author: HOLLY M. KIRBY, J„

text:
    Timothy V. RILEY and Sarah Riley v. Richard O. WHYBREW, Sandra K Parker, Marina C. Parker, Five John Does and Five Jane Does.
    Court of Appeals of Tennessee, Western Section, at Jackson.
    March 15, 2005 Session.
    Aug. 15, 2005.
    Permission to Appeal Denied by Supreme Court Dec. 27, 2005.

      Gary R. Wilkinson and C. Michael Becker, Memphis, for defendant/appellee Richard 0. Whybrew.
   OPINION

HOLLY M. KIRBY, J„

delivered the opinion of the Court,

in which W. FRANK CRAWFORD, P.J., W.S., and DAVID R. FARMER, J., joined.

This case is about nuisance and infliction of emotional distress. The plaintiff homeowners and their minor child lived in a house in a subdivision. The defendant landowner owned a house next door to the plaintiffs’ home. The defendant landowner rented his house to tenants. The tenants allegedly began to engage in disturbing conduct, including illegal drug use, discharging firearms, and harassment. The plaintiffs sued the tenants and the defendant landowner for nuisance and for intentional and negligent infliction of emotional distress. The defendant landowner filed a motion for summary judgment, asserting that the plaintiffs had no medical evidence of their emotional distress. Counsel for the plaintiffs did not respond to the motion for summary judgment and did not notify the plaintiffs of the pending motion. The trial court granted summary judgment in favor of the landowner. The plaintiffs later got a new attorney and filed a motion to set aside this judgment. The trial court set aside the grant of summary judgment, to enable the plaintiffs to file a response. After the plaintiffs filed a response, the trial court again granted summary judgment in favor of the landowner. We affirm the grant of summary judgment as to the claim of intentional infliction of emotional distress, and reverse as to claims of nuisance and negligent infliction of emotional distress.

Defendant/Appellee Richard Whybrew (“Whybrew”) owned a house and lot located in Memphis, Tennessee. The house Whybrew owned was located next door to the home occupied by Plaintiff/Appellants Sarah and Timothy Riley (“Rileys”) and their minor son.

In 1998, Whybrew rented the property to defendants Sandra K. Parker and Marina C. Parker (“Parkers”). Soon thereafter, the Rileys began experiencing problems with the Parkers. A high volume of unknown persons would come to the Par-kers’ house at all hours of the day and night, with horns honking, tires squealing and loud voices. They would drive up, engage in a brief conversation or transaction with a resident at the Parkers’ home, and leave after a few minutes. The Rileys overheard numerous conversations about the sale of drugs, as well as frequent profane and abusive language. On several occasions, firearms were discharged at the Parkers’ residence at various times during day and night. Some activities were directed toward the Rileys; foreign objects and chemicals were put in the gas tanks of their automobiles, a laser pointer was aimed at Timothy Riley, personal property was stolen from the Rileys’ home, and when the Rileys were seen by the Parkers, the Parkers or their visitors would taunt them, curse them or stare menacingly at them. In September 1999, the Rileys’ dog was shot by a visitor to the Parkers’ home. In October 1999, law enforcement officials conducted a raid on the Parkers’ residence and defendant Marina Parker was arrested for possession of marijuana. Despite the arrest, the disturbing activities at the Parkers’ home continued.

As a result, the Rileys employed an attorney to notify Whybrew of the problems. In early February 2000, the attorney sent Whybrew a letter informing him that his rental property was “being used for illegal activities, in violation of the housing and zoning codes, and probably in violation of the terms of [the] lease.” Later in February 2000, Whybrew received a letter from J. Robert “Bobby” Carter, Jr. (“Carter”), Director of the Narcotics Prosecution Unit of the Office of the Shelby County Attorney General. Carter’s letter also referred to the drug trafficking activities at the home Whybrew rented to the Parkers, and informed him that the Shelby County Sheriffs office had raided the Par-kers’ home on October 31, 1999 and had charged Marina Parker with unlawful possession of a controlled substance (marijuana). The letter noted that the amount of controlled substance found at the Parkers’ home was not enough to compel Whybrew to evict the Parkers, but stated that Carter wanted Whybrew to be aware of the situation.

In March 2000, Sarah Riley contacted Whybrew to discuss the activities occurring on Whybrew’s property. Whybrew allegedly responded that the Parkers had a lease and paid their rent on time, and he did not plan to take action against them.

In April 2000, the Rileys filed a lawsuit against Whybrew, the Parkers, and ten “John or Jane Doe” defendants. The suit detailed the illegal activities allegedly engaged in by the Parkers, including the use and sale of drugs on the premises, the discharge of firearms, sabotaging the Ri-leys’ car by putting foreign objects in the gas tank, using foul and abusive language, shooting the Rileys’ dog, and theft of the Rileys’ property. The Rileys alleged that they pleaded with Whybrew to either evict his tenants from the property or force them to stop this behavior. Based on these allegations, the Rileys asserted that the Parkers and Whybrew were guilty of intentional infliction of emotional distress, and that Whybrew was guilty of negligence in permitting the Parkers’ activities to continue. The Rileys sought compensatory damages, treble damages due to the “willful and wanton nature of the Defendant’s behavior,” and “abatement of the nuisance.”

In May 2000, the Parkers filed a pro se response asserting that the Rileys’ dog, a chow, had bitten Sandra Parker in the past, and that the dog escaped from the Rileys’ yard and attacked a friend of the Parkers. The Parkers alleged that their friend shot the dog in self defense. The Parkers maintained that they were not drug dealers, but were charged only with possession of marijuana when the police raided their home in October 1999, and noted that police had found no weapons or stolen property on the premises during the raid. The Parkers’ response stated that Whybrew had asked them to vacate the premises “just to passify [sic] the situation.” Apparently, during this time period between April and June 2000, the Parkers moved out of the house, shortly after being served with the lawsuit.

In his response to the Rileys’ complaint, Whybrew asserted that the other defendants were the sole cause of any injuries suffered by the Rileys. Whybrew maintained that the Rileys failed to state a claim upon which relief could be granted and asked the trial court to dismiss the complaint.

Discovery ensued. In October 2000, Whybrew submitted interrogatories to the Rileys. In November 2001, Whybrew took the depositions of both of the Rileys. After the Rileys’ depositions, on April 10, 2002, Whybrew filed a motion for summary judgment.

On the same day, Whybrew filed a statement of undisputed facts in support of the summary judgment motion. In this statement, Whybrew asserted that the activities of which the Rileys complained occurred between June 1999 and November 1999, and that the Rileys had admitted that Whybrew was not present during any of these activities. Whybrew stated that he first received notice of the illegal activities when he was contacted by the Rileys’ attorney in February 2000, and that Sarah Riley phoned Whybrew in March 2000 to complain about the Parkers. The statement of undisputed facts noted that the Rileys sought to recover damages from Whybrew for intentional infliction of emotional distress and negligent infliction of emotion distress, and that neither of the Rileys had sought medical, psychological, or psychiatric treatment for injuries related to the claim. Whybrew sought summary judgment based on this statement of undisputed facts and the depositions of Sarah and Timothy Riley.

The Rileys did not at that time file a response to Whybrew’s motion for summary judgment, nor did they dispute the assertions in Whybrew’s statement of Undisputed Facts. A hearing on the motion was held on July 12, 2002, and counsel for both the Rileys and Whybrew appeared. On August 5, 2002, the trial court granted summary judgment in favor of Whybrew.

In July 2008, after hiring a new attorney, the Rileys filed a petition to set aside the grant of summary judgment under Rule 60.02 of the Tennessee Rules of Civil Procedure. The Rileys alleged that the attorney who filed the lawsuit on their behalf failed to notify them of Whybrew’s motion for summary judgment and failed to respond to the motion, due in part to the death of the attorney’s father. The Rileys alleged that they learned of the dismissal of their claims against Whybrew in November 2002, after they contacted their attorney to inquire about the status of their case. After they were told of the dismissal, the Rileys obtained new counsel in an attempt to continue the suit against Whybrew. In support of their petition to set aside the summary judgment, the Ri-leys attached a copy of the letter written to Whybrew by Assistant Attorney General Bobby Carter.

The trial court heard arguments on the petition to set aside The grant of summary judgment on April 27, 2004. The Rileys’ original attorney, Mr. James Gordon, testified about the reasons for his failure to file a response to Whybrew’s motion for summary judgment or the Statement of Undisputed Facts. At the conclusion of the hearing, the trial judge, characterizing it as a “close case,” set aside the summary judgment “for the limited purpose of allowing [the Rileys] to file a response for the motion for summary judgment.” A hearing on the summary judgment motion was set for May 27, 2004.

On May 10, 2004, the Rileys filed a notice to take Whybrew’s deposition. Whybrew immediately moved to quash the deposition notice, arguing that the trial court set aside the grant of summary judgment “for the limited purpose of allowing [the Rileys] to file a Response to the motion.” Whybrew argued that, in seeking to take Whybrew’s deposition, the Rileys were attempting to introduce new evidence into the record that did not exist when the motion for summary judgment was originally filed.

On May 18, 2004, the Rileys filed their response to Whybrew’s motion for summary judgment. In support of their response, the Rileys filed their own affidavits and a response to Whybrew’s statement of undisputed facts. The response indicated that the Parkers’ objectionable activities continued after Whybrew received the letter from the Rileys’ attorney. In addition, the Rileys filed a motion to compel Why-brew’s deposition, asserting that the deposition was necessary to gain relevant information to respond to Whybrew’s motion for summary judgment. The Rileys also sought a continuance on the May 27 hearing on the summary judgment motion, to permit them time to depose Whybrew before the hearing.

On May 21, 2004, the Rileys filed a motion to amend and supplement their original complaint. The amended complaint further detailed the Rileys’ claim of nuisance against Whybrew, asserted that the Parkers’ activities and Whybrew’s failure to abate them resulted in a diminution in the value of the Rileys’ property, and asserted that the Rileys suffered additional harm after the filing of the original complaint. Not surprisingly, Whybrew opposed amending the complaint, alleging that permitting the amendment would only insert new issues into the record that were not present when the motion for summary judgment was filed.

On June 4, 2004, the trial court entered a written order memorializing its oral ruling on the Rileys’ Rule 60 petition to set aside the summary judgment in favor of Whybrew. The order stated that the trial court had set aside its grant of summary judgment to Whybrew “for the limited purpose of allowing the [Rileys] to file a response to the Motion for Summary Judgment filed on behalf of the Defendant, Richard O. Whybrew.” By order dated June 10, 2004, the trial court denied the Rileys’ motion to amend their complaint.

On June 25, 2004, the trial court, based upon the entire record, again granted summary judgment to Whybrew and dismissed the case against him with prejudice. The trial court made the order final as to Why-brew. In August 2004, the Rileys entered a voluntary non-suit as to the defendant Parkers and five defendant John Does and five defendant Jane Does. The Rileys now appeal the grant of summary judgment as to Whybrew.

On appeal, the Rileys assert that the trial court erred in granting summary judgment to Whybrew, in refusing to permit the Rileys to take Whybrew’s deposition, and in refusing to allow amendment of the Rileys’ original complaint.

A motion for summary judgment should be granted only when the movant demonstrates that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.04. The party moving for summary judgment bears the burden of demonstrating that no genuine issue of material fact exists. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn.1997). On a motion for summary judgment, the court must take the strongest legitimate view of the evidence in favor of the non-moving party, allow all reasonable inferences in favor of that party, and discard all countervailing evidence. Id. In Byrd v. Hall, 847 S.W.2d 208 (Tenn.1993), our Supreme Court stated:

Once it is shown by the moving party that there is no genuine issue of material fact, the nonmoving party must then demonstrate, by affidavits or discovery materials, that there is a genuine, material fact dispute to warrant a trial. In this regard, Rule 56.05 [now Rule 56.06] provides that the nonmoving party cannot simply rely upon his pleadings but must set forth specific facts showing that there is a genuine issue of material fact for trial.

Id, at 211 (citations omitted) (emphasis in original).

Summary judgment is only appropriate when the facts and the legal conclusions drawn from the facts reasonably permit only one conclusion. Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn.1995). Since only questions of law are involved, there is no presumption of correctness regarding a trial court’s grant of summary judgment. Bain, 936 S.W.2d at 622. Therefore, our review of the trial court’s grant of summary judgment is de novo on the record before this Court. Warren v. Estate of Kirk, 954 S.W.2d 722, 723 (Tenn.1997).

The standard of review for a trial court’s decision regarding permission to amend the complaint, as well as a pre-trial discovery issue such as the motion to compel Whybrew’s deposition, is an abuse of discretion standard. Harden v. Danek Medical, Inc., 985 S.W.2d 449, 454 (Tenn.Ct.App.1998); Doe 1 ex rel. Doe 1 v. Roman Catholic Diocese of Nashville, 154 S.W.3d 22, 42 (Tenn.2005). An abuse of discretion occurs when the trial court reaches a decision against logic that causes a harm to the complaining party or when the trial court applies an incorrect legal standard. Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn.2001) (citing State v. Shirley, 6 S.W.3d 243, 247 (Tenn.1999)). The decision of the trial court “will be upheld so long as reasonable minds can disagree as to the propriety of the decision [of the trial court].” State v. Scott, 33 S.W.3d 746, 751 (Tenn.2000).

On appeal, the Rileys first assert that the trial court erred in granting summary judgment to Whybrew on their claim for intentional infliction of emotional distress, asserting that there are disputed issues of material fact. The Rileys cite Miller v. Willbanks, 8 S.W.3d 607 (Tenn.1999), for the proposition that, in order to recover for damages for intentional infliction of emotional distress, they are not required to submit ex parte medical or scientific proof of serious mental injury. See Miller v. Willbanks, 8 S.W.3d 607, 613-614 (Tenn.1999). Regardless, in this case it is undisputed that Whybrew was not present during the Parkers’ alleged activities and there is no allegation that he instigated them. The Rileys allege inaction by Whybrew, that is, failure to stop the actions of his tenants. Even assuming that Whybrew had knowledge of the Par-kers’ illegal activities, his failure to stop them can only be characterized as negligence; no reasonable trier of fact could find that Whybrew’s failure to act constituted the intentional infliction of emotional distress. As such, the Rileys’ claim against Whybrew for intentional infliction of emotional distress must fail. Accordingly, the trial court correctly granted summary judgment in favor of Whybrew on this issue.

The Rileys further allege that the trial court erred in granting Whybrew summary judgment on the issue of negligent infliction of emotional distress. Whybrew cites Camper v. Minor, 915 S.W.2d 437 (Tenn.1996), for the proposition that a plaintiff claiming negligent infliction of emotional distress must prove serious emotional injury by medical or scientific proof unless there is also an accompanying physical injury. Camper, 915 S.W.2d at 446. Whybrew notes that the Rileys acknowledge that they never received medical treatment for their claimed emotional distress.

The Rileys respond that the medical or scientific proof required under Camper is only necessary for a “stand alone” claim for negligent infliction of emotional distress, citing Amos v. Vanderbilt University, 62 S.W.3d 133, 134 (Tenn.2001). In Amos, the court stated that the special proof requirement in Camper, i.e. the requirement that the claim of serious emotional injury be supported by expert medical or scientific proof, is “a unique safeguard to ensure the reliability of ‘stand-alone’ negligent infliction of emotional distress claims.” Amos, 62 S.W.3d at 137. It observed that the risk of a fraudulent claim for damages for emotional injury is less in a case in which there are multiple claims for damages: “When emotional damages are a ‘parasitic’ consequence of negligence conduct that results in multiple types of damages, there is no need to impose ... proof requirements that apply to ‘stand-alone’ emotional distress claims.” Id. While the Camper court abandoned the “physical manifestation” rule, the Amos court noted, the “Camper holding did not alter the longstanding rule that emotional injuries are compensable if accompanied by additional claims for damages.” Id.

The Rileys assert that a claim for property damage may be sufficient to obviate the need for expert medical or scientific proof to support the claim for negligent infliction of emotional distress. They cite Laxton v. Orkin Exterminating Company, Inc., 639 S.W.2d 431 (Tenn.1982), cited in Amos, in support of the assertion that “[e]ven before Camper, a plaintiff could recover for emotional injuries as one of several items of compensatory damages.” Amos, 62 S.W.3d at 137. See, e.g., Smith v. Gore, 728 S.W.2d 738, 751-52 (Tenn.1987); Laxton v. Orkin Exterminating Co., Inc., 639 S.W.2d 431, 434 (Tenn.1982); Roberson v. Univ. of Tenn., 829 S.W.2d 149, 152 (Tenn.Ct.App.1992). In Laxton, the plaintiffs sued an exterminating company for poisoning their water supply. Laxton, 639 S.W.2d at 431. The plaintiffs lived in a rural area and used a local spring as their water supply. Id. at 432. They hired an exterminating company to treat their house for termites. Id. at 432. Later, the plaintiffs noticed that their water had a foul smell and taste, so they contacted an environmentalist to test their water. Id. The tests showed that the water had been contaminated and the plaintiffs were told not to use the water for any reason. Id. After a period of time, the water became usable again and the plaintiffs returned to their normal use of the spring water. Id. However, after a heavy rain, the plaintiffs again found that their water had a foul taste and smell; additional testing showed that the water was again unfit for consumption. Id. At that point, the plaintiffs were advised to find a new source for their water supply. Id. In the interim, however, the plaintiffs and their children had been ingesting the contaminated water for some time; consequently, the plaintiffs began to worry about their health and the health of their children. Id. at 433. Later medical testing of the plaintiffs and their children showed no abnormalities resulting from the contaminated water. Id.

At trial, the plaintiffs were awarded damages for property damage, out-of-pocket expenses, and mental anguish. Id. at 431. The Court of Appeals affirmed the plaintiffs’ judgment for property damages and out-of-pocket expenses but reversed the award for mental anguish under the theory that there can be no recovery for shock or fright unless it is accompanied by physical injury or pain. Id. at 432 (citing Memphis St. Ry. Co. v. Bernstein, 137 Tenn. 637, 194 S.W. 902 (1917)). On further appeal, the Tennessee Supreme Court reinstated the award for mental anguish, holding that the “finder of fact may conclude that the plaintiff has sustained sufficient physical injury to support an award for mental anguish even if subsequent medical diagnosis fails to reveal any other physical injury.” Id. at 434. However, the Laxton court noted that the period of injury was limited to the time between discovery of the ingestion of the chemicals and the medical diagnosis that showed no injury. Id.

In the instant case, the Rileys claim mental anguish due to the actions of the Parkers and that the Parkers’ activities constituted a nuisance and that Why-brew, as landlord, maintained a nuisance by negligently allowing the Parkers’ behavior to continue. The claim of negligent infliction of emotional distress against Whybrew is related to the claim of negligence for his failure to abate the nuisance caused by the Parkers. See Lane v. W.J. Curry & Sons, 92 S.W.3d 355 (Tenn.2002) (“Tennessee’s definition of private nuisance is typical of how most states have defined the tort ... ”), (citing Restatement (Second) of Torts § 821D (1979)). As such, the Rileys’ claim for damages for emotional distress is not a stand alone claim and the Camper requirement of expert medical or scientific proof is not applicable.

Whybrew argues that there was no breach of any duty to the Rileys because there is no proof that he was aware of the Parkers’ illegal activities until February 2000, and the Parkers moved from the residence after being served with this lawsuit, in approximately April 2000. Apparently Whybrew contends that this time period was too short for Whybrew’s negligence to be actionable. We disagree, and hold that the Rileys have established a genuine issue of material fact on the claims of maintaining a nuisance and negligent infliction of emotional distress, sufficient to withstand a motion for summary judgment. Consequently, the grant of summary judgment in favor of Whybrew on these claims must be reversed.

The Rileys claim further that the trial court erred in refusing to permit them to depose Whybrew and to amend their complaint. In the trial court below, the trial court declined to permit the Rileys to do so, apparently in light of its decision to set aside the earlier grant of summary judgment only for the limited purpose of permitting the Rileys to file a response to the summary judgment motion. In view of our partial reversal of the grant of summary judgment, it is likely on remand that the trial court’s ruling on these issues will be reconsidered, particularly on whether deposing Whybrew is necessary to determine whether Whybrew had knowledge of the Parkers’ illegal activities prior to receipt of the February 2000 letter from the Rileys’ attorney. Consequently, we find it unnecessary to address these issues on appeal.

In sum, the trial court’s grant of summary judgment to Whybrew is affirmed as to the' claims of intentional infliction of emotional distress, and reversed as to the claims for maintaining a nuisance and negligent infliction of emotional distress. The remaining issues on appeal are pretermit-ted.

The decision of the trial court is affirmed in part and reversed in part, as set forth above, and the cause is remanded for further proceedings consistent with this Opinion. Costs of this appeal are taxed one-half to the Plaintiffs/Appellants, Sarah and Timothy Riley, and their surety, and one-half to Defendant/Appellee Richard Whybrew, for which execution may issue if necessary.

      . We note that the following actions of the Parkers were described in the Rileys’ initial complaint and the statement of undisputed facts submitted to the trial court by Whybrew. The trial court relied on the statement of undisputed facts in granting the motion for summary judgment in favor of Whybrew. We make no determination regarding the veracity of the factual assertions. Statements from the Parkers are limited to their pro se response to the initial complaint.


source: Caselaw Access Project

author: WILLIAM B. CAIN, J.,

license: Public Domain

text:
    Don C. McNEIL v. Zaidoun NOFAL.
    Court of Appeals of Tennessee, at Nashville.
    April 12, 2005 Session.
    Sept. 12, 2005.
    Permission to Appeal Denied by Supreme Court Feb. 6, 2006.

      Renard Astarie Hirsch, Sr., Nashville, Tennessee, for the appellant, Don McNeil.
    David Lyons, Nashville, Tennessee, for the appellee, Zaidoun Nofal.
   OPINION

WILLIAM B. CAIN, J.,

delivered the opinion of the court,

in which WILLIAM C. KOCH, JR., P.J., M.S. and PATRICIA J. COTTRELL, J., joined.

This appeal arises from the seller’s suit to enforce two notes as partial consideration for a seller-financed purchase of a business and inventory. The purchaser responded alleging fraud and negligent misrepresentation as an affirmative defense and counterclaim respectively. The trial court found in favor of the seller for the full amount of the lesser note, awarding attorney fees and interest as provided therein. The court found in favor of the purchaser on his counterclaim for negligent misrepresentation. In addition, the trial court found comparative fault on the part of the purchaser affecting the negligent misrepresentation damages. The court then offset recovery on the greater of the two notes with the amount of negligent misrepresentation damages awarded. The court denied the seller’s claim for attorney fees and interest on the note. We reverse the trial court’s finding of negligent misrepresentation and its reduction applied to the greater note; we affirm the trial court’s judgment as to the lesser note. The cause is remanded for a determination of attorney fees consistent with this opinion.

Zaidoun Nofal purchased the Little Barn Market from Don C. McNeil. Although Mr. McNeil had operated the market for a brief time prior to the sale, his experience with the business came more from operating the market with his son, who had left the business some six (6) months earlier. Mr. Nofal had purchased and sold similar businesses before this transaction. As consideration for the sale, Nofal paid cash, assumed an outstanding note between McNeil and Hollingsworth Oil Co., and executed two promissory notes. One note in the amount of $7,824.00 served to purchase inventory. The other note, in the amount of $25,000.00, helped to cover the purchase of the business. The terms 'of the notes provided for collection of attorney fees and interest upon default. The contract for sale provided:

This contract is contingent upon the following items:

1. Acceptable Sales Verification. (2 months worth of sales tax)
2. Buyer’s ability to receive a beer permit.
If any of these contingencies cannot be met, then the contract will become null and void and the earnest money will be returned within 7 business days.
Broker’s Fee: Buyer agrees to pay Listing Agency/Broker the fees specified by separate agreement between Listing Agency/Broker and Buyer the day of the closing. Broker has permission from both the Seller and Buyer to act as a facilitator.
Breach of Contract by Seller: If this agreement is breached by Seller or if Seller fails for any reason to complete the sale of this property in accordance with the terms set forth herein, Seller shall pay damages in an amount equal to the brokerage as specified in the listing agreement plus attorney fees and costs. In the event of default by Seller, the earnest money shall be returned to Purchaser and Purchaser shall have the right to affirm this contract and enforce its specific performance.
Entire Agreement: This contract contains the entire agreement of the parties relating to the subject matter hereof and cannot be changed except by their written consent.
Consult Your Attorney None of the Brokers or Agents, if any, can give you legal or tax advise, [sic] This is intended to be a legally binding contract. READ IT CAREFULLY. Federal law may impose certain duties when Seller and/or Purchaser is a foreign party, or Seller receive a certain amount of U.S. currency in connection with a real estate closing. IF YOU DO NOT UNDERSTAND THE EFFECT OF ANY PART OF THIS CONTRACT, CONSULT YOUR ATTORNEY OR TAX CONSULTANT BEFORE YOU SIGN THIS CONTRACT.

The buyer, Zaidoun Nofal, executed the two promissory notes and signed the Contract. Both notes contained the following language:

The occurrence of any of the following shall constitute an event of default under this note: (a) the failure of Maker to make any payment when due under this or any other obligation to Payee (time is of the essence of this note) ... Upon default, Maker agrees to pay the remaining unpaid principal balance of the indebtedness evidenced hereby and all court cost and expenses, including reasonable attorneys fees, incurred by the Payee in collecting any amounts due hereunder or to protect Payee’s interest in any collateral securing the same. In the event Maker fails to make the payments required under this agreement, the unpaid balance shall thereafter bear interest at the maximum lawful rate.

The purchase of business and inventory was set to close on January 2, 2002. The notes were executed on that date. The testimonial record reveals that the day following the closing, Mr. Nofal noticed that the sales of inventory and gasoline at the market did not approach those figures of sales stated by Mr. McNeil prior to closing. Mr. Nofal attempted to contact Mr. McNeil but to no avail. Mr. Nofal did not sue to rescind the sales contract or the promissory notes. He simply refused to make any payments on those notes. On April 10, 2002, Mr. McNeil filed his suit in Davidson County Chancery Court to enforce the promissory notes in the amount of $7,824 and $25,000, respectively. On May 8, 2002, Mr. Nofal filed his Answer and Counter Complaint in which he made the following allegations:

AFFIRMATIVE DEFENSES
The defendant raises the affirmative defenses of estoppel, fraud, illegality and waiver. The plaintiff induced the defendant to purchase his business called the Little Barn Market on Clarksville Highway, Nashville, based upon inflated monthly sales figures which were false, which the plaintiff knew were false, which the plaintiff [sic] relied upon when purchasing the Little Barn Market, to his detriment.
COUNTER-COMPLAINT
The defendant now assumes the role of counter-plaintiff and would show as follows:
1. Paragraph one of the original complaint is incorporated herein by way of reference.
2. Paragraph two of the original complaint is incorporated herein by way of reference.
FRAUD AND FRAUDULENT INDUCEMENT
22. The counter-defendant made certain statements and provided information to the plaintiff, the purpose of which was to induce the counter-plaintiff to purchase his business.
23. The statements made by the counter-defendant, and the information provided by the counter-defendant, were false. The counter-defendant knew they were false at the time that he made the statements and provided the false information.
24. The counter-defendant made false statements and provided fraudulent information to induce the counter-plaintiff to purchase the Little Barn Market. The counter-plaintiff relied upon the false and fraudulent statements made by the counter-defendant, to the detriment of the counter-plaintiff.
25. The fraudulent acts of the counter-defendant constitute the tort of fraud, fraudulent inducement, and negligent misrepresentation.
26. As a result of the false and fraudulent statements and information provided by the counter-defendant, the counter-plaintiff suffered damages, in-eluding lost income, loss of business opportunity, the purchase price, down payment, payments made to the counter-defendant and other liquidated and un-liquidated damages.
27. The fraudulent acts, statements and information provided by the counter-defendant was done willfully and intentionally, to induce the counter-plaintiff to purchase a business he would not otherwise have purchased. The counter-defendant’s conduct warrants punitive damages.

Mr. Nofal prayed for the following relief:

4. That the counter-plaintiff be awarded damages for the counter-defendant’s breach of contract in an amount to be determined at trial.
5. That the counter-defendant be found to have committed fraud, fraudulent inducement, or negligent misrepresentation in his dealing with the counter-plaintiff.
6. That the counter-plaintiff be awarded damages for the counter-defendant’s fraud, fraudulent inducement, and negligent misrepresentation.
7. That this Court award the counter-plaintiff punitive damages for the counter-defendant’s willful, intentional acts of fraud.
8. That this Court award the counter-plaintiff his attorney’s fees and all costs of this cause.
9. That the counter-plaintiff be granted other general relief.

On September 24, 2002, after a bench trial, Chancellor Lyle found that McNeil negligently misrepresented the market’s sales figures. The court assigned 20 percent (20%) comparative fault to Nofal. The court held that the measure of Nofal’s damages before assessment of comparative fault amounted to the $25,000 amount on the second note. Of particular import is the following language from the court’s Order:

The plaintiff testified, and the Court credits his testimony, that with the exit of his son and the default of the lessee, the sales of the market declined. The plaintiff testified, and the Court credits the testimony, that the plaintiff was unsure of the sales volume of the market when the lessee was operating it because the plaintiff was not required to file sales figures with the State of Tennessee. The plaintiff did not monitor or keep track of the sales volume during the time the lessee was operating the market. The plaintiff testified, and the Court credits that testimony, that in evaluating the sales volume of the market the plaintiff used the volume generated during the operation by his son because that was a fair indicator of the business potential of the market under good management.
In addition to what the defendant knew about sales volume from the plaintiff’s conversation with Ms. Glasgow are several other sources of information. First, the defendant owned a market located within a half mile of the market in issue. The defendant, thus, already had some knowledge of area. Additionally, the defendant has experience in purchasing markets. He bought and sold and owns a number of markets in the Nashville area. Finally, the defendant briefly viewed the market with the plaintiff prior to the purchase.
Consistent with the significance the defendant and Ms. Glasgow attach to sales volume was that a provision was inserted in the sales contract that the plaintiff would provide two months of verified sales figures and that if those records were not provided the defendant could cancel the transaction and receive back the earnest money. Paragraph 1 of trial exhibit 1, the contract for sale of the market, provides, “This contract is contingent upon ... 1. Acceptable Sales Verification (2 months worth of sales tax).... If any of these contingencies cannot be met, then the contract will become null and void and the earnest money will be returned within 7 business days.”
With respect to the representations made by the plaintiff in connection with the transaction asserted by the defendant as a defense to plaintiffs collection on the note and as a counterclaim, the Court dismisses the defendant’s claim that the plaintiff committed fraud. The defendant did prove that the sales volume of the market was not $2,000 per day and the defendant did show, through his track record in operating the market along with records of volume of sales for 1999 and 2000 (trial exhibits 4 and 5) under plaintiffs ownership, that characterization of the sales volume as $2,000 per day was inaccurate. In the face of this accuracy, however, the Court found the plaintiff to be credible and honest based upon the plaintiffs demeanor and the forthright manner in which he testified as well as from the testimony of both Ms. Glasgow and the defendant that the plaintiff has a reputation for honesty and integrity.
Although not culpable by fraud, the plaintiff, the Court finds, nevertheless unwittingly represented to Ms. Glasgow that the sales volume at the market was $2,000 per day. The Court finds that this representation was not intentionally inaccurate. As found above, the plaintiff did not personally place as much meaning on sales information as much as he did on good will and reputation in considering the value of the market. Moreover, the plaintiff did not know what the sales volume was during the time the tenant was managing the market and the plaintiff did not have recent sales figures. Thus, he quoted to Ms. Glasgow the sales volume he knew from the time his son operated the market. But the Court credits the testimony of Ms. Glasgow that the plaintiff did not qualify and make clear that the $2,000 per day sales volume was based on a preceding year or so when his son operated the market. The plaintiff was negligent in that he did not make it clear to Ms. Glasgow that his statement that the sales volume was $2,000 per day was the plaintiffs guess sales based upon outdated information from the time his son operated the market.
The Court also finds, however, that the defendant was negligent. Sales volume was a critical piece of information to the defendant, as he testified. The defendant had secured, as a provision of the contract, the right to insist the plaintiff provide sales records. By not enforcing that provision of the contract, the defendant contributed to the misunderstanding over the sales volume.
The Court is persuaded by the defendant that the amount of damage the defendant sustained from the negligent misrepresentation, before being reduced by his comparative fault, is $25,000.00. The Court arrives at that amount by using the promissory note as the measure of the defendant’s damage. The note is an appropriate measure given the totality of the transaction: that the defendant paid $50,000.00 down for the business, that he assumed payments on a note to Hollingsworth Oil, signed the $25,000.00 promissory note, that the defendant operated the business and ultimately sold it at a loss, and that sales while the defendant was operating the market were significantly less than the volume represented by the plaintiff.
The Court then applies comparative fault to the total $25,000 in damages. The Court assesses the plaintiff with 80% of the fault for the negligent misrepresentation and the defendant with 20% of the fault. Accordingly, the defendant is awarded $20,000.00 on his negligent misrepresentation claim.
Further, the Court declines to award the plaintiff interest on the $25,000.00 promissory note or attorney’s fees. The provisions for interest and attorney’s fees contained in the note provide, “Upon default, Maker agrees to pay the remaining unpaid principal balance of the indebtedness evidenced hereby and all court costs and expenses, including reasonable attorneys fees, incurred by the Payee, in collecting any amounts due hereunder.... ” Based upon the 80% comparative fault of the plaintiff in the negligent misrepresentation, the Court determines that it would not be reasonable to award attorney’s fees or interest on the promissory note related to the value of the business.

Mr. McNeil brings this appeal challenging the trial court’s finding of misrepresentation and its calculation of damages, interest on the notes, and attorney’s fees. Since the case was heard without the intervention of a jury, this Court reviews the factual findings of the trial court with a presumption of correctness absent a preponderance of the evidence to the contrary. Tenn. R.App. P. 13(d); see also Allstate Ins. Co. v. Wilson, 856 S.W.2d 706, 709 (Tenn.Ct.App.1992). Also consistent with Rule 13, the trial court’s conclusions of law enjoy no presumption of correctness in our review. See Tennessee Farmers Mut. Ins. Co. v. American Mut. Liability Ins. Co., 840 S.W.2d 933, 936 (Tenn.Ct.App.1992). The award of attorney’s fees and the determination of the reasonableness thereof are decisions largely within the discretion of the trial court. Deference is given to the trial court’s exercise of discretion absent a clear abuse thereof. See Carmack v. Fidelity-Bankers Trust Co., 180 Tenn. 571, 177 S.W.2d 351, 356 (1944); Trice v. Hewgley, 53 Tenn.App. 259, 381 S.W.2d 589 (1964); Wilson Management Co. v. Star Distributors Co., 745 S.W.2d 870 (Tenn.1988).

NEGLIGENT MISREPRESENTATION

A successful claim for negligent misrepresentation requires justifiable reliance. To establish a prima facie case for negligent misrepresentation, the plaintiff (in this case Mr. Nofal) must show that he justifiably relied upon a material misrepresentation made by an individual under a duty to properly inform as to the material facts. See Sears v. Gregory, 146 S.W.3d 610, 621 (Tenn.Ct.App.2004); see also Restatement (Second) of Torts § 552. Justifiable reliance in this context is not blind faith. This Court has held:

An essential requirement of any action for fraud, deceit, failure to disclose or negligent or innocent misrepresentations is detrimental reliance on a false premise. See, Farley v. Clayton, 928 S.W.2d 931, at 933 (Tenn.App.1996) citing Shwab v. Walters, 147 Tenn. 638, 251 S.W. 42 (1923); Tartera v. Palumbo, 224 Tenn. 262, 453 S.W.2d 780 (1970); Williams v. Van Hersh, 578 S.W.2d 373 (Tenn.App.1978); Dozier v. Hawthorne Development Co., 37 Tenn.App. 279, 262 S.W.2d 705 (1953). In order to succeed in any action based upon fraudulent or negligent misrepresentation, the plaintiff must prove that it relied justifiably on the defendant’s statements. See Lambdin v. Garland, 723 S.W.2d 953, 956 (Tenn.App.1986). The burden is not upon the defendant to show that it was not negligent, but rather, the burden is upon the plaintiff to show that its reliance upon any statements defendants may have made was reasonable. Metropolitan Government of Nashville and Davidson County v. McKinney, 852 S.W.2d 233, (Tenn.App.1992).

Williams v. Berube & Associates, 26 S.W.3d 640, 645 (Tenn.Ct.App.2000).

Justifiable reliance is a necessary element in a cause of action based upon negligent (or fraudulent) misrepresentation. This element is not subject to a comparative fault analysis, and until the justifiable reliance element is established, there is no negligent misrepresentation. Lambdin v. Garland, 723 S.W.2d 953 (Tenn.Ct.App.1986); Graham v. First American Nat’l Bank, 594 S.W.2d 723, 725 (Tenn.Ct.App.1979).

The parties do not dispute that the sale of the market was scheduled to close on January 2, 2002. They likewise do not dispute that closing was conditioned upon verification of sales figures. It is undisputed that Mr. McNeil had actual knowledge of the gross sales from the market in November of 2001. The sales tax worksheet was prepared in December prior to the closing date. The parties do not dispute that, at the time of negotiation, Mr. Nofal, a person with experience in such transactions, investigated the market and its environs, and, while making repeated requests for sales confirmation, never rescinded the sale or delayed closing. In this context the situation before this Court appears similar to the purchaser’s plight in Pakrul v. Barnes, 631 S.W.2d 436, wherein it is said:

The provision inserted in the offer of purchase at the insistence of plaintiffs immediately after the recitation of the purchase price, is: “... that the zoning will allow Spotless Carpet and Janitoral Service to use above building as business office.” This provision was a condition precedent made for the benefit of the purchasers and was subject to their waiver. Richardson v. Snipes, 46 Tenn.App. 494, 330 S.W.2d 381 (1959); Mack v. Hugger Bros. Const. Co., 10 Tenn.App. 402 (1929).
Plaintiff Pakrul testified Jan Argo, the real estate agent, advised him there had been businesses in the building before and she did not feel there would be a problem getting his business located there. This opinion, as found by the chancellor, does not constitute a fraudulent misrepresentation of fact and basis to rescind the contract of sale. See Scott v. Wilson, 15 Ill.App.2d 456, 146 N.E.2d 397 (1957). This case falls within the rule expressed in 91 C.J.S. Vendor and Purchaser s 68, at 945-6:
(W)here the means of information are at hand and equally accessible to both parties so that, with ordinary prudence or diligence, they might rely on their own judgment, generally they must be presumed to have done so, or, if they have not informed themselves, they must abide the consequences of their own inattention and carelessness. Unless the representations are such as are calculated to lull the suspicions of a careful man into a complete reliance thereon, it is commonly held, in the absence of special circumstances, that, where the means of knowledge are readily available, and the vendor or purchaser, as the case may be, has the opportunity by investigation or inspection to discover the truth with respect to matters concealed or misrepresented, without prevention or hindrance by the other party, of which opportunity he is or should be aware, and where he nevertheless fails to exercise that opportunity and to discover the truth, he cannot thereafter assail the validity of the contract for fraud, misrepresentation or concealment with respect to matters which should have been ascertained, particularly where the sources of information are furnished and attention directed to them, as, for example, where the source of accurate information is indicated or referred to in the contract.
This rule has been applied by this court. Claiborne v. Taff, 10 Tenn.App. 281 (1929).

Pakrul v. Barnes, 631 S.W.2d 436, 438 (Tenn.Ct.App.1981).

Mr. Nofal makes much of Mr. McNeil’s stellar reputation for truth and honesty. However, Mr. McNeil did not represent his reputation to Mr. Nofal and did not cause Mr. Nofal to omit the verification requirement, and, under the facts as revealed by the record and stipulated by the parties, did not require Mr. Nofal to abandon his contractual rights in an arm’s-length transaction between knowledgeable parties. As this Court has held:

Fraud, when made fully to appear, vitiates all contracts into which it enters. Hunt v. Walker, 483 S.W.2d 732 (Tenn.App.1971). On the other hand, if a purchaser of real property has notice or with ordinary diligence should have had notice of a problem with the real estate, the purchaser cannot attack the validity of the contract for fraud, misrepresentation, or concealment of that problem.

Winstead v. First Tennessee Bank N.A., Memphis, 709 S.W.2d 627, 631 (Tenn.Ct.App.1986).

In discussing the tort of negligent misrepresentation action, our Supreme Court has observed:

Years ago, Ultramares [Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441, 74 A.L.R. 1139] recognized the potential pitfalls of an unlimited action in tort based upon negligent misrepresentation in commercial transactions. The burden is always upon the plaintiff to establish that the supplier violated his duty to exercise due care and competence in obtaining or communicating the information. Foreseeability by the provider of the information and reliance by the user of the information are important safeguards. Negligence by the user of the information may be a bar to recovery. Each of these principles provides reasonable protection against the proliferation of litigation in this area of tort. The Restatement (2d) provisions adopted in Tartera suggest a properly balanced approach. The rule extends to the professional construction manager whose duty is to supply direction and supervision to subcontractors employed by the owner.

John Martin Company, Inc. v. Morse/Diesel, Inc., 819 S.W.2d 428, 435 (Tenn.1991).

Mr. Nofal knew prior to closing that he had an absolute right to compel Mr. McNeil under the Contract to produce “Acceptable Sales Verification. (2 months worth of sales tax).”

He knew at the closing that Mr. McNeil had represented to him in the contract negotiations $2,000 per day in sales volume. He knew at closing that Mr. McNeil had not produced two (2) months worth of sales tax. He proceeded to close without such verification.

If defendant was guilty of fraud in the inducement of the contract, plaintiffs, at their option, were entitled to a rescission. See Smith v. Greaves, 15 Lea. 459, 83 Tenn. 459 (1885). Here they went forward with the contract and, by so doing, waived their right to rescind the contract. “In the case of executory contracts, waiver of the right to rescission operates as a waiver of the right to maintain an action for damages for the fraud...37 C.J.S. Fraud § 69 (1943). There is good reason for this rule. To hold otherwise would permit recovery for a purely self-inflicted injury. See Ankeney v. Brenton, 214 Iowa 357, 238 N.W. 71, 75 (1931).

Graham v. First American Nat’l Bank, 594 S.W.2d at 726.

In the context of a fraudulent misrepresentation case, this Court addressed the element of justifiable rehance, which is an indispensable element of the plaintiffs cause of action either in fraudulent or negligent misrepresentation.

The evidence establishes a disputed issue of material fact as to whether the financing was “complete and available” under the conditions existing between KRI and Century at that time. If, however, a misrepresentation was made in this regard, Allied must prove that it reasonably relied upon the misrepresentation to its detriment. [Hill v. John Banks Buick, 875 S.W.2d 667 (Tenn.Ct.App.1993).]
In order to determine whether plaintiffs reliance upon Davis’ statements was reasonable, several factors must be considered, including “the plaintiffs business expertise and sophistication”, the “availability of the relevant information” and “the opportunity to discover the fraud.” City State Bank v. Dean Witter Reynolds, Inc., 948 S.W.2d 729, 737 (Tenn.Ct.App.1996). In this regard, Link admits that he was given the name and number of the person at Century Finance with whom the defendants had been dealing, and was invited to call and get more information. Link did speak with Lundergan at Century Finance, and according to Link, he was advised that Century Finance had been selected and that Lundergan would be handling the lease. Lundergan also told Link to send his invoices, and they would be paid. Link also acknowledged that he received a purchase order from Century on April 21 which stated that other documents were required from KRI in connection with the lease, but he did not inquire as to what those documents were. The purchase order specifically states in two places that other documents must be executed by KRI on or before a certain date, or the purchase order is “null and void.”
From the undisputed material evidence and Link’s testimony, we conclude that plaintiffs reliance on Davis’ statement was unreasonable given the fact that plaintiff was put on notice at least by April 21 that there were some conditions on the lease, and should reasonably have inquired as to what those conditions were. Plaintiff had the means to obtain the information needed and discover any “fraud” if he had simply asked Century for a copy of the actual lease agreement or inquired as to what additional documentation was required by Century before continuing the performance. While Link asserts that he had never been involved in a lease transaction before, he was an experienced business person, and on this record is charged with knowing there were contingencies to be met by a certain date in connection with the lease. Where information is reasonably discovered, and here where the plaintiff was invited to inquire, it cannot claim reasonable reb-anee upon a misrepresentation. In Solomon v. First American National Bank of Nashville, 774 S.W.2d 935 (Tenn.Ct.App.1989), this Court stated, “[generally, a party dealing on equal terms with another is not justified in relying upon representations where the means of knowledge are readily within his reach.”
The trial court also found that plaintiffs reliance on' statements made by Neely and Davis at the May 4 meeting (that the money was set to come in at the end of construction) was not reasonable because plaintiff had been found to have notice of the letter of credit requirement by that time, and because Link had testified in his deposition that he would not have proceeded with the work if he had known of the letter of credit requirement. Allied concedes that it is bound by the previous ruling that it had notice of the letter of credit requirement by May 4, but argues that Link was not told that KRI had applied for a letter of credit at several different banks and been turned down. Link did not, however, enquire of Neely or Davis about the letter of credit requirement, or whether the contingencies in the lease had been fulfilled, even though he was charged with knowing of both conditions at that juncture. Link conceded he should not have gone forward with the work knowing that a contingency existed. Plaintiffs alleged reliance on defendants’ statements were unreasonable, and we find summary judgment to be appropriate. In order to defeat summary judgment, the reasonableness of the reliance must amount to a genuine issue, not found here. See: Annaco, Inc. v. Corbin, 1998 WL 929637 (Tenn.Ct.App.1998).

Allied Sound, Inc. v. Neely, 58 S.W.3d 119, 122-23 (Tenn.Ct.App.2001).

The proof in this case fails to establish justifiable reliance; thus, no comparative fault ever comes into the equation, and judgment must be entered on the counterclaim in favor of McNeil.

ATTORNEY FEES AND INTEREST

The notes involved in this suit provided for the collection of reasonable attorney’s fees upon default, and for the collection of interest at the maximum rate allowable by law. Since this Court reverses the trial court’s finding of negligent misrepresentation as a valid claim offsetting the recovery on the $25,000 note, we recognize the effect of this holding on the lower court’s determination of a reasonable fee under the circumstances. Such a decision rests within the sound discretion of the trial court because the reasonableness of a requested fee depends on the facts of each case. See Fell v. Rambo, 36 S.W.3d 837 (Tenn.Ct.App.2000) (perm. app. denied Jan.16, 2001). The decision of the trial court should be enlightened by the factors listed in the Rules of Professional Conduct:

Rule 1.5 Fees. — (a) A lawyer’s fee and charges for expenses shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services;
(8) Whether the fee is fixed or contingent;
(9) Prior advertisements or statements by the lawyer with respect to the fees the lawyer charges; and
(10) Whether the fee agreement is in •writing.

Tenn. R. Sup.Ct. 8, RPC 1.5.

Appellant’s counsel seems to argue that since his agreement with his client was a contingency fee arrangement, any attorney’s fee recovery should be tied to the monies on the note as a matter of course. We are unpersuaded. The fee agreement notwithstanding, the determination of the reasonable fee depends on the multi-factor analysis exercised by the tribunal before whom the services were predominantly rendered. See Carmack v. Fidelity-Bankers, 180 Tenn. 571, 177 S.W.2d 351, 355 (1944). It also bears noting that the instant appeal results from a suit to enforce promissory notes. These notes provided expressly for the recovery of a reasonable fee. Our Supreme Court has held that such contracts are entitled to enforcement according to their express terms. See Wilson Management Company v. Star Distributors Company, 745 S.W.2d 870, 873 (Tenn.1988).

Where [parties] specify a reasonable fee rather than a percentage of recovery, it is clear that they expect a court to adjudicate the issue of a reasonable fee, unless they agree upon the amount after a controversy matures.... Where the trial judge erroneously awards a fee based upon a percentage of recovery, in the absence of any proof on the issue of reasonableness, it is incumbent upon the defendant to pursue the correction of that error in the trial court by insisting upon a hearing upon that issue. Again, we agree with Trice that a trial judge may fix the fees of lawyers in causes pending or which have been determined by the court, with or without expert testimony of lawyers and with or without a prima facie showing by plaintiffs of what a reasonable fee would be. Obviously, the burden of proof on the question of what is a reasonable fee in any case is upon the plaintiff and plaintiff should be in a position to tender such proof. However, if a trial judge is prepared to fix a reasonable fee based upon the appropriate guidelines without first hearing plaintiffs proof, defendant must be accorded full opportunity to cross examine plaintiffs witness and present evidence on that issue.

Wilson Management Company v. Star Distributors Company, 745 S.W.2d at 873.

Mr. McNeil claims on appeal that the appropriate rate of interest on his judgment should be the applicable formula rate as that term is defined in our statutes. See Tenn.Code Ann. § 47-14-106. The limitation in the documents executed by the parties provides for interest solely upon an event of default: “In the event the Maker fails to make the payments required under this agreement, the unpaid balance shall thereafter bear interest at the maximum lawful rate.” Our statutes provide the following with regard to the maximum effective rate of interest.

47-14-103. Maximum effective rates generally. — Except as otherwise expressly provided by this chapter or by other statutes, the maximum effective rates of interest are as follows:
(1) For all transactions in which provisions of other statutes fix a maximum effective rate of interest for particular categories of creditors, lenders, or transactions, the rate so fixed;
(2) For all written contracts, including obligations issued by or on behalf of the state of Tennessee, any county, municipality, or district in the state, or any agency, authority, branch, bureau, commission, corporation, department, or instrumentality thereof, signed by the party to be charged, and not subject to subdivision (1), the applicable formula rate; and
(3) For all other transactions, ten percent (10%) per annum. [Acts 1979, ch. 203, § 2; 1980, ch. 601, § 26; 1983, ch. 464, § 2.]
47-14-106. Contracts for applicable formula rates of interest. — Contracts to which the applicable formula rate provided in § 47-14-103(2) applies may provide for the payment of a fixed rate of interest, a variable rate of interest or any combination of fixed and variable rates in any sequence, subject to the provisions of this section.
(1) A contract may provide for a fixed rate of interest:
(A) Permissible at the time the contract to make the loan is executed;
(B) Permissible at the time the loan is made;
(C) Permissible at the time the interest rate on the loan is converted from a variable to a fixed rate, or from one fixed rate to another fixed rate, whether such conversion is by terms of the contract or by renewal, modification, extension or otherwise; or
(D) Permissible at the time of any renewal or extension of the loan or any note evidencing the loan; or
(E) Permissible by virtue of any combination of any of the foregoing.
(2) A contract may provide for a rate of interest that may vary from time to time at such regular or irregular intervals as may be agreed by the parties; provided, that such variable rate shall not exceed the greater of:
(A) That authorized by statute at the agreed time of each variance; or
(B) That authorized at the time of execution of the contract or note evidencing the indebtedness upon which such variable rate is or is to be charged;

(3) The parties may agree to a minimum fixed rate of interest to be applicable to a rate which is or may become otherwise variable; provided, that such agreed minimum fixed rate of interest does not exceed the rate permitted at the time the contract to make the loan is executed, or at the time the note is executed, or at the time of any renewal or extension thereof, whichever is greater. [Acts 1979, ch. 203, § 5; 1992, ch. 629, § 1.]

Neither note contained a fixed rate of interest, a variable rate of interest or any combination thereof. It is plain from the unambiguous language of these notes that the obligations do not fall within the type expressly provided for in section 106. As a result, the plain and unambiguous language of section 103(3) applies. To hold otherwise would be to convert sub paragraph 3 to a statutory nullity. See Tidwell v. Collins, 522 S.W.2d 674 at 676 (Tenn.1975); see also Consolidated Waste Systems, LLC v. Solid Waste Region Board of the Metropolitan Government of Nashville Davidson County, et al., M2002-00560-COA-R3-CV, 2003 WL 21957137, *3 (Tenn.Ct.App.2003).

The judgment of the trial court as to the enforcement of the $7,824 note is affirmed in all respects. The trial court’s findings of negligent misrepresentation and comparative negligence are reversed. The cause is remanded for entry of judgment enforcing the $25,000 note plus the maximum rate of interest of ten percent (10%) per annum as provided in Tennessee Code Annotated section 47-14-103(3) and for a full hearing on the reasonable amount of attorney’s fees due Mr. McNeil for the enforcement of these notes. Costs of the appeal are assessed against the appellee, Mr. Nofal.


author: D. MICHAEL SWINEY, J.,

text:
    Behrouz AMINI v. CTI, INC., et al.
    Court of Appeals of Tennessee, Eastern Section, at Knoxville.
    July 13, 2005 Session.
    Sept. 13, 2005.
    Permission to Appeal Denied by Supreme Court Feb. 21, 2006.

      Behrouz Amini, pro se Appellant.
    J. Chadwick Hatmaker and Robert L. Vance, Knoxville, Tennessee, for the Ap-pellees CTI, Inc., James Kelly Milam, and Terry Douglass.
   D. MICHAEL SWINEY, J.,

delivered the opinion of the court,

in which HERSCHEL P. FRANKS, P.J., and SHARON G. LEE, J., joined.

OPINION

Behrouz Amini (“Plaintiff’) was employed at CTI, Inc., for over six years when his employment was terminated in January of 1999. Plaintiff claims that after he was terminated, the defendants prohibited him from taking various documents and other items of his property including two written stock option agreements he received while employed by CTI, Inc. Plaintiff claims that the defendants converted various items of his personal and professional property, including his stock option agreements. Plaintiff had ninety days to exercise his stock options after his employment was terminated, but claims he did not exercise these rights because the defendants had converted the stock option agreements which detailed these rights. The Trial Court granted the defendants’ motion for summary judgment. We affirm in part, vacate in part, and remand for further proceedings.

Background

Plaintiff became employed in 1992 as a senior research scientist for CTI, Inc., a corporation now known as CTI Molecular Imaging, Inc. (“CTI”). According to Plaintiff, CTI is composed of two main departments, the Cyclotron or RDS department and the Scanner department. The Cyclotron and Scanner departments together create a medical device known as Positron Emission Topography, or PET. One of Plaintiffs primary job duties was to take care of the ion source which ran the Cyclotron.

During the course of Plaintiffs employment, CTI granted him two options to purchase company stock. The first stock option was dated July of 1993 and gave Plaintiff the right to purchase 1,115 shares of stock at a purchase price of $18.00 per share. This stock option provided that Plaintiff had until July 12, 2000, in which to exercise the option. The second stock option was dated December of 1997 and gave Plaintiff the' right to purchase an additional 1,700 shares of stock at the same price of $18.00 per share. The second stock option gave Plaintiff until December 12, 2004, in which to exercise the option. Both stock options detailed the procedure necessary for Plaintiff to follow to exercise the stock options and further provided that:

All rights to exercise options granted under this Agreement terminate three months after the Employee ceases to be an employee of the Company or one of its subsidiaries for any reason other than death.

Plaintiffs employment with CTI was terminated on January 15, 1999. Plaintiff thereafter filed this suit against CTI Pet Systems, Inc. (“CPS”), CTI, Inc., James Kelly Milam, and Terry Douglass (“Defendants”). James Kelly Milam (“Milam”) was Plaintiffs supervisor and a Vice President of CTI. Terry Douglass (“Douglass”) was CTI’s President and Chairman of the Board. In his complaint, Plaintiff alleged that he had various items of his personal property in his office which he was not permitted to retrieve when his employment was terminated, and that these items subsequently were converted by Defendants. Plaintiff also alleged:

Prior to his termination from the CTI defendants, the Plaintiff had submitted two articles for publication under CTI’s name. Additional work was needed to make these articles publishable. The Plaintiff received materials from the defendants to do the additional work and make these articles publishable. The Plaintiff completed the work and the articles were published but the CTI defendants have refused to pay the Plaintiff for his time in completing those articles. In addition, the Plaintiff accumulated stock options while employed by the defendants. These options were given to employees as an incentive to sign on as full time employees or as a bonus. Defendants CTI are refusing to acknowledge these options.

Plaintiff later amended his complaint to allege that Defendants had improperly converted his stock options.

Defendants answered the complaint generally denying any liability to Plaintiff, and thereafter filed a motion for summary judgment. The Trial Court ruled on Defendants’ motion for summary judgment as follows:

1. Defendants’ Motion for Summary Judgment on Plaintiffs claim for conversion of stock options is GRANTED and said cause of action is dismissed with prejudice;
2. Defendants’ Motion for Summary Judgment on all of Plaintiffs claims against CTI PET Systems, Inc. (“CPS”), James Kelly Milam and Terry Douglass is GRANTED and all of those claims are dismissed with prejudice;
3. Defendants’ Motion for Summary Judgment on Plaintiffs claim that CTI wrongfully refused to pay him for revising two articles is DENIED; and
4. Defendants’ Motion for Summary Judgment on Plaintiffs claim that CTI converted his technical materials is DENIED.

After the Trial Court issued its ruling, Plaintiff filed a motion requesting permission to file an interlocutory appeal pursuant to Tenn. R.App. P. 9. Plaintiff sought review of the Trial Court’s judgment to the extent it partially granted Defendants’ motion for summary judgment. After the Trial Court granted Plaintiffs request for permission to file a Rule 9 interlocutory appeal, Plaintiff filed a similar request with this Court. We denied Plaintiffs request for a Rule 9 interlocutory appeal as to the Trial Court’s grant of summary judgment to CTI PET Systems, Inc. However, we granted a Rule 9 interlocutory appeal as to the Trial Court’s grant of summary judgment on Plaintiffs claim for conversion of stock options, as well as the grant of summary judgment on all claims against Milam and Douglass.

We will discuss additional facts only as they pertain to the specific issues presented in this interlocutory appeal. Accompanying Defendants’ motion for summary judgment was the affidavit of Anne Sale (“Sale”), CTI’s Corporate Tax and Administration Manager. In her affidavit, Sale stated that Plaintiff had three months after his employment was terminated in which to exercise his stock options. According to Sale:

Dr. Amini’s employment with CTI was terminated effective January 15, 1999. Dr. Amini has never exercised his stock options pursuant to the July 12, 1993 or December 12, 1997 Incentive Stock Option Agreements. Specifically, Dr. Ami-ni has never given written notice to CTI of any intention to exercise any of his stock options, nor has he paid the Purchase Price for any such stock, as required by the terms of the Incentive Stock Option Agreements.

Plaintiff filed an affidavit in response to Defendants’ motion for summary judgment. In his affidavit, Plaintiff stated that after he was informed of his termination he told Karen Davies (“Davies”) that he would return to the company at 1:00 p.m. to begin cleaning out his office. When Plaintiff returned to CTI that afternoon, he found the power to his computer shut off. He began to sort through materials in his filing cabinets. Plaintiff stated that Davies immediately informed him that he was not allowed to take any material with handwriting on it, nor was he allowed to go through the materials in his filing cabinets. If there was any disagreement regarding whether certain property belonged to Plaintiff or CTI, then that particular property was set aside as disputed material. Plaintiff was supposed to discuss this property with Milam, but Plaintiff “never saw these disputed materials again.” After leaving with what little he could on the day his employment was terminated, Plaintiff informed Davies he would return in two days to retrieve more of his belongings. When Plaintiff returned two days later, there were several “half empty boxes” of his property which had been gathered and placed near the front door. Plaintiff placed these boxes in his automobile and left the premises.

With regard to the written stock options, Plaintiffs affidavit states, inter alia:

18. My two “Incentive Stock Option Agreements” and my documents explaining my company benefits were stored in my personal property in my office on the premises of CTI up until the time I was terminated. I did not remove them from my office. On January 15, 1999 Defendants took possession of my two Stock Option Agreements along with my other property and possessions identified in Plaintiff’s Exhibit A attached hereto. My two Stock Option Agreements were among the items that were not returned to me after my offices were raided. Neither Kelly Mi-lam nor any other CTI representative have ever returned to me my two “Incentive Stock Option Agreements”.
19. Soon after I was terminated, beginning on or about January 22, 1999, during phone conversations I asked Kelly Milam to return my personal property: my documents explaining employee rights, and I told him specifically that I needed my stock options and related documents. I wanted to know whether I could immediately exercise my stock options. I had all the intention and means to exercise my stock options. Kelly Milam told me that I should have exercised my stock options while I was an employee. He told me that when I was out I lost all my rights, I had no rights, “when you are out you are out”, and he responded, “It’s all gone” when I inquired about my personal property and my stock options. Kelly Milam also referred to the expression of my benefits, as “water under the bridge”. Mi-lam made me believe that based on company rules a terminated employee had basically no rights or benefits.
* * * ⅝
21. After invading my office, Kelly Milam and CTI unilaterally decided which of my property in my office at CTI premises would be kept by the company and what would be returned to me. My two “Incentive Stock Option Agreements” and my employees’ other rights and benefits that I kept in my office were among the very many documents that were not returned to me. Due to Milam’s false word and my not having possession of my stock options I was not aware that I had one day much less ninety (90) days to exercise my rights to buy company stock, or that there was a requirement for written notice within ninety (90) days of my termination to exercise my right to purchase company stock. The first time that I saw these “Incentive Stock Option Agreements” [after I was terminated] was on or about April 2002, when my counsel showed them to me attached to the Defendants’ Motion to Dismiss my claims, 3 years and 3 months after my request for them was denied by Kelly Milam. I would have exercised my stock options timely, had I known that I had 90 days.

With regard to Plaintiffs claims against Milam and Douglass individually, Plaintiff admitted at his deposition that he had no proof that Douglass or Milam personally went through his office or that they took any of his possessions. Concerning Plaintiffs claim that he should be compensated for his post-termination work on the articles, Plaintiff admitted he had no agreement with Douglass or Milam regarding compensation for this work. Plaintiff further admitted that it was CTI who should compensate him for working on the articles. Plaintiff added, however, that Milam knew Plaintiffs request was “fair and he could have paid and he just didn’t pay, approve for this payment.”

As noted previously, the only issues presented in this interlocutory appeal surround the propriety of the Trial Court’s grant of summary judgment dismissing altogether Plaintiffs claim for conversion of stock options, as well as the grant of summary judgment on all claims to Milam and Douglass individually.

Discussion

In Blair v. West Town Mall, our Supreme Court recently reiterated the standards applicable when appellate courts are reviewing a motion for summary judgment. Blair v. West Town Mall, 130 S.W.3d 761 (Tenn.2004). In Blair, the Court stated:

The standards governing an appellate court’s review of a motion for summary judgment are well settled. Since our inquiry involves purely a question of law, no presumption of correctness attaches to the lower court’s judgment, and our task is confined to reviewing the record to determine whether the requirements of Tennessee Rule of Civil Procedure 56 have been met. See Staples v. CBL & Assoc., Inc., 15 S.W.3d 83, 88 (Tenn.2000); Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn.1997); Cowden v. Sovran Bank/Central South, 816 S.W.2d 741, 744 (Tenn.1991). Tennessee Rule of Civil Procedure 56.04 provides that summary judgment is appropriate where: 1) there is no genuine issue with regard to the material facts relevant to the claim or defense contained in the motion, and 2) the moving party is entitled to a judgment as a matter of law on the undisputed facts. Staples, 15 S.W.3d at 88.
* * *
When the party seeking summary judgment makes a properly supported motion, the burden shifts to the non-moving party to set forth specific facts establishing the existence of disputed, material facts which must be resolved by the trier of fact.
To properly support its motion, the moving party must either affirmatively negate an essential element of the non-moving party’s claim or conclusively establish an affirmative defense. If the moving party fails to negate a claimed basis for the suit, the non-moving party’s burden to produce evidence establishing the existence of a genuine issue for trial is not triggered and the motion for summary judgment must fail. If the moving party successfully negates a claimed basis for the action, the non-moving party may not simply rest upon the pleadings, but must offer proof to establish the existence of the essential elements of the claim.

Blair, 130 S.W.3d at 763-64, 767 (quoting Staples, 15 S.W.3d at 88-89).

Our Supreme Court also has provided instruction regarding assessing the evidence when dealing with a motion for summary judgment, stating:

The standards governing the assessment of evidence in the summary judgment context are also well established. Courts must view the evidence in the light most favorable to the nonmoving party and must also draw all reasonable inferences in the nonmoving party’s favor. See Robinson v. Omer, 952 S.W.2d at 426; Byrd v. Hall, 847 S.W.2d at 210-11. Courts should grant a summary judgment only when both the facts and the inferences to be drawn from the facts permit a reasonable person to reach only one conclusion. See McCall v. Wilder, 913 S.W.2d 150, 153 (Tenn.1995); Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn.1995).

Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 89 (Tenn.2000). It is important to note that simply demonstrating that a plaintiff cannot prove an essential element of his or her case is not a sufficient basis for granting a motion for summary judgment. See Hill v. Sneed, No. E2004-00102-COA-R3-CV, 2004 WL 2346005, at *4, 2004 Tenn.App. LEXIS 673, at *12 (Tenn.Ct.App. Oct.18, 2004), no appl. perm. appeal filed, (“[I]t is clear to this Court that under Blair v. West Town Mall, supra, merely showing that a plaintiff will be unable to prove an essential element of his or her case is not a sufficient basis for obtaining summary judgment.”).

With regard to Plaintiffs claim that Defendants improperly converted his stock options, Defendants argue that stock options are intangible property rights and because of this, they cannot be converted. This argument misses the point because Plaintiffs claim for conversion is actually two-fold. While Plaintiff does claim his stock option rights were converted, he also claims that the actual documents granting him those rights were converted. Plaintiff further claims that because the actual documents were converted by Defendants, he was unable to ascertain any existing rights that he may have had and, as a result, he did not know he had ninety days to exercise his stock options. In short, Plaintiff claims that if Defendants are correct and that the time long ago ran for him to exercise his stock options, the reason he failed to exercise his stock options is because the Defendants converted the actual stock option documents and it was this conversion of the actual documents which prevented Plaintiff from being able at that time to read the documents to determine what his rights as far as exercising the stock options actually were.

Defendants further claim that Plaintiff must be charged with knowledge of the contents of the stock option agreements and that he had only ninety days post-termination to exercise his rights. In other words, because Plaintiff did not timely exercise the rights which he should have been aware of, summary judgment on this claim was appropriate. We might agree with Defendants if Plaintiff had been allowed access to these documents or to otherwise retain possession of them. However, according to Plaintiff, he was physically prevented from obtaining these documents and this is what resulted in his not knowing his rights and the eventual lapse of the ninety-day time limit. We would be hard pressed to charge Plaintiff with knowing the precise language of documents that were several years old and which were taken and kept from him, a fact that at least at this summary judgment stage is in dispute. While we are fully aware that a party cannot use as a defense his claim that he did not know the contents of a contract because he did not bother to read it before signing it, we are aware of no rule of law that says once a party signs a contract he is charged with remembering all the terms of that contract and is not allowed to read it again sometime in the future to ascertain what his contractual rights and obligations are at that time. A contract is not a memory test.

When viewing the evidence in the light most favorable to Plaintiff, Defendants’ argument is without merit at this summary judgment stage of the proceedings. Regardless of whether the stock options themselves were tangible or intangible rights, Plaintiff nevertheless has established the existence of a genuine issue of material fact as to whether Defendants improperly converted Plaintiffs physical documents titled “Incentive Stock Option Agreements” and whether this conversion prevented him from timely exercising his rights under the Agreements. The Trial Court’s grant of summary judgment to Defendants on this claim is, therefore, vacated.

The next issue involves whether the Trial Court correctly granted summary judgment to Milam and Douglass on Plaintiffs claim for conversion of his technical and scientific documents and property in addition to his stock options. As set forth above, Plaintiff alleges that Milam and Douglass converted various items of personal and professional property, including, but not limited to, various documents including the Incentive Stock Option Agreements and technical materials belonging to Plaintiff.

Milam’s and Douglass’ motion for summary judgment relied on Plaintiffs deposition testimony and argued that Plaintiff could not prove they were the ones who converted the property, assuming any conversion took place. Noticeably lacking from the motion for summary judgment are any affidavits from Milam or Douglass stating that they did not convert any of Plaintiffs property. In other words, they claim only that Plaintiff “will be unable to prove an essential element of his ... case” which is insufficient to support a grant of summary judgment. Hill v. Sneed, supra. Without an affidavit from Milam or Douglass stating that they did not convert any of Plaintiffs property, they failed to negate any essential element of Plaintiffs claim or conclusively establish any affirmative defense. It necessarily follows that Plaintiffs burden to produce evidence establishing the existence of a genuine issue of material fact never was triggered. See Blair, 130 S.W.3d at 767 (quoting Staples, 15 S.W.3d at 88-89). We likewise are unpersuaded by Milam’s and Douglass’ innovative argument that summary judgment was appropriate to them because even if they converted Plaintiffs stock options or other property, they converted it not for their own use and benefit but for the use and benefit of CTI which somehow shields them from liability for their alleged conversion. Milam and Douglass cite us to no law in support of this proposition, and we are unaware of any such law mandating such a result. The grant of summary judgment to Milam and Douglass individually on Plaintiffs claim for'conversion is, therefore, vacated.

The final issue is whether the Trial Court properly granted summary judgment to Milam and Douglass on Plaintiffs claim for post-termination compensation for work performed completing two articles. Plaintiff admitted in his deposition that this claim really was against his employer, CTI, and that he had no agreements with Milam or Douglass individually. Although Plaintiff claimed Milam knew his request for payment was fair, that is not a sufficient basis in which to hold Milam personally liable. Given that Plaintiff admits this claim is brought properly against only his employer CTI, we affirm the Trial Court’s grant of summary judgment to Milam and Douglass on this particular claim.

Conclusion

The judgment of the Trial Court is affirmed in part and vacated in part, and this cause is remanded to the Trial Court for further proceedings as necessary and consistent with this Opinion and for the collection of the costs below. Costs on appeal are assessed equally against the Appellees CTI, Inc., James Kelly Milam, and Terry Douglass.

      . Since Plaintiff alleged the actual documents were improperly converted, it makes no difference whether the stock option rights themselves were intangible and subject to being converted under the law. If, on remand, Plaintiff can prove that the documents were converted and because of the conversion he did not exercise the stock options in a timely manner, then Plaintiff’s damages would be the same as they would be if he could set forth a claim for conversion of the actual stock options. Therefore, we express no opinion on whether stock option rights are tangible or intangible, or whether they can be converted.

      . The Trial Court entered an Order on August 2, 2002, stating that technical records, computer programs, and other similar items which were created during the course of Plaintiff's employment were the property of CTI pursuant to CTI’s Guidelines for Protection of Confidential and Proprietary Information. Our ruling applies to property not covered by this Order and should not be interpreted otherwise.


author: DAVID G. HAYES, J.,

text:
    STATE of Tennessee v. John A. JUDKINS, Jr.
    Court of Criminal Appeals of Tennessee, at Nashville.
    Feb. 15, 2005 Session.
    July 20, 2005.

      David Brady, Public Defender; and John B. Nisbet, III, Assistant Public Defender, Cookeville, Tennessee, for the Appellant, John A. Judkins, Jr.
    Paul G. Summers, Attorney General and Reporter; Preston Shipp, Assistant Attorney General; William A. Gibson, District Attorney General; and William M. Locke, Assistant District Attorney General, for the Appellee, State of Tennessee.
   OPINION

DAVID G. HAYES, J.,

delivered the opinion of the court,

in which GARY R. WADE, P.J., and THOMAS T. WOODALL, J., joined.

The Appellant, John A. Judkins, Jr., appeals the sentencing decision of the De-Kalb County Criminal Court following termination of his judicial diversion. Judkins was indicted for aggravated burglary and two counts of theft of property and was granted judicial diversion and placed on supervised probation for a period of three years. Simultaneously with the entry of an order of judicial diversion, a negotiated plea agreement was presented and approved by the court to the indicted offenses which provided that Judkins would receive two three-year sentences and one eleven month and twenty-nine day suspended sentence for the three crimes. The agreement further provided for concurrent sentences to be served on “straight probation.” A probation violation warrant was subsequently issued alleging that Judkins had committed additional offenses. Following termination of judicial diversion, in the absence of a sentencing hearing, Judkins was sentenced to three years confinement in the Department of Correction. Judkins argues on appeal that the trial court erred by not imposing the effective three-year sentence of “straight probation” as provided in the plea agreement. After review, we conclude that the Sentencing Act does not contemplate the coexistent grant of judicial diversion and service of a sentence imposed pursuant to a negotiated plea agreement as the two are inconsistent in purpose. Accordingly, the trial court’s consideration of the terms of the plea agreement in the sentencing decision was error. The case is, therefore, remanded to the trial court for a sentencing hearing.

Procedural History

On July 13, 2001, the Appellant pled guilty under the terms of a negotiated plea agreement to aggravated burglary, theft over $1000, and theft under $500. The plea agreement provided for sentences of three years for the aggravated burglary, three years for the theft over $1000, and eleven months and twenty-nine days for the theft under $500. Further, the agreement specified that the sentences were to be served concurrently and that the sentences were “all suspended to straight probation.” A notation appears on the agreement that “pending TBI certification the defendant will be granted judicial diversion.” The record reflects that on the same date, the trial court granted the Appellant judicial diversion, deferred service of the sentences until July 13, 2004, and placed the Appellant on three years supervised probation.

On June 28, 2003, a probation violation warrant was issued alleging that the Appellant had been charged and arrested on June 15, 2003, with possession of drug paraphernalia and on June 21, 2003, with aggravated burglary and theft of property over $10,000. Based upon the proof presented at the sentencing hearing, the trial court found sufficient evidence to establish that the Appellant had violated the conditions of his probation. Thereafter, on October 5, 2003, the trial court terminated the Appellant’s program of judicial diversion and entered adjudications of guilt regarding the three convictions. With regard to sentencing, it was the State’s position that a sentencing hearing should be conducted while the Appellant argued that the terms of the original plea agreement should be imposed, ie., three-year sentences suspended to straight probation.

On January 15, 2004, the trial court, without conducting a sentencing hearing, reinstated the original agreed-upon sentences of three years and ordered that the sentences be served in incarceration. This appeal follows.

Analysis

On appeal, the Appellant does not challenge the termination of his diversion. Rather, he challenges only the imposition of the effective three-year sentence to be served in incarceration. The Appellant argues that the negotiated plea agreement, which was approved by the trial court, survives the termination of diversion and that, upon termination, the court was required to sentence him to the agreed sentence of “three years, suspended to straight probation.” Alternatively, he argues that the trial court erred in not conducting a sentencing hearing prior to the imposition of the sentence. Although the State initially argued that the plea agreement did not survive the termination of diversion, on appeal it asserts that the plea agreement does survive the termination but disagrees with the Appellant as to how the agreement should be interpreted.

Our Sentencing Act provides that in granting a qualified defendant judicial diversion, the trial court, upon the entry of a guilty plea, places the defendant on probation without entering a judgment of guilt. Tenn.Code Ann. § 40-35-313(a)(l)(A) (2003). If the defendant successfully completes probation, the court shall discharge the defendant and dismiss the proceedings. Id. at (a)(2). However, if the defendant’s probation is revoked, the trial may then enter an adjudication of guilt and “proceed as otherwise provided.” Id.

Case law decisions from this court have reached different conclusions with regard to the meaning of the term “proceed as otherwise provided.” In State v. Daniel Bilbrey, No. M2002-01043-CCA-R3-CD,2004 WL 392587 (Tenn.Crim.App. at Nashville, Mar. 3, 2004) and State v. Jeremy Daniel Loader, No. M2003-01084— CCA-R3-CD, 2004 WL 2070844 (Tenn.Crim.App. at Nashville, Sept. 14, 2004), guilty plea agreements and grants of judicial diversion were concurrently entered. Following termination of judicial diversion probation, the trial courts sentenced Bil-brey and Loader as provided by the terms of the guilty plea agreement without conducting a sentencing hearing. The trial courts concluded that the plea agreement survived termination of the diversion as the defendants had agreed to the pleas. On appeal, panels of this court affirmed imposition of the two sentences.

In State v. Nkobi I. Dunn, No. E2001-02120-CCA-R3-CD, 2002 WL 31863292 (Tenn.Crim.App. at Knoxville, Dec. 23, 2002) and State v. Hollie D. Campbell, No. E2000-00373-CCA-R3-CD, 2001 WL 739240 (Tenn.Crim.App. at Knoxville, July 2, 2001) panels of this court reached the opposite conclusion. The respective trial courts held that the plea agreement did not survive the termination of diversion, and panels of this court affirmed the rulings. In Dunn, this court concluded that a remand for a sentencing hearing was necessary, as no sentencing hearing had been held prior to imposition of the sentences. Dunn, No. E2001-02120-CCA-R3-CD, 2002 WL 31863292. In Campbell, the sentence was affirmed because the trial judge, following termination, had conducted a proper sentencing hearing prior to imposition of the sentence. Campbell, No. E2000-00373-CCA-R3-CD, 2001 WL 739240.

After a thorough review of the issue presented, and upon reconsideration by all members of this panel, we conclude that the Sentencing Act does not contemplate the trial court’s acceptance of a negotiated guilty plea concurrently with a grant of judicial diversion. First, to allow the State and the defendant to enter into a sentencing agreement prior to termination of diversion contradicts the purpose of the diversion statute, which is deferral of the sentence until a future date. Moreover, as evidenced by the holdings in Dunn and Campbell, any plea agreement which by its terms is ineongruent with principles of sentencing, e.g., a plea agreement which imposes probation after the offender has been revoked from diversion probation, will necessarily be rejected by the sentencing court when termination of diversion occurs. Thus, entry of a plea agreement under these circumstances represents an exercise in futility as it accomplishes nothing.

Second, although the Appellant contends that the terms of the guilty plea agreement should be enforced upon termination of diversion, the record does not reflect that the plea agreement was ever reduced to judgment. The record includes a guilty plea document reflecting the terms and conditions of the plea agreement of “straight probation” signed by the Appellant and approved by the trial judge. At the guilty plea hearing, the trial judge “accepted” the Appellant’s pleas of guilty and entered judgment accordingly. However, the trial court made no pronouncement with regard to the terms of the plea agreement. Indeed, the trial judge specifically stated that no judgment of conviction would be entered. Our rules of procedure provide that “if the court accepts the plea agreement, the court shall inform the defendant that it will embody in the judgment and sentence the disposition provided for in the plea agreement.” Tenn.R.Crim. P. 11(e)(1)(C), (e)(3). Additionally, Rule 32(e) of the Tennessee Rules of Criminal Procedure provides, in pertinent part, that “[a] judgment of conviction shall set forth the plea, the verdict or findings, and the adjudication and sentence.” Because no final judgment of conviction was ever entered embodying the plea agreement, there is no judgment from which to appeal. See Tenn. RApp. P. 3(b). It is apparent from a review of the record that the trial judge did not intend the negotiated plea agreement to represent a final judgment but, rather, a contingent sentence should diversion fail. Indeed, if judgments had been entered upon both the plea agreement and the diversion, the sentences would have been voidable, as there is no authority to sentence a defendant to two separate sentences at the same time for the same crime. See State v. Turco, 108 S.W.3d 244, 245 (Tenn.2003) (holding that there is no statutory authority for permitting judicial diversion after an adjudication of guilt or imposition of sentence.

We conclude that our Sentencing Act never contemplated that a contingency type of plea agreement would be attached to the diversion, which would usurp the sentencing authority of the trial judge following a termination of diversion. We interpret the term “proceed as otherwise provided” following revocation of judicial diversion probation to mean that a sentencing hearing should be held pursuant to the considerations of Tennessee Code Annotated section 40-35-210 (2003) and principles of sentencing.

CONCLUSION

Based upon the foregoing, the three-year sentence of incarceration is vacated, and the case is remanded to the Dekalb County Criminal Court for a sentencing hearing to determine the appropriate sentence for the Appellant.

      . This order was entered on November 23, 2001, by Judge Leon Burns, who conducted these proceedings.

      . The drug paraphernalia charge was later dropped.

      . This is not to say that the State and the Appellant are precluded from presenting to the trial court a plea agreement as provided by Rule 11(e), Tenn. R.Crim. P., subsequent to termination of judicial diversion. However, the plea agreement should not be entered or approved by the sentencing court prior to or concurrently with the grant of judicial diversion.

      . The record does include a judicial diversion order.