### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE June 24, 200 2 Session

GUY R. JENKINS, ET AL 

### . v. DAN GIBBS
Appeal from the Chancery Court for Knox County No. 142261-3 Sharon Bell, Chancellor FILED SEPTEMBER 5, 2002

No. E2001-01802-COA-R3-CV

After a dispute arose over the ownership of 1000 shares of stock in City Bonding

Company

(“City Bonding”), Guy Jenkins and Aubrey Allen Jenki ns (“Plaintiffs”) sued Dan Gibbs (“Defenda nt”)
see king a deter

mination a s to how man

y sh ares of

stock we re owne d by

the vari ous parti es. Gu y Jenkins also claimed Gibbs unlawfully p rocure d the bre ach of a

contract Guy

Jenkins had

with City Bondi ng. The Trial Court granted Gibbs summary judgment on the unlawful procurement of breach of contract claim. After a trial on theremaining issues, the Trial Court determined Gibbs owned 490 shares of stock, Guy Jenkins owned 255 shares, and the remaining 255 sha

res wer e unissue d. All parties appealed the Tria

l Court’s d

etermina tion with respect to ownership of

the stock. Guy Jenkins also appealed the gr

anti ng of sum mary judgment on his claim against Gibbs for unlawful procurement

of brea ch of cont ract . Wevacate the summary judgment granted to Gibbs and affirm the judg ment in all

other re spects.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Vacated in Part and Affirmed in Part; Case R emanded

.

D. M ICHAEL S WINEY , J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS , J., and J AMES C URWOOD W ITT , J R ., S P

. J., joined.

James S. MacDonald, Knoxville, Tennessee, for the Appellants Guy R. Jenkins and Aubrey

Allen Jenkins.

John A. L ucas, Kn oxville, Te

nnessee , for the

Appellee Dan Gibbs

.1 There is a di spute as to whet her Aubrey Allen Je nkins receiv ed any stoc k. Aubrey All en Jen kin s was a min or at all relev ant t imes and t here i s fur

ther di spute over

whether any stock he may hav e recei ved was eff ecti velytra nsf

erre d.
-2- OPINION Background

Plaintiffs filed this lawsuit seeking corporate recor ds and other

document s pertaining to City Bonding whic

h were in Gibbs’ control. Plaintiffs further claimed t here wa s a

dispute a s to the ownership of

the 1000 shares of stock in City Bonding and sought a declaratory

judgment asking the Trial Court to declare the ownership interests of the respective parties. The Trial Court dismissed the portion of the complaint seeking production of co rpor ate rec ords for failure to comply

with statutory requirements. An Amended Complaint was filed seeking essentia lly t he same r elief aswell
as setting forth a cause of action aga inst Gibbs based on Guy Jenkins’ claim that he ha d a contract withCity Bondin g for compensation in the amount of $1,139.24 per month and this contractual obligation was breached. Guy Jenkins claimed this was an unlawful proc urement of breach of contract by G ibbs in violation o f Tenn. Co de Ann. § 4 7-50-109 , thereb y e ntitling h im to trebl e damages.

Gibbs filed a motion for summary judg ment on the procurement of breach of contract claim. Gi bbs asser ted that on June 8, 1999, City Bonding adopted a resolution terminating the monthly payments it was making

on behalf of Guy Jenkins. The parties submitted affidavits and deposition testimony setting forth their ve rsion of the facts on this issue. The Trial Court granted Gibb’s motion for

summary judgme

nt on the procurement of breach of contra ct claim, leaving for trial the pr imary iss ue of t he own ershi p int erest s of th e respe ctive parti es in C ity Bondi ng.

At trial, the parties stipulatedCity Bonding wa s formed in 1982 and 1000 shares of stock were issued at that time, of whi ch Frank Harper rec eived 600 shares. The remaining 400 shares were issued to Joe Jenkins or to Joe Jenkins an d A ub re y Je nk in s j oi nt ly. 1 In January of 1984, the stock certificates were turned in and the stock w as reissued with Joe Jenkins recei vi ng 490 shares, Guy

Jenkins re ceiving

255 share s, and John Pollock receiving 255 shares. This is where any agreement between the pa rties ends.

Gibbs testifie d that in 19 85, Guy Jenkins ga

ve him 250 s hares of

stock in Cit

y Bondi ng, althoug

h no stock c ertific ate was e ver giv en to Gibb s and ther e is no documentation verifying this gift actually took plac e or that it was completed. Gibbs further claims he purchased 490 shares of stock from Joe Jenkins for $13,500.00 on January 3, 1986. Gibbs identified the cancelled check d ated Janua

ry 3, 1986, f

or $13,50 0, and als o identifi ed a nota tio n on the check which stated “ for four

hundred and ninet y sh ares of

City Bonding Company .” Since purchasing the stock, Gibbs has served as general mana ger of City Bonding taking

care of the day -to-day

operati ons. He began making a salary

of approximately eight hundred dollars per week sometime after this stock purchase. After purchasingthe 490 shares, Gibbs received advance s on his salary from City Bonding in order to pay

off money he

borrowed in order to purchase the stock. Gibbs claims Guy Jenkins was-3-

awareof this arrangement for pay ing off the money

Gibbs borrowed. Gibbs never heard any one claim Aubrey Allen Jenkins owned any sha res of stock, and he is not aware of any corporate records reflecting any owner ship interest on behalf of Aubrey Allen Jenkins. The first time Gibbs he ard anyone claim Aub

rey Allen Jenkins owned a

ny s t ockwas in 1999, and he heard this from Guy Jenkins’ attorney.

Part of t he day-to- day opera tions of City Bonding involved pre paring semi-annual financial statemen

ts on behalf of the shareholders and filing these statements and appearance bonds withvarious c ourts in

the counties in which City Bonding conducted business. Gibbs testified the documents filed with the Knox County Criminal Court since 1986 show Guy Jenkins owning 750 shares of stock and Gibbs owning the remaining 250 share s. Accord ing to Gib bs, Guy Jenkins had very little to do

with the da

y- to-day operati ons of City

Bonding. Gibbs stated when these financial statemen ts were fi rst prep ared, hi s owners hip intere st was limit ed to the 250 shares that had been givento him

and they we

re accurate. These same f

igures were just copied and used on later financial statements even though he had purchased the additional 490 shares.

Gibbs testi fied C ity Bondi ng paid approxima tely $1,500 pe r month on a

persona l note of Guy Jenkins. This payment continued to be made by City

Bonding up until the time the present lawsuit was filed. Gibbs stated in addition to the $1,500 per month, Guy Jenkins also rece ived cash at various times and City Bonding paid the majority of

the payments on a Me

rcedes owned by

Guy Jenkins. None of t

he pay ments made to Guy

Jenkins or to

Gibbs wer

e corpor ate stock dividend s. Throughout

City Bonding’s history , the co mpan y compensated of ficers and employ ees by pay ing some of their bank debts.

Att orney Jerome Templeton (“Templeton”) testified by way of deposition. Templeto n had nothing to do with the formation of City Bonding or the original issuance of stock. He

became involved with City Bonding whe n it was being acquired by Guy Jenkins. When asked if h e had occasion to inf

orm himself about

who owned how much stock, Templeton responded his recollection was vague but after looking a t his files he did have “something to do with that.” Templeton went
on to add he r

eally did not have any

independ ent rec ollection

of most of t

he matter s involved

with the corporation. During

his initial representation of City B onding, Templeton received a letter and other information from

Norman Williams (“Williams”), the attorney who repre sented City Bonding at the time of

incorpor ation. B ased on th

e informa tion conta

ined in thislett er, T empleton made
numerous handwritten note s at that t ime. There was a lengthy argument at trial over whether Williams’ letter and Templet on’s handw ri tt en no te s b as ed on th e l et te r c on st it ut ed he ar sa y. Plaintiff s’ counsel a

rgued it was a bus iness record and fell within the applicable hearsa y exception. Defend ants’ counsel disagreed for sever al reasons, one being Templeton’s handwritten notes were made well after the events described in the letter took plac e (i.e., when the stock was origina lly issued), and, therefore, were not made at or near the time of the e vent. Defendant’s counsel claimed Templeton had no persona l knowledge of th

e eventsdescrib ed in Willia ms’ letter because he was noteven involved in the corporate matters at that time. The Trial Court concluded this evidence was hearsay and did not constitute a business record.2 Other objections to ce rta in t est imony and t he admi ssi bil it y of exhi bit s wer e made on the same basis and were lik ewise r

uled i nadmissi ble hears ay by t he Trial Court

for t he reasons set f

orth above.
-4- Templeton also was questionedabout notes he made at a meeting in January of 1986 when stoc

k appare ntly was received by

Guy Jenkins. Templeton stated the stock was either given to Guy Jenkins or he paid for it. Templeton then a dded: “I don’t know about tha

t. . . . I can’t r ecall that, I don’t know that I

knew at the tim e.” The

Trial Cour

t again ruled thiswas inad

missible he ar sa y, and that

it did not qualify under the pa st recollection recorded exception because Te mpleton
never knew abo

ut the subj ect matte

r to beg in with. 2 Templeto n testifie d the stock composit ion in 1984 was Joe Jenkins 490 shares, Guy Jenkins 255 shares, and John Pollock 255 shares. Templeton later attempted to testify reg arding his handwritten notes setting forth the stock composition in later ye ars. When asked where these figures ca me from or why he

was writing them

down, Templeton responded

“I do not know.” He went on to add he did not know whether “it’s something tha t was done or whether it was something that I thought s hould

be done.” Templeton then pointed out he had no indepe

ndent re collecti on at all o n that matt er. Some o f this test

imony was likewise excluded. Guy Jenkins test

ified it wa s after t

his lawsuit was filed before he first learned Gibbs claimed to have purchased 490 shares of stock from Joe Jenkins. Guy Jenkins denied ever giving approval for Gibbs to us e b orrowe d corpor ate fund s to repa

y a persona l loan he made in or

der to purchas e the stock. Guy

Jenk ins wa s appr oached by his fat her to overs ee Cit y Bonding, and agreed to assist only if he (i.e. Guy Jenkins) had “full control.” According to Guy Jenkins, when the stock
was ini tially issued Frank Ha rper had 600 shares, and Joe and Aubrey Allen Jenkins joint l y controlled the other

400 share s. In

1984, all of the stock was reissued with 255 shares being owned by Gu y Jenkins, 255 shares being owned by John Pollock, and 490 shares being owned by Joe Jenkins. John Pollock t

hen turned in his stoc

k and the 2 55 share s becam e treasury shares. Guy Je nkins did not know his brother, Joe Jenkins, sold his 490 shares to Gibbs and has no per sona l knowl edge about that alleged transaction. According to Guy Jenkins, in January of 1 986, all the stockowners essentia

lly t urned in t heir stoc k and it wa s once ag ain reiss ued with th e new sto c k compositio n being : Guy Jenkins owning 550 share s, Gibbs owning 250 shares, and Aubrey Allen Jenkins owning 200 shares. Guy Jenkins testified he g ave Gibbs these 250 shares of stock.

The deposition of Aubrey Allen Jenkins was offered into evidence at trial. Aubrey Allen Jenkins was 19 yearsold at the time of his deposition. He first learned he supposed ly w as a stockholder

in City Bonding fr

om his uncle, Guy

Jenkins. He

learne d this abou

t a y ear bef

ore his deposition took place “but that was scratchy ”. He hear d more ab out his supp osed stock owners hip in the two months prior to his deposition. Aubr ey Allen Jenki n s testified he had no personal knowl edge about whether or not he ac tually

owned an y st ock in City Bonding, a

nd he has never seen a stock certificate evidencing his owne rship of stock.

Joe Jenkins also testified via deposition. Joe Jenkins is the brother of Guy Jenkins and father of Aubre y A llen Jenkins

. According to Joe Jenkins, in 1984 he owned 490 shares of stock, Guy Jenkins owned 255 shares, and John Pollock owned the remaining 255 shares. Joe Jenkins does notrecall h

is son Aubr

ey ever be ing a sha reholde r in City Bonding. Joe Jenkins stated he never put-5-

any stock in his son’s name and never saw a certificate of stock showing A ubrey as a n owner. Joe Jenkins cla

imed the f

irst time he ever heard any

thing about his son Aubrey owning any

stock was “[a]fter all this lawsuit started.” Joe Jenkins acknowledged he sold his 490 shares of stock to Dan Gibbs for $13,500.00.

John Walker (“Walker”) was called as an expert witness. Walker is a licensed attorney in Knoxville. Walker testified to his experience as an attorney handling corporate law matters. Walker testified the corporate records of City Bonding were “substantially incomplete,” but he reviewed what

records were

available including the corporate minute book, stock ce rtificates, and other records. H e also reviewed the depositions of Gibbs and the various members of the Jenkins fami ly. W alker testified the reconstructed stock transfe r ledger prepared by

counsel for Gibbs showing what Gibbs believed to be the stock ownership was reconstructed in a manner consistent withgenerally

accepted corporate law princ iples and procedu res. Walker also stated he questioned whether Aubrey

All en Jenkins ever had any interest in the stock. Walker based this conclusion primaril y upon the d

eposition s o f Aub rey Allen Jenkins and Joe Jenkins. Walker went on to add
even if Aubrey A

llen Jenkins did own stock, it was conve yed away by his father Joe Jenkins who had “full power and right to transfer the interest of his son in those shares.”

After a trial, the Trial Court issued its opinion as to the respec tive owne rship inte rests of the parties. After hearing fur ther argument, the Trial

Cou rt issued a Supplemental Opinion revising some of its initial findings. In the Supplemen

tal Opinio n, the Tri al Court f ound as fo llows:
(1) Phase one represents the ownership of six hundred (600) shares by M r. Harper, and four hundred shar es ownership between Joe Jenkins and Aubrey Allen Jenkins as of September, 1983.
(2) Phase two is the reissue to Joe Jenki ns of fourhundred ninety (490) shares, to Guy

Jenkins of two hundred, fifty- five (255) shares, and to John Pollock of two hundred , fifty -five (2 55) shar es in January, 1984.
(3) Respectfully, the Court ca nnot find by a preponde

rance of the evidenc e th at any of

the issua nce of sh ares in phase two came from any particula

r stock, j ust that it came from the pool of stock from phase one.
(4) The Court cannot, despite its earlier finding, deter mine that the shares of the then minor, Aub r ey Allen Jenkins, were conveye d away f

romhim w ithout authority, and cannot place a constructive trust on the shares in phase two.

The rea sons for t

his finding

are th at the th eory of constructive trust

was not ple ad nor ar

gued, a nd even if it had been,-6- ther e is no e vidence that the defendant had any knowledge of an adverse claim.
(5) Joe Jenkins so ld his four hundred, ninety (490) shares t

o the defendant in January, 1986 , thereb y ve sting ow nership in said stock in defendant.
(6) As to the two hundred, fifty sha res purportedly

transferred to the de fe nd an t b y Gu y Je nk in s i n a pp ro xi ma te ly J an ua ry, 1986, the Courtfinds that the transfer was intended as a gi ft, but that the gift failedfor want of delivery , so that Guy Jenkins remained owner of those shares.
(7) The remaining two hundred, fifty -five shares signed over to the corporation by

John Pollock have not been reissued, so that they are found to be unissued treasury shares.

Plaintiffs and Gibbs app eal the Trial Court’s determination with regard to the respective ownersh

ip interests of the parties in City B onding. Plaintiffs also appeal the exclusion of various por tions of Templeton’s deposition. Plaintiff Guy Jenkins appeals the gr anting of summary judgme

nt to Gibbs on his procurement of breach of contract c laim.

Discussion
First, we will discu ss Guy Jenkins’ appeal of the granting of summar y judgment on his claim against Gibbs for procurement of bre ach of contract. The standard for review of a

motion for summary judgme

nt is set forth in Staples v. CBL & Associates, Inc

. , 15 S.W.3d 83 (Tenn. 2000):

The standards governing an appe llate court’s review of a moti on f or summary judgment are well settled. Since our inquiry involves purely a que stion of law, no presumption of corre c tness attaches to the lowe

r court’ s judgme

nt, and ou

r task is c onfined t

o reviewing the record to determine whether the requirements of Tenn. R. Civ. P. 56 h ave bee

n met. See Hunter v . Brown , 955 S.W.2d 49, 50-51 (Tenn. 1 997); Cowden v. Sovran Bank/Ce ntral South , 816 S.W.2d 7 4 1, 744 (Tenn. 1991). Tennessee Rule of Civil Procedure 56.04 providesthat su mmary ju dgment is appropriate where: (1) ther e is no genuine issue with regard to the mate rial fa cts relevant to the claim or defense contained in the motion, see Byrd v. Hall , 847 S.W.2d 208, 210 (Tenn. 1993) ; and (2 ) the moving party is entitled to a judgment as a matter of law on the un disputed facts. See Anderson v. Standard Register Co. , 857 S.W.2d 555, 559 (Tenn. 1993). The mo ving p arty has t he bur den of provi ng t ha t its motion-7- satisfies these re quireme nts. See Downen v. Allstate Ins. Co. , 811 S.W.2d 523, 524 (Tenn. 1991). When the party seeking summar

y judgment makes a properly

supported motion, the burden shifts to the nonmoving party

to set for th specif ic facts establishing the existence of disputed, material facts wh ich must be resolved by

the trier of fact

. See Byr d v. Hall , 847 S.W.2d at 215.

To properly support its motion, the moving party must either affirmatively negate an essential element of the non-moving party ’s claim or conclusively e stablish an affirmative defense. See McCarley
v. West Quality Food Ser v
. , 960 S.W.2d 585, 588 (Tenn. 1998); Robinson v. Omer , 952 S.W.2d 423, 426 (Tenn. 1997). If the moving party fail s to negate a claimed basis for the suit, the non-moving party’s burden to produce evidence establishing the e xistence o f a genuine issue for

trial is no t trigg ered and the motion for su m mary judgmen t must fail. See McCarley v. W est Quality Food Serv. , 960 S.W.2d at 588; Robinson v. Omer , 95 2 S .W .2d at 4 26. If the moving party success f ull y neg ates a claimed basis for the action, the nonmoving party may

notsimply

rest upon the plea dings, but must offer proof to establish the existence

of the es sential e

lements of

the claim

. The standards go verning the assessment of evidence in the summary ju dgme nt context a

re also w ell estab lished. Cou rts must view the evidence in the light most favorable to the nonmoving party and must also draw all reason able i nferences in the nonmoving party’s favor. See Robinson v. Omer , 952 S. W.2d a t 426; Byrd v. Hall , 847 S.W.2d at 210-11. Cou rts s hould grant a summary judgment only when both the fac ts and the inferences to be drawn from t he fact s permit a reasonable person to reach only one conclusi o n
. See McCall v. Wilder , 913 S.W.2d 150, 153 (Tenn. 1995); Carvell v. Bottoms , 900 S.W.2d 23, 26 (Tenn. 1995). Staples , 15 S.W.3d at 88-89. A fact is “mater

ia l” for summary judg

ment purposes, if it “must be decided in order to resolve the substantive claim or defense at which the motion is directed.” Luther v. Compton , 5 S. W.3d 635, 6 39 (Te nn. 19 99)(q uoti ng Byrd v. H all , 847 S.W.2d at 211).

Gibbs denied the existence of any contract with Guy

Jenkins ent

itling him to monthly pa ym ents. In his affid avit, Gibb s stated: “ After Mr. Jenkins filed this suit against me , I consulted withmy counsel regarding whe

ther the Company

was obligated to continue making monthly loan pay ments ... on behalf o f

Mr. Jenkins.” (emphasis added). Based on this discussion, Gibbs concluded

Guy Jenkins would only be entitled to receive divide nds i f any we re paid. Since no dividends were ever paid , he could discontin

ue the pa yme nts. He also was infor

med corp orate employees could r

eceive salaries, but since Guy Jenkins was not an employee, he was not entitled-8-

to the payments as a

salary e ither. Therefore, “the Company elected [pursuant to a c orporat e resolution] to termina

te the mon

thly pay ments toHome Federal Bank that the Company had been making on Mr . Jenkins’ behalf.” According to Gibbs, he was acting on behalf of the corporation wh en te rm in at in g t he se pa yme nt s, an d h e i s, th er efor e, en ti tl ed to im mu ni ty.

Guy Jenkins testified he has received $1,000.00 per month “in lieuof sa la ry, director fees, consultant fees, committee fees, dividends or other forms of cor porate remun er ation” since early 1986. This amount was lat erincreased to $1,500.00 per month. While Guy Jenkins acknowledged

there was no written contract, he claimed “at all times there existed an oral c ontract betweenhimself and the corporation ... said contract between the Affiant and the c orporation was negotiated

directly with Gibbs, ... Gibbs confirmed this contra ct between Guy

R. Jenki ns and CBI directly to a Mr. Wes Goddard at Home Federal B ank some two to three y ears ago....” According to Gu y Jen

kins, he r eceive d these pa

yme nts until Gib

bs unilate rally , arbitra

rily , and mali c iousl y terminated them in June of 1999.

Although the Trial Court granted summary judgment

on the claim for

procurement of breach of contr act, the Tria

l Court, unf

ortunate ly, did not set

forth its r eason asto why summary judgment was appr opriate . Thus, we do not know whether the Trial Court: (1) determined there wa s no contract between City

Bonding and Guy Jenkins; (2) determined ther e was a contract

but there
was no breach; or (3) determined there w as a contract and a breach, but Gibbs ne gated an essential element of the claim or was immune.

We believe the affidavits of Guy Jenkins and Gibbs create a genuine issueof material fact regarding whether

there was a contract between City Bonding and

Guy Jenkins for the pay

ment of $1,500.00 per month. Guy Jenkins testified he wa s entitled t o these pa yme nts not just b ecause of his owner ship inter

est in City Bonding but alsobecause he was liable for sever al million dollars
on various b onds. Gibbs argues on appeal that these two situationsdo not, by

themselve s, lega

lly entitle Guy Jenkins to monthly payments, and we

agree. This, ho wever, d oes not mean an oral contract was not vo luntarily

entere d into to compensate him for his ownership or potentialliability
on the bonds. In a

nutshell, we belie

ve the te stimony

set f orth above creates a genuine issue of material fact regarding w

hether therewas an oral contract between Guy Jenkins and Ci ty Bondin g.
Even if there

was a co ntract, Gibbs still w ould be en titled to su

mma ry judg ment if the undispute d materia

l facts de monstrate that ther e was no b reach, or that Gi

bbs neg ate d a n essential element of the claim, or that Gibbs has a def ense to the claim, s uch as hisclaim of immunity. On appeal, we cannot determine if there was a brea ch of contract

without knowing what the terms of that contract, if one exis ts, are, a factual determination not made by the Trial Court. Therefore, we cannot affirm t he gra nting of summary judgmen t unless the undispute d materia l facts de monstrate that Gibbs negated an

essential element

of the procurement of breach of c ontract claim or established he is entitled to immunity.

Gibbs bases hisclaim toimmunity on language f

ound in Forreste r v. Stock still , 869 S.W .2d 328 (Tenn. 1994). In Forrester , our Supreme Court quoted with approval the fol lowin g-9-

from Thomas G. Fischer, Annotation, Liability of Corporate Director, Officer, or Empl oyee fo r Tortious In terferen ce with Cor poration's Co ntract with

Another, 72 A.L.R.4th 492, 501 (1989):

Some courts have recognized that ge nerally a c orpor ate director, officer, or employ

ee is not li able for

tortiously

inte rferin g with a corpora te contract, because he is considered a party to the contract, as long as he is a

cti ng to serv e the cor

porate interests , or unles s his activity involves individual separa te tortiou s acts. Cou

rts have als o recognized, however, that a corporate director, officer, or employee may be liable for torti ously

interfe ring wit h a corpo rate contract if he is acting outside the scope of his authority , acting with malice, or acting to serve his own inte

rests.

Forrester , 869 S.W.2d at 333. The Forrester Court noted a claim for

wrongful interference with an employment

contract by

a third person was actionable only if that person stood as a third party to the employment relationship. Id . at 331. The Court in Forrester later added:

A corpora tion can a ct only upon the a

dvice of its offic ers and a

gents, and it s officers and directors have a duty to serve the corporation. Important so ci et al in te re st s a re se rv ed by c orpo rations having the clear and candid advice of their officersand agents. Fear of personal liability would t e nd to limit such advice. Consequently, when an officer, director, or employ ee of a corporation acts within the general range of his authority, and his actions are subs tantially motivated by
an intent to further the interest of thecorpo ration, in claims of intentional inte rfer ence with employme nt, the action of the officer, director, or

employee is consider

ed to be the action of the corporation
an d i s e nt it le d t o t he sa me im mu ni ty f ro m l ia bi li ty.
Id. at 334-35 . Althoug

h the pre sent cas e does no t involve a claim for

inte rference w ith an employment contra ct, we believe Forrester is never theless a pplicabl e becau se the “s ocie tal interests ” discussed in Forrester

apply with equal for

ce regardless of whethe

r the underlying

claim is for interference

with an employment contact or pr ocurement

of brea ch of a no n-employ

ment cont ract. In the present cas e, we believe Gibbs is immune from liability on the proc urement of breach of contract claim if he acted

within the

gener al rang e of his a

uthority and his actions wer

e substan tially motivated by

an intent to furthe r the inte rest of the City Bonding

. Forrester , 869 S.W.2d at 334-35. In his affidavit, Gibbs candidly a cknowledged he met

with his at

torney to determine if the p ayments could be stopped only “[a]fter Mr. Jenkins filed this suit against me.” I n our opinion, a genuine issue of material fact exists as to whethe r Gibbs was substantially motivated by an intent to further the intere st of City Bonding or w hether he was substantially motivated to serve his own interest by retaliating against Guy

Jenkins for filing this lawsuit.-10- In light of the foregoi ng, we vacate the grant of summary judgment to Gibbs on the claim for procurement of breach of c ontract and remand this claim for further

proceedings consistent withthis opini on. In so doing, we express no opinion on whether there actually

was a contract betweenCity Bonding a

nd Guy Jenkins and, if so, what its te rms were or if it was bre ached. We also express no opinion on whether Gibbs unlawfully pr ocured a bre ach of contract, if one exists, or whether Gibbs is en

titled to imm

unity . We hold onl

y th at summar

y ju dgment o n this claim on the record before us was inappropria te for the reasons set forth above.

With regar

d to the re maining issues on a

ppeal, the factual findings of the Trial Court
are accorded

a presum ption of c orrect

ness, and we will no t overtur

n those fa ctual findings un

less the evidence preponderates against them. See Tenn. R. App. P. 13(d); Bogan v. Bogan , 60 S.W.3d 721, 727 (Tenn. 2001). With respect to legal issues, our r eview is conducted “under a pure de novo standardof review, according no def erence to the conclusions of law made by the lower courts.” Southern Constructors, Inc. v. Loudon County Bd. Of Educ. , 58 S.W.3d 706, 710 (Tenn. 2001).

Next, we address the Trial Court’s exclusionof portions of Templeton’s deposition and accompa

nying exhibit s as hearsay . Plaintiffs argue Templeton had personal knowledge of the matters which were excluded or they were admissible through one of the various exceptions to the hearsay rule.

Ad missibili ty

of evidence is within the sound discretion of the trial judge. “When arriving at a determination to admit or exclude even that evidence which is considered relevant trial courts are generally

accorded a wide degr

ee of latitude and will only be overturned on appeal where there is a showing of abuse of discretion.” Tompkins v. Annie’s Nannies, Inc. , 59 S.W.3d 669, 674- 675 (Tenn . Ct. App. 2 000)( quot ing Otis v. Cambridge Mut. Fire Ins. Co. , 850 S.W.2d 439, 442 (Tenn. 1992)). Templeton’s recollection as to the events he testified to was extr

emely vague , at best. He admitted either being unable to recall numerous matter s or not having any knowled ge of the events when they took plac e. During the course of the trial, the Trial Court carefully listened to both sid es when ruling on the admissibility of this evidenc e. After reviewing the entire depos ition o f Templeton, we are unable to conclude the Trial Court er red when it made thev ariou s ruli ngs excl udin g porti ons of

Templ eton’ s test imon y. We, th erefor e, affi rm the evide ntiar y rulings of the Trial Court regarding the exclusion of portions of Templeton’s testimony

.

Plaintiffs also argue Defendant waived the right to object to the admissibility of the excluded portions of Templeton’s testimony. Prior to the dep osition, the parties s tipulated

"[a]ll objections except as to the form of the questions are reserved to on or before the hearing." Plaintiffs claim because Defendant did not object during the depos ition, the o bjec tions were waiv ed. We addressed a very similar issue r

ecently in Perry v. Winn-Dixie Store s, Inc. , No. E-2001-00523-COAR3-CV, 2002 Tenn. App. LEXI S 160 (Tenn. Ct. App. Feb. 28, 2002)(no Rule 11 app. for perm. to appeal filed). Pe rry involved a virtually identical stipulation, and we c oncluded the Trial Court properl y concluded an objection made at trial regarding improper foundation was not to the “form of the que stion.” We

went on to

add:-11- To accept Plaintiff's argument would re quire us to completely ignore th e express stipulation the parties made at the deposition. This we will notdo. Stipula

tions are agree ments between counsel regarding business before the court which are ente red into mut u ally and voluntar ily between the pa

rties

. Overstreet v. Shoney's, Inc. , 4 S.W.3d 694, 701 ( Tenn. Ct. A pp. 1999) . Whil e partie s may not stipulate to questions of law, they may stipulate "within the range of possibly true fa cts and va

lidl egal strategies . ..." Id . On appe al, stipulations are bind

ing on the partie s and may not be a ltered. Id . at 702 (c itin g Bearman v. Camatsos , 215 Tenn. 231, 236, 385 S.W.2d 91, 93 (1964) ; First

Southern T

rust Co. v. Sowe ll , 683 S.W.2d 680, 681 (Tenn. Ct. App. 1984)). The stipulation entered into between the parties involved a v alid leg al strategy and is the type of stipulation allowed under the law. I

t is, therefore, binding upon the p arti es. We hold that the st

ipulation p ermitted

Defend ant to make an objectionat trial regard ing whether a proper foundation had been laid .... Plaintiff cannot us e the Rules o f Civil Proc edure a s a shield to ward off an objection which he expressly stipulated w as reserved for tria l.
Perry , 2002 Tenn. App. LEXI S 160 at* 17-18. We believe the same result is merited in the present
case. Defendant’s various o bjection s to the tes timony of Temple

ton were not merely o

bjection s to the form of the question. We conclude Defendant did not waive his right to object to this testimony
as hearsay , o r a ny o ther basis which did not involve simply an objection based on the form of the question.

Plaintiff’s main arg ument on a

ppeal at tacks the Trial Cour

t’s det ermination of the respective ownersh

ip intere sts of the p arties. Plaintiffs claim the Trial Court erred when it concluded Gibbs owned 490 shares of stock and further erre d when it held Aubrey Allen Jenkins was not the
owner of 200 shares. The conclusions rea che d by the Tria l Court on th

ese issue s by

necessity centered around credibility de

terminations. In resolving the factual issues presented

for appeal, we must keep in mind the Trial Court heard the conflicting testimony from the witnesses regarding their claimedownersh

ip intere st in City Bonding. “U

nlike this Court, the trial court observed the manner and demeanor of the witnes ses and was in the best position to evaluate their credibility .” Union Planters Nat’l Bank v. Island Mgmt. Auth., Inc. , 43 S.W.3d 498, 502 (Tenn. Ct. App. 2000). The trial court’s determin ations re garding cred ibility , as to thos e witn esses who testified live, are accorded considerable deference by this Court. Id. ; Davis v. Liberty Mutual Ins. Co. , 38 S.W.3d 560, 563 (Tenn. 2001). “‘[A]ppellate courts will not re-ev aluate a trial judg e’s asse ssment of witness credibi lity

absent clear and convincing evidence to the contrary .’” Wells v. Tennesse e Bd. of Re gents , 9 S.W.3d 779, 783 (Tenn. 1999).

We ca nn ot sa y the pr eponderance of the evidence weighs against the Trial Court’s finding that Gibbs purchased 490shares of stock from Joe Jenkins. Given the testimony of Gibbs that he purch ased 490

shares, the testimony of Joe Jenkins that he sold Gibbs 490 shares, as well as-12-

the cancelled check evidencing same, we cannot

conclude there was any reve rsible error with regard to the Trial Court’s conclusion that Gibbs owned 490 shares of stock. L ikewise, the preponderance of the evidence does not weig h again st the Tria

l Court’s c onclusion

that Polloc

k’s 255 sha

res rema in unissued treasur

y sh ares g iven Polloc

k’s testim ony he turne d his stock back in to the corporation and the disputed evidence concerning wha t, if anything, ha

ppened to this stock thereafter.

Plaintiffs further argue the Trial Court er red when it failed to establish a constructive trust on behalf of Aubrey

Allen Jenkins for the 200 shares of stock he su ppose dly held in 198 2. We believe the issue of

whether Aubrey

Allen Jenkins actually held any stock and whether a constructive trust should be imposed also are factually driven. The Trial Court apparently believed Aubrey

Allen Jenkins at one point did own 200 shares, notwithstanding Aubrey Allen Jenkins’ own testimony that he never knew he owned any stock. Having concluded he did own200 shares at one time, the issue then became w hether a constructive trust should be imposed. Plaintiffs rely on the following langua ge found in Gibson’s S uits in Chanc ery , § 383 Cases of Construc

tive Trust

(7 th ed. 1988):
§ 383. Cases of Construc tive Trust

s. –Construct

ive trustsare so called because they

are constructed

by t he Courtsof Equity in order to satisfy the demands of

justice, without ref

erence to any presuma ble intention of the parties. They include cases: (1) where a per son procures the legal t

itle to propert

y in violation o f some dut

y, e xpress or implied, to the true owner; or (2) where ti tle to property is obtained by fraud, duress, or ot her inequitable means; or (3) where a pe rson makes us e of some relation of influence or confidenc e to obtain the legal title upon more advantageous terms tha n could oth

erwise have been obtained; or, (4) where a person ac quir es property with notice that another is entitle d to it s benefits. In all such case s, Equity, for the purpose

of doing justice in the most effi cient man ner, con structs a trust out of the transaction, and makes a trustee of the person thus acquiring the title....

While the facts certainly

are in dispu te abo ut whether Aubrey Allen Jenkins ever ownedany stock in City

Bonding, the Trial Court apparently conclude d that he did a nd that his father, Joe Jenkins, p oss essed the authority to sell this stock. The preponde rance of the evidence does not weigh against this conclusion. Joe Jenkins testified he sold his 490 shares of stock to Dan Gibbs. Gibbs testified he purchased the 490 share s from Joe Jen

kins. The cancelled chec

k for this purchas e was admit

ted into evidence . Both Gib bs and Joe Jen

kins testi fi ed th ey were not aware Aubrey All en Je nki ns e ver

own ed a ny sto ck. Aub rey

All en Je nkins himself testified he was not
aware he ow ned any stock until shortly before his deposition and many years a fter the fact. Guy Jenkins is the only party

who testified Aubrey Allen Jenkins ever owned any

stock, and he testified at least at one point

this stock was “jointly” owned by Joe Jenkins and Aubrey

Allen Jenkins. The evidence in the record certainly supports the Trial Court’s conclusion there was a valid sale of stock between Gibbs and Joe Jenkins as well as the Trial Court’s conclusion that Gibbs and Joe Jenkins
were unaware of any

potential adverse claim to thestock that was sold. There was no testimony that3 W e belie ve the sa me c ould be sai d forthe 200 shar es of s tock Guy Jenk ins cl aims t o have “gi ven” Aubrey

Allen J enkins

. -13- Joe Jenkins or Gibbs knew abo ut any potentia l ownersh ip of stock by

Aubrey Allen Jenkins. None of the four situations for establishing a constructive trust apply in this case since there is no evidence that Gibbs violate d any

duty , exercis ed frau d, took ad vantag e of any

relation ship, or ot

herwise engaged in any inappropria

te conduct when purchasing this stock. According ly, we conc lude the Trial Court did not co mmit reversible error when it declined to establish a constructive trust on behalf of Aubrey

Allen Jenk ins fo r the 2 00 sha res of s tock. In light of thi s hol ding, we pretermit the issue of whether the Tria l Court er red whe n it refus ed to esta

blish a co nstructiv e trust because th is was not pr

operly plead at trial.

On appeal, Gibbs arg

ues not onl

y is he entitled to the 490 s hares of stock he purchased

from Joe Jenkins, but he also claims entitlement to the additional 250 shares whichGuy Jenkins admits to“giving” him prior to the purchase of the 490 shares. Given the fact Guy Jenkins actually possessed much less stock than he thought he did, it certainly is dou btful whether he intended to make a gift to Gibbs of stock he might not have p ossessed

to begin with. Nev erthele ss, Gibbs admitted no stock certificate was ever issued to him documenting this g iftand there was no documentary

evidence verify

ing he ever received this gift. The formal requirements of a gift a re “the intention by the donor to make a present gift coupled

with the delivery of the

subject of the gift by which complete dominion and control of the property is surrendered by

the donor. ” H

ansel v. Hansel , 939 S.W.2d 110, 112 (Tenn. Ct. App. 1996). Regard less of what the parties may have intended to do with

these 250 shares, the facts certainly do not preponderate against the Trial Court’s conclusion this supposed gift of 250 shares to Gibbs failed for lack of de li ve ry. 3 Accordingly , we affirm the Trial Court’s conclusion on this issue as well.

The only remaining issue i s Plaintiff s’ claim the Trial Court improperly include d certain documents in the record on appeal. Since we have disposed of

the issues on appeal without relying on these documents, this issue is moot.
Conclusion

We vacate the decision

of the Trial Court granting summary judgment

to Gibbs on Guy Jenkins’ c laim

that Gibbs unlawfully procur ed a breach of contract. The rest of the judgment of the Tria l Court is affirmed in all other respects. This case is remanded to the Trial Court for further proceedings as necessa

ry consiste nt with this o

pinion. Cos ts of appe al are ta xed one-ha

lf to the Ap pe ll an ts Gu y R. Je nk in s a nd Au br ey A ll en Je nk in s, an d t he ir su re ty, and one-half to the Appellee Dan Gibbs

.

______ ______________

________________

_ D. MICHAEL

SWINEY