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CRight ParRight-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)3|x<6X9`(*Courier 12pt10cpiXXx6X@JQX@( T$   d^!$(G.2Q$ FT!   4XX     0  MARVINBERKELESLIEMcWILLIAMS($   0  MOWLESAilorMaynardvilleGillenwaterviresBairdBledsoeMcReynoldsElizabethtonHodgeColwell("$    GGGG'dxd2 0Indent123  IDDDӀ2" 0Indent20 23  2, 0Indent30 0 23  26 0Indent40 0 0 23  2@ 0Indent50 0 0 0 23  2J 0Indent60 0 0 0 0 23  2T 0Indent70 0 0 0 0 0 23  2^ 0Indent80 0 0 0 0 0 0 23  SVWXYZ[\ ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P 8Mac DefaultMac Default ` X<  9p`(Courier New% Line 7 dffff7Border 1ddMgC << G<  9p`(Arial  F!  #d#e  ii   YYY FILEDiX December17,1996CecilCrowson,Jr.iAppellateCourtClerk PtPtHH(FG(HH(d'hStyl{WP}01  HH  2$HH  Geneva  <Px443!#4$*$$*$ KK  Geneva  Geneva .,6 Geneva   h HD: Geneva  h HD: Geneva MC<< CLevel 1Level 2Level 3Level 4Level 5($$   1  ' dxdP Pd F! . e    7XXdd7\RA'\ `    , 5  f u` RhjgA1-j|`  `@Rߛ @ INTHECOURTOFAPPEALSOFTENNESSEE@ EASTERNSECTIONTHELMAAILOR,EARLAILOR@ ) UNIONCOUNTYandPAMAILOR@ ) 03A019605CV00158 @ ) PlaintiffsAppellees/@ ) CrossAppellants@ ) @ ) HON.CONRADE.TROUTMAN,JR.̀@ ) JUDGE v. @ )@ )@ ) CITYOFMAYNARDVILLE  @ ) @ ) DefendantAppellant/@ ) CrossAppellee@ ) AFFIRMEDANDREMANDEDJONG.ROACHOFKNOXVILLEFORCITYOFMAYNARDVILLELINDAJ.HAMILTONMOWLESOFKNOXVILLEFORTHELMAAILOR,EARLAILORandPAMAILOR    OPINION         Goddard,P.J.  ThisisanappealfromajudgmententeredbytheUnionCountyCircuitCourtinacasearisingfromthefailureoftheDefendanttorepairthedamagetothePlaintiffshomecausedbytheblockageofasewerline.PlaintiffsThelma,Earl,andPamAilorfiledsuitagainstDefendantCityofMaynardvilleonSeptember29,1992,forbreachofimpliedcontractorcontractbyestoppelandfornegligenceundertheGovernmentalTortLiabilityAct.  AbifurcatedtrialwasheldMarch7,8,and9,1995.ThepartiesarguedthecontractissuebeforeajuryandarguedthenegligenceissueundertheGovernmentalTortLiabilityActbeforetheTrialJudge.ThejuryreturnedaverdictastothecontractsissueinfavorofthePlaintiffsfor$40,653.10.OnJune9,1995,theDefendantfiledamotionforadirectedverdict,or,inthealternative,forvacatingthejudgmentandgrantinganewtrial.OnMarch4,1996,theCourtoverruledtheDefendantsmotion,dismissedthePlaintiffsnegligenceclaim,andupheldthejurysawardof$40,653.10.  TheDefendantappealsthedenialofitsmotion.IntheeventthisCourtreversesthejuryverdict,thePlaintiffscrossappealtheCourtsdismissaloftheirnegligenceclaim.  OnFebruary2,1992,asewagebackupinoneoftheDefendantssewerlinescausedrawsewagetofloodthePlaintiffshomeforalmostthreehours.VonRichardson,theDefendantsCityManageratthetime,wenttothePlaintiffshomethedayaftertheincidenttospeakwithMr.Ailor.Mr.RichardsontestifiedthathecametothePlaintiffshomeasarepresentativeoftheDefendant,observedthedamagecausedbythesewage,andtoldMr.AilortofixthehouseattheexpenseoftheDefendant.Mr.RichardsondidnotgivethePlaintiffsanylimitationontheamountneededtorepairthehome.WhilenoformalactionwastakenattheCityCouncilmeeting,accordingtoMr.RichardsontheCommissionersdiddiscussthedamagetothePlaintiffshomeandagreedthattheDefendantshouldpayforit.  Mr.AilorcontactedthreeofthefiveCityCommissionerstodiscussandconfirmthathewouldbecompensatedforanyrepairsneededtorestorethehome.Mr.AilortestifiedthathedidnotcontacttheothertwoCommissionersbecauseofhisbeliefthattheywereincapacitatedduetopoorhealth.AlthoughthepartiesdisagreeastowhethertheCommissionersexplicitlyagreedtopayforthedamagestothePlaintiffshome,theCommissionersdidacknowledgetellingthePlaintiffsthattheywouldbewillingtoworkwiththemonfixingtheproblem.  BasedontheconversationswithMr.RichardsonandtheCommissioners,thePlaintiffsspentover$37,000onrepairingtheirhome.InAprilof1992,theCommissionersinstructedtheCityAttorneytogetanitemizedlistofdamagesfromthePlaintiffs.Mr.AilortoldtheCityAttorneythathehadobtainedcounseltohandletheincident.ThePlaintiffscounselsenttwolettersinJuneandJuly1992totheCityManagerwho,atthattime,wasRussellGillenwater.TheselettersoutlinedthePlaintiffsclaimfordamages,includingalistofexpenses,andaskedtheCityManagertoinformthePlaintiffscounselaboutwhatactionwouldbetakenbytheDefendanttoremedythisclaim.CityManagerGillenwaternevergavetheletterstotheCityAttorney,andtheDefendantneverpaidthePlaintiffsfortheirrepairs.   TheDefendantpresentsthefollowingissues,whichwerestate:        I.WhethertheTrialCourterredindenyingtheDefendantsmotionfordirectedverdictor,alternatively,foranewtrialonthePlaintiffsclaimforbreachofcontractbecausethePlaintiffsfailedtoestablishacontractualrelationship. II.WhethertheTrialCourterredinfailingtograntamistrialduetorepeatedreferencesbythePlaintiffscounselandwitnessestotheexistenceofliabilityinsurance.         IntheeventthisCourtreversesthejurysverdict,thePlaintiffspresentthefollowingissue,whichwealsorestate:        I.WhethertheTrialCourterredindismissingthePlaintiffsclaimundertheGovernmentalTortLiabilityAct.         ThestandardofreviewforajuryverdictapprovedbytheTrialCourtisthematerialevidencestandardassetforthinRule13(d)oftheTennesseeRulesofAppellateProcedure.ThisCourtwillsetasidethejurysverdictonlyifnomaterialevidenceexiststosupportit.WefindthatmaterialevidenceintherecordsupportsthejuryverdictandthattheTrialCourtdidnotabuseitsdiscretioninnotgrantingamistrialduetotestimonyregardingliabilityinsurance.Becauseweaffirmthejuryverdict,thisCourtdoesnotreachtheissuesraisedbythePlaintiffs.  ThePlaintiffsarguethattheDefendantisestoppedfromdenyingtheexistenceofacontractbecausetheCityManagerandseveralCityCommissionerstoldthePlaintiffsthattheDefendantwouldpayfortherepairsknowingthatthePlaintiffwouldrelyontheserepresentations.TheDefendantarguesthat,whiletheDefendanthadthepowertocontractwiththePlaintiffs,nocontractexistedbecausetheactionofMr.RichardsonasCityManagerwasnotavalidexerciseoftheDefendantspowertocontract.TheDefendantfurtherarguesthatestoppelshouldnotapplybecausethePlaintiffisresponsibleforascertaininganylimitationsoftheDefendantspowertocontract.Sincethecontractwasnotenteredintoduringasessiondulyassembled,theDefendantcontendsthecontractwasultravires.Finally,theDefendantassertsthatequitableestoppelshouldnotapplybecausethePlaintiffsufferednoharmbymakingtherepairsandbecausetheDefendantgainednobenefit.  Generally,personscontractingwiththeofficersofamunicipalcorporationdosoattheirownriskandaredeemedonnoticeofthepowersthatthecorporationhastoenterintosuchcontracts.CityofLebanonv.Baird,756S.W.2d236(Tenn.1988).Indeed,thedoctrineofequitableestoppelgenerallydoesnotapplytotheactsofpublicofficialsexceptunder"veryexceptionalcircumstances."BledsoeCountyv.McReynolds,703S.W.2d123(Tenn.1985).However,asanexceptiontothegeneralrule,whereaninnocentthirdpartyhasbeeninducedbyandreasonablyreliedontheunauthorizedactsofanagentofamunicipality,themunicipalitymaynotintentionallyrelyonthefactthattheactswereunauthorizedtoavoiditsobligations.Whetherequitableestoppelorimpliedcontractshouldapplyisdeterminedonacasebycasebasisanddependsonthefactsandequitiesoftheparticularcase.CityofLebanonv.Baird,supra.  Forthedoctrinesofequitableestoppelorimpliedcontracttoapplytoamunicipality,thecontractmusthavebeenultraviresduetothefactthatitwasnotenteredintointheappropriatemanner.Additionally,thecontractmusthavebeenexecuted.Tennesseelawrecognizestwodistinctformsofultraviresmunicipalacts.Thefirst,whichoccurswhereamunicipalitylackedthepowertoperformtheaction,isvoidandnotsubjecttoequitableestoppel.Thesecond,whichoccurswherethemunicipalityhadthepowertoperformtheactionbutdidnotfollowtheproperprocedureindoingso,maybesubjecttoequitableestoppel.Baird,supra.Inthepresentcase,theDefendantacknowledgesthatithadthepowertocontractwiththePlaintiffs.However,theDefendantassertsthatthecontractwasultraviresbecauseitwasenteredintooutsideofasessionoftheCityCommissiondulyassembled.Therefore,theDefendantsactionsfallintothesecondcategoryofultraviresacts.Additionally,thecontractwasexecutedbecausethePlaintiffsrepairedtheirhomebeforebecomingawarethattheDefendantwouldnotrepaytherepaircosts.Becausethecontractfitsinthesecondultravirescategoryandbecauseitwasexecuted,theissueofequitableestoppelorimpliedcontractapplies.  TheTennesseeSupremeCourtinMcReynoldsfoundthat"inthoseTennesseecaseswhereestoppelwasapplied,orcouldhavebeenapplied,thepublicbodytookaffirmativeactionthatclearlyinducedaprivatepartytoacttohisorherdetriment,asdistinguishedfromsilence,nonactionoracquiescence."McReynolds,supra.Inthiscase,theCityManagertookanaffirmativeactofinducementbygoingtothePlaintiffshomeandtellingthePlaintiffstomakeanynecessaryrepairsattheDefendantsexpense.ThePlaintiffsreasonablyreliedontheCityManagersactions,andsoughtthetruestateofaffairsbycontactingtheavailableCityCommissioners.AfterreceivingthesupportoftheCommissioners,thePlaintiffsrepairedtheirhomeatconsiderablepersonalexpense.Therefore,althoughdeemedonnoticeoftheDefendantsprocedureforcontracting,thePlaintiffsreasonablyreliedontheDefendantsaffirmativeinducementstotheirdetriment.  Finally,astoestoppel,theDefendantarguesthatevenifitsactionsinducedthePlaintiffstomaketherepairs,theDefendantreceivednobenefit.WhileitisarguablethattheDefendantbenefitedbytemporarilyinducingthePlaintiffstoforgotheircauseofaction,thePlaintiffsmayassertequitableestoppelongroundsotherthanshowingthattheDefendantbenefitedfromthePlaintiffsactions.OurSupremeCourthasheldthatequitableestoppelisalsoappropriatewhereonepartyinducesanothertoperformadetrimentalact.CityofLebanonv.Baird,supra.Inthepresentcase,thePlaintiffsincurredsubstantialobligations,throughloansandthesaleofcattleforaloss,tofinancetherepairstotheirhomebasedontherepresentationsmadebyCityManagerRichardsonthattheDefendantwouldrepaythesecosts.Thus,theDefendantsactionsinducedthedetrimentalactsofthePlaintiffs.BasedontheequitiesofthiscaseandbecausetheDefendantsinducementsresultedinthePlaintiffsactingtotheirdetriment,wefindmaterialevidencetosupportthejurysverdictand,therefore,weaffirm.  TheDefendantalsoassertsthatamistrialisrequiredbecausetestimonyattrialconcerningliabilityinsurancewassoprejudicialthatitseffectcouldnotbeerasedfromthemindofthejury.TheDefendantreliesonMarshallv.NorthBranchTransferCo.,166Tenn.96,59S.W.2d520(1933),forthisproposition.However,Marshallinvolvedspecificstatementsbymembersofthejuryduringdeliberationthatduetothepresenceofinsuranceaverdictshouldberenderedfortheplaintiff.Marshall,supra.TheMarshallCourtalsoheldthatthetrialcourtshouldbereversedonthebasisthattheuncontradictedstatementsoffourjurymembersshowedthattheywereinducedtochangetheirverdictbecauseofdiscussionsconcerninginsurance.  TheDefendantinthiscaseoffersnosuchproofof"misconduct,affirmativelyshowntohaveaffectedtheresultofthetrial."Marshall,supra.Tosupportthisclaim,theDefendantreferstotwoinstancesattrialwhereinsurancewasmentioned.NeitherinstancerelieduponbytheDefendantinvolvedtheuseorreferencebythePlaintiffscounseloftheword"insurance."BothreferencesweremadebyMr.VonRichardson,theformerCityManager.ThefirstreferenceoccurredduringthedirectexaminationofMr.RichardsonbythePlaintiffscounsel.InresponsetothePlaintiffscounsel'sinquiryaboutwhatactionsweretakenaftervisitingthePlaintiffsresidence,Mr.Richardsonstated:     Iwentbacktotheoffice,talkedtoMrs.Gillenwateraboutthesituationforaminuteortwo,andthencalledtheaskedherforthenumberfortheinsurancecompany.       TheDefendantobjectedtothereference.  ThesecondreferencerelieduponbytheDefendantoccurredduringdefensecounselsrecrossexaminationofMr.Richardson.InresponsetodefensecounselsinquiryaboutwhetherMr.RichardsonobtainedauthorityfromtheCityCommissiontorepairthePlaintiffshome,Mr.Richardsonstated:"No,sir,Igotitfromtheinsurancecompany.Theytoldmetofixit."Aftertwobenchconferences,theTrialCourtindicateditwouldconsiderdeclaringamistrialifinsurancecameupagain.  ThePlaintiffsarguethattherewereotherreferencestoinsuranceattrialtowhichtheDefendantdidnotobject,notablyareferencebydefensecounsel.DuringhiscrossexaminationofMr.Ailor,defensecounselstated,"Now,youknowthattherewasaclaimsrepresentativethatcamebyyourhousetoinvestigatethematter....Anddidhegiveyouanyestimatesofwhatitwasgoingtocosttofixyourproperty?"Atthispoint,thePlaintiffscounselobjected.  ThisCourthasheldthatwhereanattorney"willfullyandvoluntarilyreferstoliabilityinsuranceforthepurposeofinfluencingajury,amistrialshouldbegranted."WestEndRecreation,Inc.v.Hodge,776S.W.2d101(Tenn.App.1989),cert.denied(1989).However,thisquestionislefttothediscretionofthetrialcourt.WestEnd,supra.Inthiscase,theDefendanthasnotofferedproofofanaffirmativeappearancethatthetestimonyaffectedtheresultofthetrial,orthatthePlaintiffscounselwillfullyandvoluntarilyreferredtoinsuranceinordertoinfluencethejury.SeeColwellv.Jones,48Tenn.App.353,346S.W.2d450(1960).WethereforefindthattheTrialCourtdidnotabuseitsdiscretioninnotgrantingamistrialonthebasisofthementionofliabilityinsuranceattrial.  Fortheforegoingreasons,thejudgmentoftheTrialCourtisaffirmedandthecauseremandedforcollectionofcostsbelow.CostsofappealareadjudgedtotheDefendant,CityofMaynardville.      _______________________________      HoustonM.Goddard,P.J.CONCUR:________________________________HerschelP.Franks,J.________________________________DonT.McMurray,J.