### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE April 4, 2002 Session
PATRICK MCGEE v. TIMOTHY BE ST, ET AL 

### . A Direct Appeal from the Chancery Court for Davidson County No. 99-3-1 The Honorable Irvin H. Kilcrease, Jr., Chancellor

No. M2001-01365-COA-R3-CV - Filed June 18, 2002

This case involves the termination of membersh

ip and emplo yme

nt of a me mber of a n LL C. The terminated member and employee filed suit against the L LC and the other member s ther eof alleging breach of contract , b reach of covenant of good f aith and fair dealing, breach of fiduciary du ty, civil conspiracy, unf air competition, fraud, and misrepresentation. The t rial courtgranted defenda nts’ motion for

judgmen t on the ple adings a s to all cla ims except t

he claim for br each of contract and breach of the covenant of good faith and fair dealing . Thereafter, the trial court g ranted defenda nts’ motion for summary judgme nt on the remaining two claims. Plaintiff appeal s. We affirm, modify, re

verse in part, and remand.
Tenn. R. Civ . P. 3; A ppeal as of Rig ht; Judgment of the C hancery C ourt Affirm ed, Modified, Reversed in Part, and Remanded

W. F RANK C RAWFORD , P.J., W.S., delivered the opinion of the court, in which A LAN E. H IGHERS , J. and D AVID R. F ARMER , J., joined. G. Kline Preston, IV, Nashville for Appe llant, Patrick McGee

Tim K. Garr ett, Nash vill e, For Appellees, Timothy Best, Robert Frank, David I ngram, Ing

ram Ent ert ain men t, Inc. , an d Mc Gee , Be st , Fr ank & Ingr am LLC
OPINION

On January 4, 1999, the plaintiff, Patrick McG ee (hereinafter “McGe

e”), filed a “Complaint and Application for Extraordinary Relief” in the Chancery

Court for Davidson County, Tennessee agains t the defe ndants, Timothy Best (her einafter “Best”), Robert Fr ank (hereinafter “Fra

n k”), Davi d Ingram (hereinafter “I

ngram”), I

ngram Entertainment, I

nc. (hereinafter “I

EI”) and McGee, Best, Frank and Ingra m LLC (he

reinafter “MBF&I

”), al leging a violation of the LL C Operating Agreement and the T ennesse e Limi

ted L iability Act; breach of

contract; breach of fiduciary duty; and breac

h of the covenant of good faith and fa ir dealing.-2-

McGee avers in

the complaint that in January of 1997, he, along with Frank, Best and K. K. Wi seman , formed the Nashville, Tennessee advertising firm of McGee, Best, Frank & Wiseman, and he owned more than a 50% interest. The co m plaint states that McGee had been the president of another advertising firm prior to the formation of McGee, B est, Fra nk and W iseman. In May of 1997, the members of McGee, Best, Fra nk & Wiseman converted the firm into a n L LC, and I

EI joined as a memb er with

David Ingra

m, acting as the representative of I EI and as an officer of the LL C. After the forma

tion of the

LL C, the owne

rship inte rests we re as fo llows: McGee owned a 33 1/3% membersh

ip share; IEI

owned a 33 1/3% membership share and Frank and B est each owned
a 16 2/3% membership share. The LL C name was then changed to McGee , Best, F

rank & I ngram, LL C.

The complaint avers that the members executed an “Opera ting Agreement” on April 22, 1997, whic

h provide s in pertinent part :
1.1 Formation. Th e M em be rs he re by form a lim ite d liability company pursuant

to the Ten

nessee L im ite d Lia

bility Company Act (the “Act”).

1.2 Name. The name of t he limited

liability company shallbe McGee, Best, Frank &

Ingram L LC (the “Company

”).

* * *

5.4 Termination of

Emp loyment for Cause. In the event any Member employ ed by the L LC co mmits an act describ ed in the definition of

“Cause” in Section 10.4(f), such Member’s emplo yment

by the L LC may be terminated by a

vote of the other Members holding a

t le as t 70% of the remaining Members hip In

terests.
* * *

5.7 No Exclusive Duty. Except a s othe rwise specifically provided below, each officer or Member may have ot her business interest s and may engag e in other

activ ities in addition to those relating to the LL C. Neither the LL

C nor any Me mber shall hav e any

right to share or particip ate in such other

in vestments or activities of any othe r Member basedon the fact that ea ch are members of the L LC. No Member shall incur any

liability to any

other Member

or the LLC as a result of engaging in any other

business or venture. Notwithstanding the for e going, the Members shall not have other business interests an d m ay not eng age in activities-3- which compete in any

re sp ec t, di re ct ly o r i nd ir ec tl y, with the business of the Comp any

or which would re present a conflict of interest ; provided, however, that Ing ram Entertainment Inc. may con tinu e to ow n, ope rate an d mana ge Ingram De sign Group, Inc ., its in-house adagenc y, a nd/or any success ors to Ingram De sign Group Inc.

6.4 Action Without

a Meeting. Action require d or perm itted to be taken at a meeting of the Members may be taken without
a meeti ng i f the action is evidenced by one or more written consentsdescribing the action taken, signed by the Members holding a majority of

the Members hip voting power entitled to vote(or any

great er propo rtion req uired by this Agree

ment, the Article s, or the Act) and delivered to the Secretar y of the Company for filin g with the

Company

record s.
* * *

10.4 Option to Purchase Upon Terminat ion of Employmen t. In the event that the employment of any Member w

ho is a fulltime employee of the

Company is terminated, the Company shallhave the option to purchase the Membership Inter est of the terminated Member

for the Form ula Value (as def ined in (e) below) of the te

rminated Member’ s Member ship I nterest (as sh ow n o n t he bo ok s o f t he Co mp an y as at t he end of the month in which the event occu rs whi ch gives rise to the Company’s option), all in accordance with the following terms and condition s:
* * * (e) Formula Value. The “Formul a Value” of a Mem ber’ s Membership Interest shall mean the g reater of ( i) or (ii) below; provided, however, that in the
ev ent t he Member’s employ ment is terminated for “Cause” (as herei nafter define d), the “Formula Value” of such Memb er’s Membership Interest shall mean the lesser of (i) or (ii) below: (i) the amoun t of the capital account attr ibutable

to that M embershi p Interest; or-4- (i i) three tim

es the av erage

of th e amount of income allocated or allocab le to that Membership In terest (under Section 4.1 (a)) during each of the three prec ed ing 12 month periods (or, if less th a n 36 months, such sh o rter period during which such Memberhad such

Me mbers hi p Interest). (f) Definition of Cause. Onl y f or purpos es of this Section 10.4 and Section 5.4 hereof, “Caus e” s hall
mean any act that i s m ater ially

inimical to

the best interest s of the Company and that c onstitutes on the part of th e M em be r p er so na l d is ho ne st y, will ful miscondu c t, breach of fiduciary duty involving personal profit, intentional fai lur e to perform stated duties, or willful violation of any law, g overnmental rule or regulation.

* * *

12.5 B inding Effect. Except as h erein ot herwise provided to th e contrar y, t his Agr eement s hallbe binding

upon, and

inure to the benefit of, the M embe rs and the ir respective he

irs, executor s, administr

ators, su ccessor s, tr ansferees and as signs.

McGee further

allege s in the complaint that Tri-Vision International L TD (hereinafter

“TriVision”) is a client of MBF&I and is the exclusive licensee of the “v-chip”, which is an ele ctronic device designed to permit parentsto contro l their ch ildren’sa ccess to cert ain types of television programming based on rating codes. The complaint states that I EI is the primary

distributor of the
v- chi p for Tri-Vision in the United States and that MBF&I has planned, produced and placed advertising for Tri-Vision in various markets throughout the United States. McGee avers th at TriVision is indebted to MBF&I in the amount of

approximately $553,000 for the advertising services and IEI is indebted

to Tri-Vi sion in

the amount of $750,000 for the delivery of v-chip products that IEI will distribute. The complaintallege s that “I EI’ s failure

to pay that oblig ation hashampered TriVision’s ability to pay

the monies it owes to the LL C.”

McGee further aver s t hat IE I has directed MB F&I to re serve the entire Tri-Vision indebted ness of $553,000 as a bad deb t on the firm’s financial statements and that he was not advised of this decision until after it was made. The complaint further alleges that the accrual of the Tri-Visi on account as a ba d debt hascreate d financ ial proble ms and sta

tes:-5- 18. The conduct of IEI and Ing ram in ar tificiall y creating and then attempting to benefit from the LL C’s financial problem

violates t heir fiduciary duties owed to McGee and to the LL C. Ad diti onally, I

EI has a conflict of interest and has violated member standards under TCA § 48-240-1 02. I

ngram a nd IE I ha ve done s o by

failing to act in good faith, prudently, and in the best intere sts of the LL C; they have directed that the LL

C accrue as a bad de

bt the monie s owed by

TriVision, when IEI

has contributed to, if it has not actua lly c aused, T

riVision’s i nability

to pay the L LC by IEI ’s own fa

ilure to pa

y TriVision the monies owed for the distribution of Tri-V isio n’s v-ch ip products

. The complaint

further al leges that on December 31, 1998, Be st, Frank and IEI executed a document entitled “Action Taken onWritten Consent of the Members of McGee, Best, Fra nk and Ing ram L LC,” which pr

ovides in p ertinen

t part:
The un dersi gned me mbers (the”M embers ”), bei ng t he holder s of 66 2/3% of

the membe

rship inte rests, and 100% of

the membe

rship interest s other than those held by Patric k McGee, of McGee, Best, Frank & Ingr am LL C, a Tennessee limited liab il ity company (the “Company”), do, as of t his 31st da

y of Decemb er, 1998, hereby consent to and take th e following acti ons, as ev idenced by t heir signatures below:
WHEREAS, Patrick McGee, the Chief Man ager and a member of the Company (“M cGee ”), has committed acts described within the definition of “Cause,” as set forth in Section 10.4(f) of the Company’s Operat ing Agree ment dated April 22, 1997 (the “Operating Agreement”); and
WHEREAS, as a result of such acts, the Membersbelieve it is advis able and

in the best interest of the Company to (i) remove McGee from the office of Chief Manger of

the Compan

y, p ursuant t o Section 5.13 of the Operating Agreement; (ii) terminate McGee’s employ ment wit h the Company, pursuant to Section 5.4 of the Operating Agree

ment; and

(iii) pur chase Mc Gee’s me

m bership interest , pursuan

t to Section

10.4 of the

Operating Ag

reemen t. NOW, THEREFORE, BE IT RESOLVED, that the Members hereby remove M cGee from the office of Chief Mana ger of the Company pursuant to Section 5.13 of the Operating Ag

reemen t, and appoint Robert M. F

rank to se rve in his stead, un

til Robert M. Frank’s
success or is duly

appointe d by

the compa

ny’ s members ;-6- RESOLVED FURTHER, that the Members hereby terminat e McGee’s employ

ment with the Company pursuant to Section 5.4 of the Oper ating A greem

ent;
RESOLVED FURTHER, that the Members hereby approve the Compan

y’ s exercise

of its option to purchase McGee’s 33 1/3% membersh

ip interest in the Company, purs uant to the terms and conditions of Section 10.4 of the Operating Ag

reemen t, and a uthor ize the Company’s office

rs, andeach of

them, to c ause the

Company

to pay McGee a purchase price f or suc h intere st equal to

the Form ula Value (for Cau se), as such term is defined in Section 10.4(e) of the Operating Agreement, and to execut e and deliver such documents and take such act

ions, on be

half of th e Comp any, as any

of them may deem appropriate to consum mate the purchase of McGee’s membersh

ip interest on the terms and conditions set forth in Section 10.4 of the Operating Agreement; and

RESOLVED FURTHE R, th at the Me mbers he

reby (i) auth orize the Company’s office

rs, and each of the m, to ex ecute, deliver and/or f ile all suc h other do cuments, and to take all such other actions, as such officers may deem nec es sary to ac complish the foregoi ng; and ( ii) ra tify and appr

ove all su ch actio ns previously taken by t he Membe

rs or the Company ’s offic ers cons istent with the foreg oing re solutions.

The complain

t further avers that Best, Fra nk and IEI also sent McGee a letter dated Dece mber 31, 1998 which prov

ides in pe rtinent pa rt:
This letter is to advise you that, effective immediately, y our employment

with McGee, Best, Frank & I ngram LL

C (“the Company”) is hereby ter

minated for cause as set forth in Section 5.4 of th e O pe ra ti ng Ag re em en t o f t he Co mp an y. You ar e hereby relieved of any an d all duties, rights and responsibilities as an employee of the Company. This action also ser ves to relieve y ou of your duties, right s and responsibilities as Chief Manager of the Co mp an y. You are not

to report to work on Monday , January 4 or at any time therea

fter.

As the attached document reflects, this actionhas been taken by vote of th e u nd er si gn ed me mb er s o f t he Co mp an y, who repr esent all of the remaining Membership Interests. Your ter mination is the result of your actions which have be en mater ially inimical to

the best interest s of the Com pany and whic h constitute willful misconduct and-7- intentional failure

to perfo rm stated duties. Mo

re spec ifically , despite instructions to the contrary and d espite the requirements of the Operating Agreement, you have taken actions without nece ssa ry approval of

other Members of the Company , in violation of Section 5.3. Your willful misconduct and intentional failure to perform stated duties, for whatever reason, has underminedyour ability to remain as Ch ie f M an ag er or as an em pl oye e o f t he Co mp an y.
On behal f of the Company, we also inform you that, in acc ordan c e withSection 10.4 of the Operating Agree ment, the Company here

by exercises its option to purchase your Member ship I nt erest. The amount for which your

Membership Interest will be purcha sed w ill be determined in accordance with t he Formula

Value se t forth in Section 10.4(e) of the Ope rating Agree ment. I n accor dance w ith Section 10.4(d) of the Oper ating Agreement, we anticipate closing the purchas e of your Member s hi p Interest by no later than January 31, 1999. We will contact you in the near fut ure wit

h an exact date for that closing and with the exact amount of the purchase pr ice i n accordance with the Formula Va lue.

We also wish to remind y ou of your obliga

tions under an Employment

& Non-solicitation Agreement, w hich you signe d and which became effective Jan ua ry 1, 1998 and which we consider a very important asset of the Company. We trust thatyou will abide by your word and not conduct y ourself in any mann e r that would be in violation o f that co venant.

In sum, Mc Gee alleges that the defenda nts violated the Operating Agree ment, and t h e Tennessee Limite d Lia

bility Act by purporting to ter

minate him

without a meeting or the waiver of
a meeting . Furthe

rmore, he aversthat the d

efenda nts brea ched the agree ment and t

heir fidu ciary

duty to the L LC an d the cove

nant of good faith an d fair de aling by purporting to ter

minate his employment

for “ca use” whe n no caus e existed a

nd by attemptin g to acq

uire his me

mbership interest, without having any right to do so.

On February

4, 1999, the defendants filed an answer deny ing the material allegations of the complaint and aver tha

t in any event Mc Gee wasan employ ee at will by virtue of an “ Employment & Non-So licitation

Agree ment,” wh

ich provi des in per

tinent pa rt: NOW, T HERE FORE, in consideration of the premises and
covena nts stated below, the partie s agre e as follo ws:
1. Term . This amendedem ployment ag reement is effective as of January 01, 1998, and shall supersede any prior employment-8- agree ments betwee

n Employ ee and MB F&I, written o r oral, in all respec ts. The new term of employ ment is for an indefinite ter m commencing the effectivedate of t his agr eement s tated imme diately above (the “Te

rm”). Th is agreement sha

ll continue

indefinit ely at the will of either

party unless and

until terminated by either pa rty upon no less than 15 days notice unless f or good cau se in which event te rm in at io n b y ei th er pa rt y ma y be im me di at el y.
* * *

6. Covenant N

ot To Com pete . Employee ag rees that for a period of eighteen (1 8 ) months fo llowing t erminati on of empl oym

ent, Employee

shall not, di re ctly or indirectly , in any territory or in any
manner or capacity , as agent, partner, officer, employ ee, sales person, consulta nt, or otherwise, engage

in any activity

which solicits and/or services any

company which is or was ever a client or active prospect of MBF&I termination (sic) of Employ ee’s em ploy ment with MBF &I. In the event Employ ee violates the foregoing c ovenant, the period of time shall be extended by the amount of time Employ ee was in violation of same.

* * *

10. Violation o

f Agreem

ent . Employ

ee acknowledg es tha t any viola ti on or threa

tened vio lation of t

hese cov enants w ill cause immediate

ly and irreparable injury

to MBF&I, a

nd that the remedies at law for any

such violation or threatened vi o lation may be inadequate, and that

MBF&I shall, in addition to any other rig hts and remedies av ai la bl e i n l aw or in eq ui ty, be entitled to temporary and/or permanent

injunctive relief, and specifi c p erformance, without the necessity of pr

oving actual damages or

po st in g b on d. Ad di ti on al ly, MBF&I shallbe entitled to recover any damages it may

have suffered
as a res ult of Employe e’s bre ach of th ese cove nants.
* * *

11. Miscella

neous. Employee re

presents that he/she i s not a par ty to any ag reement which is in

conflic t with this A greem ent and isfree to render the services contemplated her ein. This Agreement shall be constructed

and enforced in accordanc e with Tennessee law, and any action arising

from t his Agreement may be maintained in a court of compet ent jurisdiction in Na shville, Tennessee or at MBF&I ’s option, where an y breac h occurs. MBF&I shall be e

ntitled to r

ecover its-9- expenses, including attorney fees, incurred

as a res ult of any violation of this Agreement by

Employee.

The answer contains a counter-cla im which was subsequently voluntarily dismissed.

Plaintiff also amended his complaint on February 25, 2000, which includes allegations of breach of contract, breach of fiduciar y duty , fraud and negligent misrepre sentation. The amendment to the compl aint goe s into gr eat deta il conce rning th e debt of IEI with Tri- Vision and

the debt o f TriVision to th e LLC . In essence, the c omplaint alleges that IEI was aware of financial aff airs and conditions of the LL

C and the fact that the LL C was owed a large amount of money by Tri-Vision. McGee alleges that, without any agreement on his part, defenda nts reserved as a bad debt approxima

tely $200,000.00 which had the effect of reducing the assets on the balance sheet of the LL C. McGee further avers that I ngram, acting on behalf of I EI, instructed the

LLC to purcha se substantial media ads for the marketing of the V-Chip and that

this was do ne by

McGee o n behalf of the LL C, relying on I

EI’s obligation to pay

its debt to Tri-Vision. In essence, he alleges that I EI failedto in for m t he LLC that it did n ot intend to honor its c ontract

ual oblig ation to Tr

i-Vision s o that Tri-Vision could pay the

substantial amountowed the LL C. He avers that he objected to the writing down of the Tr

i-Vision a ccounts receivable, which were in fact collectable, as later proved to be fact

. McGee states that the acts of I EI in relation to Tri-Vi sion matte

rs were acts by IEI as a member of the LL C and that the acts pursuant to Parag raphs 5.1 and 5.2 of

the Oper ating A greem

ent const itute
a conflict of interest and, t herefore, a breach of the provisions of Paragraph 5.7. The amendment further avers that the acts of I

EI and the other def

endants constitute a breach of contract, bre ach of fiduciar y duty , and a br

each of covena nt of goo d faith a

nd fair d ealing , unfair

competiti o n an d
co ns pi ra cy, and part

icularly alleges that the designation of the Tri-Vision account as a bad de bt when it was in fa ct collectable

resulted in a loss to plaintiff. The amendment further allege s that the failure of IEI to disclose the fact

that it was not going to pay

the contractual obligation operated as a f raud
on the LL

C, and the LL

C was induced to make media buy s for the advertising program. I n the alternative, the amendment alleges that if there was not a deliberate fraud, it was at the very least a negligent misrepresentation.

Defend ants’ answer to the am ended complaint admits the general averments of the complaint concerning organization and membership of the LL

C. The answer denies the allegations concerning the Tri-Vi sion account and avers that the account is prese ntly uncollectable. The

remaining allegations of the amended complaint are de nied and issue is joined thereon.

On October 10, 2000, the defendants filed a motion for partial judgment on the plead i ngs, stating in pertine

nt part:
4. Defendants submit that, based upon the pleadings already in the record, Plaintiff cannot state (or has not stated ) a claim u pon which relief can be granted with respect to the follow ing causes of action: breach of fiduciary duty, breac

h of covenant of good faith and-10- fair dealing , civil co nspirac y, u nfair competition, fraud, and negligent misrepresentation.

After a hearing on November

3, 2000, the trial court filed its order on November 15, 2000, granting the defendants’ motion for partial judgment on the pleading s and dismissing the plaintiff’s following causes of action: breach of fiduciar y duty ; civil conspiracy; unfa ir competition, fraudand misrepre sentation . The tria l court’sorder pr

ovides in p ertinen

t part:

IT IS, THEREFOR

E, ORDERED, ADJUDGED AND DECREED that the following causes of action are dismissed and

that,
as to these causes of action, Defendants’ motion is gra nted for th e following reasons :
1. Caus e of Acti on for Breach of Fiduciar y Duty . Plaintiff has alleged that the Defen dants breach ed their fiducia ry duty to Plaintiff in various ways. The

Court finds that the Tennessee Limited Liab ility Corporation Act

(“the Tennessee L

LC Act”) does not

create a fiducia ry duty betwee n member s of an L

LC. An LL C is a creature of statute, and any

duty which mem

bers owe must be se

t forth in the statute. However, the Tennessee L LC Act does not create a

fiduciary duty bet wee n m emb ers of a n LLC . Theref ore, Plaintiff’s cause of action based upo n a fiduciary obligat ion owing

to him indivi dually does not state

a cause of

act io n re cog ni ze d un der th e Te nne ss ee LLC Act.

2. Cause of Action for Civil Conspiracy. I n the Amended Compla int , Plaintiff makes mention in only one phrase of an allegationof a civil conspiracy . Amended Company at ¶ 85. Plaintiff appare ntly bases his cause of action fo r civil conspiracy upon that allegationalone because theCourt is unable to find in the Amended Complaint other facts or allegations upon which such cause of action is based. T

he Court f

inds that the Amended Complaint is not
su fficient in this regard because it does not set forth the fa cts upon which th e c ause of a

ction for civil con spiracy

is based a

nd fails to inform Defendants of the basis for this cause of action.

3. Cause of Action for Unfair Competition. Plaintiff alleges that the Defendants engag ed in unfair competition. However , the Courtfinds t

hat the Amended Complaint is not sufficient in setting forth this caus e of act

ion beca use it does not setforth the facts upon which the cause

of action is based and fails to inform Defendants of the basis for this cause of action.1 The tri al c ourt recog nize d tha t the nat ure of the em ploym ent rela tionship - whethe r an “at-will” relation ship or whethe r Plain tif

f coul d be termin ated only for “ cause” - is a mat ter of disput e. -11- 4. Causes of Action f o r Fraud and Misrepresentation. Plaintiff alleges the causes of action of fraud and misrepresentation. Plaintiff allege s t hat cer

tain infor mation wa s withheld

from him – either in te nt io na ll y or ne gl ig en tl y –a nd that this information was material in the manner by

which he conducte d the aff airs of th e LL C. Plaintiff does not a

llege t hat he co nducted h

is own personal affairs in reliance upon any

such mate

rial info rmatio n or that he obligated himself persona lly in reliance ther

eon. Plain

tiff doesalle ge that he
was in jured personally, see Amended Complaint at ¶ 94, but such alleged in ju ry a pp ears to be derivative. To the extent that Plaintiff relies upon a derivative injury , the P lainti ff cannot present such
causes of action in his own n ame because he lacks individual standing to do so.

Ho wever, Plaintiff

may be claiming that h

is person al in

jur y was his termination from empl oym ent. I f so, such injury certain ly is person al and not derivative, but that claim arises out of the
e mployment

relationship and does not create a cause of action for fraud or misrep

resenta tion. That

is, the Pla

intif f’ s employment relation ship is in the nature of a contra ctua l relationship and Plaintiff’s allega

tion that su ch termination was wrongful does not elevate the claim

to one of fraud and/or misrepresentation. 1 The contractual employment relationship defines the duties of the parties thereto and if allegedly

breached, the cause of action lies in contract and not in fraud and/or misrepresentation.

Defend ants’ Motion for

Partial Judg

ment on the

Ple adin gs with re spect to the remaining causes of action which w ere includ e d in th e Motion - namely the c ause of action for breach of c ontra c t under Section 5.7 of

the Operating Agree

ment and the cause of action for breach of the covenant of good faith and fair de aling - is denied.

All other matters are reserved.

On Dece mber 13, 2 000, the p laintiff filed a motion for in

terlocu tory appeal a s to his cla

im for breach

of fiduciary

duty and the trial court denied this motion by order filed January 24, 2001.

On February

12, 2001, defendants moved for summary judgment as to the p laintiff’ s remaining claims of

breach of contr act and b reach o f th e coven ant o f good f aith a nd fai r deali ng.-12-

After a hearing on Ap

ril 27, 200 1, the tria

l court fi led it s “Memorandum Order” on May 7, 2001, which pr ovides:

FINDI

NGS OF FACT AND CONCLUSI ONS OF LAW

1. In ruling on a motion for summary judgment, the Court must begin it s analysis by

determining whether the moving party has satisfied its burde

n of showing the a

bsence o f a gen

uin e iss ue of material fact. If so, the Court then must determine whether the part y opposing the motion h as come forward to show that

there is a genuine issue of material fact which would req ui re a trial. See gen erally Tenn.R.Civ.P. 56. In assessing whethe r a fact is material, the

Court considers t he substantive law supporting the causes of action upon which Plaintiff seeks relief. To determine whether a dispute as to a fact is genuine, the Court determines whether a reasona ble juror could find for the Plaintiff on that fact given the entire recor d, but without making any

credibi lity

determin ations. In this assessment, the Court must make all r easonab le infer

ences in fa vo r o f t he no n- mo vi ng pa rt y.
2. Plaintiff is a former employee and member of Defenda n t McGee, Best, Frank &

I ngram LL

C (“MBFI”or “the LL

C”). He alleges that Def

endants b reache d the Operating Agree ment of the LLC when they ter

minated his employment and when the y took action without a meeting under Section 6.4 of the Operating Agree ment. Plaintiff’s remai ning claims are as follows: (a) Defend ants wrongfully

terminated his employment in violation of the Operating Agreement, (b) Defe ndants took corporate action without
a meeti ng in vio lation of t he Oper ating A greem

ent, (c) Defend ants engaged in certain activities which constituted a “conf

lict of int erest” in violation of the Operati

ng Agreement, and (d) Defendants breached the implied covenant

of good faith and fair dealing with respect

to the Operating Ag

reemen t.
3. In Janu ary

1997, Plain

tiff, alo ng with

Tim Best (“Best”), Bobby Frank (“Frank”) , and Ms. K. K. Wiseman, formed an advertising agency

known as McGee, Best, F rank & Wi seman, L

LC. In February

1997, Ms. Wiseman resigned, and, in April 1997, Ingra m Entertainment

Inc . (“I EI” ) joined th

e LL C, which became

known as MBF I.

4. Membership Interests among the four (4) members were as follows: Plaintiff owned 33 1/3%; IEI owned33 1/3%; Frank owned 16 2/3%; and Best owned 16 2/3%. Plaintiff wa s appoint ed Chief-13- Manager, with responsibility for the d ay-to-day oper ation of the
co mp an y, and Fran k and David Ingra m (“Ingra

m”) became the Secretary and Vice-President, respectively

. 5. On April 22, 1997, the members of MBFI signed a n Operating Agreement. The Operating Agreement contemplates that the LL C’s individual members – Plaintiff, Frank and Best – would be employ ees of the LL

C.

6. In January

1998, Plaintiff signedan Employment & NonSolicitation Agreement (“the Employment

Agreement”). Howeve

r, in filings b efore t

his Court, in discove

ry response s, and in hi s deposition testimony, Plaintiff has taken the p osition tha t this Employment Agreemen

t is invalid and unenforceable. Without ru lin g on the validity of the Employ ment Ag reement, the Court finds that the Plaintiff

is estopped from now asserting any claim pursuant

to the Employ ment Ag reemen t.

7. In the parties’ respec tive motion papers, there is mu ch discussion regar

ding the business r

elationsh ip betwee n IEIand TriVision International L

TD (“Tri-Vision”) as a result of I EI’s distribution of the “v-chip ,” one of Tri-Visi on’s prod

ucts. The re also i s much discuss ion regarding th e business relationsh ip between MBFI and Tri-Vision as a result of MBFI’s adve

rtising services relating

to the sale of th

is same pr

oduct. L ikewise , t here is much discussion regarding Tri-Vision’s payment

history with MBFI . The Court finds th is historical discussion helpful to understanding the circumstan c e which led to the Plaintiff’s termination of employment. Howe ver, the Courtdoes not find the facts relating to these business relationships
as material given the

substantive law supporting Plaintiff’s causes of action be fore the Court.

8. There is no disput

e that, by Dece

mber 1998, MBFI had a significant

account receivab le b y which Tri-Vision owed MBFI approxima

tely $553,000.00. On December 21, 1998, a meeting wa s held among th

e member s, at the o ffices of IE I, rega rding MBFI ’s financial condition and its impact on the members’ w orkin g relation ships. The discu ssio ns in that meeting and soon thereafter further complica ted the wo

rking r elationsh ips among

the membe

rs. 9. On December 25, 1998, in a telephone convers ation with Tom Lunn, representing I

EI, Best and F

rank discussed their dilemma. In response to Lunn’s inquiry how they wanted to

proceed, Best and-14- Frank to ld Lunn th at t hey t hou ght it bes t t o pr oce ed w it h t he LLC withoutMr. Mc Ge e. On th e v er y ne xt da y, December 26, Mr. Frank informedPlaintiff

of their decision, which action was later finalized
on December 31, in a

formal c onsent, signed b y these three member s, agreeing to take action without a meeting, and termin ated the employment of Plaintiff.

10. Plaint iff wa s provided an official notice, effective December 31, 1998, that his employ ment was terminated.

11. On Plaintiff’s claim that the t ermi nation of his employment

was a breach of the Opera ting Agreement because

there
was no “ca use” for termination, the Court CONCLUDES that plaintiff cannot establish such cause of action as a matter

of l aw. In order for Plaintiff to establish his claim, he must first show that he coul d on ly b e terminated for cause. Otherwise, his wrong ful term ination claim cannot survive. In Tenne ssee, a contract of employ ment fo r an indefinite term is a contract at will and can be terminatedby

ei th er pa rt y, at any time, either with or without cause. Rose v . T

ipton County Pub.Works Dep’t., 953 S.W.2d 690, 691 (Tenn. Ct. App. 1997 ); Bringle v. Methodist Hosp. , 701 S.W.2d 622, 625 (Tenn. Ct. App. 1985). In fact, in T ennes see, the re is a presumption that a n employee is an e mployee at will. Rose , 953 S.W.2d at

691-92. Here, there is no provision in the Operating Agreement which guarantees Plaintiff, or any othe r Member /Emplo yee, a specif

ic term or

duration of employ

ment. There a lso is no provi sion in the

Operating Ag

reemen t, or any other agreement

in the re cord, wh

ich provi des th at Plaintiff could be terminatedonl y for

cause. As a matter of law, Plaintiff was an employee at will. Pla

intiff’s breach

of contr act c la im, premised solely upon his view that he could be terminated only f or cause, f ails as a matter of law.

12. On Plaintiff’s allegations that the Defendants’ actio n withoutmeeting violated the Operating Agreem ent and the Tennessee Limite d Liab ility Company Act, the Court CONCLUDES that the Plaintiff cannot establish this claim as a matter of law. Section 6.4 of the Oper ating A greem

ent provi des:

Action required

or permittedto be taken at a meeting of the Members may be

taken wit hout a mee

ting if the action is evidenced by one or more written co nsent s descr ibing the action taken, signed by the Members-15- holding a majority of the membe rship v ot ing power entitled to vote (or any

greater proportion required by this Agreement, the Articles, or the Act). . . . Operating Agreement, § 6.4 . In order to determine “the Me

mbership voting power e

ntitled to vote” on the issue of Plaintiff’s termination, the Court again l ooks t o the O perati ng Agr eeme nt, which provides that a member ’s employ

ment may

be te rmin at ed “for ca us e” by a “vote of the other Mem bers hol ding at least 70% of the remaining Membership Inter ests

. ” Operating Agreement, § 5.4 (emph asis added). Thus, in this instance, the “Membership Intere sts,” voted 100% to take a

ction with out a mee ting and to terminate Plaintiff’s employ ment.
13. On Plaintif

f’s bre ach of c ontract

claim b a sed upon an alleged “conflict of interest” in violation of the Oper ating A greem

ent, the Court CONCLUDES that the Plainti ff has a

bandone d that cla

im basedupon Pla

in tiff’s r esponsive papers, which do n ot addre ss this issue. Since that aspect of the motion is not opposed, the Court finds that there is no genu

ine issue of mater ial fact on that cl aim

and gr ants Defend ants’ moti on dismissin g it.

14. On Plaintiff’s claim for breach of the implied covenant of good fait h an d fair dealing, the Court CONCLU DES that Plaintiff cannot establish that claim as a matter of law. The Court must look to the terms of a contract to d etermine the standard by which good faith is measured. W

allace v. National Bank of Commerce , 938 S.W.2d 684 (Tenn. 1996). The performance of a contract according to its terms cannot be characterized as bad faith. TSC Industrie s, Inc. v. Tomlin , 743 S.W.2d 1 69, 173 (Tenn. Ct. App. 1987). Here, since the Oper

ating A greem

ent allo we d the very a

ctions which Defend ants took in ter

minating Plaintiff ’s emplo ymen t, Plaintiff cannot state a claim for breach of

the implie d covena

nt of goo d faith and fai r deali ng.
15. The Court f

urther finds and concludes that Defendant David Ing ram is not a

proper D efenda

nt. Mr. Ing

ram was not a part

y to the Ope

rating Agree ment.
16. WHEREFORE, the Court finds that there is no genuine issue of any mater

ial fact on Plaintiff’s various claims and that Defendants are entitled to judgment as a matter of law.-16- IT IS SO ORDERED. This matte r is di sm is se d i n i ts en ti re ty. Costs are assessed against Plaintiff for which execution may issue.

On May 30, 2001, the def endants moved for discretionary costs an d by orde

r filed July 2, 2001, the trial court awarded defendants their discr etionary costs in the amount of $1,871.00. The plaintiff appeals and presents the following seve n (7) issues as stated in his brief:

I. Whether the trial court erred in gran ting the defenda nts’ motion for summary judgmen t and in dis missing th

e plaintif f’s c ause o f action for bre ach of c ontract

. II. Whether th

e trial c ourt err

ed in dismissing the plaintiff’s action for breach of the coven ant of good fa ith an d fair deali ng.
III. Whether the trial court erred in dismissing the plaintiff’s causes of ac ti on fo r b re ac h o f f

id uc ia ry d ut y.
IV. Whether

the trial court erred in dismissing the cause of action for ci vi l c on sp ir ac y.
V. Whether the trial court erred in dismissing the plaintiff’s causes of action for fraud and neglig ent misrepresentation.

VI. Whether the trial court erred in dismissing the plaintiff’s causes of action for unfair competition.

VII . Discre

tionary Costs.

We have su

mmarized t

hese sev en (7) is sues into tw o (2) main issues.

One main issue for review is whether the trial court err ed in granting the defenda nts’ motion for partial judgment

on th e plead ings di sm is si ng th e p la in ti ff ’s cl ai ms fo r b re ac h o f f id uc ia ry d ut y; civil conspiracy; unfa

ir competition; and fraud and misrepresentation.

When a motion for judgment on t he plead ings is ma

de by the defe ndant, it isin effe ct a motion to dismiss for failure to state a claim upon which relief can be

granted. 3 Nancy

F. MacLea

n & Bradle y A . MacL

ean, Te nnessee Practic e 190 (2n d ed.1989 ). A motion to dismiss for

failure to state a claim upon which relief can be g ranted is the equivalent of a demurrer under our f

ormer common law procedure. Cornpropst v. Sloan , 528 S.W.2d 188, 190 (Tenn. 1975). Such a motion admits the tru th of all relevant and material averme nts in the c omplaint bu

t assertsthat such

facts cannot constitute a cause of act

ion. Id . In considering whe ther to dismiss a complaint for failure to state a claim upon which relief can be g ranted, the court should construe the complain t liberally-17-

in favor of

the plaintiff

taking all of the allegations of fact therein as true. Humphries v. We st End Terrace, Inc. , 795 S.W.2d 128, 130 (Tenn. Ct. App. 1990). A complaint should not be dismissed upon such a motion " 'unless it appears bey ond doubt thatthe plain

tiff can prove no set of fa cts in support of [the] cla

im that would entitle

[the plaintiff] to relief' ". Id . (quo ting Fuerst v. Methodist Hosp. South , 566 S.W.2d 847, 848 (Tenn. 1978)). In the instant case, the c omplaint seeks recovery basedon a written instrument and a determination of the meaning of the ins trument isa question of law. Theref

ore, our review o f the tria

l c ourt's o rder is d

e novo on t

he reco rd befor e this Cour

t. Warren v. E

state of Ki

rk , 954 S.W.2d 722, 723 (Tenn. 1997).

The secondmain issue for review is whether the trial court err ed in gran ting the defenda nts’ motion for summary judgment dismissing the plaintiff’s claims for breach of contract and breach of covenant of good faith and fair de aling.

A motion for summary judgme nt should be granted

when the movant demonstrates that there
are no genuine issues of 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 summar y judgment be ar s the burden of demonstrating that no genuine issue of material fact exists. Bain v. Well s , 936 S.W.2d 618, 622 (Tenn. 1997). On a

motion for summary judgme nt, the court must take the strongest legitimate view of the evidence in favo r of the nonmoving party, a llow all reasonable inferences in favor of that pa rt y, and discard all countervailing evidence

. Id. In Byrd v. Ha ll , 847 S.W.2d 208 (Tenn. 1993), our Supreme Court stated:

Once it is shown by the

moving party tha

t there is no genuine issue of material fact, the nonmoving party must then demonstrate, by affida vits or discov ery

materia ls, that the

re is a genuine, material fact dispute to warrant

a trial. In this rega

rd, Rule 56.05 [now Rule 56.06] provides that the non movi ng p arty cannot simply

rely upon his plead ings but must set forth specific facts showing tha t there is a genuine issue of

materia l fact fo r trial.
Id. at 211 (citations omitted) (emphasis in original). Summary judgment is only appropr iate when the facts and the legal conclusions drawn f rom the facts reasonab ly p ermit only one conclusion. Carvell v. B otto ms , 900 S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is no presumption of correctness rega rding
a trial cou rt's g rant of s ummary

judgmen t. Bain , 936 S.W.2d at 622. Therefore, our review of the trial court’s grant o f summary judgmen t is de novo on the record before this Court. Warren v. Estate of Kirk , 954 S.W.2d at 723.

In Warren v. Metropolitan Gov’t of Nashville & Davidson County , 955 S.W.2d 618 (Tenn. Ct. App. 19 97), we d

iscussed the role of a Cour

t in interp reting a contra ct:-18- Courts are to interpret and enforce the contract as written, according to its plain terms. Petty v. Sloan , 197 Tenn. 630, 277 S.W.2d 355, 358 (1955); Home Benefi cial Ass'n v

. White , 180 Tenn

. 585, 177 S.W.2d 545, 5 46 (1 944) . We are precluded from making ne w contracts for the parties by adding or deleting provisions. Central Adjustment

Bureau, Inc. v. Ingram , 678 S.W.2d 28, 37 (Tenn. 1984); Shell Oil Co. v. Presc ott , 398 F.2d 592 (6th Cir.1968). When clear contract language r

eveals the intent of the parties, there i s no needto ap pl y ru le s o f c on st ru ct io n. An am bi gu it y d oes no t arise in
a contract merely

because the parties may

differ as to inter

pretatio n of certain of its provision s. Oman Constr. Co. v. Tennessee Valley Auth. , 486 F.Supp. 375 (M.D.Tenn.1979). A contra ct is ambiguous only when it is o f uncer

tainmeaning

and may fairly be under stood in
more way s than one ; a

strained construction may not be placed

on the langua ge used to fin d an ambig uity where n one exists. Empress Health & Beaut

y Spa, Inc. v. Turner , 503 S.W.2d 188, 190-91 (Ten n .1973). We are to consider the agr eement a s a whole

in determin ing w hether the meaning of the contract is clear or ambiguo us. Gredig

v. Tennessee Farmers Mut. Ins. Co. , 891 S.W.2d 909, 912 (Tenn. Ct. App.1994). If a c ontract is plain and unambig uous, the meaning thereof is a question of law for the court. Petty v. Sloan , 277 S.W.2d at 358.
Id. at 622-23.

Further more, the rulehas been well established in this state that a contract of employ ment for an indefinite term is a contract at will and can be terminated by either

party at any

time without
cause. Randolph v. Dominion Bank of Middle Tennessee , 826 S.W.2d 477, 478 ( Tenn. Ct. App. 1991) (citing Graves v. Anchor Wire Corp., 692 S.W.2d 420 (Tenn. Ct. App. 1985). In Payne v . Western & Atl. Ry. Co. , 81 Tenn. 507 (1884), the Supreme Court said:

All may dism iss their employees a t will, be they many

or few, for good cause, for no cause or even f or c a use morally wrong

without being t hereby guil ty of legal wrong. Randolph v. Dominion Bank of Middle Tennessee , 826 S .W.2 d at 47 8 (quo ting Payne v. Western & Atl. Ry. Co. , 81 Tenn. at 519-52 0); see also Harney v. Meadowbrook Nursing Center , 78 4 S.W.2d 921, 922 (Tenn. 1990). We will now address the appellant’s first main issue.

BREACH OF FI

DUCIARY DUTY-19-

The plaintiff argues that the trial court errone ously

held that the plain tiff’s c laims based upon
an alleged breach of fiducia ry duty owed to him individually by the othe r member s must fail as a matter of law because there is no fiduciary duty between, or

among, individual members of a Limited Liab ility Corpora tion. We disa

gree. Tenn. Cod

e Ann. § 48 -240-102 (a) (20 02) provi des: (a) FID UCI ARY DUTY OF MEMBER S O F MEMBER- MANAGED

LL C. Exceptas provided in the articles or operating agreement, every member of a member-managed LLC mus t account to the LL

C for any bene

fit, and hold as trustee for it any profits derived by the me mber without the c onsent of the other members from any tr ansaction connected with the formation, conduct , or liquidation of the LLC or f rom any use by t he membe

r of its propert y including, but not limited to, confidential or proprietary information of

the LL C or other matters entrusted to the member as a result of such person's status as a member. (b) STANDARD

OF CONDUCT

. A member of a member -managed

LL C shall disc

harge such memb er's du

ties as a member, including all duties as a member of a committee: (1) In good f

aith; (2) With the care an ordinarily prudent person in a like position would

exercise under

similar c ircumsta

nces; and
(3) In a manner

the membe

r reaso nably

believes to be in the bes t interes t of the L LC.
Id

. The rule of statutory construction to which all others must yield is that the intention of the legisla ture must p

revail. Mangrum v. Owens , 917 S.W.2d 244, 246 (Tenn. Ct. App. 1995)(citing Plough, Inc. v. Premier Pneumatics, Inc. , 660 S.W.2d 495, 498 (Tenn. Ct. App. 1983 ); City of Humboldt v. Morris , 579 S.W.2d 860, 863 (Tenn. Ct. App. 1978)). "[L]e gislativ e intent o r purpose is to be ascertained primarily from the natural and ordinary meaning of the languag e used, when read in the context of the entire statute, without any forced or subtle construction to limit or extend the importof the language." Mangrum v. Owens, 917 S.W.2d at 246; (quoting Worrall v. Kroger Co. , 545 S.W.2d 736, 738 (Tenn. 1977)). The Court has a duty to construe a

statute so that no part will be inoperative, superfluous, void or insignificant. The Court must give ef fect to every

word, phrase, clause, and se ntence of the Act in order to achieve the L egislature's intent, and it must construe a statute so that no section will destroy another. Id

. (citi ng City of Caryvillev. Campbell Co unty , 660 S.W.2d 510, 5 12 (Tenn . Ct. App. 1 983); Tidwell v. Collins , 522 S.W.2d 674, 676 (Tenn. 1975).-20-

The statute in ques tion de fin es t he f id uci ary d ut y of m emb ers of a mem ber -ma nag ed LLC
as one owing

to the L LC, no t to individu al memb er s. We cannot contravene the intent of the Legislature. Theref

ore, we find that t he trial c ourt cor

rectly dismissed t

he plaint iff’s ca use of action for breach of fiduciary

duty.

CIVI L CONSPIRACY AND U NFAIR COMPETI

TION

The plaintiff argues that the trial court er red in dismissing the plaintiff’s causes of action for civilconspiracy

and unfair c ompetition

because those cla ims were not plead with spec ificity

in the plaintiff’s amended complaint. We disagree. Tennessee law p rovides that “[d]ismissal under Tenn.R.Ci v.P. 12.02(6) is warran ted only when the allege d facts will not entitle the pla intiff to relief
or when the complain t is totally lacking in c larity and spec ificity.” 421 Corp. v . Metropol

itan Gov’t

. of Nashville & Davidson County , 36 S.W.3d 469, 479 (Tenn. Ct. App. 200 0) (citi ng Dobbs v. Guenther , 846 S.W.2d 270, 273 (Tenn. Ct. App. 1992)). The plaintiff’s only mention of c onspiracy and unfa ir compe tition appe ars in the

amended complain t as follow s:
85. Plaintiff

further alleges that the

acts of IEI

and the other Defend ants set f

orth her einconstitutes breach of

contract, breach of fiduciary duty, bre ach of c ovena nt of go od fai th and fair d ealin g, unfair competition and conspiracy . (Emphasis added).

How ever, the plaintiff provided no facts upon which the causes of action for civil con spiracy a n d unfair competition are based. As to civil conspiracy , this Court has stated that “[i]t is well-settled that conspira cy claims mus tbe pled with some degree of specificity a

nd that vague and conclusory allegations unsupported by materia l facts will not be sufficient to state such a claim under § 1983.” Hayn es v. Harr

is , No. 01A01-9810-CV-00518, 1999 WL 317946 at **2 (Tenn. Ct. App. 1999)(citing Gutierrez v. Lynch , 826 F.2d 1534, 1538 (6 th Cir. 1987)). Furthermore, this Court has recognized

that although “the adoption of the Tennessee Rules of Civil Procedure greatly

relaxed the requirements as to pleadings, pleading of some fa cts giv ing r ise to a c laim for r elief is s till a necessary requirement.” Jasper Engi ne & Transmissio n Exch. v. Mi lls , 911 S.W.2d 719, 72 0 (Tenn. Ct. App . 1995 )(cit ing W & O Constr. Co . v. City of Smithville , 557 S.W.2d 920 (Tenn. 1997)).
Therefore, we find that the trial court correctly dismissed the plaintiff’s causes of action for civil conspiracy a

nd unfair competition.

FRAUD AND MISREPRESENTATION

The plaintiff argues that

the trial court erred in dismissing the plaintiff’s claim for fraud and misrepresentation because the plaintiff either had no standing to bring a de ri vative claim or the plaintiff’s injury

arose f rom a con

tractua l relatio nship; not rising to th e level of fraud or misrepresentation. We disagree. As the trial court pointed out, “the p laintiff alle ges tha

t certain information was withheld from him – either in te nt io na ll y or ne gl ig en tl y –and that this information-21-

was material in the manner by which he conducted the affairs of the L LC. Plaintiff does not al lege that he conducted

his own personal affairs in reliance upon any such material information or that he obligated himself pe

rsonally in reliance ther

eon.” Pla

intiff’samended

complain

t provide s in pertine nt part:
94. The Plaintiff was relying on statements of

employees of IEI to conduc t the aff

airs of MB F&I

and th ese mater ial omissions caused Plaintiff to act

in a manne

r that he otherwis e would

if he had known the true state of affairs thereby damaging him and the L

LC.

The plaintiff has, in essence, alleged a de rivative claim, but at

this point has no standing to bring such a cl aim. In Bour ne v. Wi llia ms , 633 S.W.2d 4 69 (Tenn . Ct. App. 1 981), Judg e Tomlin of this Court said:

It

has long been recognized tha t whe re a wrong to the corporation was claimed by a stockholde r, if the board of

directors of th e cor poration did not take steps to rectify the wrong, then a stockholder

could bring the action in thename of the corporation, for the benefit of the corporation. This is the gravamen of a "derivative" suit. 13 Fletcher, Cy c. Corp. sec. 5908 (perm. ed. 1980 ). See also Opport uni ty Christian Church v. Washington Water Power Co. , 136 Wash. 116, 238 P. 641 (1925).

Bourne v. W

illi ams , 633 S.W.2d at 471. However, the plaintiff has not proceeded in this manner. Furthermore, the plaintiff’s amended complaint also alleges a personal injury as a result o f certa

in informat ion being withheld from him. The plaintiff’s personal injury is, in essence, the pla intiff’s termination fro m em pl oyme nt wit h MB F&I. However, as the trial court noted, “that claim arises out of the employment relationship and doe s not create a cause of action for fraud or misrepresentation.”
Therefore, we find that the trial court correctly dismissed the plaintiff’s cause of action for fraud and misrepresentation. We will now address the appellant’s second main issue.

The plaintiff argues that

the trial court er red in g ranting summary judgmen t to the defendant s on the plaintiff’s claim for breach of contrac t. The plaintiff argues that the defe ndants wr ongfull y terminatedplaintiff’s empl oyment with MBF& I because de

fendants terminated plaintiff without cause, without provi ding noti c e of fifteen day s, and without a meeting. We disagree. We have reviewed the record and

agree withthe trial

court tha t the plain tiff was an employ

ee-at- will beca

use “there is no provision in the Operating Agreem ent which guarantees Plaintiff, or any other Membe r/Employee, a specific term or duration of employ ment. There also is no provision in th e Operating Agreement, or any other agreement

in the record, which provides that Plaintiff could be terminated only for c ause.”-22-

We also note that the plaintiff was provided written notice of his termination dated December 31, 1998, and that the “Employment & Non -Solicita

tion Agreement” signed by the plaintiff provides in pertine nt part:
1. Term

. This amended employme nt agreement is effective
as of January 01, 1998, and shall super sede any pr ior employ

me nt agree ments betwee

n Employ ee and MB F&I , written

or oral, in all respec ts. Th e new ter m of employment is for an indef inite term commencing the effective date of this agreement statedimmediate ly above (the “Te

rm”). Th is agreement sha

ll continue

indefinit ely at the will of eithe

r party unless and until terminated by either par ty upon no less than 15 da

ys n oti ce unless for good cause in which event te rm in at io n b y ei th er pa rt y ma y be im me di at el y. Furthermore, §6.4 of the Operating Agreement provides the following under the heading “Action Without a Meeting”:

Action required or permitted to be taken at a meeting of the Members may be take

n withouta meeting

if the action is evidenced by one or more written c onsents de scribing the actio n taken , signed by the Members holding a

majority of th e Membership voting power entitled to vote ( or any gr eat er proportion required by this Agreement, the Art i cles, or the Act) and delivered to the Secretar y of the Company for filin g with the

Company

record s.
The plaintiff argues that the trial court erred in dismissing p laintiff’s claim for breach of contract based on an alleged conflict of inter est in

viola tion o f the

Oper ating Agr eeme nt. We disagree. As the trial court corre ctly pointed out, the Plaintiff abandoned this issue because hedid notoppose this issue in his response to defendants’ motion for summary judgme

nt. The Tennessee Rules of Civ

il Proced ure prov ide in per tinent pa rt: Any party opposing

the motion for

summary judgmen t must, notlater than five day s before the hearing, serve and file a respon se to each fact set forth by

the movant . . . .

Tenn. R. Ci v. P. 56.03. As a general rule, questions not raised in the trial court will not be entertained

on appeal. See Lawrence v. Stanford , 655 S.W.2d 927, 9 29 (Tenn . 1983); see also Ci ty of Lavergne v. Southern Silver, Inc. , 872 S.W.2d 687, 691 (Tenn. Ct. App. 1993).
Therefore, after a reviewof the record, we find that the trial court corre ctly gr anted summary judgment as to the p laintiff

’s brea ch of con tract cl aim to the e

xtent that p laintiff

was wrongfully terminated. However, we find that there is a g enuine issue of material fact as to whether therewas-23-

cause to termina

te the plaintiff. This must be determined in order to properly value

any interest the pl ai nt if f h as in hi s f or me r c om pa ny. The Oper ating A greem

ent provi des in per

tinent pa rt:
10.4 Option to Purchase Upon Termination of Employment. In the even t that the e

mploy ment of a ny M ember who is a

fulltime employ

ee of the Company

is termina

ted, the Co mpa ny shallhave the option to purchase theMembers hip Interest of the terminated Member for the Formula Value ( as definedin (e) below) o f the ter

minated Me

mber’s Me

mbership Inte rest (as shown on the bo oks of the Company as at the e nd of the month in which the event occurs whi ch giv es rise to the Company’s option), all in accordance with the following terms and condition s:
* * * (e) Formula Value. The “Fo rmu la Valu e” of a Mem ber’s Members hip In

terest sh all mean t

he gre ate r of (i) or (ii) below; provided , howe ver, that in the event the Membe

r’s emplo yment is terminated for “Cause” (as hereinaf

ter defined), the “Formula Value” of such Memb er’s Member ship Interest shall mean the lesser of (i) or (ii) below: (i ) the amount of the capital acc oun t attribu table to tha t Members hip Interest; or (ii) th ree times the average of the amount of income allocated or allocab le to thatM embersh ip Int erest (under Section 4.1 (a)) during each of the three preceding 12 mon th periods (or, if less than 36 mon t hs, such shorter perio d duri ng w hich such Me mberhad such Member shi p Interest). (f) Definition of Cause. Only for purpose s of thi s Section 10.4 and Section 5.4 her eof, “Cause”shall
mean any act that is mater iall y in imical to th

e best-24- interest s of the Company and that c onstitutes on the part of t he Me mber personal dishonesty, willful misconduct, br ea ch of

fi du ci ar y du ty i n volving personal p rof

it, intentional failure to perform stated duties, or willful violation of any law, g overnmental rule or regulation.

The plaintiff

also arg ues that th

e trial c ourt err

ed in dismis sing the

pla int iff’s action for breach of the covenant of

good faith and fair dealing because the performance of a contract according to its terms cannot be characterized as bad faith. We disagree. There is no implied covenant of good faith and fair dealing in an employee- at-will contract. See Randolph v. Dominion Bank of Middle Tennessee , 826 S .W. 2d at 479 (citing Whittaker v. Care-More, Inc. , 621 S.W.2d 3 95 (Tenn . Ct. App. 1981)). Therefore, the trial court cor rectly dismissed the plaintiff’s a ction for breachof the
coven ant of

good fa ith an d fair deali ng.
In the fina l analy sis, this case boils down to a rather uncomplicated dispute controlled by the employment

contract and the Operating Ag reement. As noted, the employ ment contract creates an employment

at will which can be terminated without cause. The Operating Agree

ment allows the LLC to purchase the membership interest of a terminated employ ee. The only issue involved i s whether termination of the employment wa s for cause. This issue is only mate rial to decide the value of the membership interest of the terminated employ ee.
Ac co rd in gl y, the trial court’s order granting summary judgme

ntto defendant, Da

vid Ingram, is affirmed. The trial court ’s ord er grant ing th e defen dants ’ moti on for judgm ent on the pl eadin gs is affirmed. The trial court’s order granting the defendants’ motion for summary judgment on the breach of contract claim and bre ach of contract of good fa ith and fair de aling c laim is modifie d to grant partial s ummary

judgmen t to the defendant s on the issue as to whether plaintiff’s employ ment and membership were legally terminated. The case is remanded to the trial court for a dete rmination of whether plaintiff ’s employ ment term inatio n was with or wi thout cause and to determine the proper amount due t o the plaintiff pursuant to the Operating Agr eement. The trial court’s order gr anting defenda nts’ discreti onary

costs is rever sed to be r

econside red by the trial court in light of the further procee dings required. Costs of the appeal are assessed one-half to plaintiff, Patrick McGee, and onehalf to defendants, Timothy B est, Robert Frank, and I ngram Entertainment, I

nc.

__________________________________________ W. FRA NK CRAWFORD, PRESI DING JUDGE, W.S

.