Smith Mechanical Contractors, Inc. v. Premier Hotel Development Group, et al.

Washington County- This appeal involves the construction of a hotel in Johnson City, Tennessee. During construction, the general contractor, Barker Building Company, Inc., ("Barker Building") agreed to subordinate its lien rights to a deed of trust to be filed by First Tennessee Bank (the "Bank") related to the Bank's loaning of funds which allegedly were represented to Barker Building as being sufficient to complete construction of the hotel. In reliance on the alleged representation and in order to protect its subcontractors, Barker Building, before entering into the Subordination Agreement, also obtained a Performance Bond to assure that its subcontractors would be paid. Barker Building obtained the Performance Bond from Travelers Casualty & Surety Company of America ("Travelers"). Several lawsuits were filed and the hotel's owner filed for bankruptcy protection. One of the lawsuits filed was a suit for injunctive relief filed by the Appellants in this appeal, Barker Building and Travelers, against the Appellee in this appeal, the Bank, seeking injunctive relief for various reasons after the Bank filed the Performance Bond with the Register of Deed's Office in order to bond-off subcontractors' claims. The lawsuit seeking injunctive relief was resolved in favor of the Bank by a judgment on the merits which became final several years ago. The lawsuit now on appeal involves various other claims by Barker Building and Travelers against the Bank challenging the validity of the Subordination Agreement and Performance Bond. The Trial Court ruled all claims by Barker Building and Travelers against the Bank at issue in the lawsuit now on appeal were barred by the res judicata effects of their previously completed lawsuit against the Bank seeking injunctive relief. We affirm.