In Franks v. Bilbrey, the Tennessee Court of Appeals held
that a construction contract containing a target construction completion date
and the phrase “start immediately” contained an implied “time is of the essence”
term, which the contractor breached by delaying completion well beyond the
target completion date. No. M2021-00766-COA-R3-CV, 2022 WL 4588871, at *1 (Tenn.
Ct. App. Sept. 30, 2022).
Danny Franks and his wife Angela Franks (the “Franks”),
hired Roger Bilbrey (“Mr. Bilbrey”) to build them a dwelling based on drawings
they provided. The Franks hired Mr. Bilbrey to perform the construction, who
required a $50,000.00 upfront payment in order to clear his schedule to fit in
their project. After discussing the details with the Franks, Mr. Bilbrey
hand-wrote a construction contract that stated specifically that he was to
complete the project by Thanksgiving 2018 and to “start immediately” (brackets
omitted). The parties signed the contract on May 9, 2018, after the Franks
wired the $50,000.00 upfront payment to Mr. Bilbrey on May 1, 2018.
However, construction did not begin for another month or two
months and progressed extremely slowly. The Franks ultimately filed suit
against Mr. Bilbrey and his construction company (which the parties later
stipulated was identical to Mr. Bilbrey himself), in July 2019. The Franks
alleged a laundry list of specific issues with the construction. Mr. Bilbrey denied
all allegations on the basis that those issues arose only because the Franks
fired him prematurely.
The central issue at trial was whether Mr. Bilbrey had
timely completed the construction. The Franks contended that they had paid Mr.
Bilbrey a substantial amount of money, including the $50,000.00 upfront
payment, without seeing any appreciable progress and raised the delay issues to
him directly. Mr. Bilbrey retorted that various weather and personal interruptions
justified his delays and that the Franks had acquiesced to the delays.
The trial court credited the Franks’ testimony and
discredited Mr. Bilbrey’s, concluding that he was not credible because he had
told the Franks that he had a very busy schedule that required a substantial
upfront payment—and then testified at trial that he was working solely on their
house during the workday. Having resolved the credibility battle, and thus the
facts, against Mr. Bilbrey, the trial court also resolved the interpretation of
the contract against him. The trial court reasoned that the specified
completion date of Thanksgiving 2018 coupled with the “start immediately”
language sufficiently implied a “time is of the essence” term, and because Mr. Bilbrey
had not timely completed the construction, he was liable to the Franks for
breach of contract.
The Court of Appeals affirmed the trial court’s judgment. Holding
that the trial court properly exercised its discretion to resolve credibility
issues in favor of the Franks, the Court centered its analysis on whether the
trial court also properly interpreted the contract. The Court acknowledged Mr.
Bilbrey’s point that inclusion of a target completion date does not, of itself,
import a “time is of the essence term,” but explained that pairing the completion
date with “start immediately” rendered time of the essence. The Court observed
that to hold otherwise would not only defeat the “start immediately” language, but
would also empower a contractor to include such a term, then begin and complete
performance without regard to the timing provided in the contract. Such a
holding would, therefore, render the contractor’s performance obligation illusory.
Accordingly, because the trial court had properly found that Mr. Bilbrey’s performance constituted a material breach of the “time is of the essence” term, the Court affirmed the judgment. The reminder to contractors is that timing clauses and schedules in construction contracts have meaning, and contractors would do well to consider their schedules carefully and include provisions in the contract that take account of factors that may lead to delays.
