ÿWPC8 …# VUDa %¥ 0(«4Óçöw(ö 0J 0Th 0^¼ 0h 0r‚ 0|ô 0†p 0ö 1u† U,û 0d' U,‹ B)· DCà AM#U*pšv~²vÓ0 B D3  0@S AO“Æâ 0D¨ D/ì B˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 8§ÖhZŠ,Century-WP RegularX($¡¡Gav 3|xÇ·¸¹ºÓ€ÄÅ2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô  ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)< Œ 9p`(ModernP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Monaco% Line 7 d7Border 1dd€-Cþÿ << Gÿÿ< Œ 9p`(Arial Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÔ€!ÔÔ€!ÔÓ  Óò òÔ YYY ÔFILEDÔ€!XÔÌÌMarch€22,€1996ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó óPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'@Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑMonacoÑÑ ÑÒ  BA:Op Monaco ÒÒ  BA:Op Monaco Ò d%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÓ&€X„d&ÓÑ#€Xd#ÑÔ€ÔÝ  ÝÒ  ÒÒ £ ÒÑ\R AØ'\ÑÑ7€÷GXXdìdÈ7Ñà@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€NASHVILLEÌ_____________________________________________________________________________ÌÌFIRST€TENNESSEE€BANKà àà àà àDavidson€Chancery€No.€94„2764„IÌNATIONAL€ASSOCIATION,à àà àà àC.A.€No.€01A01„9508„CH„00348ÌÌà àPlaintiff/Appellant,à àà àà àà àHon.€Irvin€H.€Kilcrease,€Jr.,Ìà àà àà àà àà àà àà àChancellorà àà àÌvs.ÌÌTHOROUGHBRED€MOTOR€CARS,€INC.,ÌÌà àDefendant/Appellee.ÌÌÌJOHN€S.€HICKS€and€KATHERINE€A.€BROWN,€Baker,€Donelson,€Bearman€&ÏCaldwell,€Nashville,€Attorneys€for€Plaintiff/AppelleeÌÌÙ€€ÙßL€ ";+'h|!÷Ø` ç `€€LßROBERT€E.€BOSTON€andÏDAVID€E.€LEMKE,€Waller,ÏLansden,€Dortch€&€Davis,ÏNashville,€Attorneys€forÏDefendant/AppelleeÌÌòòò òAFFIRMEDó óóóÌÌOpinion€Filed:Ì_____________________________________________________________________________ÌÌÓ  ÓÓÓò òTOMLIN,€Sr.€J.Ìà àó óFirst€Tennessee€Bank€National€Association€(ð ðplaintiffðð)€filed€suit€inÏthe€Chancery€Court€of€Davidson€County€against€Thoroughbred€Motor€Cars,ÍInc.€(ð ðdefendantðð)€seeking€to€recover€damages€incurred€as€a€result€ofÏdefendantððs€alleged€breach€of€an€asset€purchase€agreement€to€which€itÏclaimed€to€be€a€third€party€beneficiary.€€Defendant€filed€a€motion€toÏdismiss€pursuant€to€T.R.C.P.€9.01€and€12.02(6),€contending€that€plaintiffððsÏcomplaint€failed€to€state€a€claim€upon€which€relief€could€be€grantedÏbecause€it€was€not€a€party€or€an€intended€beneficiary€of€the€assetÏpurchase€agreement€and€therefore€lacked€standing€to€sue€under€theÏagreement.€€The€trial€court€granted€defendantððs€motion€to€dismiss.€€OnÏappeal€the€only€error€presented€by€plaintiff€is€whether€the€trial€courtÏerred€in€granting€defendantððs€motion.€€We€hold€it€did€not€and€affirm.Ìà àÌà àMooneyham€Investment€Corporation,€Inc.€(ð ðMooneyhamðð)€operated€anÏAudi€automobile€dealership€which€in€due€course€of€events€sought€reliefÏunder€Chapter€11€of€the€Bankruptcy€Code.€€During€bankruptcy,€defendantÏand€Mooneyham€entered€into€an€asset€purchase€agreement€pursuant€toÏwhich€defendant€agreed€to€purchase€Mooneyhamððs€inventory€of€new€andÏdemonstrator€vehicles,€parts€and€accessories,€inventory,€tools,€records,Ïlicenses,€and€goodwill€in€connection€with€the€dealership.€€Plaintiff€had€aÏperfected€first€priority€security€interest€in€virtually€all€of€the€assetsÏthat€were€the€subject€of€the€purchase€agreement.ÌÌà àFollowing€the€execution€of€the€agreement€by€Mooneyham€andÏdefendant,€several€disagreements€developed€between€the€parties,€and€as€aÏresult€defendant€purchased€only€the€Audi€goodwill€and€a€few€of€theÏautomobiles€owned€by€Mooneyham€when€the€transaction€was€closed.€€ThisÏsuit€followed,€in€which€plaintiff€sought€to€recover€from€defendant€theÏdifference€in€the€purchase€price€set€out€in€the€original€agreement€and€theÏamount€actually€received€by€Mooneyham,€plus€expenses.ÌÌà àDefendant€filed€a€motion€to€dismiss€pursuant€to€T.R.C.P.€9.01€andÏ12.02(6)€on€the€grounds€that€plaintiff€asserted€a€breach€of€a€contract€toÏwhich€it€was€neither€a€party€nor€an€intended€beneficiary,€and€further€thatÏthe€plaintiff€failed€to€state€a€claim€for€which€relief€could€be€grantedÏagainst€defendant.€€In€granting€defendantððs€motion,€the€trial€court€foundÏthat€plaintiff€was€not€a€party€or€signatory€to€the€agreement€under€whichÏit€sought€to€recover€damages€from€defendant,€and€of€more€importanceÏthat€it€was€not€the€intent€of€Mooneyham€or€defendant€that€the€agreementÏwas€for€the€benefit€of€plaintiff€and€therefore,€plaintiff€was€not€a€thirdÏparty€to€the€beneficiary€to€the€agreement.ÌÌà àIn€considering€a€Rule€12.02(6)€motion€to€dismiss,€we€are€required€toÏtake€the€allegations€of€the€complaint€as€true,€and€to€construe€theÏallegations€liberally€in€favor€of€the€plaintiff.€€òòPemberton€v.€AmericanÏDistilled€Spirits€Co.óó,€664€S.W.2d€690,€691€(Tenn.€1984).€€As€a€generalÏrule,€one€may€not€sue€on€a€contract€to€which€he€is€not€a€party€unless€theÏcontract€was€made€for€his€benefit.€€òòCampbell€v.€American€Limestone€Co.óó,Ï109€F.€Supp.€741,€747€(E.D.€Tenn.€1951),€òòaffððdóó,€201€F.2d€670€(6th€Cir.Ï1952).€€òòSee€also€Title€Guaranty€Co.€v.€Bushnell,óó€228€S.W.€699,€701€(Tenn.Ï1921).€ÌÓÓÌÓÓà àIn€1967,€our€supreme€court€first€announced€the€test€to€be€used€toÏdetermine€whether€a€person€claiming€to€be€a€third€party€beneficiaryÏshould€also€be€permitted€to€enforce€a€contract.€€òòWillard€v.€Clabornóó,€419ÏS.W.2d€168,€170€(Tenn.€1967).€€The€court€statedÌÌÓÓà8 àà àIn€contracts€there€are€essentially€three€types€of€thirdÏparty€beneficiaries.€€First,€where€the€performance€of€theÏpromise€will€constitute€a€gift€to€the€beneficiary;€theÏbeneficiary€is€a€donee€beneficiary.€€Second,€if€no€purpose€toÏmake€a€gift€appears€from€the€terms€of€the€contract€and€theÏperformance€of€it€will€satisfy€an€actual€or€supposed€assertedÏduty€of€the€promisee€to€the€beneficiary;€the€beneficiary€is€aÏcreditor€beneficiary.€€Third,€in€all€other€cases€the€beneficiaryÏis€deemed€to€be€an€incidental€beneficiary.ÌÌÌÌÓÓòòId.óó€€Under€this€formulation,€a€donee€or€creditor€beneficiary€has€the€rightÏto€enforce€contracts€made€by€others€for€her€benefit.€€However,€incidentalÏbeneficiaries€do€not€have€that€right.€€òòId.óó€€€€ÌÌà àToday,€Tennessee€recognizes€two€categories€of€third€partyÏbeneficiaries,€intended€and€incidental.€€Only€if€a€party€is€an€intendedÏbeneficiary€may€it€maintain€an€action€to€enforce€the€contract.€€€òòMooreÏConstruction€Co.€v.€Clarksvilleóó€òòDepartment€of€Electricityóó,€707€S.W.2d€1,€9Ï(Tenn.€App.€1985).€€€In€order€to€establish€that€plaintiff€is€an€intendedÏbeneficiary€to€the€sales€agreement€in€this€case,€it€must€establish€(1)€aÏvalid€contract€made€upon€sufficient€consideration€between€the€principalÏparties€and€(2)€the€clear€intent€to€have€the€contract€operate€for€theÏbenefit€of€a€third€party.€€òòUnited€American€Bank€of€Memphis€v.€Gardneróó,Ï706€S.W.2d€639,€641€(Tenn.€App.€1985).€€Intent€to€benefit€may€be€shown€ifÏð ðthere€is€either€an€expression€in€the€contract€that€the€contracting€partiesÏintended€to€benefit€the€third€party€(the€ððintent€to€benefitðð€test)€or€proofÏthat€the€promisorððs€performance€would€otherwise€discharge€a€duty€owedÏto€a€third€party€beneficiary€by€the€promisee€(the€ððduty€owedðð€test).ðð€ÏòòMoore€Constructionóó,€707€S.W.2d€at€9€(citing€òòRestatement€(Second)€ofÍContractsóó€ðð€302€(1979)).Ìà àThe€middle€section€of€this€court€in€òòMoore€Constructionóó€spelled€outÏthe€burden€placed€upon€the€plaintiff€in€this€case:Ì€ÌÓÓà8 àSince€the€law€presumes€that€a€contract€has€been€executed€forÏthe€benefit€of€the€parties€thereto,€a€person€claiming€to€be€anÏintended€beneficiary€has€the€burden€of€proving€from€the€termsÏof€the€contract€itself€or€the€circumstances€surrounding€theÏcontractððs€execution€that€he€is€entitled€to€recover.€€Each€caseÏmust€be€decided€on€its€own€unique€facts€considered€in€light€ofÏthe€specific€contractual€agreements€and€the€circumstancesÏunder€which€they€were€made.ÌÌÌÌÓÓòòId.óó€at€9„10€(citations€omitted).ÌÌà àIt€is€undisputed€that€plaintiff€was€never€a€party€to€the€salesÏagreement.€€Plaintiff€relies€upon€two€paragraphs€in€the€agreement€inÏorder€to€carry€its€burden€that€it€was€an€intended€third€party€beneficiary.€ÏParagraph€4(b)€of€the€agreement€reads,€in€pertinent€part:ÌÓÓà8 àÌÌà8 àAt€the€Closing,€Buyer€shall€pay€to€Seller€or€itsÏrepresentatives,€as€may€be€required€by€applicable€provisionsÏof€the€Bankruptcy€Code,€the€purchase€price€for€the€Assets€asÏprovided€herein.€€òòThe€total€purchase€price€shall€be€paid€toÏFirst€Tennessee€Bank€National€Association€(ð ðBankðð)€inÏexchange€for€the€release€by€Bank€of€its€first€priority€liens€andÍsecurity€interests€in€the€Assetsóó.€€(emphasis€added)Ì€€€€€€€Ì€ÌÌÌThe€second€paragraph€relied€upon€by€plaintiff€is€Paragraph€9(k),€whichÏreads€as€ÌÌfollows:ÌÌÌÌà8 àòòEarnest€Moneyóó.€€Upon€the€execution€of€this€Agreement,€BuyerÏwill€deposit€with€Heiskell,€Donelson,€Bearman,€Adams,ÏWilliams€&€Kirsch,€a€Professional€Corporation€(ð ðHDBAWKðð)Ïthe€sum€of€$25,000.00€to€be€held€in€escrow€by€€HDBAWK,Ïpending€the€Closing.€€In€the€event€Buyer€fails€or€refuses€toÏclose€for€any€reason€other€than€the€default€by€Seller€or€theÏfailure€of€Audi€to€provide€necessary€approvals€within€120Ïdays€this€Agreement€and€Buyerððs€reasonable€request€for€aÏchange€in€sales€location,€òòthen€such€sum€shall€be€delivered€byÏHDBAWK€to€Bank€and€treated€as€liquidated€damages€to€Selleróó€.Ï.€.€.€(emphasis€added)ÌÌà àÌÌÓÓà àAddressing€the€first€of€the€two€above„quoted€provisions,€we€noteÏthat€it€is€undisputed€that€plaintiff€had€a€perfected,€first€priority€securityÏinterest€in€all€of€the€assets€of€Mooneyham€described€in€the€agreement.€€InÏanother€provision€of€the€agreement,€Mooneyham€obligated€itself€to€conveyÏthe€assets€ð ðfree€and€clear€of€all€liability,€liens€and€encumbrances.ðð€€WeÏnote€also€that€the€agreement€called€upon€the€defendant€to€pay€theÍpurchase€price€to€Mooneyham,€not€to€plaintiff.€€Inasmuch€as€theÏagreement€required€Mooneyham€to€convey€the€property€to€defendant€withÏa€clear€title,€which€would€require€Mooneyham€to€tender€sufficient€fundsÏto€€plaintiff€to€release€the€assets€from€plaintiffððs€security€interest,€thisÏarrangement€does€not€in€our€opinion€remotely€establish€that€theÏagreement€was€clearly€intended€ð ðfor€the€benefit€of€plaintiff.ð ð€€€TheÏagreement€did€not€create€a€duty€on€the€part€of€the€defendant€to€satisfyÏMooneyhamððs€obligation€to€plaintiff.€€Paragraph€3€of€the€agreement€readsÏin€pertinent€part€as€follows:ÌÌÓÓà8 àDefendant€will€not€assume€and€will€not€discharge€or€be€liableÏfor€any€debts,€liabilities,€or€obligations€of€[Mooneyham],Ïincluding,€without€limitation€any€(a)€liabilities€or€obligationsÏof€[Mooneyham]€to€its€.€.€.€lenders€.€.€.€.ÌÌÓÓÌIn€this€case,€defendant€simply€acknowledged€that€the€purchase€price€forÏthe€assets€€would€be€paid€over€to€plaintiff€to€release€its€liens.€ÌÓÓÌÌÓÓà àIn€our€opinion,€the€liquidated€damage€clause€of€the€agreement€isÏeven€less€supportive€of€plaintiffððs€contention.€€This€clause€would€onlyÏcome€into€play€by€virtue€of€a€breach€of€the€agreement,€not€by€itsÍconsummation.€€Furthermore,€the€clause€provides€that€the€money€inÏescrow€was€to€be€treated€as€liquidated€damages€to€òòMooneyhamóó,€notÏplaintiff.€€ÌÌà àThere€is€further€evidence€in€the€agreement€that€demonstrates€toÏthis€court€that€the€parties€did€not€intend€to€benefit€any€third€party.€ÏParagraph€9(b)€states€that€the€agreement€shall€be€binding€only€theÏparties,€their€heirs,€successors€and€assigns,€and€legal€representatives.€ÏParagraph€9(c)€provided€that€changes€in€the€agreement€could€be€made€onlyÏin€writing€signed€by€both€parties.€€We€find€no€amendments€to€the€salesÏagreement€in€the€record.€€Similar€language€has€been€held€to€demonstrateÏthat€the€terms€of€the€contract€were€intended€only€to€benefit€the€partiesÏto€the€contract.€€òòDavidson€&€Jones€Dev.€Co.€v.€Elmore€Dev.€Co.óó,€921€F.2dÏ1343,€1357€(6th€Cir.€1991).ÌÌà àIt€is€undisputed€that€plaintiff€occupied€the€position€of€a€securedÏcreditor€of€Mooneyham.€€Although€it€is€apparent€that€defendant€was€awareÏof€plaintiffððs€status€as€a€creditor€and€that€it€was€Mooneyhamððs€intentionÏto€pay€the€sale€proceeds€over€to€plaintiff€for€the€purpose€of€givingÏdefendant€clear€title€to€the€assets€being€sold,€this€would€not€constituteÍevidence€of€a€ð ðclearðð€intent€to€favor€plaintiff€as€a€beneficiary€under€theÏsales€agreement.€€This€court€dealt€with€this€contention€in€òòUnitedÏAmerican€Bank€v.€Gardneróó,€706€S.W.2d€639€(Tenn.€App.€1985),€stating:ÌÌÓÓà8 àIf€we€were€to€hold€in€this€instance€that€a€mortgage€holderÏwas€an€intended€third€party€beneficiary€of€a€contract€betweenÏa€purchaser€and€a€title€company€or€a€title€insurance€companyÏand€its€agent,€logic€would€require€us€to€also€hold€that€as€aÏmatter€of€law,€a€mortgage€holder,€without€more,€is€anÏintended€third€party€beneficiary€of€every€contract€for€the€saleÏof€encumbered€property€which€supposedly€would€entitle€theÏmortgagee€to€bring€a€suit€for€specific€performance€if€the€buy„sell€agreement€were€breached.ÌÓÓÌòòId.óó€at€642.€€Ìà àÌà àThe€judgment€of€the€trial€court€is€affirmed€in€all€respects.€€CostsÏon€appeal€are€taxed€to€plaintiff,€for€which€execution€may€issue€ifÏnecessary.ÌÌÓÓà àà àà àà àà àà àà à_____________________________________Ìà àà àà àà àà àà àà àTOMLIN,€Sr.€J.ÌÌÌÌà àà àà àà àà àà àà à_____________________________________Ìà àà àà àà àà àà àà àCRAWFORD,€P.J.ÌÌÌÌà àà àà àà àà àà àà à_____________________________________Ìà àà àà àà àà àà àà àHIGHERS,€J.