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ARC Lifemed8/2/2005
y of witnesses, lists three important policy concerns behind the rule: (1) upholding the legitimacy of the trial courts to litigants; (2) preventing an avalanche of appeals by discouraging appellate retrial of factual issues, and (3) maintaining the allocation of judicial authority. The policy underpinnings of Fed.R.Civ.P. 52(a) advance the public's interests in stability and judicial economy, and we view them as equally important to Tennessee's citizens and courts.
Mitchell v. Archibald, 971 S.W.2d 25, 29 (Tenn.Ct.App.1998).
The trial court accepted the expert testimony proffered by the plaintiffs. This testimony established that AMC-TN failed to manage LLC accounts according to generally accepted accounting principles. This failure constituted a material breach of the Management Agreement. A party who has materially breached a contract cannot recover on the contract. Nevertheless, under proper conditions and upon carrying the burden of proof as to the value of services rendered under the contract, he may recover in quantum meruit. The rule is:
Even though a contract be entire, the party who breaches the same may recover of the other party, as on a quantum merit, the value of benefits conferred on such other party by partial performance - these benefits being accepted and retained. Any damage, of course, which the party not in default suffered by the breach also to be taken into account. The law is frequently so applied in cases which involve building contracts and contracts for personal services. Stump v. Estill, 7 Tenn. (Peck.) 175; Elliott v. Wilkinson, 16 Tenn. (8 Yerg.) 411; Porter v. Woods, 22 Tenn. (3 Humph.) 56, 39 Am.Dec. 153; Barker v. Reagan, 51 Tenn. (4 Heisk.) 590, 596; Bush v. Jones, 2 Tenn.Ch. 190; Jones v. Jones, 32 Tenn. (2 Swan) 605; Congregation of Children of Israel v. Peres, 42 Tenn. (2 Cold.) 620; Massey v. Taylor, Wood & Co., 45 Tenn. (5 Cold.) 447, 98 Am.Dec. 429; Hunter v. Litterer & Cabler, 60 Tenn. (1 Baxt.) 168; Bruce v. Baxter, 75 Tenn. (7 Lea) 477.
National Life & Accident Ins. Co. v. Hamilton, 98 S.W.2d 107, 108 (Tenn.1936).
It is well to observe also that the failure of AMC-TN to timely collect its fees and expenses was itself in material breach of the Management Contract. AMC-TN presents no material evidence as to the value of its services so as to allow for a recovery in quantum meruit or any evidence of unjust enrichment. As the trial court held, the counter complaint is without merit.
VI. DAMAGES
If the "pharmacy-within-a-pharmacy" concept was difficult to administer, the separate remedies sought in this litigation are equally challenging and must be separated in order to be compatible. When breach of fiduciary duty, negligent misrepresentation and the counterclaim asserting quantum meruit and unjust enrichment are removed from the case, we are left with a breach of contract action by LifeMed, LLC against AMC-TN and a counterclaim for breach of contract by AMC-TN against LifeMed, LLC. This Court, having affirmed both the trial court's finding that AMC-TN breached the Management Contract and its dismissal of the counterclaim, now must first address the question of damages resulting to LifeMed, LLC because of the breach.
Equitable considerations cannot intervene in a pure breach of contract action.
"Equity follows the law. Where there is no legal liability, equity can create none." Henderson v. Overton, 10 Tenn. 394, 397 (1830); Bedwell v. Bedwell, 774 S.W.2d 953, 956 (Tenn.Ct.App.1989); Metropolitan Life Insurance Company v. Owens, 246 S.W.2d 971, 972 (Tenn.1952). "When in doubt equity follows the law." Tennessee-Carolina Mills v. Mauk, 14 Tenn.App. 5
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