1 The trial court viewed Attorney Mark Moore’s Motion to Dis miss as a Motion for Summary Judgment un der

Tenness ee Rul es of

Civi l Proce dure 56. 

### IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE Februar y 7, 20 03 Session TRIPLE ROCK, LLC d/b/a COMMERCIAL TEN, ET AL 

### . v.

A.C. RAINEY, ET AL 

### . Appeal from the Chancery Court for Davidson County No. 98-1372-III Ellen Hobbs Lyle, Chancellor

No. M2000-01115-COA-R3-CV - Filed June 10, 2003

Triple Rock LL C, d/b/a Commercial Ten, Perry Dale, and Earl H. Young, Jr., sued A.C. Rainey and others for damages allege dly resulting fr om the Defendants’ misappro priation, conversion, or negligent handling of mo ney s a llegedly

owed to the limited liability company . The trial court granted partial summary

judgment in favor of Defendant, Attorney Mark Moore, onhis Motion to Dismiss for failure to state a claim. Then, upon Plaintiffs’ Motion for Summary Judgmentand the response of the remaining Defendants there to, the trial court entered summary judgment in favor of the Defendants, A.C. Rainey , Miller Kimbrough, MGK Re al ty, and Mary Sny

der. From these two orders Pl aintiffsappeal. We affir m. Tenn. R. App. P. 3 Appeal as of Right ; Judgment of the Chancery Court Affirmed

W IL LI AM B. C AIN , J., delivered the opinion of the court, in which B EN H. C ANT RELL , P.J., M.S., and W. F RANK B ROWN , II

I, S P . J., joined.

Thomas J. Drake, Jr., Nashville, Ten nessee, for the a

ppellant , Tripple

Ro ck, LLC d/b/a Commercial Ten, Perry D ale, and Earl Young, Jr.

John I. Ha

rris, I II , Nashvill e, Tenne sse e, for the appellees, Albert C. Rainey , Miller Kimbrough, MGK Realt

y Se rvices, Inc ., Gary

Lufk in and Q- Change

Ltd., LL C.
Jaimee S. Wilson, Murfreesboro, Tennessee, for the appellee, Mark Moor e.
OPINION

This appe al comes to the Court upon review of the grant of two motions for summary judgmen t. 1 “Since our inquiry involves pure ly a question

of law, no pr

esumption

of corr ectness-2-

attaches to the lower court’s judgment, and our task is confined to revie wing the record

to determine whether the requirements of Tenn. R. Civ. P. 56 have been met. Cowden v. Sovran Bank/Central South , 816 S.W.2d 741, 744 (Tenn. 1991).” Bain v. W ells , 936 S.W.2d 618, 622 (Tenn. 1997); Tenn. R. App. P. 13; see also P lanters Gi n Co. v. Fe dera l Com

press & W

arehouse Co., Inc., et al ., 78 S.W.3d 885, 889 (Tenn. 2002). The standard of review is well settled. Th is Court reviews the record de novo to deter

mine firs t whether

any genuine issue of

materia l facts e xist, and seco nd whether the Defendant is entitled

to judgment as a matter

of law. A s has bee

n noted by

our supre me court, summary judgme

nt may be granted

to a non-movant. See Thomas v. Transport Insurance Co. , 532 S. W.2d 2 63, 266 (T enn. 1976 ). The re ndering court, ho wever, must take m eticulou s care t

o determine first tha

t the mova

nt had a f ull and fa ir opportuni

ty to meet the proposition that there are
no genuine issues of material fact and sec ond, that the non-mova nt is entitled to judgm

ent as a matter of law. Ibid . If, on de novo review, this Court finds a genu ine issue of mater ial fact , by

necessity the Defendant is not entitled to a judgment as a matter of law. If no genuine

issue of material fact exists, then it fa

lls upon thisCourt to de cide the legal c onclusion s de novo to determine whether the Defend ant was so

entitled t o summary

judgmen t.

The first summary judgme ntdismissed Triple Rock’s claim of negligence against Attorney Mark Moore. The sec ond summar y ju dgment d

ismissed Tr

iple Rock’ s claims a

gainst A. C. Ra in ey, Miller Kimbroug

h, MGK Rea

lty a nd Mary Snyd er. The majority of Triple Rock’s c laims arise out of two real estate transactions conducted primarily by A.C. Rainey . Triple Rock ’s clai m again st Attorney Mark Moor

e arises out of one of these transactions where Mr. Moore, asattorney for the seller, acted as closing agent on a sale of certain real

propert y in Rutherfo rd County . In a

ddition to these two claim s, Triple Roc

k also alleged tha

t A.C. Raine

y br eached his fiduc iary

duty as a member of the member-managed limited liability company by

failing to contribute equally to the profit and loss of said company a

nd for failing to account

for the f unds alle gedly

misappro priated in these real estate transactions. After unsuccessfully arguing aga

inst Mark Moore ’s motion, the plaintiff’s sought summary judgment against the remaining De fendants. The Defendants, A.C. Rainey , et al., urged the trial court to cons ider its a uthority under Rul e 56 of the

Tenness ee Rules o f Civil Procedure and award summary judgment in favor of

the non-mov ing Defendants. From the trial court’s orders o f dismissa l as to Attorney

Mark Moore and summary judgment as to the remaining Defend ants, Tri

ple Rock a

ppeals.

I. THE SU MM ARY JU DGM ENT IN FAVOR OF THE NON-MOVANTS, A.C. RAI NEY, MIL LER G. K IMBR OUG H, M GK R EALT Y, S ER VICE S, INC. , GA RY LU FKIN AND QCHANGE LTD., L

LC.

Whatfollows a

re the undisputed f

acts concerning

the summar

y ju dgmentsentere d in this
case.
A. The rel ation ship betwe en Tri ple Ro ck LLC, A.C . Rain ey and Mil ler Ki mbrou gh

A.C. Raine y, Earl Young and Perry D ale formed Triple Rock LL C on July 27, 1995. The Company was to engage in the business of buying, selling , managing, leasing, broke ring and-3-

investing in real estate properties and such other related business as the members would agree upon. In parti cular, the op erati ng agreem ent pr ovid ed the follo wing:

5. Duration - The Comp any shall comm

ence op eration

on July 27, 1995, and shall continue for

an indefinite period or otherwise terminate as here in provided. 6. Cap ital - The initial capital of the Company shall be $ 3,000. 00

. Each Member

agree s to contribu

te cash o r proper ty a t an agr eed valu ation as f

ollows: Member Amount Percent Earl Harold Young, Jr. see schedule A 3 3.3 % Albert Carl Rainey, Jr. see schedule A 33. 3 % Perry Da le, Jr. see schedule A 3 3. 3 % 7. Contribution of Additional Capital - The Members shall co ntrib ute additio nal cap ital that they may deem to be necessary

to the operation of the Company in the following amounts:

_____________________________________

__________________________________________________________________ 8. Salaries : - No member shall receive a salary unless otherwise agreed upon by the Membe

rs. 9. Loans by Members - If any Member shall advance

any money s to the Company in excess of the Capital contributed as se tforth above, the amount of the
mo ne ys so adva nce d shall be considered as a loan to the Company and shall bear intere st a t the rate

of eigh t perce nt (8%) u ntil repa id and sha

ll have pr efere nce in liquidatio n over ca

pital acc ount bala

nces. 10. Profits and Losses - The net profits, losses an d surpl us of the Company shall be divided in proportion to owner ship inter est of the Members

. Any salary pai d pursuant to paragraph 8 shall be considered an expense of the busine s s in arriving at ne

t profit or loss. 11. Management

- The Mem

bers sha ll partic ipate in

the management of the Company ’s busine ss . No twithstanding anything herein to the contrary , Earl Harold Young, Jr. shall be responsible for the day -to-day ope rations of the Co mp an y. Earl Harold Young, Jr. shallbe designated as the Chief Manag er of the Company a nd Perry Dale, Jr. s hall serv e as Secr etary until such

time as the

y r esign f rom their positions o

r as othe rwise de termined by t he Membe

rs.

. . . . 16. Limitations on Member s’ Power s/Limitation of L iability - N o Member s hall, with out the ma jority vote of th

e other M embers:

. . . . (c) Make, e xecute or deliver any assignment for the benefit of creditors or any bond, confessions of judgment , chattel m ortgag e, deed , guar

antee, i ndemnity-4-

bond, surety bond, or contr act to sell or

contract of sale

of all or substantially all the pr op er ty o f t he Co mp an y. Subsequent

to the original organization of this LLC, the business re lationships between the three members began

to deteriorate. On August 14, 1997, A.C. Rainey caused the following letter to be delivered to Earl Young and Perry Dale:

Re: My

resignation as an officer

and/or D irector

of Triple Rock, Inc. and LLC d/b/aComme

rcia l Ten (t he Compan

y) and the tr

ansfer of my affiliate broker’s license.
Dear Perry

and Ed:

After much thoug

ht, I h ave dec ided that

it is in the b est inter

est of my se lf, th e Company and both of y ou for me to resign any office I cur

rently hold with the Company and to tra

nsfer my affilia te broke r’s license

to another firm effective August 18, 1997. A s I’m

sure y ou both und

erstand , real e state companies and affiliations come and go and I stron gly feel that it is time for me to seek other opportuni ties.

I will remain as a stockholder in the Corporation and as a member i n the LL C for meantime, and as such stockholder/member I will remain in touch with both of y ou regarding the fina ncial sta tu s of the Company. As we ha ve discussed, any commissions earned

while I ha ve been affilia ted with the Company

will rema in with the Co mp an y, at

lea st unt il th e in deb ted nes s of th e Co mp any t o ot her s i s re ti red . In the event the indebtedness is retired, we can then sit down to discuss the affairsand fu tu re of th e C om pa ny.

I will advise you on where I am transferr

ing my license when

that decision is made. I wish both of you and the Company the best of luck in future endeavors. Don’t hesitate to contact me if y ou have any questions regarding this matter.
During hi s a ff

il ia ti on wi th Tr ip le Ro ck , A .C . R ai ne y b ega n working on a purchase of rea l propert y in Rutherford County on behalf of Triple Rock’s client, CMC, LLC, from Tom Hog shead. Also in the cou

rse of hi s affilia

tion with Tr

iple Rock, Rainey

began work on a

le ase between QChange, Ltd. and Nippe

rs Corners.

On December

3, 1997, A.C. Rainey

faxed the following

note to B ert Fer

rell at MG K Realty Services, Inc.:

Bert: The Commiss ion chec ks on the H ogshea

d - Matrix sa

le that co mes to this side of the sale should be 40% Com

mercial Ten, 40% MGK Realt

y Service s, 20% Fo lk Jordan – Mary Sny

der.-5-

Bert we would like

for this to

be three separa te checks. Thank s ACR

This facsimile was thenforwarded to Attorney Mark Moore

for the purposes of drafting the settlement

statement executed March 12, 1998 by rep res ent ati ves of C MC , LLC and Tom Hogshead, and for the drawing of the checks to Commercial Ten, MGK Realty Services and Folk Jordan.

At the time of the closing of the Rutherford County prope rty transaction, Triple Rock owed Libba Rainey , A.C. Rainey’s wife, a total of $21,500.00, said sum representing two demand notes executed by T riple Roc k with Libba Rainey . A.C. Rainey endorse d a check in the amount of $1,600.00 from Commercial Ten to his wife, Libba Rainey , allegedly in satisfaction of a portion of Triple Rock’s debt. In exchange for that endorsement, Libba Raine y execut ed a receip t for those funds. Likewise, $3,100.00 in commission resulting from the Q-Change lease wa s endorsedby A .C. Rainey on behalf of Commercial Ten to Libba Rainey . Libba

Rainey executed anothe

r receipt which further adjusted the outstanding debt downward accordingly . After

determin ing that the commis

sions heretofore thought due Triple Rock wer e thus directe d to Li

bba Raine y, t he Plaintif

fs filed s uit agains tA.C. Rainey for c onversion of the $3,100.00 in commissions resul ting fr om th e Q-Ch ange lease and the $4,000 .00 in commission that A.C. Rainey caused to be pa id to Miller Kimbrough, Ma ry S nyd er an d e ve nt ua ll y hi s w if e, Lib ba Ra in ey.

For his part, Miller Kimbrough began work as a n agent for Triple Rock in 1996. Though not
a member of the member-manage d LL C, Mr. Kimbrough’s license as a real e state ag ent listed his affiliation w ith T riple Rock, LLC. The rec ord be fore us shows that i n Jun e 1997 Mr. Ki mbrou gh changed his affiliation to establi sh MGK Realty Service s, Inc. I t also appears from the record that Mr. Rainey

moved his affiliation to MGK Realty while re maining a member of

Triple Roc

k, LL C. With regar

d to the co mplaint ag ain st Mr. R ainey, the Plaintiff soug ht summary judgment on the following is sues: 1) wh ether Ra iney had conv erted c ommission du e from the Rutherfo rd County sale; 2) whether Rainey

had converted

the commission from the Q-Change lease; and 3) Whether Rainey proper

ly shared in the prof

it and loss of the LL

C. At this point, it is important to note that the Plaintiffs claimed no breach of the operating a greement. L

ikewise, they proved no damage s resulting from the assignment of the $4,700.00 in commissionallegedly converted. At

their core, the claims of

the Plainti ffs are

that Mr . Rainey

imp roperly de

livered into the hands of others $4,000.00 due under the Rutherford County sale commission and $3,100.00 due from the Q-Change, Ltd. lease. As for Miller Kimbrough and MGK Realt

y Se rvices, Inc ., the sam

e reaso ning ap

plies. Each of these

two Defe

ndants, a ccordin g to the Pl aintiffs , “improp erly ” rece ived $1,6 00.00 in commission s from the

Rutherfo rd County sale. Sai d the cour

t:

The Court has reviewed therecord on this issue, including theOperating Agree ment of the limited liability company and the releva

nt statutory provisions, which are identif ied in the defendants’ reply brief. Based upon the record a nd applicab l e statutes the Court finds, as a matter of law, that there was no written ag reement among the members of the limited liability company concerning compulsory contributions of additional capital. The Court therefore finds, as a matter of law, that Ra in ey, as a member

of the limited liabil

ity c ompany , has no pe

rsonal lia bility to the-6-

company or the other members for any portion of the operating expenses or losses of th e l im it ed li ab il it y co mp an y. Finall y, plaintiff

s seek a j udgmen

t again st Miller K

imbrough. Base d upon th e record, the Court

finds as a matter of law that Kimbrough, and through him, MGK Realty Services, Inc., was e

ntitled to and did receive the appropr iate amou nt of commissions on the Hogshead transaction and further that K imbro ugh is not liabl e under the doctrine of quantum m eruit to the pla intiffs. Based upon the foregoing, the Court finds as a matter of

law that there are no genuine issues of material fact with respect to the issues in this action and that the defenda nts, althoug

h they are the nonmovan

ts, are entitled

to summary judgment a

t this time in

their fa vor as a matter of law. See, Thomas v. Transport Insuranc e Co. , 532 S.W.2d 263, 2 66 (Tenn . 1976). Accordin g ly, all claim s again st defen dants Miller Kimbrough and against MGK Realty Services, I nc., are

dismissed with prejudice. Fu rthermore, all claims against A.C. Rainey , with the exception of the claim set forth in Paragraph 3 of the complaint (relating to Q-Change of Nashville),
are dismissed with prejudice. As to the claims which are hereby dismissed, the Court fin ds that these claims are distinct from the issues remaining in this action an d thereforethat there is no just reason for delay and ente rs final j udgmen

t as to thes e claims pursuant to Tennessee Rules of Civil Procedure 54.02.

B. The Natu

re of the Claim

It is importa

nt to note th at the Pla

intiffs’ claims ar

e for co nversion . To estab lish a prima facie case of conversion, the plaintiff must show an appropriation of property to the defendants’ own
use in exclusion or defiance of the plaintiff owners pre sent possessory rig hts. Barger v. Webb , 216 Tenn. 275, 278, 391 S.W.2d 664, 665 (1965); Lance Products, Inc. v. Commerce Union Bank , 764 S.W.2d 207, 211 (Tenn. Ct. App. 1988).

The dra fters of the Resta tement pla

ce a finer point o n this inter ferenc e and excl

usion: (1) Conversion is an intentional exercise of dominion or control over a chattel which
so seriously

interfe res with t he righ t of anoth er to con trol it tha t the acto r may justly be requi red to pa y the other t

he full va lue of the chattel. (2) In determining the seriousness of the interfere nce and the justice of requiring the actor to pay the full va

lue, the f ollowing factor s are impo

rtant: (a) the extent and duration of the actor’s exercise of dominion or contr ol; (b) the acto

r’s inten t to asser t a righ t in fact inconsiste

nt with the other ’s righ

t of contr ol; (c) the actor’s good faith; (d) the extent and

duration of the re sulting in

terfer ence with the other ’s righ

t of contr ol; (e) the harm done

to the cha

ttel; (f) the inconvenience and expense cause d to the other.-7-

Restatement (Second) of Torts § 222A (1965).

The curious nature of theLL C’s claims against member A.C. Rainey relies on the allegation that Mr. Rainey, in arr

anging the pay

out of the co mm issions in the Rutherford County sale, and endorsing the $3,100.00 check from the Q-Change le ase, applied these funds for his ow n use and benefit in exclusion of the rig hts o f the LL C and its members. The record before us contains admissions on behalf of the LL C and specifically by

member Perry

Dale th at Li bba Raine

y he ld notes against Triple Rock, LL C. It is also undisputed from the record that, if indeed Mary

Snyder and Miller Kimbrough worked for the Company , in referring and contributing the perfection

of the saleof the Ruth

erford County property, they

would indeed be owed the very percentages paid at Mr. Rainey’s direction. The record fails to disclose any appropriation of any

portion of the $7,100.00 claimedby Triple Rock, for Ra iney’s own use or

benefit. Furthermore, it is undisputed that Trip le Rock received full value of the commission dollars paid toward the note held by Libba Rainey. The Plaintiffs simp ly arg ue that since Rainey disposed o f these c ommissions t o pay his wife, albeit a legitimate creditor, they

did not have the control that they w ould have preferred. Indeed, the on ly entities who are arguably

dispossessed of the $7,100.00 are the other creditors of the L LC, none of which are parties to this action. As a result, this Court finds no error in t he gran t of summary judgment against Plaintiffs on conversion. There is no genuine dispute that Mr. Rainey acte d as an agent of the limited liability com pany d/b/a C ommercial Ten. There may be a dispute as to the nature and extent of Rainey’s actual authority but for the purpose s of the Rutherford County Sale and the Nippers C o rne rs Lease there can be no dispute that Rainey was cloaked with the apparent authority of the agent for CMC, et al. and consequently an agent for

Triple Rock d/b/a Commercial Ten. As an agent with the authority to enter into agreements on behalf o f his principal, Rainey also had the authority nece ssary to eff ect his principal’s purpose. This inc ludes compe nsating those agentswho accompl

ished the refer ral to Commercial Ten. Since those agents rece ived commissions
as directed by Ra

iney, none of

those a gents acted with the requisite intent to satisfy a claim for conversion.

II. CAUSE OF ACTIO N AGAI NST MARK MO ORE

The Plaintiffs’ claim agains t Ma rk Moore began as a bare legal conclusion, i.e. “Attorney Mark Moore improperly pa id commissions to MGK Realty Services and Folk Jordan, whic h commissions were due to Commercial Ten and is liable to Commercial Ten in the amount of $4,000.00.” In re sponse to Attorney Moore’ s Motion to Dismiss filed on June 5, 1998, said Motion being suppo rted b y an affida vit an d ther efore c onsi dered a s a Mot ion fo r Sum mary Jud gm en t, Plai ntiff s asse rted t he fol lowi ng:

Mark Moore, attorney, in Dec ember of 1997, improperly paid portions of the
com mission to MGK Rea lty S ervice s and to Folk Jordan, aiding A .C. Rainey in converting those funds from Commercial Ten. Mark Moorealso gave a check made pay able to Co mm er [c i] al Te n, to A. C. Ra in ey, however, A.C. Rainey at the time was not affiliated with Commer[ci]al Ten. This action sounds in tort, for conversion.-8-

Prior to th e e nt ry of

an order on Defendant Moore’s Motion to Dismiss, the Plaintiffs obtained permission to amend their Complaint.

In the Amended

Compl aint file d on August 14, 199 8, the following isaverre d as a cla im against Moore:

A ttorney Mark Moore was closing age nt for a transaction involving Tom Hogshead as seller and CMC, LL

C, as buyer. The

transaction consisted of

the sale of real es tate in Ru therford County, by contract. Attorney

Mark Moore received fun ds related

to closing

the sale of the pr operty , and issued a commiss ion chec k to MGK Realty Servicesin the amount of $1,600.00 andto Folk Jordan in the amount of $800.00. The contract provided for commission of $8,000.00 to be paid in equal parts, $4,000.00

each, to Sims Realty

and Commercial Te n. (See Exhibit “D”) Attorney [M]ark Moor

e had a d

uty to all par

ties to condu ct the closing of the transaction according to the contract between the parties, and did no t use rea sonable
care in clo sing t he sal e. Att orney Mark Moore close d the t ransac tion by using a contract which was not duly executed and complete. Further, Attorney Mark Moore didnot have d

irection from the parties to the contract to change pay ment of commission. MGK Realty Service s and Folk Jordan were strangers to the transaction. In the alternative, the Plaintiffs allege that Attorney Mark Moore conspired withA.C. Rainey in conver ting the commis sion to MGK Realty Service s and Fol

k Jordan. At all times material, Attorney Ma rk Moore knew or should have known that Commercial Ten was t

o be paid $4,000.00 in commission, that Commercial Ten was l o cated in Davidson County, and Attorney Mark Moore knew that A.C. Rainey , or MGK Realty, of Nashville, Te

nnessee, was not authorized to, but neverth eless sent instructions to pay the commission of $4 ,000.00, not all to Commercial Ten, but $1,600.00 to MGK Realty and $800.00 to Folk Jordan. The Plaintiffs seek $2,400.00 in damages from Attorney Mark Moore.

As a result, Plaintiff

s’ concl usory allega tion in their ori ginal c omplaint me tamorpho sed into
a claim of s imple negligenc e due to Mark Moore’sallege d failure to close th

e Rutherf ord County transaction accord ing to the con tractua l papersbefore

him. They

specific ally

allege in their AmendedComplaint that the contract under which Attorney Moo re was tooperate required distribution of $4,000.00 in commission to Triple Rock d/b/a Commercial Ten.

The parties presented the trial court with two v e rsions of the contract for the sale of rea l pr op er ty. The Pla

intiffs’ v ersion of

the conta

ct for the sale of th

e Rutherf ord County

propert y provided “Sims Real

tors, Auc tioneer s, LL

C is to split

the commission 50/50 with Commercial Ten with each broker to receive $4,000.00.”

This contr

act was a ttached to the af fidavit of Perry Dale, wh ich state s, in pert

inent par t:-9- That A.C. Rainey was af

filiated with Commer[ci]al Ten as a real estate a gent, and while affiliated with Commer[ci]al Ten, was involved in the saleof prope rty in RutherfordCo un ty, between Tom [H]ogshead and CMC, LL C. A copy of the Contract for sale of Real E state

is attached hereto as exhibit “A”. Commer[ci]al Ten
wa s t o h av e r ec ei ve d a po rt io n o f t he co mm is si on in ag re em en t w it h A .C . R ai ne y.
The contract is denomina ted as a c ontract

of sale b etween

Tom Hogs head an d CMC, L LC. In the affidavits provided by the Plaintiffs there is no showing that any one from Triple Rock other than Mr. Raine

y de alt with this particular transaction. Despite the assertion in Mr. Dale’s affida vit that Mr. Raine

y no longer repres ented Comm

ercial Ten or its a

lias, Triple Rock

LL C, at the time of closing of the Rutherford County tra nsaction, no one, other than Mr . Rainey, had informe d Mr. Moore of any of the ste ps he wasto take to enforce the clause requiring Sims Realty , a third p arty to the agreement, to convey 50% of the commission to Commercial Ten. This fac t is intere sting insofar as Commercial Ten would not be entitled to any of the commission without Mr. Rainey ’s effortson the sale, and on Commercial Ten’s behalf. Mr. Moore, i n the aff idavit supportin g his motion, denied any know l edge of the Plaintiff’s version of the written contract until after the transaction ha d a lr ea dy closed. He alleged that he dealt exclusively with A.C. Rainey. Plaintiffs presen ted no evide nce di rectl y contradi cting t his ex clusi ve deal ing.

On appeal, the Plaintiffs argue that the existence of two contracts for sale create a genuine issue of fact material to the question of whether Mark Moore co mmitted “c lear an d palpabl e negligence.” Gray v. Boyle Investment Co. , 803 S.W.2d 678 (Tenn. Ct. App. 1990). They argue that in light of the Western Section’s decision in Gray , this Court should reverse the trial court’s order dismissing their claim. Gray involved an attorney w ho, having received money from the purchasers of real pr operty in connection with

closing , failed

to inform t

he purch asers th at the pr

operty was in foreclosureand took

no corrective measures to protect the purc hasers’ interest. The closing attorney puton no proof

in the tria

l court to r

ebut the p laintiff

s’ allegations. To the contrary , he relied upon the plaintiff

s’ failur e to pres ent exper

t proof of the appli cable st

andard o f care . Said the c ourt: “It appears to this cou

rt that when an att

o r ney handling a real e state tra

nsaction takes money

from a purchaser to remit to a seller and, at the time of closing, knows that the property is in foreclosure, butfails to advise purchasers of the foreclosure and takes no corrective measure s to prote ct the purchas ers’ investment, the attorney is g uilty of clear a

nd palpable negligence.” Gray , 803 S.W.2d at 683-84.

The question remains, however, for the purposes of surviving a motion to dismiss: what constitutes clear and

palpable negligence? Understandably , in light of the fact-sensitive nature of the claim, there is no hard and fast rule. Nonetheless, the phra se “clear and palpable negligence” appears throughout this state’s case law. See Lazy Seven Coal Sales, Inc. v. Stone & Hinds, PC , 813 S.W.2d 400 at 406 (Te

nn. 1991) ; see also Cl

eckner v. Dale , 719 S.W.2d 535, 540 (Tenn. Ct. App. 1986).

We find the following to be a proper clarifica tion of the exception sought by t he Plaintif

fs.4 The standard of care appli cable t o a parti cular case wi ll v ary dependi ng upon the t ype o f legal activ ity inv olved. The standard of care appli cable t o civi l li tig ators may not be t he s ame standard applicable to lawyers representing the buy ers i n a r eal esta te transact ion or to lawyers draf

ting complicated test amentary inst ruments. The varied natur e of th e practi ce of law underscore s the nec essity of ex pert p roo f intende d to a cqu aint the find er of fac t with the appli cable st andard in e ach case.
-10-

The la wye r standard of care, except in the most extreme cases , should b e provedus in g e xp er t t es ti mo ny. 4 Likewise, whether the lawyer’s conduct in a given
case departe d from the

applica ble stand ard shoul d also be proved by expert testimony.

Cleckner v. Dale , 719 S.W.2d 535, 540 (Tenn. C t. App. 1986)(emphasis added)(footnote in original).

The overarching question, however, is whethe r Mark Moore’s actions constitute any breach of duty, much less a brea

ch of such an extreme

nature t hat exper t proof of the duty or brea ch is
un ne ce ss ar y. The undisputed fac ts before the trial court establish that there was a disag reement betweenA.C. Raine

y a nd Triple Rock as to

how the commissions from the sale of real property were to have be en split am

ong the agentsrepres enting t

hoseparties. This disput

e did not a

rise until after Moore had closed th e transaction and disbursed the commissions as A.C. Rainey had advised. Viewing the fac ts in a ligh t most favorable to the Plaintiffs, A.C. Rainey was still a member of the LLC and at

the very least wa s cloake d with app arent a uthority ; Commerc ial Ten ha d no conta

ct with Mark M oore o ther t han th rough A.C. Raine y. A .C. Rainey had g

iven certain instructions to Mark Moore regarding the

commissions to be paid; the contracts themselves varied as to pay ee and amount of commission. And Moore’s version of the contract which was used at the closing contained none of the lang uage a ppearin g in the Pl aintiff’ s version . Nonethe less, the closing statement signed by the purchaser and the seller noted the portions and the payees of the $8,000.00 commission as Miller Kimbro ugh, Com mercial Ten and F

olk Jordan. It be ars notin g at this point that t he claim a

gainst Attorney Mark Moore is not for breach of contract . Likewise, the actual terms of the contract are notat issue a s they

would be in a claim for

breach. The only

question is whether Mark Moore acted
unreaso nably

under these admittedly ske tchy circumsta

nces . Wefind that there is no genuine issue of material fact without expert testimony fr om the P laintiff

s establishing the duty a

nd breach as required under Cleckner , 719 S.W.2d 535, 540 (Tenn. Ct. App. 1986) and Lazy Seven , 813 S.W.2d 400 at 406. We further find that no breach of duty

occurred under the undisputed facts as pre sented. The summary judgment for Mark Moore was proper.

III. ACTIONS AGAI

NST RAI NEY FOR B REACH OF

FID UCIA

RY DUTY AND FAI

LURE TO CONTRI

BUTE TO

THE PROFI

TS AND L

OSS.

Plaintiffs argue

that the su

mmary judgmen t of the tr ial cour t was not pr

oper on th

eir claim for breach of fiduc iary

duty and failure to contribute equally to loss and profit. I n this Court’s review of the rec ord, we n ote that e ach one of the me

mbers of the limited

liability comp any had c aus ed money to be borrowed from that member’s spouse. Whi le there are nume rous cre ditors of t

he LL C,
none of those creditors are party to this action. Likewise, the L LC and the remaining membe rs do notdispute that they rec eived from Libba Rainey a receipt for the full value of the notes pai d and can-11-

show no lo ss su ffered thereb y. It can be argu ed as Mr. Young stated in his deposition, that the payment over of t he $7,100 .00 to Libba

Rain ey might ha

ve worked a preferenc e in her favor as against all of the remaining creditors. No present injury has been shown.

As for continuing contribu tions o f additional capital, the LL C’s operating agreeme

nt as quoted above pr

ovides fo r no addit

ional ca pital con tributions . Pursuan

t to Tenne sse e Cod e Annotatedsection 48-26-101(a)(3), the oper ating a greem ent, if one exists, is r

equired to list those continuing contributions. In keeping with the concept of limited liability as evidenc ed in Tennessee Code Annotated section 48-26-10 1, et seq. , absent a ny s uch requ

irement, an individ

ual membe

r is shielded from liab ility

for cont i nuing contributions for losses. The fictional entity of the limited liability company is the par

ty responsible for these

obligations. As a result

the trial court’s summary judgment as to breach of fiduciary duty was proper

. The judgment of the court is affirmed. The cause is remanded for fur

t her proceedings not inconsistentwith this opinion. Costs are taxed against the Appellants for which execution may issue.

___________________________________ WILL IAM B. CAI

N, JUDGE