Matthew Ooten v. Jason Baril
E2022-01673-COA-R3-CV
Tenn. Ct. App.Jun 11, 2024Background
- Matthew Ooten, Linda Betz, and Jason Baril formed several LLCs after leaving their prior law firm, operating disability and personal injury legal practices and support businesses, with agreements setting out ownership shares and distributions.
- Ooten managed primarily the profitable disability practice, implementing key systems, and disputes arose between Ooten and Betz over management and proposed restructuring.
- In April 2019, Betz and Baril excluded Ooten from physical and electronic access to the businesses, changed locks and passwords, removed him from accounts, and began making distributions exclusively between themselves, effectively terminating his participation without following agreement terms.
- Ooten filed suit for breach of fiduciary duty, contract, good faith/fair dealing, conspiracy, and conversion; the trial court found for Ooten and awarded damages, attorney fees, and costs, finding the removal unjustified and continued breaches ongoing.
- Baril appealed, challenging the valuation of Ooten’s interests, admissibility of plaintiff’s expert, and the denial of a late setoff defense.
Issues
| Issue | Ooten's Argument | Baril's Argument | Held |
|---|---|---|---|
| 1. Fair value damages timing | Ongoing breaches; damages go beyond April 2019 | Damages should be fixed as of Ooten's removal in April 2019 | Damages as of trial were proper due to continuing breaches |
| 2. Admissibility of expert | Expert qualified, methods accepted | Expert lacked law practice valuation expertise, ignored certain ethical rules | Expert’s testimony admissible, methods sound and accepted |
| 3. Setoff defense | Agreed credits were already applied; late setoff waived | Entitled to setoff for payments to Ooten and related expenses | Denial of amendment and setoff proper; already credited and no mutuality |
Key Cases Cited
- Athlon Sports Commc’n, Inc. v. Duggan, 549 S.W.3d 107 (Tenn. 2018) (discretion in fair value determinations for business interests)
- Lee Med., Inc. v. Beecher, 312 S.W.3d 515 (Tenn. 2010) (standard of review for discretionary rulings)
- Raley v. Brinkman, 621 S.W.3d 208 (Tenn. Ct. App. 2020) (standard for appellate deference to trial findings)
- Wells v. Tennessee Bd. of Regents, 9 S.W.3d 779 (Tenn. 1999) (deference to trial court on witness credibility)
- McDaniel v. CSX Transp., 955 S.W.2d 257 (Tenn. 1997) (standards for admissibility of expert testimony)