WPCa }u12n@o<$$) O,ڔs7mWen9&9; !XMtTءD}6,?7R* m9k2vaR|FлnG|MA#ŷj>^ |nA+ht8HSofCJ18u=Q_Ɣ|ҋK!*b_ 辵 bZo?dUMG"Vgk燬JnIE/lIz[ZGv\||lT;"8BsX0^ ABeH  /C0YDΖ.t%|m# F UNQ % 0 UN w 4  - B 0? 0D4x-JUNwUNU:                       D3EEE 0Dxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx AO   0D D/ BDHP LaserJet 4SiHPPCL5MS,,,,,,0nL(hH  Z 6Times New Roman RegularX($71dXdXd7  HgITR[A' Legal[A' LegalA' LegalA' LegalT(Y Z 6Times New Roman Regular23D4U5678D9U:e;D<=D>?D@ADBCDEFGUHUIEJӀh&2h 3|xU #  O$H$XX `   1    XX$Anunusuallyprotractedtrial,giventhecircumstances,focusedonthequestionofthe  capitalizationofSCC,Inc. d((3O$ !7XXdXXd7  H$XXTR[A' Legal3'A' Legal3'T   `   0  (#$  0    O$H$XX `   2    XX$Selling,essentially,engineeringsoftware. #   \$HXX `   1    X XAnunusuallyprotractedtrial,giventhecircumstances,focusedonthequestionofthe  capitalizationofSCC,Inc.(hH  Z 6Times New Roman Regular   \$HXX `   2    X XSelling,essentially,engineeringsoftware.(hH  Z 6Times New Roman Regular XsXXX XXs   Ad FILED     July15,1999  CecilCrowson,Jr.s  AppellateCourt  Clerk ,cAZ"Arial Regular 'dxd(3$ !  -C<< CLevel 1Level 2Level 3Level 4Level 5($$   1  ' dxdP Pd !7XXdXXd7  H$XXTR[A' Legal3'A' Legal3'T  J::J  M'$7XdXXd7 Jr*<,(j 8 `@Ex tt0"rߛJ@  INTHECOURTOFAPPEALSOFTENNESSEE@LL(ATKNOXVILLE DARRELLO.GALDE, h     ) p KNOXCHANCERY  p  `     h     ) ` Plaintiff/Appellee h     ) p NO.03A019807CH00228 @   `     h     )v. `     h     ) p HON.H.DAVIDCATE `   `     h     ) p CHANCELLOR p  GEORGED.KERITSIS,    )   `     h     ) ` Defendant/Appellant    )  p AFFIRMED  GeorgeF.Legg,AnnaF.Hinds,Knoxville,forAppellant.DavidS.Wigler,Knoxville,forAppellee.@!!( OPINION `  `     h      p INMAN,SeniorJudge ,|    ` AcorporationstyledSCC,Inc.,wasorganizedinMay,1992bytheparties.Eachwas:isued::issued:acertificatefor500sharesofcapitalstock.: :::  #  1      ׀Thecompany l# prospered.: p::p:  #  2      ׀ForthefiscalyearendingJune30,1993,grossreceiptswerethree %  milliondollars;twoyearslater,itsgrossreceiptswerenearlysixmilliondollars.KeritsiswastheCEO,andheinformedGalde,duringthegrowthperiod,thatthecompanyshouldbesold.HeobtainedGaldesendorsedcertificateto freehishandinnegotiatingasale,andagreedtopayGalde50percentoftheproceeds.Corporateminutesmemorializedthistransaction.Butasalewasneverconsummated;rather,KeritsislootedSCCstreasury.ForthefiscalyearendingJune30,1993,hetook$142,000.00;forthefiscalyearendingJune30,1994,hetook$177,000.00;thesucceedingfiscalyearhetook$1,264,713.00.Forthe 61/ calendaryear1995hereportedtaxableincomefromSCC,Inc.of$1,569F,000F.00.  ` DuringtheseyearsGaldescompensationannuallywas$40,000.00.Hetestifiedthathisshareshadamarketvalueof1.5milliondollarsonthedayhetransferredthemtoKeritsis. ` Whenthelootingwascompleted,KeritsisclosedthedoorsofSCC,Inc.Galdefiledthisactionallegingpromissoryfraud.Thejuryagreedandreturnedaverdictfor1.2milliondollarsincompensatorydamagesandtwomilliondollarsinpunitivedamages. ` HismotionforjudgmentNOVorforanewtrialbeingoverruled,Keritsisappeals,insistingthatthereisnoevidencetosupporttheplaintiffstheoryofrecovery.Intheconsiderationoftheappeal,wearerequiredtotakethestrongestlegitimateviewoftheevidencefavoringtheplaintiff,todiscardallcontraryevidence,andtoallowallreasonableinferencestoupholdtheverdict,whichmaybesetasideonlyifthereisnomaterialevidencetosupportit.::Witter::v.::Nesbit::,878 p" S.W.2d116(Tenn.App.1993). ` Thereisnoapparentreasontodwellontheissueofmaterialevidencetosupporttheverdict.TheplaintifftestifiedthatheendorsedhisstockcertificateanddeliveredittoKeritsiswho,fornootherconsideration,promisedtosellthe *@&$ companyandpaytheplaintiff50percentoftheproceeds.RatherthansellthecompanyasBagreedBBprovidedB,andnotwithstandingabonafideoffer,Keritsissimplylooteditstreasury.Thethrustofhisargumentthattheplaintiffsactionforpromissoryfraudfailsforlackofproofisdirectedtothefactthathedidnotsellthecompany. p3., Thisargumentdeserves,primafacie,short:shirft::shrift:,becausethestandardforprovingpromissoryfraudisthattherepresentation[tofindabuyer]mustbemadewiththeintentnottoperform.Fowlerv.HappyGoodmanFamily,575S.W.2d496(Tenn. 9 52 1978).ThereisabundantevidencetosupportthejurysfindingthatKeritsispromisedtosellthestockinSCC,Inc.anddistribute50percentoftheproceedstoGalde,Cwhichhefailedtodo,Candthejudgmentisaccordingly:afffirmed::affirmed:. ` Butweareoftheopinionthattheverdictandjudgmentshouldbeuphelduponanotherground.Keritsisrefusedrepeatedlytosubmittoapretrialdeposition,andrefusedtoobeythe<c<=C=ourts>o>?O?rdersdirectinghimtodoso.TheplaintiffurgedthetrialcourttoenteradefaultjudgmentagainstKeritsisinatleastfourwrittenmotions.TheplaintiffnowurgesthisCourttopretermitallotherissuesraisedin:tis::this:appealby:afirming::affirming:thejudgmentinthiscaseonthealternativegroundthatthetrialcourtshouldhaveenteredadefaultjudgmentagainstMr.Keritsis. ` InAmericanSteinwinterInvestorGroupv.AmericanSteinwinter,Inc.,964 @ S.W.2d569(Tenn.App.1997),thedefendantStallonehadfailedtoappearandproduceitemsincludedonanoticeforhisdeposition,afterthecourthadorderedhimtodoso.ThetrialcourtstrucktheanswerofdefendantStalloneandenteredjudgmentagainsthimforviolationoftheConsumerProtectionActintheamountof$1,681,503.00.WeapprovedthejudgmentaftercitingtherelevantsubsectionsofRule37oftheTennesseeRulesofCivilProcedure: ` T.R.C.P.Rule37providesinpertinentpartasfollows:8 ` 37.01.MotionforOrderCompellingDiscovery.Aparty,uponreasonablenoticetootherpartiesandallpersonsaffectedthereby,mayapplyforanordercompellingdiscoveryasfollows: ` 8"` 8" 8 ` (2)MOTION.IfadeponentfailstoansweraquestionpropoundedorsubmittedunderRule30or31,oracorporationorotherentityfailstomakeadesignationunderRule30.02(6)or31.01,orapartyfailstoansweraninterrogatorysubmittedunderRule33,orifaparty,inresponsetoarequestforinspectionsubmittedunderRule34,failstorespondthatinspectionwillbepermittedasrequestedorfailstopermitinspectionasrequested,thediscoveringpartymaymoveforanordercompellingananswer,oradesignation,oranordercompellinginspectioninaccordancewiththerequest.Whentakingadepositiononoralexamination,theproponentofthequestionmaycompleteoradjourntheexaminationbeforeapplyingforanorder.9 52` 8"` 8" @.H.H,***  8 ` 37.02.FailuretoComplywithOrder.Ifadeponent;aparty;anofficer,director,ormanagingagentofaparty;or,apersondesignatedunderRule30.02(6)or31.01totestifyonbehalfofapartyfailstoobeyanordertoprovideorpermitdiscovery,includinganordermadeunderRule37.01orRule35,orifapartyfailstoobeyanorderenteredunderRule26.06,thecourtinwhichtheactionispendingmaymakesuchordersinregardtothefailureasarejust,andamongothersthefollowing: ` 8"` 8" 8 ` 0 ` 8"` 8"(A)Anorderthatthemattersregardingwhichtheorderwasmadeoranyotherdesignatedfactsshallbetakentobeestablishedforthepurposesoftheactioninaccordancewiththeclaimofthepartyobtainingtheorder;  8" 8" 8 ` 0 ` 8"` 8"(B)Anorderrefusingtoallowthedisobedientpartytosupportoropposedesignatedclaimsordefenses,orprohibitingthatpartyfromintroducingdesignatedmattersinevidence;  8" 8" 8 ` 0 ` 8"` 8"(C)Anorderstrikingoutpleadingsorpartsthereof,orstayingfurtherproceedingsuntiltheorderisobeyed,ordismissingthe:ation::action:orproceedingoranypartthereof,orrenderingajudgmentbydefaultagainstthedisobedientparty;  8" 8" @,***8 ` 0 ` 8"` 8"(E)WhereapartyhasfailedtocomplywithanorderunderRule35.01requiringthepartytoproduceanotherforexamination,suchordersasarelistedinparagraphs(Q),(B),and(C)ofthisrule,unlesstheparty:fialing::failing:tocomplyshowsthatheorsheisunabletoproducesuchpersonforexamination.  8" 8" @,***8 ` 37.04FailureofPartytoAttendatOwnDepositionorServeAnswerstoInterrogatoriesorRespondtoRequestsforInspection.Ifapartyoranofficer,director,ormanagingagentofapartyorapersondesignatedunderRule30.02(6)or31.01to:tetify::testify:onbehalfofapartyfails(1)toappearbeforetheofficerwhoistotakehisorherdeposition,afterbeingservedwithapropernotice,or(2)toserveanswersorobjectionstointerrogatoriessubmittedunderRule33,afterproperserviceoftheinterrogatories,or(3)toserveawrittenresponsetoarequestforinspectionsubmittedunderRule34,afterproperserviceoftherequest,thecourtinwhichtheactionispendingon:moiton::motion:maymakesuchordersinregardtothefailureasarejust,andamongothersitmaytakeanyactionauthorizedunderparagraphs(A),(B),and(C)ofRule37.02... ` 8"` 8" Wethenheld, 9 52 8 `  Itclearlyappearsf@ro@@or@mtherecordthatStallonewasguiltyofflagrantdisregardoftheRulesandOrdersoftheCourt,andthatseveresanctionswereinorder.ItalsoclearlyappearsfromtherecordthatStallonewasguiltyofovertrefusaltodiscloseseriousbreachesoffaithofthecorporateofficersanddirectorsinthemisuseand/orabstractionofthecontributionsofstockholders,andthathispersistentresistancetodiscoveryeffortswerehismeansofevadinghisliabilityforhismisconduct.ThesanctionsimposedagainsthimbytheTrialCourtwereappropriateandwelldeserved.TheamountofthejudgmentagainstStalloneissupportedbyapreponderanceoftheevidence.Nogroundof:revesal::reversal:ispresentedbyappellantsfirstissue. ` 8"` 8" AmericanSteinwinter,Inc.,964S.W.2dat57374. p   ` WeagreewiththeappelleethatthecaseatBarformeaningfulsanctionsisatleastascompellingasinSteinwinter.Keritsis:refusalrefusal::refusal:tosubmittoadepositionwas  clearlyprejudicialtotheplaintiff,whohadtheburdenofdemonstratingthatKeritsisdidnotintendtoperformhispromisetopaytheplaintiffforhisinterestinSCC,Inc.Ϝ;; ` TherecordrevealsthatKeritsisactionswereegregiouslyscornfulofthejudicialprocess.Henotonlyrefusedcontumaciouslyonfouroccasionstoappearforadeposition,herefusedtoattendthetrial;and,compoundinghisbehavior,afterJudgmentwasenteredherefusedtoappearandanswerinterrogatories.ForthisdefianceaWritofAttachmentwasissueduponafindingofcriminalcontempt. ` Weagreewiththeappelleethatundertheclearfactsofthismatter,thetrialjudgewouldhavebeenjustifiedinenteringadefaultjudgmentagainstKeritsis. ` DFinally,theappelleemakesknowntothisCourtthefactthatKeritsiscommittedafrauduponthetrialcourt. ` OnSeptember15,1998,theplaintifffiledamotionforanorderdirectingthesaleof500shares,or50percent,ofthecapitalstockofSCC,Inc.,inpartialsatisfactionofthejudgment.ThismotionwasopposedbythethencounselofKeritsisfoDErtheassertedreasonthathisclientdidnotownthestock,andproduced,for *@&$ thefirsttime,acopyofapurportedbillofsaledatedMay25,1996,twoyears -`(& beforetrial.Butindivorcelitigation,Keritsis,inMarch,1997,urgedthetrialcourt 0/*( toawardhiswifeallofhisstockinSCC,Inc.TherecordrevealsthatonDecember21,1998,theappellee,-by-.interrogatories,soughtinformationaboutthepurportedbillofsale,and,again,noresponsewasforthcoming. .EThejudgmentisaffirmedatthecostoftheappellant.Thecaseisremandedforallappropriatepurposes.AAHHIHHI `     h     _______________________________ `     h     WilliamH.Inman,SeniorJudge1̜1GGHHGGHHGGHHGGHHGGHHG 9 52 GHHGG1CONCUR:17787787_______________________________HoustonM.Goddard,PresidingJudge722322399992_______________________________HerschelP.Franks,Judge24465_______________________________HerschelP.Franks,Judge56