against Estates: Deadlines For Filing In Tennessee

Published on: November 23, 2011 | by J. Ross Pepper

If a living person owes you money, under Tennessee law, generally, you have six years to file a breach of contract lawsuit against that person to collect your money. Once that person passes away, however, certain Tennessee laws set time deadlines for filing claims against estates. These laws may drastically shorten the time within which you must take action on your claim or lose it.

It is not necessary that you have a court judgment against the deceased person for the debt you are owed in order to make a claim against the estate of the deceased person. The personal representative of the deceased person’s estate might challenge your claim by filing an “exception” to it, but cannot prevent you from filing your claim and bringing it before the probate court.

In Tennessee, the longest period that a creditor ever has to file a claim against an estate is twelve months from the date of the death of the deceased. That time period may be shorter (as discussed below). The reasoning behind requiring creditors to file their claims with a probate court within no later than one year of the death of the deceased is to allow heirs and beneficiaries of the estate of the deceased to receive their distributions without having to contend with the claims of creditors made years after the distributions.

Contractor Still Liable For Work Delegated To Subcontractor Says Supreme Court Of Tennessee

Published on: November 17, 2011 | by J. Ross Pepper

In a recent breach of contract case involving a construction contract for the replacement of a roof, the Supreme Court of Tennessee made two holdings that are crucial to understand for those lawyers, builders, and other parties involved in construction contracts, particularly, those carried out, in whole or in part, by subcontractors. First, even if a contractor does not make an express representation that it will perform its work in a workmanlike manner, that condition will be implied, by operation of law, into its contract (unless, of course, such a warranty is expressly disclaimed). Second, the contractor cannot avoid financial responsibility when work is not performed in a workmanlike manner because the contractor hired a subcontractor to perform the work (unless there is some sort of disclaimer by the contractor).

Here are the basic facts of the case:

• The Defendant was a roofing contractor who contracted to replace the Homeowners’ roof

Case Highlights Legal Difference Between Agents And Independent Contractors

Published on: October 13, 2011 | by J. Ross Pepper

In a recent decision, the Tennessee Court of Appeals reversed a trial court’s grant of summary judgment to a defendant drug testing company in a negligence case. The case is worth a blog post because, not only is it interesting, but also, it discusses three issues of law that arise frequently enough in Tennessee that they are worth reviewing: (1) negligence law; (2) exculpatory clauses; and (3) the difference between an agent and an independent contractor.

Admiral Webster, the Plaintiff, was an employee of Koyo Corporation. Koyo, the employer, had a workplace substance abuse policy. Webster, the employee, had signed an acknowledgment of the substance abuse policy wherein he agreed:

“to hold Koyo and its agents harmless from any liability arising in whole or in part from any act of negligence by any of them in connection with collection of specimens, testing, and use of the results…”

Court Rules Employee Not Entitled To Reimbursement For Classes Or Overtime Pay

Published on: September 8, 2011 | by J. Ross Pepper

A recent breach of contract and overtime pay case which was decided by the Tennessee Court of Appeals, Taylor v. Del-Nat Tire, provides some excellent insight and knowledge as to two legal issues that are prevalent in many employer/employee situations. It also provides insight on one other issue: How a case might progress through the Tennessee civil judicial system.

First, the case emphasizes the point that, regardless of what might seem fair, if you want to prevail in a breach of contract case, you had better be able to prove that there was a contract. Second, the case reminds us that, where an employee brings a case under the Fair Labor Standards Act (“FLSA”) for unpaid overtime, he or she must, with certain pretty rare exceptions, prove that he or she worked more than forty hours in a workweek (the key concept being the workweek and not Sunday or holiday work). Third, for litigants faced with an adverse verdict from a trial court, the case evidences that trial courts can misconstrue even basic law with straightforward facts.

Here are the salient facts of the case:

Breach Of Contract Case For Real Estate Commission Decided In Favor Of Homeowner

Published on: August 9, 2011 | by J. Ross Pepper

A recent Tennessee breach of contract case involving a real estate commission should probably be on the mandatory reading list for all real estate agents and agencies in Tennessee. (Ditto for any lawyer drafting listing agreements for real estate agencies). The pertinent facts of the case are as follows:

• The homeowner/seller (“Seller”) entered into a six month exclusive listing agreement with a realty company, Crye-Leike, for the sale of her home (“Home”)

• The listing agreement provided that Crye-Leike would receive a 7% commission if the home was sold during the six month term of the listing agreement

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