### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE A ssi gne d on Br ie fs O ct obe r 24, 200 5
GORDO N R. M C 

### GEE v. CARL PIPPI N, ET AL 

### . Appeal f romthe Chancer y Court for Rutherford County No. 89CV000083 Rober t E. Corlew, III, Chan cellor

No. M2004- 00296-COA-R 3-CV - F iled Novem ber 30, 2005

Stockholders of a n inso l v en t corporation sought disbursement of corpor ate f

unds remaining on de po sit wi th the tr ia l c ou rt . T he tr ia l c ou rt de te rm ine d th a t st oc kh old e r- c reditor sh ou ld b e re pa id prior t o splitt ing the excess funds equa lly betwee n stockholders. Stockholder a ppeale d and we a ff ir m th e de c isi on of

the tr ia l c ou rt

in a ll r e sp e c ts.

Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court Affi rm ed
W I L L I AM B. C A IN , J ., delivere d the opinion of the court, in which P ATR I C I A J. C O T T RE LL and F R ANK G. C L EME NT , J R ., J J ., joined. W.H. (Steve) Stephenson, I I , Nashville, Tenne ssee, for the a ppellants, Carl Pippin and Helen Pippin. Quentin Scott Horton, McMinnville, Tennesse e, for the appe llee, Gor don R. McGee

. OP IN ION
On Fe bruary

10, 1989, Gordon R. McGe e (“ McGe e”) , s t o ck holder of an insolvent corpor ation, filed a Complaint ag ainst another stockholder, Carl Pippin (“Pippin”), his wife, Helen Pippin (“Mrs. Pippin”), and an e mploy ee, David Atki ns (“A tkins”), s eeking a judg ment ag ainst them for d i s s i p ati on of cor

porate assets, re covery

of money

due fr om debtors of the c orporation, and liquidation of the corpor ation for the be nefit of c reditors.
Af te r a be nc h tr ia l, the c ou rt

e nte re d a n o rd e r o n May

16 , 1 99 6, fi nd ing that Pip pina ndhis wife ha d committed fraud a g ainst McGeeand the c orporation and aw arding the cor poration $179,474.78 plus prejudg ment interest and costs. The P ippins appeale d the dec ision of the trial court a ndthi s Co urt r e du c e d th e orig ina l ju dg me nt a g a ins t Mr . Pi pp in t o $ 3, 93 7. 95 a nddis mis se d th e su it a g a ins t Mr s. Pip pin . O n July 6, 19 98 , th e Sup re me Cou rt de nie d a n a

pp lic a tio n f

or pe rm iss ionto app e a l.-2-

Sometime later, McGe e’s c ounsel was ad v i s ed by the Clerk & Master that $44,104.36 of corpor ate f

unds were still on deposi t with the Rutherford County Chance ry

Court, and that an app ro pria te dis bu rs e me nt n e e de d to be ma de . T he Pip pin s f ile d a mo tio n to dis bu rs e fu nd s o n July 16 , 2 00 2, re qu e sti ng that th e tr ia l c ou rt c on sid er th e orig ina l su it a de ri vativ e a c tio n p ur su a nt t o T e n n e s s e e C o d e A n n o t a t e d , s e c t i o n 4 8

- 1 7

- 4 0 1 b e c au s e t h e o r i g i n a l c o m p l a i n tw a s i n i t i a t e d b y a share holder a g ainst the corpor ation, and to distribute the funds in ac cordance w ith Tennessee Code Annotated, section 48-17-401( d). I n the alternative, the Pippins requested that the disburse ment be made in ac cordance with the percenta g e of stock eac h share holder owne d. Howeve r, McGe e moved that the funds on deposit be dis bursed to the creditors of t he cor poration. He asserted that the orig inal su it w a s not a de ri vativ e a c tio n b e c aus e the su it n a me d d e fe nd a nts oth e r tha n th e c or po ratio n a ndits share holders and the specific proce dures by which to file a derivative action were not made be fore the judg ment became final. Furthermore , the funds could not be dis tributed in acc ordanc e with the perc entag e of stock e ach sha reholde r owne d beca

use t he debts of the corpor ation wer e g reater than the fu nd s r e ma ini ng on de po sit

. A hea ring was held on November 5, 2002, and an amended or der w as ente red on D ece mber 10, 2002. The orde r stated:

This cause came on to be heard on the 5 day of November, 2002, before the th Honora ble Robert E

. C o rlew II I , Chance llor of the Chanc ery Court of Rutherfor d Cou nty , T e nn e sse e , u po n Pl a int if f’ s andDe fe nd a nts ’ M oti on s to Di sb ur se fu nd s h e ld by the Clerk of the Chance ry Court for Rutherf

ord County , Tenne ssee in the a bove sty led matter, state ments of counsel, witnesses in ope n Court, and the entire rec ord as a w hole, from a ll of which the Court f inds that the Plaintiff’s Motion is well taken t h e c o u rt fu rt h erfi n d s t h e f o l l o wi n g: I t is , th e re fo re , o rd e re d, a dju dg e d, a ndde c re e d a s f oll ow s: 1. Th a t th e Cle rk

of the Chanc e ry Cou rt wi ll d isb ur se the fu ndhe ld b y sa id Cle rk in the abo ve style d matte r i n th e a mou nt o f $ 44 ,1 04 .3 6 a s f oll ow s: 2. That $39,272.79 will g o to Mr. Gordon R. McGe e. 3. That $4,537.57 will g o to Mr. Carl Pippin. 4. That $200.00 plus any

acc rued int ere st will be held in Escrow to pay the income tax on C & G Wholesale. 5. That $94.00 will be paid for prior court cost to the Clerk of the Chanc ery C o u r tf o r R u t h e r f o r d C o u n t y. 6. That any

rema ining c ourt cost is waived in the a bove sty led matter.
On J anuary 8, 2003, the Pippins filed a motion to alter or amend the or der and an ame ndment there to on October

31, 2003. On Dec ember 8, 2003, the t rial court denied the Pippins ’ m otion and an orde r wa s entere d on J anuary 2, 2004. The P i p pins filed a timely notice of a

ppeal, howe ver Appellants filed no transcript from the proceeding s below. On May 18, 2004, McGe e filed a

notice that a Rule 24(c ) statement of evidenc e was to be filed, howeve r, no such st atement wa s approve d by the trial court nor enter ed into the re cord.-3-

The Court assumes howe ver, ba sed upon the trial c ourt’s orde r and the e x hibits, t hat the court determined that McGe e had ma de per sonal contributions to the corpor ation as a c reditor, that McGe e shoul d be reimbursed for those contributions, including pr ejudg ment interest, and that any excess should be split equally betwee n the share holders. The Pippins assert on appe al that (1 ) t h e contribut ions made by McGe e to the cor

poration wer e not a loan but a

g ift; (2) the statut e o f l imitations has expired as to any claims ag ainst the corpor ation by

cre ditors; and, (3) Mc Gee is barre d from raisi n g an y cl ai m to reimbursement for persona l c ontributions made to the corpor ation by the orig inal action under re s ju dic ata . Howeve r, the Court’s ability

to addre ss these issues is hindered by the abse nce of

eit h er a t ransc ript of the proce eding s in the trial court or a statement of the e vidence prepa red pur suant to Rule 24(c) of the Tenne ssee Rules of A ppellate Proc edure

. Ordinarily , “[w]hen a trial court de cide s a ca s e wi t hout a jury , it’s findings of fac t are presumed to be corr ect unless the evidenc e in the rec ord preponde rate s ag ainst t h em .” Sherrod v. W ix , 849 S.W .2d 780, 783 (Tenn.Ct.App.1992). Howeve r, in this ca se, the fa ctual finding s cannot be re viewed de novo beca use t he record on appea l contains no record of the trial court’s finding of fac ts. The Court’s authority to review a trial c ourt’s dec ision is l imited to thos e issues for which an a d e q u a te le g a l r e c o r d h a s b e e n p r e serve d. Trusty v. Robinson , No. M2000-01590-COA- R3-CV, 2001 WL 96043, at *1 (Te nn.Ct.App. Feb. 6, 2001). The pa rties, not the court, bear

the burde n of ensuring that the record on appea l contains a fair, acc urate , and complete acc ount of what transpired in the trial court. Taylor v. Allstate Ins. Co. , 158 S.W .3d 929, 931 (Tenn.Ct.App.2004). T here fore , “we must a ssume that the rec ord, had it been pre serve d, would have c ontained suff icient evidenc e to support the trial court’ s fac tual finding s.” Sherrod , 849 S.W .2d at 783.
The Court i s there fore compelled to assume that the trial court’ s disbursement of funds and awa rd of pr ejudg ment interest we re supported by the evidenc e pre sented by the parties at the hea ring on November

5, 2002. Furthermore , “[t] he time of the a ccr ual of the cause of action, as af fec ting limit ations, is freque ntly

a question of fac t to be determined bythe jury or the trier

of fa ct, as whe re the evidenc e is conflicting or subj ect to differe nt infere nces.” Prescott v. Adam s , 627 S.W .2d 134, 139 (Tenn.Ct.App.1981) ( citing 54 C.J.S . Limitations of Ac tions § 399(b) (1948)) . There fore , we must presume that the trial c ourt’s dete rmination that McGee ’s claim to re imbursement for pe rsonal contributions made to the cor poration wa s n o t barr ed by the statute of limitations because it was likewise supported by

the evidenc e pre sented by the parties. Finally , Appellants conte nd that McGe e’s c laim to reimbursement for persona l contributions to the corpor ation are barr ed re s ju dic ata

. “The doctrine of res judicata operates to bar a ll claims that wer e ac tually

litigated or

could have been litig at ed in the first suit between the same pa rties.” Hene gar v. Int’l Minerals & Chemical Corp. , 354 S.W. 2d 69 , 70 (T e nn .1 96 2) . Be c aus e Ap pe lla nts failed to pre sent a c omplete re cord to the Court, we ar e u n ab le to deter mine whether

this matter could ha v e b ee n litigated in the f irst suit. W e ther efor e must assume that Appe llee pre sented s u f f i c i e n te v i d e n c e t o s u p p o r tt h e tr i a l c o u r t ’ s j u d g m e n tt h a th i s c l a i mw a s n o tb arr e d b y re s ju dic ata

. Th e de c isi on of

the tr ia l c ou rt

is a ff ir me d ina ll r e sp e c ts, a ndc os ts o f a pp e a l area sse sse d a g a ins t Ap pe lla nts

.-4- ___________________________________ WI LL I AM B. CAIN, J UDGE