ÿWPCf …4Vj 0(y¡w@© 0Jé 0T3 0^‡ 0hå 0rM 0|¿ 0†; 0Á 1uQ 0dÆ UB* %l U6r U>¨ B)æ DC AMR U*Ÿ É v~à B^vÓ{ D3N 0@ AOÁÆ 0DÖ D/ BIÚƒç"ÔøÔô3|xn($¡¡ Z[\]^D_`DaDbcÓ€2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô  ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ<þ6X9`(*Courier 12pt10cpiX< Œ 9p`(Courier New< Œ 9p`(&Times New Roman% Line 7 d7Border 1dd€- Cþÿ << Gÿÿ< Œ 9p`(Arial Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÝ  ÝÔ€"ÔÔ€"ÔÓ  ÓÔ YYY ÔFILEDÔ€"XÔÌÌò òJuly€25,€1997ÌÌCecil€Crowson,€Jr.ÌÔ€"ôÔAppellate€Court€Clerkó óPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'h dStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva Ò%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÝ  ÝÑ  ÑÒ Ü ÒÒ ° ÒÑ ý ÑÑ\R AØ'\ÑÑ\R AØ'\ÑÑ7€jXXdÈdÈ7ÑÔ€ÔÔ€ŠÔÙ€€ÙßR€!# A1-j|` Å `€€@ÿRß›Þ ÞÌ€€€€à@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌÌà@ àEASTERN€SECTIONÌó óÌÌÌNATIONAL€BOOK€WAREHOUSE,€à à)€C/A€NO.€03A01„9702„CH„00057ÌINC.,à àà àà àà àà àà à)€€Ìà àà àà àà àà àà à)€KNOX€CHANCERYÌà àPlaintiff„Appellant,à àà àà à)Ìà àà àà àà àà àà à)€HON.€FREDERICK€D.€McDONALD,Ìv.à àà àà àà àà àà à)€CHANCELLORÌà àà àà àà àà àà à)ÌBOOK„MART€OF€FLORIDA,€INC.,à àœ)€AFFIRMED›Ìà àà àà àà àà àà àœ)€AND›Ìà àDefendant„Appellee.à àà àœ)€REMANDED›ÌÌÌÌF.€DULIN€KELLY€and€CLINTON€L.€KELLY,€Hendersonville,€for€Plaintiff„Appellant.ÌÌJOHN€B.€WATERS,€III,€LONG,€RAGSDALE€&€WATERS,€P.C.,€Knoxville,€forÏDefendant„Appellee.ÌÌÌÌà@ àò òòòO€P€I€N€I€O€Nóóó óÌÌÓÓÌà àà àà àà àà àà àà àà àFranks.€J.ÌÌà àà àIn€this€declaratory€judgment€action,€the€plaintiff€sought€a€declaration€ofÏthe€respective€rights€of€the€parties€under€an€agreement€entered€œbetween›€plaintiff€andÏdefendant,€both€of€whom€are€engaged€in€the€retail€sale€of€books€and€relatedÏproducts.€Ìà àà àThis€action€focuses€on€a€provision€in€their€agreement€as€follows:ÌÓÓà0 àà0 àBook€Warehouse€grants€to€Book„Mart€a€thirty€day€right€of€first€refusalÏwith€respect€to€any€new€location€in€Florida€chosen€for€a€ð ðBookÍWarehouse.ðð€€That€is,€should€Book€Warehouse€elect€to€establish,€as€isÏcontemplated,€other€ð ðBook€Warehouseðð€retail€facilities€throughout€theÏState€of€Florida,€Book„Mart€will€be,€and€is€hereby,€granted€exclusiveÏright€to€assume€operation€of€such€ð ðBook€Warehouseðð€retail€facilitiesÏby€notifying€Book€Warehouse€of€its€election€to€do€so€within€thirtyÏdays€of€receipt€of€written€notice€by€Bookmart€from€Book€WarehouseÏof€the€intent€to€establish€such€a€facility.€€No€such€notice€shall€beÏprovided€without€including€in€said€notice€a€specific€proposal€withÏrespect€to€location€and€other€pertinent€aspects€of€the€proposedÏoperation€in€question.€€Should€Book„Mart€elect€to€operate€any€suchÏfacility€offered€to€it€by€Book€Warehouse,€Book„Mart€shall,€in€additionÏto€all€other€rights,€be€entitled€to€use€the€name€ð ðBook€Warehouseðð€inÏoperating€said€facility.ÌÌÓÓà àà àThe€Chancellor,€in€declaring€the€rights€of€the€parties,€said€in€pertinentÏpart:ÌÓÓà0 àà0 à[i]n€all€but€one€case,€National€Book€Warehouse€had€executed€a€leaseÏon€a€book€store€location,€which€was€given€to€or€shown€to€Book„MartÏof€Florida€so€that€notice€could€be€given€of€exercise€of€right€of€firstÏrefusal,€that€will€continue.ÌÌà0 àà0 àà àIn€order€to€establish€within€the€œmeaning›€of€the€agreement€thatÏNational€Book€Warehouse€has€elected€to€establish€a€retail€facility€inÏFlorida€under€the€agreement€it€must€enter€into€an€agreement€with€theÏlandlord.€€And€that€agreement,€that€lease,€must€be€sent€to€Book„Mart€ofÏFlorida,€œan›€accurate€and€complete€copy€of€it€containing€all€terms,Ïincluding€signatures,€together€with€any€and€all€other€documents€andÏinformation€available€to€National€Book€Warehouse€with€respect€to€thatÏlease.€€It€should€be€a€covered€letter€of€some€form€of€communication€thatÏindicates€that€this€complete€information€is€being€given€to€Book„Mart€ofÏFlorida.€€When€that€is€done,€that€will€constitute€notice€and€theÏtransmission€should€indicate€œthat€that›€is€intended€to€be€notice€under€theÏagreement.€€And€from€that€communication,€with€all€of€that€information,ÏBook„Mart€of€Florida€shall€have€30€days€within€which€to€exercise€itsððÏright€of€first€refusal.ÌÌÓÓà àà àEssentially,€the€Chancellor€required€œthe›€parties€œto€operate›€under€theÏterms€of€the€agreement€œas€they€had€until›€disputes€and€litigation€erupted€betweenÏthem.€€œà àà àThe›€evidence€established€that€plaintiff€would,€in€fact,€negotiate€andÍexecute€a€lease€œbefore€it€could€›€œrequire›€the€defendant€to€exercise€its€right€œof€firstÏrefusal€under›€the€agreement,€and€would€œthen€furnish›€all€of€the€information,€includingÏð ðeconomic€information€necessary€to€make€a€decisionðð€to€defendant.€€The€ChancellorÏrelied€heavily€upon€this€evidence€in€declaring€the€rights€of€the€parties,€but€plaintiffÏinsists€that€the€agreement€is€not€ambiguous,€and€the€Chancellor,€in€effect,€appliedÏrules€of€construction€when€no€construction€of€the€agreement€was€necessary.€€œÌà àà àWe›€observed€at€the€outset€that€plaintiffððs€action€was€based€on€a€letterÏwritten€to€defendant€on€June€15,€1995,€attaching€several€ð ðnotice€of€intent€toÏestablish€a€Florida€facilityðð.€€Essentially,€these€notices€contained€an€address,€a€leasingÏagent,€and€the€approximate€size€of€the€facility.€€Defendant,€in€response,€asked€forÏmore€information€which€was€not€furnished.€€Plaintiffððs€witness€conceded€in€hisÏtestimony€that€while€they€had€an€interest€in€opening€stores€in€these€locations,€withÏthe€one€exception€no„one€had€actually€visited€the€premises€nor€had€they€ð ðelectedððÏto€open€the€facilities.€€The€Chancellor€held€that€these€notices€were€not€sufficient€toÏtrigger€œthe€running€of€the€›€time€for€exercising€a€right€of€first€refusal€under€the€terms€ofÏthe€agreement.€€We€agree.€€œ€These›€notices€and€the€failure€to€respond€to€defendantððsÏinquiry€œwere€not€made€in€good€faith€on›€the€part€of€plaintiff,€and€the€Chancellor€couldÏhave€properly€refused€to€entertain€this€action.€€However,€under€the€broad€discretionÏaccorded€the€trial€judge,€it€was€œwithin€his€discretion€to›€declare€the€rights€of€theÏparties.€€òòSee€Southern€Fire€&€Casualty€Company€v.€Cooperóó,€200€Tenn.€283,€292ÏS.W.2d€177€(1956).€€à àà àœÌà àà àWe›€cannot€agree€with€plaintiff€that€the€Chancellor€could€not€take€intoÍaccount€the€surrounding€circumstances€of€the€parties€and€their€previousÏinterpretations€of€the€agreement€in€arriving€at€his€judgment.€€The€relationship€withÏthe€parties€at€best€was€complex€œand›€œnow€acrimonious.›€€We€believe€the€rule€ofÏpractical€construction€is€applicable€here.€€Ìà àà àThe€Supreme€Court€in€òòHamblen€County€v.€City€of€Morristownóó,€656ÏS.W.2d€331€(Tenn.€1983),€in€discussing€the€rule€said:ÌÓÓà0 àà0 àThat€rule,€long€recognized€and€applied€in€this€jurisdiction,€is€that€theÏinterpretation€placed€upon€a€contract€by€the€parties€thereto,€as€shownÏby€their€acts,€will€be€adopted€by€the€court€and€that€to€this€end€not€onlyÏthe€acts€but€the€declarations€of€the€parties€may€be€considered.€Ï(Citations€omitted).ÌÌà0 àà0 àà àThe€rule€is€stated€in€Section€235€of€the€Restatement€of€ContractsÏas€follows:ÌÌà0 àà0 àà0 àð ðIf€the€conduct€of€the€parties€subsequent€to€a€manifestation€ofÏintention€indicates€that€all€of€the€parties€placed€a€particularÏinterpretation€upon€it,€that€meaning€is€adopted€if€a€reasonableÏperson€could€attach€it€to€the€manifestation.ððÌÌà àà àòòId.óó€€at€335.ÌÌÓÓAlso€applicable€here€is€a€principle€which€œthe€Supreme€Court›€aptly€stated,€as€follows:ÌÓÓà0 àà0 àð ðThe€court€in€interpreting€words€or€other€acts€of€the€parties€puts€itselfÏin€the€position€which€they€occupied€at€the€time€the€contract€was€made.€ÏIn€applying€the€appropriate€standard€of€interpretation€even€to€anÏagreement€that€on€its€face€is€free€from€ambiguity,€it€is€permissible€toÏconsider€the€situation€of€the€parties€and€the€accompanyingÏcircumstances€at€the€time€it€was€entered€into€„€not€for€the€purpose€ofÏmodifying€or€enlarging€or€curtailing€its€terms,€but€to€aid€in€determiningÏthe€meaning€to€be€given€to€the€agreement.ðð€€òòRestatement€of€Contracts,Ïóóðð235(d)€and€Comment.ððÌÌà0 àà0 àParticularly€pertinent€here€is€the€following€principle:ÌÌà0 àà0 àð ðIntention€or€meaning€in€a€contract€may€be€manifested€or€conveyedÏeither€expressly€or€impliedly,€and€it€is€fundamental€œthat€that›€which€isÍplainly€or€necessarily€implied€in€the€language€of€a€contract€is€as€much€aÏpart€of€it€as€that€which€is€expressed.€€If€it€can€be€plainly€seen€from€allÏthe€provisions€of€the€instrument€taken€together€that€the€obligation€inÏquestion€was€within€the€contemplation€of€the€parties€when€makingÏtheir€contract€or€is€necessary€to€carry€their€intention€into€effect,€the€lawÏwill€imply€the€obligation€and€enforce€it.ðð€€17€Am.Jur.2d€òòContractsóóÏðð255€(1964)€at€649.ÌÌà àà àòòId.óó€at€334.ÌÌÓÓœThe€Chancellor€properly€implied€the€obligations€necessary€to€carry€out€theÏagreement.€€We›€affirm€the€œChancellorððs›€œdecision.›Ìà àà àNext,€plaintiff€insists€that€it€was€inappropriate€for€the€Chancellor€toÏaward€attorneyððs€fees€to€defendant€on€the€basis€that€the€defendant€did€not€find€aÏbreach€of€the€agreement€by€the€plaintiff,€and€only€declaratory€relief€was€sought.Ìà àà àThe€contractual€agreement€between€the€parties€provides,€in€pertinentÏpart:ÌÓÓà0 àà0 àin€any€litigation€arising€out€of€the€breach€of€this€agreement,€or€seekingÏto€enforce€it,€the€prevailing€party€shall,€in€addition€to€all€other€legal,Ïequitable€and€injunctive€remedies,€be€entitled€to€all€reasonable€litigationÏexpenses,€including€reasonable€attorneyððs€fees.ÌÌÓÓWe€note€that€defendant€throughout€objected€to€the€maintenance€of€this€action€andÏwas€required€to€defend€its€rights€under€the€contract.€€œThe›€notices€sent€by€plaintiff€didÏnot€comply€with€the€œrequirements€of€the€agreement,›€and€the€Trial€Court€held€theÏnotices€were€inadequate€to€trigger€the€right€of€first€refusal.€€Under€the€terms€of€theÏagreement,€the€Trial€Court€properly€awarded€attorneyððs€fees€to€defendant.Ìà àà àWe€affirm€the€judgment€of€the€Trial€Court€and€remand€at€appellantððsÏcost.ÌÌÓÓÌÌÌÌà àà àà àà àà àà à________________________Ìà àà àà àà àà àà àHerschel€P.€Franks,€J.ÌÌÌCONCUR:ÌÌÌÌÌÌ___________________________ÌHouston€M.€Goddard,€P.J.ÌÌÌÌÌÌ___________________________ÌÔ€XÔCharles€D.€Susano,€Jr.,€J.Ô€ŠÔÌÌ