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Æ 0DE 0D‰ D/Í Bü U*^CÁ¡‘bóõ v~vÓ~˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLHÎ(ÈhH  Z 6Times New Roman RegularX(;1˜$¡¡Ò°ÒÒ„°ÒÔ€XcXXXÔ-šBu Z‹$Arrus BT Roman yz{E|}H~H€Ó€Œäzz!¢ÝÝ  Ý3|x(W(3O$¤¤Ý ƒ1˜!ÝÒ°ÒÒ„°ÒÔ€X:XXXÔÝ  Ýà ` àòòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ("ÿÿ$££Ò  ÒÒ  Ò""""'ÿÿdxd d(#Ã$òòÚ  Ú0Ú  Úóó< Œ 9p`(&Times New Roman% Line 7 d&&&&7Border 1dd* 'Cþÿ << Gÿÿ*+ ,-Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó..'÷ÿ dxdüÿP Pd< Œ 9p`(Arial TÝ ƒ!ÝÑ  ÑÑ#€d#ÑÔ€%ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ+"ÝÝ  ÝÔ€/ÔÔ€/ÔÓ  ÓÔ YYY ÔFILEDÔ€/XÔÌÌò òJuneÏ23,Ï1997ÌÌCecilÏCrowson,ÏJr.ÌÔ€/ôÔAppellateÏCourtÏClerkó ó ·Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€%ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝRule€10€(Court€of€Appeals).€€òòMemorandum€Opinionóó.€„„€(b)€The€Court,Ïwith€the€concurrence€of€all€judges€participating€in€the€case,€may€affirm,€reverseÏor€modify€the€actions€of€the€trial€court€by€memorandum€opinion€when€a€formalÏopinion€would€have€no€precedential€value.€€When€a€case€is€decided€byÏmemorandum€opinion€it€shall€be€designated€"MEMORANDUM€OPINION,"Ïshall€not€be€published,€and€shall€not€be€cited€or€relied€on€for€any€reason€in€aÏsubsequent€unrelated€case.€Ô€%ÔÌ ‡Ý ƒ!ÝÑ#€d#ÑÔ€%ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€The€original€secured€loan€was€in€the€amount€of€$450,000.00,€and€aÏUCC›„1€Financing€Statement€was€filed€with€the€Tennessee€Secretary€of€State€onÏApril€14,€1994€evidencing€this€loan.€€The€secured€loan€agreements€wereÏmodified€as€the€cash€needs€of€the€company€increased.€€To€reflect€theseÏmodifications,€Stonecipher€subsequently€filed€UCC„3€forms€amending€theÏdescription€of€the€collateral€and€increasing€the€maximum€principal€indebtednessÏto€$1,500,000.00.Ì Ý ƒ!ÝÑ#€d#ÑÔ€%ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€Pinnacle€has€since€been€dissolved€and€is€no€longer€a€functioningÏcorporation.Ì ëÝ ƒ!ÝÑ#€d#ÑÔ€%ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€According€to€the€record,€Pinnacleððs€assets€were€subject€to€the€followingÏsecured€claims:€Briggs€Plumbing€Products,€$232,000.00;€State€of€Tennessee,Ï$211,000.00;€GMAC,€$18,414.79;€National€Bank€of€Commerce,€$6,301.50;ÏInternal€Revenue€Service,€$164,056.35;€and€Lowell€F.€Stonecipher,€$865,444.17.ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva ÒÝ ƒ!ÝÔ . ÔÔ€%ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÑ\R AØ'\ÑÑ\R AØ'\ÑÑ7€<­XXdðdÈ7ÑÑ  ÑÓ  ÓÞ ÞÌà@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€JACKSONÌà àà à€€€€______________________________________________ÌÌò òGERALD€WHITE,€d//b/a€GERALDà àà àó óFROM€THE€HARDIN€COUNTYò òÌWHITE€TRUCKING€COMPANY,€ó óà àà àCIRCUIT€COURT,€No.€2243;Ìà àà àà àà àà àà àà àTHE€HONORABLE€C.€CREEDÌà àPlaintiff„Appellant,à àà àà àà àMcGINLEY,€JUDGEÌÌVs.à àà àà àà àà àà àà àC.A.€No.€02A01„9605„CV„00129Ìà àà àà àà àà àà àà àò òòòAFFIRMEDóóó óÌò òAQUARIUS€INDUSTRIES,€INC.,Ìd/b/a€AQUARIUS„PINNACLE,€INC.,à àó óJeffrey€Parrish;€Reynolds€&ÏReynoldsò òÌPINNACLE€FIBERGLASS,€INC.€andà àó óof€Jackson,€For€Appellantò òÌPRAXIS€INDUSTRIES,€INC.,€ó óÌà àà àà àà àà àà àà àJohn€Cook€and€Jennie€D.€Latta;Ìà àDefendants„Appellees.à àà àà àKrivcher,€Magids,€Neal,€Cottam€&ÌÙ€*ÙßR€(0'A1-j|îM` à. `€€@ÿRßà àà àà àà àà àà àà àCampbell,€P.C.,€of€Memphisà àÌà àà àà àà àà àà àà àFor€AppelleeÌ____________________________________________________________________________ÌÌÑ7€<­XXdðXXdð7ÑÑ  Ñà@ àMEMORANDUM€OPINION× ƒ1 ××  ×Ì__________________________________________________________________________ÌÌò òòòCRAWFORD,€J.ó óóóÌÌ›ÓÓà àThis€appeal€arises€out€of€an€action€to€collect€a€debt.€€Plaintiff,€GeraldÍWhite,€d/b/a€Gerald€White€Trucking€Company€(White),€appeals€from€the€orderÏgranting€summary€judgment€in€favor€of€defendant,€Praxis€Industries,€Inc.Ï(Praxis).Ìà àPinnacle€Fiberglass€Corporation€(Pinnacle)€was€a€Tennessee€corporationÏengaged€in€the€manufacture€of€fiberglass€bathtubs€and€showers€in€Savannah,ÏTennessee.€Dr.€Lowell€F.€Stonecipher€(Stonecipher)€owned€99.13%€of€theÏcommon€stock€of€Pinnacle€and€was€also€its€president€and€the€sole€member€of€itsÏboard€of€directors.€€White€contracted€with€Pinnacle€to€haul€its€bathtubs€andÏshowers€to€various€locations€throughout€the€United€States.€€€During€1993€andÏthe€first€quarter€of€1994,€Pinnacle€experienced€financial€difficulties.€ÏStonecipher€made€significant€unsecured€loans€to€Pinnacle€during€this€time€toÏhelp€the€company€meet€cash€shortfalls.€€From€April€of€1994€forward,€however,ÏStonecipher€made€$865,444.17€in€secured€loans€to€Pinnacle€that€were€perfectedÏby€financing€statements€filed€with€the€secretary€of€state.× ƒ2 ××  ×€€Ìà àOn€December€7,€1994,€Praxis€was€incorporated€with€Stonecipher€as€itsÏsole€shareholder€and€chairman€of€its€board€of€directors.€€On€December€8,€1994,ÏStonecipher€made€demand€upon€Pinnacle€for€the€repayment€of€his€secured€loan.€ÏOn€December€15,€1994,€LRS€Real€Estate€Holding,€LLC€(LRS)€was€organized€byÏStonecipher€and€his€two€sons,€Lowell€F.€Stonecipher,€Jr.€and€Christopher€ScottÏStonecipher.€€On€December€30,€1994,€Stonecipher,€acting€as€a€secured€creditorÏof€Pinnacle,€sold€all€of€Pinnacleððs€operating€assets€to€Praxis€for€a€total€purchaseÏprice€of€$1,476,271.45.€€On€that€same€day,€Pinnacle€executed€a€quit€claim€deedÏconveying€all€of€its€real€property€to€LRS€and€a€lease€whereby€Praxis€agreed€toÏpay€$15,900.00€per€month€to€LRS€to€lease€the€premises€formerly€owned€byÏPinnacle.€€Also€on€December€30,€1994,€LRS€executed€an€assignment€of€leasesÏand€rents€in€favor€of€First€Bank€to€more€fully€secure€First€Bank€for€monies€itÏpreviously€loaned€Pinnacle€and€also€executed€an€assignment€and€transfer€of€allÏexisting€and€future€accounts€receivable€of€Praxis€to€Norfolk€Funding,€Inc.Ï(Norfolk)€and€Brotherhood€Bank€&€Trust€Company€(Brotherhood€Bank).€€Ì€€à àOn€November€9,€1994,€White€filed€a€complaint€against€AquariusÏIndustries,€Inc.,€d/b/a€Aquarius„Pinnacle€Inc.€(Aquarius),€alleging€that,€despiteÏrepeated€demands€for€payment,€Aquarius€refused€to€pay€$133,920.16€that€itÍowed€to€White€for€freight€hauling€services.€€On€December€15,€1994,€White€filedÏan€amendment€to€his€complaint€adding€Pinnacle€as€a€defendant€and€making€€allÏof€the€allegations€in€the€original€complaint€applicable€to€Pinnacle.€€Pinnacle€filedÏan€€answer€on€January€5,€1995€stating€that€there€was€no€entity€known€asÏAquarius€Industries,€Inc.,€d/b/a€Aquarius„Pinnacle,€but€that€Pinnacle€operatesÏunder€trade€names,€including€Aquarius€Industries€and€Aquarius„Pinnacle.€€In€itsÏanswer,€Pinnacle€admits€that€it€contracted€with€White€for€trucking€services,Ïbut€denies€that€it€is€liable€to€White€for€any€amounts€unpaid€for€those€services.€ÏOn€March€2,€1995,€White€filed€a€motion€to€amend€the€complaint€to€add€PraxisÏas€defendant,€which€the€trial€court€granted€by€an€order€entered€that€same€day.× ƒ3 ××  ×€ÏPraxis€filed€its€answer€denying€the€allegations€of€the€amendment€on€May€5,Ï1995€and€filed€its€motion€for€summary€judgment€on€November€28,€1995.€ÏWhile€the€motion€for€summary€judgment€was€pending,€on€February€6,€1996,ÏWhite€filed€his€motion€to€amend€the€complaint€for€a€third€time.€€In€thisÏmotion,€White€sought€to€add€LRS,€Stonecipher,€Norfolk,€Brotherhood€Bank,Ïand€First€Bank€as€additional€defendants.€€White€also€sought€to€add€additionalÍclaims,€including€fraudulent€conveyance€claims€against€Praxis€and€StonecipherÏbased€on€an€alter€ego€theory,€a€challenge€to€the€validity€of€Stonecipherððs€securityÏinterests€for€loans€made€after€April€7,€1994,€and€a€fraudulent€conveyance€claimÏagainst€LRS€based€on€the€transfer€of€Pinnacleððs€real€property.€€On€March€19,Ï1996,€Praxis€filed€an€objection€to€Whiteððs€motion€to€amend€the€complaint.€€Ìà àThe€trial€court€heard€arguments€on€both€motions€on€March€21,€1996.€ÏOn€April€15,€1996€the€trial€court€entered€an€order€denying€Whiteððs€motion€toÏamend€the€complaint€and€an€order€granting€Praxisððs€motion€for€summaryÏjudgment.€€White€appeals€the€judgment€of€the€trial€court.€à àÌà àOn€appeal,€White€presents€two€issues€for€our€review€as€stated€in€his€brief:ÌÓÓà8 àà8 à1.€€Whether€the€trial€court€was€in€error€in€denyingÏplaintiffððs€motion€to€amend€his€complaint.ÌÌà8 àà8 à2.€€Whether€the€trial€court€was€in€error€grantingÏPraxis€Industries,€Inc.ððs€motion€for€summary€judgmentÏbecause€there€were€genuine€issues€of€material€fact€thatÏshould€be€determined€by€a€finder€of€fact.ÌÌÓÓà àIn€the€first€issue,€White€asserts€that€the€trial€court€erred€in€denying€hisÏmotion€to€amend€the€complaint€to€add€additional€defendants€and€additionalÏclaims.€€Rule€15€of€the€Tennessee€Rules€of€Civil€Procedure€provides€in€relevantÏpart:ÌÓÓà8 àà8 àA€party€may€amend€the€partyððs€pleadings€once€as€aÏmatter€of€course€at€any€time€before€a€responsiveÏpleading€is€served€.€.€.€the€party€may€so€amend€it€atÏany€time€within€fifteen€(15)€days€after€[the€pleading]Ïis€served.€€Otherwise€a€party€may€amend€the€partyððsÏpleadings€only€by€written€consent€of€the€adverse€partyÏor€by€leave€of€court;€and€leave€shall€be€freely€givenÏwhen€justice€so€requires.€€ÌÌÓÓTenn.€R.€Civ.€P.€15.01.€€à àAfter€a€responsive€pleading€has€been€served,€the€denialÏof€a€motion€to€amend€the€pleadings€lies€within€the€sound€discretion€of€the€trialÏcourt€and€will€not€be€reversed€absent€a€showing€of€an€abuse€of€that€discretion.€Ïòòò òHall€v.€Shelby€County€Retirement€Bd.ó óóó,€922€S.W.2d€543,€546€(Tenn.€App.Ï1995)(citing€òòò òMerriman€v.€Smithó óóó,€599€S.W.2d€548,€559€(Tenn.€App.€1979);€Ïòòò òWelch€v.€Thuanó óóó,€882€S.W.2d€792,€793€(Tenn.€App.€1994)).€€€There€are€severalÏconsiderations€a€trial€judge€should€evaluate€in€determining€whether€to€grant€orÏdeny€a€motion€to€amend.€€ò òòòId.óóó ó€Among€these€factors€are€an€undue€delay€in€filing,Ïlack€of€notice€to€the€opposing€party,€bad€faith€by€the€moving€party,€repeatedÏfailure€to€cure€deficiencies€by€previous€amendments,€undue€prejudice€to€theÏopposing€party,€and€futility€of€amendment.€€ò òòòId.ó óóó€(citing€òòò òMerrimanó óóó,€599€S.W.2dÏat€559).Ìà àIn€light€of€the€factors€delineated€above,€we€find€ample€justification€forÏthe€trial€courtððs€denial€of€Whiteððs€motion€to€amend.€€€White€had€alreadyÍamended€his€complaint€twice,€and€by€this€motion€he€sought€to€amend€hisÏcomplaint€a€third€time€approximately€fifteen€months€after€filing€his€originalÏcomplaint.€€In€addition,€all€of€the€events€that€White€relies€on€as€ð ðnewlyÏdiscoveredðð€facts€occurred€on€December€30,€1994,€approximately€two€monthsÏbefore€he€sought€to€amend€the€complaint€for€a€second€time€to€add€Praxis€as€aÏdefendant€and€over€a€year€before€the€filing€of€this€motion.€€White€was€fullyÏaware€of€all€these€facts€almost€a€year€before€he€sought€to€amend€the€complaintÏfor€a€third€time.€€The€motion€was€thus€untimely,€thereby€constituting€an€undueÏdelay€in€filing.€€Moreover,€because€White€sought€to€add€several€additionalÏclaims,€a€courtððs€allowance€of€the€amendments€would€unduly€prejudice€Praxis.€€ÏFinally,€the€amendments€would€be€futile€because€granting€them€would€onlyÏprolong€the€litigation€and€would€not€lead€to€a€contrary€ultimate€result.€€TheÏtrial€court€did€not€abuse€its€discretion€in€denying€the€motion€to€amend.€ÏWhiteððs€argument€is€without€merit.Ìà àThe€next€issue€is€two„fold.€€White€first€contends€that€there€is€a€genuineÏissue€of€material€fact€as€to€whether€the€transfer€was€a€fraudulent€conveyanceÏmade€with€intent€to€defraud€under€T.C.A.€ðð€66„3„308€(1993).€€Section€66„3„308Ïprovides€the€following:ÌÓÓà8 àà8 àò ò66„3„308.€€Conveyances€with€intent€to€defraud.€ð"ðÏó óEvery€conveyance€made€and€every€obligation€incurredÏwith€actual€intent,€as€distinguished€from€intentÏpresumed€in€law,€to€hinder,€delay,€or€defraud,€eitherÏpresent€or€future€creditors,€is€fraudulent€as€to€bothÏpresent€and€future€creditors.€€ÌÌÓÓT.C.A.€ðð€66„3„308€(1993€&€Supp.€1996).€€White€contends€that€summaryÏjudgment€was€improper€because€there€is€a€dispute€as€to€whether€StonecipherÏintended€to€hinder,€delay,€or€defraud€creditors€when€it€transferred€PinnacleððsÏassets€to€Praxis.€€Ìà àEven€if€there€is€a€dispute€as€to€Stonecipherððs€intent€in€entering€into€thisÏtransaction,€this€dispute€is€not€material.€€In€Tennessee,€a€conveyance€may€notÏbe€set€aside€as€fraudulent€unless€prejudice€results€to€the€party€seeking€relief.€Ïò òòòHicks€v.€Sovran€Bankó óóó,€812€S.W.2d€296,€302€(Tenn.€App.€1991).€€The€record€inÏthis€case€indicates€that,€immediately€prior€to€the€sale,€Pinnacle€was€subject€toÏliens€by€secured€creditors€exceeding€the€value€of€its€assets.× ƒ4 ××  ×€€As€an€unsecuredÏcreditor€of€a€fully€encumbered€corporation,€White€was€not€prejudiced€by€theÏsale€of€Pinnacleððs€assets€to€Praxis.€€This€issue€is€without€merit.€€Ìà àWhite€also€contends€that€summary€judgment€was€improper€on€the€issueÏof€whether€the€sale€of€Pinnacleððs€assets€to€Praxis€was€a€violation€of€TennesseeððsÏUniform€Commercial€Code€„€Bulk€Transfers,€T.C.A.€ðððð€47„6„101€òòet€seq.óó:ÌÓÓà8 àà8 àò ò47„6„102.€€ð ðBulk€Transferðð€ð"ð€Transfers€ofÏequipment€ð"ðEnterprises€subject€to€this€chapter€ð"ðÏBulk€transfers€subject€to€this€chapter.€€ð"ðó ó€Ìà8 àà8 à(1)€A€ð ðbulk€transferðð€is€any€transfer€in€bulk€and€not€inÏthe€ordinary€course€of€the€transferorððs€business€of€aÏmajor€part€of€the€materials,€supplies,€merchandise€orÏother€inventory€(ðð€47„9„109)€of€an€enterprise€subjectÏto€this€chapter.€€Ìà8 àà8 à(2)€A€transfer€of€a€substantial€part€of€the€equipmentÏ(ðð€47„9„109)€of€such€an€enterprise€is€a€bulk€transfer€ifÏit€is€made€in€connection€with€a€bulk€transfer€ofÏinventory,€but€not€otherwise.Ìà8 àà8 à(3)€The€enterprises€subject€to€this€chapter€are€allÏthose€whose€principal€business€is€the€sale€ofÏmerchandise€from€stock,€including€those€whoÏmanufacture€what€they€sell.Ìà8 àà8 à(4)€Except€as€limited€by€the€following€section€all€bulkÏtransfers€of€goods€located€within€this€state€are€subjectÏto€this€chapter.ÌÌÓÓT.C.A.€ðð€47„6„102€(1996).Ìà àThe€œtransfer€in›€this€case€was€made€by€a€secured€creditor,€Stonecipher,Ïwho€is€not€œan›€enterprise€subject€to€this€bulk€transfers€law€because€his€principalÏbusiness€is€not€the€sale€of€merchandise€from€stock.€€Moreover,€even€if€PinnacleÏis€deemed€to€have€made€the€transfer,€White€did€not€establish€that€Pinnacle€isÍan€enterprise€subject€to€this€chapter.€€The€record€indicates€that€PinnacleÏmanufactures€bathtubs€and€showers,€but€that€Pinnacle€does€so€only€uponÏreceiving€an€order€from€a€wholesaler.€€There€is€no€evidence€in€the€record€thatÏPinnacleððs€principal€business€is€the€sale€of€merchandise€from€stock€as€requiredÏunder€T.C.A.€ðð€47„6„102(3).€€This€issue€is€also€without€merit.€€Ìà àWe€conclude€that€there€is€no€genuine€issue€of€material€fact€and€thatÏPraxis€is€entitled€to€judgment€as€a€matter€of€law.€€Thus,€the€trial€court€did€notÏerr€in€granting€summary€judgment€in€its€favor.Ìà àAccordingly,€the€œjudgment€of€the€trial›€court€is€affirmed€in€all€respects.€ÏCosts€are€assessed€against€appellant€for€which€execution€may€issue,€if€necessary.ÌÓÓà àà àà àà àà àà àà à_________________________________Ìà àà àà àà àà àà àà àò òW.€FRANK€CRAWFORD,€Ìà àà àà àà àà àà àà àPRESIDING€JUDGE,€W.S.ó óÌò òCONCUR:ÌÌœ____________________________________›ÌALAN€E.€HIGHERS,€JUDGEó óÌÌ____________________________________Ìò òHEWITT€P.€TOMLIN,€JR.ÌSENIOR€JUDGEó óœ