*1 were “su items AVA’sstatements Thomas EDMUNDS Robert puffing. anything other than
perior” against preponderate record does findings. of these either L.L.C., PARTNERS, et al. DELTA argues that Tanzer there Finally, Mr. invoicing disputes. Mr. Tan- certain were Tennessee, Appeals Court of alleged disputes con- that these zer asserts Section, Middle at Nashville. billing part on the deceptive stitute record, simply there is From the AVA. 14, 2012 Nov. Session. any alleged invoic- proof lack of Dec. 2012. deceptive unfair or as errors were ing TCPA, see terms are defined those Rehearing Denied Petition words, proof In other does not supra. Jan. invoicing any errors constituted show Application Appeal for Permission to or tended to cause practice that caused by Supreme Denied Court false, something believe or Mr. Tanzer to 9,May 2013. misled tended to mislead that the errors matter. While we him as a factual that the trial court did find some
concede the court discrepancies invoicing, find that these mistakes caused did not injury. Mr. Tanzer substantial Ac- discrep- court cordingly, the resolved $1,930 by awarding ancies Tanzer totality From setoffs and credits. circumstances, we cannot conclude the tri- preponderates against the evidence al court’s conclusion that setoffs and cred- favor Mr. Tanzer its in cured mis- billing, in the nor the evidence takes does against the trial court’s con- preponderate rise clusion that these mistakes failed to so as deception implicate the level TCPA. reasons, foregoing
For the we affirm the The case judgment court. proceedings remanded for all further necessary and are may be consistent are opinion. appeal this Costs this as- against Appellant, Stephen sessed Tanzer, surety. and his *5 Holt, Tennessee,
John Springfield, B. for Partners, the appellants, Delta L.L.C. and Michael Richard Garrison. L.
Richard Colbert Courtney L.' Wilbert, Franklin, Tennessee, for the ap- pellee, Robert Thomas Edmunds.
OPINION STAFFORD, J.,
J. STEVEN delivered Court, opinion in which DAVID FARMER, J., R. joined, and HOLLY M. KIRBY, J., opinion. filed a concurring Appellant corporation appeals trial rulings finding court’s liable breach damages, interest, of contract prejudgment pursuant Fair damages to the Labor Standards Act. Additionally, corpora- president appeals tion’s court’s *6 piercing action in veil to hold personally him liable for the contract dam- ages. reverse finding We the trial court’s with to veil regard piercing, but affirm the in all respects. court other Background I. Plaintiff/Appellee Robert Edmunds was employment by Defendant/Appel- offered (“Delta”) Partners, lant Delta L.L.C. purpose perform 2004. Delta’s was to manufacturing compa- “turnarounds” for nies, to cut helping companies costs profitability. Upon and increase accepting employment, the offer of Mr. Edmunds regarding received several his documents Delta, employment including with a non- agreement, disclosure non-compete and a covenant, which he agreed. docu- provided ments further that: In consideration of the performance [], required by all services Delta confidentiality provisions and covenant herein, not-to-compete set forth Em- Company agrees [i.e. Delta] (40) week. salary forty per a total of hours out- for Mr. [i.e. Edmunds] ployee work, that, while at Employee Offer Letter. Mr. Edmunds testified in the lined tasks, clerical worked salary performed and other benefits initial This program- and Employee pursuant computer issues software provided time clients may, telephone from time to as and calls from ming, Letter took Offer Company, be Per Edmunds’ by Employee employees. and other Mr. agreed and testimony, phone modified. calls occurred these in- throughout time with Delta and his provided “[e]m- further The document Tennessee, employees in volved and clients cause, for be terminable ployment shall Indiana, Alabama, Kentucky, well as as in the sole discretion being cause such addition, In in order and other states. Defen- Mr. Edmunds and Delta....” Both month, paid each employees to be Garrison, as Presi- Michael dant/Appellant Delta, computer program Edmunds would use signed docu- and dent CEO time and input regarding Offer the data their Employee ment. Mr. Edmunds’ month; program starting salary wages computer his each Letter stated that $65,000.00. signed also then checks would be The document would create to be employer. an at-will that Delta was the em- stated Mr. Garrison and distributed to From 2004 until sometime Mr. Garrison ployees. salary biweekly Edmunds was his company that the informed Mr. Edmunds $2,500.00, totaling installments experiencing financial difficulties and $65,000.00per year. dramatically.” Mr. Ed- work had “slowed company munds to remain with the accepting chose
Subsequent to Mr. Edmunds Delta, and, according despite these difficulties the offer of stock, 95% of Delta clerical testimony, performed Garrison came to own the same before, 5%. owning with his wife other tasks includ- and administrative difficulties, experienced financial ing inputting payroll information *7 employees. to pay could no afford longer and answering calls from clients phone However, with the stayed Mr. Edmunds states. Delta was un- employees in other to company personal loyalty” Mr. “out salary full in pay able to Mr. Edmunds his 2008, 2006, 2007 Mr. Garrison. In and 2007, 2006, 2008. From the evidence and payments sporadic Edmunds received trial, paid Mr. Edmunds was presented at Ultimately, Mr. Edmunds left from Delta. $3,800.00 2006, $21,250.00 total of in in due to the company in October 2008 $42,500.00in much 2007 and 2008. For payment of payments, sought lack of and 2008, receiving Mr. was his usu- Edmunds alleged to him under the the funds owed $2,500.00 biweekly payment. al prior three employment contract difficulties, payments due to more these years. in the summer of 2008. again stopped ever When asked whether Mr. Garrison January refused to pay,
When Delta failure Mr. Ed- explained pay Delta’s 22, 2009, this lawsuit in Mr. Edmunds filed ad- salary, munds his Mr. Edmunds prior County Circuit Court. A the Robertson have later may mitted that Mr. Garrison 19, September held on bench trial was did that, company informed him that not from 2011. Mr. Edmunds testified enough payroll. funds to cover 2006, have paid according was 2004 until he testified, however, at no Edmunds Employment. the terms of the Offer of Mr. Ed- Edmunds, time did Mr. Garrison terminate According Mr. from the time Ed- or inform Mr. employment Delta in munds’ he was in 2004 until he left hired contin- paid would be days he to work five a week munds that he reported work, $14,000.00 getting percent, nor did and in an in- on Delta more gent According seek unem- terest rate of 2.75 suggest percent. that Mr. Edmunds he Instead, Edmunds, early Mr. Ed- Mr. all drawn money 2006. ployment that Mr. “told me equity pay munds testified from the home line was used to addition, living expenses. when he could. He told me basic both pay he’d me every penny delayed he me their retirements were to Mr. going pay due addition, me, receiving owed to trust him.” In not pay he Edmunds his full testified that he and Mr. 2006 to 2008. Mr. Edmunds even the tax Garrison had discussed conse- Through testimony Mrs. Edmunds’ sev- receiving a con- quences of Mr. Edmunds eral letters and emails were introduced pay lump amount back siderable requested which Mrs. Edmunds some, after stating sometime money Garrison and Delta pay he be reassuring Mr. Edmunds that would allegedly owed to Mr. Edmunds. allegedly amount he was paid full letters, early May which date as as owed, asked, you Mr. Garrison want “[D]o expressed frustration with Mr. part got of it at You have all once it? Garrison’s continued failure to pay think about taxes situation.” How- Edmunds, as well Mr. Garrison’s assur- ever, Mr. Edmunds never received “something ances that happen- should be allegedly for the amounts he was back letter, ing however, soon.” One stated and, payments again stopped when owed that Mr. Edmunds would not look for an- employment Mr. Edmunds left his job other because believed that he sought unemployment
with Delta and ben- would be unable to secure efits, did oppose. which Delta not age1 due to his that Mr. and Edmunds wife, Edmunds, angry Mr. Edmund’s Amy also became and refused to discuss Del- problems testified that Mr. Garrison reassured both ta’s and outlook with Mrs. Ed- herself her that Mr. Ed- in the and husband munds. Included emails were also responses munds would be in full for his em- to Mrs. emails from Edmunds’ emails, 2006, 2007, Delta in Mr. Garrison. In one of the dated ployment with Edmunds, 7, 2007, According September to Mrs. she Mr. Garrison assured up and her went Mrs. work pick husband into considerable Edmunds that would being “things get as a of Mr. on a debt result should back *8 despite regular quickly begin her income as a teacher. basis and then paid, approximately up first couple catching pay.” used some of back $7,000.00 $8,000.00 response, August another they or had earmarked dated put money to be a 401K. Mr. Mrs. into Once Garrison assured Edmunds exhausted, salary profit was turned to a he had no or from the couple taken equity According compa- home loan. to Mrs. Ed- instead all income to the company, munds, gone expenses, couple approximately ny operating drew had to pay $38,000.00 equity payroll company’s from the home line in and taxes on the two employees. as- eight at an interest rate of to nine field Mr. Garrison also $25,000.00 at an “al- percent, interest sured Mrs. Edmunds Delta was $4,000.00 eight percent, rate of seven in most sure to another client in get to 100%” However, coming at an interest rate four to seven weeks. due to the age specifically Mr. Edmunds’ is not stated adult children. in the He record. and his wife have two stop to money, of- he ever tell Mr. Edmunds Mr. Garrison did lack of current However, en- “lay coming Ed- into he did [Mr. work. alternative” —to fered “[one] unemploy- can unemploy- he draw to courage off and Mr. Edmunds seek munds] him pay is income to ment until there compensation and to what was ment “do job.” Mr. Garri- he another with or finds family.” Mr. Garri- best for him and had with Mr. spoken he son stated that they entered also never son testified in the week and offered Edmunds earlier agreement wherein Mr. Edmunds into an that he: back home and go to let him Instead, would work free. Mr. Garri- for even him to never asked insisted Mr. that he made it clear to son testified and never getting paid work without be Mr. was to Edmunds that Edmunds deepest grati- I possible will. have the and, Delta had paid projects, when staying for the course and do tude him therefore, pay him with. De- money, to day without go through single not [one] “understanding,” Mr. Garrison spite this thinking the debt and debt about testified that Mr. Edmunds continued for him.... gratitude I have resigned usual until he report work as fall Mr. Gar- According
in the of 2008. rison, Mr. was all bi- Edmunds for fully everything right make I intend to did weekly periods If has in which Mr. Edmunds [Mr. Edmunds] whenever I can. I will job, to leave find another do weeks he projects. and work for Delta on On way I help any I him in can merely all can to paid, was not he came into way. discourage him in call, and will not phone office the occasional answer every never I have intention of I have. but, pro- were ongoing because there no meeting my obligation to Ed- [Mr. to Mr. jects, According work was scarce. I can regardless. whenever munds] Garrison, there no contract of because was no employment, Delta owed Mr. Edmunds that she Thus Mrs. Edmunds testified and always he pay were led to believe back for the weeks had worked her husband paid. pay that Mr. would Mr. not been Mr. Garrison Edmunds that, wages to Mrs. back for his lost from 2006 2008. admitted in an email he wrote record, Edmunds, which is included Mr. that Mr. Garrison denied Edmunds, pay he stated he could In- employed pursuant to a contract. despite fact that he had funds to stead, signed he document stated payroll employ- salaries and taxes on other Mr. Edmunds was an em- himself and email, in the Additionally, ees. Mr. Garri- ployee that Mr. Edmunds application extremely busy that he was son admitted merely employee. an at-will Accord- every company, working with work for Garrison, ing Mr. informed weeks, until night midnight seventeen Edmunds, all the employees, including running a as well as ten to eleven hours payroll. could not make *9 manufacturing plant day. client’s all How- that, time, Garrison testified at that he ever, portion when about asked the “debt” new encouraged Mr. Edmunds to seek em- that he saying of his statement in an email ployment unemployment or his benefits. owed Mr. Edmunds a “debt and a debt Mr. Because of Mr. Garrison’s and Ed- he gratitude,” Mr. Garrison stated that however, friendship, munds’ long-standing “part money.” referring was to When to stay Mr. Edmunds chose on the he prior statement asked about his company. Mr. Garrison testified he pay,” would catch on “back Mr. Garri- specifically up stated that Mr. never Ed- terminated, referring he was to responded munds’ son employment nor sum,” merely stating Act, “a total but was under the Fair Labor Standards § provide would Mr. Edmunds with seq. he U.S.C. 201 et. The trial court could.” “possibly much as Mr. awarded damages for breach of in contract the amount of Mr. that Mr. Ed- Garrison also denied $116,034.52together with in- prejudgment relating any pro- work to munds did annum, terest a per at rate of 7% those in Alabama jects other than from $10,660.00in unpaid minimum as a wages, to Mr. According 2006 until 2008. Garri- set off to the breach of damages, contract son, gain attempted while Delta clients $10,000 together with in attorney fees for state, their were out efforts fruitless. work on the federal claim. Delta and Mr. that, example, For Garrison stated appeal. in 2007 or attempted sometime Delta Alabama, “sell a in package” a client II. Presented Issues company buy but that the chose not to package. Mr. Garrison also admitted that 1. the trial Whether court erred in at a employee company one Delta worked finding a valid and enforceable contract for Garrison, According in Alabama. to Mr. January after 2006? clients, in order gain Delta would either 2. the trial Whether court erred times,”
visit or “call a number of but that pre-judgment decision award interest they did a penny of business” with “[n]ever (7%) a rate seven percent interest? they most of the clients solicited. In addi- 8. Whether trial court erred tion, Mr. Garrison stated that Delta had decision to consider Mr. Garrison the al- employees full-time or contract who lived Delta, ter-ego of and therefore to find him Georgia and worked and Ala- outside personally for responsible judgment? that, bama. Garrison admitted ad- 4. Whether the trial court erred answering any phone dition to calls to the decision to find Edmunds was office, Delta input Mr. Edmunds the data engaged under Fair La- commerce regarding employees’ these out-of-state bor Standards Act as defined in 29 U.S.C. generate time sheets in order to for checks 203, thereby § allowing judgment employees. attorney fees? that, Mr. Garrison further testified al- though officially registered still III. Standard of Review State, Secretary as an L.L.C. with action trial This was tried was not there operating because was no such, court As review jury. without we more work. Mr. Garrison con- findings the trial court’s novo fact de required reports tinued to file annual correctness, with a unless presumption of until corporation the time of trial. the evidence preponderates otherwise. addition, that, Mr. Garrison testified 13(d). R.App. Tenn. P. No presumption [him],” on, essentially “Delta was [] correctness, however, attaches the trial operated and that it out of his home. court’s conclusions of law and our review is The trial court entered a Memorandum Brownson, de Blair v. novo. Opinion and Order November (Tenn.2006) (citing Bowden v. order, In the court ruled that Mr. Ward, (Tenn.2000)). ego Garrison was Delta’s alter and that *10 both were liable to Mr. Edmunds for For the to preponderate evidence fact, contract, employment against finding breach of the a trial it and court’s of unpaid wages minimum attorney finding and fees must another of fact with support
822 Harding The Court finds that Delta breached convincing effect. 7. greater 4215 Harris, Edmunds employment v. 354 contract with Road Ass’n Homeowners 296, (Tenn.Ct.App.2011); failing pay Edmunds by 305 S.W.3d Assocs., $65,000.00 salary Ed- Sidney & 40 annual owed to Gilreath Walker v. 66, employ- of (Tenn.Ct.App.2000). 71 Where munds under the terms findings does not make ment contract. the trial court fact, presumption correct there is no Decem- January through From 8. “must our own inde ness and we conduct 2006, only received ber Edmunds record determine pendent review the $3,800.00 compensation despite as evidence preponderance where the existence the Contract. 403, Brooks, 992 S.W.2d lies.” v. Brooks January through Decem- 9. From (Tenn.1999). 2007, only received ber Edmunds $21,250.00 compensation despite Analysis
IV. of the existence Contract. A. Breach of Contract January through De- 10. From argues first that the trial Delta 2006, only received cember Edmunds that Mr. finding court erred in Edmunds $43,081.48 as compensation despite by pursuant was to a con employed existence Contract.2 $65,000.00 and year tract a that Delta day rarely 11. missed a Edmunds interpreta that contract. breached work, reporting every day for work and question of law. tion of a contract is a a full hour working eight day. Cleo, Inc., 995 S.W.2d Guiliano v. consis- Beginning 12. Garrison (Tenn.1999). Therefore, the trial court’s tently promised that he would Edmunds interpretation a document is of contractual him. money Edmunds the owed to pay presumption not to a of correct entitled wife, Amy and Ed- Edmunds’ ness on v. Western Heri appeal. Angus munds, via email in 2007 communicated (Tenn.Ct. Co., tage 48 S.W.3d Ins. repeatedly prom- and 2008.... Garrison App.2000). the determination of the monies owed to Ed- ised is ques occurred a whether breach has repeated munds. reliance these Krueger, tion of fact. Carter assurances, promises and Mr. Edmunds (“This is a (Tenn.Ct.App.1995) 934-35 to report provide continued to work and matter which properly of fact is addressed benefit to Delta and Garrison. direct fact.”). regard to the this trier of With and that Gar- Edmunds trusted believed issue, the trial court found: Delta, rison, the President and CEO of was a 6.The there Court finds him. up would make the debt owed to contract of between Ed- July From August through 13. Although munds and the con- Delta. timely, Edmunds received consis- will, tract was the Court terminable tent, full payments upon based finds terminated until not $65,000.00 year. salary per left the of Delta in employ October 2008.... record, ever, appears From our review of the Mr. Edmunds does take issue testamentary documentary evi- damages pursuant awarded to him dence in case that Mr. Edmunds Therefore, this shows we to address contract. decline $42,500.00 rather than the this error. $43,081.48 How- as found court. *11 through Further, January From Octo- provides
15. the contract that Delta 2008, $65,000.00 reported pay ber Edmunds work as will Mr. Edmunds annually in performed his duties a rea- required, agreement as consideration for his to the manner, all sonable and executed tasked terms the non-disclosure and non-com- him Garrison. assignments by Ed- pete clauses. As consideration is an es- was not or written disciplined up munds sential element to the formation of a con- anyone by during at Delta the course of tract, we “agreement” conclude that the employment. his is speaking issue in terms of contract for- Matlock, discharged Campbell 16. Edmunds was never or mation. v. 749 S.W.2d by addition, terminated Garrison or Delta. (Tenn.Ct.App.1987).
the document states that the terms of the
“agreement”
can
be
by
modified mu-
Despite
requests
19.
for
numerous
assent
parties. Again,
tual
of the
the doc-
payment
compensation owed to
law,
ument
speaks
terms of contract
as
Contract,
pursuant
to the
Ed-
it is
well-settled that
contract may only
$116,034.52
is still
through
munds
owed
modified by
be
mutual assent. Thompson
resignation on
his
October
Inc.,
v. Creswell
Supply,
Industrial
thoroughly
We have
reviewed the record
(Tenn.Ct.App.1996).
Ad-
case
this
and conclude that the evidence
ditionally, Delta
now admits
its appel-
preponderate against
does not
the trial
late brief that
employment
Mr. Edmunds’
finding
employment
court’s
that a valid
governed by
was
a contract. Accordingly,
existed,
contract
that the contract was not
supports
the evidence
the trial court’s find-
resignation
terminated until Mr. Edmunds’
ing that Mr.
employment
Edmunds’
was
in October
and that the contract was
governed by a contract.
by
breached
Delta when it failed to
promised.
Mr. Edmunds as
court,
in the trial
First,
that,
argued
because
the evidence
the record
the contract
for an
support’s the
indefinite term
fully
provided
trial court’s conclusion
that Mr.
that Mr.
be
employment
gov
Edmunds’
Edmunds could
terminated “at
employment
Delta,”
an
erned
contract.
In this
the sole discretion of
Mr. Edmunds
case,
Garrison,
right
both
Edmunds and Mr.
has no
enforceable
recover the
Delta,
representative
as the
signed
compensation
promised pursuant
he was
employment
outlining
document
the non
the contract.
It
true that
Tennessee
and non-compete requirements
employment
disclosure
follows
“at-will”
doctrine.
as well as the
of Mr.
employment
duties
Edmunds as At-will
employ
means that
employee.
This document refers to ment contracts of
duration
indefinite
are
an “agreement.”
itself as
Tennessee law terminable at the will of the employer or
agreement
a contract
employee
defines
be
Guy
or no cause.
“[a]n
v.
Co.,
tween two or
parties creating
more
obli Mut.
Omaha Ins.
(Tenn.2002).
gations
Thus,
that are
enforceable
otherwise
534-35
Mr. Edmunds
Jones,
recognizable at law.”
expectation
Green
No. had an
under
contract to
E2011-02587-COA-R3CV,
$65,000.00
year
WL be
so
per
long as he
2012)
July
duties,
(Tenn.Ct.App.
unless
performed
and until his
(9th
Indeed,
(quoting
Dictionary
Black’s Law
was terminated.
ed.2009)). By
brief,
very
terms of the docu his
now
admits that the
ment, then, Mr. Edmunds and Delta were
signed by
parties
documents
in 2004
entering
employment.
contract,
into
contract of
constitute an
but
enforceable
ar-
*12
Delta,
in
representative
repeatedly
was terminated
for
the contract
that
gues
them that Mr. Edmunds would
in-
assured
allegedly
Mr. Garrison
when
his
that
pay
receive full back
for
work and
that there was no
Edmunds
Mr.
formed
an em-
Mr.
was still considered
Ed-
Edmunds
compensate
to
Mr.
money
which
from
in
resignation
Delta
his
however,
ployee of
until
court,
specifi-
trial
munds. The
Edmunds
stated
October 2008. Mr.
even
Mr.
never
cally
that
Edmunds was
found
that Mr. Garrison was concerned about
From
employment.
from his
terminated
receiving
large
a
consequences
tax
such
record,
again
we
con-
our review
Mr.
pay
of back
in one
sum.
lump
amount
not prepon-
the evidence does
clude that
Garrison, however, disputes that he ever
finding.
this
against
derate
promised to
“a total
to Mr.
pay
sum”
that,
at
Mr.
admitted
trial
Instead,
Edmunds.
Mr. Garrison contends
Edmunds that there
while he informed Mr.
specifically
that while he
not
inform
did
pay
salary
money
beginning
was no
to
his
employment was
Mr. Edmunds that his
specifically told Mr. Ed-
he never
terminated,
termination was “obvious”
employment
his
was terminat-
munds that
circumstances, despite
based on
allegations
are no
ed. There
Mr.
Mr. Ed-
fact that
Garrison allowed
employee
authority
had the
to
other Delta
day
to come into work
munds
each
Mr. Edmunds’
terminate
perform
company
tasks that benefitted the
addition,
so.
In
Mr. Garri-
they did
pay
Mr. Ed-
and that
continued
son admitted that he continued to allow
munds,
Accordingly,
albeit sporadically.
days
Mr.
to come into work five
Edmunds
conflicting
we
faced
are
accounts
on
perform
tasks
behalf
week
Thus,
the events
this case.
the issues
Delta,
telling
once
Mr.
never
Edmunds
turn in
on the trial court’s
part
this case
Further,
not.
from our
he should
credibility
relative
determination
email responses
review of Mr. Garrison’s
the witnesses. When
resolution
Edmunds,
Mr. Garrison assured
Mrs.
depends upon
issues in a case
the truthful-
and his wife
business
Edmunds
witnesses,
judge
ness of
the trial
who has
pick
and that
Ed-
likely
up
opportunity
to observe the manner and
In
again
paid.
promising
munds
be
would
testifying
demeanor of
witnesses while
up
catch
that Delta would soon
on “back
position
in a far better
than this Court
pay,”
clearly
Mr. Garrison
stated his inten-
H.,
In re
decide those issues.
Arteria
tion that Mr. Edmunds receive back
(Tenn.Ct.App.2010)
326 S.W.3d
paid.
for which he was
for work
never
(citing
Corp.,
McCaleb v. Saturn
pre-
this
does not
Accordingly,
evidence
(Tenn.1995)).
412, 415
“If the
ponderate against
finding that
Ed-Mr.
factual
on
court’s
determinations are based
entirety
munds was to be
for the
its
credibility,
assessment of witness
this
just
his work with Delta and not
on weeks
Court will
reevaluate that assessment
per-
where there were
to be
projects
convincing
clear
absent
evidence
Thus, Mr.
own testi-
formed.
Garrison’s
contrary.”
Bd.
County
Franklin
Of
mony
support
tends to
the trial court’s
Crabtree,
Educ.
337 S.W.3d
finding
Mr. Edmunds was never ter-
(Tenn.Ct.App.2010) (citing Jones v. Gar-
promised
full
minated and
(Tenn.2002)).
rett,
compensation
retroactive
work
trial court
this case did not make ex-
Delta.
press credibility findings.
a tri-
addition,
may
both Mr.
al
be
finding
credibility
court’s
Garrison,
the trial
and his wife testified that
manner which
implied
*13
case,
decided the
Richards v.
reviewing
court
case.
Liber After
the
in this
record
it
Co.,
(Tenn. appears that Delta
Ins.
70 S.W.3d
instead relied on
ty Mut.
the
2002).
argument
that
the
Clearly,
finding
signed by
in
that the
documents
employ
Mr. Edmunds and Mr. Garrison in
by
contract was
terminated
Delta
ment
not
were not a contract or
Mr.
prior
time
Edmund’s
at
to
Edmunds’ Octo
terminated,
employment had been
both of
resignation,
trial
ber 2008
the
court credit
which
been
have
discussed above.
It is
testimony
the
ed the
of Mr. Edmunds over
well-settled
issues are considered
testimony of
the
Nothing
Mr. Garrison.
in
appeal by
waived on
present
failure to
leads
question
record
us to
Mr. Edmunds
them at trial. See ABN
Mortg.
AMRO
credibility
give
to
greater
leads us
Group, Inc. v. Southern Sec. Federal Cred
testimony
to the
of Mr.
weight
Garrison.
Union,
(Tenn.
126-27
S.W.3d
Instead,
weight
the evidence in the
Farr,
Ct.App.2011) (citing
Waters
supports
finding
that Mr.
record
Garri
(Tenn.2009)).
addition,
In
Edmunds,
not
son did
terminate Mr.
but
may
“a
not
an
party
litigate
issue on one
continued to utilize his services for the
ground, abandon that ground post-trial,
Delta,
repeatedly
benefit
assured
ground
and assert
new basis or
ap
on
Mr. Edmunds that Delta would compen
Leach,
peal.”
State v.
sate him for the work for which he
not
had
(Tenn.2004). Having
present
never been
we
paid. Accordingly,
been
must conclude
level,
ed
argument
with this
at the trial
not preponderate
the evidence does
trial court was unable make a specific
to
the trial
val
against
finding
court’s
that a
finding
toas whether a modification took
id, enforceable contract existed that was
place in this case. Even assuming, ar-
prior
not
by
terminated
Delta
to October
guendo,
properly
that this issue is
raised
undisputed
2008. Because it
Delta
on
we
appeal,
conclude that the evidence
pursuant
to Mr.
failed
Edmunds
to
in
preponderates
favor
a finding
contract,
finding
we affirm
court’s
the contract at issue
not
in
modified
that Delta
employment
breached the
con
argued
Instead,
by
manner
Delta.
tract and is liable
to Mr. Edmunds for
evidence shows that Mr. Garrison re
full amount of
he
compensation
was owed
peatedly assured Mr. Edmunds that he
under
contract from 2006 until his
debt,”
“a
owed him
that he would “catch[ ]
resignation
...
back
up
pay,”
that Mr. Garri
In
at
appellate
its
brief and
“every
son
of meeting my
had
intention
argument
appeal,
oral
argues
this
Delta
obligation to
whenever I
[Mr. Edmunds]
that if the
regardless.”
added).
contract was
terminated
can
(emphasis
In ad
2006, then the terms
dition,
contract were
Mr. Garrison admitted that Mr. Ed
in
modified
2006 when
never
agreed
munds had
work for no
formed Mr.
there
no
Edmunds
compensation,
though
even
mutual assent
money
payroll. Specifically,
make
Delta
required
to a
modification was
that,
argues
by remaining
compa
with the
terms of the
contract. As
ny
such,
after the
downturn
Mr. Ed
we conclude that there was no modi
agreed
regard
to work on a
fication of the contract
project-basis,
munds
to Mr.
only being paid
compensation.
Edmunds’ rate of
for those weeks in which
specific projects
he worked on
for Delta.
Pre-judgment
B.
Interest
argument,
At oral
counsel
Mr. Ed-
objected
argument
argues
munds
this
because
Delta next
that the trial
in awarding
pre-
it had not been asserted
the trial
court erred
court.
timely payment
damages
implicitly agreed
forego
the contract
interest on
judgment
remain
year.
money by choosing
an
per
Re-
percent
a rate of seven
Delta,
interest,
not be
employee of
should
enti
this Court
pre-judgment
garding
addition,
tled
prejudgment
interest.
stated:
has
that Mr. Edmunds cannot
argues
de-
wrongfully
have been
Parties who
*14
rely
by
taken
him and his
on the loans
out
money
damaged
have been
of
prived
wife, or Mr. Garrison’s assurances via
First, they have
dam-
ways.
been
two
Mr.
would be com
email that
Edmunds
they have not received the
aged because
pensated
failed to
because
Edmunds
money
they are entitled. Sec-
to which
explain to Mrs.
the true circum
Edmunds
ond, they
damaged because
have been
the declining
stances of
business.
use of
they
deprived
have been
money
they
the time
should
The trial
award of dam
court’s
judg-
until the date of
have received it
ages
prejudgment
and award of
interest is
interest
pre-judgment
ment. Awards of
an
reviewed under
abuse of discretion
type
second
are intended to address
Bank, Inc.
BancorpSouth
v.
standard.
based on the rec-
damage. They
(Tenn.Ct.
are
Hatchel,
223,
223 S.W.3d
230
is
ognition
party
damaged
Assocs.,
that a
App.2006); Franklin
L.P.
Capital
forego the
of its
being forced to
use
Inc.,
392,
Family,
v.
194 S.W.3d
Almost
General Motors
money over
time.
(Tenn.Ct.App.2005).
405
A trial court
648,
Corp.,
v.
461 U.S.
655-
Corp. Devex
applies
abuses its discretion
when it
2062-63,
56,
2058,
76 L.Ed.2d
103 S.Ct.
legal
an incorrect
standard or reaches a
(1983);
Mitchell,
211
v.
876
Mitchell
against
is
logic
reasoning
decision which
830,
(Tenn.1994). Thus, our
S.W.2d
832
injustice
party
an
causes
com
recognized
have
repeatedly
courts
Eldridge v.
42
plaining.
Eldridge,
S.W.3d
awarded,
is
not to
prejudgment interest
(Tenn.2001)
v.
(quoting
State
Shir
but
punish
wrong-doer,
compen-
(Tenn.1999)).
ley, 6 S.W.3d
If a
for
wronged party
sate
the loss
discretionary
range
decision
is within
money
use of
it
have
should
alternatives, we will not
acceptable
substi
Myint v.
Ins.
received
Allstate
earlier.
judgment
tute
that of the
our
for
Co.,
a different v. alternative. White Vander (Tenn.Ct. Univ., bilt International, Inc., Scholz v. S.B. App.1999). (Tenn.Ct.App.2000) (string S.W.3d case, pre- In this the trial court awarded omitted). Thus, law in cite “the Tennessee judgment interest to Mr. Edmunds based awarding prejudgment favors interest upon finding that: more doing fully compen whenever will so for plaintiff sate a successful the loss The evidence showed that because Mr. money plaintiff receiving agreed- use of was not to which Edmunds 2006, 2007, legally upon salary Blal for and entitled.” Lockett Charles he Sons, Inc., take ock & No. E2001-01000-COA- was forced to out a second mort- R3-CV, (Tenn.Ct. gage at *3 on his home at a variable WL interest 82). Scholz, 40 rate. He incurred additional costs App.2002) (citing be- that an award of not the benefit of the Delta contends cause did have un he was to at the pre-judgment inappropriate money interest be time due, mere award Specifically, der the facts of this case. costs that a that, argues pay remedy. because Edmunds back will in the does not pre- The evidence record rison. When paying Delta ceased Ed- Indeed, findings. installments, against regular these munds ponderate Garrison his wife was uncontroverted at trial owned 100% of the evidence Delta. Gar- fully wife rison was that Mr. and his suffered aware that Edmunds Edmunds was working portions without financially pay large due to Delta’s failure to Mr. 2006,2007, addition, and 2008. Edmunds. the evidence were made that the shows assurances personal Garrison took responsibili- pick up business would Edmunds ty for the monies owed to Edmunds. certainly be which would have paid, would promise continued stay induced Mr. Edmunds to with the Amy and his wife that he repay would company despite its financial struggles. debt owed to Edmunds. Gar- When *15 Thus, we not an spoke conclude it was abuse rison made those promises, he of discretion for the trial court to obligations award to personal Edmunds as obli- pre-judgment gations, obligations interest to Mr. Edmunds not as alone, describing his debt but argues Delta also the trial court also his gratitude” “debt of to Edmunds. awarding erred in at a interest rate report Edmunds continued to to work percent seven because the last draw on the upon based personal relationship his line a equity home was at rate of 2.75 with Garrison and personal Garrison’s percent. the evidence shows assurances eventually seventy-five percent that the over of the would be for all his work. Garrison money from equity drawn the home line only person was the who knew Del- at a between per- rate seven to nine Edmunds; ta could not to afford percent cent. The awarded rate of seven however, terminating instead of Ed- on the spectrum. is low end of this Ac- munds, Garrison continued to make cordingly, discern we no abuse of discre- promises repaid that Edmunds would be tion the trial court’s decision to award to continued allow Edmunds re- interest at a percent. rate seven daily port to work on a basis. Alter-Ego C. Respectfully, and due with deference to issue, the findings trial court’s on this we argues Mr. Garrison next that the conclude the evidence was insufficient in finding trial court erred that Delta was justify piercing corporate veil and alter-ego person and that he should be holding personally responsi- Mr. Garrison ally responsible damages for the owed to ble Delta. for the liabilities of Accordingly, Mr. Edmunds Delta. this explained must This Court the doc Court determine whether there was corporate trine of piercing veil VP justify piercing sufficient evidence Del Group, Buildings, Polygon veil Inc. v. No. corporate impose personal ta’s lia M2001-00613-COA-R3-CV, bility case, 2002 WL on Mr. Garrison. In this 15634, 8, January *4-5 following (Tenn.Ct.App. trial court findings made regard this issue: 2002): 20. The corporate Court finds that Delta and Conditions under which the alter-egos. entity disregarded vary Garrison were Garrison ad- will be accord quite ing present mitted that some time he has to the circumstances case, been manager particularly the sole officer and and the matter is with province Delta. Garrison admitted that of the trial court. Mu essentially 2006 forward Delta was Gar- M.B.H. v. roll Tennessee Gesellschaft (Tenn. 211, filed); Consultants, Inc., Emergicare Inc. v. Tape, Woolbright, Bd. No. W1998-00659-COA- (citing Electric Power Ct.App.1995) (Tenn. 1897350, R3-CV, 2000 *2 Joseph Valley v. WL at Chattanooga St. 2000) (Perm. 29, Dec. de Ct.App. app. Corp., 691 S.W.2d Steel Structural 2001). 14, Andrews, (Tenn.1985)); May No. Piper v. nied. 01A01-9612-CV-00570, 1997 WL circumstances, may In those courts (Tenn.Ct.App. at *3 Dec. veil find the pierce corporate 1997) 1998). (Perm. app. June denied entity” liable, Mu “true owners of Thus, when an question individual Gesellschaft, 908 roll S.W.2d corporate obli held liable for should be impose Lability against controlling a “to one. gations largely a factual “Each is corporate used who has shareholder involving disregard case entity legal obligations.” to avoid his entity upon special rest its facts.” must Serv., Inc. Consolidation Manufacturers 213; Gesellschaft, 908 S.W.2d at Muroll Rodell, (Tenn.Ct. S.W.3d Haynie, 833 Schlater v. disregard courts will App.2000). Our (Tenn.Ct.App.1991). entity corporation separate as a
upon showing corporation *16 or or such neces dummy sham action is presumption There is a justice. to sary accomplish Muroll Ge legal entity, is a a distinct corporation 213; sellschaft, 908 at Tennessee S.W.2d apart its wholly separate and Bell, Investors, Ltd. 709 Racquetball v. directors, shareholders, officers, affili or 617, (Tenn.Ct.App.1986); S.W.2d 619 appropriate In an corporations. ated Ridge Repair City Auto v. Oak Serv. the case in furtherance of ends of and Co., 707, 711, 57 425 Tenn.App. Fin. separate identity of justice, corpo the a 620, (1967); Fidelity 622 Trust S.W.2d the may ration be discarded and individ Co., 61, 7-8; 22 at 160 Tenn. at S.W.2d owning all ual or individuals its stock Consultants, Inc., Emergicare 2000 WL and will be treated identical to assets 1897350, 772127, *2; Piper, at 1997 WL Gesellschaft, the Muroll corporation. *3. at 213; Schlater, 908 at 833 S.W.2d S.W.2d 15634, Buildings, VP at *4-5 2002 WL 925; Fidelity v. see also Trust Co. (footnote omitted); also v. Na- see Boles Co., 57, 61, Laundry 160 Service Tenn. Co., Inc., Development tional 175 S.W.3d 6, (1929); generally 22 7-8 S.W.2d see 226, (Tenn.Ct.App.2005) (citing 244-45 fa- & v. Bailey E.O. Co. Union Planters vorably analysis the and in VP discussion Co., 439, Tenn.App. Title 232 Guar. 33 of Buildings). piercing The doctrine (1950). Discarding the fic S.W.2d 309 corporate applies equally veil cases corporate entity, tion or piercing of the party pierce a of a which seeks to the veil veil, appropriate is when corporate liability company, as Delta: limited such for a corporation is liable debt but is debt, owners, rule, members, general a without funds and As employees agents lack funds is due to some misconduct or other a Tennes- liability company on the of the directors. see limited have no part officers 213; Gesellschaft, personal liability 908 S.W.2d at for the or obli- Muroll debts S.E.A., Co., et Leasing gations company. Inc. v. Southside See Tenn.Code al., 48-217-101(a)(l); E2000-00631-COA-R3-CV, § Ann. No. Tenn.Code 48-249-114(a)(l)(B). 1449852, § (Tenn.Ct.App. 2000 at *9 Ann. an WL Under 2000) (no Sept. remedy “piercing Tenn. P. 11 known as R.App. equitable
829
however,
veil,”
sepa
“the
in fact
corporate
indistinguish
tities are
identical or
entity
may
rate
of a
be
able
legal
corporation
necessary
accomplish
and where
showing
Serv.,
that it
a
disregarded upon
justice.
Consol.
Inc.
Manufacturers
Rodell,
dummy
necessary
(Tenn.Ct.
sham a
or where
or
v.
S.W.3d
justice.”
Haynie,
v.
accomplish
Schlater
In
App.2000).
Continental Bankers Life
(Tenn.Ct.App.1991).
Ins.
v.
Co.
South
The Bank Ala
Despite
inapplicability
the reme mo,
(Tenn.1979),
v. 765 F.Supp.2d 1) parent corporation, at the time of (W.D.Tenn.2011). complained of, the transaction exercises (Bkrtcy. re 479 B.R. Steffner, over complete subsidiary, dominion its E.D.Tenn.2012). finances, policy but of practice respect business to the trans- courts Tennessee attack, under so corpo- action that the that the of piercing are cautioned doctrine transaction, entity, rate as to that had corporate applied only veil be should mind, separate no will or of its existence prevent “extreme circumstances to the use own. entity perform to defraud 2) illegal Pamperin control acts.” Streamline Such must have been used to (Tenn.Ct. Inc., Mfg., commit wrong, perpetuate fraud or *17 2008). 6, App.2008) app. Oct. (perm. statutory posi- denied the violation of a or other explained: legal duty, unjust As this Court tive or a dishonest and parties’ act in contravention of third principle piercing “The the fiction rights. veil corporate applied is to be 3) The aforesaid control and breach of great precipitately, caution and not since duty proximately injury must cause the corporate regularity.” there presumption is a ater, 925; unjust or loss of. complained 833 S.W.2d at Schl Inc., Consultants, Emergicare 2000 WL subsequent Id. at 632. this Court’s 1897350, *2; Lindsey, & Bradley at Racquetball decision Tennessee Inves Malloy Marketing Systems, v. Media Bell, tors, v. Ltd. 709 S.W.2d Inc., E2000-00678-COA-R3-CV, No 617(Tenn.Ct.App.1986), we recognized 1875882, 2000 at *4 (Tenn.Ct.App. WL these are also in an required elements 2000) (no 15, R.App. Dec. Tenn. P. 11 action to hold the individual owner a filed). party wishing The to negate the the the corporation liable for debts of cor entity such separate existence of has the poration ego theory. under the alter Id. at burden proving jus facts sufficient to 622; see, e.g., Island Brook Homeowners tify the veil. piercing corporate Schla Ass’n, Inc. v. No. M2006- Aughenbaugh, ter, 833 at 925. S.W.2d 2917781, 02317-COA-R3-CV, 2007 WL at 5, 2007); 15634, (Tenn.Ct.App. 2002 at *5. *6 Oct. Tennessee Buildings, VP WL Investors, Bell, veil, the Ltd. v. 709 piercing corporate Racquetball When a court 617, may entity (Tenn.Ct.App.1986); the 622 but disregard corporate or S.W.2d 919, liability Haynie, a see v. 833 impose against der related Schlater S.W.2d a a entity, parent corporation (Tenn.Ct.App.1991) (stating such as or 925 that Con shareholder, controlling parent/subsid the where two en tinental Bankers addressed 830 Inc., factors); NATS, No. inap Allen Altice v. relationships and was therefore
iary
M2007-00212-COA-R3-CV,
2008 WL
a
involving
case before
the
plicable to
2008)
15,
1744571,
(Tenn.Ct.App.
*2
Apr.
relationship).
corporation/shareholder
Fisher,
(same); Dolle v.
No. E2003-02356-
used
most common factors
(Tenn.
COA-R3-CV,
*4
2005 WL
to determine whether
courts
by Tennessee
2005) (same);
Boles v.
Ct.App. Aug.
corporate
originally
veil were
pierce
Inc.,
Co.,
175
Development
National
Corp.
Ins.
Deposit
in Federal
set forth
(Tenn.Ct.App.2005);
245
S.W.3d
(E.D.Tenn.1984),
Allen,
F.Supp. 386
584
Schools,
Barbour,
Inc. v.
Oceanics
follows:
(Tenn.Ct.App.2003)
S.W.3d
determining
be considered
Factors to
Consultants,
(same); Emergicare
Inc. v.
disregard
corporate
veil
whether
Woolbright, No. W1998-00659-COA-R3-
has
entity
whether
include not
CV,
1897350, *2 (Tenn.Ct.App.
2000 WL
injustice in
work fraud or
been
used
2000)
(same).
no
Generally,
Dec.
one
public policy,
but also:
contravention
determining
whether
factor is conclusive
(1)
failure
collect
there was a
whether
veil; rather,
to pierce
corporate
courts
(2)
corpora-
capital;
whether
rely
factors in
upon
will
a combination of
(3)
undercapitalized;
grossly
tion was
Pamperin, 276
deciding the issue.
S.W.3d
(4)
certificates;
stock
nonissuance
Schools,
(citing
at
Oceanics
by
indi-
ownership
of stock
one
sole
140).
though corporate
at
formali
“Even
vidual; (5)
same
or
the use of the
office
observed,
may still
ties have been
one
(6)
location;
employment of
business
challenge
corporate entity by showing
(7)
employees
attorneys;
the same
victim
that he has been the
of some basi
corporation
as an instru-
the use of
cally
by
corporate
unfair device which the
in-
mentality or business conduit for an
organization has been
form of business
(8)
corporation;
another
dividual or
inequitable result.”
used to achieve an
assets
or to
diversion
Pamperin,
(quoting
S.W.3d
entity
or other
detri-
stockholder
Haynie,
Schlater v.
creditors,
manipulation of
ment of
or the
(Tenn.Ct.App.1991)).
*18
(9)
another;
the
assets and liabilities
Mr.
two fac
Edmunds relies on
corporation
subterfuge
use of
as a
the
tors, which he contends are sufficient to
(10)
transactions;
the
illegal
formation
corporate
the
veil. Mr.
justify piercing
corporation
and
to
to
use of the
transfer
that
argues
proof
first
the
at
Edmunds
existing liability
it the
of another person
Mr.
trial showed that
Garrison exercised
(11)
or
and
the failure main-
entity;
to
and
complete dominion
control over Delta
length relationships among
tain
re-
arms
during
years
at issue in this case.
lated entities.
Indeed, Mr. Garrison admitted that Delta
(citing
juris
Id. at 397
cases from various
“essentially” him from 2006 until the
was
Jackson,
dictions);
also
v.
Coker,
see
Marshall
trial.
v.
20
time of
See Stark
Cal.2d
M2007-01764-COA-R3-CV,
(1942)
No.
mont Press
guaranteed perform-
shareholder]
818,
[the
Cal.Rptr.
10
214
Cal.App.2d
187
agreement whereby
ance
a new
ap
(1960)
piercing
veil
was
that
(holding
conditioning system
central air
would be
evidence, disput
was
there
when
propriate
However,
appellees’
installed
home.
defendant,
agreed
that he
be
by the
ed
alone,
standing
such an assurance
no
the debts of the insolvent
responsible for
way implies that [the shareholder] was
Luke,
Ga.App.
v.
164
Saxton
corporation);
merely guaranteeing
Corpo-
not
that
(1982)
751,
170,
(holding
752
296 S.E.2d
ration,
officer,
he
of which was an
would
at issue
liable on
contract
shareholder
agreement.
perform
“[T]here
this new
when,
factors,
“gave
his
among other
no
short of
speculation
is
evidence
guarantee
project
that the
would
personal
acting
was
in an
shareholder]
indi-
[the
pay
if he had to
it
completed, even
be
apposition,
vidual
whereas in
capacity
some
pocket”).
out of
own
[appellees
the records show
aware
were]
that personal
have concluded
assur
courts
by [all relevant] written documents that
controlling
part
ances on the
share
acting only
in a
[the shareholder]
corporate
piercing the
justify
holder do not
representative capacity.
Earnest v.
[ ]”
per
in order to hold
shareholder
veil
Merck,
271, 273,]
Ga.App.
358
[183
corpora
sonally liable for the debts of the
(Ga.Ct.App.1987)
S.E.2d 661[
].
Dailey,
v.
tion. See Anderson
Colo.
Hester,
335;
402 S.E.2d
see also West
(1913)
175,
(holding
P. 461
App.
v.
Broadcasting
ern
Co. Columbus Bar
an officer and shareholder
by
assurances
320,
Ga.App.
rington, 167
306 S.E.2d
corporation
charge
operations
of its
of a
(1983) (holding
piercing
the corpo
employees
its
that would be able to
plain
rate veil
inappropriate
when
any personal
them
not create
lia
pay
did
failed
tiff
to show that
the statements
him);
Corp.
bility against
Intelnet Intern.
made
of personal
were assurances
liabili
A-6974-03T1,
Corp.,
2006 WL
v. ITT
No.
Rymer,
Ga.App.
v.
ty); Menchio
2006) (con
(N.J.Super. Aug.
(1986) (reversing judgment
(E.D.Tenn.1984).
(Tenn.Ct.App.2003), the Court concluded
Specifically, there is no
(1)
veil
piercing
corporate
evidence in the
was like
record that
there
awas
(2)
appropriate
wise
when
failure to collect
the shareholder
capital;
corporation
diversion of
sold the
principal
assets
asset of the
entity
proceeds
stockholder or other
to the
from the
detri
transferred
sale
creditors,
account,
ment of
manipulation
personal
or the
to his
which rendered
(3)
another;
assets and
corporation
liabilities
without
*21
assets
above,
case,
undisputed
discussed
the
evi
at
In this
howev
as
Id.
141-42.
debts.
er,
re
that Mr. Garrison
dence
trial was that Mr. Garrison
is no evidence
there
corporate assets to
corpora
distributed
little
from the
improperly
ceived
to no income
Indeed,
Finally,
Mr. Garrison’s uncontro-
during
period
himself.
the
at issue.
tion
was
testimony at trial was
he
verted
any
record
action
nothing
suggests
the
profits from
receiving
salary
no
and no
intentionally
part
on the
of Mr. Garrison
during
struggles.
its financial
Delta
claim; instead,
Mr. Edmunds’
from
defeat
record,
appears
our review of the
cases, piercing
corporate
the
In other
Mr. Garrison disclosed Delta’s financial
the
fail
justified by
shareholder’s
veil was
lack
struggles
capital
and its
formalities.
In
corporate
to observe
ure
well
the
Edmunds and
wife
before
No.
Buildings,
Polygon Group,
Inc. v.
VP
litigation
this case commenced.
M2001-00613-COA-R3-CV,
2002 WL
8, 2002),
January
this
(Tenn.Ct.App.
Instead,
facts in
most
the
this case
corporate veil when the
pierced
Court
the
closely
Money
the
& Tax
resemble
facts
operated business in Ten
sole shareholder
Moody,
Inc. v.
835 (1) form, kept except or that as porate improper provided otherwise in this section, Finally, records. Mr. Garrison likewise not less than— signed (A) contract in this hour, an beginning on the 60th $5.85 capacity case in his as President and 25, 2007; CEO day May after clearly Delta and contract states (B) hour, an beginning 12 months $6.55 in Mr. consideration for Edmunds’ day; after that 60th work, Company agrees “the [i.e. Delta] (C) hour, an beginning 24 months $7.25 pay Employee a Mr. [i.e. Edmunds] day; after that 60th ... salary outlined in the Employee Offer Let- 206(a). § 29 U.S.C. The FLSA further Although ter.” we are sympathetic with provides a cause of employee action for an situation, recognize Edmunds’ we for unpaid wages: minimum piercing corporate veil is an “extreme” Any employer provi- who violates the remedy. Pamperin, S.W.3d at 438. sions of section or section this tending Without more evidence to show title be shall liable or employee that Mr. Garrison used the enti- employees in affected the amount of ty wrong, to “commit fraud or perpetu- unpaid their minimum wages, their or statutory ate the violation of a or other unpaid compensation, overtime as the positive duty, legal or a dishonest and be, may case and in an equal additional unjust act in parties’ contravention third liquidated amount as An damages.... must, rights,” Moody, like Court in we liability action recover the prescribed apply decline to the doctrine in this case. may against any [above] be maintained Pamperin, 276 (quoting S.W.3d at 438 public a employer (including agency) in 632). Bankers, Continental S.W.2d at competent Federal or State court of
jurisdiction by any one or
employ-
more
D. Fair Labor
Act
Standards
in
ees for and
behalf of himself
them-
or
similarly
employees
selves
other
sit-
Finally,
Delta and
shall,
....
in
uated
The court
such action
argue
finding
in
that the
court erred
in
any judgment
addition to
awarded
them liable under the
Labor
Fair
Stan
plaintiff
plaintiffs,
allow a reason-
(“the
Act,
§
dards
et. seq.
U.S.C.
attorney’s
able
fee to be
paid
FLSA”). The FLSA provides that work
defendant,
and costs
action.
ers
engaged
“commerce”
defined un
216(b).
§
U.S.C.
Edmunds was
statute,
der the
are
a
required
to be
undisputedly employed
pursu-
with Delta
minimum wage:
ant
contract
which
to a
he was
be
commerce;
Employees engaged in
home paid
salary,
than compensated
rather
in Puerto
and Virgin
workers
Rico
Is-
hourly.
that fact alone
does
lands;
Samoa;
in American
employees
prevent
bringing
pursu-
him from
a claim
vessels; agricultur-
seamen on American
ant
to the FLSA. For
in the
example,
al employees
highly analogous
Johnny’s
case of Orton v.
L.L.C.,
Every
Franchise,
employer shall
to each
pay
Lunch
836 the exemption employer, the decision on the Court reversed tiffs Appeals
cuit Court court, the plain- Appeals judgment the reversed dis holding that the district Orton, F.3d 668 at 848^19. The under the missal. proper a claim had out tiff made plaintiffs further held that the alle FLSA, employee. Court being a salaried despite salary that the reduction in his gation According the Court: to problems to the cash flow company’s due (2004) ... establish regulations new The FLSA, prevent application not of the did are agreements no employment that regulation makes no stating that “[t]he starting point for longer the relevant just exception deductions in be for is on a employee salary whether an they by cash flow cause were motivated [v. Baden-Winterwood basis. Life advising employer shortages,” and that the [618,] Inc.], Fitness, 566 F.3d Time mutually agreeable to negotiate was free Cir.2009) (6th question is there- The ]. [ salary with employee. reduction in Id. plaintiff] was owed fore not what [the at 849. rath- agreement; under his er, compensation is what the question case, In this Delta and Mr. Garri actually plaintiff] received. [the argued in the trial son court Orton, at 848. The Sixth Circuit 668 F.3d exempt employee pursu an Edmunds was despite plain- to
went on conclude 213(a)(1) § to 29 (regarding ant U.S.C. salary employer, agreement with the tiffs “executive, administrative, professional” or pursue an action for he was entitled to (2) “computer employees), (regarding wages pursuant minimum unpaid systems analyses], computer program FLSA, exempt from long so as he mer[s], engineer[s], other simi software or Thus, salary employee an the FLSA. worker[s]”). However, larly skilled only allegation there is an relevant when court specifically found these ex exempt at issue is employee apply emptions did not to Mr. Edmunds. FLSA. provisions Neither nor Mr. raised any authority employer may argument raise a or cited on this
An appellate or at oral plaintiffs exempt employee status as an issue their brief brought argument. Appellate to claims Tennessee Rule of an affirmative defense 13(b) provides appellate v. Procedure re Speedway under the FLSA. Thomas L.L.C., 496, only view will SuperAmerica, generally 506 F.3d extend those “ (6th however, Cir.2007). presented Although an Exemptions, ‘are issues review. trial, may presented the em issue have been “a narrowly against to be construed ” ordinarily to brief it ployers seeking party’s to assert them.’ Id. failure consti Inc., Kanowsky, v. Ben tutes waiver or abandonment of the issue.” (quoting Arnold Colson, 453, Mosby 80 S.Ct. No. W2006-00490-COA- 361 U.S. L.Ed.2d (I960)). (Tenn. R3-CV, employer bears the bur 2006 WL at *10 2006) (other Ct.App. establishing August den of the affirmative defense citations omitted); Co., evidence, also Newcomb v. Kohler by preponderance see (Tenn.Ct.App.2006) employer this burden satisfies (failure any authority providing and affirmative evidence “to cite “clear posi every require argument regarding construct an employee [a] meets Thomas, waiver of exemption.” appeal” ment of an 506 F.3d tion on constitutes a Bean, (internal omitted). issue); quotation marks Bean v. 55-56 at 501 (“Courts have routine (Tenn.Ct.App.2000) Because the district court Orton failed appropri plain ly held that the failure to make place the burden establish during the record and to cite all ate references to workweeks in which Ed- in the section munds authority argument paid, stating: relevant was not *24 27(a)(7) required by the brief as Rule of 27. Delta worked all across United issue.”). Thus, a constitutes waiver States. The evidence showed that Delta the issue of whether Mr. Edmunds was had in projects California, Kentucky, exempt from of the FLSA is provisions Alabama, and Arkansas. Delta made proceed waived and this Court can to con sales calls in Indiana Michigan. and of sider the merits Mr. Edmunds’ claim. Delta had employees that lived outside of the state of Tennessee. Delta re- above, As discussed the trial court found ceived and sent mail to individuals and Mr. employee that Edmunds was an of corporations that were based outside of Delta, commerce, engaged in and awarded Tennessee. Delta received and initiated damages him pursuant to the FLSA. On telephone calls to individuals and enti- however, Delta appeal, and Mr. Garrison ties located outside of the state of Ten- argue that an Mr. Edmunds was not “em- nessee. was engaged Delta in interstate for on ployee” purposes the Act weeks commerce. paid. he pro- when was not The FLSA 28. Edmunds was also in engaged in- that an “the term ‘employee’ vides means terstate commerce in his for work Delta any employed by employer.” individual an and Garrison. Edmunds communicated 203(e)(1). § argues 29 U.S.C. Delta that by telephone and electronic mail with “employed by Mr. Edmunds Del- subcontractors, Delta employees, and ta” because he was terminated in 2006 and clients that were based outside of the his on that efforts behalf of Delta were state of inputted Tennessee. Edmunds merely “an ongoing application job.” for data programs into Delta originated that However, the court specifically trial found from Delta employees and subcontrac- with that Edmunds’ Delta tors that were located outside was never terminated and we have found state of Tennessee. opened preponderate that evidence does not mail originated that outside of the state Thus, against finding. Mr. Edmunds of Tennessee and sent mail “employee” was an purposes going outside the state Tennessee. FLSA resignation until his in October We conclude that the evidence preponderate against does not the trial Next, argues Delta on findings Ed- court’s this issue. Mr. Ed- that, munds was for all which throughout weeks in he munds testified his time engaged Delta, functions, activities performed covered with several discussed, previously including answering FLSA. As the FLSA phones input only applies employees ting regarding to those that en the data state out of em commerce, gage activity or ployees. some related Even Mr. Garrison admitted 206(a). contact, § See to commerce. personally U.S.C. Delta had either or “trade, The FLSA phone, defines commerce as over various out state commerce, transmission, issue, transportation, throughout clients the time at period among communication Delta do several States but contends that did not a “a place or between any penny State and out of business” with those clients. Re 203(b). § side thereof.” 29 The spectfully, portion U.S.C.A. Delta’s business clients, court Delta specifically spent soliciting found that and was without which engaged Delta had Ac- Edmunds were commerce would have no business. testimony, be- with his Mr. Garrison ad fail see a distinction tion cordingly, we involving communications current had with out of dealings mitted tween involving po- companies throughout communications employees clients and state Indeed, of communica- types tential clients. of time at issue. period Both of Delta in email, made behalf tions were Mr. Garrison September purposes. its business furtherance of Tiffen employees working refers to Mo FLSA “commerce” under the definition of torhomes, located Alabama. another the communi- requirement no makes email, Troy Mr. Garrison admits that *25 type in of financial cations result some Locklin, Alabama, who in was still lived 29 party. one See U.S.C.A. benefit August with as as employed Delta late 203(b). § that undisputed throughout It is his 2008. Delta, Mr. tenure with Edmunds would of also much the fact Delta makes regarding the data the timesheets he input not with identify that Mr. Edmunds could from all Delta in employees, received of on any particularity any given his activities or cluding those that lived worked out of place week. case took The trial this Accordingly, state. the evidence does not 2011, nearly years three since Mr. Ed- court’s preponderate against trial find position from with Del resigned munds his was ing employee that Mr. an of Edmunds recognizes law that wit ta. Tennessee Garrison,3 engaged and Mr. and Delta may by the memories “be dimmed nesses’ commerce, for all the weeks he was not Elrod, passage time.” Waddle v. 367 of 2006, 2007, paid in and 2008.4 (Tenn.2012). 217, Despite gap between the events at issue and V. Conclusion case, review trial in this from our of the evidence, judgment The of the Circuit Court of clearly Mr. Edmunds testified every County part, Robertson is affirmed in re- engaging that he in commerce was part, and for all fur- week that he worked for Delta. While versed remanded may necessary that be attempted proceedings Garrison to rebut conten ther as and disregard jointly 3. The trial court found Mr. reckless for matter of whether severally damages pursuant and liable for by prohibited conduct the statute” its was "employer” the FLSA because was the of trigger prove three-year willfulness and Indeed, overwhelming Mr. Edmunds. limitation). "[t]he dispute There statute is no authority weight is officer pursuant Mr. Edmunds' claim to the FLSA operational corporation's with control of a timely filing this added to case enterprise employer along covered is an with original complaint. an amendment to the See corporation, severally jointly liable Tenn. R. Civ. P. 15. The trial court in this wages.” unpaid under the FLSA for Donovan case, however, conflicting findings made as to 1509, (1st Cir.1983). Agnew, F.2d v. Delta Mr. violation whether Garrison's appeal ruling. this Mr. Garrison does willful, allowing this case was Mr. Edmunds wages to recover lost minimum for the third pursu- 4. statute of limitation on claim January year, January 2006 to years from ant to the FLSA is two when the First, court the trial found Delta’s 255(a). § cause action accrued. 29 U.S.C. willful, later failure to was not then con- exception the statute an contains cluded the failure willful. Ultimate- arising "that a cause of action out of a willful though, damages ly, the trial court awarded may violation be within three commenced years unpaid Id.; wages two minimum years after the cause of action accrued.” Co., damages. as a set off the contract Neither McLaughlin also see Richland Shoe ruling by the party takes issue with this U.S. 108 S.Ct. L.Ed.2d court; therefore, (1988) will plaintiff we not disturb (requiring show employer appeal. "that either knew showed among are this opinion. consistent with Costs the issues we appeal. review on this taxed to appeal Appellant are why That is find we ourselves L.L.C., Partners, surety. and its anomaly of an opinion enforces a con- $65,000 salary tractual per year claim KIRBY, J., concurring HOLLY M. well as an FLSA claim. separately. agree fully majority’s analysis I with the ORDER in this concur separately only case. I Appellee Robert peti- Edmunds filed a portion add a comment as to the tion to rehear on December 2012. In opinion on the Fair Labor Standards Act. petition, argues Mr. Edmunds that this case, we affirming this are the trial Court failed to a proper afford deference court’s award to Mr. under the findings trial court’s and miscon- Fair Labor Standards Act and under his strued the facts and law as to whether unusual, contract. It *26 corporate veil should be pierced allow though possible, employee for an whose Appellant Michael Garrison to be liable for duties him within the place protec- would of Appellant debts tions of Fair Labor Standards Act to Partners, After L.L.C. due consideration salary also have an enforceable claim for petition, of Mr. respectfully Edmunds’ it is under an It is high- contract. DENIED. ly unusual an employee for such have a $65,000 salary
contractual of as much as Here, year. the trial found per court Mr. Edmunds was not an administrative
employee exempt who
FLSA. majority, As noted the is- appeal sues raised do not include this ruling; why reason is not