1

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

November 20, 2014 Session

BORLA PERFORMANCE INDUSTRIES, INC. v. UNIVERSAL TOOL AND 

ENGINEERING, INC.

Appeal from the Circuit Court for Washington County

No. 27603 Thomas J. Seeley, Judge

No. E2014-00192-COA-R3-CV-FILED-MAY 26, 2015

Borla Performance Industries, Inc. (Borla) entered into two contracts with Universal Tool 

and Engineering, Inc. (UTE), by the terms of which UTE was to repair and refurbish six 

of Borla‟s pipe bending machines, which machines are used in Borla‟s business of 

designing and manufacturing automobile exhaust systems. Borla later sued UTE for 

breach of contract, negligent misrepresentation, and violation of the Tennessee Consumer 

Protection Act (TCPA). Borla alleged that as a result of UTE‟s failure to timely repair 

and deliver the machines, which are also known as “benders,” Borla incurred lost profits 

in the amount of $486,166. After a four-day bench trial, the court dismissed Borla‟s 

negligent misrepresentation and TCPA claims; the court did grant Borla a judgment for

$11,839.98 on its breach of contract claim. The trial court held that Borla failed to prove 

that it incurred lost profits as a result of a breach of contract by UTE. Borla appeals the 

trial court‟s judgment denying its claims for lost profits. Borla also appeals the court‟s 

judgment dismissing the TCPA claim. UTE appeals the judgment against it for breach of 

contract. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court

Affirmed; Case Remanded

CHARLES D. SUSANO, JR., C.J., delivered the opinion of the court, in which JOHN W.

MCCLARTY and THOMAS R. FRIERSON, II, JJ., joined.

Mark S. Dessauer, Kingsport, Tennessee, for the appellant, Borla Performance Industries, 

Inc. 
2

Arthur M. Fowler and Arthur M. Fowler, III, Johnson City, Tennessee, for the appellee, 

Universal Tool and Engineering, Inc.

OPINION

I.

In 2006, Borla decided to relocate its Michigan and California facilities to a new 

plant in Johnson City. In manufacturing vehicle exhaust systems, Borla uses pipe 

bending machines. The benders are roughly 20 feet long, four to five feet wide, four feet 

tall, and weigh about 8,000 pounds. In October of 2007, UTE sent its sales 

representative, Bill Swartz, to Borla‟s California plant to evaluate three benders. On 

October 27, 2007, Swartz sent an estimate to Borla for the cost of repairing and 

refurbishing these benders. Borla issued a purchase order on May 2, 2008 for upgrading 

the three benders, describing the work as follows:

Upgrade Tube Bending Machine: Replace all existing or 

missing original controller[s] with new UTE Windows XP 

based controllers. Dismantle and Replace Electrical 

components using existing electrical panels where feasible. 

Add new servo[]s to carriage. Convert chain drive to rack 

and pinion. Add new remote operator ped[e]stal and console. 

Add new safety mats (01 per machine). Paint (brush and roll) 

each machine to match original colors. Black oxide tool 

holders. 

The purchase order also stated “estimated completion 3-4 weeks” and listed the “date 

required” as May 30, 2008. The price for the repair work on the three benders was set at

$115,000. Borla shipped the three benders (the California benders) to UTE‟s plant in 

Johnson City, and they arrived on April 17, 2008. 

At an earlier time, in January of 2008, Borla entered into another contract with 

UTE to service three benders that were located in Michigan. One of these benders was 

determined to be in such poor condition that it was not economically feasible to salvage 

it, so UTE was ultimately required to do work on only two of the Michigan benders (the 

Michigan benders). Borla shipped the Michigan benders to UTE‟s Johnson City plant in 

January 2008. A purchase order for the work was issued on January 16, 2008, and 

revised on March 12, 2008. The revised purchase order states: “Borla Owned Machinery 

to be Evaluated and serviced for minor repairs. All Machinery to be cleaned[,] stripped[,] 

and re-painted.” Regarding one of the two Michigan benders, the purchase order further 

specifies that work “Includes Touch Screen and Clips, repair and replace exposed wiring 
3

and frayed hoses, and Labor. This machine to be Delivered to Tennessee Borla Facility 

in 2 weeks.” The “date required” on the purchase orders was listed as “TO BE 

DETERMINED.” (Capitalization in original.) 

UTE worked on the Michigan Benders and had them ready to ship to Borla‟s 

Tennessee plant on April 15, 2008. Borla picked up the Michigan benders on April 21, 

2008. According to Borla, the Michigan benders were able to power up, but “they would 

not operate such that they could be used by Borla in production.” Borla hired James 

Garen to come to its Tennessee plant, get the Michigan benders in working order, and 

train Borla‟s workers to operate the benders. Garen performed that work in early June of 

2008, and the Michigan benders were operational on June 9, 2008. Garen charged Borla 

$11,839.98 for his work. 

On June 12, 2008, Borla visited the UTE plant to inspect the California benders. 

Borla requested UTE to do a full evaluation of the California benders and report back as 

to what was needed to get them fully operational. On June 17, Borla authorized UTE to 

do the additional work suggested by UTE. After this work was completed in July of 

2008, the parties discovered that the three-inch cylinders on the California benders were 

not big enough to bend the pipe that Borla needed in order to make parts. Borla then 

authorized UTE to install four-inch cylinders. On October 28, 2008, one of the 

California benders was delivered to the Borla plant, inspected, and found acceptable by 

Borla. 

Frustration mounted on both sides. UTE complained that Borla frequently took 

parts off the California benders, or “cannibalized” them, while they were at UTE‟s plant,1

in order to allow Borla‟s other benders to function. UTE alleged that Borla took the 

“servo valves” from the two remaining California benders, which were essential parts, 

and that Borla did not provide the tooling necessary to properly test the benders. Borla 

expressed frustration at the delays in repairing the benders and UTE‟s perceived inability 

to get them in functioning order. Borla paid only $75,000 of the $115,000 invoice for 

UTE‟s work on the California benders. UTE kept possession of the two remaining

California benders for the next several years. Borla did not provide the servo valves 

allegedly necessary to make the benders work until it was ordered to do so by the trial 

court.

Borla filed its complaint on May 4, 2009. UTE answered and counterclaimed for 

breach of contract. A bench trial began on August 15, 2013, and ended on August 20, 

2013. In support of its claim for lost profit damages, Borla presented the testimony of its 

chief financial officer, Allan Stoner. He explained that Borla‟s plan for smoothly 

 

1 Apparently, the distance between UTE‟s facility and Borla‟s plant in Johnson City was only 

about ten miles. 
4

transitioning its manufacturing facilities from California to Tennessee depended upon 

Borla having the Michigan benders operational and timely delivered to Borla‟s Johnson 

City plant so Borla could train its employees on the benders. Borla ceased production at

its California plant around July 1, 2008. Stoner summarized Borla‟s claim as follows:

had we had those machines here earlier from Michigan, we 

would have been able to train in the controlled environment, 

and then those employees that were trained would have been 

able to provide the bending ‒ bent materials earlier providing 

additional capacity and – or if we had those three machines 

from California at all able to provide additional capacity, we 

would have been able to add an amount of product that we 

could have sold to our customers.

Stoner testified that if everything had gone according to Borla‟s timetable and plan, Borla 

would have been able to sell an additional one million dollars‟ worth of products. After 

deducting the estimated costs of producing the additional parts, Stoner opined that a total 

of $486,166 in lost profits was “attributable to UTE‟s failure to perform under the . . . 

bending machine contracts related to Michigan and California.” 

UTE argued that it had fully and timely performed its duties under the contracts, 

and that any delays in getting the benders repaired as agreed were the result of Borla‟s 

actions. On the lost profits claim, UTE presented the expert testimony of Richard Ray, 

who concluded that Borla‟s “damages calculation is speculative and clouded by factors 

other than the actions of [UTE].” Ray opined that, while it was undisputed that Borla lost 

a great deal of money in 2008 ‒ a total of $3,403,736 according to Stoner‟s 2008 income 

statement ‒ the losses were likely caused by other factors, including the general sharp 

economic downturn, the initially inefficient operation of the new plant, and unrelated 

labor issues. Ray testified that Stoner‟s estimate of $1,000,000 additional revenue was 

speculative and unfounded in his view.

At the end of trial, the court dismissed Borla‟s claims for negligent 

misrepresentation and violation of the TCPA, finding that Borla failed to satisfy its 

burden of proof to establish those claims. The court delivered a memorandum opinion in 

which it found and held as follows:

Let me talk about the two Michigan benders first and the 

contract there, the purchase order from Borla says Tube 

Bender Evaluation and that‟s what was required of UTE. We 

know that those benders were delivered to Borla on April 21, 

2008, and I know there was testimony concerning the fact 
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they didn‟t work well or did not work, and . . . there was 

testimony that as far as UTE was concerned they weren‟t 

transported correctly. They were picked up in a rollback 

fashion and they weren‟t delivered on a ‒ I think they called it 

an air truck. In any event, Mr. Garen was called and came 

from California to get the machines in operation and also to 

train the employees, and he did that, and he was out of there 

by June 9, 2008. His bill was $11,839.98.

I think the proof is sufficient that some more work needed to 

be done. There may have been loose wiring and other minor 

things that were basically damaged in transport, but the Court 

feels there‟s sufficient proof to find in favor of Borla on that 

and will find that UTE is responsible to Borla for $11,839.98.

With respect to the two California benders still in possession 

of UTE, . . . I do believe that the cannibalization did occur. 

I‟m going to find the proof is sufficient to find that those 

machines do not have the two servo valves.

[T]his is what I‟m going to order: That Borla supply the two 

servo valves needed for those two California benders. If there 

are any other parts missing, UTE is responsible for replacing 

those parts to make it operable. And after getting the servo 

valves and any other parts that UTE has to get, if the 

machine[s are] up and running, then Borla shall pay the 

remainder due on the contract. No interest, no nothing. If 

after Borla supplies the two servo valves, . . . the two 

machines are not working, they‟re not up and running, then 

they‟ll be returned to Borla as is and Borla will be refunded 

the difference between the cost of fixing one machine, which 

was somewhere in the neighborhood of $38,000, $39,000 –

that will be deducted from the $75,000 and UTE will be 

responsible for reimbursing Borla the difference. As I said, if 

the machines are up and running and the two servo valves are 

supplied by Borla, Borla will owe the rest of the money, the 

$40,000.

. . . I do think basically UTE has a lien on them until they‟re 

paid. But again, they‟re not going to get paid until they‟re up 
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and running and that basically means the servo valves and 

any other parts that are needed on them.

The parties complied with the trial court‟s order after trial. Borla provided the 

servo valves, and after the benders were tested, it paid UTE the balance due on the 

contract and took possession of the California benders. This aspect of the trial court‟s 

judgment ‒ the disposition of the California benders ‒ has not been appealed. Regarding 

the claim for lost profits, the trial court held as follows:

What‟s significant to me is, of course, Borla has the burden of 

proof on that issue. Borla contends that they weren‟t really 

subject to the downturn that occurred starting in 2007 and 

took a sharp decline in 2008, and I think we all know that that 

decline was felt to a greater extent possibly by the auto 

industry than most other industries, and I understand Borla‟s 

position that they have a niche market and they don‟t think 

that that decline would affect them as much. I don‟t really 

know, but I know there was a general decline across the 

country in 2008. It was a sharp decline. I know that plant 

relocations cost money and I know Mr. Ray talked about the 

decline in California sales. . . . [I]t seems like the best proof 

of lost sales, are sales that Borla lost because they couldn‟t 

meet the demand, cancelled sales that they say they lost ‒ and 

that‟s basically what they said they lost as a result of the 

lateness in these machines going on line.

There‟s no documentation of any lost sale; there‟s no 

documentation of any cancelled sale. There‟s no

documentation of any order that could not be filled, and that‟s 

the best evidence, it seems, to show this court that there really 

were some lost sales. It‟s pointed out by UTE the three 

benders that remained in California were here and on line 

sometime in the summer.2 They were here in July 2008, and

they had the two Michigan benders working at that time. 

Also, the problem Borla had with training local workers had 

to adversely affect Borla‟s reaching full capacity production. 

That was a significant problem that contributed to lost profits. 

 

2 Borla had at least three other benders at its California plant that were not involved in the UTE 

contract and were shipped to the new Tennessee plant as part of the transition.
7

I find basically that with respect to lost profits that Plaintiff 

has not proved with reasonable certainty that the decline in 

their gross revenues and net profit between 2007 and 2008 

was attributable to any actions of UTE. There‟s no question 

they sustained a loss between 2007 and 2008, but the proof is 

lacking that that loss occurred as a result of the actions of 

UTE in delaying getting these machines on line. The Court‟s 

going to find there‟s no loss of profits by Borla.

(Footnote added.) Borla timely filed a notice of appeal.

II.

Borla raises the following issues, as quoted from its brief:

1. Did the trial court err in concluding that Borla failed to 

meet its burden of proof and in failing to award Borla lost 

profit damages?

2. Did the trial court err in concluding that Borla failed to 

meet its burden of proof on its claim under the Tennessee 

Consumer Protection Act and in dismissing such claim?

UTE raises the following additional issue:

Did the trial court err in holding that UTE breached the 

contract relating to the Michigan benders?

III.

Our review of this non-jury case is de novo upon the record of the proceedings 

below with a presumption of correctness as to the trial court‟s factual findings, a 

presumption we must honor unless the evidence preponderates against those findings. 

Tenn. R. App. P. 13(d). “When the resolution of an issue depends upon the credibility of 

witnesses, „[t]he weight, faith, and credit to be given to any witness‟s testimony lies in 

the first instance with the trier of fact, and the credibility accorded will be given great 

weight by the appellate court.‟ ” In re Conservatorship of Tate, No. M2010-01904-

COA-R3-CV, 2011 WL 6935342 at *3 (Tenn. Ct. App. M.S., filed Dec. 29, 2011). We 

review the trial court‟s conclusions of law de novo with no presumption of correctness. 

Oakes v. Oakes, 235 S.W.3d 152, 156 (Tenn. Ct. App. 2007).
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IV.

A.

Borla argues that the trial court erred in refusing to award it lost profits as a part of 

its damages for breach of contract. As both parties and the trial court recognized, this 

Court set forth the principles governing a claim for lost profits damages in Waggoner 

Motors, Inc. v. Waverly Church of Christ, 159 S.W.3d 42, 58-59 (Tenn. Ct. App. 2004): 

[A]n injured party may recover lost anticipated profits when 

their nature and occurrence have been established with 

reasonable certainty. Baker v. Hooper, 50 S.W.3d 463, 470 

(Tenn. Ct. App. 2001); Tire Shredders, Inc. v. ERM–North 

Cent., Inc., 15 S.W.3d 849, 857 (Tenn. Ct. App. 1999); 1 

RECOVERY OF DAMAGES FOR LOST PROFITS § 1.4, at 9.

The reasonable certainty standard applies chiefly to the 

evidence regarding the existence of damages. 1 RECOVERY 

OF DAMAGES FOR LOST PROFITS § 1.6, at 17. It is a flexible 

standard that permits the courts to take the particular facts of 

each case into consideration. The existence of damages has 

been proven with reasonable certainty when the mind of a 

prudently impartial person is satisfied that the injured party 

has been damaged. 

Once an injured party proves that it has been damaged, the 

amount of the damages need not be proved with certainty or 

mathematical precision. McClain v. Kimbrough Constr. Co., 

806 S.W.2d 194, 200 (Tenn. Ct. App. 1990); see also

Authentic Architectural Millworks, Inc. v. SCM Group 

USA, Inc., 262 Ga. App. 826, 586 S.E.2d 726, 731 (2003). 

After the fact of damages ha[s] been established, less 

certainty is required with regard to the amount of the 

damages. The amount of lost profits damages may be based 

on estimates. While definite proof regarding the amount of 

damages is desirable as far as it is reasonably possible, it is 

even more desirable that an injured party not be deprived of 

compensation merely because it cannot prove the extent of 

the harm suffered with complete certainty. Restatement 

(Second) of Torts § 912 cmt. a (1979). This principle is 

based on the policy that defendants should not be permitted to 
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complain about the lack of exactness or precision in the proof 

regarding the amount of damages when their wrongdoing 

created the damages in the first place. Walgreen Co. v. 

Walton, 16 Tenn. App. 213, 223, 64 S.W.2d 44, 50 (1932); 1 

RECOVERY OF DAMAGES FOR LOST PROFITS § 5.2, at 385.

An award for lost profits damages depends on whether the 

evidence provides a satisfactory basis for estimating what the 

injured party‟s probable earnings and expenses would have 

been had the wrongdoing not occurred. Since lost profits can 

rarely be computed down to the last penny, the evidence 

needed to support an award for lost profits need only provide 

a reasonable or rational basis for calculating what the lost 

profits would have been. 

Anticipated future profits may be reasonably ascertained from 

the past volume of the injured party‟s business and from other 

provable data relevant to probable future sales. The best 

evidence of lost profits is a comparison of the experience of 

the injured party‟s own business before and after the 

wrongdoing. 

Damages for lost profits must be based on net profits, not on 

gross revenues or on gross profits. In cases involving the loss 

of expected profits from the sale of goods, the expected net 

profits equals the expected revenue from the sale of the goods 

minus the cost of the goods sold minus all of the seller‟s 

expenses fairly attributable to the sale of the goods. Thus, 

persons seeking to recover for lost expected profits must 

prove not only the probable income from the sale of the goods 

but also the expenses they would have incurred to produce 

that income.

(Footnotes and internal citations omitted.)

The trial court quoted Waggoner Motors and discussed and applied the principles 

quoted above in deciding the lost profits issue. In support of its assertion that the trial 

court erred in refusing to award lost profits, Borla makes the following argument, as 

quoted from its brief:
10

The Trial Court held Borla to too high or an erroneous legal 

standard for lost profit damages by requiring Borla to provide 

documentation of lost or cancelled sales as the “best 

evidence” of lost profits when, under applicable law, Borla 

was only required to provide reasonably certain evidence of 

its lost profits. There is no requirement under Tennessee law 

that lost profits be proven with the “best evidence”, as held by 

the Trial Court.

We believe this argument is based upon a misinterpretation of the trial court‟s statements 

and its holding. The trial court did not hold that the “best evidence” of lost profits must 

be presented to recover such damages. Nor did the court base its ruling entirely on 

Borla‟s failure to present documentation of any lost or cancelled sales in 2008. The trial 

court observed that “the best proof of lost sales, are sales that Borla lost because they

couldn‟t meet the demand, cancelled sales that they say they lost . . . as a result of the 

lateness in these machines going on line.” Borla‟s failure to provide such proof was an 

important factor, but it was not the only factor supporting the trial court‟s decision, nor 

was it necessarily the dispositive factor. The trial court‟s decision is supported by a 

number of additional factors, as further discussed below. 

As already noted, Borla‟s theory was that the delays in getting the Michigan and 

California benders repaired, shipped to its new Tennessee plant, and ready for 

production, caused it to lose sales and resulted in lost or cancelled orders for automobile 

parts. In support of this theory, CFO Stoner testified:

The plan that Borla had was that when production ceased in 

California that the Tennessee facility had to be up and . . . 

producing product at volume to satisfy the customer demand 

and to maintain the revenue stream. Therefore, we had to be

training the [Tennessee] employees on benders and the other 

skill sets prior to having to go live production in order to have 

them experienced enough that they can provide product for 

the customers.

* * *

We did not have the capacity, as I said, for two reasons. The 

fact that we did not get the two Michigan benders early 

enough to start training so that the Tennessee employees were 

up to speed when California shut down. Or if we would have 

had the three California benders to us, we would have been 
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able to train on that because they were supposed to be there. 

The original plan was that they would be there. . . the end of

May. Had we had those machines there, we would have been 

also training ‒ ramping up on those, and we would have had 

the ability to build product on that. And . . . if we‟d been able 

to move those up two months, or on the three California 

machines having had them when they were scheduled, we 

would have had them as incremental revenue producing 

machines. We‟re saying that $1 million of revenue was 

possible for ‒ if we had had those events.

* * *

Q: So . . . the amount . . . of lost profit damages, $486,166 

that in your opinion are attributable to UTE‟s failure to 

perform under the two . . . bending machine contracts related 

to Michigan and California?

A: Yes.

UTE‟s expert, Ray, testified as follows in support of his opinion that Stoner‟s 

“damages calculation is speculative and clouded by factors other than the actions of” 

UTE:

[I]n evaluating the fact of damages, I have three situations . . . 

that really cause me concern as to whether there has been 

proof with reasonable certainty. Those three are: the general

economic downturn experienced in the U.S.A. in the 

automotive industry. The second is this . . . whole

overarching issue of the plant relocation, and specifically the 

effect of the failure of [Borla] to execute its relocation 

objective. That‟s number two. And the third point that 

clouds the fact of damages proof is the calculated loss of the 

California customer base. 

* * *

I took a look at the Bureau of Economic Affairs report for 

value add[ed] for gross domestic product for 2008 versus 

2007 in the . . . automobiles and parts industry. That industry 

suffered a 33 percent reduction in sales in 2008 compared to 
12

2007. That‟s in line with the reduction in sales that Borla

experienced from 2008 to 2007. So we have the issue of a

general economic downturn that has impact in a properly

calculated “but for” loss determination. One has to take into

consideration the general economic downturn.

Regarding Stoner‟s estimation of one million dollars in lost sales, Ray stated:

I don‟t know how the $1 million came up. That‟s my

problem is I didn‟t see objective basis for the $1 million

revenue.

* * *

Q: And would you agree with me that Mr. Stoner‟s analysis is 

a reasonable one?

A: No.

Q: What about a rational one?

A: Relative to $1 million lost profit -- lost revenue?

Q: Yes.

A: I think it‟s speculative.

THE COURT: Well, your whole position is, isn‟t it, that the 

fact of actual damages resulting from any act of UTE has not 

been proven with reasonable certainty?

THE WITNESS: Within ‒ yes, Your Honor, within

reasonable certainty within the cloud of the overarching

issues that we described earlier. . . . [W]hen we look at the

calculation, I just ‒ I cannot subscribe to starting with: Let‟s 

start with a million dollars and figure out what the lost profits 

would be on that. . . . As far as a calculation is concerned, it 

has to be . . . based with convincing best available proof as to 

the rationale behind the million dollars. Where did the 

million dollars come from? I‟m used to seeing product 

numbers, customers, volumes and prices.
13

Regarding documentation, or lack thereof, of any of Borla‟s alleged lost sales, 

CFO Stoner testified as follows:

Q: Now, during the months of May, June, July, August and 

September of 2008 were there customer orders that Borla was 

unable to fill?

A: Yes.

Q: And why could those orders not be filled?

A: Those orders could not be filled because Borla did not 

have the ability to meet the production in ‒ starting in July.

We could not meet the production because we did not have 

the bending capacity to provide enough volume to provide

that tubing to the rest of the final assembly welders and make

that finished goods. So customers were contacting us. We

were unable to provide that, so they either cancelled orders or 

did not place orders.

* * *

[B]ecause we did not have the capacity to meet the customers 

when they called and when they say, “I need a product,” if we 

do not have that product available and can confirm we can 

make that product within their time line of when they need it, 

they will not place an order and they will, in fact, go to our 

competitors for the product.

Q: Okay. You never furnished us with a list of those

cancelled orders, have you?

A: I was never asked to.

Q: All right, sir. The ‒ and you don‟t have a list? You didn‟t 

get a list? You didn‟t compile a list of the cancelled orders to 

come up with this million dollars of lost profits you‟ve 

testified about, have you?

A: No, I did not.
14

In reaching its conclusion that Borla did “not prove[] with reasonable certainty 

that the decline in their gross revenues and net profit between 2007 and 2008 was 

attributable to any actions of UTE,” the trial court quite rationally observed that Borla 

would have been well served to provide documentation of the lost or cancelled sales that 

it alleged were the cause of its financial losses in 2008. The trial court did not state that 

such proof was required to recover lost profits. Neither has this Court made such a 

statement; but we did observe in Waggoner Motors that “definite proof regarding the 

amount of damages is desirable as far as it is reasonably possible,” and that “[p]arties 

seeking to recover lost profits damages would be well advised to provide the best 

available proof as to the amount of their loss that the particular situation permits.” 159 

S.W.3d at 58 n.29. 

Moreover, the trial court did not find that UTE breached the contract for the 

California benders. UTE, in support of its argument that any delays in getting the 

California benders were caused by Borla‟s actions, presented the testimony of its design 

engineer, Matt Raby, who stated:

Q: During [UTE‟s] . . . repair or retrofitting these machines, 

did you-all need to do testing on the machines to make sure 

that they would work properly?

A: Certainly. Yes, sir.

Q: And . . . where did you get the tooling and the piping to do 

that testing?

A: That was Borla‟s tooling and pipe.

Q: Okay. And did you have difficulty getting tooling and 

pipe from Borla to do the testing as you were repairing the 

machines?

A: Yes, sir. . . . I remember sometimes we would get tooling 

and have it for an hour and then somebody would come and 

get it because they needed it for production at the facility. So, 

yes. And then we may not hear from them for a couple of 

weeks or days or ‒ so yes, it was a difficult process.

Q: Are you aware of any parts on the California machines 

being removed and taken to the Borla plant?
15

A: Yes, sir.

Q: And how often did that happen?

A: Several times.

Q: And when they had that -- the components of the bending 

machines, did that interfere with your ability to repair them?

A: 100 percent.

* * *

Q: When the machine ‒ California machine was picked up by 

Borla and taken to its plant, were the other two machines also 

ready to be picked up?

A: I don‟t recall. They were – they‟d had parts taken from 

them and some of the bend arm mechanisms and some of the

hydraulic control system to repair machines that were on their

floor. . . . I don‟t recall at the time whether the components 

had been taken from the machines and they were operational 

because they . . . were many months that they sat there with 

the parts that had been taken and not replaced by them.

THE COURT: Who ‒ who took the parts?

THE WITNESS: Borla employees.

THE COURT: Okay. . . . I've heard the term cannibalize. Is

that ‒

THE WITNESS: Accurate, yes, sir.

THE COURT: Is that what you‟re talking about?

THE WITNESS: Uh-huh.

THE COURT: Yes?
16

THE WITNESS: It happens in the industry. If you have 

machines that are idle, you go to repair a machine that you 

need to be functioning, you‟ll take parts from an idle machine 

and it sits aside and it‟s forgotten about.

* * *

Q: And you really have no knowledge, do you, why the other 

two California machines were not delivered to Borla?

A: Sure I do. They ‒ they didn‟t work. There were parts 

missing from the machine that had been taken to their

production facility and placed on others.

Robert Rasnake, a UTE machinist who did some of the work on the California benders, 

similarly testified as follows:

Q: [T]ell the Court what you know about the Borla employees 

coming and taking parts off the California machines and 

taking them back to Borla.

A: We were trying to get the three machines running and two 

of them, they kept coming and robbing different parts off, and 

we could ‒ we got them to a point that we could – you know, 

we needed the parts and we could never get those parts back.

Q: Okay. And did that slow down your-all‟s work?

A: On two of the machines, yes.

Q: [W]hat about the tooling? Did ‒ could you get the 

necessary tooling when you needed it from Borla to do the 

work?

A: They would bring us tooling and they would be right

behind with another guy to pick it up saying they needed that

to run production, and they would bring it by that evening or

that night and then be there first thing the next morning to

pick the tooling up again saying they needed it for production

again. It was very hard to get tooling available to actually do 

a runoff.
17

Q: Now, . . . describe the tooling that was brought.

A: A lot of times it was mix matched. It was wore out. 

Sometimes it would be decent tooling, but we wouldn‟t even 

‒ we would be starting to put it on the machine and they 

would come by and take it off and have to take it back to the 

plant.

Q: Now, the ‒ was one of the pieces of equipment that was 

taken called a servo valve?

A: Yes, sir.

Q: And what does a servo valve do?

A: It controls the bend arm. It‟s a – it‟s basically an 

electronic hydraulic valve that controls the bend arm.

Q: Now, without that can you operate the machine?

A: No, sir.

Q: How many of those servos did Borla come and take from 

those machines?

A: Two of them.

The trial court found that “the cannibalization did occur” and ordered that “Borla supply 

the two servo valves needed for those two California benders.” The trial court was 

prepared to enforce the California benders contract, but did not hold that either party 

breached it. Consequently, because UTE did not breach the California benders contract, 

it cannot be held liable for Borla‟s lost profits allegedly due to the delays in getting the 

California benders fixed and in production. 

CFO Stoner testified that the alleged $486,166 in lost profits “are attributable to 

UTE‟s failure to perform under the two . . . bending machine contracts related to 

Michigan and California,” but when he was asked, “in coming up with these damages,

lost profit that you‟ve come up with, you did not segregate the two contracts, the 

Michigan benders contract and the California benders contract, did you?”, he answered, 

“I did not.” This failure to separate damages attributable to the alleged breach of the 
18

Michigan contract, vis-à-vis the California contract, introduces another variable of 

significant uncertainty into Borla‟s lost profits claim. 

The trial court also found that Borla‟s unrelated labor problems at its new 

Tennessee plant likely contributed as a cause of its lost profits. The evidence does not 

preponderate against this finding. UTE presented the testimony of John Thompson, a 

bureau chief with the Johnson City Press, who in March of 2009 interviewed Alexander 

Borla, CEO and owner of Borla Performance Industries, Inc., for a newspaper article. 

Thompson testified:

Q: Did [CEO Borla] talk to you about a couple of crises that 

ha[d] occurred at the plant?

A: Yes.

Q: And what were those crises?

A: I remember him talking about the work force that he

initially received was not adequate and he had to step into the 

matter and pick more capable workers.

* * *

Q: [A]s far as the work force issue, does that refresh your 

memory?

A: Yes. I did have some memories from those that did need 

to be refreshed. I remember him talk ‒ talking about that and 

it was kind of distressing to me to hear that East Tennessee 

workers were not up to ‒ up to par for him.

Q: And so what did he say he did?

A: He found better workers.

Q: Okay. He ‒ I think you say in [the newspaper article] he 

cleaned house.

A: Yes.

Alexander Borla testified as follows regarding the labor problems at the startup plant:
19

Q: Now, after you started operations here, . . . did you have 

to come in personally and clean house and start rehiring?

A: We had ‒ we had a greater turnover in the beginning

which is fairly customary and usual in all companies starting

in a new area. I hired a general manager who was familiar

with the area and I wasn‟t. He was familiar with the customs

and the work force and the culture, and he basically improved

our employee base significantly. 

Q: Did you ever have to come in and clean house?

A: He‟s the one who cleaned house, sir.

Q: All right, sir. And he did that in 2008, didn‟t he?

A: Yes, sir.

Q: All right, sir. In the . . . first group of employees that you 

got, they were sent over by the economic development 

people, [weren‟t] they?

A: Some were, yes, sir.

Q: And they couldn‟t meet your production levels, could 

they?

A: They could not meet our attendance level, sir.

* * *

Q: And you mentioned that with certain employees or certain 

personnel you had to clean house ‒ used the word “clean 

house.” I don‟t know if those were your words or Mr. 

Fowler‟s, but did you mean that you let everybody go?

A: No, sir. We probably had a 20, 25 percent turnover.

In order to prevail on its claim for lost profits, Borla had the burden to present 

evidence that “provides a satisfactory basis for estimating what [its] probable earnings 
20

and expenses would have been had the wrongdoing not occurred.” Waggoner Motors, 

159 S.W.3d at 58-59. The trial court held that Borla failed to prove with reasonable 

certainty that its lost profits were caused by UTE‟s breach, finding that other factors 

likely caused the losses, including (1) the sharp general economic downturn in 2008; (2) 

Borla‟s labor problems and costs associated with its plant relocation; and (3) Borla‟s 

actions that resulted in delays getting the California benders repaired and in production. 

The trial court also heard, and apparently credited, Ray‟s expert testimony opining that 

the estimate of Borla‟s lost sales revenue was unreasonable and speculative. Finally, the 

court considered as a factor Borla‟s failure to provide documentary evidence of any lost 

sales. Considering the totality of these factors and the circumstances as a whole, the 

evidence does not preponderate against the trial court‟s judgment declining to award 

Borla lost profits as part of its damages. 

B.

We next address UTE‟s assertion that the trial court erred by finding it breached 

the Michigan benders contract. As already stated, the purchase order for the work on the 

Michigan benders states: “Borla Owned Machinery to be Evaluated and serviced for 

minor repairs. All Machinery to be cleaned[,] stripped[,] and re-painted,” and further 

specifies that work on one of the benders “Includes Touch Screen and Clips, repair and 

replace exposed wiring and frayed hoses, and Labor.” UTE engineer Raby testified as 

follows about the Michigan benders agreement:

Q: [W]hat was UTE to do on the first two machines that 

came in from Michigan?

A: I think it‟s best summed up with three words, repair and 

replace. Our understanding ‒ my understanding of this

contract when it came into our shop was to make a pit stop for

these machines. They were to be functioning machines. We 

were to make them pretty because they were going into the 

new facility, so I included a paint job. Inspect them for minor

mechanical wear. Look them over. If there were any major

mechanical wear and identify it and then take action after

consulting with them. Replace hydraulic hoses that may have

worn with age. Inspect for any wiring damage and replace if

necessary. And it was more of a maintenance pit stop.

* * *
21

[W]e were given those machines as working machines. We 

were ‒ we were essentially painting. I equate it to putting 

your car in the body shop for a paint job and then getting mad 

at them because your engine stopped. That‟s kind of how I 

feel that went down is that ‒ you know, it was a pit stop, look 

them over, make sure they‟re okay, paint them, get them 

ready to go on our floor. We‟re taking them out of

production here. We‟re going to stop them here for a couple

of weeks just to let you look them over and put them on our

floor. And that didn‟t turn out to be the case. They had some 

serious problems. Well, they had problems big enough that 

would keep them from going into production and I questioned 

whether they were in Michigan.

The trial court heard conflicting testimony about the condition of the Michigan benders 

when they arrived at the Borla plant on April 21, 2008. Tim Lovelady, a Borla employee, 

testified as follows:

Q: [A]fter their delivery, did the two [Michigan] bending

machines operate such that they could be used by Borla in

production?

A: No, sir.

Q: And what problems or deficiency were with the machines 

that precluded their use in production?

A: Basically, we just couldn‟t get them to run. We could get 

them to power up, but we couldn‟t get them to operate. That 

was fundamentally the problem with them. And then when 

we did get them to get them moving a little bit, we couldn‟t 

get them to repeat and so they were inoperable to us.

Q: What do you mean by repeat?

A: When the machine would bend a certain degree, it couldn‟t 

bend that same bend repeatedly. It may bend one at 90 

degree, the next time it may be, you know, 110 degrees or

less or something like that. It couldn‟t bend the same bend

over and over and over.
22

Q: And given the condition or the operation of the machines 

as you describe, were you able to train anybody to operate 

them?

A: No, sir.

Q: And did UTE send out any representative to work on the 

machines?

A: Yes, sir.

Q: Were they able to get them operational so you could put 

them in production?

A: No, sir.

* * *

Q: All right, sir. Now, after Mr. Garen came and finished 

training ‒

A: Yes, sir.

Q: ‒ and he left, those machines worked fine, didn‟t they?

A: Yes, sir.

Darrell Adams, a repair and maintenance technician for Borla, testified as follows:

Q: And were you present at Borla on 4/21/08 when the two 

machines arrived?

A: Yes.

Q: And do you recall any wires being loose on the machines?

A: No, sir.

Q: Do you recall any damage that had occurred in transit of 

the machines from UTE to Borla?
23

A: No, sir.

Q: And did you power up the machines?

A: Yes, sir.

Q: And after their delivery did the two machines operate such 

that they could be put in production?

A: No, sir.

Q: And what problems did you discover with the machines as 

to why they would not operate?

A: The double stack [bender] had a bad Y motor. The single

stack [bender] had some voltage problems to be adjusted.

* * *

Q: Could you take a look [at] the two Garen and company 

invoices. Were you present when Mr. Garen did his work on 

the two Michigan benders?

A: Yes, sir.

Q: And after he performed his work, was Borla able to use 

those two benders in production?

A: Yes, sir.

Finally, Alexander Borla testified as follows:

Q: [W]hat was intended by Borla with respect to requesting 

UTE to do a tube bender evaluation?

A: Basically to inspect them, repair them as necessary.

Q: Was there any time that any repair work . . . that UTE 

identified was necessary on these machines refused by Borla?
24

A: No. . . . as a matter of fact, we would encourage UTE to 

find more things wrong with the machine so they could repair 

more things [so] that we could rely on the machine to a 

greater degree on the floor.

Q: And if you could turn to . . . the two Garen Company 

invoices.

A: Yes.

Q: And the work that [Garen] describes in his notes on the

two invoices, did you consider that work to be within the

scope of the work you had requested UTE to perform on the

Michigan benders?

A: Yes. As the absence of this work prevented these

machines from working and we expected a fully working 

piece of equipment from UTE. Yes.

UTE did not dispute that the Michigan benders needed more work to properly 

function after they were delivered to the Borla plant. UTE‟s witnesses testified to the 

effect that the additional work needed was beyond the scope of its contract with Borla; 

that the repairs needed were relatively minor “tweaks” that did not take Garen long to fix; 

that some of the mechanical issues were caused by Borla‟s improper transportation of the 

benders; and that most of Garen‟s time was spent training Borla workers on the 

machines, not fixing them. The trial court resolved the conflicting testimony on this issue 

in Borla‟s favor, and found UTE liable for the amount charged by Garen for his work on 

the Michigan benders, $11,839.98. The evidence does not preponderate against the trial 

court‟s ruling regarding UTE‟s breach of the Michigan benders contract, and we affirm it.

C.

Borla argues that the trial court erred in dismissing its TCPA claim. As this Court 

has recently observed,

The Tennessee Consumer Protection Act, Tennessee Code 

Annotated Sections 47–18–101, et seq. (“TCPA”), prohibits, 

among other things, “unfair or deceptive acts or practices 

affecting the conduct of any trade or commerce.” Tenn. Code 

Ann. § 47–18–104(a). . . . A “deceptive” act or practice is 

“one that causes or tends to cause a consumer to believe what 
25

is false or that misleads or tends to mislead a consumer as a 

matter of fact.” Tucker v. Sierra Builders, 180 S.W.3d 109, 

116 (Tenn. Ct. App. 2005) (citations omitted). An act or 

practice may be deemed unfair if it “causes or is likely to 

cause substantial injury to consumers which is not reasonably 

avoidable by consumers themselves and not outweighed by 

countervailing benefits to consumers or to competition.” Id.

at 116-17 (citing 15 U.S.C. § 45(n)). Because the TCPA is 

remedial, courts have determined that it should be construed 

liberally in order to protect the consumer. Id. at 115. In 

order to recover under the TCPA, a plaintiff must prove: (1) 

that the defendant engaged in an unfair or deceptive act; and 

(2) that the defendant‟s conduct caused an “ascertainable loss 

of money or property. . . .” Id. (quoting Tenn. Code Ann. § 

47–18–109(a)(1)); see also Cloud Nine, L.L.C. v. Whaley, 

650 F.Supp.2d 789, 798 (E.D. Tenn. 2009) (“plaintiffs 

asserting claims under the [TCPA] are required to show that 

the defendant‟s wrongful conduct proximately caused their 

injury). . . .

Whether a particular representation or act is “unfair” or 

“deceptive,” within the meaning of the TCPA, is a question of 

fact, Id. at 116 (citation omitted), which we review de novo

upon the record with a presumption of correctness, unless the 

evidence preponderates otherwise. Tenn. R. App. P. 13(d).

Furthermore, when the resolution of an issue in a case 

depends upon the truthfulness of witnesses, the trial judge 

who has had the opportunity to observe the witnesses and 

their manner and demeanor while testifying is in a far better 

position than this Court to decide those issues.

Audio Visual Artistry v. Tanzer, 403 S.W.3d 789, 809-10 (Tenn. Ct. App. 2012). 

The trial court held as follows at the close of trial:

the Court‟s not going to find any negligent misrepresentation, 

nor am I going to find any violation of [the] Tennessee 

Consumer Protection Act. I think this is a breach of contract 

case. The damages would be approximately the same

whether it‟s negligent misrepresentation or as far as

consequential damages or compensatory damages, be the 
26

same under the [TCPA] without the penalties that the [TCPA]

has. But generally when you think about the [TCPA], you‟re 

talking about basically fraudulent or deceptive practices, and I 

don‟t find there‟s sufficient proof of any fraudulent or 

deceptive practices on behalf of . . . UTE. Of course, on all 

of those issues Borla has the burden of proof and I don‟t think 

you sustained the burden of proof with respect to negligent 

misrepresentation or a violation of the Tennessee Consumer 

Protection Act.

Borla argues that the trial court erred in its legal analysis, in that the TCPA “does not 

require proof of fraud nor is it coterminous with fraud or fraudulent conduct.” Borla 

asserts that the TCPA “is much broader than fraud[,] and a consumer under the TCPA 

can recover without meeting the burden of proof that is required for common law fraud,” 

citing Tucker v. Sierra Builders, wherein we stated, 

The scope of the TCPA is much broader than that of 

common-law fraud. Under the TCPA, a consumer can obtain 

recovery without having to meet the burden of proof that is 

required in common-law fraud cases, and the numerous 

defenses that are available to the defendant in a common-law 

fraud case are simply not available to the defendant in a 

TCPA case. Misrepresentations that would not be actionable 

as common-law fraud may nevertheless be actionable under 

the provisions of the little FTC acts, including the TCPA. 

Claims under the TCPA are not limited to misrepresentations 

that are fraudulent or willful. Smith v. Scott Lewis Chevrolet, 

Inc., 843 S.W.2d 9, 12–13 (Tenn. Ct. App. 1992). Instead, 

the TCPA applies to any act or practice that is unfair or 

deceptive to consumers. Tenn. Code Ann. §§ 47–18–104(a), 

–104(b)(27).

* * *

The concept of deceptiveness is a broader, more flexible 

standard of actionable merchant misconduct than the 

traditional remedy of common-law fraud. A deceptive act or 

practice is one that causes or tends to cause a consumer to 

believe what is false or that misleads or tends to mislead a 

consumer as to a matter of fact. Thus, for the purposes of the 
27

TCPA . . . the essence of deception is misleading consumers 

by a merchant‟s statements, silence, or actions.

180 S.W.3d 109, 115, 116 (Tenn. Ct. App. 2005) (footnotes and internal citations 

omitted).

As Tucker illustrates, Borla is obviously correct in its assertion that a TCPA claim 

is broader than a common-law fraud claim, and thus the trial court‟s statement that 

“generally when you think about the [TCPA], you‟re talking about basically fraudulent or

deceptive practices” was a bit loose in this regard. But we have carefully reviewed the 

record and have found no evidence of deceptive or misleading conduct on the part of 

UTE, and the court therefore correctly found no cause of action under the TCPA. Borla 

did not appeal the trial court‟s dismissal of its negligent misrepresentation claim, likely 

because there is no proof that any agent of UTE made any material or actionable 

misrepresentation. In its brief, Borla identifies several statements made by UTE 

employees that Borla says were unfair or misleading, which we quote: (1) “UTE claimed 

itself as a specialist with the ongoing ability to repair, rebuild and refurbish bending 

machines”; (2) “Nowhere did Mr. Raby state that he may have to consult outside expert 

advice or that UTE was not qualified to conduct all required work”; (3) “it was deceptive 

for UTE to represent deadlines when it could not knowingly deliver the services by the 

contractually agreed upon dates”; (4) UTE “never advised Borla that it was „impossible‟ 

to complete the work on the California benders by the end of May, 2008”; (5) “UTE 

stated to Borla on December 12, 2007 that „we‟ll take good care of your machines and 

will present all costs fairly.‟ ” None of these statements, taken either separately or 

together, is actionable under the TCPA. Assuming, arguendo, that these statements were 

made, they are not false, deceptive, misleading, or unfair; nor did they result in an 

ascertainable loss by Borla. See Morrison v. Allen, 338 S.W.3d 417, 440 (Tenn. 2011) 

(“A private cause of action under the TCPA is only available where a plaintiff can show 

“ascertainable loss of money or property . . . as a result of the use or employment by 

another person of an unfair or deceptive act or practice.”). 

V.

The judgment of the trial court is affirmed. Costs on appeal are assessed to the 

appellant, Borla Performance Industries, Inc. The case is remanded to the trial court for 

enforcement of the judgment and collection of costs assessed below.

____________________________________ 

CHARLES D. SUSANO, JR., CHIEF JUDGE