Lunn Real Estate Investments v. Boiler Supply Company, Incorporated

IN THE COURT OF APPEALS OF TENNESSEE,
AT NASHVILLE

_______________________________________________________

)
LUNN REAL ESTATE ) Davidson County Circuit Court
INVESTMENTS, INC., ) No. 96C 1688
)
Plaintiff/Appellant. )
)
VS. ) C.A. No. 01A01-9704-CV-00191
)
BOILER SUPPLY COMPANY, )
INCORPORATED, )

Defendant/Appellee.
)
)
FILED
)
May 6, 1998
______________________________________________________________________________

From the Circuit Court of Davidson County at Nashville. Cecil W. Crowson
Honorable Hamilton Gayden, Jr., Judge Appellate Court Clerk

H. Naill Falls, Jr., FALLS, RAMSEY & VEACH, P.L.C., Nashville, Tennessee
Attorney for Plaintiff/Appellant.

Charles Patrick Flynn, Nashville, Tennessee
Attorney for Defendant/Appellee.

OPINION FILED:

AFFIRMED AND REMANDED

FARMER, J.

CRAWFORD, P.J., W.S.: (Concurs)
TOMLIN, Sr. J.: (Concurs)
 This case involves a contractual dispute between the lessor and lessee of certain

commercial property. The appellant, Lunn Real Estate Investments, Inc. (Lunn), leased the subject

premises to the appellee, Boiler Supply Company, pursuant to an agreement executed by the parties

on January 1, 1989. On August 31, 1995, Lunn served Boiler Supply with written notice that it was

requiring the latter to vacate the premises by October 1, 1995.1 On October 5, 1995, Lunn filed a

detainer action in the general sessions court seeking possession of the property. By order entered

April 19, 1996, the court found the claim for possession moot due to Boiler Supply’s vacating of the

premises on November 30, 1995, but awarded Lunn a judgment for two months holdover rent plus

attorney’s fees.2 Lunn appealed the decision to circuit court where, after a hearing, a judgment was

entered for Lunn for $17,790. Lunn now appeals from that decision to this Court requesting

additional compensatory damages, due to Boiler Supply’s alleged failure to maintain the premises

in accordance with the contract, and attorney’s fees. For the reasons set forth below, we affirm.

The subject property is approximately 50 years old and consists of two main parts:

the main or office building, covered with a “flat” or tar roof and a shed or “warehouse” structure,

built and attached thereto in the 1960s. The warehouse roof is rounded and made of sheet metal.

The property housed the business of Boiler Supply for over 30 years. Both the property and the

business were family owned. Eddie Lunn, Sr., founded and operated the business until his death in

1978. Since then, his son, Eddie Lunn, Jr., has served as its president.3 Gloria Lunn Allison and

Beverly Lunn Young began serving on the board of directors of Boiler Supply sometime after their

father’s death. Boiler Supply originally leased the property from Mr. Lunn, Sr. and his wife, Gladys.

In 1984, Lunn Real Estate Investments was established and Boiler Supply began leasing the property

from the appellant. Lunn’s owners were Mr. Lunn, Jr., his mother, Gladys and two sisters, Ms.

Allison and Ms. Young. Its assets consisted of three properties, including the one in question. In

1
The record indicates that in August 1995, pursuant to a separate lawsuit brought by
Boiler Supply, a judgment was entered holding that the lease had previously terminated in
December 1991 and that Boiler Supply had been a month-to-month tenant from that point
forward. It was Boiler Supply’s contention that the lease had terminated at that time.
2
The general sessions court awarded judgment in the amount of $7,790 plus
approximately $4,000 in attorney’s fees.
3
Mr. Lunn testified that Boiler Supply is in the business of “repair[ing] big boilers. The
kind . . . that are used in hospitals, the operations of industries, [and] large commercial buildings,
. . .” It also engages in construction projects and its employees include sales engineers,
electricians and welders.
May 1990, the family assets were divided resulting in Ms. Allison and Ms. Young relinquishing their

respective interests in Boiler Supply and Mr. Lunn, Jr. relinquishing all interest in Lunn Real Estate.

Throughout the years, various agreements were entered into regarding the leasing of

the premises. The one at issue provides the following, as here relevant:

2. Terms of Lease. Lessor leases to Lessee, to have and to hold the
same subject to all terms and conditions set forth herein for a term of
three (3) years, beginning on the 1st day of January, 1989, and ending
on the 31st day of December, 1992, unless sooner terminated as
provided herein . . .4

....

7. Maintenance of Premises

7.1 Lessee agrees at its sole risk and expense to maintain the Premises
in good and substantial condition, order and repair except for ordinary
depreciation and ordinary wear and tear throughout the Term of this
Lease. Lessee agrees not to commit any waste of the Premises, and
upon the expiration or other termination of this Lease, Lessee
covenants to surrender possession of the Premises to Lessor in as
good a condition as the same were in at the commencement of the
Term, except for reasonable wear and tear and normal depreciation.
Lessee shall maintain and make all replacements of depreciable items
and capital items located on said Premises.

....

7.3 In the event Lessee should neglect to maintain the Premises or to
repair or replace any damage or injury caused by Lessee, it’s agent or
invitee to the Premises within thirty (30) days of occurrence, Lessor
shall have the right (but not the obligation) to cause repairs and
corrections to be made, and any reasonable cost thereof shall be
payable to Lessee to Lessor as additional rent on the next rental
installment date.

....

8.1 Lessee shall not create any openings in the roof or exterior walls,
nor make any alterations, additions, or improvements to the Premises
without prior consent of Lessor. Lessee shall have the right, but not
the obligation, at all times to install equipment, machinery, additional
air conditioning and heating equipment and trade fixtures, provided
Lessee complies with all applicable governmental laws, ordinances
and regulations; . . .

8.2 . . . Lessor recognizes that from time to time throughout the
initial and any extension or renewal term hereof, Lessee will cause to
be placed upon the Premises certain machinery, equipment, fixtures
and trade fixtures. Lessor hereby acknowledges and agrees that all

4
The obvious ambiguity in this provision led to the unrelated litigation hereinabove
mentioned.
 items of machinery, equipment, fixtures and trade fixtures so placed
or located upon the Premises shall be and remain the sole property of
Lessee . . . and shall be and remain personal property regardless of the
manner in which said equipment and fixtures are attached to the
Premises; that such equipment and fixtures shall not at any time be
deemed a part of the realty; and that such equipment and fixtures may
be removed from the Premises by Lessee . . . at any time before the
expiration or other termination of this Agreement; . . .

....

21. Holding Over. Should Lessee or any of its successors in interest
remain in possession of (or hold over) the Premises or any part
thereof after the expiration of the Term, unless otherwise agreed in
writing, such holding over shall constitute and be construed as
tenancy from month to month only, at a monthly rental equal to the
rent paid for the last month of the Term of the Lease, and otherwise
subject to the conditions, provisions and obligations of this Lease
insofar as the same are applicable to a month to month tenancy. . . .

22. Events of Default.

....

(b) Lessee shall fail to comply with any Term, provision or covenant
of this Lease, other than the payment of rent, and shall not cure such
failure within twenty (20) days after due written notice thereof to
Lessee;

....

24. Attorneys’ Fees. If, on account of any breach or default by
Lessor or Lessee of their obligations to any of the parties hereto,
under the terms, covenants and conditions of this Lease, it shall
become necessary for any of the parties hereto to employ an attorney
to enforce or defend any of their rights or remedies hereunder, and
should such party prevail, it shall be entitled to any reasonable
attorneys’ fees incurred in such connection.5

The appellant argued before the trial court, and now on appeal, that the appellee

breached the lease agreement by failing to comply with its obligations under paragraph 7, or more

specifically, by failing to replace depreciable and capital items and by removing five infrared heaters

upon vacating the property. Appellant contends that such breach entitles it to additional

compensation. In ruling, the trial court found that “there was waste committed,” but “not

5
On May 3, 1990, the parties amended the lease to add language stating that at the end of
its initial term, it “would automatically be extended at the Lessor’s option” until the earlier of
certain specified events: the 90th day following the death of Gladys Lunn or the end of the 90th
day after which the lessee provides the lessor with a contract of sale for the underlying real estate.
The record indicates that Appellee began making attempts to purchase the property in 1992. The
amendment further provided that the parties “reaffirm[ed]” the January 1, 1989 Lease Agreement
and “agree[d] to be bound by all the terms and provisions [thereof] . . . .”
intentional[ly].” The court continued, “[w]aste in the sense that the sub-ceiling of the metal roof

rotted out in places, all of which, in the court’s opinion, could have been prevented.” The court

found, however, that the appellee had not acted “unreasonable” in failing to replace the roofs and

expressly held that it was finding for the appellant “in a very small amount.” The court awarded a

judgment for $7,500, plus $2,500 in attorney’s fees and $7,790 representing the two months rent that

appellee remained on the premises after being notified to vacate. Finally, the court found that the

infrared heaters were fixtures which, under the contract, could be removed by the appellee upon

vacating.

Appellant raises the following issues on appeal:

1. In plaintiff-lessor’s action against defendant-lessee for
breach of a commercial lease agreement, did the trial court err in
refusing to enforce a lease clause requiring the lessee to make
necessary replacements of depreciable capital items[?]

2. Did the trial court err in ruling the plaintiff-lessor could not
recover the repair costs it incurred upon lessee’s surrender because
the repair costs allegedly exceeded the value of the depreciation
caused by lessee’s failure to maintain the property[?]

3. Did the trial court err in failing to compensate plaintiff-
lessor for lost rents incurred during the time the premises were
unleasable and undergoing repairs following lessee’s surrender of the
premises?

4. Did the trial court err in failing to compensate plaintiff-
lessor for the value of heating units lessee removed from the premises
in violation of the lease agreement?

5. Did the trial court err in reducing plaintiff’s damage award
because of acrimony between opposing family members,
notwithstanding the undisputed expert proof that plaintiff’s damage
claims were reasonable and necessary?

Appellee presents the following additional issue:

The trial court erred when it awarded the Plaintiff damages in
excess of the hold-over rent which had already been tendered.
Because of the tender, the Plaintiff was not entitled to recover
attorney’s fees or court costs.

Our review of this case is pursuant to Rule 13(d) T.R.A.P. which provides for a de
novo review upon the record, accompanied by a presumption of correctness of the trial court’s

findings of fact, unless the evidence preponderates otherwise. E.g., Northland Ins. Co. v. State

Farm Mut. Auto. Ins. Co., 916 S.W.2d 924, 926 (Tenn. App. 1995). No presumption of correctness

attaches to the trial court’s conclusions of law. Lucius v. City of Memphis, 925 S.W.2d 522, 524

(Tenn. 1996); Presley v. Bennett, 860 S.W.2d 857, 859 (Tenn. 1993).

Appellant’s first issue concerns the trial court’s alleged error in failing to enforce the

lease provision under paragraph 7, section 7.1, which states that the “[l]essee shall maintain and

make all replacements of depreciable items and capital items located on said Premises.” Appellant

argues that section 7.1 is not ambiguous and requires the appellee to replace, at its own expense,

those “worn-out” capital items, including the two roofs. Appellee insists that it has no obligation

in this respect because it was never given notice and an opportunity to cure pursuant to paragraph

22(b). Appellant counters that the latter provision is inapplicable because it is not now seeking to

declare a default under and terminate the lease as it had ended prior to the lawsuit and before

Appellee vacated the premises. Appellant further contends that until Boiler Supply had vacated the

premises, it could not make a final determination of whether the property had been surrendered in

the condition required under paragraph 7.

The trial court found both the 1989 Agreement and its 1990 amendment ambiguous.

As to the specific provision in question, the court found that “[i]f read literally, that would mean that

by signing this lease, the lessee was required to replace all capitol [sic] items. Not only was that not

done by the parties, but The Court does invoke the parol evidence rule, . . . . Basically, this was a

conditional lease, . . . that at the death of . . . Gladys Lunn, it evoked the termination part. Or read

one way, it almost requires the lessors to sell property to the lessee with three estimates . . . . But

that, obviously, wasn’t the conduct of the parties, either, and that wasn’t done . . . . obviously, the

lessee . . . really didn’t know what kind of lease they had in the first place. So you have to read that

in conjunction with the conduct of the parties before 1989, the fact that this is a family piece of

property . . . . I’ll have to put all of that into the mix.”

The cardinal rule for contract interpretation is to ascertain the intention of the parties

and give effect to those intentions consistent with legal principles. HMF Trust v. Bankers Trust
Co., 827 S.W.2d 296, 299 (Tenn. App. 1991). To determine the parties’ intent, we first look to the

material contained within the four corners of the document itself. Words or phrases contained in the

instrument are to be given their ordinary and usual meaning, unless otherwise expressly provided.

Rogers v. First Tennessee Bank Nat’l Ass’n, 738 S.W.2d 635, 637 (Tenn. App. 1987); Jaffe v.

Bolton, 817 S.W.2d 19, 25 (Tenn. App. 1991). In determining whether the meaning of the contract

is clear or ambiguous, the language in dispute must be examined in context of the entire agreement.

Gredig v. Tennessee Farmers Mut. Ins. Co., 891 S.W.2d 909, 912 (Tenn. App. 1994). If the

language of the contract is clear and unambiguous, it must be construed as written. Cummings v.

Vaughn, 911 S.W.2d 739, 742 (Tenn. App. 1995). In such case, neither party is to be favored when

construing the contract. Heyer-Jordan & Assoc., Inc. v. Jordan, 801 S.W.2d 814, 821 (Tenn. App.

1990). The language of the contract is said to be ambiguous when its meaning is uncertain and when

it can be fairly construed in more than one way, Gredig, 891 S.W.2d at 912, or, as stated by the court

in Book-Mart of Florida, Inc. v. National Book Warehouse, Inc., 917 S.W.2d 691, 693 (Tenn.

App. 1995), “when a court [cannot] perceive the respective obligations of the parties for

enforcement.” If the contract is determined ambiguous, we are to determine the intention of the

parties not only from its language but also from the surrounding facts and circumstances. HMF

Trust, 827 S.W.2d at 299.

The foregoing rules of construction in mind, we find the plain language of paragraph

7 to require Appellee to maintain and make all replacements of depreciable and capital items. It is

important to note, however, that during the course of the lease the parties operated under two

different tenancies. The second being a month-to-month tenancy from December 1991 forward.

Paragraph 21 of the lease, which pertains to any holdover by the lessee, states that such period shall

be construed as a month-to-month tenancy and “subject to the conditions, provisions, and obligations

of this Lease insofar as the same are applicable to a month-to-month tenancy.” The eviction notice

Appellant delivered to Appellee dated August 31, 1995, acknowledges that the latter had been “a

month-to-month tenant since December 1, 1991.” We do not believe paragraph 7 (as it pertains to

the replacement of depreciable items) may reasonably be interpreted to apply to a month-to-month

tenancy. Thus, the contract does not require a month-to-month tenant to replace capital items, such
as the roof.6

To require the appellee to replace those depreciable and capital items as Appellant

suggests, it would seem necessary to know exactly at what point in time the roof and other such

items needed replacing. A 1992 “home condition analysis report” conducted on behalf of Appellant

and provided to the appellee states that the roofs needed “repair.” The report specifically reads:

“[t]he structure’s cover roof will require repair in order to meet minimum satisfactory requirements.

It is advised that a qualified and experienced roof contractor provide bids of repairs. It should be

noted that at times it may be difficult to find a qualified contractor to perform repairs on a roof cover.

Often they require replacement, due to the implied warranty of repair work on a roof system.” The

report further states that “[t]he water heating system installation appears not to be functional or a[n]

improper installation. Replacement may be necessary.” As to the heating and air conditioning

systems, the report states that both “appear[ ] not to be working properly” and that the “services of

a qualified service person [were] needed” for further evaluation. Nothing in the record indicates that

these items were in need of replacement prior to the establishment of the month-to-month tenancy.

Moreover, the court found and the record establishes that “[t]here was never a demand to replace the

roof at any time until after the [present] lawsuit was filed.” We further do not find the last sentence

of paragraph 7 to come into play only upon the lessee’s surrender of the premises. Certainly, the

appellant, as a means of preserving its own property, could have come upon the premises at any time

to inspect its condition. We, therefore, conclude that Appellee was not required, as a month-to-

month tenant, to replace the depreciable and capital items on the premises. However, we do find the

record to support the finding that Boiler Supply improperly maintained the premises (insofar as

repair) while in occupancy.

Proof presented at trial included the following: Mr. Lunn testified that Boiler Supply

“. . . tried to make repairs on an as needed basis, on both roofs, the metal roof and the tar roof.” He

acknowledged that during the six years of the lease, no outside roofing company was employed to

repair the roofs. He believed the roofs on the property were in as good a condition in November

1995 as they were in January 1989 even though they leaked throughout these years. He was

6
Ms. Allison testified that Appellee paid approximately $19,000 to replace the two roofs
after Boiler Supply vacated the premises.
questioned:

Q. So those leaks just continued to leak and the roof obviously
deteriorated as a result. Wouldn’t you agree with that?

A. I would agree with that. I would have to state that there were
repairs to the metal roof in some cases that were made by our own
personnel . . . I can’t be specific with those, but cases where wind
damage or something like that would occur, we would attempt to
repair something with our own people, if it were appropriate.

Lunn further acknowledged that the shed roof leaked at the end of the lease. He explained as

follows:

This shed . . . covered a dirt yard, truck unloading dock, and a truck
turnaround. . . . it was nothing but dirt . . . . The truck dock was
covered with the flat roof that is there . . . this shed was built simply
to cover that dirt area.

. . . I say all of that to say . . . , we don’t bring a lot of boilers
in there, [but do on occasion]. A boiler, by nature, . . . is an
extremely dirty piece of the equipment . . . . We have to clean them
. . . . the shed, I don’t believe, ever was intended to keep water out
completely. The floor was designed to hose down and to wash off.

Lunn stated that the shed was used for pipe and brick storage and, on occasion, used pieces of

equipment. Welding work was also performed there. He commented that the type of work done

there was “very dirty” and that it was not an “office-type environment.” Since Lunn began working

at Boiler Supply in 1972, he could never recall a time when the shed roof was water tight. The flat

roof also had recurring leaks and it, too, leaked as of January 1989. There were extensive water

stains throughout the building at the beginning of the lease as a result of the roof leaks.

Lunn stated that routine manual maintenance was performed on the cooling system,

including filter work and replacing the cooling tower, piping, electrical motors and a compressor.

Prior to vacating the premises, Boiler Supply resurfaced the driveway on the property and painted

the building exterior. It also employed a company to paint the metal roof and replace four missing

panels.

Danny Demonbreun testified that he had been in the roofing business for 17 years and
inspected the condition of the roofs in order to bid on their repair/replacement after Boiler Supply

vacated the premises. Upon inspection, he found moisture coming from three areas and between the

layers of the flat roof, and “quite a bit of rot there where it had been leaking.” He concluded that the

flat roof was in “very poor condition.” As far as maintenance measures, he found that there had been

some patching done and possibly some hot asphalt mopping, but it was not uniform in application.

The metal roof had problems also, including loose panels which allowed water to get through. Some

of the wooden beams underneath the metal roof “had leaked to the extent that they were rotted

almost in two.” He did not believe the two roofs would have been in the condition in which he

found them had they been properly maintained during the past six years. Donald Morris, a real estate

appraiser, testified that he inspected and appraised the property in June 1993. He described it at the

time as “in a poor state of repair” and also found evidence of “deferred maintenance or lack of

maintenance.”

Terry Gentry, an electrician, testified that he inspected the building’s electrical system

sometime in 1996 and concluded that repairs were needed. There were lights that did not burn, some

plug covers were missing; he performed “just mainly service work.” He also reconditioned the

electrical service equipment to “bring it [up] to safety standards.” His total charges were $2,075.

Donald Rich, the owner of Rich Construction Company, testified that he inspected

the heating and air conditioning units at Boiler Supply in 1996. He found the heating system

unrepairable and the air conditioning unit “in real poor shape.” He replaced both units at a cost of

$12,500. He proposed a charge of $5,800 to “rework” the two units as opposed to replacement.

Jimmy Rich, general manager of Rich Construction, also inspected the premises at Appellee’s

request in December 1995. He found the roof “to be very old, ill repaired” and to leak in several

places. He did not consider the building safe. His total charges for general repairs were $5,980.

William Ellis, an employee of Boiler Supply for 26 years, testified on Appellee’s

behalf. He stated that the condition of the premises was “just about the same” in January 1989 as

it was in November 1995. The company’s maintenance of the premises from January 1989 forward

was the same as during the lifetime of Mr. Lunn, Sr. He denied that there ever came a time when

the company began “slacking off” or “just stopped” maintaining the premises, because they “didn’t
know whether [they] were going to be there for a hundred years or what.” He believed that the

condition of the premises in November 1995 was “[i]n some respect . . . better” than it was in

January 1989. On cross-examination, Ellis admitted that he had no expertise in roofing or heating

and air conditioning. He stated that both roofs had leaked for the past 26 years.

James Oakley testified that he had been employed by Boiler Supply since 1957. He

stated that there were problems with the warehouse area roof (leaks occurring on and off) “for the

last several years.” He maintained that the condition of the property at the end of November 1995

“was essentially the same” as its condition in January 1989 except for the “cosmetic improvements”

Boiler Supply made just prior to vacating.

Bill Hawkins, an industrial real estate broker who had opportunity to view the

property both in January 1989 and November 1995, testified that its condition during this time period

“didn’t change drastically.” He determined that the property was rentable on the day Boiler Supply

vacated the premises at a reduced rate commensurate with its condition. In 1989, he valued the

property at approximately $180,000 and in November 1995, at $225,000. These figures were based

on the overall condition of the property and the upswing in market conditions during that time

period. On cross-examination, Hawkins admitted that he was not a real estate appraiser and that he

inspected only the “physical structural parts of the building.” He believed the property, at the time

Boiler Supply vacated, could be rented at a monthly rate of $2,000. He agreed that during the time

period in question, the percentage of appreciation on commercial property in the area was more

substantial than the appreciation on this particular property. On redirect examination, Hawkins

stated that he believed the rental value of the property from 1989 to 1995 was “about the same.”

As we have determined the record to support a finding that Appellee failed to properly

maintain the premises, we now address Appellant’s issue regarding whether the trial court erred in

disallowing a recovery of its entire repair costs because such expenses allegedly exceeded the value

of the “depreciation” caused by Appellee’s improper maintenance. Appellant’s argument is directed

at the trial court’s ruling at the close of Appellant’s proof in regard to its motion to dismiss. In

granting the motion, in part, the court stated: “[t]he cost to the repairs produced by the [Appellant]

are much greater than the depreciation of the property based on the waste that’s been proven . . . .”
The court held that it was relying on the “general proposition that if the costs to repair exceed the

depreciation as a result of the waste, then the depreciation is the measured damages” and cited Fuller

v. Orkin Exterminating Co., 545 S.W.2d 103 (Tenn. App. 1975). The court continued “[Appellant]

has put nothing in the record to invoke the magic formula, what was the value of the property before;

what was the value of the property afterwards, which there is a difference.” At the close of all proof,

the court found that “the costs of repairs far exceed the value of this property in 1989, as opposed

to the value in 1995, the difference in value is that appreciation.”

Appellant contends that the proper measure of damages are those as set forth under

the contract. The contract reads that in the event Boiler Supply neglected to maintain the premises,

Appellant had the right to “cause repairs and corrections to be made” with the “reasonable costs

thereof” payable by Boiler Supply. The damages sought by Appellant include $5,980 for general

repairs, $19,000 for roof replacement, $5,800 for heating and air conditioning repair and $2,075 for

electrical system repair, for a combined total of $32,855.

The court in Fuller v. Orkin held as follows:

Our appellate courts have uniformly held that the measure of
damages for injury to real estate is the difference between the
reasonable market value of the premises immediately prior to and
immediately after injury but if the reasonable cost of repairing the
injury is less than the depreciation in value, the cost of repair is the
lawful measure of damages. . . . Of course, the trier of fact can also
take into consideration the reasonable cost of restoring the property
to its former condition in arriving at the difference in value
immediately before and after the injury to the premises.

Fuller, 545 S.W.2d at 108 (citations omitted).

As we find the record, the only testimony on the fair market value of the property

indicates an appreciation in value of approximately $45,000 from 1989 to 1995. As the property

appreciated in value but not to the extent possible due to the appellee’s waste, the trial court looked

to the requested costs for repair versus the amount of depreciation in terms of waste. The trial court

found that the cost of repairs exceeded the amount of depreciation. We imply from the court’s ruling

that $7,500 represents the costs of repair for which Appellant is reasonably entitled. Although
Appellant has requested some $30,000 in damages we note that the entire replacement costs for the

roof ($19,000) are not properly included within this figure as we have previously determined that

Boiler Supply had no duty to replace the roof as a month-to-month tenant. We further find the record

to reflect that some of the repair costs included replacing certain materials and items on the property

which resulted in an actual improvement of the property or a betterment of its condition than was

the case in January 1989. We, therefore, conclude that the reasonable costs of repair to which the

appellant is entitled, based on the appellee’s waste, were properly decided.

Appellant’s next issue is whether the trial court erred in failing to compensate it for

the lost rents incurred during the time the premises were “unleaseable” and undergoing repairs

following surrender. The trial court awarded Appellant damages representing two months rent.

Gloria Allison testified that the last repair work performed on the property after Boiler Supply

vacated was in May 1996. Efforts were not made to lease the property again until June 1996 after

completion of all the repair work. She was asked, “you just made the conscious decision that until

you had all of this work done, you weren’t . . . going to try to . . . market . . . it; is that right?”, she

responded, “[t]hat was my decision.” Appellant thereafter rented the property to a new tenant at a

monthly rate of $3,900. The monthly rental paid by Boiler Supply at the time it vacated was $3,895.

Mr. Hawkins testified that the property could have been rented upon surrender for

approximately $2,000 per month. There is no testimony to the contrary. Moreover, Ms. Allison

stated that she made a conscious decision to not attempt to rent the premises during this period.

After all necessary repairs and replacements were made, the appellant rented the property for $3,900,

only $5 more than the monthly rate paid by the appellee at the end of its lease. Thus, this Court is

unsure exactly who was getting the better of the deal during those months the appellee was paying

$3,895 in rent when there was testimony that at the end of the term the property could probably be

rented for no more than $2,000 per month. In any event, we find no error by the trial court in failing

to award lost rents during the entire time period of repair where Appellant made no attempt to rent

the property during this period and there was unrefuted testimony that the premises were rentable

upon surrender.

It is next argued that the trial court erred in failing to compensate the appellant for
the value of five infrared heaters that were removed by the appellee upon vacating the premises. Mr.

Lunn testified that the heaters were attached to the rafters that connected to the electrical and natural

gas lines. He confirmed that these were the only source of heat in the warehouse area and were

installed prior to 1989. He removed the equipment because Boiler Supply was a “dealer” for these

kind of heaters and, therefore, believed them a part of his company’s equipment. Lunn stated that

the heaters were used to allow Boiler Supply employees to work in specific areas of the warehouse

and that these particular heaters were not designed to heat the entire warehouse area. He testified:

The infrared heater, itself, is a focused heat that heats just a certain
area. It’s widely used in places where you either need spot heating or
you have a large area heat that you don’t want to heat the air, you just
want to heat the surface that it strikes.

Mr. Oakley testified that the heaters were “removable.” He described them as “suspended by chains,

much like a certain type of light fixture . . . . [B]ut they were suspended from beams overhead by

chains.”

Boiler Supply argues that the trial judge obviously “misspoke” when he stated that

the infrared heaters were “fixtures” that Boiler Supply was entitled to remove. Appellant contends

that the trial court correctly ruled the items fixtures, but because they were placed on the premises

prior to 1989, when the various other leases executed by the parties called for all fixtures placed on

the premises by the lessee to become the property of the lessor at the expiration thereof, they

rightfully belong to the appellant.

The court in State ex rel. Comm’r v. Teasley, 913 S.W.2d 175 (Tenn. App. 1995),

defined the terms “fixture” and “trade fixture”as follows:

Black’s Law Dictionary defines the term “fixture” as “[a]n article in
the nature of personal property which has been so annexed to the
realty that it is regarded part of the land.” “Trade fixture”, on the
other hand, is defined as “[p]ersonal property used by the tenant in
business. Such fixtures retain the character of personal property . . .
.”

Teasley, 913 S.W.2d at 177. The court further held:
 In Tennessee only those chattels are fixtures which are so
attached to the freehold that, from the intention of the parties and the
uses to which they are put, they are presumed to be permanently
annexed, or a removal thereof would cause serious injury to the
freehold. . . . The usual test is said to be the intention with which a
chattel is connected with realty. If it is intended to be removable at
the pleasure of the owner, it is not a fixture.

Id. at 177-78 (quoting Memphis Housing Authority v. Memphis Steam Laundry-Cleaner, Inc., 463

S.W.2d 677, 679 (Tenn. 1971) (citations omitted)).

Considering the record, we do not find the five infrared heaters to be “fixtures” as

herein defined. There was testimony that the heaters were used to “spot” heat certain areas of the

warehouse in order that the Boiler Supply employees could work there. They did not heat the whole

warehouse area and were suspended by chains. Mr. Oakley stated that they were removable and

there was no testimony that upon such removal there was any damage to the freehold. Furthermore,

Lunn testified that Boiler Supply was a dealer of the heaters. We do not believe the record supports

a finding that the parties intended that they be permanently annexed to the property. Consequently,

we hold that Boiler Supply was entitled to remove them upon vacating the property.

Finally, Appellant contends that its damage award was erroneously reduced by the

trial court because of the acrimonious relationship of the parties who are family members. The

record indicates that the trial court considered the family dynamics involved in this case. However,

it does not suggest any over-emphasis by the trial court in this regard. We find the record to support

the trial court’s decision regarding damages and hold that any particular importance placed by the

trial court on such family dynamics, if any, was harmless error.

We find no merit in the appellee’s contention that Appellant is entitled to no award

in excess of the two months holdover rent which was undisputably tendered to Appellant. It is

asserted that because of the tender, Appellant is not entitled to an award of attorney’s fees or court

costs. The contract provides for an award of attorney’s fees in the event of any breach, if

successfully litigated. The trial court determined that the appellee was in breach of the agreement

by failing to properly maintain the premises, a decision in which we have concurred. The case tried

before the trial court was one for damages for breach of the lease in addition to the holdover rent.
We conclude that no error was committed by the trial court in this regard.

We deny Appellant’s request for an additional award of attorney’s fees incurred in

this appeal. The judgment of the trial court is affirmed and this cause remanded for any further

necessary proceedings. Costs are assessed against the appellant for which execution may issue if

necessary.

____________________________________
FARMER, J.

______________________________
CRAWFORD, P.J., W.S. (Concurs)

______________________________
TOMLIN, Sr. J. (Concurs)