IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

March 9, 2023 Session

BARON CONSTRUCTION, LLC v. 4J CONSTRUCTION COMPANY, INC. 

ET AL.

Appeal from the Chancery Court for Davidson County

No. 16-1286-II Anne C. Martin, Chancellor

___________________________________

No. M2022-00412-COA-R3-CV

___________________________________

A general contractor sued two business entities and their sole owner for breach of contract. 

The defendants denied liability and filed a counter-complaint. Four years later, the 

contractor moved for sanctions under Tennessee Rule of Civil Procedure 16.06. The trial 

court entered a default judgment against the defendants and dismissed their counterclaims 

with prejudice due to their repeated failure to comply with pretrial orders. The defendants 

moved to set aside the final judgment. The trial court granted the owner relief from the 

judgment. But it refused to set aside the judgment against his two companies. And it 

granted the contractor summary judgment against the owner on the remaining claims. We 

affirm.

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

W. NEAL MCBRAYER, J., delivered the opinion of the court, in which ANDY D. BENNETT

and JEFFREY USMAN, JJ., joined.

J. Noble Grant, III, Jackson, Tennessee, for the appellants, 4J Construction Company, Inc., 

Push 4J Construction Company, LLC, and LaFayette Johnson.

J. Ross Hutchison, Nashville, Tennessee, for the appellee, Baron Construction, LLC.

OPINION

I.

A.

02/23/2024
2

The Sumner County government chose Baron Construction, LLC to oversee 

construction of an emergency operations building. Baron Construction, in turn, 

subcontracted with 4J Construction Company, Inc. for a portion of the work. Dissatisfied 

with 4J Construction’s performance, Baron Construction eventually terminated the 

subcontract.

In 2016, Baron Construction sued 4J Construction for breach of contract. The 

complaint also named Push 4J Construction Company, LLC and LaFayette Johnson as 

defendants. According to the complaint, both companies performed work under the 

subcontract, and Mr. Johnson was their sole owner. Baron Construction alleged that all 

three defendants were jointly and severally liable for breach of the subcontract.

After the defendants retained counsel, the parties agreed to extend the deadline for 

filing a responsive pleading until May 2017. But in early June 2017, defense counsel 

moved to withdraw. The court granted the withdrawal and gave Mr. Johnson thirty days 

to secure new counsel. Shortly after that deadline passed, Mr. Johnson requested an 

extension as he was “having a little difficulty securing the necessary retainer.” The court 

granted his request.

New counsel entered an appearance about a month later and filed an answer 

generally denying liability. In a counter-complaint, the defendants alleged that Baron 

Construction owed them compensatory and punitive damages for breach of contract and 

racial discrimination. According to the defendants, 4J Construction met its contractual 

obligations, but Baron Construction failed to pay for the work. And the termination was 

racially-motivated. 4J Construction was a minority enterprise. Baron Construction 

replaced it with a non-minority subcontractor who submitted a lower bid. Allegedly, the 

general contractor had engaged in similar conduct on other projects.

Discovery ensued. When the defendants failed to disclose the factual basis for their 

racial discrimination claim, Baron Construction filed a motion for Rule 11 sanctions. See

TENN. R. CIV. P. 11. The defendants asserted that sanctions were unwarranted because 

they expected the evidence to develop through further discovery. The court denied the 

motion. Still, it admonished the defendants for their inadequate responses. And it alerted 

them it would take their conduct into consideration if presented with a future motion for 

sanctions.

A short time later, the defendants’ second attorney moved to withdraw. The court 

granted the motion and gave Mr. Johnson forty-five days to secure a replacement. A week 

before the court’s deadline, Mr. Johnson requested more time. The court extended the 

deadline for another month and informed Mr. Johnson that it would not grant another 

extension. Yet, the day before the deadline expired, Mr. Johnson requested “a little more 

time.” He had reached a tentative agreement with new counsel, but he was “having a little 

difficulty securing the necessary retainer.”
3

Frustrated with the delay, Baron Construction moved for sanctions under Tennessee 

Rule of Civil Procedure 16.06. It asked the court to enter a default judgment in its favor 

and strike the defendants’ counterclaims based on their repeated failure to comply with 

pretrial orders.

The court postponed the motion for sanctions. Because Mr. Johnson indicated that 

he had partially secured new counsel, it granted him an additional thirty days to finalize 

the arrangement. But it warned him that this deadline was final.

On the day the deadline was set to expire, Mr. Johnson filed an expedited motion 

seeking even more time. The partial arrangement had fallen apart. And he needed more 

time to secure new counsel. As promised, the court denied his request. The case had been 

on hold for five months. It would proceed with Mr. Johnson as a pro se litigant. A jury 

trial was set for August 2020.

1

 

In January 2020, the court held a hearing on the postponed motion for Rule 16.06 

sanctions. None of the defendants filed a written response. But Mr. Johnson attended the 

hearing. The court found that the corporate defendants’ failure to pursue their 

counterclaims had unduly prejudiced the opposing party. The case had been pending for 

four years. The defendants’ counsel had withdrawn two times. In the court’s view, 

“continuing to push this matter out into the future without holding the [counterplaintiffs] 

accountable d[id] not serve the goals of judicial economy.” The companies had failed to 

appropriately participate in the litigation, either to defend themselves or to pursue their 

counterclaims. So the court dismissed their counterclaims and awarded judgment against 

them on liability. The claims involving Mr. Johnson individually remained pending. 

Almost two months later, new defense counsel appeared and moved to set aside the

partial default judgment. See TENN. R. CIV. P. 54.02. The defendants argued that their 

failure to secure counsel by the court’s deadline was not willful. In an affidavit, 

Mr. Johnson attested to his diligent search for an attorney and his inability to raise 

sufficient funds at an earlier date. The defendants maintained that reinstatement of their 

claims would not be prejudicial because the case was still ongoing. And they had asserted 

a meritorious defense in their answer and counter-complaint.

The court set aside the interlocutory judgment. Given the liberal standard of review, 

the court could not find that the defendants had acted willfully. And the prejudice to Baron 

Construction was limited. Yet the court admonished the defendants that “any future failure 

to actively participate in [the] proceedings and adhere to the Tennessee Rules of Civil 

 

1 The defendants demanded a jury.
4

Procedure and this Court’s orders w[ould] result in a reinstatement of the default 

judgment.” By agreement, trial was postponed until February 2021.

Three months later, the defendants’ third attorney moved to withdraw, citing a 

breakdown in client communication and a failure to abide by contractual obligations. 

Despite having notice, Mr. Johnson failed to appear at the withdrawal hearing. In his 

absence, Baron Construction asked the court to dismiss the defendants’ claims based on 

the pattern of disregard for the proceedings.

The court allowed defense counsel to withdraw. And it declined to impose new 

sanctions at that time. In a written order sent to Mr. Johnson’s address, the court informed 

Mr. Johnson that he had thirty days to obtain new counsel for his companies. Otherwise, 

the court would reinstate the previous sanctions. This was the third defense counsel to 

withdraw. The fact that the latest attorney only lasted four months indicated to the court 

that the defendants were not engaging in the litigation in a good faith manner. The court

also advised Mr. Johnson that if he failed to cooperate in discovery or otherwise adhere to 

his obligations to the court and the litigation process, the court would consider imposing 

identical sanctions against him individually.

The court’s deadline passed without the appearance of new defense counsel or any 

word from Mr. Johnson. Baron Construction filed another motion for Rule 16.06 sanctions. 

See TENN. R. CIV. P. 16.06. Once again, none of the defendants filed a written response.

This time the court granted the motion. Mr. Johnson failed to file a timely written 

response to the motion as required by the local rules of practice. So the court was 

authorized to grant the motion without a hearing. See 20TH JUD. DIST. LOC. R. § 26.04

(providing that “if no response is timely filed and personally served, the motion shall be 

granted [. . .]”). Sanctions were also appropriate under the Tennessee Rules of Civil 

Procedure. See TENN. R. CIV. P. 16.06. The defendants failed to comply with the court’s

order despite explicit warnings. They had not notified the court of an intention to move 

forward with the litigation. No new counsel had made an appearance on their behalf. And 

Baron Construction had been unduly prejudiced by the defendants’ conduct. So the court 

entered a default judgment on liability against all defendants and dismissed their 

counterclaims with prejudice.

The court held an evidentiary hearing on damages. Mr. Johnson appeared to defend 

against Baron Construction’s damages claims. While he denied being responsible for the 

claimed expenses, he did not produce any evidence to contradict the general contractor’s 

claims. And on October 27, 2020, the court entered a judgment against all three defendants, 

jointly and severally, for $696,732.66.2

 

2 The award included $505,694.64 in damages for breach of contract, $93,085.66 in attorney’s fees 

and costs, and $97,952.36 in prejudgment interest.
5

Thirty-three days later, new counsel entered an appearance on behalf of the 

defendants. That same day, the defendants moved to set aside the default judgment and 

dismissal order. They argued that the court lacked a sufficient basis for imposing sanctions 

on Mr. Johnson. The court never set a deadline for Mr. Johnson to secure individual 

counsel. He was entitled to proceed as a pro se litigant. And they insisted that the court’s 

entry of sanctions against the two company defendants was premature. They could have 

secured new counsel in time to prepare for trial as scheduled.

The court granted the motion in part. It noted that Mr. Johnson had not participated 

consistently in the litigation. But it was reasonable for him to assume that he could proceed 

pro se. And default and dismissal were severe penalties for his failure to file a timely 

written response. So the court vacated the sanctions imposed on Mr. Johnson.

But the court refused to grant relief to the two company defendants. They had been 

warned on August 5 to secure counsel within thirty days or the court would impose 

sanctions. As of October 2, 2020, they had failed to secure counsel. They had repeatedly 

failed to adhere to the court’s orders. Their conduct throughout the litigation evidenced a 

disregard for the process and an unwillingness to proceed. The court was authorized to 

impose sanctions under these circumstances. And the companies did not establish a basis 

for the court to set the judgment.

B.

Baron Construction then filed a motion for summary judgment on all remaining 

claims. Specifically, it sought an order imposing personal liability on Mr. Johnson for the 

conduct of his two companies and a judgment in its favor on his racial discrimination 

counterclaim.

Based on the undisputed facts, the court determined that 4J Construction and Push 

4J Construction were mere instrumentalities for Mr. Johnson and it would be unjust to 

allow him to use his companies as a shield against liability. The court also agreed that 

Mr. Johnson lacked sufficient evidence to establish his counterclaim. So the court 

concluded that Baron Construction was entitled to entry of a judgment in its favor as a 

matter of law.

II.

The defendants contend that the court abused its discretion when it imposed the 

second set of sanctions and when it refused to grant the company defendants relief from 

the judgment. They also challenge the court’s decision to pierce the corporate veil. 
6

We review a trial court’s decision to impose sanctions and its decision on a motion 

to set aside a judgment for an abuse of discretion. Discover Bank v. Morgan, 363 S.W.3d 

479, 487 (Tenn. 2012); McInturff v. Neeseman, 986 S.W.2d 11, 12 (Tenn. Ct. App. 1998). 

Our review of discretionary decisions is limited. Beard v. Bd. of Prof’l Resp., 288 S.W.3d 

838, 860 (Tenn. 2009). We do not “second-guess the court below” or “substitute [our] 

discretion for the lower court’s.” Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 

2010). Instead, we consider “(1) whether the factual basis for the decision is properly 

supported by evidence in the record, (2) whether the lower court properly identified and 

applied the most appropriate legal principles applicable to the decision, and (3) whether 

the lower court’s decision was within the range of acceptable alternative dispositions.” Id. 

So we uphold the trial court’s ruling as “long as reasonable minds can disagree as to [the] 

propriety of the decision made.” Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001) 

(quoting State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000)).

A trial court’s decision on a motion for summary judgment presents a question of 

law, which has no presumption of correctness on appeal. Martin v. Norfolk S. Ry. Co., 271 

S.W.3d 76, 84 (Tenn. 2008); Blair v. W. Town Mall, 130 S.W.3d 761, 763 (Tenn. 2004). 

We review the record de novo and make a fresh determination of whether the requirements 

of Rule 56 of the Tennessee Rules of Civil Procedure have been met. Eadie v. Complete 

Co., 142 S.W.3d 288, 291 (Tenn. 2004); Blair, 130 S.W.3d at 763.

A.

Trial courts have the authority to impose appropriate sanctions on a party that fails 

to obey a pretrial order. TENN.R.CIV. P. 16.06. Among other things, the court may dismiss 

the action or render a judgment by default against the disobedient party. TENN. R. CIV. P.

37.02(C); see also TENN. R. CIV. P. 41.02(1).

The defendants concede that Mr. Johnson’s companies violated the August 5, 2020 

pretrial order to secure replacement counsel. But they complain that the court imposed too 

harsh a sanction under the circumstances.3 We disagree. “[A] clear record of delay or 

contumacious conduct” is enough to justify dismissal. Shahrdar v. Glob. Hous., Inc., 983 

S.W.2d 230, 236 (Tenn. Ct. App. 1998). The court found that the defendants were not 

engaging in the litigation in good faith. The case had been pending for four years. There 

were multiple lengthy delays due to the withdrawal of defense counsel. The court 

repeatedly reminded Mr. Johnson that his companies could not participate in the litigation 

 

3 The defendants also contend that the court erred in granting the sanctions motion based on the

violation of a local rule. See 20TH JUD. DIST. LOC. R. § 26. As they point out, local rules of practice that 

conflict with the Tennessee Rules of Civil Procedure are invalid. See Smalling v. Smalling, No. E2013-

01393-COA-R10-CV, 2014 WL 285682, at *3 (Tenn. Ct. App. Jan. 24, 2014); TENN. R. S. CT. 18(c). But 

we see no conflict here. The absence of a similar rule in the Tennessee Rules of Civil Procedure does not 

create a conflict.
7

without representation. See Old Hickory Eng’g & Mach. Co. v. Henry, 937 S.W.2d 782, 

786 (Tenn. 1996) (“[A] corporation cannot act pro se in a court proceeding nor can it be 

represented by an officer or other non-lawyer agent.”). Yet he failed to maintain counsel 

for his companies. In March 2020, Mr. Johnson assured the court that he intended “to 

diligently pursue the claims of [his] companies . . . and . . . take any necessary steps to 

ensure that the[ir] rights [we]re vindicated.” But his actions belied his words. Four months 

later, his third attorney moved to withdraw due to a breakdown in communication and the 

clients’ failure to comply with contractual obligations. Mr. Johnson did not appear at the 

withdrawal hearing. And despite the court’s explicit warnings, he failed to secure 

replacement counsel for his companies in a timely fashion.

The defendants contend that the court’s decision was premature. Four months 

remained until the scheduled trial. And they could have secured new counsel without 

causing further delay. But we cannot fault the court for acting. The defendants did not 

respond to the sanctions motion or request additional time to secure counsel. It took 

Mr. Johnson six months to secure counsel after the last withdrawal. On this record, the 

court had no reason to presume that this time would be any different.

We discern no abuse of discretion in the trial court’s decision to impose these 

sanctions. A “trial judge [is] in the best position to determine whether [a party’s] actions 

and inactions throughout the proceedings support[ ] an order to dismiss [the case].” 

Langlois v. Energy Automation Sys., Inc., 332 S.W.3d 353, 359 (Tenn. Ct. App. 2009). 

The court applied the correct law, the record supported its decision, and its decision was 

within the range of acceptable alternatives.

B.

When the defendants moved to set aside the second set of sanctions, they sought 

relief from a final judgment.4 Relief sought more than thirty days after entry of a final 

judgment must be pursued under Tennessee Rule of Civil Procedure 60.02(1). Discover 

Bank, 363 S.W.3d at 489.

The defendants sought relief from a final judgment based on “excusable neglect.” 

So, as a threshold issue, we must decide “whether the conduct precipitating the default was 

willful.” Id. at 494; Henry v. Goins, 104 S.W.3d 475, 481 (Tenn. 2003). Willful conduct 

includes both “deliberate choices” and “conduct that is flagrant and unexplained.” 

 

4 Finality may be achieved through a series of orders. On October 2, 2020, the court entered a 

default judgment against all defendants on the claims raised in the complaint. It also dismissed the 

defendants’ counterclaims with prejudice. And on October 27, 2020, the court entered a final judgment 

resolving Baron Construction’s damages claims. At that point, the court had resolved all of the parties’ 

claims. There was nothing left for the court to adjudicate. See Ball v. McDowell, 288 S.W.3d 833, 836-37 

(Tenn. 2009).
8

Discover Bank, 363 S.W.3d at 493 (first quoting Barber & McMurry, Inc. v. Top-Flite Dev. 

Corp., 720 S.W.2d 469, 471 (Tenn. Ct. App. 1986); and then quoting Hayes v. Hayes, No. 

M2006-02356-COA-R3-CV, 2007 WL 2580026, at *2 (Tenn. Ct. App. Sept. 6, 2007)). If 

the conduct of the defaulting party is willful, “the judgment cannot be set aside on 

‘excusable neglect’ grounds.” Id. at 494.

The defendants contend that financial issues prevented them from complying with 

the court’s directives. The court did not find their conduct willful when it set aside the

earlier sanction. But circumstances had changed. After the third request to withdraw, the 

court found that the defendants were not acting in good faith. Despite Mr. Johnson’s 

assurances, he failed to maintain representation for his companies. The third defense 

counsel had moved to withdraw because of a breakdown in communication and the clients’

failure to comply with contractual obligations. And that representation had lasted only four 

months. The court warned Mr. Johnson in August that it would re-impose sanctions if he 

failed to secure counsel as directed. Yet he did not comply. Nor did he communicate with 

the court. He never requested an extension of time. He did not respond to the motion for 

sanctions. Unspecified financial troubles, real or not, were not an adequate explanation for 

this conduct.

The trial court did not abuse its discretion in denying the company defendants relief 

from the default judgment and dismissal order. These defendants failed to prove that they 

were entitled to relief on excusable neglect grounds. 

C.

Summary judgment may be granted only “if the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the affidavits, if any, show that there 

is no genuine issue as to any material fact and that the moving party is entitled to a judgment 

as a matter of law.” TENN. R. CIV. P. 56.04. The party moving for summary judgment has 

“the burden of persuading the court that no genuine and material factual issues exist and 

that it is, therefore, entitled to judgment as a matter of law.” Byrd v. Hall, 847 S.W.2d 208, 

211 (Tenn. 1993). If the moving party satisfies its burden, “the nonmoving party must then 

demonstrate, by affidavits or discovery materials, that there is a genuine, material fact 

dispute to warrant a trial.” Id.

“[W]hether to disregard the corporate fiction depends on the special circumstances 

of each case.” Oceanics Schs., Inc. v. Barbour, 112 S.W.3d 135, 140 (Tenn. Ct. App. 

2003). The decision is generally not suitable for summary judgment. Mike v. Po Grp., 

Inc., 937 S.W.2d 790, 795 (Tenn. 1996). But here the facts are largely undisputed. 

Mr. Johnson does not claim otherwise. Instead, he argues that summary judgment was 

inappropriate because Baron Construction failed to show that he used the corporate form 

to perpetuate a fraud or injustice. See Pamperin v. Streamline Mfg., Inc., 276 S.W.3d 428, 

438 (Tenn. Ct. App. 2008).
9

A corporation’s separate legal status “may be disregarded upon a showing that it is 

a sham or a dummy or where necessary to accomplish justice.” Schlater v. Haynie, 833 

S.W.2d 919, 925 (Tenn. Ct. App. 1991). Our courts consider a series of factors when 

determining whether to pierce the corporate veil. See CAO Holdings, Inc. v. Trost, 333 

S.W.3d 73, 88-89 (Tenn. 2010) (citing Fed. Deposit Ins. Corp. v. Allen, 584 F. Supp. 386, 

397 (E.D. Tenn. 1984)). No one factor is decisive. Id. But, as a whole, the equities must 

substantially favor the party seeking to pierce the corporate veil. Id.

Mr. Johnson was the sole owner of both 4J Construction and Push 4J Construction. 

He operated the companies without other officers. No stock certificates were ever issued 

for either company. The companies occupied the same principal place of business, an 

office building owned by Mr. Johnson. Yet they did not have a lease agreement or pay any 

rent. During this project, they shared one full-time employee, a secretary. Mr. Johnson 

treated his companies as “one and the same.” When Baron Construction requested 

documentation for the project, Mr. Johnson provided documents in his own name or in the 

name of Push 4J Construction, not 4J Construction. As Mr. Johnson points out, these facts 

alone “are insufficient to justify piercing the corporate veil.” Edmunds v. Delta Partners, 

L.L.C., 403 S.W.3d 812, 831 (Tenn. Ct. App. 2012). Mr. Johnson had the right to control 

his businesses “so long as [he] [did] not use the control to defraud [others].” Pamperin, 

276 S.W.3d at 439.

Baron Construction demonstrated that 4J Construction was grossly undercapitalized 

on this project. This was a “pay when paid” contract. But 4J Construction was not an 

active business. Because 4J Construction “had a credit problem,” Mr. Johnson ordered the 

materials for the project through his other company. No invoices or payments were 

exchanged between the companies. They did not have a contractual relationship. 4J 

Construction also lacked sufficient funds to pay its suppliers on the project. Baron 

Construction ultimately stepped in and began paying those bills directly. At some point, 

4J Construction dissolved and ceased operations.

Mr. Johnson also commingled personal and corporate funds without maintaining 

proper documentation. Baron Construction paid 4J Construction a $30,000 mobilization 

fee. Instead of depositing the fee into 4J Construction’s bank account, Mr. Johnson placed 

the funds in his own personal account. He claimed that this was repayment for a $50,000 

loan he made to the company at the beginning of the project. But he had no loan 

documentation or any records of how 4J Construction used the loan proceeds. He also 

cashed Baron Construction’s other payments to 4J Construction rather than depositing the 

funds in the corporate account. And he paid his company’s laborers through his personal 

account rather than the corporation’s account. Again, there were no corporate records 

reflecting this activity.
10

Like the trial court, we conclude that these facts show that “the corporate entity was 

a mere instrumentality for [Mr.] Johnson and it would be an injustice to allow [him] to use 

the corporate entity as a shield to thwart the satisfaction of the judgment obtained in this 

case.” Mr. Johnson “disregarded the corporate form by commingling assets and failing to 

maintain corporate records.” He viewed his companies as interchangeable. And he treated 

corporate assets as his own. 4J Construction lacked sufficient capital to pay its suppliers 

and laborers on the project. None of Baron Construction’s payments to 4J Construction 

were deposited into the corporate account. They were either deposited into Mr. Johnson’s 

personal account or cashed. And there were no corporate records reflecting any of this 

activity.

Baron Construction demonstrated that it was entitled to a judgment as a matter of 

law. The only reasonable conclusion to be drawn from the undisputed facts is that the 

separate legal status of 4J Construction should be disregarded.

III.

The court did not abuse its discretion when it imposed the second set of sanctions 

or when it declined to grant the company defendants relief from the judgment. And Baron 

Construction was entitled to a judgment as a matter of law on its request to pierce the 

corporate veil. So we affirm the trial court’s decision. 

 s/ W. Neal McBrayer 

W. NEAL MCBRAYER, JUDGE