Court reviews a case involving an unpaid promissory note, unjust enrichment, and breach of a purchase agreement

LAUNDRIES, INC. v. COINMACH CORPORATION v. CARLA MOYER, ET AL. (Tenn. Ct. App. March 21, 2012)

Plaintiff filed an action to recover $150,000 due on a promissory note executed in conjunction with the purchase of its assets. Defendant admitted that it had not paid the full amount of the promissory note but denied that the amount was due, and asserted a counterclaim contending, inter alia, that the plaintiff had breached the asset purchase agreement, committed misrepresentation and not disclosed material facts with respect to the transaction, had fraudulently induced defendant to close on the transaction, and that plaintiff had been unjustly enriched. Plaintiff filed a motion for dismissal and for judgment on the pleadings, which the trial court granted. Defendant appeals. Finding that the causes of actions asserted in defendant’s counterclaim failed to state a claim for relief, we affirm the dismissal of the counterclaim. We reverse the grant of the motion for judgment on the pleadings and remand the case for further proceedings.

Opinion available at:
https://www.tba.org/sites/default/files/laundriesinc_032112.pdf

Court reviews whether a guarantor was personally liable for the debt on an open account

AMBER BRAZILIAN EXPORT RESOURCES, INC., DBA AMBER INTERNATIONAL v. CROWN LABORATORIES, INC. ET AL. (Tenn. Ct. App. March 21, 2012)

Amber Brazilian Export Resources, Inc., doing business as Amber International (“the Plaintiff”), filed this action against Crown Laboratories, Inc. and Jeffrey A. Bedard (collectively “the Defendants”) to collect a debt owed on an “open account.” The liability of Mr. Bedard is based upon a personal guaranty of Crown’s obligation. The Defendants admit that something is owed on the account but deny the amount and further deny that Mr. Bedard signed the guaranty in a personal capacity. The Plaintiff filed a motion for summary judgment supported by the affidavit of its president, which the Defendants opposed with the affidavit of Mr. Bedard in which he states that he signed the guaranty in a representative capacity. He also disputes the amount due as stated in the Plaintiff’s affidavit. The trial court granted the Plaintiff’s motion. The Defendants appeal. We affirm that part of the judgment holding Mr. Bedard liable on the guaranty and vacate that part of the judgment setting the amount owed because there is a genuine issue of material fact as to the amount.

Opinion available at:
https://www.tba.org/sites/default/files/amberbrazilian_032112.pdf

Court reviews breach of fiduciary duty, breach of contract, and other issues in a case involving an employee's termination

CYNTHIA H. KOVACS-WHALEY, DIRECTOR AND SHAREHOLDER OF WELLNESS SOLUTIONS, INC. v. WELLNESS SOLUTIONS, INC. ET AL. (Tenn. Ct. App. March 19, 2012)

Plaintiff, an employee, shareholder, and director of Wellness Solutions Inc., filed this action against the Company and shareholders Steven Scesa and Laura Reaves following the termination of Plaintiff’s employment with Wellness Solutions, Inc., asserting a shareholder derivative action and claims for breach of fiduciary duty and duty of good faith.

Following her termination and the initiation of this action, the Company exercised a call option contained within the Shareholders’ Agreement and purchased Plaintiff’s stock. Plaintiff then amended her complaint to include claims for breach of contract and false light invasion of privacy against Mr. Scesa.

The trial court summarily dismissed all of Plaintiff’s claims. We reverse the summary dismissal of Plaintiff’s claim for breach of contract finding there are genuine issues of material fact. We also reverse the summary dismissal of Plaintiff’s claim for false light invasion of privacy finding that Mr. Scesa, as the moving party, failed to negate the essential element of damages or demonstrate that Plaintiff cannot prove the essential element of damages at trial.

We affirm the summary dismissal of Plaintiff’s claims for breach of fiduciary duty, breach of the duty of good faith, and breach of the duty of loyalty upon the finding the Defendants demonstrated that the business judgment rule applies to their decisions at issue, which negates an essential element of each of these claims. Further, we deny Defendants’ request for attorneys’ fees pursuant to Tennessee Code Annotated § 47-56-401(c) upon the finding that Plaintiff did not properly bring a shareholder’s derivative action.

Opinion available here:
https://www.tba.org/sites/default/files/kovacs-whaleyc_031912.pdf