IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

May 7, 2019 Session

JOHNNY NESMITH v. SAMUEL C. CLEMMONS, ET AL.

Appeal from the Chancery Court for Williamson County

No. 43480 Michael W. Binkley, Judge

___________________________________

No. M2017-02521-COA-R3-CV

___________________________________

Defendants appeal the judgment entered in favor of Plaintiff in this breach of contract 

action arising out of a failure to pay a promissory note. Defendants argue that the trial 

court erred in several pretrial rulings, in concluding that the contract was ambiguous and 

considering parol evidence, in holding that the attorney that drafted the agreement 

represented Defendants and construing the ambiguous term against them, and in denying 

their motion to supplement the appellate record. Upon our review, we discern no 

reversible error and affirm the judgment of the trial court.

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

RICHARD H. DINKINS, J., delivered the opinion of the court, in which J. STEVEN 

STAFFORD, P.J., W.S., and CARMA DENNIS MCGEE, J., joined.

Robert Dalton and L. Jeffrey Payne, Lewisburg, Tennessee, for the appellants, Samuel C. 

Clemmons and Shannon N. Clemmons.

Virginia L. Story and Kathryn L. Yarbrough, Franklin, Tennessee, for the appellee, 

Johnny Nesmith.

OPINION

I. FACTUAL AND PROCEDURAL HISTORY

This appeal stems from a breach of contract action to recover on a promissory note 

executed between family members who were also business partners. Dr. Samuel 

Clemmons and his wife, Shannon, founded Elite Emergency Services (“Elite”)1, an 

 

1 The record shows that Elite was formed as a corporation, not a partnership or limited liability company.

Taken in context, the reference in various documents to the parties’ “membership interest” in Elite

11/07/2019
2

emergency room physician staffing business. Mrs. Clemmons’ parents, Johnny and 

Brenda Nesmith, bought into the company, with each person owning 25 percent of the 

company. In July 2010, after a disagreement between Dr. Clemmons and Mr. Nesmith, 

Dr. and Mrs. Clemmons gave notice of their offer to sell their membership interest in 

Elite via a document styled “Notice of Exercise of Business Agreement’s Put/Call 

Provision.” Pursuant to that notice, Mr. Nesmith was also permitted the option of 

requiring Dr. and Mrs. Clemmons to purchase his membership interest, which he elected 

to exercise. A Membership Transfer Agreement (“MTA”) was entered into by Dr. 

Clemmons, Mrs. Clemmons, and Mr. Nesmith on August 27, 2010, and the Clemmons 

executed a promissory note to Mr. Nesmith in the amount of $600,000, payable in 

monthly installments of $10,000 beginning September 1, 2010; they stopped making 

payments in October 2013.

On August 27, 2014, Mr. Nesmith (“Plaintiff”) filed suit in the Chancery Court for 

Williamson County, alleging that Dr. and Mrs. Clemmons (“Defendants”) failed to make

payments according to the schedule in the Note and were therefore in default; he sought 

$118,000 for the arrearages and late fees, plus interest and attorneys’ fees.

Defendants moved to dismiss the action or, in the alternative, transfer it to the 

circuit court for Williamson County, where they had previously initiated a suit against 

Mr. Nesmith and six others who worked for, advised, or provided services to Elite; the 

motion was denied. Defendants then answered the complaint, asserting a counterclaim 

for breach of contract and pleading the affirmative defenses of estoppel, laches, unclean 

hands, and waiver; in an amended answer, Defendants asserted that the promissory note

was not valid due to a material mistake of fact and sought a judgment in their favor as to 

the damages caused by the breach of contract. Plaintiff answered the countercomplaint, 

asserting the defense of failure to state a claim and the doctrines of unclean hands, unjust 

enrichment, and consent and acquiescence.

A bench trial was held on April 25, 26 and May 12 and 20, 2016, and on April 5, 

2017.

2

The following witnesses testified: Mr. Nesmith; Russell Morrow, who prepared 

 

appears to be solely to their percentages of ownership of the corporation, and not to any administrative or 

executive responsibilities attendant to their ownership. 

 

2 The interlude between the fourth and fifth days of trial was due to the resolution of a recusal motion by 

the appellate courts. Defendants filed a “Motion for Disqualification” in the trial court on April 15, 2016,

and on April 20, the court notified the parties that it was denying the motion; an order denying the motion

was entered on May 11. Defendants filed another recusal motion in August 2016; that motion was also 

denied. Defendants appealed the denial of that motion pursuant to Supreme Court Rule 10B, and this 

Court affirmed the denial of the motion on procedural grounds. Clemmons v. Nesmith, No. M2016-

01971-COA-T10B-CV, 2016 WL 6583790 (Tenn. Ct. App. Nov. 4, 2016) (“Clemmons I”). On appeal to 

the Supreme Court, the case was remanded to this Court to consider the merits of the issues raised in the 

appeal; we concluded that the trial court did not err in denying the recusal motions. Clemmons v. 
3

Elite’s corporate tax returns from 2000 until 2009; Dr. Clemmons; Randy Stockton, who 

worked for Frost-Arnett Company, a collections agency used by Elite; Michael Bowen, 

who works in the Medical Specialty Group of SunTrust Bank, where Elite’s bank account 

was held; Brenda Nesmith; Dan Huffstutter; Kelly Pendergrass; and Wanda Jones. 

By order entered August 17, 2017, the trial court held that Defendants had 

breached the promissory note and proceeded to consider whether Plaintiff had first 

breached the MTA by bringing “harm” to Defendants or Elite. The court held that the 

term “harm” as used in the MTA was ambiguous, calling for the court to consider parol 

evidence to consider the parties’ intent. The court concluded that Defendants failed to 

show by a preponderance of the evidence that Plaintiff breached the MTA or the 

promissory note, failed to establish the affirmative defenses they raised, and failed to 

prove the elements of their counterclaim for breach of contract and material mistake of 

fact. The court awarded judgment in the amount of $240,000 and held that Plaintiff was 

entitled to reasonable attorney’s fees and costs, to be determined in a subsequent order; 

the court also awarded prejudgment interest to Plaintiff at the rate of ten percent per 

annum from the date of the filing of the complaint until entry of the order as well as post 

judgment interest. By order entered November 27, the court entered judgment in the 

amount of $202,780.47 for Plaintiff’s attorneys’ fees and costs. 

Defendants filed their notice of appeal on December 22, 2017. They moved in this 

court to supplement the record with additional documents which they asserted were not 

included in the technical record and were “essential for a fair and accurate consideration 

of all of the issues on appeal.” By order entered May 31, 2018, this Court remanded the 

matter to the trial court for consideration, which denied the motion to supplement. On 

July 31, Defendants filed another motion to supplement the record in this court, arguing 

that “the trial court has refused to grant Defendants any relief whatsoever, even when it is 

facially apparent that the current Technical Record is entirely insufficient and not in 

conformity with the truth.” This Court denied the motion without prejudice to the trial 

court taking further action relative to the record. The Tennessee Supreme Court denied 

Defendants’ Rule 10 application for extraordinary appeal. 

Defendants raise six issues for our review. Two concern the court’s rulings on a 

discovery motion and a motion to continue the trial; three concern holdings relative to the 

MTA; lastly, Defendants appeal the denial of their motion to supplement the record. 

Plaintiff seeks his attorney’s fees incurred in this appeal. 

 

Nesmith, No. M2016-01971-COA-T10B-CV, 2017 WL 480705 (Tenn. Ct. App. Feb. 6, 2017) 

(“Clemmons II”).
4

II. ANALYSIS

A. THE RECORD ON APPEAL

We first consider Defendants’ contention that the trial court erred in denying their

Motion to Correct and Supplement the Record. After Defendants filed their notice of 

appeal on December 22, 2017, they filed a Designation of the Record on January 8, 2018, 

identifying 33 items. When the trial court clerk certified the record on appeal, she 

included an affidavit in which she stated that four of the items identified in the 

Designation were already included in the record, one could not be found “nor was it 

identified with particularity,” and that “[a]ll remaining requests were for documents that 

were not filed in the trial court . . . during the pendency of the proceedings.” Defendants 

filed a motion with this Court to correct and supplement the record, and we remanded the 

case for the trial court’s consideration; the trial court held a hearing and denied the 

motion by order entered July 6, 2018. Defendants moved this court for relief from the 

trial court’s decision, and we denied the motion, “find[ing] no extraordinary 

circumstances which would warrant this court disregarding the trial court’s decision.” 

Defendants filed an application for an extraordinary appeal from our decision in the 

Tennessee Supreme Court, pursuant to Rule 10 of the Rules of Appellate Procedure; the 

Supreme Court denied the application. Defendants have included this issue in their 

appeal as of right. 

Defendants assert in their brief on appeal that the court’s decision was error for 

three reasons, which we quote below:

[1] First, regarding the Designation, the vast majority of the documents 

enumerated in the Designation are not included in the Technical Record . . . 

[2] Second, regarding motions and orders relating to discovery, Appellants 

concede that such materials were not included in the Designation. . . . As 

trial counsel pointed out in Paragraph 4 of the Declaration, the lack of 

meaningful discovery and unreasonable restrictions placed thereon by the 

trial court are critical issues in the appeal of the trial court’s final ruling. . . . 

Based on this reasoning, Appellants argued in their Motion that the 

Technical Record should be supplemented to include each and every 

motion and order relating to discovery. . . . [3] Finally, ... the Appendix to 

the Brief of Appellant is replete with documents that otherwise should have 

been included in the Technical Record pursuant to Tenn. R. App. P. 24(a) 

but, inexplicably, were not. . . . In sum, Appellants have been denied 

procedural due process by the deficiencies in the record and the trial court’s 

refusal to correct them. As evidenced by the lengthy Appendix to this brief 

and the numerous citations thereto contained herein, the documents that 

have been excluded from the record are essential to Appellants’ arguments 

on appeal.
5

This issue addresses the application of Rule 24 of the Tennessee Rules of Appellate 

Procedure. We accord great deference to decisions of this nature made by the trial court:

The procedure for correction or modification of the record reflects 

the policy of avoiding technicality and expediting a just resolution on the 

merits by according deference to the trial court’s decision on which matters 

are properly includable in the record, thereby avoiding additional litigation 

on that subject alone. The specific purpose of Rule 24 is accommodated as 

well, since the trial judge is in the best position to determine which matters 

are necessary to “convey a fair, accurate and complete account of what 

transpired with respect to those issues that are the bases of appeal.” See also 

Artrip v. Crilley, 688 S.W.2d 451, 453 (Tenn. [Ct.] App. 1985).

Bradshaw v. Daniel, 854 S.W.2d 865, 868–69 (Tenn. 1993). Rule 24 provides in 

pertinent part: 

(a) . . . The following papers filed in the trial court are excluded 

from the record: (1) subpoenas or summonses for any witness or for any 

defendant when there is an appearance for such defendant; (2) all papers 

relating to discovery, including depositions, interrogatories and 

answers thereto, reports of physical or mental examinations, requests 

to admit, and all notices, motions or orders relating thereto; (3) any 

list from which jurors are selected; (4) trial briefs; and (5) minutes of 

opening and closing of court. Any paper relating to discovery and offered 

in evidence for any purpose shall be clearly identified and treated as an 

exhibit. No paper need be included in the record more than once. . . . If 

the appellee deems any other parts of the record to be necessary, the 

appellee shall, within 15 days after service of the description and 

declaration, file with the clerk of the trial court and serve on the 

appellant a designation of additional parts to be included. All parts of 

the record described or designated by the parties shall be included by

the clerk of the trial court as the record on appeal. The declaration and 

description of the parts of the record to be included on appeal provided in 

this subdivision may be filed and served with the declaration and 

description of the parts of the transcript to be included in the record

provided in subdivision (b) of this rule. If a party wishes to include any 

papers specifically excluded in this subdivision, but fails to timely 

designate such items, the trial court clerk may supplement the record as 

provided for in subdivision (e) without modifying the previously prepared 

record.

***
6

(e) Correction or Modification of the Record. If any matter 

properly includable is omitted from the record, is improperly included, or 

is misstated therein, the record may be corrected or modified to conform 

to the truth. Any differences regarding whether the record accurately 

discloses what occurred in the trial court shall be submitted to and 

settled by the trial court regardless of whether the record has been 

transmitted to the appellate court. Absent extraordinary 

circumstances, the determination of the trial court is conclusive. If 

necessary, the appellate or trial court may direct that a supplemental 

record be certified and transmitted.

***

(g) Limit on Authority to Add or Subtract From the Record.

Nothing in this rule shall be construed as empowering the parties or any 

court to add to or subtract from the record except insofar as may be 

necessary to convey a fair, accurate and complete account of what 

transpired in the trial court with respect to those issues that are the bases 

of appeal.

Tenn. R. App. P. 24 (emphasis added). 

In the order entered on July 6, 2018, the trial court held in pertinent part:

Based upon the total lack of information presented by counsel for the 

Clemmons as to the issues for appeal, if any, this Court is not in a position 

to have any basis from which a decision can be made as to whether or not 

the requested documents to supplement the record are needed to convey a 

fair, accurate, and complete account of what transpired with respect to the 

issues, if any which may or may not be presented to the Court of Appeals in 

this case.

With respect to the Defendants’ first argument, Rule 24 makes clear that items not 

filed with the court are not properly includable in the record on appeal. Nowhere in their 

brief do they address the clerk’s affidavit attesting that the items Defendants identified 

“were already included in the record” and that “[a]ll remaining requests were for 

documents that were not filed in the trial court . . . during the pendency of the 

proceedings.” Defendants have not identified which documents identified in the 

Designation were introduced in the trial court but excluded from the appellate record, as 

they are required to do by Rule 24. Accordingly, the Defendants have not demonstrated 

that extraordinary circumstances exist to assign error to the trial court’s decision in this 

regard.
7

With respect to their second argument, Defendants concede that the Designation 

does not identify the motions and orders that they contend are pertinent to the first and 

second issues they raise in this appeal relating to the court’s pre-trial rulings denying their

motion to continue and imposing a discovery sanction against them, which will be 

discussed in Section B, infra. Relative to the trial court’s holding that Defendants did not 

provide sufficient information as to what issues would be raised on appeal, in their brief 

on appeal Defendants cite Paragraph 4 of the their counsel’s Declaration and argue that 

“the lack of meaningful discovery and unreasonable restrictions placed thereon by the 

trial court are critical issues in the appeal of the trial court’s final ruling,” and, 

consequently, the record should have been supplemented “to include each and every 

motion and order relating to discovery.” 

In paragraph 4 of the Declaration, Defendants’ counsel stated:

Each of the documents included in the Designation of Record relates 

to issues on Appeal, including issues related to the following: (I) failure to 

consolidate cases with compulsory counterclaims; (II) failure to allow 

discovery and improper discovery rulings; (III) improper and unfair 

rulings; (IV) failure to disqualify based on the appearance of impropriety; 

(V) any other issues that will be part of Appellants’ appeal. 

(Emphasis added.) Issue II in the above list, which directly relates to this argument, does 

not state which of the multitude of discovery rulings made by the trial court over the 

course of this litigation that Defendants wished to address, nor does it explain how those 

rulings constituted a “lack of meaningful discovery” or “unreasonable restrictions.” Rule 

24(a) imposes an obligation on the parties to designate the paper or matter filed in the 

trial court that the party wishes to include in the record. In addition, when given the 

opportunity do so, the trial court held that Defendants failed to articulate the specific 

rulings that they were appealing or the issues relating to the orders they sought to have 

included in the record. Given the protracted nature of this lawsuit and the multitude of 

rulings made pre-trial, the trial court was not obligated, consistent with the language of 

Rule 24(e), to correct or modify the record when Defendants failed to satisfy their 

obligation to clearly identify the materials they wanted included or the issues they 

planned to present on appeal. The trial court did not err in this regard.

In similar fashion, we conclude that Defendants’ third argument that “the 

documents that have been excluded from the record are essential to Appellants’ 

arguments on appeal” is without merit. Items I and IV of the Defendants’ statement of 

issues in their counsel’s Declaration are not raised as issues in this appeal, and Items II, 

III, and V are vague and do not state the motions or orders that are pertinent or state in 

short and plain terms the particular issue(s) that will be presented, as required by Rule 

24(a). 
8

The trial judge is in the best position to determine which matters are necessary for 

inclusion in the record “to convey a fair, accurate and complete account of what 

transpired with respect to those issues that are the bases of appeal.” Bradshaw, 854 

S.W.2d at 868. We are to accord deference to the trial court’s decision on which matters 

are properly includable in the record. Id. The purpose of Rule 24 and the procedure for 

correction or modification of the record is to avoid technicality and to expedite a just 

resolution on the merits, thereby avoiding additional litigation. Id. Defendants have not 

demonstrated that extraordinary circumstances exist that would cause us not to defer to 

the judgment of the trial court. 

B. PRETRIAL RULINGS

Trial of the case was set for April 25, 2016. Two of the issues raised by 

Defendants stem from an order entered following a hearing on April 12, wherein the 

court denied Defendants’ Emergency Motion to Continue the Trial, allowed Defendants 

to send a “specific set of discovery” to three witnesses by 9 a.m. on April 13, to be 

responded to within seven days, and set a third day for the trial, if necessary, for May 20.3

These issues concern the court’s decisions on discovery matters and a motion to 

continue, both of which are reviewed under the abuse of discretion standard. In re 

A’Mari B., 358 S.W.3d 204, 213 (Tenn. Ct. App. 2011) (motions to continue reviewed 

under an abuse of discretion standard); State Dep’t. of Children’s Servs. v. V.N., 279 

S.W.3d 306, 317 (Tenn. Ct. App. 2008) (motions to continue reviewed under an abuse of 

discretion standard); Culbertson v. Culbertson, 393 S.W.3d 678, 682–83 (Tenn. Ct. App. 

2012) (quoting Lee Medical, Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010), holding 

that “[b]ecause decisions regarding pretrial discovery are inherently discretionary, they 

are reviewed using the ‘abuse of discretion’ standard of review.”). This standard was set 

forth in Lee Medical, Inc.:

The abuse of discretion standard of review envisions a less rigorous 

review of the lower court’s decision and a decreased likelihood that the 

decision will be reversed on appeal. It reflects an awareness that the 

decision being reviewed involved a choice among several acceptable 

alternatives. Thus, it does not permit reviewing courts to second-guess the 

court below, or to substitute their discretion for the lower court’s. The 

abuse of discretion standard of review does not, however, immunize a 

lower court’s decision from any meaningful appellate scrutiny. 

Discretionary decisions must take the applicable law and relevant 

facts into account. An abuse of discretion occurs when a court strays 

beyond the applicable legal standards or when it fails to properly consider 

the factors customarily used to guide the particular discretionary decision. 

 

3 Ultimately, trial was also held on May 12 and 20, 2016, and April 5, 2017. 
9

A court abuses its discretion when it causes an injustice to the party 

challenging the decision by (1) applying an incorrect legal standard, (2) 

reaching an illogical or unreasonable decision, or (3) basing its decision on 

a clearly erroneous assessment of the evidence. 

312 S.W.3d at 524-25 (internal citations omitted). 

Our analysis regarding the motion to continue is also guided by the holding in 

Howell v. Ryerkerk: 

Decisions regarding continuances are fact-specific and motions for a 

continuance should be viewed in the context of all the circumstances 

existing when the motion is filed. This Court has held that the party seeking 

a continuance carries the burden to prove the circumstances that justify the 

continuance. In order to meet this burden, the moving party must supply 

some strong excuse for postponing the trial date. Factors relevant to the 

trial court’s decision include: (1) the length of time the proceeding has been 

pending, (2) the reason for the continuance, (3) the diligence of the party 

seeking the continuance, and (4) the prejudice to the requesting party if the 

continuance is not granted.

372 S.W.3d 576, 580-81 (Tenn. Ct. App. 2012) (internal citations and quotations 

omitted).

Defendants contend that they did not have ample time to conduct discovery of 

Wanda Jones, Tiffany Jones, and Kelly Pendergrass, who worked in the billing 

department at Elite, when a stay on discovery in this case had only been lifted on April 5, 

2016. Defendants have not identified an order imposing the stay which they assert 

prevented them from conducting discovery of non-parties to this litigation and which was 

lifted on April 5. 

 

The April 5 order in the record states:

On November 25, 2014, this Court severed and stayed Plaintiffs 

Wanda Jones, Tiffany Jones, and Kelly Pendergrass’ action[4]pending 

resolution of the related federal case. On September 30, 2015, Plaintiffs 

filed a Motion to Lift the Stay in the Circuit Court action. This and other 

matters came before the Court on January 14, 2016.

In light of the Federal Court’s ruling declining to enjoin further 

litigation in this Court, the Court now lifts the stay.

 

4 The suit in which Wanda Jones, Tiffany Jones, and Kelly Pendergrass were plaintiffs was an action 

brought in federal court under the Fair Labor Standards Act.
10

The Court hereby ORDERS, ADJUDGES, AND DECREES that the 

Motion to Lift Stay is GRANTED.

 

Despite these references to specific dates, motions, and actions of the court, the record 

does not contain a November 25, 2014 order, or a September 30, 2015 motion to lift a 

stay, nor does it contain an order from the circuit court which stays discovery in this

chancery court case. Moreover, the record contains an order entered in this case on 

September 21, 2015, following a hearing on August 27, stating in pertinent part:

IT IS THEREFORE ORDERED ADJUDGED AND DECREED 

that Plaintiff’s Motion for Sanctions for Failure to Obey Lawful Orders of 

the Court, for Discovery to be Provided shall be granted. The Court is 

alarmed at the disobeyance of the Court Order by Defendants and finds that 

there is no excuse for disregard of the Court Orders. The Defendant’s shall 

provide answers to each Interrogatory and responses to each Request for 

Production of Documents requested by Plaintiff no later than 12:00 p.m. 

(noon) on Thursday, September 3, 2015.

* * *

IT IS FURTHER ORDERED ADJUDGED AND DECREED that 

Plaintiff’s Motion to Quash the Notice of Deposition of Mr. Nesmith Set for 

August 25, 2015 is moot. Mr. Nesmith was timely deposed on August 25, 

2015.

* * * 

IT IS FURTHER ORDERED ADJUDGED AND DECREED the 

deposition of Sam and Shannon Clemmons shall be re-set from September 

1, 2015 to September 9, 2015 to allow sufficient time for discovery to be 

provide[d] to Plaintiff.

IT IS FURTHER ORDERED ADJUDGED AND DECREED that 

any supplementation to discovery shall be completed and submitted to the 

other party no later than September 22, 2015, one week prior to the trial 

date of September 29, 2015.

Thus, it appears that the parties were engaged in some discovery after the case was 

continued from its September 2015 trial date; it is not clear that discovery was actually 

stayed in this case prior to April 2016, in the manner contended by Defendants. In any 

event, this action had been pending since August 27, 2014; the order entered September 

21, 2015, memorializes that trial had been set for September 29. An order entered on 

September 30 states, inter alia, “trial in this matter has now been re-set from September 

29, 2015 to April 25, 26 and 27 and thus discovery will be supplemented.” (Emphasis 

added.) 
11

Defendants assert that they filed the Emergency Motion, seeking to continue the

April 25, 2016 trial in order to conduct written discovery and to depose three non-party 

witnesses; the record shows that the court granted their request for written discovery. 

Defendants have failed to explain why they did not either take the discovery they sought

or seek to lift the stay earlier.

5

 They argue that they were “required to rush through 

discovery of key witnesses and were not allowed to complete any meaningful discovery,” 

which “undermined” a “fundamental” theory of their case. However, counsel for 

Defendants represented to the court on the first day of trial that the depositions of the 

three witnesses had been taken. Moreover, two of the witnesses were called by 

Defendants to testify at the trial on May 20, and Defendants elected to not call the third. 

Giving consideration to the factors set forth in Howell, on the record presented, the court 

did not abuse its discretion in denying the motion to continue the trial. We find no basis 

upon which to assign error to the court in its management of discovery matters. 

Defendants next assert that the trial court erred when it entered an order imposing 

discovery sanctions on May 28, 2016, in which it “found that trial counsel for Appellants 

failed to comply with the requirements of Tenn. R. Civ. P. 5.02(2)(a), gave them no 

opportunity to remedy the technical lack of a certificate, and ordered that Appellants 

could conduct no further discovery of Mss. Jones, Jones, and Pendergrass.” The order to 

which they refer is not in the record and Defendants did not include this order in the list 

of documents they sought to include in the appellate record. Our review is limited to the 

appellate record and, in the absence of the order, we are unable to consider this argument. 

See Grand Valley Lakes Prop. Owners Ass’n, Inc. v. Burrow, 376 S.W.3d 66, 86 (Tenn. 

Ct. App. 2011) (citing Tenn. R. App. P. 24(b)).

C. THE HOLDINGS RELATIVE TO THE MEMBERSHIP TRANSFER AGREEMENT

Defendants do not deny that they did not pay Plaintiff the $10,000 per month after 

October 2013; they assert that they were not obligated to do so because he breached the 

“Do No Harm” provision of the Membership Transfer Agreement by withholding 

documents belonging to Elite, by conspiring with Wanda Jones to open a post office box 

and directing payments to that box without authorization, by improperly selling a 

company vehicle, and by improperly cashing out a life insurance policy. They contend 

that the court erred with respect to three holdings relative to the ‘Do No Harm’ clause of 

the Membership Transfer Agreement: that it was ambiguous; that parol evidence should 

be considered to interpret the clause and, related thereto, in prohibiting them from 

introducing parol evidence at trial; and that Attorney Dan Huffstutter was representing

Defendants (instead of all members of Elite) when he drafted the Membership Transfer 

Agreement, and in construing the agreement against them when it was considering the 

question of ambiguity.

 

5 Defendants do not explain why it was necessary for them to depose non-party witnesses.
12

The “Do No Harm” clause reads: 

3. Parties Agreement. The Purchasers, Sellers and Elite (individually 

“Party” and collectively “Parties”), agree that upon consummation of the 

transaction contemplated by this Agreement . . .

B. Not to engage in any written or verbal action with the intent of 

trying to disparagingly portray a Party or bring harm to a Party.

“The interpretation of a contract is a matter of law that requires a de novo review 

on appeal.” Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999) (citing Hamblen 

County v. City of Morristown, 656 S.W.2d 331, 335–336 (Tenn. 1983)). Our analysis of 

this issue is guided by the Tennessee Supreme Court’s decision in Planters Gin Co. v. 

Fed. Compress & Warehouse Co., Inc.,

A court’s initial task in construing a contract is to determine whether 

the language of the contract is ambiguous. Once found to be ambiguous, a 

court applies established rules of construction to determine the parties’

intent. “Only if ambiguity remains after the court applies the pertinent rules 

of construction does [the legal meaning of the contract] become a question 

of fact” appropriate for a jury. Smith v. Seaboard Coast Line R.R. Co., 639 

F.2d 1235, 1239 (5th Cir. 1981). 

... If clear and unambiguous, the literal meaning of the language 

controls the outcome of contract disputes.

Nonetheless, a contractual provision may be susceptible to more 

than one reasonable interpretation, which renders the terms of the contract 

ambiguous. Memphis Housing Auth. v. Thompson, 38 S.W.3d 504, 512 

(Tenn.2001), cert. denied, 534 U.S. 823, 122 S.Ct. 59, 151 L.Ed.2d 27 

(2001). “A contract is ambiguous only when it is of uncertain meaning and 

may fairly be understood in more ways than one.” Turner, 503 S.W.2d at 

190–91. Where the terms of the contract are ambiguous, the intention of the 

parties cannot be determined by a literal interpretation of the language, and 

the courts must resort to other rules of construction.

78 S.W.3d 885, 890 (Tenn. 2002). In the case of Pierce v. Pierce, this Court noted:

Words must be construed in accordance with their usual and ordinary 

meaning. St. Paul Surplus Lines Ins. Co. v. Bishops Gate Ins. Co., 725 

S.W.2d 948, 951 (Tenn. Ct. App. 1986). “An ambiguity does not arise in a 

contract merely because the parties may differ as to interpretations of 

certain of its provisions.” Cookeville Gynecology & Obstetrics, P.C. v. 
13

Southeastern Data Sys., Inc., 884 S.W.2d 458, 462 (Tenn. Ct. App. 1994). 

“Neither the parties nor the courts can create an ambiguity where none 

exists in a contract.” Id.

Pierce v. Pierce, No. E2007-01403-COA-R3-CV, 2008 WL 2557363, at *4 (Tenn. Ct. 

App. June 26, 2008).

In Individual Healthcare Specialists, Inc. v. BlueCross BlueShield of Tennessee, 

Inc., our Supreme Court has held that while the words of a contract remain our “lodestar” 

in interpretation, 566 S.W.3d 671, 694 (Tenn. 2019), courts are not prevented from 

considering parol evidence, so long as it is not used to modify or vary the terms of the 

contract:

Tennessee cases have also eschewed an extreme textual approach. 

Instead, they reflect balance; they demonstrate a definite focus on the 

written words in the parties’ contract, but they also consider evidence 

related to the situation of the parties and the circumstances of the

transaction in interpreting those words. . . .

In Hamblen County v. City of Morristown, this Court considered 

extrinsic evidence in the form of the parties’ post-contract behavior, i.e., the 

rule of practical construction. 656 S.W.2d 331, 333-35 (Tenn. 1983). The 

Court used language that approved consideration of extrinsic evidence of 

context, even for interpretation of a contract that seemed facially 

unambiguous, with the important qualification that such evidence cannot be 

used to modify, expand, or restrict the contract:

The court in interpreting words or other acts of the 

parties puts itself in the position which they occupied at the 

time the contract was made. In applying the appropriate 

standard of interpretation even to an agreement that on its 

face is free from ambiguity it is permissible to consider the 

situation of the parties and the accompanying circumstances 

at the time it was entered into—not for the purpose of 

modifying or enlarging or curtailing its terms, but to aid in 

determining the meaning to be given to the agreement.

Hamblen Cnty., 656 S.W.2d at 334 (quoting Restatement of Contracts § 

235(d) and comment); see also Burress v. Sanders, 31 S.W.3d 259, 265 

(Tenn. Ct. App. 2000) (quoting Bryan A. Garner, The Elements of Legal 

Style 7 (1991)) (noting that “everything [in contract interpretation] hangs on 

context and purpose”).
14

566 S.W.3d at 692, 693 (footnotes omitted). 

Having reviewed the entire Agreement, we do not find other language in the 

document that is helpful or provides additional context in interpreting the disputed 

language. The word “harm” is broad, but just because the parties interpret a term 

differently does not render it ambiguous. Staubach Retail Servs.-Se., LLC v. H.G. Hill 

Realty Co., 160 S.W.3d 521, 526 (Tenn. 2005). In reading the clause as a whole and 

construing the word according to its usual and ordinary meaning, we do not find the 

disputed language to be ambiguous. Empress Health & Beauty Spa, Inc. v. Turner, 503 

S.W.2d 188, 191 (Tenn. 1973) (observing that a court will not place “strained 

construction . . . on the language used to find ambiguity where none exists.”). Though 

the parties interpret the word “harm” differently, taken in the context of the entire 

agreement, the word is broad enough to encompass the harm allegedly caused by Plaintiff

and asserted by Defendants as a defense to the breach of contract claims.

Our conclusion that the contract is not ambiguous obviates the need for extensive

consideration of the remaining issues raised by Defendants on appeal.6,7

Given our de novo review of the contractual language and the fact that this case 

went to trial, we next consider whether the proof at trial established that Plaintiff engaged 

in written or verbal actions that brought harm to Defendants, such that they were not 

required to make payments pursuant to the MTA and Promissory Note.

The judgment was rendered after a non-jury trial and “is subject to our de novo

review upon the record of the proceedings below. Tenn. R. App. P. 13(d) mandates that 

there is a presumption that the trial court’s findings of fact are correct, and we must honor 

that presumption unless the evidence preponderates to the contrary.” Cannon v. Loudon 

Cty., 199 S.W.3d 239, 241 (Tenn. Ct. App. 2005) (citing Union Carbide Corp. v. 

Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993)). For the evidence to preponderate against 

 

6 Defendants contend that the court erred in considering parol evidence. The parol evidence rule does not 

prohibit consideration of evidence that does not contradict the written contract. Individual Healthcare 

Specialists, Inc., 566 S.W.3d at 693, 696. The trial court concluded that the term was ambiguous and 

considered the testimony of Mr. Clemmons to aid it in its interpretation of the meaning of “harm”; under 

our analysis, this testimony is irrelevant and, in any event, does not contradict the meaning of the term. 

The definition settled upon by the trial court is in fact encompassed within the broad term “harm”; 

accordingly, the court’s assigned definition did not modify or vary the terms of the contract. Thus, there 

was no reversible error in its consideration of parol evidence. See Tenn. R. App. P. 36(b). 

7 With respect to Defendants’ contention that the court erred in concluding that attorney Dan Huffstetter 

represented them, such that the contract provision should be construed against them, our holding that the 

provision at issue is not ambiguous eliminated the need to apply the rule that “[a]n ambiguous provision 

in a contract generally will be construed against the party drafting it.” Allstate Ins. Co. v. Watson, 195 

S.W.3d 609, 612 (Tenn. 2006). 
15

the trial court’s factual finding, it must support another finding of fact with greater 

convincing effect. Walker v. Sidney Gilreath & Assocs., 40 S.W.3d 66, 70–71 (Tenn. Ct. 

App. 2000). We afford no presumption to the correctness of the court’s conclusions of 

law. Cannon, 199 S.W.3d at 241 (citing Campbell v. Florida Steel Corp., 919 S.W.2d 

26, 35 (Tenn. 1996)).

Defendants do not contend that the court’s extensive factual findings of fact are 

unsupported by the evidence. We have examined the proof in light of Defendants’

affirmative defenses that Plaintiff first harmed them by withholding documents belonging 

to Elite, by conspiring with Wanda Jones to open a post office box and directing 

payments to that box without authorization, by selling a company vehicle, and by cashing 

out a life insurance policy. We have paid careful attention to the portions of testimony 

cited by the parties in their briefs. Upon our review, the preponderance of the evidence 

supports the conclusion that Plaintiff did not breach the “Do No Harm” provision of the 

MTA such that Defendants would be excused from performing their obligations under the 

MTA; neither does the record establish by a preponderance any of the affirmative 

defenses or counterclaim alleged by Defendants in their amended complaint. 

D. ATTORNEY’S FEES ON APPEAL

Plaintiff asserts that he is entitled to his attorney’s fees on appeal. “The decision 

to award attorney fees incurred on appeal lies solely within the discretion of the appellate 

court.” Andrews v. Andrews, 344 S.W.3d 321, 340 (Tenn. Ct. App. 2010). Tennessee 

adheres to the “American Rule” for award of attorney fees, under which “a party in a 

civil action may recover attorney fees only if: (1) a contractual or statutory provision 

creates a right to recover attorney fees; or (2) some other recognized exception to the 

American rule applies, allowing for recovery of such fees in a particular case.” Cracker 

Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009) (citing 

John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn. 1998); Pullman 

Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985); Taylor v. Fezell, 158 

S.W.3d 352, 359 (Tenn. 2005)). 

The Promissory Note executed by the parties reads, in pertinent part, that “It is 

expressly understood and agreed to by Makers that if it is necessary to enforce payment 

of this note through an attorney or by suit, the Makers shall pay reasonable attorney’s 

fees and all costs of collection.” Pursuant to the language of the promissory note and in 

light of the outcome of this appeal, we hold that Plaintiff is entitled to recover his 

attorney’s fees incurred in defending this appeal and remand to the trial court for a 

determination of the amount.
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III. CONCLUSION

For the foregoing reasons, we affirm the judgment of the trial court. 

RICHARD H. DINKINS, JUDGE