ÿWPCö …# VU:a %› 0(¡w@É4  , B4 v 0J~ 0TÈ 0^ 0hz 0râ 0|T 0†Ð 0V 1uæ 0d[ U*¿ B)é DC AMU΢ Bpv~vÓ  D3Þ 0@ AOQÆ  0Df D/ª BÙ˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 ,†r‰AZ‹"Arial RegularX($¡¡ mnDoUpqrDtDuvÓ€€DÒ xá 3|x€C:\WPWIN60\TEMPLATE\STANDARD.WPT2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Arial% Line 7 d!!!!7Border 1dd€-"Cþÿ << Gÿÿ ÄÝ ƒ!ÝÔ€ ÔÝ  ÝÔ€ ÔÓ  Óò òÔ YYY ÔFILEDÔ€ XÔÌÌNovember€20,€1996ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó ó dPtPtHHøHÿöÿòV,(ühhØ hd'0ÿÎÿºF ® Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  BA Op Geneva ÒÒ  BA Op Geneva Ò%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ ÔÝ  ÝÓ  ÓÑ\R AØ'\ÑÑ7€‡µXXdædÈ7Ñ›à@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€NASHVILLEÌÌÌCONTRACTORS€HEATING€à àà à)Ì&€COOLING,€INC.,€andà àà àà à)ÌJAMES€T.€REDD,à àà àà àà à)€€Ìà àà àà àà àà àà à)Ìà àà àó óPlaintiffs/Appellees,à àò ò)€€€Davidson€Chancery€No.€94„841„IIÌà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)€€€Appeal€No.€01A01„9602„CH„00086ÌÙ€€ÙœßL€#$";+'h|«•` ç `€€Lß›à àà àà àà àà àà à)ÌPAUL€L.€DEVINE,à àà àà àà à)Ìà àà àà àà àà àà à)Ìà àà àó óDefendant/Appellant.à àò ò)ó óÌÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€DAVIDSONÏCOUNTYÌà@ àAT€NASHVILLE,€TENNESSEEÌà@ àTHE€HONORABLE€ELLEN€HOBBS€LYLE,€CHANCELLORÌÌÌÌÌÌÌÌÌò òTODD€E.€PANTHERó óÌò òTUNE,€ENTREKIN€&€WHITEÌó óNashville,€TennesseeÌAttorney€for€AppellantÌÌÌò òGAIL€P.€PIGGÌó óNashville,€TennesseeÌAttorney€for€AppelleesÌÌÌÌÌÌÌÌÌò òAFFIRMEDÌÌÌÌÌÌó óà àà àà àà àà àà àà àà àà àò òALAN€E.€HIGHERS,€J.ÌÌÌÌCONCUR:ÌÌW.€FRANK€CRAWFORD,€P.J.,€W.S.ÌÌHOLLY€KIRBY€LILLARD,€J.ÌœÌÑ7€‡µXXdæXXdæ7Ñó ó›ÓÓà àPlaintiff,€James€T.€Redd,€filed€suit€in€the€Chancery€Court€of€Davidson€CountyÏagainst€defendant,€Paul€L.€Devine,€seeking€to€enforce€a€stock€retirement€agreementÏ(ð ðSRAðð).€€The€trial€court€held€that€the€SRA€was€valid€and€enforceable.€€The€trial€courtÏordered€Devine€to€convey€his€stock€to€the€company€for€the€price€stated€in€the€SRA.€ÏDevine€has€appealed,€arguing€that€the€SRA€should€not€be€enforced€and€that€theÏcompany€should€be€required€to€pay€fair€market€value€for€his€stock.€€We€find€DevineððsÏcontentions€to€be€without€merit€and,€for€the€reasons€stated€herein,€we€affirm€the€trialÏcourtððs€judgment.ÌÌÓ  Óò òI.ó óÌÌÓ  Óà àThe€relevant€facts€are€as€follows.€€Contractors€Heating€&€Cooling,€Inc.Ï(ð ðcompanyðð)€was€originally€formed€in€1959,€by€Carl€Parker,€Jr.,€Carl€Gardner,€andÏForest€Dillingham,€who€each€owned€30€shares€of€stock€in€the€company.€€ShortlyÏthereafter,€Redd€purchased€all€of€Dillinghamððs€stock.€€At€all€times€pertinent€herein,ÍRedd€served€as€president,€director,€and€part€owner€of€the€company.€ÌÌà àIn€1972,€Devine€became€an€employee€of€the€company.€€In€1977,€Parker,ÏGardner,€and€Redd€offered€Devine€a€minority€ownership€interest€in€the€company.€ÏDevine€purchased€3€shares€of€stock€from€each€of€the€three€stockholders€for€a€totalÏpurchase€price€of€$45,000.00.€€At€the€time€of€the€purchase,€all€of€the€stockholdersÏsigned€a€Stock€Retirement€Agreement.€€According€to€Devine,€the€purpose€of€the€SRAÏwas€to€prevent€Devine€from€having€any€control€over€the€affairs€of€the€company.€€InÏcontrast,€Redd€asserts€that€the€purpose€of€the€agreement€was€to€prevent€the€stock€fromÏfalling€into€the€wrong€hands€and€to€ensure€that€no€one€else€could€acquire€anÏownership€interest€in€the€company€until€the€last€of€the€stockholders€either€retired€orÏdied.€ÌÌà àThe€SRA€provided€that€when€a€stockholder€ceased€his€employment€with€theÏcompany,€the€company€would€repurchase€his€stock.€€The€1977€agreement€providedÏthat€the€value€of€the€stock€would€be€determined€according€to€ð ðbook€value.ðð€€ÏSpecifically,€the€agreement€provided:ÌÓÓœ›à8 àà8 àIn€the€event€of€the€foregoing€circumstances,€the€CorporationÏshall€pay€as€a€purchase€price€for€each€share€of€stock€ownedÏby€the€permanently€disabled€or€severed€Stockholder€a€sumÏequal€to€the€book€value€per€share€of€the€Corporationððs€stockÏas€reflected€by€financial€statements€prepared€for€the€lastÏending€fiscal€year€preceding€the€purchase€of€such€shares.̛̜œÌ›ÌÓÓà àIn€1980,€however,€the€stockholders€executed€a€new€SRA.€€The€1980€agreementÍrevised€the€method€by€which€the€stock€would€be€valued€as€follows:€ÌÓÓœ›à8 àà8 àIn€the€event€of€the€foregoing€circumstances,€the€CorporationÏshall€pay€as€the€purchase€price€for€each€share€of€stockÏowned€by€the€permanently€disabled€or€severed€StockholderÏthe€amount€agreed€upon€by€all€the€Stockholders€as€statedÏunder€Section€6€of€this€Agreement.€Ìà àÌà8 àà8 àUpon€the€execution€of€this€Agreement€and€annually,Ïthereafter,€or€whenever€the€Stockholders€actingÏunanimously€shall€determine,€ò òthe€Stockholders€and€theÏCorporation€hereby€agree€that€the€value€per€shareÏof€the€stock€owned€by€Stockholders€shall€beÏ$6,200.00€per€share.€€Said€value€shall,€by€mutualÏagreement,€be€revised€upwards€or€downwardsÏeach€yearó ó€within€ninety€(90)€days€following€the€close€ofÏCorporationððs€fiscal€year.€€ò òWhere€no€revision€as€toÏvalue€is€agreed€upon€by€all€of€the€Stockholdersó ó,€asÏevidenced€by€an€addendum€to€this€Agreement,€signed€byÏall€of€the€Stockholders,€ò òthe€last€value€agreed€upon€byÏall€of€the€Stockholders€shall€be€the€operableÏvalueó ó.€(emphasis€œadded).ÌÌÌÌÓÓ›à àSince€the€execution€of€the€1980€agreement,€the€stockholders€did€not€adjust€theÏvalue€of€the€stock€from€the€stated€$6,200.00€per€share€price€to€a€figure€that€reflectedÏthe€actual€value€of€the€stock.€ÌÌà àIn€1981,€the€company€purchased€Parkerððs€27€shares€of€stock€for€approximatelyÏ$300,000.00.€The€same€year,€Devine€became€a€director€and€vice„president€of€theÏcompany.€€In€1986,€the€company€purchased€Gardnerððs€27€shares€of€stock€forÏ$200,000.00€cash,€plus€$75,000.00€for€consulting€services,€$87,500.00€for€hisÏexecution€of€a€non„compete€agreement,€and€$87,500.00€for€commissions.€€TheseÏstock€redemptions€rendered€Redd€a€75%€owner€of€the€company€and€Devine€a€25%Íowner.€òòò òÌÌà àó óóó€From€1981€until€1994,€Devine€was€in€charge€of€the€sales€and€installation€ofÏheat€and€air€systems.€€Sometime€in€1993,€Devine€became€dissatisfied€with€theÏcompany.€€He€began€discussing€with€one€of€the€companyððs€major€competitors,€A/CÏServices,€the€possibility€of€going€to€work€for€them.€ÌÌà àOn€January€17,€1994,€Devine€submitted€his€notice€of€resignation€to€Redd€andÏoffered€to€sell€his€stock€to€the€company€for€$166,666.68.€€Redd€allegedly€told€him€thatÏthe€company€could€not€afford€to€pay€that€much.€€Redd€asked€Devine€to€reconsider€hisÏdecision€to€resign,€which€Devine€agreed€to€do.€€Later€the€same€day,€however,€DevineÏleft€Redd€a€note€stating€that€he€intended€to€resign.€ÌÌà àDevine€and€Redd€next€met€on€January€27,€1994.€€At€this€meeting,€DevineÏoffered€to€sell€his€stock€for€$45,000.00,€plus€title€to€a€Jeep€Grand€Cherokee€vehicle.ÏRedd€accepted€this€offer.€ÌÌà àLater€that€day,€Devine€became€suspicious€about€the€rapidity€with€which€ReddÏaccepted€his€offer.€€Consequently,€he€took€the€companyððs€1993€financial€statement€toÏan€accountant€for€evaluation.€€As€a€result,€Devine€learned€that€the€book€value€of€theÏcompany€exceeded€$800,000.00.€€Devine€then€wrote€a€letter€to€Redd€rescinding€hisÏ$45,000.00€offer.ÌÌà àAlthough€Devine€was€no€longer€a€stockholder€in€the€company€in€1994,€theÏcompany€retained€100%€of€its€1994€earnings,€and€allocated€25%€of€those€earnings€toÏDevine,€which€resulted€in€tax€liability€to€Devine.€€ÌÌà àRedd€filed€a€complaint€against€Devine,€alleging€that€Devine€breached€the€SRAÏby€refusing€to€sell€his€stock€to€the€company€for€$6,200.00€per€share.€€Redd€soughtÏspecific€performance,€plus€damages€for€Devineððs€alleged€breach€of€fiduciary€duty.ÌÌà àIn€his€answer,€Devine€asserted€that€his€offer€to€sell€his€stock€for€$45,000.00€wasÏbased€upon€Reddððs€misrepresentations€that€the€company€was€in€poor€financialÏcondition€and€could€not€afford€to€pay€more.€€Devine€further€asserted€that€the€companyÏwas€estopped€to€rely€on€the€SRA€due€to€the€stockholdersðð€failure€to€revalue€the€stock.ÏDevine€counterclaimed€on€the€basis€that€the€stockholdersðð€failure€to€revalue€the€stockÏand€Reddððs€conveyance€of€inaccurate€information€relating€to€the€financial€condition€ofÏthe€company€constituted€breaches€of€fiduciary€duty,€and€that€Redd€oppressed€DevineÏby€attempting€to€force€him€to€sell€his€shares€for€less€than€fair€market€value.€ÏAccordingly,€Devine€sought€to€compel€the€company€to€purchase€his€stock€at€fair€marketÏvalue.€ÌÌà àFollowing€a€non„jury€trial,€the€trial€court€found€that€although€the€fair€market€valueÏof€Devineððs€stock€was€$268,776.00,€Devine€was€required€by€the€SRA€to€sell€his€stockÏto€the€company€for€$6,200.00€per€share.€Specifically,€the€trial€court€held€as€follows:ÌÓÓà8 àà8 à1.€That€the€April€1,€1980€Stockholders€RetirementÍAgreement€(ð ðSRAðð)€is€valid€and€controls€this€matter.€ÏApplication€of€the€provisions€of€the€SRA€to€the€facts€of€thisÏcase€establish€that€the€defendant€is€entitled€to€receiveÏ$66,666.69€in€exchange€for€his€9€shares€of€stock€in€theÏcorporation.ÌÌà8 àà8 à2.€The€defendant€did€breach€his€duty€as€an€officer€andÏdirector€of€the€corporation€by€sharing€proprietary€records€ofÏthe€corporation€with€the€principals€of€a€competing€business.€ÏThe€Court€determines,€however,€that€the€defendantÏcommitted€this€breach€of€trust€negligently€and€not€with€anyÏmalicious€or€bad€intent€to€harm€the€corporation.€€The€CourtÏfurther€determines€that€the€proof€failed€to€establish€that€anyÏdamage€resulted€to€the€plaintiff€corporation€as€a€result€of€theÏbreach€of€trust€and,€therefore,€that€no€damages€areÏassessed€against€the€defendant€for€his€breach€ofÏconfidentiality.€ÌÌà8 àà8 à3.€The€plaintiff€corporation€is€required€to€pay€to€theÏdefendant€$13,913.00€for€tax€liability€on€the€grounds€thatÏthe€tax€liability€pertained€to€the€conduct€and€relationship€ofÏthe€defendant€and€the€corporation€before€the€defendant€leftÏthe€corporation€and,€therefore,€the€past€practice€of€theÏcorporation€in€funding€such€tax€liabilities€as€a€bonus€orÏotherwise€for€its€directors€should€be€followed.€€Additionally,Ïthe€corporation€reaped€the€benefit€of€that€tax€treatment.ÌÌà8 àà8 à4.€€The€plaintiff€corporation€did€not€act€arbitrarily,€vexatiouslyÏor€capriciously€regarding€the€purchase€of€the€defendantððsÏshares€of€stock€and,€therefore,€liability€for€the€defendantððsÏattorneys€fees€and€costs€is€not€established€as€to€the€plaintiffÏcorporation.€€ÌÌÓÓÌà àDevine€has€presented€several€issues€for€our€consideration€on€appeal.€ÏHowever,€we€deem€these€issues€to€be€enveloped€by€the€cardinal€question€of€whetherÏthe€trial€court€erred€in€enforcing€the€provisions€of€the€SRA€with€respect€to€the€price€ofÏDevineððs€stock.ÌÌÓ  Óò òII.ÌÓ  Óó óÌà àOur€standard€of€review€of€the€trial€courtððs€findings€in€this€case€is€òòde€novoóó€uponÏthe€record,€accompanied€by€a€presumption€of€correctness,€unless€the€evidenceÏpreponderates€otherwise.€€T.R.A.P.€13(d).ÌÌà àDevine€first€challenges€the€trial€courtððs€finding€that€the€majority€shareholders€didÏnot€breach€their€fiduciary€duties€to€Devine€as€a€minority€shareholder€by€failing€toÏrevalue€the€stock.€€According€to€Devine,€a€majority€stockholder€has€a€duty€to€revalueÏstock€according€to€its€fair€value.€€We€disagree.€€In€doing€so,€we€find€the€observations€ofÏthe€Rhode€Island€Supreme€Court€on€this€issue€to€be€persuasive.€€In€òòEstate€of€Meller€v.ÏAdolf€Meller€Co.óó,€554€A.2d€648€(R.I.€1989),€the€Court€stated:ÌÓÓà8 àà8 à[T]he€value€of€a€shareholderððs€stock€in€a€closely€heldÏcorporation€is€irrelevant€when€there€has€been€a€clear€andÏunambiguous€agreement€for€the€redemption€of€theÏshareholderððs€interest....[W]hen€an€agreement€for€theÏredemption€of€the€stock€interest€has€been€entered€intoÏwithout€fraud,€misleading,€or€overreaching,€that€agreementÏwill€prevail€and€there€is€no€equitable€duty€on€the€part€of€theÏother€shareholders€to€revise,€update,€or€change€theÏredemption€price€in€the€absence€of€an€agreement€to€do€so.ÌÌòòId.óó€at€652€(internal€citations€omitted).ÌÌà à€€€€€€€€€œ›ÓÓà àœÌ›à àIn€clear€and€unambiguous€terms,€the€SRA€sets€the€purchase€price€for€the€stockÏat€$6,200.00.€€The€SRA€permits€the€value€of€the€stock€to€be€readjusted€only€upon€theÏmutual€agreement€of€the€shareholders.€Where€there€is€no€revaluation€agreed€upon€byÏall€shareholders,€the€SRA€provides€that€the€last€value€agreed€upon€shall€control.€€WeÍdisagree€with€Devine€that€the€language€of€the€SRA€indicates€that€the€partiesðð€intentÏwas€to€revalue€the€stock€from€time€to€time.€€The€language€of€the€SRA€contains€noÏlanguage€evincing€such€an€intent,€but€instead,€specifically€provides€that€the€last€valueÏagreed€upon€shall€control€in€the€event€that€no€revised€value€is€agreed€upon€by€theÏshareholders.€€Devine€signed€the€SRA€and€agreed€to€the€terms€contained€therein.€€It€isÏnot€the€function€of€this€court€to€rewrite€a€contract€in€order€to€relieve€a€party€from€theÏhardship€of€an€improvident€bargain.Ìà àÌà àIn€a€closely€held€corporation,€the€logic€behind€the€enforcement€of€stockÏredemption€agreements€is€particularly€compelling€because€a€close€corporation€has€aÏspecial€need€to€control€both€the€character€and€the€number€of€shareholders.€€InÏaddition,€a€stock€redemption€agreement€allows€the€business€to€continue€withoutÏhaving€to€pay€out€insupportable€amounts€of€money€upon€the€death€or€retirement€of€aÏkey€shareholder.€€òòEstate€of€Melleróó,€554€A.2d€at€653.Ìà àÌà àDevine€has€advanced€several€other€examples€of€alleged€breaches€of€fiduciaryÏduties€justifying€nonenforcement€of€the€SRA.€€Whether€a€shareholder€has€breached€hisÏfiduciary€duty€to€another€shareholder€is€a€question€of€fact.€€Thus,€the€trial€courtððsÏdeterminations€in€this€regard€are€afforded€a€presumption€of€correctness.€€From€aÏreview€of€the€record,€we€do€not€find€that€the€evidence€preponderates€against€the€trialÏcourtððs€finding€that€there€was€no€breach€of€fiduciary€duty€sufficient€to€merit€setting€asideÏthe€SRA.ÌÌà àFinally,€Devine€argues€that€because€in€actual€practice,€the€company€did€notÏfollow€the€dictates€of€the€SRA€with€respect€to€Parker€and€Gardner,€the€company€isÏequitably€estopped€from€asserting€those€terms€against€Devine.€€Ìà àÌà àð ðEstoppel€is€not€favored€and€it€is€the€burden€of€the€party€seeking€to€invoke€theÏestoppel€to€prove€each€and€every€element€of€an€estoppel.ðð€€òòBokor€v.€Holderóó,€722ÏS.W.2d€676,€680€(Tenn.€App.€1986).€A€party€claiming€estoppel€must€prove:€ÌÓÓà8 àà8 à(1)€Lack€of€knowledge€and€of€the€means€of€knowledge€ofÏthe€truth€as€to€the€facts€in€question;€(2)€reliance€upon€theÏconduct€of€the€party€estopped;€and€(3)€action€based€thereonÏof€such€a€character€as€to€change€his€position€prejudicially.€ÏòòChattem,€Inc.€v.€Provident€Life€&€Acc.€Ins.€Co.óó,€676€S.W.2dÏ953,€955€(Tenn.€1984)(quoting€òòProvident€Washington€Ins.ÏCo.€v.€Reeseóó,€213€Tenn.€355,€373€S.W.2d€613,€615€(1964)).ÌÌÌÓÓà àDevineððs€attempt€to€rely€upon€equitable€estoppel€must€fail€because€there€is€noÏshowing€that€any€inconsistent€position€taken€by€the€company€or€its€stockholdersÏcaused€Devine€to€change€his€position€and€suffer€detriment€in€reliance€thereon.Ì€€€€à àÌà àAccordingly,€we€hold€that€the€trial€court€properly€concluded€that€the€SRA€wasÏvalid€and€enforceable.€€The€judgment€of€the€trial€court€is€affirmed€in€all€respects.€€WeÏfind€that€this€is€not€a€proper€case€for€imposition€of€sanctions€for€a€frivolous€appeal.€ÏœCosts›€are€adjudged€against€the€appellant.ÌÌÓÓÌà àà àà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ïóóà àà àà àà àà àà àà àà àHIGHERS,€J.ÌÌÌÌCONCUR:ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌCRAWFORD,€P.J.,€W.S.ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌLILLARD,€J.