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Wischermann Partners, Inc. v. Nashville Hospitality Capital LLC
3:17-cv-00849
M.D. Tenn.
Jul 2, 2019
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Background

  • NHC owns the Westin Hotel in Nashville; Wischermann Partners (managed by Paul Wischermann) had a Management Agreement with NHC beginning 2014.
  • NHC terminated the Management Agreement in May 2017 for cause; Wischermann Partners sued NHC and NHC filed counterclaims.
  • NHC added individual claims against Paul Wischermann for breach of fiduciary duty, inducement of breach, fraudulent misrepresentation, and fraudulent concealment.
  • Wischermann moved for summary judgment seeking dismissal of all claims against him in his individual capacity.
  • Wischermann argued (1) the Management Agreement limited remedies to contractual parties and thus barred suits against him individually, and (2) he had conditional statutory immunity as a corporate officer under Tenn. Code Ann. § 48-18-403.
  • The court denied summary judgment, finding the Agreement did not waive suits against Wischermann and genuine fact disputes (and threshold statutory applicability issues) precluded resolution of the immunity defense on summary judgment.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the Management Agreement bars individual claims against Paul Wischermann Agreement contains no waiver or limitation barring suit against officers/third parties; remedies clause preserves other legal/equitable remedies Agreement’s specified remedies and termination provisions implicitly limit remedies to contractual parties and preclude individual suits against principals Court: Denied — Agreement, read as a whole, did not waive NHC’s right to sue Wischermann individually
Whether Tenn. Code Ann. § 48-18-403 grants Wischermann officer immunity NHC: statute inapplicable (Wischermann Partners is a Minnesota corporation), statute applies mainly to derivative actions, and factual disputes exist about good faith Wischermann: acted in good faith as officer and is entitled to conditional statutory immunity Court: Denied — Wischermann failed to show the statute applies and genuine fact issues exist about good faith

Key Cases Cited

  • Guiliano v. CLEO, Inc., 995 S.W.2d 88 (Tenn. 1999) (contract interpretation is a question of law; ascertain parties’ intent from the contract language)
  • Planters Gin Co. v. Fed. Compress & Warehouse Co., Inc., 78 S.W.3d 885 (Tenn. 2002) (interpret contract by usual, natural, and ordinary meaning)
  • Rodgers v. Banks, 344 F.3d 587 (6th Cir. 2003) (movant’s burdens on summary judgment)
  • Wexler v. White’s Fine Furniture, Inc., 317 F.3d 564 (6th Cir. 2003) (court construes facts in favor of nonmoving party at summary judgment)
  • Sanford v. Waugh & Co., Inc., 328 S.W.3d 836 (Tenn. 2010) (discusses scope of derivative claims and fiduciary-duty frameworks)
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Case Details

Case Name: Wischermann Partners, Inc. v. Nashville Hospitality Capital LLC
Court Name: District Court, M.D. Tennessee
Date Published: Jul 2, 2019
Docket Number: 3:17-cv-00849
Court Abbreviation: M.D. Tenn.