Mary Ann Sklar v. Patrick Clancy

10/02/2019
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 17, 2019 Session

MARY ANN SKLAR v. PATRICK CLANCY, ET AL.

Appeal from the Chancery Court for Jefferson County
No. 16-CV-116 Telford E. Forgety, Jr., Chancellor
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No. E2018-01487-COA-R3-CV
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This appeal involves a review of the denial of a motion pursuant to Rule 60.02 of the
Tennessee Rules of Civil Procedure. We affirm the ruling of the trial court.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and THOMAS R. FRIERSON, II, J., joined.

Jeffrey A. Armstrong, Morristown, Tennessee, for the appellants, Mary Ann Sklar and
Rosemary Sklar.

Luke D. Durham, Knoxville, Tennessee, for the appellee, Patrick Clancy.

OPINION

I. BACKGROUND

This matter involves a 30-acre farm located at 2563 East U.S. Highway 25/70,
Dandridge, Tennessee (“the Real Property”). Mary Ann Sklar (“Seller”), the owner of
the Real Property, entered into a land purchase contract with Patrick Clancy on
September 6, 2016. The agreement stated that “[t]he purpose of this contract permits the
purchaser, Patrick Clancy, exclusive use and ownership of the 30 acres . . . owned
currently by seller, Mary Ann Sklar . . . .” It further provided that “[i]n return, Mary Ann
Sklar, Rosemary Sklar, Thomas Cartwright will have right to occupy the property with
agreement to terms in separate binding contract.” The contract was acknowledged by a
notary public and was “Witnessed by” Rosemary Sklar. The Real Property was conveyed
to Clancy by quitclaim deed executed by Seller on September 8, 2016, and recorded with
the Register of Deeds for Jefferson County, Tennessee, on September 20, 2016.1

Seller is a widow in her 70s who claimed she engaged Clancy regarding the care
of animals on the farm that she had inherited in 1985 from her mother. She contends that
Clancy tricked her into signing the quitclaim deed rather than a business contract.

Clancy asserts that he agreed to care for Seller’s animals, assume all debt and liens
on the property, and pay any outstanding property taxes in return for Seller transferring
the Real Property and the animals to him. According to Clancy, he intended to open the
property to the public for educational purposes. He stated that the Sklars were “to
continue to reside on the property pursuant to [a] later agreed upon lease.”

Seller initiated the instant litigation seeking to rescind the quitclaim deed to the
Real Property. Clancy responded that if the quitclaim deed was to be rescinded, he
would be entitled to recover the consideration he paid for it, including paid liens and
taxes and the value of any improvement to the Real Property. Seller followed up with an
“Amendment to Petition to Rescind Quitclaim Deed” on March 6, 2017, requesting that
the land purchase contract be declared void or rescinded.

A bench trial occurred on November 29, 2017. In the judgment entered on
January 12, 2018, the trial court ordered as follows:

The Petition, as amended, to rescind the parties’ quitclaim
deed and land purchase contract is granted, expressly
conditioned upon the Petitioner’s payment of $21,800 to the
clerk of this court, for the benefit of respondent, within forty-
five days of the trial, on or before January 13, 2018. If
petitioner does not pay $21,800 into the clerk of the court on
or before January 13, 2018, the quitclaim deed and land
purchase contract are not rescinded and are, therefore, upheld
and found by this court to be valid and enforceable[.]

In the memorandum opinion incorporated by reference, the trial court observed as
follows:

… [T]his contract permits the purchaser, Patrick Clancy,
exclusive use and ownership . . . of 30 acres . . . .

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Seller testified that she did not sign the land purchase contract or the quitclaim deed. On
this issue, the trial court found that “[t]he evidence is absolutely overwhelming that Ms. Skylar
[sic] was told what she signed, understood what she signed, knew what she was signing and on
that point the evidence is just overwhelmingly against Ms. Skylar [sic].”
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In return, Mary Ann Skylar [sic], Rosemary Skylar [sic],
Thomas Cartwright will have the right to occupy the property
with agreement to terms in separate binding contract.

The paragraph is contradictory in itself . . . .

You get the right to occupy the property in the Skylars [sic],
what is it? Is it a life estate[?] The land purchase contract
doesn’t call it that. Is it a lease? The land purchase contract
doesn’t call it that. Is it a license? It doesn’t call it that.

It says that there are terms in a separate binding contract,
which indicates to the court that [there] were to have been
other terms to define the Skylars [sic] right to occupy the
property. That’s what it says. There were to have been other
terms. Well apparently those other terms were never settled.
There is nothing in the record to show that they were settled
what those other terms were to have been. There is nothing in
the record to show what the parties intended to do.

You move on beyond that, the quit claim deed executed two
days later contains no provision in it whatsoever about the
Skylars [sic] right to occupy the property either by life estate,
by lease, by license. It contains no provisions whatsoever.

The question then this whole transaction and by the way the
court has raised the issue about whether or not the land
purchase contract was merged out by the deed and ordinarily
speaking, they are. Ordinarily speaking the underlying land
contract in a purchase and sale transaction is merged out by
the deed and it’s the provision of the deed that controls.

. . . [H]ere, in the court’s opinion there is no question in the
court’s mind but that there was to have been some right of
possession in the Skylars [sic] as a matter of the
consideration. . . . [T]he Skylars [sic] were to have had some
right to occupy the property.

***

. . . [T]he land purchase contract says in the first sentence,
paragraph one, Mr. Clancy’s got the exclusive right to
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 exclusive use and ownership of the 30 acres and says that the
Skylar’s [sic] have the right to occupy the property. So its
internally inconsistent and then the quitclaim deed does not
refer to a right of occupation in the Skylars [sic], lease, life
estate, license or anything else. It doesn’t make any provision
for the Skylars [sic] to have any occupation joint with Mr.
Clancy or otherwise.

***
. . . You haven’t asked me to construe it, but even if you had,
how do I make a contract for these parties when the terms of
that occupation by the Sklars was very clearly to have been
defined by the parties in a separate contract and it never was. .
..

The trial court ultimately found that the parties’ agreement “just is so indefinite here that
this land contract and this quit claim deed cannot be, just cannot be enforced.” The court
specifically set both aside for “lack of definiteness.” The memorandum opinion reflects
the trial court determined that there was not an enforceable express contract between the
parties. We note that a contract “must be sufficiently definite to be enforced.” Anderson
Cnty. v. Architectural Techniques Corp., No. 03A01-9303-CH-00110, 1993 WL 346473,
at *4 (Tenn. Ct. App. Sept. 9, 1993) (citing Johnson v. Central Nat’l Ins. Co., 356 S.W.
2d 277 (1961)); see Doe v. HCA Tenn. Health Servs. of Tennessee, Inc., 46 S.W.3d 191,
196 (Tenn. 2001).

The trial court conditioned rescission upon Seller paying Clancy the amount of
$21,800 within 45 days in order to return him back to the position he was in before the
transaction took place. No appeal was taken from the judgment. Seller never paid
$21,800 into the court. As a result, the order granting rescission was revoked by the
judgment’s terms.

Clancy thereafter filed a detainer summons against the Sklars requesting
possession of the Real Property. Seller filed a “Motion for Relief from Judgment”
pursuant to Rule 60.02 of the Tennessee Rules of Civil Procedure, in which she argued
that there was an “inherent contradiction in the judgment.” Seller observed that the trial
court had ruled the contract between Clancy and Seller lacked sufficient definiteness to
be enforceable. She contended that her failure to reimburse Clancy “did not, as a matter
of law, make the indefinite land purchase contract and quitclaim deed ‘valid and
enforceable.’” Seller argued that the status quo could have been restored by simply
awarding a money judgment against her while immediately setting aside the quitclaim
deed and the contract. The trial court, however, denied the Rule 60.02 motion and
dismissed it with prejudice. The court further awarded possession of the Real Property to
Clancy and ordered that a “Writ of Possession may issue at any time after thirty (30) days
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after judgment . . . .” The Sklars filed a timely appeal. After Seller requested a stay of
proceedings pending the appeal, we granted it conditioned “upon the posting by the
appellants of a bond in cash, or by appropriate surety satisfactory to the Trial Court, in an
amount to be determined by the Trial Court.” At a hearing on September 26, 2018, the
trial court set the bond amount at $15,000. The Sklars moved for review, arguing that the
bond was unjustly high in light of the fact that they were proceeding as indigent persons.
We denied the motion by order entered October 18, 2018, and review by the Tennessee
Supreme Court was denied in an order entered on November 1, 2018. The Sklars
ultimately did not post the required bond but instead relinquished possession of the Real
Property to Clancy.

II. ISSUES

The issues raised on appeal by the Sklars are restated as follows:

a. Was the denial of Seller’s Rule 60.02 motion an abuse of
discretion?

b. Whether the doctrines of res judicata or collateral estoppel
barred the trial court from granting Clancy’s detainer
summons/warrant for possession of real property he
purportedly purchased from Seller?

c. Did the trial court err by ordering the Sklars to vacate the
property?

III. STANDARD OF REVIEW

The trial court heard this case without a jury. Accordingly, our review of the trial
court’s findings of fact is de novo on the record with a presumption of correctness
afforded to the trial court’s findings unless the evidence preponderates otherwise. Tenn.
R. App. P. 13(d); M&M Elec. Contr., Inc. v. Cumberland Elec. Membership Corp., 529
S.W.3d 413, 422 (Tenn. Ct. App. 2016). The review of the trial court’s conclusions of
law is conducted de novo with no presumption of correctness. Rogers v. Louisville Land
Co., 367 S.W.3d 196, 204 (Tenn. 2012); Brunswick Acceptance Co., LLC v. MEJ, LLC,
292 S.W.3d 638, 642 (Tenn. 2008); Whaley v. Perkins, 197 S.W.3d 665, 670 (Tenn.
2006).

A trial court’s ruling on a Rule 60.02 motion for relief from a final judgment must
be reviewed under an abuse of discretion standard. Hussey v. Woods, 538 S.W.3d 476,
487 (Tenn. 2017); Discover Bank v. Morgan, 363 S.W.3d 479, 487 (Tenn. 2012). Abuse
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of discretion is found only if the trial court “applied incorrect legal standards, reached an
illogical conclusion, based its decision on a clearly erroneous assessment of the evidence,
or employ[ed] reasoning that causes an injustice to the complaining party.” Konvalinka
v. Chattanooga-Hamilton Cnty. Hosp. Auth., 249 S.W.3d 346, 358 (Tenn. 2008). The
appellate court should “review a [trial] court’s discretionary decision to determine (1)
whether the factual basis for the decision is properly supported by the evidence in the
record, (2) whether the [trial] court properly identified and applied the most appropriate
legal principles applicable to the decision, and (3) whether the [trial] court’s decision was
within the range of acceptable alternative dispositions.” Lee Med., Inc. v. Beecher, 312
S.W.3d 515, 524-25 (Tenn. 2010) (internal citations omitted). “The abuse of discretion
standard does not permit an appellate court to merely substitute its judgment for that of
the trial court.” Discover Bank, 363 S.W.3d at 487.

IV. DISCUSSION

A.

Based upon its finding that the provisions of the land purchase contract are
contradictory, the trial court held “that the quit claim deed and the land purchase contract
must be set aside for lack of definiteness.” The court further ruled that in order to rescind
the quitclaim deed and the land purchase agreement, Clancy must “be returned to the
status quo” as “that’s one of the duties of the party who seeks to rescind a contract.” In
the judgment, the trial court held as follows:

The Petition, as amended, to rescind the parties’ quitclaim
deed and land purchase contract is granted, expressly
conditioned upon the Petitioner’s payment of $21,800 to the
clerk of this court, for the benefit of respondent, within forty-
five days of the trial, on or before January 13, 2018. If
petitioner does not pay $21,800 into the clerk of the court on
or before January 13, 2018, the quitclaim deed and land
purchase contract are not rescinded and are, therefore, upheld
and found by this court to be valid and enforceable.

As noted above, Seller did not appeal from the judgment entered on January 12, 2018,
and it became a final judgment.

A judgment or order of final disposition that adjudicates the rights and claims of
all the parties to an action becomes final thirty days after it is entered. See Tenn. R. Civ.
P. 58, 59; see also Tenn. R. Civ. P. 54; Tenn. R. App. P. (3)(a); Furlough v. Spherion Atl.
Workforce, LLC, 397 S.W.3d 114, 133 (Tenn. 2013). Within 30 days of entry of an
order, a party may seek relief from the order by filing a motion under Tennessee Rule of
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Civil Procedure 59.02. Discover Bank, 363 S.W.3d at 489. A party who waits more than
30 days after entry of an order to seek relief must do so under Rule 60.02. Campbell v.
Archer, 555 S.W.2d 110, 112 (Tenn. 1977).

After the detainer summons was issued, Seller filed her motion pursuant to Rule
60.02 seeking relief from the original judgment. She did not submit any affidavits or
other evidentiary materials with the motion. She argued only that “Petitioner’s failure to
reimburse respondent by January 13, 2018, did not, as a matter of law, make the
indefinite land purchase contract and quitclaim deed ‘valid and enforceable.’”

On appeal, Seller requests relief pursuant to either Rule 60.02(1) or Rule 60.02(5)
of the Tennessee Rules of Civil Procedure. Rule 60.02 reads in relevant part as follows:

On motion and upon such terms as are just, the court may
relieve a party or the party’s legal representative from a final
judgment, order or proceeding for the following reasons: (1)
mistake, inadvertence, surprise or excusable neglect . . .; or
(5) any other reason justifying relief from the operation of the
judgment.

Tenn. R. Civ. P. 60.02.

The Sklars contend that the original judgment granting rescission was
contradictory within its own terms because it made “the rescission conditioned upon
Mary Ann Sklar paying $21,800 to reimburse Clancy for property taxes and ‘other
expenses,’” but if that payment was not made, the land purchase contract and quitclaim
deed would not be rescinded and would be found to be valid and enforceable. Seller
contends that her failure to make the $21,800 payment does not add definiteness to the
contract and quitclaim deed for the purpose of enforcement. She further notes that the
now “valid and enforceable” contract reserved the Sklars’ “right to occupy the property . .
. .” Thus, according to the Sklars, they cannot wrongfully possess real property that they
have a legal contractual right to occupy.

Clancy asserts that counsel for Seller expressly agreed to the formulation of the
conditional rescission at trial, as when the court asked counsel for the parties how the
judgment should deal with the issue, counsel for the Sklars stated: “The court is stating
that condition. I don’t see how it could be worded differently.” Clancy additionally
argues that Seller did not appeal from this allegedly contradictory judgment and allowed
it to become a final judgment. Clancy further notes that the Sklars have provided no
explanation for not noticing the asserted contradiction during the appeal period. See
Selitsch v. Selitsch, 492 S.W.3d 677, 689 (Tenn. Ct. App. 2015) (holding that a party fails
to meet the standard to show facts supporting a failure to avoid mistake, inadvertence,
surprise, or neglect when there is evidence that they could have discovered the error in
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question).

Relief under Rule 60.02 is considered an exceptional remedy that is designed to
strike a proper balance between the competing principles of finality and justice.
Furlough, 397 S.W.3d at 127. Rule 60.02 allows relief from a final judgment under
limited circumstances. Hussey, 538 S.W.3d at 482. “The burden is on the party seeking
this extraordinary relief to establish facts explaining why such relief is justified.”
Selitsch, 492 S.W.3d at 682; Wine v. Wine, 245 S.W.3d 389, 397 (Tenn. Ct. App. 2007).
In order to be granted relief under Rule 60.02, the party seeking relief must substantiate
the request with clear and convincing evidence. Hussey, 538 S.W.3d at 483; Furlough,
297 S.W.3d at 128; Selitsch, 492 S.W.3d at 682; McCracken v. Brentwood United
Methodist Church, 958 S.W.2d 792, 795 (Tenn. Ct. App. 1997). Evidence sufficient to
grant relief under Rule 60.02 is only clear and convincing when it leaves no serious or
substantial doubt about the correctness of the conclusions drawn. Hussey, 538 S.W.3d at
483. The escape valve offered by Rule 60.02 “should not be easily opened.” Furlough,
297 S.W.3d at 127 (quoting Toney v. Mueller Co., 810 S.W.2d 145, 146 (Tenn. 1991)
(internal quotation marks omitted)).

The only argument advanced by the Sklars in relation to the Rule 60.02 motion is
that the judgment from which Seller did not appeal was drawn in the manner in which the
trial court found the deed and contract to be unenforceable, but then found it to be
enforceable if Seller could not restore Clancy to the status quo. The Sklars are
complaining that the law was improperly applied by the trial court to the known facts.

A mistake of law is not a basis for relief under Rule 60.02. Spruce v. Spruce, 2
S.W.3d 192, 195 (Tenn. Ct. App. 1998); see also Selitsch, 492 S.W.3d at 689 (“a mistake
of law is not a ground for relief under Rule 60.02”). Because Seller submitted no
affidavits or other evidentiary material in relation to her Rule 60.02 motion and is only
asserting that the judgment reflects an error of law, Rule 60.02 cannot be applied to grant
relief from the argued mistake of law made by the trial court.

The standards of Rule 60.02(5) are more demanding than those applicable to the
other grounds for Rule 60.02 relief. Hussey, 538 S.W.3d at 486. Rule 60.02(5) functions
as a catch-all to provide equitable relief when relief is not available under the other
subsections. Duncan v. Duncan, 789 S.W.2d 557, 564 (Tenn. Ct. App. 1990). Its
language is open ended but subject to a narrow interpretation. Underwood v. Zurich Ins.
Co., 854 S.W.2d 94, 97 (Tenn. 1993). The rule “affords relief in the most extreme,
unique, exceptional, or extraordinary cases and generally applies only to circumstances
other than those contemplated in sections (1) through (4) of Rule 60.02.” Furlough, 397
S.W.3d at 128 (quoting Holiday v. Shoney’s South, Inc., 42 S.W.3d 90, 94 (Tenn. Ct.
App. 2000) (internal quotation marks omitted)). Reasons justifying relief under Rule
60.02(5) are found only in cases of overwhelming importance or in cases involving
extraordinary circumstances or extreme hardship. Federated Ins. Co. v. Lethocoe, 18
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S.W.3d 621, 624 (Tenn. 2000) (citing Underwood, 854 S.W.2d at 97). The bar for
obtaining relief under Rule 60.02(5) is set very high and the moving party bears a heavy
burden. Delong v. Vanderbilt Univ., 186 S.W.3d 506, 511 (Tenn. Ct. App. 2005). A
party remains under a duty to take legal steps to protect his own interests. Hussey, 538
S.W.3d at 486 (quoting Banks v. Dement Constr. Co., 817 S.W.2d 16, 19 (Tenn. 1991)).

Seller again asserts the perceived error of law by the trial court in the original
judgment that she certainly could have and should have perceived within the 30-day
appeal period and which she could have appealed but failed to do so. A mistake of law is
simply not a basis for Rule 60.02 relief. Spruce, 2 S.W.2d at 195. Seller does not show
any extreme or extraordinary circumstances whatsoever and thus is not entitled to relief
under Rule 60.02(5). We hold that the trial court did not err in denying the Rule 60.02
motion.

The trial court ordered Seller to return Clancy to his original status, as rescission is
designed to put both parties in the position they were in when the contract was made.
Lamons v. Chamberlain, 909 S.W.2d 795, 800 (Tenn. Ct. App. 1993). However,
“rescission is not available if the parties cannot be placed in status quo.” Klosterman
Dev. Corp., 102 S.W.3d at 635; Lamons, 909 S.W.2d at 801. In the judgment, the court
recognized that if Seller was unable to return Clancy to status quo, with the original
contract unenforceable, it could impose a quasi-contractual obligation as an equitable
substitute. Doe, 46 S.W.3d at 197; ICG Link, Inc. v. Steen, 363 S.W.3d 533, 546 (Tenn.
Ct. App. 2011); Forrest Constr. Co., LLC v. Laughlin, 337 S.W.3d 211, 227 (Tenn. Ct.
App. 2009). Accordingly, there was no basis in law or in fact for the trial court to grant
the requested relief.

B.

We further find that neither res judicata nor collateral estoppel applies to bar the
action for possession of the Real Property. The same claim or cause of action was not
asserted in both suits, and there has been no showing that the issue to be precluded is
identical to an issue decided in the earlier proceeding. Accordingly, the cause of action
by Clancy seeking possession of the Real Property is not barred by any findings of fact in
the original judgment and memorandum opinion.

C.

Clancy seeks an award of damages and attorney fees pursuant to Tennessee Code
Annotated section 27-1-122, which reads as follows:

Damages for frivolous appeal. – When it appears to any
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 reviewing court that the appeal from any court of record was
frivolous or taken solely for delay, the court may, either upon
motion of a party or of its own motion, award just damages
against the appellant, which may include, but need not be
limited to, costs, interest on the judgment, and expenses
incurred by the appellee as a result of the appeal.

Tenn. Code Ann. § 27-1-122. The statute authorizing an award of damages for frivolous
appeals “must be interpreted and applied strictly so as not to discourage legitimate
appeals.” See Davis v. Gulf Ins. Grp., 546 S.W.2d 583, 586 (Tenn. 1977) (citing the
predecessor to Tennessee Code Annotated § 27-1-122). This court has discretion in
awarding damages under this provision. Chiozza v. Chiozza, 315 S.W.3d 482, 493 (Tenn.
Ct. App. 2009).

The Sklars have lost 30 acres of farmland because they were unable to pay a
$21,800 judgment. We respectfully decline to exercise our discretion to award further
damages to Clancy in this appeal.

V. CONCLUSION

The judgment of the trial court denying the motion for relief from the judgment
filed by Seller and granting possession of the Real Property to Clancy is affirmed. Costs
of appeal are assessed against the appellants, Mary Ann Sklar and Rosemary Sklar.

_________________________________
JOHN W. MCCLARTY, JUDGE

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