IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

September 12, 2017 Session

BLAKE BOOKSTAFF v. DAVID GERREGANO, 

COMMISSIONER OF REVENUE, STATE OF TENNESSEE

Appeal from the Chancery Court for Knox County

No. 192969-2 Clarence E. Pridemore, Chancellor

No. E2017-00763-COA-R3-CV

In this action, the Tennessee Department of Revenue (“the Department”) sought to 

collect unpaid franchise and excise taxes owed by a dissolved corporation from its former 

shareholder. The trial court entered a judgment in favor of the shareholder, determining 

that the Department could not collect on the assessments originally issued in 2008 and 

2009 due to the six-year statute of limitations contained in Tennessee Code Annotated § 

67-1-1429. The trial court also determined that the shareholder was not a “person” or 

“taxpayer” subject to franchise and excise taxes because those taxes are assessed solely 

against entities such as corporations. Finally, the trial court determined that the 

shareholder had no personal liability for the taxes owed by the dissolved corporation

absent proof of a fraudulent conveyance. The Department timely appealed. Determining 

that the trial court erred in its construction and application of the applicable tax statutes, 

we reverse the judgment in favor of the shareholder.

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

Reversed; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL 

SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.

Herbert H. Slatery, III, Attorney General and Reporter; Andrée S. Blumstein, Solicitor 

General; Charles L. Lewis, Deputy Attorney General; and Jonathan N. Wike, Senior 

Counsel, for the appellant, David Gerregano, Commissioner of Revenue, State of 

Tennessee.

John A. Lucas, Knoxville, Tennessee; G. Michael Yopp and Christopher A. Wilson, 

Nashville, Tennessee, for the appellee, Blake Bookstaff.

12/20/2017
2

OPINION

I. Factual and Procedural Background

The plaintiff, Blake Bookstaff, was formerly a principal and shareholder of

popularcategories.com (“PopCat”), a Florida corporation that was formed by Mr. 

Bookstaff and William Marquez in 2000. In 2001, PopCat and another Florida company,

Compatible Technologies of Orlando, LLC, joined together to form Popular Enterprises, 

LLC (“Popular Enterprises”), a Florida limited liability company. Popular Enterprises

operated an internet search engine and internet domain name aggregator. Mr. Bookstaff 

managed certain aspects of PopCat and Popular Enterprises from his place of business in

Knoxville.

Mr. Bookstaff later acquired Mr. Marquez’s shares in PopCat, becoming PopCat’s 

sole shareholder in 2005. In 2006, Popular Enterprises was sold to a third party. The 

proceeds from that sale were paid to PopCat in two installments, the first in 2006 and the 

second in 2007. Mr. Bookstaff has acknowledged in his appellate brief that the sale 

proceeds were then distributed to him as sole shareholder. Later in 2007, PopCat filed 

articles of dissolution with the Florida Secretary of State.

Subsequently, the Department determined that the proceeds from the sale of 

Popular Enterprises were business earnings and that PopCat owed additional franchise 

and excise (“F&E”) taxes for 2006 and 2007. On June 6, 2008, the Department issued a 

notice of assessment to PopCat of estimated unpaid F&E taxes for 2006, plus penalties 

and interest, for a total assessment in the amount of $899,288.78. On February 15, 2009, 

the Department issued a notice of assessment to PopCat of estimated unpaid F&E taxes 

for 2007, plus penalties and interest, for a total assessment in the amount of $630,515.23. 

In 2009, PopCat filed two lawsuits challenging these assessments in the Davidson 

County Chancery Court, which lawsuits were later consolidated. The Department filed 

counterclaims in each suit, seeking judgment against PopCat for the amount of the unpaid 

tax assessments. On March 22, 2017, the Davidson County Chancery Court entered an 

“Order and Final Judgment Pursuant to Tenn. R. Civ. P. 54.02,” which upheld the 

assessments and granted judgment on the Department’s counterclaims in the amount of 

$2,107,691.54.1 PopCat has appealed that ruling in a separate action. Mr. Bookstaff, 

individually, was not a party to the Davidson County lawsuits. 

 

1The Department has filed a motion asking this Court to consider this order as a post-judgment fact. The 

disposition of this motion will be discussed in a subsequent section of this Opinion.
3

On January 6, 2011, the Department “assessed” the unpaid F&E taxes owed by 

PopCat against Mr. Bookstaff personally, by letter notice. The Department asserted that 

all of the income received by PopCat had been distributed to Mr. Bookstaff and that 

PopCat was thereafter dissolved, resulting in Mr. Bookstaff’s personal liability for the 

unpaid F&E taxes pursuant to Tennessee Code Annotated §§ 67-4-2016 and -2117.2 In 

this letter, the Department instructed Mr. Bookstaff that he could request a conference to 

discuss the assessment. Mr. Bookstaff requested and the Department conducted an

informal conference regarding the assessment pursuant to Tennessee Code Annotated § 

67-1-1801(c)(3). The Department issued a written decision affirming the assessment 

against Mr. Bookstaff on November 21, 2016.

The Department filed an action against Mr. Bookstaff to collect these taxes on 

January 5, 2017, in the Knox County Chancery Court. On January 18, 2017, before he 

was served with process in that lawsuit, Mr. Bookstaff initiated the instant action against 

the Department, in a different division of the Knox County Chancery Court (“trial 

court”), challenging the assessment levied against him personally and seeking an 

injunction prohibiting any attempts by the Department to collect. Mr. Bookstaff 

requested a temporary restraining order, which was granted. Following his receipt of 

service of process concerning the lawsuit filed by the Department, Mr. Bookstaff 

amended his complaint and sought an additional temporary restraining order, which was 

also granted by the trial court in the instant action.

Following a hearing, the trial court granted Mr. Bookstaff’s motion for an

injunction in an order entered March 20, 2017. The court enjoined the Department from 

filing a lawsuit or levy against Mr. Bookstaff and directed the Department to cancel the 

2011 assessment, which the court determined was not a new assessment but rather was an 

attempt to collect the earlier assessments against PopCat. The court determined, inter 

alia, that the Department could not collect on the assessments originally issued in 2008 

and 2009 due to the six-year statute of limitations contained in Tennessee Code 

Annotated § 67-1-1429. The court also determined that Mr. Bookstaff was not a 

“person” or “taxpayer” subject to F&E tax because F&E taxes are assessed only against 

entities such as corporations. Finally, the court determined that Mr. Bookstaff had no 

personal liability for the taxes owed by PopCat absent proof of a fraudulent conveyance. 

The Department timely appealed.

 

2 These statutory provisions are discussed in detail in section VI of this Opinion.
4

II. Issues Presented

The Department presents the following issues for our review, which we have 

restated slightly:

1. Whether the trial court erred by determining that the six-year statute 

of limitations would bar any attempt by the Department to collect the 

tax represented by assessments previously made against PopCat 

from Mr. Bookstaff personally.

2. Whether the trial court erred by determining that a personal 

assessment against Mr. Bookstaff was not authorized by Tennessee 

Code Annotated §§ 67-4-2016(a) and -2117.

3. Whether the trial court erred by determining that Mr. Bookstaff 

could not be held personally liable for the tax represented by 

assessments against PopCat in the absence of a fraudulent 

conveyance.

III. Standard of Review

The issues in this matter turn upon whether the trial court properly interpreted the 

applicable tax statutes. As our Supreme Court has explained with regard to statutory 

construction:

Issues of statutory construction are questions of law to which the de 

novo standard with no presumption of correctness applies. See Perry v. 

Sentry Insurance Co., 938 S.W.2d 404, 406 (Tenn. 1996). When

construing a statute, our goal is “to ascertain and give effect to the 

legislative intent without unduly restricting or expanding a statute’s 

coverage beyond its intended scope.” Owens v. State, 908 S.W.2d 923, 926 

(Tenn. 1995). 

Leab v. S & H Mining Co., 76 S.W.3d 344, 348 (Tenn. 2002).

IV. Consideration of Post-Judgment Facts

The Department has asked this Court to consider as post-judgment facts, pursuant 

to Tennessee Rule of Appellate Procedure 14, the following orders entered in the separate 

but related litigation between the Department and PopCat:
5

(1) the Davidson County Chancery Court’s March 22, 2017 judgment 

upholding the F&E tax assessments against PopCat and granting

judgment on the Department’s counterclaims in the amount of 

$2,107,691.54; and

(2) the Davidson County Chancery Court’s May 26, 2017 order denying 

PopCat’s motion to alter or amend filed in that action.

Both of these orders were entered following entry of the final judgment in this matter on 

March 20, 2017. In his response to the Department’s motion, Mr. Bookstaff stated that 

although he does not believe these orders should be considered because they are

irrelevant to the matter herein, he does not object to their inclusion in the appellate 

record.

Tennessee Rule of Appellate Procedure 14 provides that this Court, in its 

discretion, may consider facts “concerning the action that occurred after judgment.” 

Such consideration generally extends “only to those facts, capable of ready 

demonstration, affecting the positions of the parties or the subject matter of the action 

such as mootness, bankruptcy, divorce, death, other judgments or proceedings, relief 

from the judgment requested or granted in the trial court, and other similar matters.” See

Tenn. R. App. P. 14 (emphasis added). We determine that the judgment ultimately 

rendered in the related litigation between PopCat and the Department is a fact capable of 

ready demonstration, which affects the positions of the parties herein. The orders entered 

by the Davidson County Chancery Court are relevant to the subject matter of this action

because those orders concern the Department’s assessments of F&E taxes against 

PopCat, which are the same assessments the Department now seeks to enforce against 

Mr. Bookstaff. We therefore exercise our discretion to determine that the Department’s 

motion for consideration of post-judgment facts should be granted.

V. Statute of Limitations

The Department asserts that the trial court erred in its determination that the sixyear statute of limitations found in Tennessee Code Annotated § 67-1-1429(a) (Supp. 

2017) barred the Department’s action against Mr. Bookstaff. This statutory section 

provides in pertinent part:

(1) Where the assessment of any tax imposed by this or any other title 

has been made within the applicable period of limitation, such tax 

may be collected by levy or by a proceeding in court, but only if the 

levy is made or the proceeding begun: 
6

(A) Within six (6) years after the assessment of the tax becomes final . . . 

.

The Department argues that a collection “proceeding in court” was initiated within 

the initial six years following the assessments of F&E taxes against PopCat, which

resulted in a judgment in favor of the Department.

3

 As the Department points out, 

Tennessee Code Annotated § 67-1-1429(a)(3) further provides:

The period for collection provided in subdivision (a)(1)(A) shall not apply

if the tax liability has been reduced to judgment in a suit begun within such 

period. Such tax may be collected at any time subsequent to assessment 

without limitation after such judgment.

(Emphasis added.) Therefore, according to the Department, because it filed a 

counterclaim against PopCat in the Davidson County Chancery Court lawsuit within six 

years of the initial assessments, with such claim resulting in a judgment granted in the 

Department’s favor, the Department can attempt to collect said judgment at any time

without limitation pursuant to Tennessee Code Annotated § 67-1-1429(a)(3). Our 

Supreme Court has explained that a counterclaim should be regarded as an independent 

action, as if it were “a separate suit brought.” See Brown v. Hipshire, 553 S.W.2d 570, 

571 (Tenn. 1977) (quoting Consol. Motor Lines v. M. & M. Transp. Co., 20 A.2d 621 

(Conn. 1941)).

Tennessee Rule of Civil Procedure 13 addresses counterclaims and cross-claims, 

providing in relevant part: “A pleading shall state as a counterclaim any claim, other than 

a tort claim, which at the time of serving the pleading the pleader has against any 

opposing party, if it arises out of the transaction or occurrence that is the subject matter of 

the opposing party’s claim . . . .” This Court has previously explained that a party is not 

prohibited from filing such a counterclaim as a separate lawsuit “if that party is willing to 

run the risk that it may well lose the right to pursue its claim in the separate lawsuit if the 

initial suit results in a final judgment first.” See Crain v. CRST Van Expedited, Inc., 360 

S.W.3d 374, 379 (Tenn. Ct. App. 2011). In this matter, the Department chose to bring its 

claim against PopCat as a counterclaim in the action filed by PopCat, rather than in a 

separate lawsuit, when either choice was acceptable. We cannot fault the Department for 

filing its claim as a counterclaim and see no reason to draw a distinction, for the purposes 

of construing the above statutory section, between a claim that is filed via an original 

 

3 No allegation has been raised that the F&E tax assessments were not made within the applicable 

limitations period found in Tennessee Code Annotated § 67-1-1501(b) (Supp. 2017) (providing that “the 

amount of any tax imposed under any title, in which the filing of a return is required by the state, shall be 

assessed within three (3) years from December 31 of the year in which the return was filed . . . .”).
7

complaint and a claim filed as a counterclaim. In either scenario, the Department has 

begun a “proceeding in court” to collect taxes previously assessed pursuant to Tennessee 

Code Annotated § 67-1-1429.

As Mr. Bookstaff points out, the Davidson County Chancery Court lawsuit was 

between the Department and PopCat; Mr. Bookstaff was not a party. We note, however, 

that collection of taxes assessed against a corporation may be sought from a shareholder 

in certain situations. We now turn to the issue of whether the Department may collect 

this tax liability from Mr. Bookstaff individually.

VI. Personal Liability

The trial court determined that the Department could not assess F&E taxes against 

Mr. Bookstaff individually because he did not meet the definition of a “taxpayer” 

contained in the definitions section of the franchise and excise tax provisions. Tennessee 

Code Annotated § 67-4-2004(38) (Supp. 2017) provides:

“Person” or “taxpayer” means every corporation, subchapter S corporation, 

limited liability company, professional limited liability company, registered 

limited liability partnership, professional registered limited liability 

partnership, limited partnership, cooperative, joint-stock association, 

business trust, regulated investment company, REIT, state-chartered or 

national bank, or state-chartered or federally chartered savings and loan 

association . . . .

Therefore, according to the trial court’s analysis, because Mr. Bookstaff is not included 

within this definition, he could not be “classified as a taxpayer for” F&E taxes.

The Department asserts, however, that the franchise and excise tax provisions 

authorize it to collect taxes previously assessed against the corporation from Mr. 

Bookstaff individually pursuant to Tennessee Code Annotated §§ 67-4-2016 (2013) and 

-2117 (2013).

4

 Tennessee Code Annotated § 67-4-2016(a) provides:

The commissioner is empowered and it is the commissioner’s duty to 

collect the tax, together with penalty and interest, levied under this part 

from any officer, stockholder, partner, member, principal, or employee of a 

taxpayer that is out of business or has dissolved, liquidated, otherwise 

terminated at a time when it has refused or failed to pay the excise tax 

 

4 Tennessee Code Annotated § 67-4-2016 is contained within the section regarding excise taxes, and § 67-

4-2117 is contained within the section regarding franchise taxes.
8

levied under this part, and any such officer, stockholder, partner, member, 

principal, or employee has received property belonging to the taxpayer, but 

such collection shall be limited to the value of the property received.

Likewise, Tennessee Code Annotated § 67-4-2117 provides:

The commissioner is empowered and it is the commissioner’s duty to 

collect the tax, together with penalty and interest, levied under this part 

from any officer, stockholder, partner, member, principal, or employee of a 

taxpayer that has dissolved or has been liquidated, at a time such taxpayer 

has refused or failed to pay the franchise tax levied under this part, and such 

individual has received property belonging to the taxpayer, but such 

collection shall be limited to the value of the property received.

To summarize, these nearly identical subsections provide that the Department is 

empowered to collect the tax assessed against a dissolved corporation from a stockholder 

who has received assets that belonged to the corporation, but the amount collected must

not exceed the value of the assets received. 

The Department contends that the 2017 lawsuit filed against Mr. Bookstaff to 

collect PopCat’s unpaid F&E taxes was timely by virtue of the judgment obtained by the 

Department in the Davidson County Chancery Court action. Tennessee Code Annotated 

§ 67-1-1429(a)(3) provides that such money judgment could then be collected without 

time limitation. The Department posits that, by virtue of Tennessee Code Annotated §§ 

67-4-2016 and -2117, the judgment could be collected against Mr. Bookstaff due to the 

fact that PopCat had been dissolved. We agree. Because the Department obtained a

judgment against PopCat for the unpaid taxes, thus establishing that such judgment could 

be collected at any time pursuant to Tennessee Code Annotated § 67-1-1429(a)(3), and 

because Tennessee Code Annotated §§ 67-4-2016 and -2117 permit collection from a 

stockholder, we determine that the Department’s 2017 lawsuit against Mr. Bookstaff was 

not barred by the statute of limitations contained in Tennessee Code Annotated § 67-1-

1429(a)(1)(A). 

VII. Requirement of Fraudulent Conveyance

The trial court determined that Mr. Bookstaff could not be held personally liable 

for the F&E taxes assessed against PopCat in the absence of allegations of a fraudulent 

conveyance from PopCat to Mr. Bookstaff. In making this determination, the court found 

that the language in Tennessee Code Annotated §§ 67-4-2016 and -2117, enacted in 

1999, conflicted with the language of Tennessee Code Annotated § 67-1-1444 (2013), 

enacted in 1988. Section 67-1-1444 provides:
9

(a) When assets are conveyed or obligations are created by a person 

owing taxes to the state, on or after the date any such taxes are 

incurred, and such conveyance of assets or creation of obligations is 

in violation of title 66, chapter 3, then the commissioner may 

proceed to collect such tax debt from the transferee, pursuant to this 

part, in the same manner as the commissioner otherwise could have 

collected such debt from the transferor.

(b) The liability of any such transferee shall be limited to the fair market 

value of the assets conveyed at the time of the transfer from the 

original taxpayer or the amount of any such obligation at the time 

the obligation is created.

(Emphasis added.) Tennessee Code Annotated § 66-3-301, et seq., known as the 

Uniform Fraudulent Transfer Act, concerns transfers made by a debtor to avoid collection 

by a creditor. Therefore, the trial court essentially superimposed the requirement of proof 

of a fraudulent transfer onto the provisions of Tennessee Code Annotated §§ 67-4-2016 

and -2117 when those sections do not expressly require such a showing. 

The Department asserts that this requirement was added by the trial court in error 

because Tennessee Code Annotated sections 67-4-2016 and -2117 appear in a chapter of 

the tax code separate from section 67-1-1444 and are thus independent. Mr. Bookstaff 

argues that these provisions must be read in pari materia because Tennessee Code 

Annotated § 67-1-1444 is found within Chapter 1, Part 14, which is entitled, “Tax 

Enforcement Procedures Act.” This Part also contains Tennessee Code Annotated § 67-

1-1402 (2013), which states in pertinent part:

(a) This part shall apply to every public tax, license or fee, and/or any 

penalty or interest payable thereon, levied under any existing or later 

enacted law that is codified in this or any other title and is collectible 

by the commissioner of revenue.

(b) The purpose of this part is to supplement and clarify existing 

provisions of the general law relating to the enforcement of state 

taxes and to compile in a single part the principal enforcement 

procedures previously enacted and codified in numerous other 

chapters of this title.

(c) In the event of any conflict between the provisions of this part and 

those of any other specific statutory provisions contained elsewhere 
10

in this title or in any other title, it is declared to be the legislative 

intent that, to the extent such other specific provisions are 

inconsistent with or different from this part, the provisions of this 

part shall prevail. 

We determine, however, that the simplest construction of these statutory sections, 

and one that does not create conflict between them, is to enforce the plain language of 

Tennessee Code Annotated §§ 67-4-2016 and -2117, which does not require the finding 

of a fraudulent conveyance solely in those situations where the transferee of assets is a 

shareholder in a now-dissolved corporation. Similarly, the plain language of Tennessee 

Code Annotated § 67-1-1444 demonstrates that it would apply in any other situation 

wherein assets have been transferred by any person in order to defraud the Department 

from levying against those assets for the collection of tax liability. In other words, the 

two provisions are not conflicting—rather, the more recently enacted provisions found in 

Tennessee Code Annotated §§ 67-4-2016 and -2117 provide an additional remedy to the 

Department in those instances when assets have been conveyed by a dissolved 

corporation to a shareholder.

In conducting this analysis, we adhere to the following longstanding principles of 

statutory interpretation:

When dealing with statutory interpretation, well-defined precepts apply. 

Our primary objective is to carry out legislative intent without broadening 

or restricting the statute beyond its intended scope. Houghton v. Aramark 

Educ. Res., Inc., 90 S.W.3d 676, 678 (Tenn. 2002). In construing 

legislative enactments, we presume that every word in a statute has 

meaning and purpose and should be given full effect if the obvious 

intention of the General Assembly is not violated by so doing. In re 

C.K.G., 173 S.W.3d 714, 722 (Tenn. 2005). When a statute is clear, we 

apply the plain meaning without complicating the task. Eastman Chem. 

Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). Our obligation is 

simply to enforce the written language. Abels ex rel. Hunt v. Genie Indus., 

Inc., 202 S.W.3d 99, 102 (Tenn. 2006). It is only when a statute is 

ambiguous that we may reference the broader statutory scheme, the history 

of the legislation, or other sources. Parks v. Tenn. Mun. League Risk 

Mgmt. Pool, 974 S.W.2d 677, 679 (Tenn. 1998). Further, the language of a 

statute cannot be considered in a vacuum, but “should be construed, if 

practicable, so that its component parts are consistent and reasonable.” 

Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968). Any 

interpretation of the statute that “would render one section of the act 

repugnant to another” should be avoided. Tenn. Elec. Power Co. v. City of 
11

Chattanooga, 172 Tenn. 505, 114 S.W.2d 441, 444 (1937). We also must 

presume that the General Assembly was aware of any prior enactments at 

the time the legislation passed. Owens v. State, 908 S.W.2d 923, 926 

(Tenn. 1995).

In re Estate of Tanner, 295 S.W.3d 610, 613-14 (Tenn. 2009).

Based on these precepts, we presume that the General Assembly was aware of the 

language of Tennessee Code Annotated § 67-1-1444 at the time Tennessee Code 

Annotated §§ 67-4-2016 and -2117 were enacted. We determine that in order to construe 

these provisions in such a way that one section is not repugnant to the other, we must also 

presume that the General Assembly intended to provide a broader remedy to the 

Department in those situations when a shareholder has received assets from a dissolved 

corporation that owes taxes. We conclude that, based upon the plain language of 

Tennessee Code Annotated §§ 67-4-2016 and -2117, the Department was not required to 

demonstrate that a fraudulent conveyance was made by PopCat to Mr. Bookstaff. We 

therefore reverse the trial court’s imposition of this additional requirement.

VIII. Conclusion

In our discretion, we hereby grant the Department’s motion seeking consideration 

of post-judgment facts. Because the Department timely obtained a judgment against 

PopCat for unpaid F&E taxes, thus establishing that such judgment could be collected at 

any time pursuant to Tennessee Code Annotated § 67-1-1429(a)(3), and because 

Tennessee Code Annotated §§ 67-4-2016 and -2117 permit collection from a stockholder 

who has received assets from a dissolved corporation, we determine that the 

Department’s 2017 lawsuit against Mr. Bookstaff was not barred by the statute of 

limitations contained in Tennessee Code Annotated § 67-1-1429(a)(1)(A). We further 

determine that the Department was not required to demonstrate that a fraudulent 

conveyance was made by PopCat to Mr. Bookstaff. We therefore reverse the trial court’s 

judgment in favor of Mr. Bookstaff and its grant of injunctive relief. We remand this 

matter to the trial court for further proceedings consistent with this Opinion. Costs on 

appeal are taxed to the appellee, Blake Bookstaff.

_________________________________ 

THOMAS R. FRIERSON, II, JUDGE