IN THE COURT OF APPEALS OF TENNESSEE
EASTERN SECTION AT KNOXVILLE FILED
December 10, 1997
ONEIDA WOOD PRODUCTS, INC., ) Cecil Crowson, Jr.
) Appellate C ourt Clerk
Plaintiff/Appellant )
) SCOTT CHANCERY
v. )
) NO. 03A01-9707-CH-00264
ONEIDA WOOD INDUSTRIES, INC., )
LUMBER, INC. and DANIEL L. )
BILLINGSLEY, ) HON. BILLY JOE WHITE
) CHANCELLOR
Defendants/Appellees )
) VACATED and
) REMANDED
Danny P. Dyer, Knoxville, for Appellant.
Johnny V. Dunaway, LaFollette, for Appellees.
OPINION
INMAN, Senior Judge
The corporate parties are closely held and competitively engaged in the
lumber business. David L. Billingsley [“Billingsley”], owns a substantial
number of shares of the plaintiff, Oneida Wood Products [“Oneida”], and is a
corporate officer. Before his termination on September 13, 1996, he was
employed as Plant Manager.
Billingsley is also principal shareholder and President of the defendants,
Oneida Wood Industries, Inc. [“OWI”], and Lumber, Inc. The corporate
plaintiff accuses him of fraudulent conduct involving his manipulations of the
various corporations resulting in his enrichment to the detriment of the plaintiff.
The complaint was filed on September 13, 1996. The corporate defendants and
Billingsley in course filed their answers, generally denying the allegations of
false dealings.
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On June 2, 1997, the plaintiff filed a motion for a temporary restraining
order against Billingsley, who allegedly intended to close an access road to the
plaintiff’s plant which it had used for eight years.1
The defendants, on June 5, 1997, moved to dissolve the TRO, alleging
that the affidavit of Escue in support of the motion was ‘inaccurate.’
On June 11, 1997, the plaintiff filed a motion for a temporary injunction,
which enlarged upon the motion for the TRO. The motion for a temporary
injunction was heard on June 12, 1997.
The thrust of the plaintiff’s evidence is that the disputed road across
Billingsley’s land to the public Verdun road has been used for more than seven
years and is vital to its continued existence. The thrust of the defendant’s
evidence is that the plaintiff has no vested rights in the disputed road and that
the plaintiff has unfettered access to another public road on which its property
abuts.
The Chancellor found no ‘legal basis for a permanent easement,’ but gave
the plaintiff the right to use the ‘driveway’ for 90 days in order to facilitate
another access. The plaintiff appeals, (1) insisting that the defendants should be
estopped from denying the existence of the easement, and (2) that the
Chancellor improperly “awarded relief to a non-moving party that had not been
requested in any pleading.”
Our review of the findings of fact made by the trial court is de novo upon
the record of the trial court, accompanied by a presumption of the correctness of
the finding, unless the preponderance of the evidence is otherwise. TENN. R.
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Th e T RO was app aren tly granted. It is not inc luded in the reco rd. W e as sum e it
restrained the defenda nts from closing the “access road.” It was supported by the affidavit of
Alvin Escue, President and principal shareholder of the plaintiff, who testified, essentially, that the
plaintiff would be irreparably harmed if the TRO was not granted.
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APP. P., RULE 13(d).
The defendants objected to the introduction of evidence of the ownership
interests of Billingsley in these competing corporations. According to the
pleadings, he owned one-third of the shares of the plaintiff and 100 percent of
the shares of each defendant. He was the Secretary of the plaintiff and the
President of each defendant. As owner of the land over which the easement by
estoppel is claimed, he allowed the plaintiff, which employed him as plant
manager, to utilize the easement for seven years. Its use was apparently
permissive; there was no documentation involved. Given the apparent posture
of Billingsley, which allegedly subjects him to a conflict of interest with respect
to the other shareholder of the plaintiff, we think the argument of the plaintiff
that the relief granted to Billingsley was in excess of the pleadings is well-
taken. See, T. C. A. § 48-18-310; 48-18-403; Knox-Tenn Rental Co. v. Jenkins
Ins., Inc., 755 S.W.2d 33 (Tenn. 1986); Fidelity-Phenix Fire Ins. Co. of N. Y. v.
Jackson, 181 S.W.2d 625 (Tenn. 1944); John J. Heirigs Const. Co., Inc. v.
Exide, 709 S.W.2d 604 (Tenn. App. 1986).
The particular procedural problem presented here is to be found in the
fact that the issue was whether a temporary injunction should be issued,
keeping in mind that none of the defendants filed a pleading seeking to have the
plaintiff’s right to use the access road terminated. The defendants argue that the
Chancellor could not adjudicate the issue of whether to grant a temporary
injunction without first determining whether the plaintiff had an easement as
claimed; we disagree. The Chancellor based his conclusion that no easement
existed because the Statute of Frauds, which was not pleaded, required
documentation of it; he did not reach the issue of whether the defendants should
be equitably estopped from denying the claimed easement, and as to this we
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offer no opinion and none should be inferred. We note, in passing, that an
easement by estoppel may be established by proof of a representation
communicated to the plaintiff which was believed and relied upon. See,
Charton v. Burgess, Court of Appeals, 1989 WL 105655 (1989). In light of the
defendants’ sustained objection to testimony relative to the relationship and
activities of Billingsley, we think that the issue of whether the plaintiff has an
easement as claimed should be reserved for a merit trial. Since the denial of a
temporary injunction was based solely upon the finding that no easement
existed, the judgment is vacated in toto and the case is remanded. Costs are
assessed to the appellee.
_____________________________
William H. Inman, Senior Judge
CONCUR:
__________________________________
Houston M. Goddard, Presiding Judge
___________________________________
Charles D. Susano, Jr., Judge
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