IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 24, 2010 Session
EARLENE WADDLE v. LORENE B. ELROD
Appeal from the Chancery Court for Rutherford County
No. 07-0147CV Robert E. Corlew, III, Chancellor
No. M2009-02142-COA-R3-CV - Filed April 29, 2011
The trial court’s enforcement of a settlement agreement between the parties’ attorneys is
appealed on the sole basis that the Statute of Frauds precludes enforcement since the parties
never signed any agreement and the settlement pertained to real property. Because the
Statute of Frauds concerns the sale of real property interests and not settlement agreements
touching upon real property interests, it is not a bar to enforcement of a settlement agreement.
The trial court is affirmed on that issue. The trial court’s assessment of court costs, however,
is reversed as it differs from the parties’ agreement.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed in Part, Reversed in Part
P ATRICIA J. C OTTRELL, P.J., M.S., delivered the opinion of the Court, in which F RANK G.
C LEMENT, J R. and A NDY D. B ENNETT, JJ., joined.
W. Kennerly Burger, Murfreesboro, Tennessee, for the appellant, Lorene B. Elrod.
Mary Beth Hagan, John T. Blankenship, Murfreesboro, Tennessee, for the appellee, Earlene
Waddle.
MEMORANDUM OPINION 1
The narrow issue on appeal concerns whether the Statute of Frauds prohibits
enforcement of a settlement agreement between two parties concerning real property.
The cross complainants who brought this appeal were originally defendants in this
action brought by Regent Investments (“Regent”). The complaint filed by Regent in January
of 2007 alleged that it had a contract to purchase residential property (“Property”) in
Rutherford County from the defendant, Earlene Waddle. According to the complaint, Ms.
Waddle warranted that she could convey clear title to the Property. However, the complaint
alleges that in violation of this warranty, Ms. Waddle had conveyed one-half her interest in
the Property to her niece, Ms. Lorene Elrod. Regent sought to recover for breach of contract
and a declaratory judgment as to ownership of the Property.
In May of 2007, Ms. Waddle then filed a cross complaint against her niece, Ms. Elrod,
alleging, among other things, undue influence over Ms. Waddle in the conveyance of the
Property.
Regent dismissed its claims against Ms. Waddle and Ms. Elrod in June of 2009 in
exchange for return of the earnest money Ms. Waddle had received from Regent.
Consequently, the remaining action was between Ms. Waddle and Ms. Elrod.
Ms. Elrod and Ms. Waddle reached a settlement agreement memorialized by e-mails
between their counsel. Over Ms. Elrod’s later objection, the trial court entered an order
recognizing their agreement that Ms. Elrod would return the one-half interest in the Property
to Ms. Waddle.
Ms. Elrod appeals arguing that the trial court erred by finding the parties had reached
an enforceable settlement agreement in violation of the Statute of Frauds. Ms. Waddle
appeals only the trial court’s assessment of court costs against her.
1
Tenn. R. Ct. App. 10 states:
This Court, with the concurrence of all judges participating in the case, may affirm, reverse
or modify the actions of the trial court by memorandum opinion when a formal opinion
would have no precedential value. When a case is decided by memorandum opinion it shall
be designated “MEMORANDUM OPINION,” shall not be published, and shall not be cited
or relied on for any reason in any unrelated case.
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A NALYSIS
The following facts are not disputed on appeal. The day before trial, counsel for Ms.
Waddle received an offer from Ms. Elrod’s counsel to settle the case if Ms. Elrod would
return the one-half interest in the Property. Counsel for Ms. Waddle accepted the offer if she
would bear no court costs. The parties’ attorneys confirmed the agreement in a series of e-
mails. The key e-mail to Ms. Elrod’s attorney from Ms. Waddle’s attorney provides as
follows:
This confirms that we have settled this case on the following terms: Elrod
deeds property interest back to Wadle (sic). Both parties sign full release,
Wadle (sic) bears no court costs. Let me know if I have correctly stated our
agreement.
Ms Elrod’s attorney responded “that is the agreement” and that Ms. Waddle’s attorney
would draft the deed and order with no admission of guilt. Ms. Elrod, however, refused to
sign the documents necessary to effectuate this agreement. Ms. Elrod’s attorney withdrew
based on her refusal to proceed with the settlement.
Ms. Waddle filed a motion for the trial court to enter an Order of Settlement
recognizing a settlement agreement that had been reached between the parties. Over the
objection of Ms. Elrod, on September 15, 2009, the trial court entered an Order Entering
Settlement Agreement finding that the case between them had been resolved and an order
memorializing their agreement should be entered.
Considering testimony and reviewing the e-mail correspondence, the trial court found
the parties reached the agreement in the e-mail correspondence. The trial court specifically
found that when Ms. Elrod refused to sign the necessary documents she stated that she had
changed her mind and she to no longer wanted to settle. Accordingly, the trial court entered
an order that all of Ms. Elrod’s interest in the Property is divested from Ms. Elrod and wholly
vested in Ms. Waddle. All claims between Ms. Waddle and Ms. Elrod were dismissed with
each party bearing their own attorney’s fees and costs. Costs of the proceeding below were
assessed against Ms. Waddle.
On appeal, Ms. Elrod does not challenge the factual findings by the trial court or that
an agreement was reached by the parties to settle. Instead, Ms. Elrod argues that since the
settlement agreement involved real property, then under the Statute of Frauds, Tenn. Code
Ann. § 29-2-101(A)(4), the parties’ agreement is unenforceable.
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Tenn. Code Ann. § 29-2-101(A)(4) provides that no action shall be brought “[u]pon
any contract for the sale of lands, tenements, or hereditaments” unless the agreement or
memorandum or note is in writing and signed by the party or a lawfully authorized
representative.
The settlement agreement between the parties, however, was just that - an agreement
to settle a lawsuit between the parties and was not, as described in the Statute of Frauds, a
sale of any interest in real property. While one party agreed to convey an interest in real
property to effectuate the agreement, it was not a “contract for the sale” of an interest in real
property. Consequently, Ms. Elrod’s appeal fails.
Ms. Waddle, on the other hand, appeals the trial court’s assessment of court costs
against her since the parties’ explicit agreement provided that she would pay no court costs.
We agree and reverse the trial court’s assessment of court costs against Ms. Waddle.
The trial court is affirmed except as it relates to the trial court’s assessment of court
costs against Ms. Waddle, which assessment is reversed, and the matter is remanded for
assessment of court costs against Ms. Elrod.
Costs of appeal are assessed against Ms. Elrod for which execution may issue if
necessary.
_________________________________
PATRICIA J. COTTRELL, JUDGE
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