Court Opinion

ID: 4154400
Source: CourtListenerOpinion
Date Created: 2017-03-21 19:12:52.072867+00
Date Added: 2024-06-11T14:07:21.170057
License: Public Domain

03/21/2017

                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                               December 14, 2016 Session

              CLAYTON EDDY POWERS v. A&W SUPPLY, INC.

          Interlocutory Appeal from the Chancery Court for Knox County
             No. 189651-2       Clarence E. Pridemore, Jr., Chancellor
                      ___________________________________

                            No. E2016-01489-COA-R9-CV
                        ___________________________________

This appeal arose from a contract dispute between the plaintiff employee and the
defendant corporation regarding shares of corporate stock. The parties signed an
agreement in June 1993, which provided that the plaintiff would become vested with the
right to receive two and one-half percent of the total number of issued and outstanding
shares of the corporation’s capital stock so long as the plaintiff remained an employee in
good standing with the corporation from the date of said agreement until the vesting date
of December 31, 2001. It is undisputed that the plaintiff remained an employee in good
standing with the corporation on the vesting date. Following the vesting date, the
corporation never delivered stock certificates to the plaintiff or recognized the plaintiff as
a shareholder within the company.             The corporation terminated the plaintiff’s
employment in October 2014, and in November 2014, the plaintiff made his first inquiry
about his ownership interest in the stock to which he was entitled under the agreement.
The defendant company denied that the plaintiff owned any stock in the company. The
plaintiff thereafter filed an action against the corporation, seeking specific performance,
declaratory judgment, and damages resulting from breach of contract. The plaintiff filed
a motion for partial summary judgment, requesting a determination that the plaintiff was
automatically vested in two and one-half percent of the total number of shares of the
corporation’s capital stock. The defendant also filed a motion for summary judgment,
averring that because the corporation never took action to transfer the shares of capital
stock to the plaintiff on the vesting date, the plaintiff’s cause of action accrued in 2001,
rendering the plaintiff’s present action time barred by the applicable statute of limitations.
The trial court determined that the plaintiff was vested with ownership of the shares on
the vesting date and that the plaintiff’s action was not barred by the statute of limitations.
Discerning no error, we affirm.

     Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Chancery Court
                             Affirmed; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which CHARLES D.
SUSANO, JR., and JOHN W. MCCLARTY, JJ., joined.

David L. Johnson, Nashville, Tennessee, for the appellant, A&W Supply, Inc.

Kevin A. Dean, Knoxville, Tennessee, for the appellee, Clayton Eddy Powers.

                                      OPINION

        Clayton Eddy Powers began working as a sales representative for A&W Supply,
Inc. (“A&W”) in May 1988. Mr. Powers remained employed by A&W for over twenty-
six years until his employment was terminated by A&W in October 2014. On June 24,
1993, Mr. Powers and A&W entered into a written agreement (“the Agreement”), which
entitled Mr. Powers to become vested with the right to receive two and one-half percent
of the total number of issued and outstanding shares in A&W’s capital stock (“the
Employee Shares”) upon his continued employment in good standing with the
corporation through the vesting date of December 31, 2001. The Agreement, signed by
Mr. Powers and representatives of A&W, contained the following provisions in relevant
part:

             1. Ownership Interest in Shares. Provided that the Employee shall
      be an employee in good standing of the Company at all times from the date
      hereof through and including December 31, 2001 (the “Earnout Period”),
      the Employee shall on December 31, 2001 (the “Vesting Date”) become
      vested with the right to receive from the Company that number of shares of
      the capital stock of the Company which is equal to two and one-half
      percent (2.5%) of the total number of issued and outstanding shares of the
      Company’s capital stock on the Vesting Date (the “Employee Shares”).
      The Employee Shares shall be transferred to the Employee by the
      Company, and shall constitute additional compensation to the Employee
      from the Company.

             2. Effect of Termination of Employment Prior to Vesting. Upon the
      termination of the Employee’s employment with the Company at any time
      for any reason prior to such time as the Employee shall have become vested
      with the Employee Shares, all rights of the Employee to become vested
      with respect to or receive all or any part of the Employee Shares shall cease
      and terminate as of the effective date of termination of the Employee’s
      employment. The Employee shall not be vested with or have any
      ownership interest in the Employee Shares by reason of employment with
      the Company for less than the entire Earnout Period, it being expressly
      understood and agreed that the Employee must be an employee of the
                                            -2-
Company in good standing at all times during the Earnout Period in order
to be vested with respect to the Employee Shares.

        3. Delivery of Certificate to Employee. Subject to the conditions
and limitations set forth in this Agreement, at such time as the Employee
has become vested with the Employee Shares, the Company shall execute
and deliver, or cause to be executed and delivered, to the Employee, within
thirty (30) days from and after the Vesting Date, a certificate or certificates
representing the Employee Shares whereby the Company shall transfer the
Employee Shares to the Employee, but subject to the terms, provisions,
restrictions and limitations set forth in this Agreement, and such certificate
or certificates shall bear an appropriate legend on the face thereof
evidencing this fact.

       4. Covenants and Agreements of Employee Relative to Employee
Shares. At such time as the Employee shall become vested with the
Employee Shares as provided in this Agreement, the Employee agrees that
the Employee and the Employee Shares shall be subject to the following:

       ***

               (e) The Employee shall have the right from and after the
       Vesting Date to receive the Employee’s pro rata share of all
       distributions from the Company with respect to its capital stock,
       which shall be paid and/or delivered to the Employee upon the same
       terms and conditions as the other shareholders of the Company. The
       Employee acknowledges and agrees, however, that the Employee
       shall not, solely by virtue of ownership of the Employee Shares, be
       entitled to receive, nor have the right to require the Company to
       make, any distributions or payments of any kind to the Employee
       with respect to its Employee Shares, and that all such distributions
       and/or payments by the Company with respect to its capital stock,
       including the Employee Shares, shall be made solely upon the
       determination of the board of directors and/or all shareholders of the
       Company acting pursuant to the charter and bylaws of the Company
       and applicable law[.]

       ***

       7. Additional Cash Compensation. The Employee acknowledges
that the Employee shall have no vested or other interest in the Employee
Shares until such time as the Employee Shares shall have vested pursuant to
the terms of this Agreement.
                                   -3-
      ***

             8. Severance Payment. The Company and the Employee agree that
      upon the termination of the Employee’s employment with the Company
      prior to such time as the Employee has become vested with the Employee
      Shares as provided for in this Agreement, for any reason, the Employee
      shall be entitled to the severance payment described in this paragraph 8 (the
      “Severance Payment”), the acceptance of which by the Employee shall
      operate as a waiver of all other or remaining claims by the Employee
      against the Company . . . .

      ***

              In the event that the Employee’s employment with the Company
      shall terminate on or after the Vesting Date, the Employee shall have no
      right to the Severance Payment described in this paragraph 8, which right
      shall immediately and forever expire upon the vesting of the Employee
      Shares on the Vesting Date.

(Emphasis in original.)

       During Mr. Powers’s employment, A&W attempted to purchase his interest in
A&W’s stock on two separate occasions. The first offer was made in March 1999 at the
price of $27,940.00 in exchange for Mr. Powers’s “70% vested interest.” Subsequently,
A&W offered Mr. Powers $40,165.72 in 2001 for his interest in the shares of A&W’s
capital stock. The parties failed to come to an agreement, however, and A&W never
purchased Mr. Power’s interest in the A&W capital stock.

        It is undisputed that Mr. Powers remained an employee in good standing at all
times from the date of the Agreement through December 31, 2001, the vesting date
specified in the contract. A&W also does not dispute that Mr. Powers became vested
with the right to receive the stock on December 31, 2001. The parties agree that A&W
never issued or delivered “stock certificates” to Mr. Powers or recognized Mr. Powers as
a shareholder in the corporation. According to A&W, the corporation representatives do
“not recall the circumstances in which [Mr.] Powers was not issued stock certificates.” In
his response to A&W’s statement of undisputed facts, Mr. Powers acknowledged that he
had knowledge in February 2002 that A&W had not provided him with any stock
certificates. Mr. Powers also does not dispute that he never sought to exercise his rights
as a shareholder during his employment.

      Following Mr. Powers’s termination in October 2014, Mr. Powers first mentioned
his ownership interest of A&W’s stock to Michael Taylor, the Chief Executive Officer
                                        -4-
for A&W. Mr. Taylor executed an affidavit, describing his meetings with Mr. Powers
and his investigation into Mr. Powers’s purported stock ownership. Mr. Taylor
determined:

       A&W could not locate any signed agreement . . . relating to agreeing to pay
       Mr. Powers in lieu of him becoming a shareholder, that A&W had no
       record of paying Mr. Powers any amount of money in lieu of him becoming
       a shareholder, and that A&W had no records that Mr. Powers had ever been
       issued any shares or been considered as a shareholder.

Also according to his affidavit, Mr. Taylor eventually met with Mr. Powers and informed
him that “A&W had never made him a shareholder and that the statute of limitations had
expired for any claim for failure to do so.” An employment separation agreement signed
by Mr. Powers and Mr. Taylor stated that “[Mr.] Powers claims to be the owner of 250
shares of A&W stock, which A&W denies[.]”

        On May 20, 2015, Mr. Powers filed a complaint, requesting a declaratory
judgment, specific performance, and, alternatively, damages for breach of contract
regarding the Agreement. Mr. Powers participated in depositions during the pendency of
the case. On April 29, 2016, A&W filed a motion for summary judgment, asserting that
there was no genuine issue of material fact and requesting that the trial court find that Mr.
Powers’s claim was barred by the applicable statute of limitations. See Tenn. Code Ann.
§ 28-3-109(a)(3). A&W principally argued that Mr. Powers was only vested with a right
to receive the shares on December 2001 and that he would not have become the owner of
the Employee Shares until the delivery of the stock certificates. A&W therefore
contended that the statute of limitations began to run on January 30, 2002, thirty days
after the contractual vesting date within which the stock certificates should have been
delivered. As such, A&W claimed that Mr. Powers’s action was barred by the six-year
statute of limitations for contract actions.

        Also on April 29, 2016, Mr. Powers filed a motion for partial summary judgment,
alleging that no genuine issue of material fact existed and requesting that the trial court
declare Mr. Powers an owner of the Employee Shares as of December 31, 2001. In his
motion, Mr. Powers requested that the trial court find that he had been automatically
vested with ownership of the Employee Shares on December 31, 2001, after he
completely performed his obligations under the contract, despite A&W’s failure to
deliver the stock certificates to him. According to Mr. Powers, the Agreement signed by
the parties automatically vested him with ownership of the Employee Shares on the
vesting date because “there is no affirmative obligation on behalf of [Mr. Powers] to take
any action to trigger the vesting[.]” Consequently, Mr. Powers claimed that the statute of
limitations did not bar his action for relief.

                                            -5-
       On July 11, 2016, the trial court granted partial summary judgment in favor of Mr.
Powers, “specifically declaring that [Mr. Powers] is a vested owner of 2.5% of the total
number of issued and outstanding shares of [A&W’s] capital stock as of December 31,
2001, with [A&W] required to take the action(s) necessary to recognize this vested
ownership interest.” In turn, the trial court denied A&W’s motion for summary
judgment. Upon oral motion of counsel for A&W, the trial court granted permission to
seek an interlocutory appeal, determining that A&W’s “statute of limitations argument
presents a novel issue of Tennessee law.” On July 25, 2016, A&W sought permission
from this Court for an interlocutory appeal, which was granted on August 12, 2016.

                                   II. Issue Presented

       Pursuant to Tennessee Rule of Appellate Procedure 9, “we are limited on appeal to
the questions certified by the trial court in its order granting permission to seek an
interlocutory appeal and in this Court’s order granting the appeal.”             In re
Bridgestone/Firestone & Ford Motor Co. Litig., 286 S.W.3d 898, 902 (Tenn. Ct. App.
2008). This Court granted an interlocutory appeal in the instant action to address the
following issue:

      Whether the action below was barred by the running of the statute of
      limitations set forth in Tennessee Code Annotated section 28-3-109(a)(3).

                                III. Standard of Review

        The grant or denial of a motion for summary judgment is a matter of law;
therefore, our standard of review is de novo with no presumption of correctness. See Rye
v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick
Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013)
(citing Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court
must “make a fresh determination of whether the requirements of Rule 56 of the
Tennessee Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250. As
our Supreme Court has explained concerning the requirements for a movant to prevail on
a motion for summary judgment pursuant to Tennessee Rule of Civil Procedure 56:

      [W]hen the moving party does not bear the burden of proof at trial, the
      moving party may satisfy its burden of production either (1) by
      affirmatively negating an essential element of the nonmoving party’s claim
      or (2) by demonstrating that the nonmoving party’s evidence at the
      summary judgment stage is insufficient to establish the nonmoving party’s
      claim or defense. We reiterate that a moving party seeking summary
      judgment by attacking the nonmoving party’s evidence must do more than
      make a conclusory assertion that summary judgment is appropriate on this
      basis. Rather, Tennessee Rule 56.03 requires the moving party to support
                                          -6-
       its motion with “a separate concise statement of material facts as to which
       the moving party contends there is no genuine issue for trial.” Tenn. R.
       Civ. P. 56.03. “Each fact is to be set forth in a separate, numbered
       paragraph and supported by a specific citation to the record.” Id. When
       such a motion is made, any party opposing summary judgment must file a
       response to each fact set forth by the movant in the manner provided in
       Tennessee Rule 56.03. “[W]hen a motion for summary judgment is made
       [and] . . . supported as provided in [Tennessee Rule 56],” to survive
       summary judgment, the nonmoving party “may not rest upon the mere
       allegations or denials of [its] pleading,” but must respond, and by affidavits
       or one of the other means provided in Tennessee Rule 56, “set forth specific
       facts” at the summary judgment stage “showing that there is a genuine issue
       for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party “must do more
       than simply show that there is some metaphysical doubt as to the material
       facts.” Matsushita Elec. Indus. Co., 475 U.S. [574,] 586, 106 S. Ct. 1348
       [(1986)]. The nonmoving party must demonstrate the existence of specific
       facts in the record which could lead a rational trier of fact to find in favor of
       the nonmoving party. If a summary judgment motion is filed before
       adequate time for discovery has been provided, the nonmoving party may
       seek a continuance to engage in additional discovery as provided in
       Tennessee Rule 56.07. However, after adequate time for discovery has
       been provided, summary judgment should be granted if the nonmoving
       party’s evidence at the summary judgment stage is insufficient to establish
       the existence of a genuine issue of material fact for trial. Tenn. R. Civ. P.
       56.04, 56.06. The focus is on the evidence the nonmoving party comes
       forward with at the summary judgment stage, not on hypothetical evidence
       that theoretically could be adduced, despite the passage of discovery
       deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65 (emphasis in original). Pursuant to Tennessee Rule of Civil
Procedure 56.04, the trial court must “state the legal grounds upon which the court denies
or grants the motion” for summary judgment, and our Supreme Court has instructed that
the trial court must state these grounds “before it invites or requests the prevailing party
to draft a proposed order.” See Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316
(Tenn. 2014).

                                 IV. Statute of Limitations

        A&W contends that Mr. Powers’s cause of action began to accrue in January 2001
and is therefore untimely due to operation of the six-year statute of limitations for
contract actions. See Tenn. Code Ann. § 28-3-109(a)(3) (2000). In response, Mr. Powers
argues that he was vested in ownership of the Employee Shares in December 2001 and
that the statute of limitations does not preclude his action.
                                              -7-
       In determining that Mr. Powers currently owns the Employee Shares, the trial
court stated as follows:

      Upon hearing the arguments of counsel, and upon consideration of the
      record as a whole, the Court finds that, based on the competing motions,
      statements of undisputed material facts filed by each party (including
      exhibits), and the replies filed to each of the competing motions, that there
      are no genuine issues as to any material fact and [Mr. Powers] is entitled to
      judgment as a matter of law; pursuant to Tenn. R. Civ. P. 56.04, the Court
      hereby grants [Mr. Powers’s] motion for partial summary judgment and
      denies [A&W’s] motion for summary judgment on the following grounds:

      (1) Based on the record as a whole, specifically the Statements of
      Undisputed Material Facts filed by each party and the statements of counsel
      for both [Mr. Powers] and [A&W] in open court, [Mr. Powers] and [A&W]
      are in agreement that there are no genuine issues as to any material fact
      with respect to the question of whether [Mr. Powers] owns any interest in
      the capital stock of [A&W];

      (2) [Mr. Powers] fully performed under the Agreement . . . and acquired a
      vested ownership interest in 2.5% of the total number of issued and
      outstanding shares of [A&W’s] capital stock as of December 31, 2001;

      (3) Under Tennessee law, reflected in Comment 2 to Tenn. Code Ann. §47-
      8-302, Article 8 (of Tennessee’s version of the Uniform Commercial Code)
      does not determine whether a property interest in a certificated or
      uncertificated security is acquired under other law, such as the law of gifts,
      trusts, or equitable remedies; and

      (4) The Court has considered and weighed the equitable remedies pled by
      each party and finds that an appropriate equitable remedy is recognition of
      [Mr. Powers’s] vested ownership interest in 2.5% of the total number of
      issued and outstanding shares of [A&W’s] capital stock as of December 31,
      2001.

             It is therefore ORDERED that [Mr. Powers’s] motion for partial
      summary judgment is GRANTED, the Court specifically declaring that
      [Mr. Powers] is a vested owner of 2.5% of the total number of issued and
      outstanding shares of [A&W’s] capital stock as of December 31, 2001, with
      [A&W] required to take the action(s) necessary to recognize this vested
      ownership interest. It is further ORDERED that [A&W’s] motion for

                                          -8-
      summary judgment is DENIED given that [Mr. Powers] was vested with
      ownership interest in the capital stock of [A&W] as of December 31, 2001.

Having carefully reviewed the record in this cause, we agree with the trial court’s
conclusion that the applicable statute of limitations does not preclude Mr. Powers’s
action. In order to fully address the issue regarding the statute of limitations, it is
necessary to first address whether Mr. Powers became vested with ownership of the
Employee Shares on December 31, 2001, under the parties’ agreement.

       The Agreement, executed on June 24, 1993, provided that if Mr. Powers remained
an employee of A&W in good standing at all times “through and including” December
31, 2001, Mr. Powers would “become vested with the right to receive from [A&W]” the
Employee Shares on December 31, 2001. The Agreement identified December 31, 2001,
as the “‘Vesting Date.’” A&W does not dispute that Mr. Powers remained an employee
of A&W in good standing on December 31, 2001. A&W also does not dispute that Mr.
Powers therefore had the right to receive the Employee Shares on December 31, 2001.

      Pursuant to the Agreement:

      [A]t such time as [Mr. Powers] has become vested with the Employee
      Shares, [A&W] shall execute and deliver, or cause to be executed and
      delivered, to [Mr. Powers] within thirty (30) days from and after the
      Vesting Date, a certificate or certificates representing the Employee Shares
      whereby [A&W] shall transfer the Employee Shares to the Employee . . . .

Neither party disputes that (1) stock certificates were never issued or presented to Mr.
Powers, (2) Mr. Powers had knowledge that he had not received stock certificates
regarding the Employee Shares in February 2002, (3) Mr. Powers never sought to
exercise any rights as a shareholder of A&W during his employment, and (4) A&W did
not recognize Mr. Powers as a shareholder in the company. The parties agree that Mr.
Powers first inquired about his ownership interest in A&W capital stock in November
2014 after his termination from A&W in October 2014. It was thereafter when an A&W
representative, Mr. Taylor, informed Mr. Powers that A&W never made him a
shareholder in the company and “that the statute of limitations had expired for any claim
of failure to do so.” Through an employment separation agreement executed by Mr.
Powers and Mr. Taylor on November 21, 2014, A&W acknowledged that Mr. Powers
claimed ownership to the shares while specifically denying that Mr. Powers was an
owner of any shares of A&W stock.

      This Court has previously applied equitable principles in circumstances involving
enforcement of a shareholder’s agreement. See Pelot v. Cakmes, E1999-02550-COA-R3-
CV, 2000 WL 116046, at *6 (Tenn. Ct. App. Jan., 31, 2000). Under the specific
circumstances of this case, we find the following equitable principle applicable:
                                         -9-
“Tennessee courts have long recognized that ‘[e]quity regards that as done which in good
conscience ought to be done.’” Holt v. Holt, 995 S.W.2d 68, 71 (Tenn. 1999) (citing
McCann Steel Co. v. Third Nat’l Bank, 337 S.W.2d 886, 891 (Tenn. Ct. App. 1960);
William H. Inman, Gibson’s Suits in Chancery § 21 (7th ed. 1988); 11 Tenn. Jur. Equity
§ 11 (1995); 2 Pomeroy Equity Jurisprudence § 364 (5th ed. 1941)). The most recent
edition of Gibson’s Suits in Chancery § 2.12 (formerly § 21 in previous editions) states in
relevant part:

             Equity Regards That as Done Which Ought to Be Done. – In a
      Court of Chancery ought to be becomes is; and whatever a party ought to
      do or ought to have done, in reference to the property of another, will
      ordinarily be regarded as done. The rights of the parties will be adjudicated
      as though, in fact, it had been done.

      ***

      This maxim is nearly allied to another maxim: No one can take advantage
      of his own wrong. To prevent a party from deriving advantage from his
      own wrong, Equity regards that as done which, in good reason and good
      conscience, ought to have been done. Agreements based on a valuable
      consideration are, in Equity, considered, in the interests of the person
      entitled to their performance, as performed, and performed at the time
      when, and in the manner in which, they ought to have been performed. The
      same consequences attach to the agreement as though it had actually been
      performed, so that the party in default shall not benefit by his wrong, nor
      the other party suffer thereby.

             In reference to agreements the maxim is sometimes stated as thus:
      What is agreed to be done is considered as done, and sometimes thus,
      Equity treats that as done which is agreed to be done upon sufficient
      considerations. It must be borne in mind that the maxim seeks no more
      than to enforce an equitable obligation. There must be a right on one side
      and a corresponding duty on the other side. Equity does not regard as done
      what might have been done, or what could have been done, but what ought,
      in good reason and good conscience, to have been done. Nor does this rule
      operate in favor of anyone except him who has the equitable right to have
      the act performed, and those standing in his shoes; nor does it operate
      against anyone except him upon whom the duty has devolved, and upon
      those who stand in his place.

                                          - 10 -
Henry R. Gibson, Gibson’s Suits in Chancery § 2.12 (8th ed. 2004) (emphasis in
original).1

        Ownership of shares of corporate stock is not required to be represented by stock
certificates. See Tenn. Code Ann. § 48-16-206 (2012). Furthermore, unless expressly
provided otherwise, a shareholder’s rights and obligations are identical with or without
representation by a stock certificate. Id.; see Leimas v. Davies, No. 01A01-9303-CH-
00127, 1993 WL 404147, at *5 (Tenn. Ct. App. Oct. 8, 1993) (citing Cartwright v.
Dickinson, 12 S.W. 1030 (Tenn. 1890)). Stock certificates are “mere evidence of
ownership of shares of corporate stock.” Leimas, 1993 WL 404147, at *5 (citing Young
v. South Tredegar Iron Co., 2 S.W. 202 (Tenn. 1886)). Moreover, our Supreme Court
has held: “A sale or transfer of stock, to be valid, need not be in writing. The certificate
need not, in fact, be delivered. A transfer is perfectly good, although the seller of the
stock never had a certificate at all, and although no certificate is issued to the transferee.”
Parker v. Bethel Hotel Co., 34 S.W. 209, 216 (Tenn. 1896).

        On December 31, 2001, Mr. Powers fully performed his obligations under the
Agreement. A&W, however, never issued to Mr. Powers stock certificates evincing his
ownership of the Employee Shares. A&W now seeks to rely on its failure to issue such
certificates to Mr. Powers as a defense to preclude Mr. Powers’s claim. A&W essentially
argues that although it breached the Agreement, Mr. Powers cannot recover for such
breach due to expiration of the six-year statute of limitations for contract actions. See
Tenn. Code Ann. § 28-3-109(a)(3). However, inasmuch as a transfer of stock does not
require issuance or delivery of a stock certificate to be valid, see Parker, 34 S.W. at 216,
we apply the above principle of equity to determine that the issuance and delivery of
stock certificates to Mr. Powers is considered as having been done pursuant to the
Agreement between the parties. By reason of the foregoing, we determine that Mr.
Powers was vested with ownership of the Employee Shares on December 31, 2001.

       Having so concluded, we must address whether Mr. Powers’s instant action is time
barred pursuant to the six-year statute of limitations provided in Tennessee Code
Annotated § 28-3-109(a)(3). Mr. Powers, in person, first directed an inquiry regarding
his ownership of A&W stock to Mr. Taylor on November 14, 2014. Following that
meeting, Mr. Taylor investigated the claim and could find no evidence that an agreement
had been reached for Mr. Powers to receive a sum of money in lieu of becoming a
shareholder in the company. Likewise, he found no proof that A&W had paid Mr.
Powers any sum of money for such purpose. Furthermore, Mr. Taylor discovered no
records documenting that A&W had transferred the Employee Shares to Mr. Powers as

1
  The text in the eighth edition of Gibson’s Suits in Chancery § 2.12 appears to be identical to
section 21 in the seventh edition of Gibson’s Suits in Chancery. See Henry R. Gibson, Gibson’s
Suits in Chancery § 2.12 (8th ed. 2004); William H. Inman, Gibson’s Suits in Chancery § 21 (7th
ed. 1988).
                                             - 11 -
required by the Agreement. Mr. Taylor again met with Mr. Powers on November 21,
2014, informing the latter that “A&W had never made him a shareholder and that the
statute of limitations had expired for any claim of failure to do so.” In an employment
separation agreement signed by Mr. Powers and Mr. Taylor, A&W denied Mr. Powers’s
ownership in A&W’s stock.

       During the November 21, 2014 meeting, A&W representatives made clear to Mr.
Powers that A&W did not intend to recognize Mr. Powers’s stock interest acquired
pursuant to the Agreement. Consequently, Mr. Powers’s cause of action accrued on
November 21, 2014, when A&W refused to recognize Mr. Powers’s ownership of the
Employee Shares. Because Mr. Powers subsequently filed the present action on May 2,
2015, we determine that his action was timely filed inasmuch as the statute of limitations
did not bar his claims.

                                  V. Doctrine of Laches

       A&W also seeks to rely on the doctrine of laches as a bar to Mr. Power’s claim.
As this Court has previously explained: “For interlocutory appeals, the only issues that
can be raised are those certified in the trial court’s order granting permission to seek an
interlocutory appeal and in the appellate court’s order granting the interlocutory appeal.”
Heatherly v. Merrimack Mut. Fire Ins. Co., 43 S.W.3d 911, 914 (Tenn. Ct. App. 2000).
This Court did not certify an issue regarding the applicability of the doctrine of laches for
review in this interlocutory appeal. Therefore, the question of whether the doctrine of
laches precludes Mr. Powers’s action is beyond the scope of the instant appeal.

                                      VI. Conclusion

       For the reasons stated above, we affirm the judgment of the trial court. This case
is remanded to the trial court for further proceedings consistent with this opinion and
collection of costs below. Costs on appeal are taxed to the appellant, A&W Supply, Inc.

                                                    _________________________________
                                                    THOMAS R. FRIERSON, II, JUDGE

                                           - 12 -