Court Opinion

ID: 4580682
Source: CourtListenerOpinion
Date Created: 2020-10-26 21:13:38.068493+00
Date Added: 2024-06-11T09:28:16.796408
License: Public Domain

10/26/2020
                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                  July 23, 2020 Session

               LAURA COWAN COFFEY v. DAVID L. COFFEY

                  Appeal from the Chancery Court for Knox County
                  No. 189999-2   Robert E. Lee Davies, Senior Judge

                             No. E2020-00157-COA-R3-CV

This is the second appeal in this action, the facts of which date back to the 1995 death of
Steven Coffey, the successful owner of a securities business. In 2015, the deceased’s
widow sued the deceased’s father, who had served as executor of the estate. Following
summary judgment in favor of the executor, the widow appealed and we remanded the
matter to the trial court. Following a bench trial, the trial court ruled, among other things,
that the three-year statute of limitations applicable to the widow’s claims were tolled by
application of the fraudulent concealment doctrine. The executor appealed. Discerning
no error, we affirm the trial court’s decision.

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

JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which D. MICHAEL
SWINEY, C.J., and THOMAS R. FRIERSON, II, J., joined.

Paul S. Davidson, Taylor J. Askew, and Danielle N. Johns, Nashville, Tennessee, for the
appellant, David L. Coffey.

Thomas S. Scott, Jr., Knoxville, Tennessee, David Thomas Black, Maryville, Tennessee,
and Christopher T. Cain, Knoxville, Tennessee, for the appellee, Laura Cowan Coffey.
                                                 OPINION

                                        I.       BACKGROUND

       This is the second appeal within this action. Appellee, Laura Cowan Coffey1 filed
a lawsuit on July 17, 2015, asserting causes of action for fraud, breach of fiduciary duty,
conversion, and unjust enrichment. In the first appeal, we reviewed the trial court’s order
granting summary judgment to the defendants. We affirmed the dismissal of the claims
for unjust enrichment and extrinsic fraud under Tennessee Rule of Civil Procedure
60.02., but concluded that genuine issues of material fact precluded summary judgment
on the remaining claims. Coffey v. Coffey, 578 S.W.3d 10, 24–26 (Tenn. Ct. App. 2018)
perm. app. denied (Tenn. Feb. 20, 2019) (“Coffey I”). The trial court dismissed all
defendants except David L. Coffey. The case proceeded to a bench trial held September
9, 2019 through September 18, 2019.

       On July 13, 1995, Steven Coffey (“the deceased”) and his mother-in-law, Mrs.
Peggy Cowan, were tragically killed in a private airplane crash en route to Hilton Head
Island, South Carolina. The deceased was 38 years old and was survived by his spouse,
Laura, and their two children Cliff and Courtney. As relevant to this appeal, the deceased
was also survived by his brother, Michael “Mike” Coffey, and by his father, Appellant
David L. Coffey.2

        The deceased died testate and his will, prepared by attorney Chris Hall, designated
the deceased’s father, David Coffey, to be executor of the estate and trustee of a
testamentary trust (“the family trust”). The deceased’s will named Laura and the family
trust as beneficiaries of his estate, and also provided that First Tennessee Bank would be
the successor executor or trustee, if needed. David Coffey served as executor from the
opening of the estate on July 18, 1995, until the conclusion of its administration on
January 23, 1998. Attorney Chris Hall represented David Coffey with respect to the
probate of the estate. By court order and pursuant to a provision within the deceased’s
will, the estate was closed without a detailed accounting.

      The deceased was an entrepreneur who had formed and had operated as CEO two
businesses, Securities Service Network (“SSN”) and Renaissance Capital. SSN was a
successful broker-dealer business that employed an innovative processing system to
provide fee-based stock brokerage services to financial advisors and representatives.

1
 Throughout the record, including in her own briefs, Laura Cowan Coffey is referred to by her first name.
We mean no disrespect.
2
    In Coffey I, we referred to David L. Coffey as “David the senior.”

                                                     -2-
Renaissance, a wholly-owned subsidiary of SSN, owned physical assets that it leased to
SSN. SSN stock was the largest non-liquid asset of the deceased’s estate. Soon after the
deceased’s death, David Coffey instructed Michael Coffey to go to SSN’s offices to
secure the deceased’s computer. Michael Coffey removed the deceased’s computer from
SSN, copied the computer’s contents onto floppy disks, and kept the disks in a box at his
own home. Michael Coffey did not share the existence of the floppy disks with anyone
until over twenty years later at his deposition.

        As Michael Coffey reviewed the computer’s contents, he found what is known in
this litigation as the Dear Laura letter, the subject line of which is “What to do in the
event of my death.” Michael Coffey printed the letter, promptly gave a copy of it to his
father, David Coffey, and, around the time of her mother’s funeral, tendered a copy to
Laura. The Dear Laura letter was unsigned, appeared to have been drafted in 1992 and
last updated by the deceased in 1994, and instructed as follows: That there was a file at
the deceased’s office in which Laura would find his latest financial statement and copies
of their wills; that Laura should “[c]all Chris Hall or Dennis Ragsdale, the attorneys that
drafted the wills,” and ask them to file his death certificate with the insurance company,
so that she could obtain the insurance proceeds of $1,000,000 for herself and $250,000
for each child, Cliff and Courtney;3 that Laura should call David Coffey, to “[t]ell him to
sell the company as quickly as he can” because “[t]he reps may run, if they don’t feel the
place is being run competently. He may have to take over on a temporary basis and look
like he’s heading the place for a while.” The Dear Laura letter further instructed that
David Coffey

          can call Larry Raffone (he’s a friend and he’ll help) . . . and tell him you
          want to sell at 35% of the last 12 months Gross Revenue. Be ready to let it
          go at 30% of Gross. Look for all cash, but be prepared to accept half down
          and half in 12 months or maybe even one-third down, a third at [the] end of
          twelve months and then another third 24 months out. Make them
          collateralize the outstanding debt with something outside of the business
          entities. Tell the low ballers to get lost. This place has been built right and
          is in better shape than anybody else I know of.

       Shortly following the airplane crash, David Coffey presented Laura with a
resignation letter and she resigned from SSN. As instructed in the Dear Laura letter,
David Coffey contacted the deceased’s friend, Larry Raffone, who was quite
knowledgeable about businesses of SSN’s type. Mr. Raffone provided David Coffey
potential purchasers for SSN. Although Mr. Raffone agreed with the thirty to thirty-five
percent rule of thumb that the deceased had expressed in the Dear Laura letter, he

3
    Only two life insurance policies were identified: one for $500,000 and another for $40,000.
                                                      -3-
indicated to David Coffey that the current sales of broker-dealer businesses were going
for ten to fifteen percent of gross revenues.

        Before contacting the potential purchasers, David Coffey immersed himself in the
management and operation of SSN. In so doing, David Coffey recognized that there was
a natural tension between the two remaining executive officers, Mike Neubeck and Brian
Propes. David Coffey determined that both men were important to SSN’s success, so to
fill the vacuum his son’s death had caused, he created the “office of the presidency,”
comprised of three executives who would run the company: Mr. Neubeck, Mr. Propes,
and chief financial officer Carl Hollingsworth. This alliance lasted for eight weeks, until
Mr. Propes resigned. Then, Mr. Propes’s much less experienced assistant became SSN’s
compliance officer.

       Potential purchasers communicated with David Coffey about their interest in
buying SSN. David Coffey discussed the sale of SSN with one person in-depth, Pat
Pierce, who was an affiliated representative of SSN and who owned Associated
Investment Management, Inc. The two men began extensive negotiations in September
of 1995. At one point, David Coffey traveled to Omaha to visit Mr. Pierce. David
Coffey told Mr. Pierce that he would invest $500,000 of his own cash into purchasing
SSN, and that this would be paid to the deceased’s estate as part of the purchase price.
The proposal also included quarterly dividends to be paid to Laura. An additional term of
the proposed sale was the payment of “excess cash” from SSN to the estate. David
Coffey told Mr. Pierce that “Laura’s cash” would have to be removed from SSN before
the sale.4

        Laura was never informed that the cash in SSN belonged to her as the beneficiary
of her late husband’s estate and that it was to be removed before Mr. Pierce purchased
SSN. David Coffey did not make Laura privy to the discussions he had with Mr. Pierce
or the information he obtained from those discussions. However, he did have discussions
with Steve Maggart, Laura’s CPA.5 If David Coffey assumed Mr. Maggart was
representing Laura in the negotiations, this was just an assumption, because Laura did not
indicate to anyone that Mr. Maggart was her agent to negotiate the sale of SSN on her
behalf. Eventually, the proposal between David Coffey and Mr. Pierce went awry. On

4
  In a note dated “11-16-95,” David Coffey wrote “need to remove Laura’s cash” and “agrees that Laura
should take out excess cash now, before we close.”
5
  We credit the trial court’s finding that “Mr. Maggart’s role in the proposed sale of SSN was unclear . . . .
[Laura] initially engaged Maggart to advise her on her personal financial matters, i.e., what amount of
income she was going to have and how she was going to pay her bills.”

                                                    -4-
Mr. Pierce’s request, David Coffey paid Mr. Pierce $7,000 for his attorney fees either
directly out of SSN or by allowing Mr. Pierce a credit toward his monthly fee with SSN.

        While David Coffey was negotiating with Mr. Pierce, SSN’s net profits were
steadily increasing. At that time, Laura was receiving $7,000 monthly rent that SSN was
paying to Renaissance Capital, but this was not enough to cover the family’s living
expenses. David Coffey did not distribute SSN’s net profits to Laura as the estate’s
beneficiary. Rather, SSN retained the net profits. Laura approached David Coffey for an
advance from the Estate and was denied. David Coffey also rejected Laura’s idea of not
selling SSN to keep the business for the deceased’s son, Cliff, to eventually run. By
December of 1995, David Coffey was no longer trying to sell SSN. David Coffey also
misrepresented to Laura that she could not own and operate her late husband’s company
because she was not properly registered and licensed. Notably, David Coffey himself
was neither registered nor licensed.6 David Coffey represented to Laura that she had to
sell the companies to have money on which to live.

       David Coffey was a Representative in the Tennessee General Assembly for a
decade. In January of 1996, he announced that SSN’s chief financial officer, Carl
Hollingsworth, would become president of SSN and then left to complete his final term
in the General Assembly. From January through May of 1996, no buyers came forward
to purchase SSN. In the Spring of 1996, Mr. Maggart suggested that David Coffey and
Laura could own SSN together. David Coffey rejected this idea, so Mr. Maggart
suggested that David Coffey consider buying SSN. David Coffey told Laura that if he
could afford to purchase SSN at an independently appraised price, he would do so.

       Acting on attorney Chris Hall’s advice, David Coffey employed Mercer Capital
Management, Inc. (“Mercer Capital”) to conduct an appraisal of SSN’s then-present
value. Mercer Capital had done valuation work for David Coffey prior to the SSN
valuation. David Coffey testified that at a meeting in July of 1996 with Mr. Maggart,
there was a proposal that David Coffey purchase SSN for $1.5 Million, which
represented “just a general number being picked.” The appraisal (“the Mercer
Valuation”) was completed by accredited senior appraiser Ken Patton. The trial court
summarized Ken Patton’s testimony as follows:

       Patton testified that there were three general categories of appraisals: 1) an
       appraisal which is completely controlled by the appraiser; 2) a limited
       appraisal; and 3) a calculation. In a calculation, the client has much more
       influence in the methods and procedures of the appraisal, and the appraiser
       does not consider as many methods. The 1996 Mercer [Valuation] was a
6
  At trial, a securities compliance expert testified that both Laura and David Coffey could own SSN as
long as they were not involved in its day-to-day management.
                                                     -5-
       calculation.   Patton conducted telephone interviews, he met with
       Hollingsworth and David Coffey, and reviewed financial documents
       furnished by SSN. Patton ruled out one of the three major approaches, the
       transaction method, since there were no other sales of a company similar to
       SSN. He did use the net asset approach and the income approach.

       Patton acknowledged there was no mention of the thirty to thirty-five
       percent rule of thumb [as] suggested by [the deceased] in the Mercer
       Valuation. He explained that neither David [Coffey] nor his attorney, Chris
       Hall[,] furnished him with a copy of the Dear Laura letter or ever informed
       him of [the deceased’s] rule of thumb. Patton acknowledged that if he had
       this information, he certainly would have considered it; however, he was
       not sure if it would have impacted his final valuation of the company.
       Patton indicated that the asset approach resulted in a value of $700,000, but
       he did not give much weight to that approach and instead relied on the
       income approach.

       Patton knew that the intended use for his appraisal was for the sale of the
       company. This is important since the purpose of the appraisal directs the
       appraiser to an appropriate set of rules and regulations for considering
       value. Patton was told by [SSN] management [their] expectations for
       growth [to] slow.[7] Patton also considered that SSN did not have an
       experienced compliance officer and that SSN’s unique model of one
       hundred percent commission payout resulted with significant cash flowing
       through the company as both income and expense without any associated
       profitability. In addition, SSN had recently acquired a customer who
       accounted for twenty percent of its total revenues, which could have [had] a
       significant negative impact if the customer [had] left. In his report [(the
       Mercer Valuation)] dated August 16, 1996, Patton, on behalf of Mercer
       Capital, concluded the fair market value of SSN was $1,557,200 as of July
       31, 1996 using the adjusted capitalization of earnings method. Although
       the initial draft of the Mercer Valuation also included a ten percent
       discount, Chris Hall informed Mercer that David [Coffey] did not want to
       take a discount. This had the effect of increasing the value of the company.
       On cross examination, Patton acknowledged that his income approach did
       not consider whether after tax income stayed in the company or was to be
       paid out prior to the sale. At the time of the valuation, there was $1.2
       million in cash which Patton stated was working capital; however, he

7
 There was tremendous growth at SSN, beginning in 1995. Mr. Patton testified that revenues exploded
upward in 1996. SSN management’s anticipation of a downturn was wrong.
                                               -6-
      admitted this conclusion was based entirely on his conversation with
      Hollingsworth and David [Coffey].

At trial, Mr. Patton admitted that had he used the twelve-month trailing revenue number
of $18,000,000 instead of the year-end 1996 revenue number of $12,000,000 in the
appraisal, the resulting valuation would have been higher.

       In May of 1996, David Coffey, Laura, Mr. Maggart, and attorney Chris Hall met
to discuss David Coffey’s possible purchase of one hundred percent of the shares of SSN
from the estate. At that point, attorney Hall recommended that David Coffey request a
court-appointed guardian ad litem to represent the interests of the minor children, Cliff
and Courtney, and an administrator ad litem to represent the interests of the estate as
related to the sale of the deceased’s companies to David Coffey. This was in contrast to
the deceased’s wishes, as expressed in his will. The will gave Laura guardian status over
her children. Furthermore, the will directed that First Tennessee Bank was to be the
executor should David Coffey fail to qualify or cease to serve. The trial court found that
“the parties had a second meeting in June 1996 where they agreed the purchase price [of
the deceased’s companies] would be set by Mercer Capital and would include the
purchase of Renaissance for book value.”

       Attorney Hall prepared David Coffey’s petition for the appointment of
administrator ad litem and guardian ad litem, recommending to the court that it appoint
Paul Harrison and Ed Cox, to serve in these respective roles. The court appointed
attorneys Harrison and Cox by order entered July 29, 1996. Attorney Hall had practiced
law with attorney Cox in the past, and attorney Harrison had recently left attorney Hall’s
firm. Attorney Hall informed the attorneys ad litem that all parties wanted SSN to be
sold if the attorneys ad litem approved the ultimate sales price. Thus, the deal was
already made such that attorneys Harrison and Cox played a minor role in these events
and did not negotiate on behalf of the estate or the minor children the price at which the
deceased’s companies would be sold to David Coffey. At no point did David Coffey or
attorney Hall provide the Dear Laura letter to the attorneys ad litem or to the court.
David Coffey brought Laura papers to sign so that he could obtain the court’s approval to
purchase the companies himself. He told Laura that she did not need to go to court
because he and attorney Hall were handling everything. Attorney Hall prepared David
Coffey’s petition for approval of the sale.

       Although the Mercer Valuation valued SSN as of July 31, 1996, the sale of the
companies did not close until September 3, 1996, when the court entered its order
approving the sale of stock. Shortly thereafter, David Coffey transferred $1,613,200,
representing his purchase price of SSN and Renaissance, into the estate brokerage

                                           -7-
account.8 On January 23, 1998, the administration of the estate concluded. The court
entered an order to close the estate without a detailed accounting, pursuant to the terms of
the deceased’s will. At David Coffey’s request, the estate documents were sealed by
court order.

        It is undisputed that SSN did not decrease in value between the deceased’s death
and David Coffey’s purchase of SSN. Noting David Coffey’s admission that all the
profits of SSN remained in the company during this time period, the trial court found that
from February 1 to June 30, 1996, SSN earned $305,770, and that from July 1 to August
31, 1996, the company earned $120,000 of profit. The trial court found that as of
February 1997, the retained earnings amounted to $1,004,527. The trial court observed
that “[a]t the time he purchased SSN, there was no one who knew more about SSN than
David Coffey,” despite his testimony to the contrary:

          Although David [Coffey] testified that he felt the company was risky, that
          he did not understand the company, and that he called his two surviving
          children to apologize about investing as much money in SSN, the Court
          finds that testimony not credible. David [Coffey] was a very sophisticated
          businessman and investor. He had a history of buying and selling closely
          held businesses. He also had the advantage of observing the operations of
          SSN for an entire year before he purchased it. During this year, not a single
          sales rep left the company. The only person who left was the compliance
          officer, Propes. David [Coffey] had access to all of the financial
          information concerning the company and had his ‘finger on the pulse’ of
          SSN.

        From the time of her husband’s death through the closing of his estate, Laura
trusted her father-in-law’s representations to her regarding the estate. She had known
David Coffey since the late 1970s and was grateful to him for stepping up and taking
control of SSN. Her late husband had always managed the family’s finances, and she had
no idea how to proceed. At the time, she had no misgivings about the sale of SSN and
Renaissance to David Coffey or about his treatment of her while he was executor of the
estate.

       From 1996 until 2001, Laura unsuccessfully sued a company involved in the crash
that killed her husband and mother.9 To establish damages during that wrongful death

8
    David Coffey paid $1,557,200 for SSN plus $56,000 for Renaissance.
9
  Coffey v. Cherokee Aviation, Inc., No. E1999-01037-C0A-R3-CV, 2000 WL 991657 (Tenn. Ct. App.
July 19, 2000) perm. app. denied (Tenn. Mar. 5, 2001).

                                                  -8-
litigation, Laura’s attorney relied upon the Mercer Valuation and SSN’s financial
statements, reports, and stock purchase and sale agreements related to David Coffey’s
acquisition of SSN. As of 2002, the Mercer Valuation was within one of multiple boxes
given to her at the end of the litigation. The boxes contained materials from the crash
litigation, including a picture of the charred remains of her husband. Due to the explicit
nature of the images, Laura promptly put the boxes in her attic without further review.
Laura maintains that she never retrieved nor reviewed the Mercer Valuation contained
therein until September 2014.

       According to Laura’s son, Cliff, by 2006 she had not “indicated any concern about
the way the estate had been handled or SSN had been sold.” That same year, Laura met
with David Coffey. In the meeting, he told her that he had decided to transfer 100% of
the SSN stock to a Grantor Retained Annuity Trust (“GRAT”) for estate planning
purposes, and that his two surviving children and the deceased’s and Laura’s two children
would be the beneficiaries. David Coffey also informed Laura that she was not a
beneficiary of the GRAT and that SSN’s value had appreciated to $18,000,000.

       During the 2008 and 2009 recession, Laura lost quite a bit of money that was
invested in the stock market, so she was feeling insecure about her family’s financial
future. Her daughter Courtney married in 2009 and had a young child, but her husband
lost his job. Laura was commuting to Nashville to help watch her granddaughter so
Courtney could work. At the time, Laura was seeing a psychiatrist who suggested that
she confront the issues and feelings that she had regarding her former in-laws. She
contacted the deceased’s brother, Michael Coffey, told him that she had never seen the
Mercer Valuation that had been spoken of for many years, and requested a copy. On
January 12, 2009, Michael Coffey emailed Laura the 1996 Mercer Valuation noting,
“Hopefully this email will go through. The appraisal is 64 pages long, so the file is pretty
big. Let me know if you get it and all appears okay.” Laura testified that she was not
aware of that email, but does not dispute that she received it. Michael Coffey testified
that he also mailed Laura a hard copy of the Mercer Valuation. Laura admitted that she
received a two-page summary of the Mercer Valuation in the mail, but she never did
anything with this information.

       The trial court found that in 2010, “after she had met with her psychiatrist, [Laura]
decided to ask questions that she had never broached with the Coffeys.” The trial court
detailed these exchanges as follows:

       She reached out to Michael regarding the [Mercer] valuation of SSN,
       seemingly unaware that he had already sent that to her in an email.
       However, as a result of her conversation with Michael, David [Coffey] sent
       Laura a copy of the Mercer valuation by email on March 19, 2010. When
                                            -9-
      Laura received the email from David [Coffey] with the Mercer valuation,
      she forwarded it to her son, Cliff. Cliff was attending Cornell University
      where he was working on an MBA. At that time, Cliff was on spring break
      and never opened the email until years later. Laura also forwarded the
      email to Michael Coffey and Karen Coffey Williams and requested Michael
      to meet with her, to which Michael agreed.

      On March 31, 2010, Laura called Michael and asked if there was something
      wrong with the acquisition of SSN by David [Coffey]. She said that she
      had concerns that David [Coffey] was acting as both buyer and seller in the
      acquisition of SSN. Laura asked Michael if David [Coffey] had done
      anything that was illegal in the sale of SSN, to which Michael responded,
      “absolutely not.”

The remainder of Michael Coffey and Laura’s telephone conversation involved Laura’s
airing of hurt feelings about things that David Coffey had allegedly done or said to her,
and Michael’s defense of David Coffey. After the telephone call, there was a less-than-
positive email exchange between Laura and Michael. They decided not to meet in person
and after April 2010, they did not discuss the sale of SSN.

       Around the same time, Laura also spoke with David Coffey. She recalled that
“[o]nce [David] Coffey found out that I had requested a Mercer valuation, he became
angry, I’m assuming, thinking that I thought something was wrong.” David Coffey
suggested that they meet with attorney Hall and Mr. Maggart to discuss the Mercer
Valuation, but Laura declined.

      Next, Laura spoke with a friend, attorney Tom Wall. Mr. Wall recommended that
she contact a lawyer. This was the same advice Laura’s then-third-husband, Jeffrey
Bowlin, had offered her. The trial court summarized the subsequent events as follows:

      Bowlin indicated that Laura talked a lot about the estate and that she was
      concerned that David [Coffey] had bought SSN for less than it was worth.
      However, she never explained to Bowlin the reason for her concern.
      Bowlin indicated that he would see Laura cry on occasion when discussing
      the estate. At his suggestion, Laura contacted an attorney in Minnesota that
      Bowlin knew, and that attorney suggested that she call Baker Donelson.

      Laura followed this advice and set up a meeting with Matt Sweeney of
      Baker Donelson in Nashville. Bowlin went with her to see Matt Sweeney.
      Laura met with Attorney Sweeney for twenty minutes, and she showed him
      the two-page summary of the valuation that she received from Michael.
                                          - 10 -
She told Sweeney that she received $1.6 million dollars for SSN and
Renaissance. Sweeney told Laura that if she wanted to understand what
had happened, she would have to ask for many more documents. Bowlin
attended the meeting with Laura; however, he could not remember if she
brought anything with her. He did confirm that after the meeting Laura was
upset because Sweeney told her there was no lawsuit.

Attorney Sweeney followed up their meeting with a letter dated May 11,
2010 in which he confirmed that he did not agree to represent Laura and
therefore did not provide her with any legal advice regarding her situation.
Sweeney did advise Laura about the statute of limitations and that she
should decide promptly whether to retain counsel and then whether there
was any basis to assert a claim against anyone.

Acting on Attorney Sweeney’s advice, Laura contacted Chris Hall, the
attorney for David [Coffey] in his role of executor of the estate. Laura
asked Hall for extensive documentation; however, Hall only sent her a few
documents, mostly which were not relevant to her inquiries. Hall also
indicated that they would have to request the probate judge to unseal the
file if they needed anything else, and that the file had already been sent to
storage making his ability to obtain copies of the probate records more
difficult. Laura was not satisfied with Hall’s response and again contacted
him requesting more information regarding the probate of her husband’s
estate. On June 3, 2010, Hall wrote Laura informing her that she had
waived the need for a personal representative to prepare a final accounting
and that she had released David [Coffey] from all liabilities and obligations
with respect to the probate of the estate. Again, Laura contacted Hall’s
office and requested him to provide an accounting of all legal fees paid by
the estate. On August 2, 2010, Hall responded by letter which provided in
part as follows:

     Mr. [David] Coffey and I would have been happy to provide you
     with a detailed accounting of legal fees paid by the estate if you
     had asked for one, but you waived your right to receive a final
     accounting. We are not willing, at this late juncture, to prepare
     an accounting that you voluntarily waived thirteen years ago . . .
     . Mr. [David] Coffey administered the estate in a fair and
     reasonable manner in accordance with Tennessee laws
     governing fiduciaries and he expended countless hours of work
     on behalf of the estate at no charge . . . . We (Hall and David
     [Coffey]) both worked hard to follow the terms of Steve’s last
                                    - 11 -
            will and testament and to keep your advisor, Steve Maggart,
            apprised of information and developments that we thought you
            would want to know. At this point, however, the probate of the
            estate has long since passed.

       After receiving the response from Chris Hall that David [Coffey] had been
       completely above board and treated her fairly [when he was] executor of
       the estate and that he was not willing to provide her with any of the
       documents that she requested, Laura terminated her investigation of the sale
       of SSN to David [Coffey] and the performance of his duties as executor.

        The matter laid dormant until September of 2014, when Cliff received an email
from his uncle Michael Coffey notifying him that SSN was going to be sold for
$45,000,000. Cliff also read a press release announcing the sale which indicated that
SSN’s revenues at the time were approximately $110,000,000. At the time, Cliff and his
sister Courtney were beneficiaries to the trust that owned SSN. The sale did not sit well
with Cliff because he had wanted to be involved with SSN and to be placed on its board,
but had always been rebuffed by his grandfather, David Coffey. Instead, David Coffey
placed his son Michael on the board. Cliff was hurt by being excluded from the company
because his late father had built it, because he viewed the company as his late father’s
legacy, and because he thought SSN had more of a connection to his own family than to
his uncle Michael’s family.

        Cliff called Laura, informed her of the upcoming sale of SSN, and asked her for
any financial information she had related to the 1996 sale of SSN by the estate to David
Coffey. Laura sent Cliff the two-page valuation, but could not find the full Mercer
Valuation. One month later, Laura found the entire Mercer Valuation in her attic, stored
in a box from the wrongful death lawsuit that ended in 2001. She forwarded the appraisal
to Cliff who by that point, thanks to his dual master’s degrees in real estate finance and
investments and an MBA in investment banking and corporate finance from Cornell
University, could understand the appraisal. In October of 2014, Cliff and Laura reviewed
the Mercer Valuation together. Cliff developed concerns. He noticed the revenue
performance of SSN and how it trended up. He was concerned that SSN sold for roughly
$1.5 million in July of 1996, significantly less than what his late father had instructed in
the Dear Laura letter, while at the same time its revenue increased from $6 million to $20
million. Cliff had to explain the Mercer Valuation to Laura several times before she
began to understand it. Cliff expressed his concerns to his uncle Michael, who responded
that attorney Chris Hall ordered the appraisal and that everything concerning the sale of
SSN had been done correctly. Cliff replied, “it looks like the buyer of the company did
the valuation, right?” On December 13, 2014, Cliff emailed David Coffey and Michael
Coffey outlining his specific concerns about the purchase of SSN by David Coffey. He
                                           - 12 -
never received a response to the email from either David or Michael Coffey. At that
point, Laura engaged counsel who began the investigation leading to this lawsuit.

       Following trial, on January 13, 2020, the trial court entered its memorandum and
order finding that (i) David Coffey had fraudulently concealed Laura’s causes of action,
thus tolling the running of the statute of limitations until 2014; (ii) Laura failed to carry
her burden that David Coffey had improperly influenced the appraisal of SSN prior to
purchasing it; and (iii) David Coffey breached his fiduciary duty and converted $522,000
of excess cash by failing to cause SSN to distribute that amount to the estate before
purchasing SSN. The trial court awarded Laura a judgment in the amount of $522,000,
plus prejudgment interest of ten percent per annum from September 3, 1996, through
January 13, 2020. David Coffey timely appealed.

                                    II.   ISSUES

       David Coffey raises three issues for our review: (a) whether the trial court erred in
finding that Laura met her burden to prove the three-year statute of limitations had been
tolled by the discovery rule or by fraudulent concealment; (b) whether the trial court
erred in finding that he breached his fiduciary duty and committed conversion by
retaining $522,000 of SSN’s excess cash; and (c) whether the trial court erred in
awarding Laura the maximum amount of prejudgment interest on its award of $522,000.

        In her posture as Appellee, Laura raises the following issues: (d) whether the trial
court erred by placing the burden on her to prove that David Coffey improperly
influenced the Mercer Valuation, instead of shifting the burden to David Coffey, as
fiduciary, to prove the fairness of the transaction by clear and convincing evidence,
resulting in an under-calculation of her damages; or, alternatively, (e) whether the trial
court erred by determining that she failed to prove that David Coffey improperly
influenced the 1996 transaction.

                             III.     STANDARD OF REVIEW

       We review a non-jury case de novo upon the record, with a presumption of
correctness as to the findings of fact unless the preponderance of the evidence is
otherwise. See Tenn. R. App. P. 13(d); Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn.
2000). For the evidence to preponderate against a trial court’s finding of fact, it must
support another finding of fact with greater convincing effect. Watson v. Watson, 196
S.W.3d 695, 701 (Tenn. Ct. App. 2005). The presumption of correctness applies only to
findings of fact and not to conclusions of law. Campbell v. Florida Steel Corp., 919
                                            - 13 -
S.W.2d 26, 35 (Tenn. 1996). The trial court’s conclusions of law are subject to a de novo
review with no presumption of correctness. Blackburn v. Blackburn, 270 S.W.3d 42, 47
(Tenn. 2008); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). The
trial court’s determinations regarding witness credibility are entitled to great weight on
appeal and shall not be disturbed absent clear and convincing evidence to the contrary.
See Morrison v. Allen, 338 S.W.3d 417, 426 (Tenn. 2011). This is because the trial court
alone had the opportunity to observe the appearance and demeanor of the witnesses.
Royal Ins. Co. v. Alliance Ins. Co., 690 S.W.2d 541, 543 (Tenn. Ct. App. 1985).

      “An award of prejudgment interest is within the sound discretion of the trial court
and the decision will not be disturbed by an appellate court unless the record reveals a
manifest and palpable abuse of discretion.” Myint v. Allstate Ins. Co., 970 S.W.2d 920,
927 (Tenn. 1998).

                                  IV.    DISCUSSION

                         (a) Tolling of the Statute of Limitations

        “A defense predicated on the statute of limitations triggers the consideration of
three components—the length of the limitations period, the accrual of the cause of action,
and the applicability of any relevant tolling doctrines. All of these elements are inter-
related and, therefore, should not be considered in isolation.” Redwing v. Catholic
Bishop for Diocese of Memphis, 363 S.W.3d 436, 456 (Tenn. 2012). The date on which a
claim accrues is the date on which the limitations period begins to run. Id. at 457.
Although the burden of proof is upon the party asserting the bar of the statute of
limitations to show the bar, when that showing is made, the burden shifts to the other
party to show the applicability of any doctrine which would toll the running of the statute
of limitations. See Coffey I, 578 S.W.3d at 22.

        The statute of limitations may be tolled by application of the discovery rule and by
application of the fraudulent concealment doctrine. Under the discovery rule, “a cause of
action accrues and the statute of limitations begins to run not only when the plaintiff has
actual knowledge of a claim, but also when the plaintiff has actual knowledge of facts
sufficient to put a reasonable person on notice that he or she has suffered an injury as a
result of wrongful conduct.” Redwing, 363 S.W.3d at 459 (citations omitted). The
discovery rule includes “not only the discovery of the injury but also the discovery of the
source of the injury.” Id. at 458 (citing Sherrill v. Souder, 325 S.W.3d 584, 595 (Tenn.
2010)); see also John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d 528, 532 (Tenn.
1998) (holding that the cause of action accrues when the plaintiff knows or in the

                                           - 14 -
exercise of reasonable diligence should know that it sustained an injury “as a result of
wrongful or tortious conduct by the defendant”).

       “[T]he doctrine of fraudulent concealment is aligned with the discovery rule.”
Redwing, 363 S.W.3d at 462. As set forth by the Tennessee Supreme Court, the elements
of fraudulent concealment are:

       (1) an affirmative act by the defendant to conceal the cause of action or the
       failure to disclose material facts despite a duty to speak; (2) that the
       plaintiff could not have discovered the cause of action despite exercising
       reasonable care and diligence; (3) the defendant must be aware of the
       wrong; (4) the concealment of material information from the plaintiff by
       withholding information or making use of some device to mislead the
       plaintiff in order to exclude suspicion or prevent inquiry.

Coffey I, 578 S.W.3d at 22 (citing Redwing, 363 S.W.3d at 462–463). In general, the
affirmative act to conceal material information must be more than mere silence. Shadrick
v. Coker, 963 S.W.2d 726, 735 (Tenn. 1998). However, “when there is a confidential or
fiduciary relationship between the parties, the ‘failure to speak where there is a duty to
speak is the equivalent of some positive act or artifice planned to prevent inquiry or
escape investigation.’” Id. (quoting Hall v. DeSaussure, 297 S.W.2d 81, 85 (Tenn. Ct.
App. 1956); Benton v. Snyder, 825 S.W.2d 409, 414 (Tenn. 1992)). “Plaintiffs asserting
the doctrine of fraudulent concealment to toll the running of a statute of limitations must
demonstrate that they exercised reasonable care and diligence in pursuing their claim.”
Redwing, 363 S.W.3d at 463. Application of the fraudulent concealment doctrine serves
to toll the statute of limitations “until the plaintiff discovers or, in the exercise of
reasonable diligence, should have discovered the defendant’s fraudulent concealment or
sufficient facts to put the plaintiff on actual or inquiry notice of his or her claim.” Id. At
that point, “the original statute of limitations begins to run anew, and the plaintiff must
file his or her claim within the statutory limitations period.” Id. Whether the plaintiff
exercised reasonable diligence to discover her claims against the defendant is a question
of fact. Id. at 466 (citing Sherrill v. Souder, 325 S.W.3d at 596); see Wyatt v. A-Best,
Co., 910 S.W.2d 851, 854 (Tenn. 1995).

       It is undisputed that the sale through which David Coffey purchased SSN and
Renaissance closed on September 3, 1996. The parties previously stipulated that Laura’s
claims sound in tort, so the statute of limitations is three years. See Tenn. Code Ann. §
28-3-105. Laura filed suit on July 17, 2015, sixteen years after the statute of limitations
would have expired.

                                            - 15 -
       We turn now to the evidence that was presented to the trial court on this issue.
Importantly, the trial court made specific findings as to the relative sophistication of the
parties which, although not an element of fraudulent concealment, cannot be ignored
given the facts of this case and David Coffey’s role as executor:

       Laura Coffey was an unsophisticated and naïve person on matters related to
       business transactions, estate matters, and basic finances. Since her
       marriage to [the deceased], she had performed the duties of housewife and
       mother. Although she was secretary of SSN, this was in name only. Laura
       simply signed whatever documentation her husband asked her to sign. Her
       husband handled all of the personal finances of the family. Upon the death
       of her husband and her mother, Laura was consumed by grief. She trusted
       her father-in-law and completely relied upon him to handle her husband’s
       estate. . . . While [in 2006] Laura was understandably upset with her father-
       in-law for cutting her out of the [GRAT], it does not follow that she should
       have been suspicious with regard to the sale of SSN.

David Coffey, by contrast, “was a very sophisticated business man and investor . . . [who]
had a history of buying and selling closely held businesses.” He had “his ‘finger on the
pulse’ of SSN” and “there was no one who knew more about SSN than David Coffey.”

        On appeal, David Coffey first argues that the trial court did not identify any
affirmative act by him or by his agents to conceal Laura’s potential causes of action. We
disagree. Keeping in mind the fiduciary relationship, the trial court first and foremost
found that neither David Coffey nor attorney Hall provided the Dear Laura letter to Ken
Patton, the person tasked with appraising the estate’s largest asset, SSN. Both men kept
silent about the fact that the Dear Laura letter contained the deceased’s wishes
concerning the sale of his company and his rule of thumb for the sale price.10 The trial
court further found that neither David Coffey nor his attorney shared the existence of the
Dear Laura letter or the rule of thumb contained therein with the attorneys ad litem who
were supposed to be representing the interests of the estate while David Coffey purchased
its largest asset. Additionally, the trial court recounted Pat Pierce’s proposal to purchase
SSN, which would have included quarterly dividends paid to Laura and the payment of
SSN’s excess cash to the estate, and the fact that David Coffey did not discuss this
proposal with Laura. The trial court found that David Coffey inaccurately told Laura she
could not own SSN. The trial court also noted Michael Coffey’s assurance to Laura in
2010 “that everything David had done regarding the sale of SSN was above board and

10
  Mr. Patton acknowledged that he certainly would have considered the Dear Laura letter in performing
the Mercer Valuation. David Coffey’s own expert, David Michael Costello, opined that Ken Patton
“should have considered” the Dear Laura letter.

                                               - 16 -
legal.” Finally, as to Laura’s quest for documentation on the sale of SSN and David
Coffey’s actions as executor, the trial court found:

       [Laura] contacted Attorney Hall who David [Coffey] consulted when
       dealing with Laura on just about everything. Hall gave Laura the
       ‘runaround’ and never sent her the documents she was requesting. When
       Laura persisted, Hall wrote her a stern letter, rebuffed her request, and told
       her that David [Coffey] had administered the estate fairly in accordance
       with the laws governing fiduciaries.

       Second, David Coffey argues that Laura’s access to some or all of the Mercer
Valuation at various times from 1996 to 2010, and her attorney’s reliance on the
valuation to establish damages in the wrongful death litigation, conclusively prove that
she did not exercise reasonable care and diligence in discovering her claims. He
maintains that it was Laura’s “obligation to read the documents available to her and ask
questions about them.” The trial court did not take such a narrow view of the facts
surrounding Laura’s reasonable care and diligence. The trial court found that Laura was
unaware she had received the full Mercer Valuation in emails from David and Michael
Coffey, and “[e]ven if she had received the valuation, she was incapable of interpreting
the report, which explains why she forwarded the email to her son Cliff.” Cliff testified
that he was “no expert by any means” but, by 2014, having “graduated from business
school” and having “worked valuing companies for a couple years,” he could understand
the Mercer Valuation enough to explain its import to Laura. Even still, Cliff “had to
follow up with her . . . and show her what the numbers meant, and that’s how we got to
that.”

       David Coffey also maintains that Laura “could easily see that the price [he] agreed
to pay was less than the ‘rule of thumb’ in the Dear Laura letter,” that Laura “could also
easily see that the terms of the Transaction did not include her receipt of a cash
distribution from SSN,” and that Mr. Maggart11 and Laura had every opportunity to
discuss the terms of the deal with the appraiser. Although the details of David Coffey’s
purchase of SSN for himself may have been easy for him and for his counsel to
understand, the evidence shows that this was not the case for others. For instance,
Michael Coffey, who eventually served on SSN’s board, testified that he was “a little bit”
familiar with the full sixty-four-page Mercer Valuation and further testified:

       Q. All right. You didn’t see anything in that 64 pages that a layperson
       would look at and read something like Mr. Coffey did this or Mr. Coffey

11
   Again, the trial court found that Mr. Maggart’s role in the transaction was unclear, and the evidence
does not support a finding that he was negotiating the terms of the transaction on Laura’s behalf.
                                                   - 17 -
      did that and this was wrong, anything like that? You didn’t see anything
      like that in the appraisal, did you?

      A. No, there wouldn’t be something like that in an appraisal, I don’t think.

      Q. . . . [T]here was financial information --

      A. Yes.

      Q. -- in the appraisal, right?

      A. Right.

      Q. Would you expect somebody without financial training to know what a
      capitalization rate would be, and how it might affect an appraisal?

      A. I think you would need to -- need to be a valuation person really to
      understand the valuation principles in these things.

...

      Q. Okay. My point is, there’s nothing overtly in the Mercer appraisal that
      put Laura on notice of any wrongdoing on the part of your father, do you
      agree with that or not?

      A. I agree with that.

Additionally, Laura’s expert witness, Mr. Curtis Kimball, opined that the average person
or an ordinary lay person reviewing the Mercer Valuation would find it “very, very
difficult” to determine she had been “cheated.” In short, the evidence in the record
preponderates in favor of the trial court’s findings on these points.

       The trial court also detailed another reason Laura did not discover potential causes
of action against David Coffey prior to 2014. The trial court found that, on the advice of
her then-husband, Laura made an appointment in 2010 with attorney Matt Sweeney to
discuss questions and concerns, but “it is clear from Sweeney’s [disengagement] letter
that he was unable to give her any advice regarding her concerns.” Laura’s then-husband
“remembered Laura was upset because Sweeney had told her there was nothing he could
do since he did not have enough information,” noted the trial court.

                                           - 18 -
       Third, David Coffey asserts that the trial court “erred in finding that [he] knew he
should have required SSN to make a distribution of ‘excess cash’ to Laura Coffey from
SSN’s equity prior to the sale in 1996.” He argues that SSN’s management made the
decision. However, the evidence illustrates that David Coffey was running the show at
SSN at the time, especially the sale. Notably, when Pat Pierce was SSN’s potential
buyer, David Coffey wrote “need to remove Laura’s cash” and “agrees that Laura should
take out excess cash now, before we close.” David Coffey was aware that, as executor of
the deceased’s estate, he was fiduciary to the estate’s beneficiaries. He does not argue
otherwise.

       Finally, David Coffey argues that he did not mislead anyone, attempt to evade
suspicion, or prevent inquiry. At the time of the sale of the SSN stock, David Coffey was
in a trusted fiduciary relationship with Laura, so he had a duty to disclose material
information to her concerning the deceased’s estate, of which she was beneficiary.
Instead, as outlined previously in this opinion and as the trial court found throughout its
order, David Coffey remained silent about, concealed, or misrepresented several material
facts surrounding his purchase of the companies. The trial court scrutinized the sale:

      The court: So when the estate was selling it to Mr. David Coffey, you
      know, they had to go to court, get it approved, you had an administrator ad
      litem, you had a guardian ad litem, nobody showed you the report or went
      over the report with you?

      Laura: No, never spoke to me about the report, other than the bottom line
      value. This is what they say the company is worth, this is what I’m going to
      pay. That’s basically it.

        Based upon the breadth of evidence presented at trial and the specific evidence
detailed above, the trial court concluded that “the conduct by David [Coffey] and his
agents constituted fraudulent concealment to toll the running of the statute of
limitations,” and that Laura proved “that even though she exercised reasonable diligence,
she could not have discovered the cause of action due to the conduct of Defendant, David
Coffey.” We agree that Laura exercised reasonable diligence under the circumstances.
The evidence in the record preponderates in favor of the trial court’s findings.
Accordingly, we affirm the trial court’s determination that the statute of limitations
applicable to Laura’s claims was tolled until 2014 by application of the fraudulent
concealment doctrine.

                                           - 19 -
                      (b) Breach of Fiduciary Duty and Conversion

       David Coffey contends that the trial court erred in finding that he breached his
fiduciary duty and converted SSN’s excess cash belonging to Laura. It is well
established that “[a]n executor of an estate occupies a fiduciary position” and owes
certain duties to the estate and the beneficiaries. In re Estate of Ladd, 247 S.W.3d 628,
637 (Tenn. Ct. App. 2007) perm. app. denied (Tenn. Nov. 19, 2007). Accordingly, the
executor must deal with the beneficiaries in utmost good faith and “exercise the same
degree of diligence and caution that reasonably prudent business persons would employ
in the management of their own affairs.” Id. (citations omitted).

       Conversion is an intentional tort, and a party seeking to make out a prima facie
case of conversion must prove (1) the appropriation of another’s property to one’s own
use and benefit, (2) by the intentional exercise of dominion over it, and (3) in defiance of
the true owner’s rights. Mammoth Cave Prod. Credit Ass’n v. Oldham, 569 S.W.2d 833,
836 (Tenn. Ct. App. 1977).

       Although there is authority to the contrary, the general rule is that money is
       an intangible and therefore not subject to a claim for conversion. However,
       there is an exception where the money is specific and capable of
       identification or where there is a determinate sum that the defendant was
       entrusted to apply to a certain purpose. Identifiable funds are deemed a
       chattel for purposes of conversion, and conversion may be established
       where a party shows ownership or the right to possess specific, identifiable
       money.

PNC Multifamily Capital Institutional Fund XXVI Ltd. P’ship v. Bluff City Cmty. Dev.
Corp., 387 S.W.3d 525, 553 (Tenn. Ct. App. 2012) perm. app. denied (Tenn. Sept. 19,
2012).

        In this case, the trial court found that once David Coffey decided to purchase SSN
from the estate, he should have resigned as executor due to the inherent conflict of
interest. Then, First Tennessee Bank would have been appointed successor executor to
negotiate on the estate’s behalf, pursuant to the will’s terms. The trial court concluded
that, by failing to resign as executor, David Coffey breached his duty of undivided loyalty
to Laura and to the estate because:

       Here, there was no one representing the estate to negotiate the terms of
       purchase and specifically the issue of excess cash. [Attorneys ad litem]
       Harrison and Cox did not negotiate on behalf of the estate. Their only
       function was to approve or disapprove the purchase price. Thus, the
                                           - 20 -
       oversight by the Court was perfunctory since neither Cox nor Harrison
       [was] made aware of the excess cash issue.

...

       [Ken] Patton admitted that as of June 30, 1996, there was $714,000 of
       equity in SSN. Kimb[all] testified there should have been an accounting of
       all the cash at the time of the sale and that the excess cash should have been
       reserved to the seller (the estate). Normally, that would be an issue which
       would be subject to negotiation between the buyer and the seller. Here,
       however, as executor, David [Coffey] was both the buyer and the seller.

       If David [Coffey] as executor had been acting solely for the benefit of the
       estate, he should have insisted that $522,000 in excess cash be paid out to
       the estate prior to the closing on September 3, 1996. Instead he placed his
       own interest as the buyer over that of the estate and retained all of the
       excess cash. This was a breach of his fiduciary duty as executor of the
       estate which caused an injury to the estate in the amount of $522,000.

The trial court also concluded that David Coffey “committed the tort of conversion by
converting $522,000 in excess cash which should have gone to the estate and ultimately
Laura Coffey upon the sale of SSN.”

        In challenging the trial court’s findings, David Coffey argues that excess cash is a
nebulous concept in this litigation. We find this argument unavailing because the record
illustrates: David Coffey recognized the idea of removing cash from SSN when he was
negotiating its sale with Pat Pierce; a securities compliance expert witness discussed
excess net capital and testified that excess cash could be defined as capital in excess of
what was required by the SEC, which was then $100,000; Laura’s expert on the matter of
estate administration, Albert W. Secor, testified that Laura owned SSN before it was sold
and its profits belonged to her; Laura’s expert witness, Mr. Kimball, conducted an
analysis and estimate of excess cash in SSN as of June 30, 1996, the last day of the data
period covered by the Mercer Valuation; and, more importantly, the trial court defined
the term. The trial court found:

       The NASD and SEC required SSN to maintain a minimum of $100,000 as
       “net capital.” The net capital requirement was to ensure the company
       maintained enough funds to pay off liabilities to customers. In addition to
       the minimum net capital requirement, SSN would need to have operating
       capital. However, after reserving some amount for operating capital, excess
       cash is the amount of retained earnings or profits left in the company.
                                           - 21 -
The evidence does not preponderate against this definition or against the trial court’s
decision to credit Laura’s expert witness when calculating the amount of excess cash.

        For this reason, we also reject David Coffey’s argument that the amount of excess
cash in SSN, “if any,” at the time of the sale was “an indeterminate sum that is not
subject to a claim for conversion.” He is correct that the Mercer Valuation simply
concluded there was no excess cash in SSN at the time due to “management’s”
expectation—which turned out to be incorrect—that the company’s growth would slow
dramatically and that dividends would not be paid in the foreseeable future. However,
upon finding that “Patton never made any analysis of excess cash in [the Mercer]
valuation,” the trial court credited Mr. Kimball’s expert testimony and calculated the
company’s cash at the end of the valuation period to be “$400,000 in excess cash as of
June 30, 1996.” The trial court found that from the date of the Mercer Valuation, “July
31 to the closing on September 3, 1996 there were additional profits of $122,000, for a
total of $522,000 in excess cash.” Mr. Kimball explained that because the Mercer
Valuation was “based on the financial statements closing on 6/30/1996, it’s been my
experience in working with mergers and acquisitions and buyers and sellers in that area
that the seller will retain the cash or the profits for the period of time between the notion
of the valuation date and the closing date. It’s a common practice.” Mr. Kimball agreed
that if that is not done, it has the effect of the buyer purchasing the company with part of
the seller’s money. As the trial court noted, “[f]urther buttressing Kimb[all’s] analysis of
excess cash is the fact that a few months later in December 1996, David [Coffey] paid
himself a $400,000 dividend.12 The evidence does not preponderate against the trial
court’s calculation of excess cash.

        David Coffey also contends that his conflict of interest was “known by all” and
“addressed according to the statutory processes set forth in the Tennessee Code.” See
Tenn. Code Ann. §§ 30-1-109 and 30-2-303. As the trial court correctly observed, “[i]n
this case, the executor conducted a private sale. By making a private sale, an executor
invites questions regarding the integrity of his conduct.” Although the trial court
acknowledged that attorneys Harrison and Cox were appointed as attorneys ad litem and
that the chancery court ultimately approved the sale, it was proven that David Coffey did
not share material information, such as the Dear Laura letter, with either attorney or with
the court. Mr. Secor concluded there was no evidence that attorney Harrison participated
in the negotiation of the sale or price or the stock purchase agreement. He simply looked
at the price and determined, based on the Mercer Valuation, that it was okay. It was also
proven that the transaction was not arm’s length.
12
  As referenced in a trial exhibit, when SSN was again sold in 2015, David Coffey did take “cash of
$8,200,000” prior to or at the closing of the sale.

                                              - 22 -
      With the above considerations in mind, we affirm the trial court’s finding that
David Coffey breached his fiduciary duty and converted $522,000 of excess cash
belonging to the estate.

                                 (c) Prejudgment Interest

        Pursuant to Tennessee Code Annotated section 47-14-123, prejudgment interest
may be awarded “in accordance with the principles of equity at any rate not in excess of a
maximum effective rate of ten percent (10%) per annum.” “An award of prejudgment
interest is within the sound discretion of the trial court[.]” Myint, 970 S.W.2d at 927
(citations omitted). The “principles of equity” are foremost in guiding an award of
prejudgment interest and “the court must decide whether the award of prejudgment
interest is fair, given the particular circumstances of the case.” Id. “[T]he purpose of
awarding the interest is to fully compensate a plaintiff for the loss of the use of funds to
which he or she was legally entitled, not to penalize a defendant for wrongdoing.” Id.
(citations omitted). An award of prejudgment interest addresses damages incurred by a
party “because they have been deprived of the use of that money from the time they
should have received it until the date of judgment.” Scholz v. S.B. Int’l, Inc., 40 S.W.3d
78, 82 (Tenn. Ct. App. 2000). “[I]f the existence or amount of an obligation is certain,
this fact will help support an award of prejudgment interest as a matter of equity.” Myint,
970 S.W.2d at 928. However, “[t]he uncertainty of either the existence or amount of an
obligation does not mandate a denial of prejudgment interest, and a trial court’s grant of
such interest is not automatically an abuse of discretion, provided the decision was
otherwise equitable. The certainty of the plaintiff’s claim is but one of many
nondispositive facts to consider when deciding whether prejudgment interest is, as a
matter of law, equitable under the circumstances.” Id.

       The trial court awarded Laura prejudgment interest at the rate of ten percent per
annum because “David [Coffey] breached his fiduciary duty and retained th[e] excess
cash [of $522,000] for his own benefit.” David Coffey argues that the award was in error
because “both the existence and the amount of an obligation to distribute ‘excess cash’
was in reasonable dispute.”

       Here, as in most cases, the defendant reasonably disputed the plaintiff’s right of
recovery. “The test for determining whether the amount of damages is certain is not
whether the parties agree on a fixed amount.” Id. Rather, “the test is “whether the
amount of damages is ascertainable by computation or by any recognized standard of
valuation . . . even if there is a dispute over monetary value or if the parties’ experts
compute differing estimates of damage.” Id. The trial court calculated Laura’s damages
based on the testimony of the expert witnesses, particularly Mr. Kimball. For twenty-
                                           - 23 -
four years, Laura has been denied the use of the monetary damages. The trial court’s
decision to award prejudgment interest at the maximum rate was equitable under the facts
of this case, was based on applicable legal principles, and was consistent with the
evidence. See Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 709 (Tenn. Ct. App. 1999).
Therefore, we affirm the trial court’s discretionary decision to award Laura prejudgment
interest at the rate of ten percent per annum from September 3, 1996, through January 13,
2020.

                                 (d) & (e) Undue Influence

       In her posture as Appellee, Laura argues that the trial court erred by not applying a
presumption of undue influence on the entire transaction by which David Coffey
purchased SSN from the estate. Specifically, she maintains that David Coffey “grossly
undervalued SSN, paying [her] and the Estate anywhere from $3,722,800 to $4,943,000
less than it was worth.” Laura calculates these figures by using her expert Mr. Kimball’s
fair market value and by using the deceased’s 35% of the trailing twelve-month revenue
rule of thumb. David Coffey responds that Laura did not meet her burden to trigger the
presumption of undue influence and thereby shift the burden of proof to him to rebut it by
clear and convincing evidence. See ORNL Fed. Credit Union v. Estate of Turley, No.
E2019-00861-COA-R3-CV, 2020 WL 1652573, at *9 (Tenn. Ct. App. Apr. 3, 2020).

       “Undue influence . . . consists of exerting enough influence or pressure to break
down a person’s will power and to overcome a person’s free agency or free will so that
the person is unable to keep from doing what he or she would not otherwise have done.”
Rawlings v. John Hancock Mut. Life Ins. Co., 78 S.W.3d 291, 301 (Tenn. Ct. App. 2001).
David Coffey does not deny that a confidential relationship existed with Laura, but he
correctly notes that this relationship alone does not warrant rescinding his purchase as
unfair. It is not the relationship itself, but the abuse of it that concerns the courts. In re
Estate of Maddox, 60 S.W.3d 84, 89 (Tenn. Ct. App. 2001). Accordingly, proof of a
confidential relationship must be supplemented “with evidence of one or more other
suspicious circumstances that give rise to a presumption of undue influence.” Id.

       As to the purchase price David Coffey paid for SSN, the trial court found:

       The Court recognizes it must be cautious in allowing hindsight to influence
       this issue. The question is what information existed at the time of the
       valuation in 1996, and did David [Coffey] inappropriately influence the
       appraisal to his benefit and therefore to the detriment of the estate? The
       Court finds both Mr. Patton (who performed the Mercer valuation) and Mr.
       Kimb[all] (who critiqued the Mercer valuation) to be credible. However,
       this is not a case where the Court is responsible for determining the fair
                                            - 24 -
       market value of a business as it would in a divorce case. Here, the Court is
       reviewing the appraisal performed by Patton in 1996 to determine if it was
       improperly influenced.

       The most significant fact concerning this issue was the failure of David
       [Coffey] and Attorney Hall to provide Patton with the Dear Laura letter
       which contained [the deceased’s] rule of thumb that SSN should sell for
       30% to 35% of the last twelve months gross revenue. Patton candidly
       admitted he would have considered that fact in his valuation, but he also
       doubted it would have impacted his ultimate value. There was no other
       evidence David [Coffey] improperly influenced the valuation. Although
       there were clearly differences of opinion in the methods used by Kimb[all]
       and Patton, the Court finds that those were differences of opinion and not
       fundamental errors which can be attributed to David [Coffey’s] improper
       influence. To be sure, David [Coffey] breached his fiduciary duty to the
       estate by failing to provide the appraiser with [the deceased’s] opinion.

        Additionally, the trial court detailed the other factors that influenced the Mercer
Valuation including that: SSN was a unique business concept; there were no comparable
sales; the founder and key man was deceased; one of the other officers had left SSN;
SSN’s new president lacked experience in “two critical areas, compliance and sales
reps”; Mr. Raffone had indicated that broker/dealer businesses like SSN were only selling
for ten to fifteen percent of their gross revenues at the time; there was a single client who
was responsible for twenty percent of SSN’s revenue; and most economists did not
expect the economy’s growth from 1996 to 2000. For all of these reasons, the trial court
could not conclude that David Coffey’s failure to provide the appraiser with the
deceased’s rule of thumb for valuation had a material adverse impact on the Mercer
Valuation.

      On this issue, the trial court’s order fairly outlines the testimony, other evidence,
and the required information concerning how the trial court reached its ultimate
conclusion based upon the facts presented. Discerning no error, we affirm.

       Neither party requested attorney fees on appeal.

                                   V.      CONCLUSION

       We affirm the decision of the Chancery Court. The case is remanded for such
further proceedings as may be necessary and consistent with this opinion. Costs of the
appeal are taxed to the appellant, David L. Coffey.
                                            - 25 -
         _________________________________
         JOHN W. McCLARTY, JUDGE

- 26 -