author: WILLIAM B. CAIN, J.,

text:
    Randall BILBREY, et al. v. Gary WORLEY, et al.
    Court of Appeals of Tennessee, at Nashville.
    May 7, 2004 Session.
    Nov. 1, 2004.
    Permission to Appeal Denied by Supreme Court May 9, 2005.
    Jon E. Jones, Cookeville, Tennessee, and Amy V. Hollars, Livingston, Tennessee, for the appellants, Randall Bilbrey, as Executor of the Estate of Agnes Bilbrey, deceased, and the Bilbrey Family Partnership and Randall Bilbrey as General Partner of the Bilbrey Family Limited Partnership.
    Onnie Winebarger, Byrdstown, Tennessee, for the appellees, Gary Worley and Larry Worley.
   OPINION

WILLIAM B. CAIN, J.,

delivered the opinion of the court,

in which WILLIAM C. KOCH, JR., P.J., M.S., and FRANK G. CLEMENT, JR., J., joined.

This is a landlord/tenant case involving abandonment and surrender by the tenant of the leased premises and whether or not the surrender was accepted by the landlord so as to prevent the landlord from collecting rents for the unexpired term of the lease. The chancellor first held for the landlord on the issue but thereafter came to believe himself bound by an unreported decision of this court and reversed his position to hold for Appellee. We find the first judgment of the chancellor to have been correct and reinstate his original judgment.

This case involves a commercial lease wherein the tenant abandoned the premises long before the expiration of the extended term of the lease and the landlord sues for the recovery of accumulated rents subsequent to the abandonment. On January 25, 2002, the chancellor filed comprehensive findings of fact and conclusions of law which we believe properly recite and dispose of the issues in this case and which provide in pertinent part:

1. This case involves a lease entered into on October 31, 1984, by and between The Cumberland Company and Gary Worley and Larry Worley, d/b/a Super-D Drugs. This lease superseded a prior lease between those same parties. The lease was in effect for a term of ten years beginning January 1, 1985, and ending December 31, 1994. The lease provided for a base rent of $21,324.80 a year or $1,777.07 a month, payable in advance. In addition, the lease contract contained a provision for “additional rent” which provided that the tenant pay an overage fee of two percent of all annual gross sales over $1,066,240. The lease provided that this overage payment be made “forthwith” following the end of each calendar year, based on the sales of the prior calendar year.
2. The original landlord became insolvent. In the summer of 1996, the plaintiffs acquired the shopping center from L.H. Hardaway, Jr., Trustee. Quenton and Agnes Bilbrey owned the property from August 13, 1996, through March 5, 1997, when Quenton Bilbrey died. His widow, Agnes Bilbrey, owned the property until she conveyed it to her son, Randall Bilbrey (a two percent undivided interest), and her grandsons, Stacey Bilbrey (a 49 percent undivided interest) and Tony Bilbrey (a 49 percent undivided interest), on July 30, 1998. Thereafter, these three individuals conveyed their interests on August 7, 1998, to the Bilbrey Family Limited Partnership, Randall Bilbrey, general partner. Agnes Bilbrey died on December 25, 1998. Randall Bilbrey is the executor of her estate.
3. The defendants vacated the property on or about April 30, 1997. At the time they vacated the property, the defendants had been “holding over” for two years, four months. The defendants did not make any overage payments for sales during 1994, or for any subsequent year.
4. The first issue for the Court to decide was whether the defendants breached the lease by vacating the property on or about April 30, 1997, and by failing to pay any rent thereafter. The defendants contend that there is a conflict between the “option to renew” clause and the “holding over” clause in the lease. The Court does not agree. The “option to renew” clause sets out certain procedures that the tenant can follow and, thereby, exercise an option to renew the lease for two additional five-year periods. To trigger the option, the tenant was required to give a 90-day notice. The defendants argue that there is no requirement that that notice be in writing. The Court disagrees. The lease itself defines the requirements for notice. Page eight of the lease states: “The mailing of notices. The mailing of a written notice or demand by registered or certified mail return receipt requested (in a sealed post-paid envelope) addressed to the landlord as follows: The Cumberland Company, c/o Imperial Management Company, P.O. Box 60464, Nashville, TN 37206.” There was no proof whatsoever in the record that the tenants gave any notice, written or otherwise, or any intent to exercise an option to renew the lease for an additional period. Certainly, the defendants did not give notice of any such intent as required by the terms of the contract.
5. Since the defendants failed to follow the provisions of the lease regarding giving notice of their intent to exercise an option to renew the lease for five years, they have no basis to assert that the lease’s provisions regarding the effect of holding over should not apply to them. The hold-over clause of the lease states that if the tenant remains in possession of the property for more than 30 days following the expiration of the original term, the landlord can elect, at any time while the tenant is still occupying the property, to extend the lease for a second ten-year term. To effect the extension, the landlord must give a written notice of same to the tenant before the tenant surrenders occupancy. It was undisputed in this case that on November 25, 1996, the landlord delivered a letter to the tenants giving them notice of the landlord’s election to extend the lease for a second ten-year term. This written notice was delivered to the tenants while they still occupied the premises. This written notice, therefore, effectively extended the lease contract for a second ten-year period, or from January 1, 1995, through December 31,2004.
6. The plaintiffs are entitled to recover unpaid base rent for the second ten-year period of the lease, or through December, 2004. The plaintiffs have shown reasonable efforts to rent the property and to mitigate them damages. Their best efforts in this regard, however, were generally unsuccessful because of the rental market for commercial property in Livingston, Tennessee. After the defendants vacated the property, the plaintiffs initially stored material in the space. Therefore, for two months (May and June, 1997), the property was not available for lease, and the defendants cannot be charged with unpaid rent for those months. During the months of July,1998, through April, 1999, the property was rented to a local furniture manufacturer, and the defendants are entitled to mitigation for the amount of rent paid by this manufacturer. After giving the defendants full credit for the offsetting rent and for the two months in which material was stored in the property, the defendants remain indebted to the plaintiffs for monthly rental as follows:
Agnes Bilbrey Estate:
July, 1997, through June, 1998
(12 months @ $1,777.07=$21,-324.84) ($4,904.71-interest)
July, 1998, @ $277.07 * =$277.07 ($57.49-interest)
These monthly amounts (after application of 6% prejudgment interest through October, 2001), total $26,564.11.
Bilbrey Family Limited Partnership:
August, 1998, through April, 1999
(9 months @ $277.07 * =$2,493.63) ($430.15-interest)
May, 1999, through October, 2001
(30 months @ 1,777.07 = $53,312.10) ($3,998.41 interest)
These monthly amounts (after application of 6% prejudgment interest through October, 2001), total $60,234.29.
* After mitigation.
** After the hearing, the attorneys for the parties advised the Court that Mr. Randall Bilbrey had begun occupying the premises in November 2001, for the purposes of operating a business. The parties agreed that no damages would be owed to the plaintiffs for the period that Mr. Bilbrey’s occupancy continues. The parties further agreed, and the Court rules, that the plaintiffs may file a new suit for loss of future rentals if the property becomes unoccupied at any time before the end of December, 2004, subject to any defenses the defendants may have at that time, including surrender and failure to mitigate.

In reversing himself on the issue of acceptance by the landlord of the surrender by the tenant the learned chancellor followed the holding of this court in the unreported case of Maney v. Parker, 1995 WL 577805 (Tenn.Ct.App. Oct.3, 1995). In the Maney case, the parties entered into a five year lease whereby Parker leased from Maney a commercial building and, after occupying it for slightly more than a year, vacated the premises. The landlord then filed suit seeking among other things back rent. The chancellor denied recovery of back rent and Maney appealed.

This court held:

Our decision in this case turns upon whether Mr. Maney should be deemed to have accepted Mr. Parker’s abandonment. Our Supreme Court addressed this issue in Karns v. Vester Motor Co., 161 Tenn. 331, 30 S.W.2d 245 (1930). In Karns, the Supreme Court, in quoting from 35 Corpus Juris, 1093, adopted the following rule (161 Tenn. at page 333, 30 S.W.2d at page 245):
The acceptance of a surrender is not implied from the mere fact of a reletting of the demised premises, although taken in connection with other circumstances the reletting may amount to an acceptance and work a surrender of the term by operation of law. Whether a relet-ting shows an acceptance of the surrender depends on whether the landlord relets on the account of the tenant or on his own account.
The Court, cognizant of the rule requiring mitigation of damages, also stated: “[T]he landlord may refuse to accept a surrender, and after notice to the lessee of his intention to do so, relet the premises for the best rent obtainable, and recover the difference between the rent reserved in the lease and the rent received from the subsequent tenant.” (Emphasis added).
Thus it is quite clear that a landlord who relets abandoned property but wishes to avoid the doctrine of surrender by operation of law, must notify the tenant that the reletting is only in mitigation of damages and does not indicate an intent to accept the tenant’s abandonment. The record in this case indicates that Mr. Maney left a message regarding the lease on Mr. Parker’s answering machine approximately two months after receiving Mr. Parker’s last rent payment. Mr. Parker testified that he attempted to return the call but got no answer. Mr. Maney made no further attempt to notify Mr. Parker of his intentions regarding the property even though they occasionally saw each other around town and Mr. Parker’s address and telephone number remained the same.
We find that Mr. Maney’s single attempt to telephone Mr. Parker regarding the lease is not sufficient to constitute notice of an intent to relet on Mr. Parker’s account in mitigation of damages. Therefore, Mr. Maney’s subsequent re-letting of the property is an act inconsistent with the landlord and tenant relationship which evidences an intent to accept Mr. Parker’s abandonment of the premises. Taken together, the acts of Mr. Parker and Mr. Maney constitute a surrender of the term by operation of law. Therefore, Mr. Parker was relieved of his obligations under the lease, not because of the alleged parol agreement to terminate, but because of Mr. Maney’s acceptance of Mr. Parker’s abandonment of the premises.

Maney v. Parker, 1995 WL 577805, **2-3 (Tenn.Ct.App.1995).

While the trial court was justified in following the Maney case we disagree with Maney in its holding that the landlord must notify the tenant that the reletting is only in mitigation of damages and does not indicate an intent to accept the tenant’s abandonment. This extension of certain of the language of the supreme court in Karns v. Vester Motor Co., 161 Tenn. 331, 30 S.W.2d 245 (1930) has the effect of aligning Tennessee with the New York rule set forth in Gray v. Kaufman Dairy & Ice Cream Co., 162 N.Y. 388, 49 L.R.A. 580, 76 Am.St.Rep. 327, 56 N.E. 903 (1900). This New York rule, which has found little support in other jurisdictions, states that when the landlord takes possession of the premises after abandonment by the tenant he must notify the tenant that the property is being re-rented at the risk of the tenant and that failure to give the tenant such notice absolves the tenant of any responsibility for unpaid rent accruing under the lease. Rules governing this particular feature of the landlord-tenant relationship are of ancient origin and the development of such rules is exhaustively annotated in Higgins v. Street, 19 Okla. 45, 92 P. 153, 13 L.R.A. (N.S.) 398 (1907).

The minority rule is refuted by the United States Court of Appeals for the District of Columbia:

There are some authorities to the effect that a re-entry and reletting of abandoned premises by the landlord without the consent of the tenant would create a surrender, by operation of law. ⅜ ⅜ * T^e best approved cases, however, assert the contrary doctrine, and hold that, where a tenant repudiates the lease and abandons the demised premises, and the lessor enters and relets the property, such re-renting does not relieve the tenant from the payment of the rent under the covenants of the lease. Oldewurtel v. Wiesenfeld, 97 Md. 165, 176, 54 A. 969, 970.
But the landlord, by taking possession, repairing, and advertising the house to let cannot be regarded as accepting the surrender of the tenant’s terms. Such acts are equally as referable to the interest and benefit of the tenant, and do not discharge him from his covenant to pay rent. Wood, Landlord & Tenant, vol. 2, p. 1171.
The quitting of the premises occupied by a tenant during the term, and sending the key to the landlord, who proceeds to repair and use the house, does not discharge the tenant from his liability to pay rent, unless the landlord consents to acquit the rent. Livermore v. Eddy’s Adm’r, 33 Mo. 547.

Baskin v. Thomas, 12 F.2d 845, 846 (App.D.C.1926).

In addressing this question, the Court of Appeals of Maryland, in Oldewurtel, held:

The general rule is well settled that, to constitute a valid surrender of rented premises by a tenant during the term, there must be the assent of both parties to the rescinding of the contract of renting, and such assent may be expressed or implied from such acts as would reasonably indicate that the parties have agreed that the tenant shall abandon the premises, and the landlord assume its possession. Biggs v. Stueler, 93 Md. 100, 48 A. 727. The appellant admits that the defendant returned the key before the expiration of the lease. It was not accepted, and therefore up to this time no surrender took place. It is further conceded that the plaintiff had a right to enter for the purpose of taking care of the property, of repairing the premises, and to put a “for rent sign” in the window. But it is earnestly urged that the re-renting of the property for the benefit of the tenant without his assent was an acceptance of a surrender, an ouster of the tenant, and released him from liability for rent under the lease. There are some authorities to the effect that a re-entry and reletting of abandoned premises by the landlord without the consent of the tenant would create a surrender by operation of law. Underhill v. Collins, 132 N.Y. 269, 271, 30 N.E. 576; Gray v. Kaufman, 162 N.Y. 388, 56 N.E. 903, 49 L.R.A. 580, 76 Am.St.Rep. 327; Day v. Watson, 8 Mich. 535; Rice v. Dudley, 65 Ala. 68. The best approved cases, however, assert the contrary doctrine, and hold that, where a tenant repudiates the lease, and abandons the demised premises, and the lessor enters and relets the property, such re-renting does not relieve the tenant from the payment of the rent under the covenants of the lease. Auer v. Penn, 99 Pa. 370, 44 Am.Rep. 114; Meyer v. Smith, 33 Ark. 627; Bloomer v. Merrill, 1 Daly, 485; Scott v. Beecher, 91 Mich. 590, 52 N.W. 20; Rich v. Doyenn, 85 Hun, 510, 33 N.Y.S. 341; Alsup v. Banks, 68 Miss. 664, 9 South. 895, 13 L.R.A. 598, 24 Am.St.Rep. 294. In Biggs v. Stueler, 93 Md. 100, 111, 48 A. 727, this court said the acts upon which the appellee in this case relies to prove a surrender are the acceptance of the keys by the appellee, the repairs to the house, and the reletting. But those are insufficient of themselves to show acceptance, unless, under all the circumstances, they are of such a character as to show a purpose on the part of the tenant to vacate and on the part of the landlord to resume possession, to the exclusion of the tenant.

Oldewurtel v. Wiesenfeld, 97 Md. 165, 54 A. 969, 970-971 (1903).

In discussing this question in the context of a collateral rule relative to a reletting beyond the term of the original lease, the Court of Appeals of Maryland, drew the sharp contrast between the New York rule and the contrary rule prevailing elsewhere.

The New York rule was summarized in In re Kerr, 29 F.Supp. 414 (S.D.N.Y.1939) in which a surrender was held to have been accepted where the landlord relet for two years beyond the term of the original lease which authorized relet-ting “ ‘for the whole or any part of the term from time to time as (landlord) may deem best.’ ” Id. at 415. The court said:
The courts of New York hold that in the absence of an express provision in the lease authorizing the landlord to relet the making of a new lease is an acceptance of surrender of a then existing lease. Gray v. Kaufman Dairy & Ice-Cream Co., 162 N.Y. 388, 56 N.E. 903.... However, in the case at bar the landlord entered into a lease extending beyond the term of the bankrupts’ lease. In making such a lease the New York courts say that the landlord will be presumed to be acting for his own account and to have recognized a surrender of the premises in the absence of consent to such reletting. Brill v. Friedhoff, 192 App.Div. 802, 183 N.Y.S. 463 (1920); Matter of Adams’s Estate, 149 Misc. 289, 267 N.Y.S. 910; Matter of Goldburg’s Estate, 148 Misc. 607, 266 N.Y.S. 106; Bonsignore v. Koondel, 134 Misc. 344, 235 N.Y.S. 453. (Id. at 415-16).
The 1900 decision in Gray v. Kaufman Dairy Co., supra, was that an acceptance of surrender occurs by reletting without the consent of the tenant, and that consent cannot be inferred from mere silence. Consent may, however, be given in the lease. Thus New York decisions frequently turn on a search for consent to the length of the reletting in the terms of the original lease. Since this Court declined in Oldewurtel v. Wiesenfeld, supra, 97 Md. at 176, 54 A. at 970, to adopt the rule of Gray v. Kaufman we do not find the rationale of the New York decisions to be persuasive.
Restatement (Second) of Property § 12.1, Comment I at 391 (1977) has adopted an unequivocal position:
A reletting may be for the benefit of the tenant even though it is for a term shorter or longer than the term in the original lease, and even though it is for a rent lesser or greater than the rent reserved in the original lease. Furthermore, the reletting may be for the benefit of the tenant even though various other terms of the original lease are not carried over in the lease to the new tenant. (Emphasis added).

Millison v. Clarke, 287 Md. 420, 413 A.2d 198, 204-205 (1980) (footnotes omitted).

In applying Tennessee law District Judge Irving R. Kaufman ventured an opinion as to what Tennessee would do on reletting after surrender and the effect on the rule of Tennessee’s requirement that the lessor must mitigate his damages.

Defendant first contends that by operation of law there was a surrender and acceptance of the property by virtue of the subsequent re-letting of the premises to a third party for a period beyond the expiration date of the initial lease. The lease in question permitted the landlord to re-let, but it is alleged did not authorize re-letting beyond the term of the first lease.
The New York rule appears to be that in making a lease for a term which exceeds that of the first lease, the landlord will be presumed to be acting on his own account and to have recognized a surrender of the premises in the absence of consent to such re-letting. In re Kerr, (S.D.N.Y.) 29 F.Supp. 414 (1939), although some New York courts have expressed dissatisfaction with ‘so hard and fast a formula’ for determining the intent of the landlord. Dasanat Realty Corporation v. Murray, 138 Misc. 492, 246 N.Y.S. 693, 696 (1930). In the instant case the lease was negotiated in Tennessee and concerns Tennessee realty and it is clear therefore that the Tennessee law of surrender and acceptance governs. Unfortunately, it is not settled how the courts of that jurisdiction would deal with the present case. The only Tennessee authority on the effect of re-letting to which I have been referred is Karns v. Vester Motor Co., 161 Tenn. 331, 30 S.W.2d 245 (1930). That case did not deal directly with the problem of a re-letting beyond the term of the first lease but applied the general rule that the resolution to the question whether a re-letting of the leased premises after the abandonment thereof by the tenant constitutes an acceptance of the surrender, depends on the intention of the parties as gathered from all the circumstances. I am inclined to the view that the Tennessee courts would not hold re-letting for a term beyond that fixed in the original lease conclusive as to intent as a matter of law, D.A. Schulte, Inc. v. Haas, 224 Mo.App. 365, 287 S.W. 816 (1926), but rather would submit for determination by the trier of facts the question whether the landlord’s actual intent was to accept surrender.
This conviction is bolstered by an examination of the rationale of Karns v. Vester Motor Co., supra. There the court said, at 161 Tenn. 331, 30 S.W.2d 245, 246:
“We do not hesitate, therefore, to adopt the broad and just rule stated above, which conforms to a general rule approved by this court, requiring the injured party to a contract to do everything possible to minimize his damages.”

C.H. Little & Co. v. Gay Apparel Corp., 108 F.Supp. 762 (S.D.N.Y. Dec.22, 1952).

The lease in the case at bar contains a provision relative to default wherein it provides:

As used in this lease, the term “event of default” shall mean any of the following, (a) Tenant’s failure to make payment of any rental installment or any other amounts payable by Tenant to Landlord hereunder within ten (10) days after same is due and payable; ... Upon the happening of an “event of default” landlord at its option, may (a) terminate this lease; ... or ©) terminate Tenant’s right of possession of the lease premises without terminating the term of the lease ... Upon termination of the Tenant’s right of possession as provided above, Tenant shall promptly surrender possession to Landlord and vacate the leased premises. If Landlord elects to terminate Tenant’s right of possession without terminating the terms of this lease, Landlord may, at its option, lease or sublet all or any part of the Leased Premises on such terms and conditions as Landlord may elect and collect from Tenant any balance remaining on the rent or other obligations payable by Tenant under this Lease.

The litany of contingencies set forth in Karns v. Vester Motor Co., 161 Tenn. 331, 30 S.W.2d 245 (1930)(quoting from 35 Corpus Juris at 1093) is disjunctive not conjunctive. Thus, the lead contingency “stands alone” in providing “there is no acceptance of the surrender where the re-letting is pursuant to the provision of the lease authorizing the reletting on the lessee’s account.” 161 Tenn. 331, 30 S.W.2d 245 at 245-246.

The intention of the parties as to the future of the lease after expiration of the initial term is evidenced by the provision for holding over and the written communications between the parties. The provision for holding over by the tenant after reciting that possession after the expiration of the lease would make the tenant a tenant-at-will provides: “However, this lease shall be deemed to have been extended for an additional period equal to the immediately preceding term or period of this Lease, if (at any time after thirty (30) days from the termination of this lease, but before Tenant vacates the Leased Premises) Landlord notifies Tenant of its election that the holding over shall result in such an extension.”

On November 20, 1996, Worley notified Bilbrey in writing: ‘We are using this letter to give you notice that we will soon be vacating the building here. We feel we have an opportunity now to lower our overhead that may not be there in the future. We will vacate the building on or before February 20,1997.”

On November 25, 1996, Bilbrey notified Worley by letter: “I received your letter of November 20. Please refer to your lease, page 7, which as the paragraph regarding holding over. This letter is notice of the landlord’s election that the holding over be deemed to have extended the lease for an additional period of ten years from the date of the expiration of the original term on December 31,1994.”

The facts of this case demonstrate the harsh realities that are sometimes compelled by the clear and unambiguous terms of written contracts. For several years these parties were co-tenants in a shopping center owned by The Cumberland Company and both Bilbrey and Worley commiserated with each other because they were laboring under an “additional rent” provision in each of their leases which required them to pay to the landlord an overage fee of 2% of all annual gross sales over a designated dollar figure. Bil-brey discussed with Worley the possibility that he might build a new shopping center or in the alternative might seek to purchase the existing shopping center from L.H. Hardaway, Jr., Trustee who was successor in interest to The Cumberland Company. The original ten year lease contract between The Cumberland Company and Worley expired on December 31, 1994 and Worley simply held over paying rent on a month to month basis. In the Summer of 1996, Bilbrey purchased the shopping center from L.H. Hardaway, Jr., Trustee and thereafter took a very different view about the overage fee and the “additional rent” generated thereby as to the Worley premises.

The situation of the parties after the Bilbrey purchase from Hardaway is best expressed by Larry Worley in his testimony:

Q. Did you just really want to move? Is that what the problem was?
A. No. We wanted to stay there. And would have, if we could have gotten a new lease. But this two percent overage had become too much.
Q. Did you have discussions with Mr. Bilbrey about the overage?
A. Yes, we did. We knew that he was wanting to get out of the same position, the same overage. Because he had talked numerous times about getting out of the [shopping] center himself, or moving and building a new one.
Q. BY MR. WINEBARGER: How did you know that? Did he tell you this?
A. Yes. He told us the overage was killing him, just like it was us. And he was getting out of it one way or the other. He was either — he had property down on West Main Street. If he couldn’t buy the shopping center, he was going to move down there. He told us that several times....
Q. BY MR. WINEBARGER: Okay. After Mr. Bilbrey or his companies purchased the property, did you have a conversation with him about renegotiating the lease?
A. After he bought the shopping center?
Q. Right, after he purchased it?
A. I had one conversation in our store for about twenty minutes one day.
Q. Okay. And what did he say about renegotiating the lease?
A. Well, I spent about twenty minutes explaining to him the way our situation had changed since the early nineties, with the insurance companies, and the pharmacy benefit managers, with their dictating our reimbursement. So, but he became so angry over the, over us wanting to drop the percentage part of it. He became angry, and he wouldn’t even talk about it.
Q. BY MR. WINEBARGER: As a result of his response to this conversation, what did you and your brother do?
A. Well, my brother had, Gary had already talked to him. My dad had talked to him about the same situation, which I didn’t know about then.
THE COURT:. Well, I don’t know if you can talk — you can’t testify as to what your dad said.
A. Well, okay. But I saw then that he was only interested in forcing us to sign the old original lease with the three thousand — I mean, the 3.5 dollars per square foot per year, plus the overage which amounted to two percent. And our situation was that we could no longer sign that kind of a lease anywhere. So he became so angry about it and would not talk about it. So I saw then that we could not talk to him anymore. That is when we made the decision to vacate. And so I sent him a letter, a certified letter saying we would be vacating the premises. And it was after that that he sends back a letter to us trying to hold us to this provision on the lease that had done been, done died. Done a dead lease.

The difficulty with the Worley position is that the lease was not “done a dead lease” but was in fact alive and well under the “hold over” provisions of the lease. The Worleys knew at the time of the heated discussions with Bilbrey before they made their decision to vacate the premises that Bilbrey was insisting on the continued viability of the 2% overage provision of the lease. At that time, the Worleys were also aware of the provisions of the “holding over by tenant” paragraph of the original lease. The key provision was “however, this lease shall be deemed to have been extended for an additional period equal to the immediately preceding term or period of this lease, if (at any time after thirty (30) days from the termination of this lease, but before tenant vacates the leased premises) landlord notifies tenant of its election that the holding over shall result in such an extension.” The “preceding term” of the lease was ten years. The Worleys were still in possession of the premises when they elected to send to Bilbrey their letter of November 20, 1996 informing Bilbrey of their intention to vacate the building on or before February 20, 1997. Bilbrey promptly responded with his letter of November 25, 1996 electing to extend that lease for the additional ten year period under the “holding over by tenant” lease provision.

This business decision by Bilbrey was clearly consistent with his rights under the hold over provisions of the lease, and the only way to avoid the effect of that provision would be for the Worleys to have vacated the premises before Bilbrey had the opportunity to exercise his election. Practical considerations in the closing of a retail pharmacy business without the means of immediately continuing to service customers would militate against such an option.

The provisions of the lease agreement in Maney are not disclosed by the opinion of the court, and we cannot determine whether or not that lease contained a provision similar to the lease at bar relative to the reletting of the premises by the landlord upon abandonment thereof by the tenant. The default provision in the lease at bar gives the landlord the right to elect whether to terminate the lease or to terminate the tenant’s right of possession upon abandonment of the premises by the lessee. The provision states:

If Landlord elects to terminate Tenant’s right of possession without terminating the terms of this lease, Landlord may, at its option, lease or sub-let all or any part of the Leased Premises on such terms and conditions as Landlord may elect and collect from Tenant any balance remaining on the rent or other obligations payable by Tenant under this Lease.

The lease provision does not require the landlord to give notice to the tenant as to which course he is electing to pursue. Such notice is not necessary except in cases following the New York rule, and the inquiry, just as is stated in Karns, depends on a factual determination of whether the landlord has relet the property on his own account or on account of the tenant.

As one jurisdiction put it:

The jury found the tenant surrendered with the consent of the landlord because the landlord did not consult the tenant with respect to reletting, did not notify the tenant of the terms of the relettings, and did not notify the tenant what he would be expected to pay, or that he would be held for the difference. A tenant may not, by abandoning the premises and ceasing to pay rent, relieve himself of obligation to pay rent. He cannot reap an advantage from his own breach of the contract. If he desires to surrender, he must secure the landlord’s consent, and, if he alleges surrender, he must establish unequivocal manifestation of consent on the part of the landlord to termination of the relation of landlord and tenant. When a tenant abandons leased premises and ceases to pay rent, a landlord is not privileged to collect stipulated rent in full if he can make the premises earn something by reletting them. The tenant does not need to be told what his obligation is. He knows it is to pay rent to the end of the term, according to the covenant of the lease. Therefore reletting does not establish release of obligation to pay rent, and notice of reletting is not necessary to prevent surrender. All this has been said before, in the opinions in the cases of Brown v. Cairns, 63 Kan. 584, 66 P. 639, and Hoke v. Williamson, 98 Kan. 580,158 P. 1115.

Guy v. Gould, et al., 126 Kan. 25, 266 P. 925, at 925 (1928).

The Supreme Court of Wisconsin addressed this question of election by the lessor.

Under the rule of Lincoln Fireproof Warehouse Co. v. Greusel, 199 Wis. 428, 227 N.W. 6, 7, where a tenant vacates or abandons the leased premises before the end of the term, the landlord has a right to elect to accept the surrender and terminate the lease or to enter and take possession for the purpose of mitigating the damages for which the tenant is liable because of his breach of the lease. The election to enter for the purpose of mitigating damages may be evidenced by formal notice or by other proper means constituting such unequivocal act as would amount to an election of remedies in a proper case.
The mere entry and taking possession of the premises for the purpose of leasing the same does not constitute such an election, because it is an equivocal act— something to be done by the landlord regardless of whether his purpose be to terminate the lease or merely to perform his legal duty to mitigate damages.
The right to elect which course he will pursue remains with the landlord until he makes his election by taking some step which clearly evidences an intent to make a choice between the two inconsistent remedies that are open to him. Such a choice was made in this case when the plaintiff began this action. That act clearly evidenced an election on the part of the landlord to hold the tenant liable on the covenants of the lease, and established the fact that the landlord took possession for the purpose of reletting the premises in order to mitigate the damages which he sustained through the tenants’ breach of the lease. The lease expressly gave the lessor the option, upon the lessees abandoning or vacating the premises before the expiration of the term, to relet the same and apply the rents reserved from such reletting upon the lessees’ obligation for rents due or to accrue. Consequently, the lessor’s retention of the key, the placing of “For Rent” signs, and the reletting, were merely in exercise of the option which the lessees gave the lessor. At best, those acts might be considered of merely an equivocal nature, capable of being construed as indicating either an intention on the part of the landlord to relet for the benefit of the lessees, in order to mitigate the damages for which the lessees are liable because of their breach of the lease, or as indicating an intention to permit the lessees to surrender the premises and terminate the lease. As stated in Thompson on Real Property, § 1470: “Too much importance should not be attached to a delivery of the keys to the landlord and his attempt to re-let the premises. The legal effect of these acts depends largely on the intent with which the keys were delivered and for what purpose they were accepted.”

Weinsklar Realty Co. v. Dooley, et al., 200 Wis. 412, 228 N.W. 515, 517 (1930).

The Supreme Court of Pennsylvania addressed the same question holding that:

The burden of showing such acceptance is on the lessee (Auer v. Penn, supra; see, also, 35 C.J. 1094), and is primarily a question of the landlord’s intention. It is usually a question of fact for the jury (Breuckmann v. Twibill, 89 Pa. 58), but the evidence may be such as to make it one of the law for the courts.
The lessees contend there is a surrender through the lessors’ neglect to protest or to notify them that they would not accept the abandonment. The court below instructed the jury such notice was necessary. This is not the law. The result of such instruction is to make every quitting or abandonment of the premises effective as a surrender, unless such notice is given. The landlord is not required to protest against an abandonment of the demised premises. In re Mullings Clothing Co., (151 C.C.A. 134) 238 F. 58.
Lessees now claim that an acceptance appears from the fact that notice was not given that the reletting was for lessees’ benefit. The lessors’ right to claim for rent after abandonment does not depend on either notice. The legal relations existing between the parties have not been changed by the absence of notice, and, in the reletting, where the new leases are within the terms of the original lease (Rafferty v. Klein, 256 Pa. 481, 100 A. 945), lessor’s right is not lost.
The contract of lease created an estate in the lessee, and covenants between the lessor and lessee. The privity of estate, which is part of the completed legal relation of landlord and tenant, is divested when the lessee quits the premises. If the landlord refuses to accept the surrender offered, the privity established by the contract is not terminated. The liability to pay rent is based on the covenants therein. The landlord, under his common-law right, for the protection of the demised premises, has a legal right to enter. On this theory he could permit the premises to remain idle and recover for the balance of the entire term. 16 R.C.L. 969, § 431. Reletting is not imposed on a landlord as a duty (Auer v. Penn, supra); and he cannot be held liable for failure to rent where a tenant is offered (Lipper v. Bouve, Crawford & Co., 6 Pa.Super. Ct. 452 supra). Nevertheless, a landlord should be reasonably diligent in securing a desirable tenant for the best rent ob-tamable to minimize the first lessee’s loss. In re Mullings Clothing Co., supra. Reletting does not invade the covenants by which lessee was bound, unless it exceeds or is so inconsistent with them that the two leases could not stand together. Reletting within those covenants is merely the administration of an abandoned estate. When it is done, the landlord should not be held to have accepted the abandonment merely because he does not notify the lessee that the reletting is for his benefit. Lessees must respond to a liability arising from the covenant of the lease. An act done to minimize that liability does not discharge the lessee from that covenant.

Ralph, et al. v. Deiley, et al., 293 Pa. 90, 141 A. 640, 642-43 (1928).

In an extensive discussion of the issue, and relying upon encyclopedic authority, the Court of Appeals of Wisconsin stated:

¶ 10 After a tenant has breached its lease and vacated the premises, a tenant’s liability for the breach is evaluated in part by determining whether the landlord has accepted the tenant’s return in a manner that effects a legal surrender of the premises. 51 C.J.S. Landlord & Tenant § 122 (1968). “Surrender” entails the tenant’s giving up of the lease before its expiration and the landlord’s acceptance of the tenant’s relinquishment of rights, either in fact or as implied at law. 49 Am.Jur.2d Landlord & Tenant § 242 (1995).
¶ 11 Once the premises have been returned to the landlord before the expiration of the lease, a landlord may either: (1) accept the tenant’s surrender and reenter the premises to re-let them for the landlord’s own account, thereby releasing the tenant from any further liability for rent, or (2) notify the tenant that it is re-entering and re-letting the premises for the tenant’s benefit and therefore the monies received from the successor tenancy will be fully credited to the initial tenant’s obligation under the lease. See Kersten v. H.C. Prange Co., 186 Wis.2d 49, 53, 520 N.W.2d 99, 101 (Ct.App.1994); First Wis. Trust Co. v. L. Wiemann Co., 93 Wis.2d 258, 271, 286 N.W.2d 360, 366 (1980). If the premises are re-rented for the initial tenant’s account, that tenant remains responsible for the payments due on the underlying lease until its term has concluded. 49 Am.Jur.2d Landlord & Tenant § 243.
¶ 12. In this case, we consider whether CCS North Henry took possession of the premises for the purposes of mitigating damages and thereby entered into a lease with Army Store for the account of Tully or whether it accepted surrender of the premises and rented to Army Store for its own account, because those are mutually exclusive choices. See First Wis. Trust Co., 93 Wis.2d at 271, 286 N.W.2d at 366; Wis. Stat. § 704.29(4)(b). As the court stated in First Wisconsin Trust:
The right to elect which course he will pursue remains with the landlord until he makes his election by taking some step which clearly evidences an intent to' make a choice between the two inconsistent remedies that are open to him.
First Wis. Trust, 93 Wis.2d at 271, 286 N.W.2d at 366 (quoting Weinsklar Realty Co. v. Dooley, 200 Wis. 412, 415, 228 N.W. 515, 517 (1930). However, as the court instructs, the mere entry and taking possession of the premises does not necessarily constitute acceptance of surrender as a matter of law. That act is equivocal, as the landlord’s obligation to mitigate damages by re-letting the premises could cause it to re-rent without the intent to accept the surrender of the premises, and it is the landlord who has the right to elect which remedy it will select.

C.C.S. North Henry, LLC v. Tully, 240 Wis.2d 534, 624 N.W.2d 847, 850, 851 (App.2000).

In the Tully case the court reasoned that since the landlord had rented the property to the Army Store and then had refused to apply the rentals received therefrom in mitigation of the lessee’s damages the landlord had as a matter of fact elected to re-let the premises in its own right thus discharging the lessee’s liability for future rents.

As the Supreme Court of Kansas held in Guy v. Gould, the party who has breached the contract is the lessee, and in jurisdictions such as Tennessee and Kansas 'the landlord must make reasonable efforts to re-let the premises and thus mitigate the damages owing by the lessee. The election belongs to the lessor and “the tenant does not need to be told what his obligation is. He knows it is to pay rent to the end of the term, according to the covenant of the lease. Therefore reletting does not establish release of obligation to pay rent, and notice of reletting is not necessary to prevent surrender.” Guy v. Gould, 126 Kan. 25, 266 P. 925 (1928).

To accept, as Maney purports to do, the New York rule and presume that reletting after abandonment manifests an intention by the landlord to discharge the tenant from future rentals defies the progression of common law and contract provisions relative to reletting. In the case at bar the tenant, not the landlord, breached the lease contract and set in motion this chain of events leading to the consequences of his abandonment.

Historically it has been a troublesome problem for landlords as to what course of action to pursue when a tenant has abandoned the premises before the end of the lease term. If the landlord simply stood aside and suffered the premises to remain vacant the lease relation continued, but if the landlord as a man of prudence attempted to utilize the premises by reletting them, he incurred the risk of terminating the landlord-tenant relationship and with it the liability of the tenant for the rent unless he was exceedingly careful. Under the prevailing rule in most jurisdictions, a landlord is under no obligation to attempt to relet the premises following an abandonment thereof by the tenant before the expiration of the lease. 49 Am.Jur.2d Landlord and Tenant § 621 (1970); Groll, Landlord-Tenant: The Duty to Mitigate Damages, supra at 312; Comment, Landlord’s Obligation to Mitigate When Tenant Abandons, 1960 U.Ill.L.F.R.C. 1533.161 332; see e.g. Patterson v. Emerick, (1899) 21 Ind.App. 614, 52 N.E. 1012. Aberdeen Coal & Mining Co. v. City of Evansville (1896), 14 Ind.App. 621, 43 N.E. 316. In fact, a landlord who does more than sit idly by and collect rent may find he has acted to his detriment. As a result, although it is undesirable to simply permit premises to lie unproduetively vacant, landlords have been reluctant to take steps to relet for fear their actions would terminate the tenant’s liability.
To avoid this result, lease provisions evolved expressly covering the situation where the tenant abandons the leased premises before the expiration of the term. Both parties found such provisions more advantageous than simply permitting the premises to lie vacant. The lessors preferred to relet since this meant they would no longer have to rely solely upon the continued solvency of the original tenant, and their losses would be reduced in the event of that lessee’s insolvency or disappearance. See 2 R. Powell, The Law of Real Property ¶ 231[1] (P. Rohan ed.1977). The tenant preferred to have the premises relet since its losses would also be reduced or obviated by such an action. Accordingly, the parties began expressly contracting to permit a landlord to relet the premises in the event of a forfeiture or abandonment by the tenant.
It is now clear a lessor and lessee may expressly agree that a re-entry and re-letting shall not constitute a surrender. 3A G. Thompson § 1345; McCormick, The Rights of the Landlord upon Abandonment of the Premises by the Tenant, 23 Mich.L.Rev. 211 (1925). Since a lease, like other contracts, should be reasonably interpreted to effectuate the intention of the parties, when a lease expressly permits the landlord to relet, there is no reason why it should not be enforced, thereby recognizing the integrity of the landlord and the tenant to contract, Comment, Landlord’s Obligation to Mitigate When Tenant Abandons, supra; consequently, these provisions have been uniformly upheld by the courts. 3A G. Thompson § 1343; Krieger & Shurn, Landlord-Tenant Law: Indiana at the Crossroads, 10 Ind.L.Rev. 591, 639 (1977).
There is nothing illegal or improper in an agreement that the obligation of the tenant to pay all the rent to the end of the term shall remain, notwithstanding there has been a re-entry for default; and, if the parties choose to make such an agreement, we see no reason why it should not be held to be valid as against both the tenant and his sureties.
Grommes v. St. Paul Trust Co., (1893) 147 Ill. 634, 35 N.E. 820, 822; accord Yates v. Reid, (1950) 36 Cal.2d 383, 224 P.2d 8; Ruston v. Centennial Real Estate & Investment Co., (1968) 166 Colo. 377, 445 P.2d 64; see also Waffle v. Ireland, (1927) 86 Ind.App. 119, 155 N.E. 513. As long as the landlord does no more than exercise the rights accorded to it under the lease, the lessor’s conduct will not result in a surrender of the lease by operation of law.

Grueninger Travel, etc. v. Lake County Trust, 413 N.E.2d 1034,1041-1042 (Ind.Ct.App.1980).

The Grueninger case involved a lease provision wherein the landlord, at his option, could relet the premises and reduce the tenant’s obligation for future rent by the offset resulting or could terminate the lease. The court then observed:

This court has previously held that when such a savings clause appears in a lease and the landlord endeavors to relet the premises, these reletting efforts will not constitute a surrender by operation of law, Hirsch v. Merchants National Bank & Trust Company of Indiana, (1975) 166 Ind.App. 497, 336 N.E.2d 833; Carpenter v. Wisniewski, (1966) 139 Ind. App. 325, 215 N.E.2d 882, since it would be inconsistent to ask landlords to act diligently to mitigate damages and then, in effect, penalize them for so acting by finding their steps toward mitigating evidenced an acceptance. Today we decline to limit the permissible bounds within which the landlord can act to only efforts to relet. If the lease expressly provides, as the agreement herein did, that the landlord may relet without terminating the original lessee’s liability, then we see no reason to hold a surrender and acceptance have been effectuated as a matter of law simply because the landlord relets the premises. See Groll, Landlord-Tenant: The Duty to Mitigate Damages, supra at 316; Krieger & Shurn, Landlord-Tenant Law: Indiana at the Crossroads, supra at 638; cf. Waffle v. Ireland, supra. Before we will imply an acceptance by the landlord, the landlord’s actions must be equivalent to an agreement to accept the proffered surrender. Carp & Co. v. Meyer, (1929) 89 Ind.App. 490, 167 N.E. 151. Where as here, the landlord acts pursuant to the lease agreement, its actions are consistent with the subsisting landlord-tenant relationship and therefore will not discharge the original tenant.

Grueninger Travel, etc. v. Lake County Trust, 413 N.E.2d 1034, 1043 (Ind.Ct.App.1980).

Finally, the Maney case seems to be inconsistent with Quarles v. Shoemaker, 978 S.W.2d 551 (Tenn.Ct.App.1998) (perm.app.denied). In that case the tenant abandoned the leased premises and landlord sought to recover rentals for the unexpired term of the lease.

Bennett took steps to re-lease the property, but it essentially remained vacant from February, 1996 through January, 1997.
At no time did Quarles consent to a surrender of the premises and waive his right to collect rent for the remaining term of the lease, and his actions in securing the property may fairly be construed as an effort on his part to secure the unoccupied premises and mitigate damages upon Shoemakers’ breach and abandonment of the lease.

978 S.W.2d 551, 552, 554 (Tenn.Ct.App.1998).

Nothing in the proof in this case provides factual support for finding an intent by Bilbrey to accept Worley’s abandonment of the premises as a surrender in law. While the Worleys were still in possession of the premises he forwarded his letter of November 25, 1996 extending the lease contract for ten years. The Worleys acknowledged in their testimony that at the time they determined to abandon the premises Bilbrey had already made his intentions known to them, and no other evidence appears in the record that would show any intention by Bilbrey at any time to do other than hold the Worleys to the lease agreement.

While the course taken by the lessor in this case is harsh and costly to the lessee, it is a business decision clearly authorized by the unambiguous provisions of the lease agreement. Believing that Karns does not mandate the holding in Maney relative to the necessity of notice to the defaulting party prior to reletting the premises, we decline to follow Maney, reverse the final judgment of the chancellor on this issue, and reinstate his initial judgment of January 25, 2002, with judgment to be entered in favor of Agnes Bilbrey’s Estate and Bilbrey Family Limited Partnership in the amounts set forth in the chancellor’s judgment of January 25, 2002.

The case is remanded to the tidal court for such further proceedings as may be necessary. Costs of the cause are assessed to the appellees.

      . Also included in the case below was an issue of "additional rent” based on a provision of the lease providing for payments of an overage fee to the landlord of 2% of all annual gross sales over $1,066,240. This issue was tried and judgment rendered thereon by the trial court. The "additional rent” issue was not appealed by either party and will not be further considered.

      . But see Charleston, S.C. Mining & Mfg. Co. v. American Chemical Co., et al., 126 Tenn. 18, 150 S.W. 1143 (1911) citing Gray for the general rule that a surrender by operation of law requires "some act so inconsistent" with the landlord-tenant relation as to imply their agreement to a surrender. In this 1911 supreme court case involving a mineral lease, a subsequent purchaser of the leasehold delayed in paying rent and exercising his mineral rights. When he later tried to pay the royalty to the landlord’s successor, the owner of the lease remainder refused the royally. The supreme court considered these actions in concert to operate as a surrender.

      . The two alternatives available to the landlord are correctly paraphrased as they appear in 49 Am.Jur.2d Landlord & Tenant § 243. The second option as it relates to notifying the tenant is not supported by Weinsklar Realty Co. v. Dooley, 200 Wis. 412, 228 N.W. 515, 67 A.L.R. 875. The only other case cited to support the Am Jur. text is Centurian Development Ltd. v. Kenford Co., 60 A.D.2d 96, 400 N.Y.S.2d 263. Likewise, in the text of the opinion the authorities cited are not supportive of a requirement that the landlord notify the tenant that the reletting is for the purpose of mitigation. Kersten v. H.C. Prange Co., 186 Wis.2d 49, 53, 520 N.W.2d 99, 101 (Ct.App.1994) does not so state and the only other case cited, First Wisconsin Trust Co. v. L. Wiemann Co., 93 Wis.2d 258, 271, 286 N.W.2d 360, 366 (Wis.1980), in fact states: “When a tenant vacates or abandons the lease premises before the end of the lease term, the landlord has a right to elect (1) to accept the surrender and terminate the lease or (2) to enter and take possession for the purpose of mitigating the damages for which the tenant is liable because of his breach of the lease.” 93 Wis.2d 258, 286 N.W.2d 360, 366 (1980). Weinsklar Realty Co. v. Dooley held that the bringing of the action to collect rent from the tenant provided the only notice to the tenant necessary and “constituted ... such unequivocal act as would amount to an election of remedies in a proper case.” 200 Wis. 412, 228 N.W. 515, 517 (1930). Centurian Development Ltd. recognized New York cases limiting the Gray v. Kaufman Dairy Rule,, particularly in cases where contractual provisions provided reletting options but reaffirmed the New York common law rule.


source: Caselaw Access Project

author: HOLLY M. KIRBY, J.,

license: Public Domain

text:
    R.L. LOVE v. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES LOCAL 1733, and Willie Joe Alexander.
    Court of Appeals of Tennessee, Western Section, at Jackson.
    May 18, 2004 Session.
    Nov. 1, 2004.
    Permission to Appeal Denied by Supreme Court May 2, 2005.

      Kenneth P. Jones, Memphis, Tennessee, for the appellant, R.L. Love.
    Murray B. Wells, Memphis, Tennessee, for the appellee, American Federation of State, County and Municipal Employees Local 1733.
    Willie Joe Alexander, appellee, pro se.
   OPINION

HOLLY M. KIRBY, J.,

delivered the opinion of the Court,

in which ALAN E. HIGHERS, J., and DAVID R. FARMER, J., joined.

This is a claim against a union for negligence. The plaintiff was a correctional officer at a county correctional facility and a member of the defendant union. The employee was terminated from his job after he was arrested for possession of a controlled substance. The employee sought the union’s assistance in appealing his termination through the county grievance process. After his grievance was preliminarily denied, the union had fifteen days in which to appeal the denial by requesting arbitration of the employee’s case. The employee urged the union to file a request for arbitration, and the defendant union officer agreed to do so. However, the defendant union officer failed to submit the request for arbitration by the deadline, and consequently the request was denied as untimely. The employee then sued the union and the union officer, alleging that the union officer’s conduct was negligent and that it constituted a breach of contract. After a bench trial, the trial court rejected the employee’s breach of contract claim. It concluded that the defendants’ failure to request arbitration in a timely manner was negligent, but that the negligence did not cause the employee’s damages. The employee now appeals. We affirm the dismissal of the breach of contract claim, but reverse the dismissal of the negligence claim, finding that the evidence preponderates against the trial court’s conclusion that the employee failed to prove causation of his damages.

From November 1989 until his termination on June 30, 1998, Plaintiff/Appellant R.L. Love (“Love”) was employed by Shelby County, Tennessee, as a correctional officer at the Shelby County Correctional Center in Memphis (“Penal Farm”). As a correctional officer, Love was a dues-paying member of Defendant/Appellee American Federation of State, County and Municipal Employees Local 1733 (“the Union”). Defendant/Appellee Willie Joe Alexander (“Alexander”) served as President and/or Acting Director of the Union. Alexander was in charge of the day-to-day operations of the Union.

Mid-morning on June 5, 1998, Love was stopped in his car by a police officer in Memphis for disregarding a stop sign. On the front seat of Love’s vehicle, the police officer observed what turned out to be a marijuana cigarette. Love was arrested and charged with disregarding a stop sign as well as for possession of a controlled substance. Later that day, Love was released without bond. Love called his supervisor at the Penal Farm to inform him of the arrest. Love was later suspended without pay from his job at the Penal Farm based on the seriousness of the charges against him.

The administrative grievance process for employees of the Penal Farm is outlined in the Memorandum of Understanding (“MOU”) between the Shelby County Government Correction Center (“County”) and the Union. The MOU is a voluntary agreement designed “to assure harmonious relations between the County and the Union and to provide for peaceful adjustment of differences which may arise related to wages, hours and other working conditions of employment consistent with the Labor Policy of Shelby County.” While the MOU is not an enforceable contract, it represents the understanding between the Union and the County.

On June 7, 1998, pursuant to the grievance procedure outlined in the MOU, Union Steward Lillie Wilson filed a grievance on Love’s behalf with the County. On June 15, 1998, Love received notification that a “Loudermill hearing” would be held to determine whether his employment would be terminated. The Loudermill hearing was conducted on June 18, 1998, and the Department determined that Love’s employment would be terminated effective June 30, 1998. The stated bases for his termination were willful disregard of lawful orders and violation of administrative policies and procedures. It is undisputed that this arose solely out of the marijuana found in Love’s car. At the time his employment was terminated, the criminal charges against Love were still pending in Shelby County criminal court.

On July 6, 1998, the Union filed another grievance on Love’s behalf, known as a “Step III” grievance, referring to the third step in the grievance process outlined in the MOU. The grievance asserted that Love was wrongfully terminated because he had not yet been convicted of the criminal charges against him, and requested that Love’s termination be canceled, that all charges against him be dropped, and that all documentation regarding the termination be removed from his employment file. In the grievance, Love also sought reinstatement, as well as his lost wages for the time during which he was suspended.

On July 27,1988, the County held a Step III hearing on Love’s grievance. The County denied the grievance in a letter dated August 5, 1998, addressed to Union Director Dorothy Crook. The letter was faxed to the Union that day, and it is undisputed that the Union received the faxed letter. At this time, the criminal charges against Love were still pending in Shelby County criminal court.

Under the terms of the MOU, after the denial of Love’s Step III grievance, the Union had seven (7) business days from the date of the denial within which to appeal the matter to the Shelby County Civil Service Merit Board (“Merit Board”) for review, or, in the alternative, fifteen (15) business days in which to request arbitration of Love’s termination. The MOU provides that only the Union can request arbitration; the County would not accept a request for arbitration from an individual member.

On August 11, 1998, Love received a copy of the August 5, 1998 letter to the Union denying his claim. The next day, on August 12, 1998, Love went to the Union hall and met with Alexander, the Union’s President and Acting Director. In this meeting, Love formally requested that the Union submit his termination to arbitration or to the Merit Board for review. Love told Alexander that he was willing to appeal the termination through either route, but that he preferred arbitration. Love reminded Alexander that the time for appeals had begun to run. Alexander told Love that he had just finished preparing some cases for the Merit Board, and assured Love that he would call to set up his appeal. Love asked Alexander if there was anything else for Love to do to expedite the matter, but Alexander said no, that he would take care of it.

A few days later, on August 18, 1998, the Shelby County criminal court dismissed the criminal charges against Love. Love had filed in the criminal court the affidavit of his nephew, Jasper Love, who admitted that the marijuana found in Love’s car belonged to him, not to Love. Ultimately, Love paid a fine for disregarding the stop sign, and the charge of possession of a controlled substance was dropped. The record on Love’s criminal charge was expunged.

In the meantime, Alexander, despite his assurances to Love, failed to make a timely request for review of Love’s case with either the Merit Board or through arbitration. On September 15, 1998, well after the fifteen-day time limitation to request arbitration, Alexander belatedly sent a letter to the County seeking arbitration of Love’s termination. On September 23, 1998, the County sent Alexander a letter denying the Union’s request for arbitration as untimely. At that point, the termination of Love’s employment became final.

On January 15, 1999, Love filed this lawsuit in the trial court below. On November 2, 2002, Love filed an amended complaint against the Union and Alexander (collectively, “defendants”), alleging that they were negligent in failing to file a timely appeal of the termination of his employment. As a result of the defendants’ negligence, Love asserted, the termination of his employment became final and he was precluded from seeking reinstatement, despite the fact that the criminal charges against him had been dismissed and his work record was exemplary. Consequently, Love contended, the defendants’ negligence caused him to suffer monetary damages including, but not limited to, lost wages, lost employment benefits, pain, suffering, and mental anguish. Love also asserted a breach of contract claim against the defendants, claiming that, when Alexander promised to file an appeal on Love’s behalf, the Union and Alexander “thereby entered into an agreement with Love to timely appeal his termination.” The failure to do so, Love alleged, constituted a breach of that oral agreement.

On May 13 and 14, 2003, a bench trial was conducted. At the outset of the trial, the parties presented to the trial court thirty-three stipulated exhibits, which were entered into evidence. Among those documents was the MOU between the County and the Union, several favorable evaluations of Love’s performance issued during Love’s tenure at the Penal Farm, and copies of the grievances filed on Love’s behalf and the ensuing grievance denials.

Also included in the stipulated exhibits were previous decisions of the Civil Service Merit Board, submitted to support Love’s argument that, under established County policy, he would have been reinstated had his case been arbitrated. These previous decisions included a published order of the Merit Board regarding the case of correctional officer Jeffery Sor-rells (“Sorrells”). The decision on Sorrells was dated March 4, 1998, shortly before Love’s arrest. In that case, Sorrells had been suspended from work as a result of his arrest for assault. In the hearing on Sorrells, the Director of the Correction Center, Rob Sprecher, testified “that when a[] Corrections Officer is arrested for a job related misdemeanor and charged with a crime, they are put on suspension without pay status pending final court action.” Sprecher added that, “if the Petitioner is acquitted and the charges pending against the Petitioner are dismissed, the Petitioner will be returned to work with full backpay and seniority rights.” Sorrells had requested that he be permitted to return to work until a final court action was rendered on his assault charge, consistent with the policy described by Sprecher. The Board granted Sorrells’ request, stating that “the Correction Center has consistently followed their rules and regulations concerning an officer being arrested and charged with assault. It is also the opinion of the Board that if the Petitioner is acquitted and all charges pending against him are dismissed, the Petitioner will return to his position and receive full back-pay and benefits.”

The stipulated exhibits included several other recent Merit Board decisions. Some of the decisions demonstrated the Board’s policy of reinstating an officer when the officer’s criminal charges are dismissed, while others showed that the Board considered the employee’s good work performance as a mitigating factor weighing in favor of granting the relief requested by the employee.

Several witnesses testified at trial. Love submitted the testimony of Danny Kail (“Kail”), the County’s deputy administrator for human resources and the County employee overseeing employee labor relations at the time Love’s termination was under consideration. Kail received Alexander’s belated request for arbitration of Love’s termination and denied it as untimely. Kail testified that the County followed a practice of suspending an officer without pay if he was arrested for a crime, and that the suspension would remain in effect until the criminal charges were resolved. If the charges were dismissed or dropped, Kail stated, the employee was ordinarily summoned back to work.

Kail was instrumental in drafting the MOU between the County and the Union, and indeed he “wrote most of it.” Under the process outlined in the MOU, Kail testified, once an employee’s grievance is denied in Step III of the grievance process, the union can request arbitration on behalf of the employee, or the employee can appeal to the Merit Board. If the employee asks the Union to arbitrate, the Union has a fiduciary duty to decide whether the ease has sufficient merit to move forward. If the Union determines that the case has merit, it submits a request and the case then proceeds to arbitration. Kail testified that the arbitrator’s decision is not binding on the County; rather, it is a recommendation to the County Mayor, who can accept or reject that recommendation.

The trial court also heard testimony from Warren Cole (“Cole”), a correctional officer at the Penal Farm and secretary of the Union at the time of Love’s termination. Similar to Kail, Cole testified that normally, when an officer is arrested and charged with a criminal offense, he is suspended before the outcome of any court action on the criminal charges. In Love’s case, Cole testified, he and Claude Elliott represented Love at the Step III grievance hearing. When the grievance was denied, Cole conceded, it was the Union’s responsibility to requést arbitration. Once arbitration is requested, Cole explained, a grievance committee meets to determine whether “it was a good and true grievance,” and then votes to’ determine whether the case would be. sent to arbitration. Cole acknowledged that it was Alexander’s responsibility to request arbitration on Love’s behalf, and he recalled that Alexander told Love that Alexander had “it covered. Don’t worry about it.” Despite Alexander’s assurances to Love, Cole testified, the request for arbitration of Love’s termination was not processed. Cole said that Love “was a very dependable officer as well as being the chief steward. He led by example. I can’t recall him being late for work any. I don’t have any knowledge of any complaints from members of management concerning Mr. Love about his work ethics.”

Another correctional officer at the Penal Farm, Lillie Wilson (“Wilson”), testified at trial. Wilson was a Union steward at the time of the events in question, and she explained that a steward was a Union member who listened to complaints of employees and helped them file grievances. Wilson testified that, at the time of Love’s termination, he was a chief steward for the Union. So that Love would not have to file his own grievance, Wilson filed the Step III grievance on Love’s behalf, but was not involved with his case after that point. Wilson observed that Love’s job performance seemed to be good.

Love testified on his own behalf. Love noted at the outset of his testimony that his job performance evaluations had always been positive, as reflected in numerous job performance evaluations included in the stipulated exhibits. Love also described the events surrounding his arrest on June 5, 1998, and explained that the criminal charges against him were dismissed and his record was expunged. He claimed that very few officers are suspended without pay when they are charged with a crime but have not yet been convicted.

Love testified that he received a copy of the August 5, 1998 letter denying his Step III grievance on August 11, 1998, and that he visited Alexander the following day. At that meeting, Love said, he told Alexander that he wanted to go to arbitration. Love testified that Alexander assured him that he would “take care of it.” Love said that, after that, he called Alexander’s office periodically to make sure the paperwork was in process. Love later learned that the request for arbitration of the termination of his employment was not timely filed. Love asserted that, had he been given the opportunity to arbitrate, he believed that he would have been reinstated -and made whole for all of his lost work time. Love testified that the ordeal had caused him stress, problems sleeping, and nervousness, and claimed that it also caused financial problems and problems in his marriage.

Alexander testified at trial, and, in addition, portions of his prior deposition testimony were read into the record. In his deposition, Alexander gave no justification for the Union’s failure to file a request for arbitration on Love’s behalf. He stated:

[Question]: [S]ince the union was aware of the [August 5, 1998 letter denying the Step III grievance], [shouldn’t] the union have timely filed the arbitration or civil service review petition?
[Alexander]: I would agree with that, yes.
[Question]: Do you know why that did not happen?
[Alexander]: No, I don’t.

At trial, Alexander admitted that Love asked him to file a request for arbitration, but suggested that by the time Love approached him to ask that the Union file a request for arbitration, such a request was already untimely and they both knew it. Alexander said that he nevertheless “obliged” Love by sending the belated letter. Alexander confirmed that, when a member wants arbitration, the Union’s grievance committee determines whether the case is sufficiently meritorious for the Union to request arbitration, and if it is meritorious, the Union sends a letter requesting arbitration.

At the conclusion of the trial, the trial court issued a ruling from the bench. Initially, the trial court rejected Love’s breach of contract claim, stating that there was no “breach of contract cause of action stated as such.” With respect to the negligence claim, the trial court found that Love in fact met with Alexander on August 12, 1998, as Love had maintained, and that Alexander assured Love that “he would take care of it for him.” Thereafter, the trial court concluded, the Union negligently failed to timely seek arbitration on Love’s behalf. However, the trial court found that Love had not shown that the defendants’ negligence caused any damage to him, because the proof did not show that, had Love gone through the arbitration process, the arbitration would have resulted in a ruling favorable to Love. The trial court analyzed it in a manner akin to a legal malpractice claim:

DOt’s ... two cases, a case within a case....
... [The defendants] did have a duty ... to take steps that were normal according to all of the testimony to protect [Love’s] rights in connection with the arbitration.... The proper steps were not taken to protect Mr. Love in connection with the arbitration....
[The defendants] dropped the ball....
The second case within a case is the question of what would have happened had they not dropped the ball.... [Love] has to prove it more probably than not that he would have prevailed [in the arbitration]. Based on all of the proof that I’ve heard I’m not convinced that Mr. Love has carried that burden of proof that he would prevail. There would have been numerous exhibits presented as to what happened, what his record was, all of this was presented to the various entities that reviewed his work record and so forth and they came up with termination.
I can’t say that [Love] proved to me that if he went through the process of arbitration ... that the arbitration would have been in his favor or that the mayor would have acted in a way that was favorable to Mr. Love.

Thus, the trial court held that Love could not prove that the defendants’ negligence caused his damages. On May 20, 2003, the trial court entered a judgment in favor of the defendants, consistent with its oral ruling. From that order, Love now appeals.

On appeal, Love argues that the evidence preponderates against the trial court’s conclusion that the evidence was insufficient to show that he would have prevailed had his case been arbitrated. Love points out that, at the time he was terminated and at the time his Step III grievance was denied, he had not yet been absolved of the criminal charges against him. By the time his arbitration would have occurred, Love argues, his criminal charges were dismissed, his criminal record was expunged, and there was no longer any basis on which the arbitration panel could have upheld his termination. Love argues that the evidence at trial showed that Shelby County maintained a policy of reinstating an officer to his original position with full backpay and benefits if he were suspended based on criminal charges for which the officer was later acquitted. Further, Love notes that the evidence is undisputed that his work record was exemplary, which would have further improved the chance that he would have been reinstated in an arbitration proceeding. In addition, Love contends that the trial court erred in rejecting his breach of contract claim. Therefore, Love argues, the trial court’s decision should be reversed and the cause remanded for further proceedings related to damages.

In response, the defendants argue that the trial court should have applied the standard used in federal cases involving the breach of the duty of fair representation under the National Labor Relations Act (“NLRA”). Under the federal standard, to prove that a union breached its duty of fair representation to a union member, the plaintiff must show that the alleged breach was in bad faith, was discriminatory, or was arbitrary. See Vaca v. Sipes, 386 U.S. 171, 177-78, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). The defendants concede that the NLRA is inapplicable to the instant case, since Love was employed by a governmental entity. They argue, however, that the federal standard should be applied in the instant case, rather than a simple negligence standard, so that a union representing governmental employees will not be held to a different standard of liability as other unions in an identical situation. Alternatively, the defendants argue, the trial court correctly concluded that Love did not prove that he would have succeeded in arbitration.

The trial court’s findings of fact are reviewed de novo on the record, presuming those findings to be correct unless the evidence preponderates otherwise. Cross v. City of Memphis, 20 S.W.3d 642, 645 (Tenn.2000); Tenn. R.App. P. 13(d). Conclusions of law are reviewed de novo, with no such presumption of correctness. Thurmon v. Sellers, 62 S.W.3d 145, 151 (Tenn.Ct.App.2001).

Love argues on appeal that the trial court erred in rejecting his breach of contract claim. Love claims that, when Alexander agreed to “take care of’ appealing his termination at the August 12, 1998 meeting, this created an oral agreement in which Alexander agreed to timely appeal his termination. Love does not specify the terms of the agreement, nor does he identify any consideration given or bargained-for exchange between the parties. Furthermore, the evidence submitted at trial does not support Love’s claim of the existence of a contract between him and the defendants. Under these circumstances, we affirm the trial court’s conclusion that Love did not establish a breach of contract.

As to Love’s negligence claim, the defendants argue that the federal standard, applicable to federal cases involving the duty of fair representation under the NLRA, should be applied in the instant case to prevent disparate results between cases involving a non-governmental employer and a governmental employer. Whether the federal standard or a simple negligence standard should apply in such cases brought against the union by an aggrieved union member is an issue of first impression in Tennessee. The Union cites no other case applying this standard in a similar situation. Under the circumstances, where the NLRA is clearly not applicable, we decline to adopt the federal standard. Therefore, we apply a negligence analysis to this claim.

On appeal, the defendants do not dispute the trial court’s finding that Love met with Alexander on August 12, 1998, within the time limit for filing a request for arbitration, that Alexander assured Love that he would “take care of it,” and that the Union nevertheless failed to submit a request Love’s behalf within the required time period. The trial court concluded that the Union had a duty to Love to protect Love’s rights with respect to arbitration of his termination, and that the Union “dropped the ball” in failing to do so. This element of Love’s claim is not in dispute on appeal. The focus, then, is the trial court’s finding that Love did not carry his burden of proving that “more probably than not ... he would have prevailed” had the request for arbitration been timely filed.

In proving a negligence claim, the plaintiff must establish both causation in fact and proximate, or legal, causation as necessary elements of his claim. See Burroughs v. Magee, 118 S.W.3d 323, 327-28 (Tenn.2003). “Causation, or cause in fact, means that the injury or harm would not have occurred ‘but for’ the defendant’s negligent conduct.” Kilpatrick v. Bryant, 868 S.W.2d 594, 598 (Tenn.1993). Thus, “causation [in fact] refers to the cause and effect relationship between the tortious conduct and the injury.” Id. Once cause in fact is established, the question becomes whether the defendant’s negligence was the proximate cause of the plaintiffs injuries. Id. Determining proximate causation is a policy decision regarding whether to impose liability under particular circumstances when cause in fact has been established. White v. Lawrence, 975 S.W.2d 525, 529 (Tenn.1998). The Tennessee Supreme Court has explained the difference between cause in fact and proximate cause:

The distinction between cause in fact and proximate, or legal, cause is not merely an exercise in semantics. The terms are not interchangeable. Although both cause in fact and proximate, or legal, cause are elements of negligence that the plaintiff must prove, they are very different concepts. Cause in fact refers to the cause and effect relationship between the defendant’s tor-tious conduct and the plaintiffs injury or loss. Thus, cause in fact deals with the “but for” consequences of an act. The defendant’s conduct is a cause of the event if the event would not have occurred but for the conduct. In contrast, proximate cause, or legal cause, concerns a determination of whether legal liability should be imposed where cause in fact has been established. Proximate or legal cause is a policy decision made by the legislature or the courts to deny liability for otherwise actionable conduct based upon considerations of logic, common sense, policy, precedent and “our more or less inadequately expressed ideas of what justice demands or of what is administratively possible and convenient.” (Citations omitted.)

Snyder v. LTG Lufttechnische GmbH, 955 S.W.2d 252, 256 n. 6 (Tenn.1997). The Court has also established a three-part test for determining whether proximate cause exists:

1. The defendant’s conduct must have been a “substantial factor” in bringing about the harm complained of;
2. There is no rule or policy that should relieve the wrongdoer from liability because of the manner in which the negligence has resulted in the harm; and
3. The harm giving rise to the action could have reasonably been foreseen or anticipated by a person of ordinary intelligence and prudence.

See McClenahan v. Cooley, 806 S.W.2d 767, 775 (Tenn.1991); see Kilpatrick, 868 S.W.2d at 598 n. 1, Brown v. Hamilton County, 126 S.W.3d 43, 50 (Tenn.Ct.App.2003). Thus, a defendant’s negligence is the proximate cause of the plaintiffs injury if it was a substantial factor in causing an injury that could have reasonably been foreseen by an ordinary person. The negligence need not be the only cause of the plaintiffs injuries; it need only be a substantial factor. See Roberts v. Robertson County Bd. of Edu., 692 S.W.2d 863, 871 (Tenn.Ct.App.1985); Waller v. Skeleton, 31 Tenn.App. 103, 212 S.W.2d 690, 696 (1948). Both causation in fact and proximate cause must be proven by a preponderance of the evidence. Kilpatrick, 868 S.W.2d at 598. Consequently, the relevant inquiry is whether or not the defendant’s conduct “more likely than not” was a substantial factor in causing the plaintiffs injuries. See id. at 598-99. This standard is also applied in legal malpractice cases which, like the case at bar, require the plaintiff to prove “a case within a case.” See Metcalfe v. Waters, No. 02A01-9510-CV-00236, 1996 WL 622696, at *2 (Tenn. Ct.App. Oct 29, 1996), rev’d on other grounds, 970 S.W.2d 448 (Tenn.1998) (recognizing that, in order to prove causation in a legal malpractice claim, plaintiff must show that he more probably than not would have prevailed in his underlying case, essentially proving a “case within a case”); Bruce v. Olive, No. 03A01-9509-CV-00310, 1996 WL 93580, at *3 (Tenn.Ct.App. Mar.4, 1996) (same); see also Kilpatrick, 868 S.W.2d at 602 (holding that, in a medical malpractice case, a finding that the defendant’s negligence “ ‘might have’ ‘may have’ [or] ‘could have’ ” caused the injury is not enough; the plaintiff must prove that the negligence more probably than not caused the injury).

Therefore, the issue on appeal is whether the defendants’ negligence in failing to protect Love’s appeal “more likely than not” was a substantial factor -in causing Love’s termination to become permanent. Therefore, as correctly stated by the trial court, Love had the burden of proving that had the defendants not been negligent, i.e., had they timely requested arbitration, he “more likely than not” would have prevailed in the arbitration and would have been reinstated as a correctional officer.

In reaching the conclusion that Love did not meet his burden of proof, the trial court observed that Love’s case had been “presented at various steps to the county and through the process,” and he had failed to prevail at each of those steps. The trial court also found significant that the arbitration process is advisory, rather than binding. The trial court noted that Love did not show that the Mayor would have approved the arbitration result or “acted in a way that was favorable to Mr. Love.” Based on these facts, the trial court held that Love did not prove causation.

As the trial court observed, by the time Love received the August 5, 1998 letter denying his grievance and met with Alexander on August 12, 1998, he had gone through the third step of the County grievance process, to no avail. Shortly after that, however, on August 18, 1998, the criminal charges against Love were dismissed and Love’s record was expunged, based on Love’s proof that the marijuana found in his car did not belong to him. Once the criminal charges against Love were dismissed and his record expunged, this changed the picture drastically. At this point, no basis remained for Love’s employment to be terminated.

At the time the criminal charges against Love were dismissed, the steps remaining in the appeal process were for the Union grievance committee to determine whether Love’s request for arbitration was meritorious, for Love’s case to be arbitrated and a recommendation by the arbitrator sent to the County Mayor, and for the County Mayor to determine whether Love should be reinstated. The evidence at trial indicated that the Union’s grievance committee is not obligated to file a request for arbitration if it determines that the employee’s case is not meritorious. However, since the Union in fact filed a request for arbitration, albeit an untimely one, this indicates that the Union grievance committee found Love’s case meritorious. If the Union in fact requests arbitration, the result of the arbitration depends on the individual arbitrator. Finally, if the arbitrator recommends reinstatement of the employee, his recommendation is advisory and the County Mayor may decide nevertheless to deny reinstatement.

The trial court in this case rightly took into account the uncertainty involved in arbitration and the possibility that the County Mayor would not follow an arbitrator’s recommendation of reinstatement. However, the evidence on the County’s practice of reinstating employees whose criminal charges are dismissed, as well as the evidence of Love’s exemplary work record, was strong and unrefuted. Danny Kail, the County’s deputy administrator for human resources and its chief negotiator with the unions, testified that the corrections center’s practice, if an employee was suspended from work because of an arrest, and the criminal charges were later resolved in favor of the employee, was that the employee “would be summonsed back to work.” This was corroborated by the Civil Service Merit Board’s decisions regarding correctional employee Jeffery Sor-rells, in which the director of the corrections center testified that if a corrections employee is arrested while off duty and the charges are later dismissed, the employee would “be returned to work with full backpay and seniority rights.” The defendants offered no evidence to the contrary. Love also submitted evidence that he enjoyed an exemplary work record over the eight and one-half years he served as a correctional officer, and that officers with such records were given favorable consideration in disputes over punishment for first-time criminal offenses. Again, that evidence was unrefuted.

Thus, the undisputed evidence showed that Love had an exceptionally strong case for reinstatement. He was arrested off-duty for a non-violent offense, possession of a controlled substance; it was his first criminal arrest; the charges were dismissed because the owner of the controlled substance admitted culpability; Love’s record was expunged, and he was a long-term employee with an outstanding record of job performance. Apart from the vagaries inherent in the decisions of a human being such as an arbitrator or a county executive, it is hard to imagine how Love could have presented a stronger case. Under these circumstances, we must conclude that the preponderance of the evidence shows that if the defendants had protected Love’s right to arbitration, Love more likely than not would have prevailed. Therefore, we reverse the trial court’s conclusion that Love failed to prove that the defendants’ negligence caused his injuries. The cause must be remanded for the trial court to determine the amount of damages and any other related issues.

We affirm in part and reverse in part the decision of the trial court and remand for further proceedings not inconsistent with this Opinion. Costs on appeal are to be assessed equally to the Appellant R.L. Love and his surety, and Appellees American Federation of State, County and Municipal Employees Local Í733 and Willie Joe Alexander.

      . Love was 54 years old at the time of the incident.

      . The Loudermill hearing is the first hearing in the grievance process, in which the employee is given the opportunity to present reasons why he should not receive the proposed discipline.

      . In the first step of the process, or Step I, the union steward brings an oral grievance to the county shift commander on behalf of the employee within five working days of the incident at issue. The shift commander must consider the grievance and make a decision. If the employee is dissatisfied with the decision, he may proceed to Step II, which requires that the grievance be presented in writing to the operations manager or his designated representative. The operations manager reviews the grievance and issues a decision. If the employee is dissatisfied with the outcome in Step II, the aggrieved employee may proceed to Step III, where the grievance may be presented in writing to the Administrator of Security. The Administrator of Security then makes arrangements to meet with the Union, the grievant, and a management representative so that each will be afforded an opportunity to present his position on the matter.

      . Love's initial complaint named the Shelby County Correction Center, Robert Sprecher, Robert Moore, and Jim Rout, Mayor of Shelby County, Tennessee, as additional defendants. Love later voluntarily dismissed those defendants. The amended complaint also included revised claims for relief.

      . Prior to the trial, the defendants filed a motion to dismiss, claiming that Love's lawsuit was preempted by the NLRA. On February 13, 2003, the trial court denied the motion to dismiss, concluding that federal law was inapplicable because the NLRA does not apply to employer-employee relations of any state or political subdivision thereof, citing City of Alcoa v. Int’l B'hood of Elec. Workers, Local Union 760, 203 Tenn. 12, 308 S.W.2d 476 (1957). The defendants now concede that Love’s claim is not preempted, but argue that the standard applied in federal NLRA cases should apply to his .claim.'