Court Opinion

ID: 1044362
Source: CourtListenerOpinion
Date Created: 2013-10-08 02:11:48.211508+00
Date Added: 2024-06-11T11:43:41.774309
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                     June 4, 2013 Session

H. PRESTON INGRAM ET AL. v. SCOTT T. SOHR, INDIVIDUALLY AND
   AS TRUSTEE OF THE SCOTT T. SOHR FAMILY 2007 GRANTOR
              RETAINED ANNUITY TRUST ET AL.

                 Appeal from the Chancery Court for Davidson County
                    No. 10725-II    Carol L. McCoy, Chancellor

                   No. M2012-00782-COA-R3-CV - Filed July 31, 2013

This complex litigation arises out of a series of disputes between two former partners and
members in more than twenty partnerships and limited liability companies that were in the
business of real estate development. Following a tumultuous six year business relationship,
in an attempt to extricate themselves from their business relationships, the parties executed
a Membership Interest and Exchange Agreement, which distributed the entities so a portion
were solely owned by one former partner/member and the others were solely owned by the
other former partner/member. After closing on the Exchange Agreement, the plaintiff
commenced this action against his former business partner alleging fraud, violation of the
Tennessee Consumer Protection Act, breach of contract, breach of fiduciary duty, and
fraudulent transfer of which most, but not all, of the claims arose from the Exchange
Agreement. The complaint was later amended to add additional claims. The defendant filed
a Counter-Claim alleging that the plaintiff was also in breach of the Exchange Agreement.
The trial court dismissed several of the plaintiff’s claims on summary judgment. The
remaining issues were tried. At the close of the plaintiff’s proof during the jury trial, the trial
court granted a directed verdict in favor of the defendant on some, but not all, of the
remaining claims. At the conclusion of the jury trial, the jury entered a verdict for the
defendant on the remaining claims. Although the jury found the defendant in breach of three
provisions of the Exchange Agreement and a partnership agreement of a jointly owned
company, the jury awarded no damages based upon the plaintiff’s prior knowledge and
acquiescence of the breaches. Thereafter, each party sought to recover their respective
attorney’s fees pursuant to § 11(l) of the Exchange Agreement. The trial court held that
defendant was the prevailing party; therefore, the trial court granted the defendant’s motion
to recover his attorney’s fees pursuant to § 11(l) of the Exchange Agreement and awarded
attorney’s fees and costs to the defendant. The trial court also awarded the defendant
indemnity under the bylaws of one corporation and the partnership agreement of another. The
trial court also assessed discretionary costs against the plaintiff. On appeal, the plaintiff raises
numerous issues relating to the dismissal of his claims on summary judgment and directed
verdict, the instructions given to the jury, the trial court’s ruling on a post-trial motion to
amend the defendant’s answer, attorney’s fees and costs, and indemnity. We affirm the trial
court’s rulings on summary judgment and directed verdict in all respects. We affirm the trial
court’s ruling on attorney’s fees and costs under the Exchange Agreement, holding that as
the trial court correctly determined the defendant was the prevailing party for those purposes.
We also affirm the trial court’s determinations that the defendant was entitled to
indemnification under the provisions of the Partnership Agreement and indemnification
under the bylaws of IS Investment, Inc.

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

F RANK G. C LEMENT, J R., J., delivered the opinion of the Court, in which A NDY D. B ENNETT
and R ICHARD H. D INKINS, J.J., joined.

Eugene N. Bulso, Jr. and Steven A. Nieters, Nashville, Tennessee, for the appellants, H.
Preston Ingram and IS Investment, Inc.

W. Scott Sims and Jason W. Callen, Nashville, Tennessee, for the appellees, Scott Sohr and
SIS Development, LLC.

                                          OPINION

        H. Preston Ingram, the plaintiff, was introduced to Scott Sohr, the defendant, by a
mutual business acquaintance in the early 1990’s. Thereafter, the parties purchased and
developed several parcels of real estate together. In 2003, the parties entered into their first
partnership, Stonegate Land Company, that gave rise to this action. Following the formation
of Stonegate, the parties created several other jointly owned business entities as they acquired
real estate for development. Their general practice was that when a property was acquired,
they formed a new entity, usually an LLC, to hold title to the property. By the end of the
partnership, the parties jointly owned more than twenty entities that held title to more than
twenty-five parcels of real estate. One of these entities was IS Investment, Inc., which is also
a plaintiff in this action. IS Investment held a $20 million line of credit that the parties used
to purchase other property. IS Investment, which also paid the expenses for other Stonegate
companies, was housed in a building owned by Sohr on Trousdale Drive, and Sohr was
responsible for the day to day management of the corporation. Another entity at issue was
Prescott Land Investments, a general partnership owned by Ingram and Sohr.

                                               -2-
        The business relationship between Sohr and Ingram was terminated upon the closing
of a Membership Interest Exchange Agreement (“Exchange Agreement”) on July 8, 2009.1
In the Agreement, the business entities jointly owned by Sohr and Ingram were transferred
so that each party became the sole owner of specific entities.2

        On April 28, 2010, following the closing of the Exchange Agreement, Ingram and IS
Investment, Inc., commenced this action against Sohr, individually, and as Trustee of the Scott
T. Sohr Family 2007 Grantor Retained Annuity Trust (“GRAT”) asserting claims of fraud,
violation of the Tennessee Consumer Protection Act, breach of contract, breach of fiduciary
duty, and fraudulent transfer.3 Thereafter, Ingram filed a First Amended Complaint adding an
allegation that Sohr invalidated Ingram’s title to a 2008 BMW Alpina; Ingram also sought a
temporary injunction for the return of the title to the BMW from Sohr.4 Sohr filed an Answer
to the First Amended Complaint on June 28, 2010.

      In January 2011, the trial court granted leave for Ingram to file a Second Amended
Complaint wherein Ingram asserted additional claims of breach and sought a declaratory
judgment on several issues. Sohr then filed a Counter-Claim seeking $21,710.908, for
Ingram’s alleged breach based upon the same legal argument as a breach alleged by Ingram.
On March 28, 2011, Sohr filed a Third Party Complaint against Prescott Land Investments.

       On October 15, 2010, Sohr filed his First Motion for Summary Judgment seeking
summary dismissal of the claims against him. Following a hearing, the trial court granted the
motion in part and denied the motion in part. The trial court summarily dismissed the
following claims against Sohr: Fraud (Count I); violation of the Tennessee Consumer
Protection Act (Count II);5 any breach of fiduciary duty or fraud claims related to the
Gladstone purchases referenced in the First Amended Complaint; any breach of fiduciary duty
or fraud claims related to the Riverwatch purchase referenced in the First Amended
Complaint; any breach of fiduciary duty or fraud claims related to the monetary distributions

        1
          The partners had previously entered into a separation agreement in February 2009, however, due
to the failure of several conditions precedent, the agreement did not go into effect.
        2
         A small number of entities remained jointly held by both Ingram and Sohr, despite the deteriorating
relationship between the parties.
        3
        The complaint also named Paul Hineman as a defendant in the action for liability under a
promissory note; Mr. Hineman is not a party to this appeal.
        4
            The trial court granted the injunction requiring that Sohr return the title to the BMW to Ingram.
        5
            The TCPA claim is not at issue in this appeal; and thus, we will not address this claim further in this
opinion.

                                                         -3-
to Ingram & Sohr by IS Investment made in the First Amended Complaint; and any breach
of fiduciary duty or fraud claims related to the monetary distributions made to Ingram and
Sohr by SIS Development referenced in the First Amended Complaint. The trial court denied
Sohr’s motion for partial summary judgment on numerous other claims, announcing its
reasoning for the grant or denial of summary judgment from the bench. The trial court’s basis
for dismissal of the fraud claim, which was based upon the alleged failure to disclose an
appraisal by Thomas Fuller regarding one of the properties, was that there was no failure to
disclose as Ingram and his agents were fully aware of the appraisal. Notably, while the trial
court dismissed the majority of the fraud claims, the breach of contract claims relating to the
same pieces of property, such as the Riverwatch property, survived.

        Following the trial court’s ruling, Sohr filed a motion to reconsider the trial court’s
summary judgment ruling, inter alia, the trial court’s decision to not dismiss Ingram’s claims
that Sohr’s transfer of assets to the GRAT constituted a fraudulent transfer. On May 3, 2011,
the trial court granted the motion and entered an order dismissing the claim finding no
genuine issue of material fact existed and the evidence established that Sohr received the
reasonably equivalent value in the transfer at issue.

       Ingram filed a Motion for Partial Summary Judgment on March 25, 2011, and
thereafter, Sohr filed a Second Motion for Partial Summary Judgment. The motion by Sohr
sought dismissal of the claims that: Sohr breached an implied agreement to leave the Atkins
Note and Woodmont Receivable out of the Exchange Agreement, that Sohr breached § 7(l)
of the Exchange Agreement, that Sohr breached the express warranty in § 7(n) of the
Exchange Agreement, and that Sohr violated the Tennessee Securities Act of 1980 in
connection with the Exchange Agreement transaction. Following a hearing, the trial court
denied Ingram’s motion in all respects and granted Sohr’s motion in all respects. The trial
court announced its reasoning for its grant of summary judgment from the bench. The trial
court found that the claim related to § 7(l) of the Exchange Agreement based upon the
allegation that Sohr failed to disclose a material contract in the form of a promissory note, was
actually an error in the financial records, which should have been pursued under the Notice
of Error provision of the Exchange Agreement and therefore Ingram had waived his right to
pursue any action in regards to the promissory note. The trial court granted summary judgment
on the claim for breach under § 7(n) on the finding that there was no evidence of materiality
and thus the claim should be dismissed. The claim that Sohr breached an implied agreement
to leave the Atkins Note and Woodmont Receivable out of the Exchange Agreement was
summarily dismissed upon the finding that the parol evidence rule barred any evidence of an
oral agreement as a matter of law.6

       6
           The other claims addressed in the motions and order are not at issue in this appeal and therefore will
                                                                                                    (continued...)

                                                        -4-
       Ingram filed a Second Motion for Partial Summary Judgment on June 17, 2011,
seeking dismissal of Sohr’s Counter-Claim. Thereafter, on August 24, 2011, Sohr filed a
Third Motion for Partial Summary Judgment. Following a hearing, the trial court entered an
order stating the motions were to be held in abeyance.

       Subsequently, Sohr filed a Motion to Revise the January 2011 order denying his
Motion for Summary Judgment as to claims under § 7(k) of the Exchange Agreement. The
following day, Ingram also filed a Motion to Revise. After a hearing on the competing
motions, the trial court entered an Order on November 4, 2011, addressing its prior oral
rulings as follows:

                The court denied Ingram’s motion to revise.

                The trial court granted in part and denied in part Sohr’s Third
                Motion for Summary Judgment, resulting in the dismissal of the
                following claims: Ingram’s claims concerning the Renasant bank
                guaranty, the breach of fiduciary duty claims arising out of the
                allegations in paragraph 57 of the Second Amended Complaint,
                which listed numerous alleged instances of malfeasance, and
                Ingram’s breach of warranty claims under § 7(n) of the Exchange
                Agreement based upon the allegations set forth in paragraph 57
                of the Second Amended Complaint.

                As for the Renasant bank guaranty, the trial court found that the
                released obtained by Sohr satisfied his obligation under the
                Agreement.

                The trial court also granted in part and denied in part Sohr’s
                Motion to Revise the ruling on the breach of warranty claim
                under § 7(k) of the Exchange Agreement resulting in the
                dismissal with prejudice as to all liabilities that Ingram contended
                Sohr failed to list on Schedule C of the Exchange Agreement
                except for 4 liabilities: 1) the alleged $34,000 liability of Harvey
                Development, LLC relating to the Berkshire Walking Trail; 2)
                the alleged $111,100 liability of Hood Developments, LLC to
                Don Martin; 3) the alleged $397,783 liability of Tims Ford
                Development, LLC to Holiday Landing Marina regarding boat

        6
         (...continued)
not be elaborated upon in this opinion.

                                                -5-
               slips, and 4) the alleged $542,117 liability of Tims Ford North
               Development, LLC to Holiday Landing Marina regarding boat
               slips. The trial court found that Ingram had knowledge of the
               liabilities because the liabilities were disclosed on financial
               statements provided to Ingram.

               Lastly, the order granted Ingram’s Second Motion for Partial
               Summary Judgment on Sohr’s Counter-Claim, which alleged
               Ingram had breached the warranty contained in § 6(k) of the
               Exchange Agreement.

        On November 7-16, 2011, a trial was held before a jury on the remaining claims. On
November 14, at the close of Ingram’s proof, Sohr moved for a directed verdict as to all of
Ingram and IS Investment’s claims against him; the trial court granted a directed verdict as
to one claim. Sohr renewed his motion at the close of his proof. Ultimately, the trial court
granted a directed verdict to Sohr on three claims: Sohr’s alleged failure to disclose a liability
of Harvey Developments, LLC on Schedule C of the Exchange Agreement;7 Ingram’s claim
that a liability of $97,203 for Bugg Hollow was mistakenly allocated to him at closing; and
IS Investment’s claim that Sohr breached his fiduciary duty by improperly using resources of
IS Investment. On the Harvey Developments claim, the trial court found that there was no
liability because the letter from Sohr to the mayor of Spring Hill did not create a contract
obligating the building of the Belshire walking trail. On the Bugg Hollow claim, the trial court
found that Sohr was not responsible for the creation of the Agreement and that both parties
were represented by attorneys during the negotiations, who reviewed the Exchange Agreement
and attached documents. The trial court found the breach of fiduciary duty claim was barred
by the applicable statute of limitations.

         On November 15, 2011, the trial court instructed the jury, and the following day the
jury returned its verdict. The jury found for Ingram on the claim for the ownership of the
BMW Alpina automobile, awarded $9,750 for the cost of the airline miles given by Ingram
to Sohr that were not repaid, and found that the purchase of the Riverwatch property violated
the Partnership Agreement of Prescott Land Investments but found that Ingram had
acquiesced in the purchase; thus the trial court dismissed the claim. The jury further found that
Sohr breached his warranty in section 7(k) of the Exchange Agreement by not listing the four
remaining liabilities at issue on Schedule C, but found that Ingram had knowledge of the
liabilities when the Exchange Agreement was executed; based upon this finding by the jury,
the claim was dismissed by the trial court. The jury also found that Sohr did not cause IS

       7
       Ingram received Harvey Developments, LLC, in the division of the corporations under the Exchange
Agreement. The liability that Sohr allegedly failed to disclose was the “Belshire walking trail.”

                                                  -6-
Investment to pay salary or overhead expenses in violation of any agreement with Ingram. The
jury additionally found that a mistake was made in the amount of $24,703 made in connection
with a $790,000 Promissory Note executed by RC Properties and that Sohr was obligated to
pay 42.5% (not 50%) of the Promissory Note. Lastly, the jury found that Ingram was entitled
to receive $11,478.65 from $74,835.69 in funds held in escrow, with Sohr to receive the
balance. The Judgment Order was entered on December 7, 2011.

        Following the trial, on January 6, 2012, Ingram filed a Tennessee Rule of Civil
Procedure 59 motion to alter or amend, or in the alternative, a motion for new trial. Ingram
also filed a motion for discretionary costs pursuant to Tennessee Rule of Civil Procedure
54.04 and a motion for attorney’s fees based upon Section 11(l) of the Exchange Agreement.
Thereafter, Sohr filed a motion for discretionary costs and attorney’s fees. A hearing occurred,
following which the trial court entered an order denying Ingram’s Rule 59 motion to alter or
amend in all respects. Ingram filed a Third Motion to Revise under Rule 54.02 seeking the
trial court’s reversal of its prior summary judgment rulings in favor of Sohr, which the trial
court denied.

       On March 7, 2012, Sohr filed a Motion to Amend his Answer pursuant to Tennessee
Rule of Civil Procedure 15.02 to add the affirmative defense of acquiescence, which the trial
court granted. Stating its reasons from the bench, the trial court found that Ingram had
“acquiesced by his conduct throughout the entire trial” and thus the issue had been tried by
express or implied consent throughout the trial.

       A hearing on the issue of attorney’s fees occurred on March 22, 2012. Thereafter, on
May 1, 2012, the trial court issued a Memorandum and Order denying Ingram’s motion for
attorney’s fees and costs. On the issue of attorney’s fees recoverable under § 11(l) of the
Exchange Agreement, the court found that Ingram was the prevailing party only as to four
claims, three of which were unrelated to the Exchange Agreement. As for the remaining claim
regarding the Schedule C liabilities, the jury found that there were no damages, thus the court
found Ingram was not the prevailing party and therefore he was not entitled to attorney’s fees.
The trial court found that Sohr, however, was the prevailing party on the vast majority of the
claims for breach of fiduciary duty, warranty, representation, and others that were alleged
pursuant to the Exchange Agreement and therefore was entitled to attorney’s fees and costs.8
The trial court further found that Sohr was entitled to indemnification of his legal fees and
expenses from two entities: IS Investment, based upon a provision in its bylaws, and by
Prescott Land Investments, based upon a provision in the Partnership Agreement. The court
also awarded Sohr $24,348.84 of allowable discretionary costs pursuant to Tennessee Rule
of Civil Procedure 54.

       8
           The court reserved the issue of the amount of attorney’s fees recoverable.

                                                      -7-
        Following the trial court’s decision, Ingram filed a Motion to Revise and Recuse
requesting that the trial court reverse its ruling on attorney’s fees and costs, and seeking the
trial court’s recusal based upon evidence of unfair bias towards Sohr. Following a hearing,
the trial court entered an Amended Memorandum and Order revising its previous ruling on
attorney’s fees and costs, which revisions are not material to this appeal, and in effect denying
Ingram’s Motion to Revise and Recuse, although the order did not address the issue of
recusal. On June 25, 2012, a hearing on discretionary costs occurred and thereafter, the trial
court entered an order resolving any remaining issues regarding discretionary costs and
attorney’s fees. The order awarded Sohr $696,311.77 in attorney’s fees. Thereafter, Ingram
filed a timely appeal.

                                           A NALYSIS

        On appeal, Ingram raises numerous issues relating to the various stages of litigation
in this action and the trial court’s decisions as they relate to those stages. Sohr also raises one
issue on appeal relating to the dismissal of his counter-claim against Ingram and requests his
attorney’s fees incurred on appeal. We shall address each issue in turn.

                       I. C LAIMS D ISMISSED ON S UMMARY J UDGMENT

        Ingram argues on appeal that the trial court erred in denying his motion for summary
judgment on his breach of contract claim against Sohr under section 7(k) of the Exchange
Agreement. He further argues that the trial court erred in granting summary judgment to Sohr
and dismissing Ingram’s claims for breach under sections 7(k), 7(l), and 7(n) of the Exchange
Agreement, breach of the Guaranty and Indemnification Agreement, breach of contract
relating to the Atkins Note and Woodmont Receivable, and the claim relating to Sohr’s
transfer of assets to the Grantor Retained Annuity Trust.

       Sohr argues on appeal that if this court reverses the grant of summary judgment to Sohr
on the issue of breach of warranty under section 7(k) of the Exchange Agreement, then the
court must also reverse the trial court’s dismissal of his Counter-Claim against Ingram as it
was based upon the identical warranty contained in section 6(k) of the Exchange Agreement.

                                    A. Standard of Review

       Summary judgment is appropriate when a party establishes that there is no genuine
issue as to any material fact and that a judgment may be rendered as a matter of law. Tenn.
R. Civ. P. 56.04; Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003). The party seeking
summary judgment bears the burden of demonstrating that no genuine disputes of material
fact exist and that the party is entitled to judgment as a matter of law. Godfrey v. Ruiz, 90

                                                -8-
S.W.3d 692, 695 (Tenn. 2002). To be entitled to summary judgment, the moving party must
affirmatively negate an essential element of the nonmoving party’s claim or show that the
moving party cannot prove an essential element of the claim at trial. Martin v. Norfolk S. Ry.
Co., 271 S.W.3d 76, 83 (Tenn. 2008).

        Summary judgments do not enjoy a presumption of correctness on appeal. BellSouth
Adver. & Publ’g Co. v. Johnson, 100 S.W.3d 202, 205 (Tenn. 2003). Because the resolution
of a motion for summary judgment is a matter of law, we review the trial court’s judgment de
novo with no presumption of correctness. Martin v. Norfolk Southern Ry. Co., 271 S.W.3d
76, 84 (Tenn. 2008) The appellate court makes a fresh determination that the requirements of
Tenn. R. Civ. P. 56 have been satisfied. Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn. 1977).
As does the trial court, the appellate court considers the evidence in the light most favorable
to the nonmoving party and resolve all inferences in that party’s favor. Martin, 271 S.W.3d
at 84; Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003); Godfrey v. Ruiz, 90 S.W.3d 692,
695 (Tenn. 2002). When reviewing the evidence, the appellate court first determines whether
factual disputes exist. If a factual dispute exists, the court then determines whether the fact
is material to the claim or defense upon which the summary judgment is predicated and
whether the disputed fact creates a genuine issue for trial. Byrd v. Hall, 847 S.W.2d 208, 215
(Tenn.1993).

        A party is entitled to summary judgment only if the “pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits . . . show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment as
a matter of law.” Tenn. R. Civ. P. 56.04. A properly supported motion for summary judgment
must show that there are no genuine issues of material fact and that the moving party is
entitled to judgment as a matter of law. Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 88
(Tenn. 2000); McCarley v. W. Quality Food Serv., 960 S.W.2d 585, 588 (Tenn. 1998). If the
moving party makes a properly supported motion, then the nonmoving party is required to
establish the existence of the essential elements of the claim. McCarley, 960 S.W.2d at 588;
Byrd, 847 S.W.2d at 215. If, however, the moving party does not properly support the motion,
then the nonmoving party’s burden to produce either supporting affidavits or discovery is
relieved and the motion must fail. McCarley, 960 S.W.2d at 588; Martin, 271 S.W.3d at 83.

       To make this showing and shift the burden of production, a moving party may: 1)
affirmatively negate an essential element of the nonmoving party’s claim; or 2) show that the
nonmoving party cannot prove an essential element of the claim at trial. Martin, 271 S.W.3d
at 83; Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 5 (Tenn. 2008); Byrd, 847 S.W.2d at 215
n.5. Whichever approach the moving party takes, both require more than assertions of the
nonmoving party’s lack of evidence. Martin, 271 S.W.3d at 83-84. In addition, the moving
party must present evidence that more than “raises doubts” about the ability of the nonmoving

                                               -9-
party to prove its claim at trial. Id. at 84. The moving party must produce evidence or refer to
previously submitted evidence. Id.; accord Hannan, 270 S.W.3d at 5. Thus, to negate an
essential element of a claim, a moving party must refer to evidence that tends to disprove an
essential element of the claim made by the nonmoving party. Martin, 271 S.W.3d at 84.

                B. Breach of Sections 6(k) & 7(k) in the Exchange Agreement

        Section 7(k) of the Exchange Agreement provided a warranty by Sohr that: “Except
as listed on Schedule C hereto, to the best of Sohr’s knowledge none of the Sohr Transferred
Companies has any liabilities, whether accrued, absolute, contingent or otherwise, that are
greater than $5,000 either individually or in the aggregate.” An identical warranty made by
Ingram to Sohr was contained in § 6(k) of the Exchange Agreement.

       It is undisputed that both parties knew that the Sohr Transferred Companies and the
Ingram Transferred Companies had numerous liabilities in excess of $5,000; nevertheless,
neither Ingram nor Sohr listed any liabilities on Schedule C. In fact, all that is stated on
Schedule C is the word “none” as it pertains to all companies transferred by each party to the
other.

        In his Second Amended Complaint, Ingram alleged that Sohr was in breach for his
failure to list liabilities in excess of $6 million on Schedule C.9 In his Counter-Claim, Sohr
alleged that Ingram failed to list over $20 million in liabilities on Schedule C.10 Ingram also
asserted claims related to contingent liabilities.

        9
          These liabilities were: (1) a $397,783 liability of Tims Ford Development, LLC for boat slips at
Holiday Landing Marina on Tims Ford Lake; (2) a $542,117 liability of Tims Ford North Development, LLC
for boat slips at Holiday Landing; (3) a $1,000,000 note payable by King Development, LLC to Ingram’s
attorney, Tommy Sidwell; (4) a $65,280 liability of Hood Development, LLC to Celebration Homes for
earnest money deposits; (5) a $95,875 liability of Hood Development, LLC to Mike Ford Homes for earnest
money deposits; (6) a $49,400 liability of Hood Development, LLC for amenity fees associated with the sale
of lots in the Canterbury subdivision; and (7) a $6,111 liability of Hood Development, LLC to Don Martin
for Commissions. Later, in a Motion in Limine, Ingram alleged that these liabilities also included a $3.6
million contingent liability of Hood Development, LLC for the construction of future amenities in the
Canterbury Development, a $34,300 contingent liability for the construction of a walking trail in the Belshire
development, and increased the Don Martin liability to $111,104 and the Sidwell note to $1,250,000.
        10
          Sohr maintained, however, that he was asserting the counter-claim as a protective measure and
believed that neither party was actually in breach as both parties were aware of the liabilities prior to entering
into the Exchange Agreement as the liabilities were disclosed on financial statements that each party was
provided prior to their entry into the Exchange Agreement.

                                                       -10-
         The trial court granted summary judgment to Sohr and denied Ingram’s motion for
summary judgment on Ingram’s claims for breach of section 7(k) for failure to list on
Schedule C on all but four liabilities, based upon the determination that Ingram had
knowledge of the liabilities at the time he entered into the Exchange Agreement because these
liabilities were disclosed on financial statements provided to Ingram.11 The trial court granted
summary judgment to Ingram on Sohr’s alleged counter-claim based upon the same reasoning.
The trial court also dismissed Ingram’s claim for a liability related to the Canterbury
Development without reaching the issue of knowledge, upon the holding that there was no
evidence in the record that there was a contractual obligation for the alleged liability, and that
there was no evidence Ingram suffered any damage as a result of this alleged liability or
would be subject to any damage in the foreseeable future.

      On the claims dismissed based upon Ingram’s prior knowledge, the trial court looked
to § 8(b) of the Exchange Agreement. Section 8 of the Agreement is entitled
“Indemnification; Survival.” Section 8(b) provides:

        Sohr shall hold harmless and indemnify Ingram from and against any
        reasonable loss, damage, liability, or deficiency in the aggregate greater than
        $25,000 (the indemnification shall include, without limitation, attorneys’ fees
        and other reasonable costs and expenses incident to any claim, suit, action,
        investigation or other proceeding but such amounts shall not be considered
        when determining the floor amount of $25,000) arising out of or resulting from,
        and will pay Ingram on demand the full amount of any sum which Ingram may
        pay or become obligated to pay on account of (i) any inaccuracy in any
        representation or the breach of any warranty made by Sohr hereunder, or (ii)
        any breach of any covenant or obligation in this Agreement. In addition, Sohr
        shall indemnify and hold harmless Ingram from, for and against, any costs and
        expenses, including attorneys’ fees, which Ingram may suffer or sustain in
        seeking to enforce the indemnification obligations of Sohr hereunder.
        Notwithstanding the foregoing, Sohr shall not be liable under this Section 8
        with respect to any damages arising out of or related to matters within the
        knowledge of Ingram as of the Effective Date.

      On appeal, Ingram argues that the trial court’s ruling was erroneous based upon the
language contained in § 8(c) of the Exchange Agreement. Section 8(c) states that:

        11
        The four liabilities that survived were the Tims Ford liability for the boat slips, the Tims Ford
North Development liability for boat slips, the Don Martin liability, and the Belshire walking trail liability.

                                                     -11-
       Except as provided below, all representations, warranties, covenants and
       obligations in this Agreement shall survive the consummation of the
       transactions contemplated hereby for a period of two (2) years from the Closing
       Date. The right to indemnification, reimbursement or other remedy based upon
       such representations, warranties, covenants and obligations shall not be affected
       by any investigation conducted with respect to, or any knowledge acquired (or
       capable of being acquired) at any time with respect to the accuracy or
       inaccuracy of or compliance with any such representation, warranty, covenant
       or obligation.

        In his argument, Ingram acknowledges that he received the financial statements, which
contained the liabilities that he claims Sohr failed to list on Schedule C of the Exchange
Agreement, which he argues results in a breach of the warranty contained in § 7(k). However,
he argues that based upon § 8(c), such knowledge is irrelevant. He further argues that § 8(b)
is not relevant to his claims for breach of warranty against Sohr.

       There are no disputed facts regarding the failure to disclose the liabilities on Schedule
C that were resolved on summary judgment on the issue of knowledge. This issue rests solely
upon the interpretation of the provisions contained within the Exchange Agreement. The
interpretation of a contract is a question of law. Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95
(Tenn. 1999). Issues as to interpretation and application of unambiguous contracts are
likewise issues of law, the determination of which enjoys no presumption of correctness on
de novo appellate review. Doe v. HCA Health Servs. of Tennessee, Inc., 46 S.W.3d 191, 196
(Tenn. 2001); Angus v. W. Heritage Ins. Co., 48 S.W.3d 728, 730 (Tenn. Ct. App. 2000).
Therefore, the trial court’s interpretation of a contract is not entitled to a presumption of
correctness under Tennessee Rule of Appellate Procedure 13(d) on appeal. Angus, 48 S.W.3d
at 730. Accordingly, we will review the contractual issues de novo and reach our own
independent conclusions regarding their meaning and legal import. Guiliano, 995 S.W.2d at
95; Hillsboro Plaza Enters. v. Moon, 860 S.W.2d 45, 47 (Tenn. Ct. App. 1993).

        “The cardinal rule for interpretation of contracts is to ascertain the intention of the
parties and to give effect to that intention consistent with legal principles.” Rainey v. Stansell,
836 S.W.2d 117, 118-19 (quoting Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc.,
521 S.W.2d 578 (Tenn. 1975)). A primary objective in the construction of a contract is to
discover the intention of the parties from a consideration of the whole contract. McKay v.
Louisville & N. R. Co., 182 S.W. 874, 875 (Tenn. 1916). When resolving disputes concerning
contract interpretation, we are to ascertain the intention of the parties based upon the “usual,
natural, and ordinary meaning” of the contractual language. Rainey, 836 S.W.2d at 119. “All
provisions in the contract should be construed in harmony with each other, if possible, to

                                               -12-
promote consistency and to avoid repugnancy between the various provisions of a single
contract.” Guiliano, 995 S.W.2d at 95 (citing Rainey, 836 S.W.2d at 118-19).

       The court, at arriving at the intention of the parties to a contract, does not attempt to
ascertain the parties’ state of mind at the time the contract was executed, but rather their
intentions as actually embodied and expressed in the contract as written. Rainey, 836 S.W.2d
at 118-119 (citing Sutton v. First Nat’l Bank of Crossville, 620 S.W.2d 526 (Tenn. Ct. App.
1981)). Where there is no ambiguity in the contract language, neither party is to be favored
in the construction of the contract. Ballard v. N. Am. Life & Cas. Co., 667 S.W.2d 79, 83
(Tenn. Ct. App. 1983). “The language of a contract is ambiguous when its meaning is
uncertain and when it can be fairly construed in more than one way.” Gredig v. Tennessee
Farmers Mut. Ins. Co., 891 S.W.2d 909, 912 (Tenn. Ct. App. 1994) (citing Farmers-Peoples
Bank v. Clemmer, 519 S.W.2d 801, 805 (Tenn. 1975)). “A strained construction may not be
placed on the language used to find ambiguity where none exists.” Id. (quoting Farmers-
Peoples Bank, 519 S.W.2d at 805). “An 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) (citing Hanover Ins. Co. v. Haney, 425 S.W.2d 590, 592 (Tenn. 1968); Vargo
v. Lincoln Brass Works, Inc., 115 S.W.3d 487, 492 (Tenn. Ct. App. 2003)).

         Ingram argues that § 8(b) is inapplicable because it only applies to indemnity or
recovery, and since he did not “pay or become obligated to pay” a third party, it cannot be
used to excuse liability for Sohr’s failure to list the liabilities on Schedule C. We find this
interpretation by Ingram in clear conflict with the plain language of the last sentence of § 8(b),
which states: “Notwithstanding the foregoing, Sohr shall not be liable under this Section 8
with respect to any damages arising out of or related to matters within the knowledge of
Ingram as of the Effective Date.” In contrast, § 8(c), by its plain language, applies to matters
not within the knowledge of either Ingram or Sohr upon entry into the contract, but states that
knowledge acquired or capable of being acquired does not affect a claim for the two-year
period following the consummation of the transactions in the Exchange Agreement. We hold
that Section 8(b) bars Ingram’s claims for breach of warranty based upon Sohr’s failure to
disclose the liabilities contained at Schedule C at issue on summary judgment because Ingram
had undisputed knowledge of such liabilities on the financial statements provided to Ingram
as far back as March 2009. Thus, Ingram is not entitled to recovery for any damages as the
liabilities not disclosed on Schedule C were within his knowledge. Therefore, we affirm the
trial court’s denial of Ingram’s motion for summary judgment as to the breach of § 7(k), the
trial court’s grant of summary judgment to Sohr on the claims that he breached §7(k) and the
resulting dismissal of those claims, and the trial court’s grant of summary judgment to Ingram
on Sohr’s counter-claim for breach of § 6(k).

                                               -13-
                                 C. Canterbury Development

       Ingram asserted a claim that Sohr breached § 7(k) by failing to disclose an alleged
contingent liability to construct future amenities in the Canterbury Development, which was
owned by Hood Development, LLC, one of the Sohr Transferred Companies. The basis for
Ingram’s claim was that neighborhood amenities were promised to residential lot purchasers
in the Canterbury Development. The trial court also summarily dismissed Ingram’s
Canterbury Development claim. Ingram insists this was error; we find no error with this
decision.

         There was no contractual obligation to build such amenities, but Ingram argued that
because the purchasers could potentially file suit under a promissory estoppel theory, Sohr
should have disclosed the cost of the amenities, which he argues was approximately
$3,686,985. Sohr contends that the trial court properly granted summary judgment on this
claim because there was no evidence that the alleged promises of amenities was a “contingent
liability” as contemplated in the Exchange Agreement, that the undisputed facts showed the
representations were made, not by employees of Hood Development, but by employees of
Mike Ford Homes, and further that marketing materials of the Canterbury Development
contained disclaimers, which provided: “The developer reserves the right to modify this plan
at its sole discretion,” and “subject to change without notice or cause” thus providing further
support that the statements regarding amenities did not give rise to a contingent liability for
Hood Development that should have been disclosed on Schedule C pursuant to § 7(k).

       As the trial court noted, it was undisputed that there was no contractual obligation by
Hood Development to build the amenities in the Canterbury Development. Ingram’s tenuous
argument that he could at some point be liable in the future for residents who decided to bring
a lawsuit on a theory of promissory estoppel is not sufficient to establish a contingent liability
subject to disclosure under the Exchange Agreement. Further, there is no evidence in the
record that Hood Development had any obligation whatsoever to build such amenities. We,
therefore, affirm the summary dismissal of Ingram’s claim that Sohr breached § 7(k) of the
Exchange Agreement.

                   D. Breach of Section 7(l) of the Exchange Agreement

      Ingram alleged that Sohr breached § 7(l) of the Exchange Agreement by failing to list
on Schedule D all “material contracts” of any Sohr Transferred Company, specifically a
Memorandum of Understanding that King Development, LLC, executed in favor of Bill
Charles, which cancelled Mr. Charles’s obligation to pay a Promissory Note of $160,000.

                                              -14-
       Section 7(l) of the Exchange Agreement states that: “Except as listed on Schedule D
hereto, to the best of Sohr’s knowledge none of the Sohr Transferred Companies are bound
by or a party to any material contracts, leases, instruments or commitments, whether written
or verbal.”

       In Ingram’s Second Amended Complaint, Ingram asserted a fraud claim related to the
Promissory Note in which he asserted that he was unaware of the Memorandum of
Understanding, which forgave the $160,000 Promissory Note. However, the proof
demonstrated that the Memorandum of Understanding was clearly documented in the
corporate records and known to Ingram’s agents and employees of IS Investment and thus the
claim was dismissed by the trial court on summary judgment.12 Thereafter, Ingram changed
his theory regarding the Promissory Note to a claim for breach of warranty under § 7(l) of the
Exchange Agreement.

        The trial court granted summary judgment to Sohr on the breach of warranty claim on
the basis that Ingram had failed to comply with the Notice of Error provision in Section 9 of
the Exchange Agreement, which provided that each party had one year from the effective date
to deliver a written notice of errors to the other party regarding any material errors or
omissions in the books of account or other financial records of the companies for amounts
greater than $25,000. In each notice of error, the party was required to specify in reasonable
detail the nature of any error asserted and the amount owed by the other party. The trial court
found that Ingram provided timely notice of errors to Sohr on July 6, 2010; however, the court
also found that the Memorandum of Understanding forgiving the $160,000 Promissory Note
was listed as an error. In so finding, the trial court rejected the argument that Ingram had
generally asserted this error noting that the provision required “reasonable detail” of the
nature of the error and there was no reference to the Memorandum of Understanding. Thus,
the trial court found that Ingram was barred under Section 9 of the Exchange Agreement from
now asserting such an error as he did not comply with the procedure set forth for correction
of errors in the Exchange Agreement.

        Ingram argues in this appeal that the Memorandum of Understanding was a material
contract that should have been listed on Schedule D pursuant to § 7(l) of the Exchange
Agreement and therefore was a breach of that warranty. In his brief, Ingram argues that the
trial court erred in treating this as an issue that fell within the Notice of Error provision
regarding financial records arguing that “this was beside the point.” We disagree.

      The Memorandum of Understanding was drafted as part of a deal that occurred in
October 2007 between King Development and Bill Charles, in which a lot owned by King

       12
            The dismissal of this fraud claim on summary judgment is not an issue in this appeal.

                                                     -15-
Development in the King’s Crossing subdivision was exchanged for services Charles had
previously provided in connection with several other development properties. The deal was
negotiated by IS Investment. The deal was structured so that Charles would sign a promissory
note in the amount of $160,000, and that note would be forgiven by King Development, a
procedure recommended by Larry Mullins, Ingram’s tax accountant. The Memorandum of
Understanding noted that “the Parties agree that the purchase of this Lot has been fully settled
and no outstanding monies are due to King Development, LLC from Bill Charles.” Despite
this, King Development continued to list the $160,000 Promissory Note on its balance sheet
continuing through the time of the Exchange Agreement. Clearly, this circumstance falls
within the Notice of Error Provision contained in the Exchange Agreement as the Promissory
Note should have been taken off the balance sheet of King Development long before the
execution of the Exchange Agreement and that the listing of the Promissory Note was an error
in the financial records of King Development.

       Thus, we affirm the trial court’s rulings that the Notice of Error Provision applied and
that Ingram’s failure to list this material error on his written notice of error with reasonable
detail waived his right to a remedy; therefore, we affirm the trial court’s dismissal of this
breach of warranty claim as a matter of law.

                   E. Breach of Section 7(n) of the Exchange Agreement

        Ingram also alleged that Sohr breached Section 7(n) of the Exchange Agreement by
his failure to provide written notice of a valuation of the Canterbury Development by Thomas
Fuller. On appeal, Ingram argues that the trial court’s dismissal of the claim on summary
judgment was in error as it invades the province of the jury.

       Section 7(n) of the Exchange Agreement provides that:

       There are no other facts of which Sohr has knowledge which have or will have
       a material adverse effect on the development of any of the property owned by
       the Sohr Transferred Companies or the valuation of any of the Sohr Transferred
       Interests, and have not been disclosed in writing to Ingram.

        As with several other claims, Ingram initially alleged that he was fraudulently induced
into entering into the Exchange Agreement by Sohr’s failure to inform him of several property
valuations prepared by Thomas Fuller. Following proof that Ingram and his agents were aware
of the Fuller valuations, the fraudulent inducement claims were dismissed. Ingram then argued
that one of the valuations performed by Fuller on the Canterbury Development constituted a
breach of § 7(n) because it had a material adverse effect on the valuation of the Canterbury
Development and it was not disclosed to him in writing.

                                              -16-
       The trial court dismissed this claim on summary judgment finding that there was no
evidence of materiality in the record. Ingram argues that materiality is a question for the jury
and thus the trial court’s ruling and subsequent dismissal of this claim was erroneous. Sohr
argues, however, that the valuation does not fall within the scope of § 7(n) as a matter of law
because there was no evidence of materiality other than conclusory statements and allegations,
which were insufficient to defeat his properly supported motion for summary judgment. Sohr
argues that the valuation was essentially meaningless to the Exchange Agreement and was in
fact prepared at the behest of Ingram’s agent to minimize the tax consequences to Ingram.
Further, Sohr argues that even if the valuation by Fuller did fall within § 7(n)’s scope,
Ingram’s claim based upon this would be barred by his prior knowledge under § 8(b), and the
claim is deficient because Ingram has shown no injury associated with this alleged breach.

        As with the claim for breach of warranty under § 7(k) of the Exchange Agreement, we
hold that Ingram’s prior knowledge of the Fuller valuation bars his recovery for damages
based upon § 8(b), which provides that “Sohr shall not be liable under this Section 8 with
respect to any damages arising out of or related to matters within the knowledge of Ingram
as of the effective date.” The evidence demonstrated that Ingram and his agents were aware
of the Fuller valuations and in fact that the Fuller valuations were prepared at the behest of
Ingram for the purposes of maximizing his anticipated tax loss from the Exchange Agreement
transaction. In fact, Tommy Sidwell, who was employed by Ingram, hired Fuller to achieve
a low valuation. Thus, Ingram’s knowledge was not only that the valuations occurred but also
that they were to be lower for tax purposes. Accordingly, we affirm the trial court’s decision
to dismiss this claim on summary judgment, although on different grounds. City of Brentwood
v. Metropolitan Bd. of Zoning Appeals, 149 S.W.3d 49, 60 n.18 (Tenn. Ct. App. 2004) (“The
Court of Appeals may affirm a judgment on different grounds than those relied on by the trial
court when the trial court reached the correct result.”).

                           F. Atkins Note and Woodmont Receivable

        Another claim dismissed by the trial court on summary judgment was a breach of
contract claim by Ingram that Sohr breached an oral agreement between Sohr and Ingram that
assets owned by SIS, a company which following the Exchange Agreement was solely owned
by Sohr, were to be transferred out of SIS before the Exchange Agreement was
consummated.13

       13
           These assets are referred to as the “Woodmont Receivable,” which consists of funds loaned and
interest charged on a loan that SIS made to Woodmont Development, LLC, another company of Ingram and
Sohr, which amounts to $573,726, and the “Atkins Note,” which is a $702,000 promissory note given to SIS
by a home builder as part of the payment for lots purchased from SIS.

                                                  -17-
       This claim was originally fashioned as a fraud claim by which Ingram asserted that he
was unaware that the two assets existed prior to entering into the Exchange Agreement.
Following evidence that the two assets were listed on the March 31, 2009 balance sheet of
SIS, which was prepared by IS Investment, whose President was Ingram, the fraud claim was
dismissed on summary judgment.14 Ingram then morphed the claim by asserting that an oral
agreement existed that the only material asset to be in the possession of SIS Development at
the time of the closing of the Exchange Agreement were lots in the Courtside Development,
and that the Woodmont Receivable and the Atkins Note were not to be included in the
company received by Sohr. The Exchange Agreement provided that Sohr was to receive 100
percent ownership of SIS Development, LLC.

       The trial court summarily dismissed the breach of contract claim finding that the parol
evidence rule barred any evidence of an oral agreement as a matter of law. Ingram argues on
appeal that the trial court’s ruling was erroneous because evidence of a contemporaneous oral
agreement that does not contradict the terms of a written agreement is admissible. Ingram
argues that the oral agreement does not contradict the terms of the Exchange Agreement,
which “merely omits reference to it.” Ingram contends that his affidavit, and the statement of
his agent, Sidwell, demonstrate that there was a contemporaneous agreement that the Atkins
Note and Woodmont Receivable were to be transferred out of SIS Development prior to the
execution of the Exchange Agreement.

       “The parol evidence rule is a rule of substantive law intended to protect the integrity
of written contracts.”GRW Enterprises, Inc. v. Davis, 797 S.W.2d 606, 610 (Tenn. Ct. App.
1990) (citing Maddox v. Webb Constr. Co., 562 S.W.2d 198, 201 (Tenn. 1978)). The parol
evidence rule provides that contracting parties cannot use extraneous evidence to alter, vary,
or qualify the plain meaning of an unambiguous written contract. Id. (citing Jones v. Brooks,
696 S.W.2d 885, 886 (Tenn. 1985); Clayton v. Haury, 452 S.W.2d 865, 867 (Tenn. 1970)).
This rule recognizes that generally “courts should not look beyond a written contract when
terms are clear.” Id. (citing Newark Ins. Co. v. Seyfert, 392 S.W.2d 336, 348 (Tenn. 1964)).

      There are exceptions to the parol evidence rule, however, which the court in GRW
Enterprises elaborated upon:

       [T]he rule does not prevent using extraneous evidence to prove the existence
       of an agreement made after an earlier written agreement, Brunson v. Gladish,
       174 Tenn. at 316, 125 S.W.2d at 147; Bryan v. Hunt, 36 Tenn. (4 Sneed) 543,
       547–48 (1857); Trice v. Hewgley, 53 Tenn. App. 259, 267–68, 381 S.W.2d 589,
       593 (1964), or to prove the existence of an independent or collateral agreement

       14
            The dismissal of this claim is not at issue in this appeal.

                                                       -18-
      not in conflict with a written contract. McGannon v. Farrell, 141 Tenn. 631,
      637, 214 S.W. 432, 433 (1919); Isabell v. Aetna Ins. Co., 495 S.W.2d 821, 824
      (Tenn. Ct. App. 1971). In each of these circumstances, the courts have
      conceived that the parol evidence is not being used to vary the written contract
      but rather to prove the existence of another, separate contract.

      The courts have also recognized certain circumstances that permit contracting
      parties to vary or to circumvent the plain terms of their written contract. Thus,
      the parol evidence rule does not prevent using extraneous evidence to prove
      that a written contract does not correctly embody the parties’ agreement,
      Davidson v. Greer, 35 Tenn. (3 Sneed) 384, 384 (1855); Rentenbach Eng'g Co.,
      Constr. Div. v. General Realty, Ltd., 707 S.W.2d 524, 526–27 (Tenn. Ct. App.
      1985); Gibson County v. Fourth & First Nat’l Bank, 20 Tenn. App. 168,
      178–79, 96 S.W.2d 184, 190 (1936); 3 A. Corbin, Corbin on Contracts § 582
      (1960), or to prove estoppel or waiver. Woods v. Forrest Hills Cemetery, 183
Tenn. 413, 421, 192 S.W.2d 987, 990 (1946); Freeze v. Home Fed. Savs. &
      Loan Ass’n, 623 S.W.2d 109, 112 (Tenn. Ct. App. 1981); Bailey v. Life &
      Casualty Ins. Co., 35 Tenn. App. 574, 582, 250 S.W.2d 99, 102 (1952).

      Id. at 610-11.

        We affirm the summary dismissal of this claim against Sohr finding that the parol
evidence rule bars the admission of evidence regarding the alleged oral agreement. The
Exchange Agreement clearly provided that Sohr was to “purchase all of Ingram’s Membership
Interests in . . . SIS LLC.” The Exchange Agreement defined “Membership Interests” as all
of the membership interests in the Companies. The Agreement did not provide for any assets
of any entities or corporations to be separately purchased, exchanged, or removed from any
entities.

       Further, the Exchange Agreement contained a Clause entitled “Interpretation”, which
clearly stated that:

      All previous negotiations and understandings between Ingram and Sohr or their
      respective agents and employees with respect to the transactions set forth
      herein, whether oral or written, are merged into this Agreement which fully and
      completely expresses the parties’ rights, duties and obligations. This
      Agreement, together with the related agreements contemplated hereunder,
      constitute the entire understanding between Sohr and Ingram and may be
      amended or modified only in a writing signed by Ingram and Sohr.

                                            -19-
        Considering the foregoing, we find the trial court correctly excluded the proffered
evidence of Ingram and his agent, Sidwell, that the Atkins Note and Woodmont Receivable
were not to be included in SIS Development at the execution of the Exchange Agreement as
such evidence was parol evidence and therefore should be excluded as a matter of law. The
evidence did not fall within one of the exceptions to the parol evidence rule as it was in
conflict with the unambiguous terms of the integrated contract that was the Exchange
Agreement. Although Ingram argues that the alleged oral agreement was a separate, collateral
agreement, we find no merit to this characterization. The statements by Ingram are an attempt
to redefine the membership interests of SIS Development by stating that SIS Development did
not contain the two assets at issue.15 The introduction of such evidence to vary the terms of
the Exchange Agreement in which the parties clearly divided and transferred entities, not
assets, is the exact type of evidence the parol evidence rule is designed to exclude in order “to
protect the integrity of written contracts.” GRW Enterprises, Inc., 797 S.W.2d at 610 (citing
Maddox v. Webb Constr. Co., 562 S.W.2d at 201). Further, the introduction of a collateral,
oral agreement would clearly contradict the Exchange Agreement’s clause that states the
Agreement is the “entire understanding” between the parties.

      We also agree with the trial court’s rejection of Ingram’s argument that this claim
should fall under the Errors and Omissions Agreement of the contract. The Errors and
Omissions Agreement provides that:

       In the event any of the documents which evidence the Transaction . . .
       inaccurately reflect . . . the purpose and intent of the Exchange Agreement and
       the Transaction, and said misstatement or inaccuracy is due to unilateral
       mistake on the part of either of the Exchange Parties . . . or if any essential
       documents are not included with the legal instruments evidencing the
       Transaction . . . then in such event, each of the undersigned hereby agrees that,
       upon request by . . . any of the Exchange Parties, and in order to correct such
       . . . misstatement, inaccuracy, or omission, each of the undersigned shall
       execute such new or additional documents and instruments . . . as . . . the
       Exchange Parties may deem necessary to remedy said inaccuracy, mistake or
       omission.

       Ingram argues that Sohr “mistakenly” failed to remove the assets out of SIS
Development prior to the execution of the Exchange Agreement and that the Errors and
Omissions Agreement provides that such mistakes will be corrected. Ingram does not contend
that any “essential document” was not included with other documents, as this was an alleged

       15
         We also find this argument somewhat disingenuous as Ingram originally argued that he was
unaware of the existence of the Atkins Note and Woodmont Receivable.

                                              -20-
oral agreement by the parties. Further, we note that the Exchange Agreement did not contain
a parceled out description of the assets to be held by the entities divided, but merely listed the
entities that each party was to transfer to the other party in order to complete the agreement.
The financial statements provided to the parties prior to the Exchange Agreement showed that
SIS Development was the owner of the Atkins Note and Woodmont Receivable. Thus, when
the transactions identified in the Exchange Agreement occurred, and Sohr became the owner
of SIS Development, he also became owner of the Atkins Note and the Woodmont
Receivable.

         G. Renasant Bank Loan – The Guaranty and Indemnification Agreement

        Ingram asserted a claim alleging that Sohr breached the Guaranty & Indemnification
Agreement (“Indemnification Agreement”) by failing to provide a satisfactory instrument of
release and cancellation of a loan by Renasant Bank that was guaranteed by Ingram. The trial
court summarily dismissed the claim upon the finding that Sohr obtained a release that
satisfied his obligation under the Indemnification Agreement. Ingram contends this was error.

        The Renasant loan was made in connection with the Waterbridge real estate
development, which was owned by Stonegate Land Company. Pursuant to the Exchange
Agreement and the Indemnification Agreement, Ingram transferred his interest in Waterbridge
to Sohr in consideration for, inter alia, Sohr paying off the Renasant loan by October 10,
2010, and obtaining and providing to Ingram a full release from the bank of Ingram’s guaranty
of the loan. The Indemnification Agreement provided in pertinent part that Sohr would:

       [O]btain a release and cancellation of the Ingram Guaranty on or before
       October 10, 2010 by delivering to Ingram an instrument of release and
       cancellation executed by the Lender, [Renasant Bank] or by delivering the
       original of the Ingram Guaranty to Ingram with a notation on its face signed and

       dated by an authorized officer of Lender stating “Cancelled in Full as to all
       Guaranteed Obligations.

       Sohr timely repaid the Renasant loan in full and, on August 23, 2010, Renasant Bank
executed and delivered a written release of the Ingram Guaranty. Ingram, however, asserted
that Sohr failed to obtain the type of release required by the Indemnification Agreement for
which Ingram sought damages, or in the alternative, rescission of the Exchange Agreement
due to Sohr’s failure to obtain a “full, noncontingent release and cancellation of the guaranty.”

        There are no disputes of fact relevant to this issue; thus, the disposition of this issue
rests solely on the interpretation of the language contained in the Indemnification Agreement.

                                               -21-
        The release provided by Renasant Bank stated:

        1.      Subject to Section 2 below, the obligations of [H. Preston Ingram] under
                the Guaranty are hereby terminated, released and discharged.

        2.      Notwithstanding the provisions of Section 1 above, in the event that the
                Lender is required by any court or regulatory agency to disgorge or turn
                over any portion of the Payment, then [Ingram’s] liability under the
                Guaranty shall be reinstated to the amount of the Payment required to be
                disgorged and/or turned over.

       The Indemnification Agreement obligated Sohr to pay the Renasant loan in full and
obtain a release of Ingram’s guaranty prior to October 10, 2010. On August 23, 2010, Sohr
obtained a release from Renasant Bank which expressly stated that Ingram was “terminated,
released and discharged” from his obligations under the Guaranty.16 The Indemnification
Agreement stated that Sohr must obtain and deliver to Ingram “an instrument of release and
cancellation executed by the Lender [Renasant],” by October 10, 2010, and Sohr satisfied that
obligation. Thus, we affirm the summary dismissal of this claim.

                  H. Alleged Fraudulent Transfer to the Sohr Family GRAT

       Sohr sold 291,216.67 membership units in Correct Care Solutions, LLC (“CCS”) to
the Scott T. Sohr Family 2007 Grantor Retained Annuity Trust (“Sohr Family GRAT”) for
approximately $8 million.17 The sale was effective July 31, 2007. In this action, Ingram asserts
that Sohr’s sale of his CCS membership units to the Sohr Family GRAT violated the Uniform
Fraudulent Transfer Act, Tennessee Code Annotated § 66-3-301, because Sohr failed to
receive a reasonably equivalent value for the CCS membership units and because the transfer
occurred at a time when Sohr was insolvent or was thereby rendered insolvent. The trial court
summarily dismissed this claim finding that Sohr received a reasonably equivalent value for
the transfer of the membership units to the GRAT and was therefore entitled to summary
judgment as a matter of law. Ingram contends this was error.

        The Uniform Fraudulent Transfer Act, Tennessee Code Annotated § 66-3-305(a)(2)
states that a transfer is constructively fraudulent if:

        16
          On January 28, 2013, Renasant Bank issued a new release to Ingram that removed the reinstatement
provision to which Ingram objected and provided that the Lender terminated, released, and discharged the
Guarantor, Ingram, from any obligations under the guaranty.
        17
         CCS is a healthcare company. At the time of the transfer CCS was principally owned by Ingram,
Sohr, and another member.

                                                   -22-
       (2) Without receiving reasonably equivalent value in exchange for the transfer
       or obligation, and the debtor:

               (A) Was engaged or was about to engage in a business
               transaction for which the remaining assets of the debtor were
               unreasonably small in relation to the business or transaction; or

               (B) Intended to incur, or believed and reasonably should have
               believed that the debtor would incur, debts beyond the debtor’s
               ability to pay as they became due.

        The trial court’s decision to grant summary judgment to Sohr on this claim was based
on the affidavit submitted by Sohr that he received the reasonably equivalent value of the
membership interest at the time of the transfer. Sohr stated in his affidavit that the sales price
was established by the law firm of Bass, Berry & Sims, PLC based on a sale of the units to
a third party, Cary McClure, the Chief Financial Officer of CCS. The affidavit also stated that
the other two primary shareholders of CCS, one of whom was Ingram, sold their membership
interest in CCS to their respective family GRATs within sixty days of each other and the same
unit price was used in all three sales. Furthermore, CCS’s operating agreement required
majority shareholder approval prior to any sale of membership units; thus, the sale of Sohr’s
membership units required Ingram’s express consent, which consent was provided in writing
by Ingram. Significantly, there is no countervailing evidence to Sohr’s affidavit.

        Although the term “reasonably equivalent value” is not defined in the UFTA, the trial
court properly considered the evidence regarding the determination of the value for which
Sohr would be paid, which was determined at the request of CCS’s members by Bass, Berry
& Sims, and which value was also used by Ingram when he transferred his membership units
to the Ingram family GRATs.

       The undisputed facts clearly established that Sohr received a reasonably equivalent
value for his membership interests in CCS; thus, we affirm the summary dismissal of this
claim.

                  I. Ingram’s Motion to Revise Fraudulent Transfer Ruling

       After the trial court summarily dismissed the fraudulent transfer claims, Ingram filed
a motion asking the trial court to revise that ruling. The trial court denied the motion to revise.

      On appeal, Ingram asserts that the denial of his motion to revise was erroneous
because, he contends, there was a genuine issue of material fact concerning whether Sohr

                                               -23-
received “fair consideration” for the transfer of his interests in CCS. In support, Ingram argues
that financial statements Sohr previously provided to Ingram show the value of Sohr’s
membership units for the period of June 30, 2007 to December 31, 2007 were well above the
value that Sohr received for the membership units. Ingram points to the June 30, 2007
statement that valued the interest at $15,292,178, the December 31, 2007 statement that
valued the interest at $17,207,247, and the September 30, 2008 statement that valued the
interest at $18,355,233.

       Ingram made this argument in his motion to revise the summary judgment ruling.
However, while the financial records were referenced in the original summary judgment
arguments, when Ingram argued the original motion for summary judgment, he merely
asserted that the statements demonstrated Sohr’s insolvency; Ingram did not rely on the
financial statements to assert that Sohr did not receive a reasonably equivalent value in
exchange for the transfer of his CCS units.

       At the hearing on the motion to revise, the trial court ruled that the financial statements
were inadmissible as to the reasonably equivalent value because they were hearsay and the
court did not believe the statements were properly authenticated. Ingram asserts that this
ruling was contrary to Tennessee Rule of Evidence 803(1.2), which provides that a party’s
own statement offered against himself is not hearsay, and that because the financial statements
were provided by Sohr, the statements constitute admissions by a party opponent. Further,
Ingram asserts that the financial statements were properly authenticated by an affidavit of
Ingram in accordance with Tennessee Rule of Evidence 901(b)(1), which permits
authentication by “testimony that a matter is what it is claimed to be.” Based upon this
argument, Ingram contends the trial court improperly excluded these financial statements,
which created a disputed issue of fact; therefore, the trial court erred by summarily dismissing
his fraudulent transfer claim.

        A trial court’s decision to grant or deny a motion to revise will only be overturned
when the trial court has abused its discretion. Harris v. Chern, 33 S.W.3d 741, 746 (Tenn.
2000). Decisions regarding the admissibility of evidence rest within the sound discretion of
the trial court. Danny L. Davis Contractors, Inc. v. Hobbs, 157 S.W.3d 414, 418-19 (Tenn.
Ct. App. 2004) (citing Otis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 442 (Tenn.
1992)). The trial courts are given wide latitude on evidentiary decisions and we will only
overturn the trial court’s decision upon a showing of abuse of discretion. Id. at 419. “The
abuse of discretion standard requires us to consider: (1) whether the decision has a sufficient
evidentiary foundation; (2) whether the trial court correctly identified and properly applied
the appropriate legal principles; and (3) whether the decision is within the range of acceptable
alternatives.” Id. (citing Crowe v. First Am. Nat'l Bank, No. W2001–00800–COA–R3–CV,
2001 WL 1683710, at *9 (Tenn. Ct. App. Dec. 10, 2001) (citing State ex rel. Vaughn v.

                                              -24-
Kaatrude, 21 S.W.3d 244, 248 (Tenn. Ct. App. 2000))).

        In our prior discussion of the trial court’s fraudulent transfer summary judgment ruling,
we affirmed the trial court. Nevertheless, we are now asked to reverse the trial court’s
decision to deny Ingram’s motion to revise that order. To grant the relief Ingram requests, we
must find that the trial court abused its discretion in excluding the financial reports based on
lack of authentication as required under Tennessee Rule of Evidence 901 and Tennessee Rule
of Civil Procedure 56.06. We, however, find no abuse of discretion.

        The 2007 and 2008 financial reports provided by Sohr were “authenticated” by
Ingram’s affidavit to the extent he testified that Sohr provided them to Ingram. Tennessee
Rule of Evidence 901 provides that authentication or identification is a condition precedent
to the admissibility of evidence; this condition is generally satisfied by evidence sufficient to
the court to support a finding by the trier of fact that the matter in question is what its
proponent claims, which can include testimony of a witness with knowledge that the matter
is what it is claimed to be. Tennessee Rule of Civil Procedure 56.06 states that supporting
affidavits shall be made on personal knowledge, shall set forth facts as would be admissible
in evidence, and shall show affirmatively that the affiant is competent to testify to the matters
stated therein. To the extent that Ingram testified that Sohr provided the financial reports to
Ingram, this condition precedent has been satisfied. That, however, does not establish the
reports constitute trustworthy evidence of the reasonable value of the CCS membership units
when they were transferred to the Sohr Family GRAT.

       The foregoing notwithstanding, Ingram asserts that the personal financial records,
which are based upon Sohr’s personal opinion, are evidence of the reasonable value of the
membership units. This assertion, however, is undermined by the fact that Ingram failed to
provide evidence of the trustworthiness of the values stated; Ingram merely states that this is
what Sohr provided. Based upon the lack of evidence to establish that the values stated in the
financial reports are trustworthy, we find no abuse of discretion with the trial court’s decision
to exclude the personal financial statements.18

       Based upon the foregoing, and finding that there were no genuine issues of material
fact and the evidence demonstrated Sohr was entitled to judgment as a matter of law because
he received the reasonably equivalent value for his membership units in CCS, we affirm the
denial of Ingram’s motion to revise the order summarily dismissing Ingram’s fraudulent
transfer claim.

        18
         As we have found the trial court did not abuse its discretion in excluding the financial reports under
Tennessee Rule of Evidence 901 and Tennessee Rule of Civil Procedure 56.06, we do not need to address
Ingram’s argument regarding Tennessee Rule of Evidence 803.

                                                     -25-
                       II. C LAIMS D ISMISSED ON D IRECTED V ERDICT

        The trial court granted a directed verdict in favor of Sohr on several claims, only three
of which are at issue in this appeal. We shall address each claim in turn. A motion for a
directed verdict pursuant to Tennessee Rule of Civil Procedure 50.01 requires the trial court
to determine as a matter of law whether the evidence is sufficient to create an issue for the
jury to decide. See Underwood v. Waterslides of Mid-America, Inc., 823 S.W.2d 171, 176
(Tenn. Ct. App. 1991). When considering a motion for directed verdict, the trial court must
take the strongest legitimate view of the evidence and allow all reasonable inferences in favor
of the non-moving party, while discarding all evidence to the contrary. Conatser v. Clarksville
Coca-Cola Bottling Co., 920 S.W.2d 646, 647 (Tenn. 1995); Dobson v. Shortt, 929 S.W.2d
347, 349-50 (Tenn. Ct. App. 1996).

       The standard of review on appeal from a motion for a directed verdict does not permit
us to weigh the evidence. Conatser, 920 S.W.2d at 647; Benton v. Snyder, 825 S.W.2d 409,
413 (Tenn. 1992). Moreover, it does not permit us to evaluate the credibility of the witnesses.
Benson v. Tenn. Valley Elec. Coop., 868 S.W.2d 630, 638-39 (Tenn. Ct. App. 1993). The
standard requires that we review the evidence in the light most favorable to the motion’s
opponent, give the opponent the benefit of all reasonable inferences, and disregard all
evidence contrary to the opponent’s position. Alexander v. Armentrout, 24 S.W.3d 267, 271
(Tenn. 2000) (citing Eaton, 891 S.W.2d at 590). “We may affirm the motion ‘only if, after
assessing the evidence according to the foregoing standards, [we] determine[ ] that reasonable
minds could not differ as to the conclusions to be drawn from the evidence.”’Biscan v. Brown,
160 S.W.3d 462, 470 (Tenn. 2005) (quoting Childress v. Currie, 74 S.W.3d 324, 328 (Tenn.
2002)).

                                  A. Belshire Walking Trail

         Ingram asserted a claim against Sohr for breach of § 7(k) for failure to disclose an
alleged liability of Harvey Development to build a walking trail for the Belshire development
at an estimated cost of $34,300. The trial court granted a directed verdict to Sohr on Ingram’s
claim for breach of § 7(k).

         The Belshire development, a residential community in Spring Hill, Tennessee, was
owned and operated by Harvey Development, an entity Sohr transferred to Ingram pursuant
to the Exchange Agreement. Ingram claimed that a contingent liability to construct a walking
trail at Belshire existed based upon a May 2006 letter written by Sohr to the Mayor of Spring
Hill and that Sohr breached the Exchange Agreement by failing to list this contingent liability
on the financial statements of Harvey Development or on Schedule C of the Exchange
Agreement as required under § 7(k). The May 2006 letter Ingram relies on states:

                                              -26-
       As discussed, Harvey Development, LLC will agree to develop and build an 8
       ft. wide asphalt walking trail on top of existing sewer easement, on its property
       south of the bridge, at it’s [sic] cost and then donate the improvement to Spring
       Hill. I have attached an exhibit showing the section. We would like to have this
       conditioned on Spring Hill committing that they will cause the balance of that
       trail to be completed.

         During the trial, no evidence was introduced to show that Spring Hill responded to the
letter, responded to the condition proposed by Sohr in order for the construction of the trail
to occur, or that Spring Hill had, in fact, constructed any portion of the balance of the trail.
Upon motion of Sohr at the close of Ingram’s proof, the trial court directed a verdict in favor
of Sohr finding that the letter did not contractually obligate Harvey Development to construct
a walking trail and, therefore, there was no liability for Sohr to disclose.

         In this appeal, Ingram argues that the trial court erred in finding no liability because
the May 2006 letter was a contingent liability of Harvey Development and, therefore, should
have been disclosed because § 7(k) requires the disclosure of both actual and contingent
liabilities on Schedule C.

       The determination of whether a contract has been formed is a question of law. German
v. Ford, 300 S.W.3d 692, 701 (Tenn. Ct. App. 2009) (citing Murray v. Tenn. Farmers
Assurance Co., No. M2008–00115–COA–R3–CV, 2008 WL 3452410, at *2 (Tenn. Ct. App.
Aug.12, 2008)). The interpretation of a contract and the ascertainment of the parties’
intentions relating to the contract are also questions of law. Id. at 701-702. (citing Guiliano,
995 S.W.2d at 95; Doe, 46 S.W.3d at 196).

        The only evidence introduced at trial concerning the Belshire Walking Trail was the
letter quoted above, which does not rise to the level of a contract. The letter is simply a
proposal that Harvey Development “will agree” to build a portion of the walking trail if
Spring Hill committed to build the remainder of the trail. There was no evidence of any
response from, or commitment or action taken by Spring Hill regarding the proposed walking
trail. Finding that reasonable minds could not differ as to the conclusions to be drawn from
the evidence presented concerning the alleged contingent liability of Harvey Development to
construct part of the walking trail, we affirm the trial court’s grant of a directed verdict to
Sohr on this claim.

                                       B. Bugg Hollow

      Ingram asserted a claim that a $97,203 liability was mistakenly allocated to Bugg
Hollow, LLC, a company Ingram received under the Exchange Agreement. He claimed that

                                              -27-
he was entitled to relief from this mistake under the Errors and Omissions Agreement in the
Exchange Agreement. The trial court granted a directed verdict on the claim.

       The $97,203 liability was part of an $18 million balance on an outstanding credit line
of IS Investment, which was allocated among the various properties that were transferred
pursuant to the Exchange Agreement. The allocations were performed by Mike Baas, the
former Controller of IS Investment; following the allocation by Baas, the parties and their
respective attorneys reviewed and approved the allocations.

        Ingram argues that the trial court improperly granted a directed verdict to Sohr based
upon a faulty recollection of the evidence presented at the trial. Specifically, he points to his
own testimony at trial that the liability was erroneously attributed to the Bugg Hollow. Ingram
argues that the liability should have been divided equally between the parties. Sohr states that
the trial court’s decision was proper as Ingram presented no “competent evidence” that the
Bugg Hollow liability was improperly allocated or that Sohr caused the allocation. Further,
Sohr argues that the undisputed proof established that Mike Baas made the determination that
the $97,203 outstanding balance should be allocated to Bugg Hollow.

        Taking the strongest legitimate view of the evidence and allowing all reasonable
inferences in favor of the non-moving party, in this case Ingram, we find that reasonable
minds could reach but one conclusion on this claim. Conatser, 920 S.W.2d at 647; Dobson,
929 S.W.2d at 349-50; Biscan, 160 S.W.3d at 470. The undisputed evidence established that
the allocation was determined by Mike Baas, at the request of the parties, and that following
his allocation, it was given to both parties who reviewed and approved it prior to the
Exchange Agreement. Thus, we affirm the grant of a directed verdict to Sohr on Ingram’s
claim that the $97,203 was improperly allocated to Bugg Hollow.

                          C. Claim Asserted by IS Investment, Inc.

        IS Investment, Inc., also a plaintiff in this civil action, asserted a claim that Sohr, an
officer and director of IS Investment, breached his fiduciary duty to the corporation by
misusing the resources of IS Investment to pay his own family-owned businesses. The trial
court directed a verdict on this claim finding the claim was barred by the one year statute of
limitations set forth in Tennessee Code Annotated § 48-18-601 (2010). IS Investment asserts
this was error.

       As a preliminary matter, Sohr argues that IS Investment is not a party to this appeal;
therefore, this issue is not properly before this court. Ingram and IS Investment insist that IS
Investment was identified as a party taking an appeal from this ruling.

                                               -28-
       Tennessee Rule of Appellate Procedure 3(f) provides that:

       The notice of appeal shall specify the party or parties taking the appeal by
       naming each one in the caption or body of the notice (but an attorney
       representing more than one party may describe those parties with such terms as
       “all plaintiffs,” “the defendants,” “the plaintiffs A, B, et al.,” or “all defendants
       except X”), shall designate the judgment from which relief is sought, and shall
       name the court to which the appeal is taken. An appeal shall not be dismissed
       for informality of form or title of notice of appeal.

       The notice of appeal filed in this action provides that: “The plaintiff, H. Preston Ingram
(“Ingram”), hereby appeals to the Tennessee Court of Appeals. . . .” Throughout the rest of
the body of the notice of appeal, only “plaintiff” singular is referenced. IS Investment, Inc.,
is, however, listed in the caption of the notice of appeal, which identifies the parties as “H.
Preston Ingram and IS Investment, Inc.” The attorney signature line also identifies the
attorneys as representing both H. Preston Ingram and IS Investment, Inc. Therefore, IS
Investment minimally complied with Rule 3(f) and is a party to this appeal.

      Turning to the merits of the trial court’s ruling granting a directed verdict against the
claim by IS Investment, the trial court found the claim was barred by Tennessee Code
Annotated § 48-18-601 (2010), which provides:

       Any action alleging breach of fiduciary duties by directors or officers, including
       alleged violations of the standards established in § 48-18-301, § 48-18-302 or
       § 48-18-403, must be brought within one (1) year from the date of such breach
       or violation; provided, that in the event the alleged breach or violation is not
       discovered nor reasonably should have been discovered within the one-year
       period, the period of limitation shall be one (1) year from the date such was
       discovered or reasonably should have been discovered. In no event shall any
       such action be brought more than three (3) years after the date on which the
       breach or violation occurred, except where there is fraudulent concealment on
       the part of the defendant, in which case the action shall be commenced within
       one (1) year after the alleged breach or violation is, or should have been,
       discovered.

       IS Investment asserts that the evidence demonstrated that Sohr caused the corporation
to pay certain expenses in April, May, and June of 2009, which was less than one year prior
to the filing of the complaint on April 28, 2010, and thus the dismissal of the breach of
fiduciary claim related to these instances was clear error. IS Investment further argues that the
determination of when the statute of limitations began to run was a question of fact for the

                                               -29-
jury and the trial court could only grant a directed verdict if the uncontradicted evidence was
such that no reasonable juror could conclude anything other than that IS Investment knew of,
or should have known of, the need to investigate. IS Investment argues that no such
uncontradicted evidence was introduced at trial. The corporation further argues that it was not
until discovery in this action that IS Investment was able to fully confirm the extent to which
it was paying the overhead costs for other companies associated with the location at 4521
Trousdale Drive.

       IS Investment was the financial center of Stonegate, the parties’ real estate venture, and
the evidence introduced at trial established that IS Investment was on notice as early as June
2008 that employees of IS Investment were doing work for businesses solely owned by Sohr.
Based in part on admissions by Ingram, also an officer and director of IS Investment, the
proof established that Ingram, in June 2008, confronted Vicky Rutledge, Sohr’s administrative
assistant and questioned her regarding which companies’ matters she was working on, and
Ingram voiced objections to her salary being paid by IS Investment. A cause of action accrues
and the statute of limitations begins to run when one discovers or reasonably should have
discovered the alleged breach or violation. Tenn. Code Ann. § 48-18-601 (2010). The
applicable limitation to this claim is one year. Id. The claim by IS Investment was filed in
April 2010, which is outside of the one year statute of limitations that began to run in June of
2008.19 Thus, the trial court properly granted a directed verdict on this claim.20

                        III. J URY INSTRUCTIONS AND J URY V ERDICT F ORM

        Ingram presents several challenges to the propriety of the jury instructions and the jury
verdict form. “The propriety of jury instructions given in a particular case is a question of law,
which we review de novo with no presumption of correctness.” Latiff v. Dobbs, No. E2006-
02395-COA-R3-CV, 2008 WL 238444, at *11 (Tenn. Ct. App. Jan. 29, 2008) (citing Solomon
v. First Am. Nat’l Bank, 744 S.W.2d 935, 940 (Tenn. Ct. App.1989)). “When issues involving
the jury charge are raised on appeal, we review the jury charge in its entirety and consider it
as a whole in order to determine whether the trial court committed prejudicial error.” Id. “The
charge will not be invalidated as long as it fairly defines the legal issues involved in the case
and does not mislead the jury.” Id. (citing Otis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d
19
           While IS Investment contends on appeal that there were additional expenses in 2009 that fell within
the statute of limitations, at trial, IS Investment only represented that the claim was for overhead expenses
and salaries that were paid in 2006, 2007, and 2008. Thus, any claim related to expenses in 2009 has clearly
been waived.
        20
         We also note that Ingram brought a separate breach of contract claim against Sohr for the alleged
overpayment of salary and expenses, which the jury rejected finding that Sohr did not cause IS Investment
to improperly pay any salary or overhead expenses.

                                                     -30-
439, 446 (Tenn. 1992)). “Furthermore, we must abide by the mandate of Tennessee Rule of
Appellate Procedure 36(b), which states: ‘A final judgment from which relief is available and
otherwise appropriate shall not be set aside unless, considering the whole record, error
involving a substantial right more probably than not affected the judgment or would result in
prejudice to the judicial process.”’ Id.

                                       A. Section 7(k) Claims

        Ingram asserts that the trial judge erroneously instructed the jury concerning his
Section 7(k) claims. Specifically, he asserts that the instruction regarding Sohr’s affirmative
defense that Ingram’s knowledge of the liabilities excused Sohr from disclosing the liabilities
on Schedule C was erroneous. Ingram asserts the error entitles him to judgment for damages
or, in the alternative, a new trial as to damages. He also asserts that providing the jury with
a verdict form permitting the defense was error.

        The jury found that Sohr breached § 7(k) of the Exchange Agreement by failing to list
three liabilities on Schedule C of the Exchange Agreement.21 However, the jury awarded no
damages to Ingram upon the finding that Ingram had knowledge of all three liabilities at the
time of the execution of the Exchange Agreement.

        Earlier in this opinion we affirmed the trial court’s dismissal of the other § 7(k) claims
on summary judgment based upon Ingram’s prior knowledge and § 8(b) of the Exchange
Agreement. Based upon the reasoning set forth in that section, we affirm the trial court’s
instructions to the jury that Ingram’s prior knowledge of the liabilities would result in no
liability for Sohr under the provisions of the Exchange Agreement. Finding no error in the
instructions, and therefore no error in the jury verdict form, we affirm the dismissal of the
claims by the trial court as a result of the jury’s findings.

                                          B. Acquiescence

       Ingram asserts that the trial court erred in instructing the jury on the affirmative defense
of acquiescence as a defense to his claim arising from Sohr’s purchase of a parcel of land in
a development called Riverwatch by Prescott Land Investments. Ingram contends that the
purchase of this property was a breach of the Prescott Land Investments’ Partnership
Agreement. Further, Ingram contends that this affirmative defense was not specifically pled

        21
         These three liabilities were sales commissions owed to Don Martin for the Canterbury development
and two liabilities for boat slips to Holiday Landing by Tims Ford Development and Tims Ford North
Development.

                                                  -31-
in Sohr’s Answer and that the “novel application of ‘acquiescence’ is contrary to Tennessee
law.” We find no merit to these contentions.

       In his Answer, Sohr specifically raised the affirmative defenses estoppel, waiver, and
laches. In Crye-Leike, Inc. v. Carver, No. W2010-01601-COA-R3CV, 2011 WL 2112768, at
*11 (Tenn. Ct. App. May 26, 2011), this court defined acquiescence as follows:

        “Acquiescence” has been defined as a conduct from which may be inferred an
        assent with a consequent estoppel or quasi-estoppel, and also has been
        described as a quasi-estoppel, or a form of estoppel. An acquiescence to a
        transaction is a person’s tacit or passive acceptance, or an implied consent to
        an act. Generally, acquiescence as a defense has a dual nature in that, it may on
        the one hand, rest on the principle of ratification and be denominated an
        “implied ratification,” or, on the other hand, rest on the principle of estoppel
        and be denominated as “equitable estoppel.” The doctrine arises where a
        person knows or ought to know that he or she is entitled to enforce his or her
        right to impeach a transaction and neglects to do so for such a time as would
        imply that he or she intended to waive or abandon his or her right.

Id. (quoting 31 C.J.S. Estoppel and Waiver § 178 (2008); citing Hinton v. Stephens, No.
W2000–02727–COA–R3–CV, 2001 WL 1176012, at *3 (Tenn. Ct. App. Oct. 4, 2001))
(emphasis added). Because Sohr pled the affirmative defense of estoppel in his Answer, and
because acquiescence has been defined as a type of estoppel, we hold that Sohr raised the
issue of acquiescence.

        We also find that Ingram was given fair notice of the defense of acquiescence and an
opportunity to rebut it. Throughout the trial, Sohr introduced and solicited evidence related
to this defense, such that Ingram was on notice throughout the trial that Sohr was asserting
the affirmative defense of acquiescence.22 Our courts have held that the failure to plead an
affirmative defense with specificity does not result in a waiver of the defense if “the opposing
party is given fair notice of the defense and an opportunity to rebut it.” See Tip’s Package
Store, Inc. v. Commercial Ins. Mgrs., Inc., 86 S.W.3d 543, 553 (Tenn. Ct. App. 2001) (citing
George v. Building Materials Corp. of Amer., 44 S.W.3d 481, 486-87 (Tenn. 2001)). Evidence

        22
          Based upon this, we hold that the trial court did not abuse its discretion when it permitted Sohr to
amend his Answer to add the defense of acquiescence for two reasons. See Zach Cheek Builders, Inc. v.
McLeod, 597 S.W.2d 888, 891 (Tenn. 1980). One, acquiescence has been treated by our courts as a form of
estoppel, and two, because as Tennessee Rule of Civil Procedure 15.02 sets forth, the motion was to conform
to the evidence presented at the trial. Contrary to Ingram’s argument, we find the motion by Sohr was not
an admission that acquiescence was never plead, but is more accurately a simple housekeeping measure. See
id.

                                                     -32-
presented at trial included actions by Ingram taken following his initial email objection to the
purchase of Riverwatch that implicitly approved the purchase such as Ingram signing loan
documents that financed the purchase and signing documents confirming the sale of
Riverwatch to a third party in December 2008. Thus, we hold that the trial court did not err
in permitting the instruction of the affirmative defense of acquiescence to the jury and in
including this defense on the jury verdict form.

        Ingram also argues that the instructions given to the jury on acquiescence were contrary
to Tennessee law. Ingram argues that if acquiescence is a subset of estoppel or waiver, then
the trial court should have charged the jury using the standards for waiver set forth in
Tennessee Pattern Jury Instruction 13.09 or estoppel as set forth in the comment to 13.09.

       We note at the outset that the pattern jury instructions are not mandatory authority for
instructions. Cortazzo v. Blackburn, 912 S.W.2d 735, 740 (Tenn. Ct. App. 1995). Further, as
we noted previously, a jury instruction will not be determined as error where it clearly defines
the legal issues involved and does not mislead the jury. Latiff, 2008 WL 238444, at *11; see
also Cortazzo, 912 S.W.2d at 745 (citing Otis, 850 S.W.2d 439). The trial court instructed the
jury on the defense of acquiescence as follows:

       If you determine that the defendant, Scott T. Sohr, breached any agreement with
       respect to the purchase of Riverwatch. . . you will then be asked to determine
       whether the plaintiff, Preston H. Ingram, acquiesced to any of these breaches.

       Acquiescence can occur in several ways so long as a plaintiff has knowledge,
       or sufficient notice or means of knowledge, of the material facts relating to the
       breach.

       The ways in which acquiescence can occur include when, one, a plaintiff freely
       does what amounts to a recognition of the breach as a valid act.

       Two, a plaintiff acts in a manner inconsistent with the repudiation of the breach.

       Or, three, a plaintiff lies for a considerable time and knowingly permits the
       defendant to deal with the subject matter under the belief that the transaction
       has been recognized or freely abstains from impeaching it.

       Acquiescence occurs if any of these actions by the plaintiff reasonably induce
       the defendant to suppose that the plaintiff does not intend to assert a claim
       based upon the breach.

                                              -33-
       If you determine that Ingram acquiesced in this manner to any of the breaches
       identified above, Ingram will be barred from recovering damages for those
       breaches for which he acquiesced.

        Having reviewed this instruction in its entirety, we hold that the instruction was not
contrary to Tennessee law. In fact, the instruction given by the trial court was consistent with
Crye-Leike v. Carver, which we quoted at length above, and which recognized that
acquiescence arises “where a person knows or ought to know that he or she is entitled to
enforce his or her right to impeach a transaction and neglects to do so for such a time as would
imply that he or she intended to waive and abandon his or her right.” Crye-Leike, 2011 WL
2112768 at *11; Hinton v. Stephens, 2001 WL 1176012, at *3. Further, the instruction also
comports with acquiescence as recognized in other cases in Tennessee including Mood Realty
Co. v. Huestis wherein the court recognized that “a voidable contract can be ratified by acts
or statements, and one who has failed to object timely to the circumstance while aware of it
has confirmed its validity.” 237 S.W.3d 666, 677 (2007) (citing Valley Fidelity Bank & Trust
Co. v. Cain Partnership, Ltd., 738 S.W.2d 638 (Tenn. Ct. App. 1987); Russell v. Zanone, 404
S.W.2d 539 (Tenn. Ct. App. 1966)).

       The jury charge on acquiescence fairly defined the legal issues and did not mislead the
jury, Latiff, 2008 WL 238444, at *11; Cortazzo, 912 S.W.2d at 745; therefore, we find no
prejudicial error.

           IV. A TTORNEY’S F EES U NDER § 11(l) OF THE E XCHANGE A GREEMENT

       The trial court awarded Sohr his attorney’s fees and expenses that pertained to claims
arising under the Exchange Agreement. Section 11(l) provides: “In the event Ingram or Sohr
breaches any of their respective obligations under [the Exchange Agreement] and the other
commences an action relating to such breach, the party prevailing in such action shall be paid
such party’s reasonable attorneys’ fees and costs by the defaulting party.” The trial court held
that Sohr was the prevailing party on the vast majority of the claims for breach of the
Exchange Agreement and that Sohr was entitled to recover his reasonable attorney’s fees and
costs pursuant to § 11(l) of the Exchange Agreement.

       Ingram contends that the trial court erred in its interpretation of § 11(l) of the Exchange
Agreement. He states that § 11(l) unambiguously provides that attorney’s fees are available
only in the event of a breach of the Exchange Agreement, and only to the party who is
successful in proving such a breach against the defaulting party. Ingram argues that he did not
breach the Exchange Agreement; therefore, Sohr was not entitled to recover his attorney’s
fees. Ingram further argues that he is entitled to recover his attorney’s fees because he
successfully demonstrated that Sohr breached the Exchange Agreement by failing to list actual

                                               -34-
and contingent liabilities under Schedule C, failing to list material contracts on Schedule D,
and failing to provide written notice of a fact likely to have a material adverse effect on the
development or valuation of a Sohr Transferred Interest. Ingram additionally requests his
reasonable attorney’s fees and costs on appeal. For his part, Sohr contends the trial court
properly awarded him his reasonable attorney’s fees and costs; Sohr also seeks to recover his
attorney’s fees and costs on appeal.

        “Litigants must pay their own attorney’s fees absent a statute or agreement providing
otherwise.” J & B Investments, LLC v. Surti, 258 S.W.3d 127, 138 (Tenn. Ct. App. 2007)
(citing State v. Brown & Williamson Tobacco Corp. 18 S.W.3d 186, 194 (Tenn. 2000)). A
provision in a contract awarding attorney’s fees will be enforced by the courts, limited to the
situation agreed to by the parties in the contract. Id. (citing Pullman Standard Inc. v. Abex
Corp., 693 S.W.2d 336, 338 (Tenn. 1985); Clark v. Rhea, No. M2002-02717-COA-R3-CV,
2004 WL 63476, at *2 (Tenn. Ct. App. Jan. 13, 2004); Pinney v. Tarpley, 686 S.W.2d 574,
581 (Tenn. Ct. App. 1984)). The contractual provision regarding attorney’s fees is subject to
the rules of contract interpretation. Id. (citing Clark, 2004 WL 63476, at *2).

       As noted earlier, the interpretation of a contract is a question of law. Guiliano, 995
S.W.2d at 95. Issues as to interpretation and application of unambiguous contracts are
likewise issues of law, the determination of which enjoys no presumption of correctness on
de novo appellate review. Doe, 46 S.W.3d at 196. Therefore, the trial court’s interpretation
of § 11(l) is not entitled to a presumption of correctness under Rule 13(d) on appeal. Angus,
48 S.W.3d at 730. Accordingly, we will review the contractual issues de novo and reach our
own independent conclusions regarding their meaning and legal import. Guiliano, 995 S.W.2d
at 95; Hillsboro Plaza Enters., 860 S.W.2d at 47.

        As the Exchange Agreement provides, in the event one of the parties breaches any of
their respective obligations under the Agreement and the other commences an action relating
to such breach, the party prevailing shall be paid his reasonable attorneys’ fees and costs by
the defaulting party. Although the term “prevailing party” is not defined in the Exchange
Agreement, our courts have held that a prevailing party “is one who succeeded ‘on any
significant issue in litigation which achieves some of the benefit the parties sought in bringing
suit,”’ Fannon v. City of LaFoullette, 329 S.W.3d 418, 431 (Tenn. 2010), and that “the
‘prevailing party’ is the party ‘who obtains some relief on the merits of the case or a material
alteration in the legal relationship of the parties,’” Isaac v. Center for Spine, Joint, &
Neuromuscular Rehab., P.C., No. M2010-01333-COA-RW-CV, 2011 WL 2176578, at *8
(Tenn. Ct. App. Jun. 1, 2011)). Furthermore, in Tennessee “a party need not attain complete
success on the merits of a lawsuit” in order to be considered the prevailing party, Fannon, 329
S.W.3d at 431.

                                              -35-
        The foregoing principles were discussed in Dayton v. Ackerman, No. M2010-00922-
COA-R3-CV, 2011 WL 5183763 (Tenn. Ct. App. 2011), a decision we find instructive on this
issue. The contract for sale in Dayton contained a provision stating: “In the event that any
party hereto shall file suit to enforce this agreement (including suits filed after closing which
are based on or related to the contract), the prevailing party shall be entitled to recover all
costs of such enforcement, including reasonable attorney’s fees as determined by the court.”
Id. at *10. In that case, the purchasers of the home filed suit against the sellers for breach of
warranty and damages for replacing windows in the home, the cost of shutters for the
windows, and the cost of repairs for structural defects in the home. Id. at *1-2. The sellers,
who prevailed on the claim for damages related to the structural repairs, asked the court to
award them their attorney’s fees. The trial court, however, denied the sellers’ request because
the buyers prevailed on the other claims. On appeal this court affirmed upon the reasoning that
“each party prevailed on one of the claims, [thus] neither is necessarily ‘the prevailing party.”’
Id. at *11.

        Ingram asserted a plethora of claims, approximately 39, that allege various breaches
by Sohr of the Exchange Agreement. Ingram asserted five other claims that did not arise from
alleged breaches of the Exchange Agreement and only the claims that arise from and pertain
to alleged breaches of the Exchange Agreement are pertinent to the issue of attorney’s fees
under § 11(l) of the Exchange Agreement. In the following paragraphs we discuss generally
the final disposition of Ingram’s claims that allege breaches of the Exchange Agreement.23

       The trial court summarily dismissed the following claims on the first motion for
summary judgment: Fraud (Count I); violation of the Tennessee Consumer Protection Act
(Count II); breach of fiduciary duty or fraud claims related to the Gladstone purchases in the
First Amended Complaint; and breach of fiduciary duty or fraud claims related to the
monetary distributions made to Ingram and Sohr by SIS Developments referenced in the First
Amended Complaint. Following Sohr’s second motion for summary judgment, the trial court
dismissed Ingram’s claims that Sohr breached an implied agreement to leave the Atkins Note
and Woodmont Receivable out of the Exchange Agreement, that Sohr breached § 7(l) of the
Exchange Agreement, that Sohr breached the express warranty in § 7(n) of the Exchange
Agreement, and that Sohr violated the Tennessee Securities Act of 1980 in connection with
the Exchange Agreement transaction. Following a third motion for summary judgment, the

        23
          Realizing that a narrative summary of the plethora of claims filed by Ingram and the disposition
of those claims can be confusing, Sohr’s attorney provided a report to and for the benefit of the trial court,
which identified all claims filed by Ingram and the disposition of those claims. The trial court included that
report in its order and we include it as an Addendum to this opinion believing the report minimizes the
confusion. Although the vast majority of the claims pertain to the Exchange Agreement, some of those listed
do not, and we have not considered those that do not pertain to the Exchange Agreement in our analysis of
the attorney fee provision.

                                                     -36-
trial court then dismissed the following claims: Ingram’s claims concerning the Renasant bank
guaranty and Ingram’s breach of warranty claims under § 7(n) of the Exchange Agreement
based upon the allegations set forth in paragraph 57 of the Second Amended Complaint. The
trial court also granted, in part, Sohr’s Motion to Revise the ruling on the breach of warranty
claim under § 7(k) of the Exchange Agreement resulting in the dismissal of all liabilities
Ingram contended Sohr failed to list on Schedule C of the Exchange Agreement except for
four liabilities, which went to trial.

        During the trial of the few remaining claims, the trial court granted a directed verdict
as to Ingram’s claims that Sohr failed to disclose a liability of Harvey Developments, LLC on
Schedule C of the Exchange Agreement and that a liability of $97,203 for Bugg Hollow was
mistakenly allocated to Ingram at closing. At the conclusion of the trial, the jury found that
Sohr breached his warranty in section 7(k) of the Exchange Agreement by not listing the four
remaining liabilities at issue on Schedule C; however, the jury found that Ingram had
knowledge of the liabilities when the Exchange Agreement was executed; therefore, based
upon this finding, the trial court also dismissed this claim.

       As for Sohr’s one claim that pertained to the Exchange Agreement, the trial court
granted Ingram’s Second Motion for Partial Summary Judgment on Sohr’s Counter-Claim,
which alleged Ingram had breached the warranty contained in § 6(k) of the Exchange
Agreement. Thus, Ingram prevailed in the defense of this claim.

       The trial court found that Ingram was the prevailing party as to the claims that Sohr
breached the Exchange Agreement for the failure to list liabilities on Schedule C; however,
the court found that Sohr was also the prevailing party on his counterclaim that Ingram
breached the same provision. Thus, neither party can be considered the prevailing party as to
these two competing claims. As for all other claims arising from the Exchange Agreement,
it cannot be disputed that Sohr is the prevailing party because all of Ingram’s claims that Sohr
breached the Exchange Agreement were either summarily dismissed, dismissed upon a
directed verdict, or dismissed based on the jury’s verdicts.24

       Based upon the disposition of the claims, we have concluded that Sohr is the prevailing
party of the claims arising under the Exchange Agreement because he prevailed on all but one
claim (Sohr’s counter-claim) relating to the alleged breaches of the Exchange Agreement and

        24
          The following claims, in which Ingram prevailed, did not arise from the Exchange Agreement; thus,
they are not relevant to the attorney fee provision in § 11(l) of the Exchange Agreement: the claim for
ownership of the BMW Alpina; the value of the airline miles given by Ingram to Sohr that had not been
repaid, for which the jury awarded Ingram $9,750; and $11,478.65 from $74,835.69 in funds held in escrow
by a law firm.

                                                   -37-
Sohr is the one who clearly obtained the most relief on the merits by defeating all of Ingram’s
claims arising under the Exchange Agreement. See Fannon, 329 S.W.3d at 431; see also
Isaac, 2011 WL 2176578, at *8. Therefore, we affirm the trial court finding that Sohr is the
“prevailing party” under § 11(l) of the Exchange Agreement and the award of attorney’s fees
to Sohr.

     V. INDEMNIFICATION C LAIMS N OT A RISING F ROM T HE E XCHANGE A GREEMENT

                                 A. Prescott Land Investments

       Sohr asserted that he was entitled to indemnification from Prescott Land Investments
of his attorney’s fees and costs arising from claims challenging the propriety of acts he
performed on behalf of the partnership. The trial court awarded Sohr $27,079.79 in attorney’s
fees based upon the indemnification provision in the Partnership Agreement of Prescott Land
Investments. Ingram contends this was error.25

       The pertinent provision is Section 2.5 of the Agreement provides:

       The Partners shall be entitled to indemnification from the Partnership for any
       act performed by them within the scope of the authority conferred on them by
       this Agreement, except for acts of malfeasance, gross negligence, fraud, or
       misrepresentation; provided, that any indemnity under this section shall be paid
       only out of, and to the extent of, Partnership assets.

        Ingram argues that Sohr is not entitled to indemnification under this provision, because
he was not acting “within the scope of authority conferred” on him, since his action in
purchasing Riverwatch was in breach of the Partnership Agreement as found by the jury.
Although the jury found that Sohr breached the Partnership Agreement by purchasing the
Riverwatch property, the jury found that Ingram acquiesced to the purchase and, therefore,
the jury awarded Ingram no damages. Other claims arising for breach of fiduciary duty arising
from the Prescott Land Investments Partnership Agreement were also dismissed based upon
knowledge imputed to Ingram. Nevertheless, Ingram asserts that Sohr is not entitled to
indemnification because there was no finding that Sohr’s actions were not malfeasance.

       The indemnity clause for the Partnership Agreement provides that a partner is entitled
to indemnification for acts performed “within the scope of the authority” conferred on them

       25
          Sohr contends Ingram lacks standing to challenge the indemnification by Prescott Land
Investments. Prescott Land Investments was a partnership between Ingram and Sohr and thus Ingram has
standing to challenge an award under the Partnership Agreement.

                                                -38-
by the Partnership Agreement. The jury found that Sohr’s purchase of the Riverwatch property
violated the Partnership Agreement; however, the jury also found that Ingram acquiesced to
the purchase. Sohr contends that the acquiescence of his action ratifies his actions and, thus,
his acts cannot constitute malfeasance, gross negligence, fraud, or misrepresentation.
Therefore, Sohr insists he was entitled to indemnification for the expense of defending the
claims arising from the Partnership Agreement. Conversely, Ingram insists that his
acquiescence does not cure Sohr’s malfeasance.

        We have concluded previously that Ingram acquiesced in the actions taken by Sohr;
thus, Ingram cannot subsequently argue, when the parties relationship is fractured, that the
acquiesced actions constitute malfeasance, gross negligence, fraud, or misrepresentation.
Accordingly, we affirm the trial court’s determination that Sohr was entitled to
indemnification in the amount of $27,079.79 for the attorney’s fees and costs he incurred
defending Ingram’s claims arising under the Partnership Agreement of Prescott Land
Investments in the trial court.

       We also find that Sohr is entitled to indemnification of the reasonable and necessary
attorney’s fees and costs he incurred in this appeal; on remand the trial court shall set the
amount and award judgment accordingly.

                                      B. IS Investment, Inc.26

       Sohr asserted that he was entitled to indemnification from IS Investment of his
attorney’s fees and costs in fees incurred in the defense of claims asserted by IS Investment.
The trial court awarded Sohr $58,025.98 in fees incurred in the defense of these claims.
Ingram and IS Investment contend this was error.

       The award was based upon the court’s interpretation of Article V, § 2 of the by-laws
of IS Investment, which states:

        The corporation shall indemnify to the fullest extent permitted by law any and
        all persons who may serve or who have served at any time as directors or
        officers, or who at the request of the board of directors of the corporation may
        serve or at any time have served as directors or officers of another corporation
        in which the corporation at such time owned or may own shares of stock or of
        which it was or may be a creditor, and their respective heirs, administrators,
        successors, and assigns, against any and all expenses, including amounts paid

        26
         We note that Sohr contends Ingram lacks standing to challenge the indemnification judgments. We
have previously determined that IS Investment, Inc. is a party to this appeal and thus there is standing.

                                                  -39-
       upon judgments, counsel fees, and amounts paid in settlement (before or after
       suit is commenced), actually and necessarily incurred by such persons in
       connection with the defense or settlement of any claim, action, suit, or
       proceeding in which they, or any of them, are made parties, or a party, or which
       may be asserted against them or any of them, by reason of being or having been
       directors or officers or a director or officer of the corporation, or of such other
       corporation, except in relation to matters as to which any such director or
       officer or person shall be adjudged in any action, suit, or proceeding to be liable
       for his own negligence or misconduct in the performance of his duty. Such
       indemnification shall be in addition to any other rights to which those
       indemnified may be entitled under any law, bylaw, agreement, vote of
       shareholders, or otherwise.

        Ingram challenges the award on two fronts. One, he asserts that the award should be
set aside because, as we addressed earlier, the trial court erred in granting Sohr a directed
verdict concerning the claim of IS Investment that Sohr breached his fiduciary duty. He
further asserts that indemnification was not permissible under Tennessee’s corporate statutory
scheme.

        The trial court rejected the argument made by Ingram that Tennessee only permits
indemnification of “an individual made party to a proceeding because the individual is or was
a director,” citing to Tennessee Code Annotated § 48-18-502(a), or to an officer, employee,
or agent sued as a result of a position, but only, Ingram contends, if such person is not also
a director, citing to Tennessee Code Annotated § 48-18-507. The trial court found that Ingram
provided no authority to support this contention; the court also found that public policy favors
indemnification of officers and directors. We agree with the trial court.

        Ingram also asserts that the award of indemnification based upon the bylaws of IS
Investment was error. We disagree. The bylaws expressly provide, in pertinent part, that “[t]he
corporation shall indemnify to the fullest extent permitted by law any and all persons who may
serve or who have served at any time as directors or officers, . . .” Furthermore, the bylaws
state that indemnification under § 2 is “in addition to any other rights to which those
indemnified may be entitled under any law, bylaw, agreement, . . .” Therefore, the fact that
Sohr served as both an officer and director of IS Investment would not preclude him from
entitlement to indemnification. Accordingly, we affirm on this issue as well.

                                              -40-
                               VI. P OST-T RIAL M OTION FOR R ECUSAL

       Ingram made a post-trial motion for recusal contending the trial court’s “impartiality
might reasonably be questioned” on remand. The motion was denied; Ingram contends this
was error.

        The motion for recusal was made on May 10, 2012, prior to the effective date of
Tennessee Supreme Court Rule 10(B).27 Thus, the former legal principles apply. Baker v.
Baker, No. M2010-01806-COA-R3-CV, 2012 WL 764918, at *6 (Tenn. Ct. App. Mar. 9,
2012). Under the Code of Judicial Conduct in effect prior to July 1, 2012, decisions
concerning recusal are addressed to the sound discretion of the judge asked to be recused and
“the judge’s decision will not be reversed on appeal unless a clear abuse appears on the face
of the record.” See State v. Hines, 919 S.W.2d 573, 578 (Tenn. 1995).

        The sole basis of Ingram’s motion for recusal was the adverse rulings by the trial court
and what Ingram describes as “the nature” of the rulings, specifically the trial court’s
statements regarding the definition of “defaulting” party under the attorney’s fee provision
of the Exchange Agreement. Adverse rulings by a trial judge, however, are not usually
sufficient to establish bias. State v. Cannon, 254 S.W.3d 287, 308 (Tenn. 2008). Rulings of
a trial judge, even if erroneous, numerous and continuous, do not, without more, justify
disqualification. Duke v. Duke, 398 S.W.3d 665, 671 (Tenn. Ct. App. 2012) (citing Alley v.
State, 882 S.W.2d 810, 821 (Tenn. Crim. App. 1994)). Ingram has referenced the adverse
rulings but he failed to provide more as Duke and Alley note is required. Thus, we find the
ground asserted to demonstrate bias is insufficient to require recusal and the record is wholly
insufficient for this court to find “clear abuse” in the trial court’s decision to deny the motion
for recusal.

                                      VII. D ISCRETIONARY C OSTS

      The trial court assessed $24,348.83 in discretionary costs against Ingram; Ingram
contends this was error.

         Tennessee Rule of Civil Procedure 54.04(2) states that the trial court may award costs,
in its discretion, to the prevailing party. These costs are now referred to as discretionary costs.
The rule goes on to provide that a prevailing party may recover the following discretionary
costs:

        27
          By its expressed provisions, Tennessee Supreme Court Rule 10(B) applies to motions for recusal
filed on or after July 1, 2012; it does not apply to motions for recusal filed prior to July 1, 2012. Baker v.
Baker, No. M2010-01806-COA-R3-CV, 2012 WL 764918, at *6 (Tenn. Ct. App. Mar. 9, 2012).

                                                     -41-
       [R]easonable and necessary court reporter expenses for depositions or trials,
       reasonable and necessary expert witness fees for depositions (or stipulated
       reports) and for trials, reasonable and necessary interpreter fees for depositions
       or trials, and guardian ad litem fees; travel expenses are not allowable
       discretionary costs.

        Parties are not automatically entitled to costs under Tennessee Rule of Civil Procedure
54.04(2) simply because they prevail at trial. Sanders v. Gray, 989 S.W.2d 343, 345 (Tenn.
Ct. App. 1998). When deciding whether to award discretionary costs the equities of the case
are to be considered. Perdue v. Green Branch Mining Co., 837 S.W.2d 56, 60 (Tenn. 1992).
As a general rule, however, the courts should award discretionary costs to a prevailing party
if the costs are reasonable and necessary and if the prevailing party has filed a timely and
properly supported motion. Massachusetts Mut. Life Ins. Co. v. Jefferson, 104 S.W.3d 13, 35
(Tenn. Ct. App. 2002). When determining whether to award discretionary costs, trial courts
are directed to: (1) determine whether the party requesting the costs is the “prevailing party;”
(2) limit awards to the costs specifically identified in the rule; (3) determine whether the
requested costs are necessary and reasonable; and (4) determine whether the prevailing party
has engaged in conduct during the litigation that warrants depriving it of the discretionary
costs to which it might otherwise be entitled. Id.

         The award of discretionary costs is within the trial court’s reasonable discretion,
Perdue, 837 S.W.2d at 60, and the abuse of discretion standard does not permit this court to
second-guess the lower court’s judgment or merely substitute an alternative we prefer. Lee
Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010). Therefore, we are to affirm the
discretionary decision so long as reasonable legal minds can disagree about its correctness.
Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001). A trial court abuses its discretion only
if it (1) applies an incorrect legal standard, (2) reaches an illogical or unreasonable decision,
or (3) bases its decision on a clearly erroneous evaluation of the evidence. Elliott v. Cobb, 320
S.W.3d 246, 249–50 (Tenn. 2010).

       In this case, the trial court found that Sohr was the prevailing party. In fact, as the trial
court noted, Sohr prevailed on all but three of the approximately thirty-nine claims asserted
by Ingram, including claims for breach of fiduciary duty, malfeasance, and breach of various
provisions of the Exchange Agreement. We concur with the trial court’s determination that
Sohr was the prevailing party in the trial court. Based upon that determination, it was within
the sound discretion of the trial court to assess discretionary costs against Ingram. We find no
abuse of discretion in the trial court’s decision to assess $24,348.83 in allowable discretionary
costs against Ingram. Thus, we affirm the award of discretionary costs to Sohr.

                                               -42-
                VIII. A TTORNEY’S F EES AND C OSTS INCURRED ON A PPEAL

        Both parties seek to recover attorney’s fees and costs they have respectively incurred
in this appeal. The decision whether to award attorney’s fees and costs on appeal is solely
within the discretion of this court. Archer v. Archer, 907 S.W.2d 412, 419 (Tenn. Ct. App.
1995).

       We have affirmed the award of attorney’s fees to Sohr that were incurred at trial.
Further, as our opinion clearly reveals, Sohr has prevailed on all issues in this appeal.
Accordingly, we find that Sohr is entitled to recover the reasonable and necessary attorney’s
fees he incurred in this appeal which pertain to issues arising from the Exchange Agreement.
We also find that Sohr is entitled to recover the reasonable and necessary attorney’s fees and
costs incurred on appeal as they pertain to the claims related to Prescott Land Investments
based upon the indemnification provision in the Partnership Agreement. Further, we find that
Sohr is entitled to recover his reasonable and necessary attorney’s fees and costs incurred on
appeal as they pertain to the claims related to IS Investment as provided in Article V, § 2 of
the bylaws of the corporation.

       We, therefore, remand these issues to the trial court to set the reasonable and necessary
attorney’s fees and costs Sohr is entitled to recover under the Exchange Agreement, the
Partnership Agreement of Prescott Land Investments, and the bylaws of IS Investment.

                                      I N C ONCLUSION

      The judgment of the trial court is affirmed and this case is remanded for further
proceedings consistent with this opinion. Costs of appeal assessed against H. Preston Ingram.

                                                        ______________________________
                                                        FRANK G. CLEMENT, JR., JUDGE

                                              -43-
                                         A DDENDUM

       The report of the claims asserted by Ingram and their disposition provided by Sohr’s
attorney to the trial court is set forth below. It appears as it did in the trial court’s order.

I. Claims dismissed by summary judgment dated January 28, 2011

       a.     Fraudulent inducement (i) Fuller Appraisals (ii) McFarlin Property (iii)
              Charles Note (iv) Atkins Note and (vii) Woodmont Receivable
       b.     Tennessee Consumer Protection Act claims (same as above)
       c.     Breach of Fiduciary Duty & Fraud claims re: Gladstone condo purchase
       d.     Breach of Fiduciary Duty & Fraud claims re: Riverwatch property
              purchase
       e.     Breach of Fiduciary Duty & Fraud claims re: IS Investment, Inc.
              monetary purchase
       f.     Breach of Fiduciary Duty & Fraud claims re: SIS Development, LLC
              monetary distributions

II. Claims dismissed by summary judgment dated May 3, 2011

       a.     Fraudulent Transfer claim re: Sohr’s 2007 grantor retained annuity trust
              ("GRAT")

III. Claims dismissed by summary judgment dated July 17, 2011

       a.     Claims re: Atkins note
       b.     Claims re: Woodmont Receivable
       c.     Breach of Warranty § 7(n) claim re: Fuller Appraisals
       d.     Breach of Warranty § 7(1) claim re: Charles Note
       e.     Tennessee Securities Act claims

IV. Claims dismissed by summary judgement dated November 4, 2011

       a.     Breach of Contract claim re: Renasant Bank Guaranty
       b.     Breach of Fiduciary Duty claims re: allegations in subparts (a) through
              (j) of paragraph 57 of the Second Amended Complaint
       c.     Breach of Warranty 217(n) claims re: allegations of subparts (a) through
              (j) of paragraph 57 of the Second amended Complaint
       d.     Breach of Warranty § 7(k) claim re: all but four liabilities allegedly
              omitted from Schedule C to Exchange Agreement

                                              -44-
V. Trial - November 7-16, 2011

      a.    Claims dismissed by Directed Verdict

            i.     Breach of Warranty § 7(k) claim re: Belshire walking trail
            ii.    Breach of Contract claim re: IS Investment, Inc.,
                   monetary distributions
            iii.   Breach of Fiduciary Duty claim re: Bugg Hollow Liability
            iv.    Breach of Contract claim re: Bugg Hollow Liability
            v.     Breach of Fiduciary duty claim re: misuse of
                   resources of IS Investment, Inc.

      b.    Jury Verdict in favor of Sohr

            i.     Breach of Warranty § 7(k) claim re: Don Martin liability
            ii.    Breach of Warranty § 7(k) re: boat slips liability of Tims Ford, LLC
            iii.   Breach of Warranty § 7(k) re: boat slips liability of Tims
                   North Ford, LLC
            iv.    Breach of Contract claim re: Riverwatch property
                   purchase
            v.     Breach of Contract claim re: misuse of resources of IS
                   Investment, Inc.
            vi.    Declaratory Judgment claim re: Waller escrow account
                   (Sohr only obligated to pay 42.5% of RC Properties Note)

      c.    Jury Verdicts Against Sohr

            i.     Breach of oral contract claim re: airline miles ($9,750.00)
            ii.    Declaratory Judgment claim re: Waller escrow account (RC Properties
                   loan amount understated in promissory note by $24,703 ($11,478.65
                   awarded out of $74,000 escrow account).

                                            -45-