In Liberty Constr. Co., LLC v.
Curry, the Tennessee Court of Appeals, Nashville Division, reversed a lower
court’s holding that the owners of a commercial building failed to provide a
construction company with notice and a reasonable opportunity to cure a defect
it allegedly caused. 2020 WL 6158461, at *1 (Tenn. Ct. App. Oct. 21, 2020).
The building owners, Peter H. Curry
and Patricia B. Curry (“the Currys”), entered into a written contract with the
construction company, Liberty Construction Company, LLC (“Liberty”), in July
2013. The parties first entered into a written stipulated sum contract for the
construction of a commercial retail facility for the fixed sum of $329,000. Later,
the scope of the project was expanded, and the parties entered into an oral cost-plus
contract for modifications to the original plans and additional interior work. A
notice of completion for the project was filed on November 10, 2014. However,
the parties disagreed as to (1) the amount Liberty was entitled to under the
written stipulated sum contract, and (2) the remaining balance under the oral
cost-plus agreement.
Liberty brought suit against the
Currys nearly a year later, on November 5, 2015, and asserted claims for breach
of contract and a mechanic’s and materialman’s lien. The Currys filed a
counterclaim for breach of contract alleging, in part, that Liberty had not constructed
the property in accordance with the plans and failed to perform the work in a timely,
workmanlike manner. A bench trial was held in February 2019 which resulted in
the trial court awarding Liberty $129,691.53, which included $90,302.61 in
damages, plus prejudgment interest. The trial court dismissed the Currys
counterclaim “for lack of proof.”
The Currys appealed the decision.
The appellate court analyzed, among other questions, whether the trial court
erred in ruling the Currys were not entitled to recover the cost of correcting defects
which they alleged were caused by Liberty’s failure to construct a pond in
accordance with the construction plans. Liberty argued the Currys could not
recover this cost because they failed to establish the defect was caused by it
and, further, did not provide it with notice and an opportunity to cure, as
required by Tennessee law.
Despite affirming the lower court’s
finding that the Currys failed to present sufficient evidence that Liberty
caused the defect, the appellate court held that Liberty had been provided
notice and a reasonable opportunity to cure the alleged defect. The notice the
appellate court found to be sufficient was a single email forwarded by Mr.
Curry to Liberty, in which an engineer hired by the Currys stated that he: “ha[d]
little faith that any instruction [he] [would give] the Contractor [would] be
followed” and recommended repairs to the pond be performed by another company.
The appellate court noted that, Tennessee
Code, Section 66-36-103, requires only that Liberty was provided an opportunity
to assess the alleged defect and given “reasonable access” to determine the
cause of the defect and to notify Mr. Curry of its intent to remedy the alleged
defect. The appellate court found that Liberty “made it known that it intended
to remedy the issue” when it recommended the Currys “hire an engineer to assess
what needed to be done to compensate for the loss in volume of the pond.” The Court
held that because there was no evidence before it that the Currys prevented Liberty
from accessing the pond or interfered with any repair attempts, Liberty was
provided with a reasonable opportunity to cure the alleged defect under
Tennessee law.
Contractors performing work in
Tennessee should take note of the low threshold for a property owner to meet
the notice and opportunity to cure requirement set forth in the Tennessee Code,
as evidenced in the appellate court’s decision in this case.
