### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON CUSTOM INTERIORS & SUPPLY CO., INC. v. INN-WAY, INC., ET AL 

### .

Direct Appeal from the Circuit Court for Henry County

No. 1120 Julian P. Guinn, Judge

No. W1999-02191-COA-R3-CV - Decided May 5, 2000

This appeal arises from

a dispute over whether Defendant Robert Shropshire personally g uaranteed the debts of Defendant Inn-Way, I nc., to Plaintiff

Custom Interiors & Supply Company, I nc. Custom Interiors sued Inn-Way to recover the sum of $54,537.30 for or ders placed

by Inn-Way

after October 1996. Custom Interiors also sued Inn-Way’s pre sident and owner, Robert Shropshire, contending that Shropshire had personally guaranteed I nn-Way’s debts to Custom Interiors. After I nn-Way filed for bankruptcy protection, Custom Interiors proceeded to tria l against Shropshire. The trial court
en tered a judgment finding that Custom Interiors had failed to carry its burden of proof and that Shropshire was not

a persona l guaran tor of I nn-Way ’s debts to

Custom I nteriors . Weaffirm the trial court’s judgment based upon our conclusion that the evidencedoes not preponde rate against th

ese findings.

Tenn. R. App. P. 3 Appeal as of R ight; Judgment of t

he Circuit Court A

ffirmed; and Remanded

F ARMER , J., delivered the opinion of the court, in which C RAWFORD , P.J., W.S., and L ILLARD , J., joined. David A. Riddick, Jackson, Tennessee, for the appellant, Custom Interiors & Supply Co., Inc. Estelle C. Gaerig, Memphis, Tennessee, for the appellee, Robert Shropshire.

OPINION

Custo m Interiors filed this action against Inn-Way and Shropshire a fter Inn-Way failed to pay $54,537.30 for orders that it placed wi th Custom I nteriors after October 1996. Custom Interiors
ma nufactures draperies and bedspreads for the hospitality industry. Inn-Way was one of Custo m Interiors’ authorized dealers, and it sold Custom Inte

riors’ products to

hotels and motels.

In a typical transaction, Inn-Way placed an order with Custom I nteriors, and Custom Interi ors shipped the finished productsdirectly to Inn-W ay’s customer. Inn-Way placed it s orders by send ing a purchase order to Custom Interi

ors specify

ing the products

it wished to order.

After receivin

g a pu rchase order, Custom Interiors sent Inn-Way a form entitled

Order Acknowledgement and Sales Contract that confirmed Inn-Way’s order, specif ied t he products

ordered, and indicated the price of the

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products. Inn-Way

then verified tha

t the information on

the form was corr

ect, signed the form, and returned it to Custom Interiors. Throughout

this business relation ship, In n-Way did not pay in a timely manner for the productsit ordered. At one point, Inn-Way

owed Custom Int

eriors almost $ 20 0,000 for previous orders. In early 1998, therefore, Custom Interiors ce ased processing orders for Inn-Wayunless InnWay’s customers agreed

to pay for the products in cash. Custom Interiors filed this action a

gainst Inn-Way in May

1998.

In its initial complaint

, Custom I

nte riors named Inn-Way and Ricky Lovelace, Inn-Way ’s vice president, as defendants. In support of its claim against Lovelace, Custom I nteriors alleged

that Lovelace had personally

guaranteed the payment

of Inn-Way’s debts to Custom Interiors. Custom Interiors later amended its complaint, howeve

r, to name Robert Shropshire, Inn-Way’s president and owner, a s adefendant and to assert that Shropshire was the one who personally guaranteed InnWay’s debts to Custom Interiors.

In February 1999, Inn-Way filed a pe tition seeking ba nkruptcy pr

otection in feder

al court. Inn-Way’s

petition listed Custom Interiors as one of its creditors, andInn-Way’s debts to Custom Interiors were subsequently discharged. Custom Inte riors was unable t o se rve Defendant Ricky Lovelace with process, so Custom Interiors proceeded to trial ag ainst only Robert Shropshire.

At trial, Custom Interiors present ed the test

imony of its p resident, Gary Jones. Th rough Jones’ testimony, Cus

tom Interiors

introduced a cop

y of a docum

ent t hat Cust om Interiors contended constituted a personal guaranty by Robert Shropshire to pay In n-Way’s future debts to Custom Interiors. The do cument was one of Custom Interiors’ Order Acknowledgement and Sales Contrac t s , and it contained the following language: “I t is also agreed

that all orders pr

ocessed herea

fter shall be guaranteed by the principals of I nn-Way, Inc.”

In the space beside

“Order Acknowledged By,”
someone had signed his or her initials. Gary Jones testified that, although hewas not present when the Acknowledgeme

nt form was signe

d, he was fami

li ar with Robert Shropshire’s signature and knew that Shrops hire was the person who signed his initials on the form. Jones testified that Shropshire signed the A cknowledgem ent form con taining th e guaranty language after the two men had a discussi on about Inn-Way’s failure to pay for its orders in a timely manner. Jones further testified that the entire $54,537.30 indebtedness was incurred by I nn-Way after October 1996,when Shropshire signed the Acknowledgement form.

Robert Shropshire did notdispute that, since October 1996, I nn-Way had in

curred debts to Custom Interiors totaling $54,537.30. Through his counsel, however, Shropshire di d dispute whether he had personall

y guaran teed these debts. Bonnie Shropshire, Robert Shropshire’s wife and Inn-Way’s

secretary-treasurer,

testified on behalf of her

husband. According to Bonnie Shropshire, Robert Shropshire was completely bedridden as a result of suffering th

ree separate s

trokes. Bonnie Shro pshire acknowledged that, after his fi

rst stroke in July

1995, Robert Shrops

hire continued to
come into the office to work. She insisted, however, that her husband could not hav e signed th e Acknowledgement

for m co ntaining the guaranty languag e because, after his July 1995 stroke, he1 Inasmuch as the trial court did not incorporat

e its oral c omme nts made at the trial’s conclusion into its written judgm ent entered aft

er the trial,

this court is limited to reviewing only the written judgment. See Whisenhut v. Whisenhut , No. 02A01-9506-CV-00126, 1997 WL 305296, at *2 (Tenn. Ct. App. June 9, 1997) ( no perm. app. filed ).


### -3- could no longer write or sign his name. Bonnie Shropshire had been marr ie d to her husband for twenty-two

years, and she was familiar with his signature. She testified that the signature on the Acknowledgement

form was not that of her husband. Moreover, she testified that Robert Shropshire had not and would not have signed a document personally guar anteeing Inn-Way ’s debts. Bonnie Shropshire and her husband h ad discussed this

issue in the past, and he had consistently stated that he would not sign a personal guaranty.

In rebuttal, Gary

Jones testifie

d that h e was certain that Robert Shropshire signed the Acknowledgement

form because

Jones received the signed form shortly after the two men discussed the personal guaranty. According to Jones, Shropshi re signed the form at Jones’ insistence when Jones informed Shropshire that, if he did not execute a personal guaranty

, Custom Interio

rs would notship any more

orders for I

nn-Way. Jones r

eiterate d that he wa s familiar with Shropshire’s signature, and he indicated that he had no doubt the signature on the form was Shropshire’s.

At the trial’s conclusion, the trial court made some brief comments that indicated the court’s intention to rule in favor

of Robert Shropshire. The trial court later entered a final judgment in favor of Shropshire. I

n its judgment, the

trial court made t

he following fin

dings: That [Custom Interiors] failed to carry its burden of proof; That the defendant

Bob Shropshire is not a personalguarantor of any alleged debt owed to [Custom Interiors] by Inn-Way , Inc., a Tennessee corporation which prev iou sly f ile d a C hap ter 7 Ban kru ptc y; That the defendant Bob Shropshire is entitled to a judgment in his favor and that this case should be dismissed on the merits.

Our review of thetrial court’s judgment 1 is governed by rule 13(d) of the Tennessee Rules of Appellate Proce

dure, which prov

ides that, in civil actions, the appellate court’s review of the trial court’s finding s of fact

“shall be de novo upo n th e rec ord of t he t ria l co urt , acc omp ani ed b y a presumpt ion of t he correctness of the finding, u

nless the prepond

erance of the e

vidence is otherwise.” Tenn. R. App. P. 13(d). Under this standard, “[w]here theissue for decision depends
on the determination of the credibility of witnesses,” this court recognizes that “the trial court is the bes t judge of the credibility” and that “its findings of credibility are entitled to great weight” on appeal. Tenn-Tex Properties v. Brownell-Electro, Inc. , 778 S.W.2d 423, 426 (T enn. 1989). This
court d efers to the trial court’s findings of credibility “because the trial court alone has the opportunity

to observe the appearance and the demeanor of the witnesses.” Id . Accordingly , this court will affirm the trial court’s judgment unless the evidence preponderates against the trial court’s findings or unless the trial court has erred in its application of the law. See Dailey v. Bateman , 937 S.W.2d 927, 930 (Tenn. Ct. App. 1996).

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Applying the foregoing standard, we affirm the trial court’s final judgment entered in favor of Robert Shropshire. The only significant factual di spute in this case was the issue of whether Shropshire signed

the Acknowledgement

form containing the guaranty languag e. Shropshire’s wife of twenty-two years, Bonnie Shropshire, testified unequivocally that her husband’s signature did not appear on the Acknowledg

ement form and tha

t, in any eve

nt, he would not hav

e agreed to pe

rsonally guarantee Inn- Way’ s debts . Altho

ugh Ga ry Jo n es contradicted this testimony, the trial court apparently

resolved this credibility issue in favor of Shropshire. As the fact-finder in this non-jury trial, the trial court was required to resolve any credibility issues, and on appeal, this court is required to place great weight on the trial court’s decision. After carefully reviewing the

record, we conclude that the evidence does not

preponderate against the

trial court’s findings that Custom Interiors failed to carry its burden of proof and that Robert Shropshire was not the personal guarantor of Inn-Way ’s debts to Custom Interiors.

The trial court’s judgment is affirmed , and this cause is remanded for further p roceedings consis t ent with this opinion. Costs of this appeal ar

e taxed to the appel

lant, Custom Inte

riors & Sup ply C omp any, Inc. , fo r wh ich exe cut ion may i ssu e if nece ssa ry.