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F&M Marketing Services, Inc. v. Christenberry Trucking and Farm, Inc.

Court of Appeals of Tennessee, Knoxville

January 31, 2017

F&M MARKETING SERVICES, INC.
v.
CHRISTENBERRY TRUCKING AND FARM, INC. ET AL.

          Session September 13, 2016.

         Appeal from the Chancery Court for Knox County No. 182985-2 Clarence E. Pridemore, Jr., Chancellor

         The question presented is whether the corporate veil of Christenberry Trucking and Farm, Inc. (CTF), should be pierced and its sole shareholder, Clayton V. Christenberry, Jr., be held personally liable for a debt owed by CTF to F&M Marketing Services, Inc. In 2012, F&M obtained a judgment against CTF for breach of contract. By that time, CTF, a trucking company, had suffered mortal setbacks primarily owing to the great recession. CTF was administratively dissolved that same year. CTF had no assets to satisfy the judgment. F&M brought this action, seeking to hold Mr. Christenberry personally liable for the debt. After a bench trial, the court held that F&M did not meet its burden of proving that CTF's corporate veil should be pierced. F&M appeals. We affirm the trial court's judgment.

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

          Christopher J. Oldham, Knoxville, Tennessee, for the appellant, F&M Marketing Services, Inc.

          John T. McArthur, Melanie E. Davis, and Carlos A. Yunsan, Maryville, Tennessee, for the appellees, Christenberry Trucking and Farm, Inc., and Clayton V. Christenberry, Jr.

          Charles D. Susano, Jr., J., delivered the opinion of the court, in which Thomas R. Frierson, II, and Brandon O. Gibson, JJ., joined.

          OPINION

          CHARLES D. SUSANO, JR., JUDGE.

         I.

         This is the second appeal of this action to pierce the corporate veil. On the first appeal, this Court found "the trial court's findings of fact and conclusions of law insufficient to facilitate appellate review, " vacated the judgment of the trial court, and remanded for sufficient findings of fact and conclusions of law. F&M Marketing Servs., Inc. v. Christenberry Trucking and Farm, Inc., No. E2015-00266-COA-R3-CV, 2015 WL 6122872, at *1 (Tenn. Ct. App., filed Oct. 19, 2015). Our earlier opinion provides the following brief factual and procedural background:

[T]he trial court entered a written order on February 13, 2012 awarding F & M a judgment totaling $375, 524.29 plus post-judgment interest. The trial court entered its final judgment on February 13, 2012.
At the time the trial court entered judgment, [CTF] had no assets to satisfy the judgment. After learning this, F & M commenced an action on May 25, 2012 seeking to disregard the corporate entity of [CTF] and hold its primary shareholder, Clayton Christenberry, Jr., personally liable for the judgment against the corporation.
* * *
On February 4, 5, and 6, 2015, the trial court conducted a trial on F & M's action to pierce the corporate veil of [CTF]. At the conclusion of the trial, the trial court orally ruled from the bench, concluding that F & M had not carried its burden to prove that the corporate veil should be pierced. . . . Accordingly, the trial court dismissed the entirety of F & M's claims against all of the defendants. F & M filed a timely notice of appeal.

Id. at *1, *2. In the first appeal, we concluded:

Here, the eleven factors in [FDIC v.] Allen[, 584 F.Supp. 386 (E.D. Tenn. 1984)] require a fact-intensive inquiry for each individual case; the necessity for sufficient findings of fact and conclusions of law cannot be overstated in cases where a party seeks to pierce the corporate veil, as it "depends on the specific facts and circumstances of the case."
* * *
Respectfully, the trial court's failure to render specific findings concerning the factors, and even more importantly, the trial court's failure to render legal conclusions as to any of the factors, warrant a vacatur of the final judgment. Under these circumstances, the appropriate remedy is to vacate the judgment and remand to the trial court for the entry of an order compliant with Rule 52.01.

Id. at *6.

         Following remand, the trial court entered an order containing factual findings in support of its conclusion that the proof was insufficient to warrant piercing the corporate veil of CTF and imposing personal liability on its shareholder. F&M has again appealed this decision.

         II.

         The issue presented is whether the trial court erred in holding that F&M did not meet its burden of proof to demonstrate that the corporate veil of CTF should be pierced.

         III. Our standard of review is as follows:

Where, as here, the trial court sits without a jury, we review findings of facts de novo upon the record accompanied by a presumption of correctness unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); In re Adoption of A.M.H., 215 S.W.3d 793, 809 (Tenn. 2007). Questions of law . . . are reviewed de novo with no presumption of correctness. Adoption of A.M.H., 215 S.W.3d at 809; Kirkpatrick v. O'Neal, 197 S.W.3d 674, 678 (Tenn. 2006).

Christenberry Trucking & Farm, Inc. v. F&M Marketing Servs., Inc., 329 S.W.3d 452, 457 (Tenn. Ct. App. 2010), [1] quoting In re Angela E., 303 S.W.3d ...


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