IN THE SUPREME COURT OF TENNESSEE
AT JACKSON
(HEARD AT DYERSBURG) FILED
July 6, 1998
Cecil Crowson, Jr.
Appellate C ourt Clerk
FOR PUBLICATION
Filed: July 6, 1998
WHITEHAVEN COMMUNITY )
BAPTIST CHURCH, FORMERLY )
KNOWN AS FAIRWAY MISSIONARY )
BAPTIST CHURCH, AND )
T.L. JAMES, SR., )
)
PLAINTIFFS/APPELLANTS, ) SHELBY CHANCERY
)
v. ) Hon. Neal Small, Chancellor
)
ALCUS HOLLOWAY AND ) No. 02S01-9709-CH-00084
GENEVA HOLLOW AY, )
)
DEFENDANTS/APPELLEES. )
FOR APPELLANTS: FOR APPELLEES:
Charles R. Curbo Herschel L. Rosenberg
Memphis Memphis
OPINION
AFFIRMED AS MODIFIED HOLDER, J.
OPINION
We granted this appeal to determine whether summary judgment was
properly granted in this case involving claims for recision of contract and unjust
enrichment. The Court of Appeals affirmed the trial court's order granting the
defendants' motion for summary judgment on both issues. Upon review, we
affirm the appellate court as modified.1
BACKGROUND
The plaintiffs in this case are Whitehaven Community Baptist Church
("Whitehaven") and T.L. James, Sr. ("James"). Whitehaven purchased a parcel
of land on which it intended to construct a new church. The parcel of land was
partially secured by a first mortgage in the amount of $ 120,000.00. Whitehaven
then contracted with James for James to be the general contractor in the
construction of the new church.
The plaintiffs encountered financial problems after beginning construction.
Whitehaven was subsequently unable to obtain construction loans from
commercial lenders. James, acting on behalf of Whitehaven, began negotiations
with the defendants, Alcus and Geneva Holloway, in an attempt to obtain a short-
term construction loan. Both the plaintiffs and the defendants reached an
agreement on the terms of the short-term loan. A contract was then prepared by
attorney Garvin Holland who had represented the plaintiffs in prior real estate
transactions.
1
Ora l argu me nt wa s hea rd in th is cas e on M arch 4, 19 98, in Dyers burg , Dyer Cou nty,
Tenn essee , as part of this Cou rt’s S.C.A.L .E.S. (Supreme Court Advancing Lega l Education for
Students ) project.
2
The defendants agreed to loan Whitehaven $ 100,000.00 to finance the
plaintiffs’ construction of a new church. The contract as executed provided in
pertinent part:
This agreement entered into this 3rd day of May, 1991 by
and between the Trustees of and for Fairway Missionary Baptist
Church, parties of the first part and Alcus Holloway and Geneva
Holloway, parties of the second part.
WHEREAS, the Trustees of Fair Way Missionary Baptist
Church is the owner of lots 1, 2, 3, 8 and one/fourth Half of lot 4,
Block 2, Minna Palmer Wall's Whitehaven Park Subdivision as
recorded in Plat Book 9, page 142, in the Register's Office of
Shelby County, Tennessee; and
WHEREAS, the Trustees of Fairway Missionary Baptist
Church are in the process of constructing a building upon the said
lots; and
WHEREAS, said trustees have had difficulty in obtaining
construction funds for the completion of the building, and
WHEREAS, Alcus Holloway and Geneva Holloway have
agreed to furnish $ 100,000.00 in construction funds to finish the
building.
NOW, THEREFORE, the parties agree that under the
following terms and conditions Alcus Holloway and Geneva
Holloway will furnish $ 100,000.00 in construction funds:
1. The Trustees of Fairway Missionary Baptist Church must obtain
a firm take-out commitment of $ 260,000.00 from a recognized
lending institution. Also building must meet their specifications.
2. The trustees must carry a builders-risk insurance policy while
under construction.
3. Property deeded to Alcus Holloway and Geneva Holloway
with the understanding when the church building is finished and
meets the city code inspection approval. The property is to have a
clear title and no liens against it.
4. Alcus Holloway and Geneva Holloway are to furnish One
Hundred Thousand Dollars ($ 100,000.00) as construction money.
Alcus Holloway is to disburse this money for labor and materials,
when he sees the material has gone into the building by eye-sight
and receipt, then he is to pay off. There is to be bids taken for
each job to complete the building.
5. Mr. T. L. James has agreed to pay Alcus Holloway and Geneva
Holloway $ 120,000.00 plus 10 % interest at the closing. When all
the agreements have been fulfilled, Mr. T. L. James absolutely
will have the right and will buy the property back.
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6. The life of this loan must be closed within seven months from
the date that this agreement is signed, with all agreements fulfilled.
7. I, Rev. T. L. James, will pledge my home (house) and will
secure another member of the church to pledge his home (house)
as collateral, to secure the first mortgage monthly notes to Palmer
Brothers of $ 998.00 until the Rev. T. L. James buys the church
back.
(emphasis supplied). The contract was executed on May 3, 1991.
In consideration for the construction loan, the plaintiffs executed a
warranty deed prepared by attorney Holland. The warranty deed conveyed title
of the property to the defendants as collateral for the loan pursuant to the
contract. The plaintiffs also declared that the property was unencumbered
"except for the 1991 City and County taxes and Agreement between the
Trustees of and for Fairway Missionary Baptist Church and Alcus Holloway and
Geneva Holloway." The warranty deed did not mention the presence of an
existing mortgage on the property.
The total sum of money that the plaintiffs borrowed from the defendants is
$ 120,000.00. The record indicates that the plaintiffs have not paid any portion
of the money that they owed to the defendants. The plaintiffs further did not
procure permanent financing from an approved lending institution as provided for
in the contract. Moreover, the plaintiffs defaulted on the property's first
mortgage, and the defendants were compelled to pay the holder of the first
mortgage $ 122,533.00 to prevent foreclosure on the property. The defendants
obtained a writ of possession for the property.
The plaintiffs filed suit in chancery court seeking reformation of the
contract and recision of the executed warranty deed. James also filed a claim
for unjust enrichment. The defendants' motion for summary judgment was
granted by the trial court. The appellate court affirmed the trial court's dismissal
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of the case. Upon review, we affirm the appellate court for the reasons set forth
in this opinion.
CONTRACT CLAIM
Whitehaven argues that the warranty deed it signed should be reformed.
Whitehaven's claim is predicated on two assertions: (1) that it signed the
warranty deed believing the document to be a mortgage; and (2) that it was
informed that the warranty deed was a mortgage. The defendants counter that
the plaintiffs were fully aware that the instrument they signed was a warranty
deed.
In McCarley v. W est Quality Food Serv., 960 S.W.2d 585 (Tenn. 1998),
we stated:
A party seeking summary judgment must demonstrate the
absence of any genuine and material factual issues. Byrd v. Hall,
847 S.W.2d 209, 214 (Tenn. 1993). Mere "conclusory assertion[s]
that the non-moving party has no evidence is clearly insufficient."
Id. at 215. The movant must either affirmatively negate an
essential element of the non-movant's claim or conclusively
establish an affirmative defense. Id. 215 n. 5. If the movant does
not negate a claimed basis for the suit, the non-movant's burden to
produce either supporting affidavits or discovery materials is not
triggered and the motion for summary judgment fails. Id.
If, however, the movant does successfully negate a claimed
basis for the suit, the non-movant may no longer simply rely upon
the pleadings. Id. The non-moving party must then establish the
existence of the essential elements of the claim. Id. The non-
movant's burden may be met by:
(1) pointing to evidence establishing material factual
disputes that were over-looked or ignored by the
moving party;
(2) rehabilitating the evidence attacked by the
moving party;
(3) producing additional evidence establishing the
existence of a genuine issue for trial; or
(4) submitting an affidavit explaining the necessity for
further discovery pursuant to Tenn. R. Civ. P., Rule
56.06.
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Id. at 215 n. 6. The non-moving party's evidence shall be taken as
true. Id. Moreover, summary judgment shall be denied if "any
doubt whether or not a genuine issue exists." Id. at 211.
McCarley, 960 S.W.2d at 587.
The defendants submitted the affidavit of attorney Holland in support of
their motion for summary judgment. Holland's affidavit indicates that he
explained to the plaintiffs that the instrument was a warranty deed. Moreover,
the signed document very conspicuously reads "WARRANTY DEED" in bold
capitalized letters across the top of the instrument. The signed contract referred
to transfer of the property and the plaintiffs' "absolute" right to buy the property
back. Accordingly, the defendants have preliminarily negated a claimed basis of
the plaintiffs' contract claim and triggered the non-movant's burden to establish
the essential elements of their suit. We must now determine whether the
plaintiffs have met their burden.
The plaintiffs proffered an affidavit of a Whitehaven trustee who claims
that attorney Holland did not explain that the instrument being executed was a
warranty deed. The plaintiff relies on this affidavit to show that a material issue
of disputed fact exists as to whether the plaintiffs understood the document to be
a warranty deed.
Upon review, we find that the defendants are entitled to summary
judgment as a matter of law. Whitehaven asserts that it simply misunderstood
the nature of the contract and the document it signed. An elementary precept of
contract law, however, is that a court will not look beyond the four corners of a
contract or to the parties' intention when the language of the contract is clear.
See Bob Pearsall Motors, Inc. v. Regal Chrysler-P., Inc., 521 S.W.2d 578, 580
(Tenn. 1975) ("It is the Court's duty to enforce contracts according to their plain
terms."); Cummings v. Vaughn, 911 S.W.2d 739, 742 (Tenn. Ct. App. 1995) ("If
the language of the contract is clear and unambiguous, it must be construed as
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written."). The instruments executed by the parties unambiguously indicate that
title to the property was being transferred. The warranty deed conspicuously
stated "WARRANTY DEED" across the top of the document.
While the affidavits may create an issue of fact, the issue is not one that is
material to the resolution of the case. Byrd v. Hall, 847 S.W.2d at 215 (stating
that the issues for evaluation include (1) whether a factual dispute exists; (2)
whether the disputed fact is material to the outcome of the case; and (3) whether
the disputed fact creates a genuine issue for trial.). The signed documents were
unambiguous, and the plaintiffs' assertions in their affidavit do not change the
unambiguous nature of those documents. The trial court's granting of summary
judgment was, therefore, proper.
UNJUST ENRICHMENT
James apparently argues that the defendants were unjustly enriched
when they took possession of the property. He alleges that the defendants
"have received a very substantial and valuable improvement to the property
which is a benefit to them and have not paid any of the benefits for same."
Unjust enrichment is a quasi-contractual theory or is a contract implied-in-
law in which a court may impose a contractual obligation where one does not
exist. Paschall's Inc. v. Dozier, 407 S.W.2d 150, 154-55 (Tenn. 1966). Courts
will impose a contractual obligation under an unjust enrichment theory when: (1)
there is no contract between the parties or a contract has become unenforceable
or invalid; and (2) the defendant will be unjustly enriched absent a quasi-
contractual obligation. Id. at 154-55.
James was both the executive trustee of the plaintiff Whitehaven and the
general contractor for the plaintiff Whitehaven. As general contractor for
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Whitehaven, James was in charge of building the church. Whitehaven
contracted with the defendants to obtain money to construct the church. The
construction money was paid to James. James' deposition indicates that he
retained approximately $ 500.00 or more a week from the defendants’ loan as
compensation. James also paid for materials and labor out of the proceeds from
the defendants' loan.
This Court has previously stated that the
most significant requirement for a recovery on quasi contract is that
the enrichment be unjust. Consequently, if the landowner has
given any consideration to any person for the improvements, it
would not be unjust for him to retain the benefit without paying the
furnisher. Also, we think that before recovery can be had against
the landowner on an unjust enrichment theory, the furnisher of the
materials and labor must have exhausted his remedies against the
person with whom he had contracted, and still has not received the
reasonable value of his services.
Paschall's, Inc. v. Dozier, 407 at 155 (Tenn. 1966).
James had a contractual or quasi-contractual relationship with
Whitehaven for whom he acted as general contractor. The record does not
indicate that he has attempted to exhaust his remedies with Whitehaven for any
alleged deficiencies in his compensation. Whitehaven merely contracted with
the defendants for the defendants to supply funding for construction. James
retained money from the construction loans for compensation.2 The defendants
obtained physical possession of the property following: (1) Whitehaven's failure
to repay any portion of the defendants' $ 120,000.00 loan; and (2) the
defendants’ payment of $ 122,533.00 to the first mortgage holder of the property
to prevent foreclosure. Accordingly, the defendants have provided consideration
2
Jam es ass erts in his de position tha t he is entitled to the full value o f the prop erty
including the completed church, which he estimates as $ 325,000.00. As a general contractor he
would be entitled only to receive compensation for his services (quantum meruit). He would not
be entitled to receive the fair market value of the improved property. The value of the completed
church would m ost assuredly exceed the value of Jam es' services as a general contractor.
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for both the improvements and the property. It is, therefore, not unjust for the
defendants in this case to retain this property with its improvements. James'
claim of unjust enrichment was properly dismissed as a matter of law.
The plaintiffs’ claims are dismissed with prejudice, and the case is
remanded to the trial court for further proceedings on the defendants'
counterclaims which are not before this Court. Costs of this appeal shall be
taxed against the plaintiffs, Whitehaven Community Baptist Church and T.L.
James, Sr., for which execution may issue if necessary.
JANICE M. HOLDER, JUSTICE
CONCURRING:
Anderson, C.J.
Drowota and Birch, J.J.
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