ÿWPC …4Vj 0(y¡w@© 0Jé 0T3 0^‡ 0hå 0rM 0|¿ 0†; 0Á 1uQ 0dÆ UB* %l U6r B)¨ DCÑ AM U*a ‹ B£DÀv~vÓ‚ D3U 0@ˆ 0lÈ 0D4 AOxÆÇ 0D D/Ñ Bƒ‰"ÔøÔô3|x¢($¡¡ ŽD‘D’“”D•D–D—Ó€2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô  ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ<þ6X9`(*Courier 12pt10cpiX< Œ 9p`(Courier New% Line 7 d7Border 1dd€- Cþÿ << Gÿÿ< Œ 9p`(Arial Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÝ  ÝÔ€"ÔÔ€"ÔÓ  ÓÔ YYY ÔFILEDÔ€"XÔÌÌò òApril€28,€1997ÌÌCecil€Crowson,€Jr.ÌÔ€"ôÔAppellate€Court€Clerkó ó d :Ý ƒ!ÝÑ#€d#ÑÔ€ÔÝ  ÝÝ ƒg$Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ€ôÔContrary€to€defendantððs€accusations,€the€complaint€charges€a€breach€of€Ìà0 àthe€fiduciary€relationship€created€by€the€agency€relationship.ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{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$$$$'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò((3úÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””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€ªXXdÈdÈ7ÑÙ€€ÙßR€!# A1-j|` Å `€€@ÿRß›Þ ÞÌÌ€€€€à@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌÌà@ àEASTERN€SECTIONÌó óÌÌÌÌÌÌÌÌEVELYN€OGLE,€DeWITT€R.à àà à)€C/A€NO.€03A01„9610„CH„00336ÌSHELTON,à àà àà àà àà à)Ìà àà àà àà àà àà à)€SEVIER€CHANCERYÌà àPlaintiffs„Appellees,à à)€Ìà àà àà àà àà àà à)€HON.€CHESTER€S.€RAINWATER,€JR.Ìv.à àà àà àà àà àà à)€CHANCELLORÌà àà àà àà àà àà à)ÌREALTY€WORLD„BARNES€REALà àà à)ÌESTATE€COMPANY€and€DOTTIE€à à)ÌWOOD,à àà àà àà àà à)€œAFFIRMED€IN€PART,›€Ìà àà àà àà àà àà à)€œMODIFIED€IN€PART,›Ìà àDefendants„Appellants.à à)€œAND€REMANDED›ÌÌÌÌÌÌÌDOUGLAS€S.€YATES,€BRABSON,€YATES€AND€HAMILTON,€P.L.C.,ÏSevierville,€for€Plaintiffs„Appellees.ÌÌÌJEFF€D.€RADER,€OGLE,€WYNN€&€RADER,€Sevierville,€for€Defendant„Appellant,€Realty€World„Barnes.ÌÌÌSTEVEN€E.€MARSHALL,€Sevierville,€for€Defendant„Appellant,€DottieÏWood.ÌÌÌÌÌÌÌÌà@ àò òòòO€P€I€N€I€O€Nóóó óÌÌÌÌÌÓÓà àà àà àà àà àà àà àà àFranks.€J.ÌÌÌà àà àIn€this€action€the€dispute€is€between€plaintiff€ownersÏof€property€and€the€defendant€real€estate€agents€who€heldÏearnest€money€in€escrow€for€the€sale€of€plaintiffsðð€property,Ïwhich€the€buyer,€Wayne€Connelly,€did€not€purchase€as€agreed.Ìà àà àThe€Trial€Judge€determined€the€escrow€funds€should€beÏpaid€to€the€plaintiffs,€and€defendants€have€appealed.€€We€adoptÏin€part€the€Chancellorððs€finding€of€fact€as€our€review€hasÏdetermined€the€evidence€does€not€preponderate€against€theseÏfindings.€€T.R.A.P.€Rule€13(d):ÌÓÓà0 àà0 à[i]n€June€of€1993,€Mr.€Connelly€again€showed€anÏinterest€in€plaintiffsðð€property€and€this€eventuallyÏled€to€a€sale€and€purchase€contract€prepared€by€theÏdefendants€as€plaintiffsðð€broker€and€agent€wherebyÏplaintiffs€agreed€to€sell€and€Connelly€agreed€to€buyÏthe€subject€property€for€the€sum€of€two€million€sixÏhundred€thousand€dollars.ÌÌà0 àà0 à.€.€.ÌÌà0 àà0 àà àThis€contract€made€reference€to€an€attached€andÏincorporated€document€setting€forth€the,€ð ðStandardsÏfor€Real€Estate€Transactions,ð ð€and€being€the€same€asÏcontained€in€the€former€June€24,€1992€contract€whichÏwe€have€heretofore€referred€to.€€Plaintiffs€deny€thatÏsuch€standards€were€attached€to€or€presented€at€theÏexecution€of€said€contract.€€The€defendants€insist€theÏsame€was€stapled€to€a€specially€prepared€contract€usedÏfor€this€purpose€and€as€to€distinguished€[sic]€fromÏthe€usual€and€ordinary€form€where€all€is€contained€onÏthe€front€and€the€back€pages,€as€was€the€case€with€theÏ1992€contract.ÌÌà0 àà0 àà àBy€an€attachment€to€said€contract,€being€pageÏthree,€the€broker€was€to€receive€from€sellers;€thatÏis,€plaintiffs,€a€commission€of€ten€percent€of€theÏgross€sales€price.€€At€this€point€the€sum€of€$27,500Ïwas€paid€by€the€buyer€to€the€broker€and€placed€in€theÏescrow€account€by€the€broker.€€By€addendum€number€one,Ïundated,€entitled,€ð ðFor€Sale€of€Property,ð ð€states€asÏfollows:€ð ðSellers,€Mr.€R.€DeWitt€Shelton€and€LelaÏEvelyn€Ogle€and€buyer,€Mr.€Wayne€L.€Connelly,€agreeÏwith€this€sale€close„out€by€8„1„93€the€sellers€wouldÏallow€the€hundred€thousand€dollars€to€be€credited€toÏthe€purchase€price,€at€this€time€making€a€price€of€twoÏpoint€six€million€dollars€sale€price€to€Mr.€WayneÏConnelly€and€the€following€will€apply:€ÌÌà0 àà0 àà0 àððA.ðð€€sellers€to€owner€finance€the€balance€of€aÏmillion€six€hundred€thousand€for€a€period€ofÏthree€years€at€the€interest€rate€of€ten€percentÏwith€interest€only€payments€made€semi€annuallyÏin€the€amount€of€$80,000€every€six€months.€€ThenÏwhereas€the€principle€will€balloon€at€the€end€ofÏthe€third€year.€ÌÌà0 àà0 àà0 àððB.ðð€€with€this€agreement€seller€will€releaseÏeight€acres€with€deed€at€closing.ÌÌà0 àà0 àà0 àððC.ðð€€Wayne€L.€Connelly€would€be€responsible€forÏcommission€to€Realty€World€Barnes€of€ten€percentÏof€purchase€price€due€when€closed.ÌÌà0 àà0 àà àAddendum€number€two€to€the€contract,€againÏundated,€generally€provided€for€a€possible€alternativeÏto€sale€and€purchase€by€means€of€establishing€a€leaseÏpurchase€agreement€and€earnest€money€made€part;€thatÏis,€earnest€money€that€had€been€paid€in,€would€be€madeÏpart€of€the€first€lease€payment.ÌÌà0 àà0 àà àAddendum€number€three€to€this€contact€of€June€21Ï„„€June€15,€1993,€and€dated€June€21,€1993,€providedÏfor€referral€of€the€contract€matters;€that€is,€theÏdealing€with€the€transaction€of€the€sale€and€purchaseÏby€the€broker€to€an€attorney€or€title€company€toÏprepare€the€necessary€closing€documents€and€agreed€toÏby€all€the€parties.€€On€August€1st€of€1993,€by€way€ofÏa,€ð ðExtension€of€Sales€and/or€Lease€Contract,ð ð€theÏparties€further€entered€into,€in€addition€to€or€[sic]Ïamendment€their€original€contract€and€which€providedÍas€follows.€€The€court€quotes.€€ð ðThis€is€to€be€anÏextension€of€the€sales€contract€and/or€lease€contractÏdated€June€19,€1993€which€was€to€close€August€1,€1993.€ÏAll€parties€to€this€contract€agrees€[sic]€to€extendÏthe€contract€to€August€12,€1993.€€One,€providing€Mr.ÏWayne€L.€Connelly€agrees€to€wire„transfer€anÏadditional€$75,000€additional€earnest€money€to€RealtyÏWorld€Barnesðð€escrow€account€to€make€the€total€moneyÏin€escrow€for€this€transaction€a€hundred€and€twoÏthousand€five€hundred€dollars€non„refundable€by€8„8„92.€€Two,€this€sale€and/or€lease€is€to€close€by€fiveÏp.m.€August€12,€1993.€€Three,€if€Mr.€Wayne€ConnellyÏcompletes€the€lease€as€of€August€12,€1993€then€he€willÏhave€from€8„13„93€until€September€10,€1993€at€fiveÏp.m.,€which€is€28€days€to€convert€to€the€sale,€with€aÏcredit€of€a€hundred€thousand€dollars€of€the€leaseÏtransaction€to€apply€towards€his€down€payment€of€theÏone€million€dollars€needed€for€the€owner€financing€ofÏthe€sale€at€two€million€six€hundred€thousand€dollars.€ÏAny€time€after€this€period€is€and€will€be€consideredÏthe€lease€contract.ÌÌà0 àà0 àà àAll€commissions€due€to€Realty€World€Barnes€afterÏAugust€12,€1993€on€the€sale€transaction,€or€the€leaseÏto€sale€transaction,€will€be€paid€by€the€buyer,€Mr.ÏWayne€Connelly,€as€per€the€sale/lease€contract€datedÏJune€19,€1993,€without€any€compensation€being€paid€byÏthe€sellers€after€that€date,ð ð.ÌÌÓÓà àà àThe€Court€then€determined€that€Item€K€of€the€StandardsÏfor€Real€Estate€Transactions€had€not€been€attached€to€thisÏcontract.€€The€Chancellor€held€that€assuming€that€Item€K€wasÏincluded€as€a€part€of€the€contract,€the€later„executed€addendumsÏcontradicted€the€boiler„plate€language€of€Item€K€in€theÏstandards€and€said:ÌÓÓà0 àà0 àBy€the€final€document€of€these€transactions,€being€theÏAugust€1,€1993€agreement€entitled,€ð ðExtension€of€SaleÏand/or€Lease€Contract,ð ð€and€as€added€to€this€documentÏafter€it€was€originally€prepared€by€the€defendant,€isÏthe€following€statement:€ð ðall€commissions€due€toÏRealty€Barnes€after€August€12,€1993€on€the€saleÏtransaction€or€the€lease€to€sales€transaction€will€beÍpaid€by€the€buyer,€Mr.€Wayne€Connelly,€as€per€theÏsale/lease€contract€dated€June€19,€1993.€€Without€anyÏcompensation€being€paid€by€sellers€after€that€date.ð ðÌÌÓÓAppellant€Realty€World€Barnesðð€first€issue€on€appeal€is€that€theÏChancellor€improperly€shifted€the€burden€to€defendants€toÏestablish€that€Standards€for€Real€Estate€Transaction€was€a€partÏof€the€contract.€€We€pretermit€that€issue,€because€theÏChancellorððs€decision€was€based€on€an€assumption€that€contraryÏto€his€finding,€Item€K€was€a€part€of€the€contract.€€TheÏChancellor€determined€that€the€parties€under€all€theÏcircumstances€did€not€intend€for€the€money€held€in€escrow€to€beÏpaid€œpursuant€to€Item€K€to›€defendants€as€their€commission.€ÏIndeed,€the€construction€placed€upon€this€agreement€and€theÏpartiesðð€prior€agreement€œby€the€parties€themselves€supports›€hisÏdetermination.€€The€first€agreement€between€the€same€parties,Ïwithout€question€contained€the€standards,€yet€the€defendants€didÏnot€insist€on€its€application€to€the€monies€held€in€escrow€whenÏConnelly€did€not€close.€€In€this€subsequent€transaction€beforeÏthe€Court,€the€defendants€did€not,€through€their€words€andÏdeeds,€initially€place€the€construction€on€the€contracts€asÏhereinafter€discussed,€which€they€now€insist€upon.€€Relating€toÏthe€second€attempt€to€sell€the€property,€Lela€Ogle€testified€asÏfollows:ÌÓÓà0 àà0 àQ.à0 àHow€much€money€did€you€tell€Mrs.€Wood€that€youÏwanted€as€earnest€money?ÌÌà0 àà0 àA.à0 à$25,000.ÌÌà0 àà0 àQ.à0 àAnd€why€were€you€asking€for€$25,000?ÌÌà0 àà0 àA.à0 àBecause€we€were€taking€our€property€off€theÏmarket€for€Mr.€Connelly€again.€€And€thatððs€justÏtypical.€€Nobody€does€that€for€nothing€hardly.ÌÌà0 àà0 àQ.à0 àHow€much€money€actually€did€she€get€a€check€forÏin€reality?ÌÌà0 àà0 àA.à0 àTwenty„seven€five.ÌÌà0 àà0 àQ.à0 àDid€she€tell€you€how€that€number€came€about?ÌÌà0 àà0 àA.à0 àShe€said€she€went€ahead€and€included€herÏcommission€on€top€of€the€twenty„five€thousand.€ÏShe€was€to€get€ten€percent.ÌÌÓÓà àà àIt€is€a€well„settled€law€in€this€jurisdiction€that€theÏinterpretation€given€to€a€contract€by€the€parties€themselves€asÏshown€by€their€acts,€will€be€the€construction€adopted€by€theÏcourts.€€òòSee€Hamblen€County€v.€City€of€Morristownóó,€656€S.W.2dÏ331€(Tenn.€1983);€òòRobertson€v.€Lyonsóó,€553€S.W.2d€754€(Tenn.€App.Ï1977).€€Ìà àà àNext,€this€appellant€argues€that€there€was€an€accordÏand€satisfaction€reached€between€the€parties€by€virtue€of€anÏagreement€dated€September€20,€1993,€wherein€plaintiffs€were€toÏreceive€$20,000.00,€which€agreement€provided:Ìà0 àà0 àIt€is€agreed€that€the€Escrow€Realty€World€Barnes€hasÏin€escrow€of€Wayne€Connelly€$102,500.00€has€beenÏforfeited.€€With€costs€being€paid€to€Guaranty€LandÏTitle€Company.€€And€the€balance€split€50/50€withÏRealty€World„Barnes.€€For€time,€expenses€andÍcommissions.€€Ìœ›à0 àà0 àI,€Evelyn€Ogle,€ð ðLela€E.€Ogleð ð€am€requesting€a€draw€onÏthe€escrow€in€the€amount€of€Twenty€ThousandÏ($20,000.00)€Dollars,€as€of€today.€€As€for€R.€DeWittÏShelton€also€in€this€transaction.€€But€being€out€ofÏtown,€I€Evelyn€Ogle€will€handle€this€release€on€hisÏbehalf.ÌœThis›€agreement€was€initially€signed€by€Lela€E.€Ogle.€€At€Trial,ÏOgle€acknowledges€that€she€had€requested€a€draw€from€defendant,Ïbut€was€told€by€Wood€that€the€document€she€signed€was€a€receiptÏto€show€that€she€had€received€the€disbursement,€but€whenÏplaintiff€Shelton€later€arrived€to€sign€the€document,€SheltonÏdiscovered€that€the€defendantsðð€desired€50%€of€the€earnest€moneyÏand€Ogle€voided€the€check€and€struck€through€her€signature€onÏthe€document€and€left€the€documents€at€the€attorneyððs€officeÏwhich€defendants€had€left€with€the€attorney€for€execution.€€Ìà àà àThe€record€establishes€as€determined€by€the€TrialÏJudge,€there€was€no€accord€and€no€delivery€of€an€executedÏagreement,€but€demonstrates€that€defendantsðð€œwere€acting›€contraÏto€their€present€position€on€the€efficacy€of€Item€K.€€Ìà àà àDefendant€Dottie€Woodððs€other€issue€on€appeal€is€thatÏshe€has€no€personal€liability€to€the€œplaintiffs€under€the€termsÏof€the€Contract.›€€The€record€shows€that€after€the€dispute€arose,Ïthe€defendants€split€amongst€themselves€in€excess€of€$50,000.00Íof€the€earnest€money.€€The€record€also€establishes€thatÏdefendant€Wood€was€plaintiffððs€agent€in€all€of€the€transactions.€ÏòòSee€Wyner€v.€Athens€Utility€Board,óó€821€S.W.2d€597€(Tenn.€App.Ï1991),€and€thus€was€in€a€fiduciary€relationship€with€theÏplaintiffs.× ƒ% ××  ×€€Wood€conceded€at€trial€that€she€had€encroached€onÏthe€escrow€account€and€otherwise€breached€her€fiduciaryÏresponsibilities€to€plaintiffs,€and€an€agent€who€breaches€herÏfiduciary€duties€to€her€principals€is€liable€for€any€pecuniary€Ïloss€caused€by€the€breach.€€òòSee€Youngblood€v.€Wallóó,€815€S.W.2dÏ512€(Tenn.€App.€1991).€€Ìà àà àThroughout€the€first€transaction,€the€defendants,Ïthrough€their€deeds€and€actions,€construed€the€contract€toÏprovide€them€with€a€ten€percent€œcommission€on€the€money€held.›€ÏIt€was€the€plaintiffs€in€the€first€transaction€œwho›€initiated€andÏagreed€to€pay€twenty€percent,€due€to€what€the€plaintiffsÏconsidered€an€extraordinary€amount€of€work€done€by€defendants.€ÏFrom€the€outset€of€the€second€transaction,€the€evidenceÏestablishes€that€the€defendants€also€treated€this€œcontract€withÏidentical€provisions€to€the€first€contract,€as›€if€they€would€beÏentitled€to€ten€percent€of€œthe€earnest€money.›€€It€was€only€atÏthe€time€the€plaintiffs€attempted€to€obtain€a€withdrawal,€didÏdefendants€change€their€position€as€to€their€interpretation€ofÍthe€contract.€€We€believe€the€parties€should€be€bound€to€theÏconstruction€they€both€placed€upon€the€contract€at€the€outset€ofÏits€execution,€which€is€ten€percent€of€all€the€monies€collectedÏfrom€the€œpurchaser€as›€earnest€money.€€Accordingly,€we€modify€theÏTrial€Courtððs€judgment€to€provide€for€the€defendants€to€receiveÏten€percent€of€the€earnest€money€as€their€commission€in€theÏsecond€transaction.€€Ìà àà àFinally,€plaintiffs€argue€that€the€Chancellor€erred€inÏfailing€to€award€the€statutory€maximum€ten€percent€pre„judgmentÏinterest.€€The€defendants€withdrew€$50,000.00€from€the€escrowÏaccount.€€Under€our€holding€the€defendants€were€entitled€to€tenÏpercent€of€the€total€escrow€account.€€As€to€the€excess€of€theÏwithdrawal€over€that€ten€percent€that€the€$50,000.00€represents,Ïwe€believe€it€is€appropriate€to€award€ten€percent€pre„judgmentÏinterest€from€the€date€of€withdrawal€œon€the€excess€over€theirÏten€percent.›€€òòSee€óóT.C.A.€ðð47„14„143.€€Accordingly,€the€cause€isÏremanded€for€the€entry€of€a€judgment€consistent€with€thisÏopinion,€and€the€cost€of€the€appeal€is€assessed€one„half€to€eachÏparty.ÌÌÓÓÌÌÌà àà àà àà àà àà à________________________Ìà àà àà àà àà àà àHerschel€P.€Franks,€J.ÌÌÌCONCUR:ÌÌÌÌÌÌ___________________________ÌDon€T.€McMurray,€J.ÌÌÌÌÌÌÌ___________________________ÌCharles€D.€Susano,€Jr.,€J.ÌÌÌ