ÿWPCï 3# ÚUNå %3 0(9w@a4¡µÄ 0lÌ 0D8 0J| 0TÆ 0^ 0hx 0rà 0|R 0†Î 0T 1uä 0dY AM½ ë 0Xõ D3M B€ õ U>’B)ÐDCù AM<U*‰ AQ³Æ 0DÊ 0D D/R Bv~žvÓ˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLHÎ(ÈhH  Z 6Times New Roman RegularX($¡¡ üVýVþVÿVUVPPÓ€Œƒ*#ddddd3|x((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ* &Cþÿ << Gÿÿ áÝ ƒ!ÝÔ€$ÔÝ  ÝÔ€(ÔÔ€(ÔÓ  ÓÔ YYY ÔFILEDÔ€(XÔÌÌò òOctober€7,€1997ÌÌCecil€Crowson,€Jr.ÌÔ€(ôÔAppellate€Court€Clerkó ó(0"ÿÿ$££Ò  ÒÒ  ÒÒ  ÒÒ  Ò""""'ÿÿdxd d ëÝ ƒ!ÝÑ#€d#ÑÔ€$ÔÝ  ÝÓ  Óà àòòÚ  ÚÚ  ÚóóNonconnah€has€alternatively€asserted€that€Thompson€is€individually€liable€due€to€TQMððsÏfailure€to€obtain€a€certificate€of€authority€to€do€business€in€Tennessee.€€However,€the€statute€citedÏby€Nonconnah,€Tenn.€Code€Ann.€ðð€48„12„104,€discusses€the€liability€of€a€person€who€acts€onÏbehalf€of€a€corporation,€while€he€knows€that€there€is€no€incorporation.€€Thus,€any€asserted€liabilityÏof€Thompson€under€this€statute€would€commence€when€TQMððs€charter€of€incorporation€wasÏrevoked.€€Consequently,€this€issue€is€pretermitted€by€our€holding€regarding€the€revocation€ofÏTQMððs€corporate€charter,€discussed€below.€Ì< Œ 9p`(&Times New Roman% Line 7 d%%%%7Border 1dd* &Cþÿ << Gÿÿ< Œ 9p`(Arial*+ ,-Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó..'÷ÿ dxdüÿP PdPtPtHHÚ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ion-F Geneva ÒÒ  ion-F Geneva ÒÝ ƒ!ÝÔ . ÔÔ€$ÔÝ  ÝÑ\R AØ'\ÑÑ\R AØ'\ÑÑ\R AØ'\ÑÑ\R AØ'\Ñ›à@ àÞ ÞÌò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€JACKSONÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌÌóóÌAMBERJACK,€LTD.,€INC.,à àà à)Ìd/b/a€NONCONNAH€CORPORATEà à)ÌCENTER,à àà àà àà àà à)Ìà àà àà àà àà àà à)Ìà àó óPlaintiff/Appellant,à àà àà àò ò)à àó óShelby€Law€No.€53877€T.D.Ìà àà àà àà àà àà àò ò)Ìvs.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àó óAppeal€No.€02A01„9512„CV„00281ò òÌœßR€&A1-j|Òù$` Å `€€@ÿRß›FRED€THOMPSON,€Individually,€andà à)Ìd/b/a€THOMPSON€QUALITY€à àà à)ÌMANAGEMENT,€INC.€and€THOMPSON)ÌQUALITY€MANAGEMENT,€INC.,à à)Ìà àà àà àà àà àà à)Ìà àó óDefendants/Appelleesà àà àò ò)ÌÌÌÌó óÌÌà0 àà àà@ àAPPEAL€FROM€THE€CIRCUIT€COURT€OF€SHELBY€COUNTYÌà@ àAT€MEMPHIS,€TENNESSEEÌÌÌÌÌà@ àTHE€HONORABLE€JAMES€E.€SWEARENGEN,€JUDGEÌÌÌÌòòÌÌFor€the€Plaintiff/Appellantóó:òòà àà àà àFor€the€Defendant/Appellee,€Fred€Thompsonóó:ÌÌMonique€A.€Nassar€€à àà àà àà àBeth€Brooks€€€€€€€ÌMemphis,€Tennessee€€à àà àà àGermantown,€Tennessee€€ÌÌÌÌà àà àà àà àà àà àò òREVERSED€IN€PART,€Ìà àà àà àà àà àà àAFFIRMED€IN€PART€Ìà àà àà àà àà àà àAND€REMANDEDó óÌÌÌÌà àà àà àà àà àà àHOLLY€KIRBY€LILLARD,€J.ÌÌÌCONCUR:ÌÌÌALAN€E.€HIGHERS,€J.ÌÌÌDAVID€R.€FARMER,€J.€ÇØØÙ  ÙÑ7€\¨XXdðXXdð7ÑÑ  ÑÓ  Óà@ àò òOPINIONÌÌÓÓó óà àThis€lawsuit€involves€the€breach€of€a€lease€agreement.€€The€corporate€lessee€vacated€theÏpremises€and€stopped€paying€rent;€consequently,€the€lessor€filed€suit.€€The€trial€court€found€theÏlessee€in€breach€of€the€lease,€but€found€the€lease€agreement€unconscionable,€held€that€the€lessorÏfailed€to€mitigate€its€damages,€and€held€that€the€president€of€the€corporate€lessee€could€not€be€heldÏpersonally€liable.€€We€affirm€the€trial€courtððs€finding€of€a€breach,€but€reverse€its€remaining€findingsÏand€award€the€lessor€damages€for€the€entire€term€of€the€lease.€€Ìò òà àó óIn€July€1991,€Thompson€Quality€Management€(ð ðTQMðð)€entered€into€an€agreement€to€leaseÏ900€square€feet€of€commercial€space€from€Nonconnah€Corporate€Center€(ð ðNonconnahðð).€€€TheÏlease€agreement€€(the€ð ðAgreementðð)€was€executed€by€Fred€Thompson€(ð ðThompsonðð),€the€presidentÏof€TQM.€€The€lease€was€for€a€three„year€period,€beginning€in€August€1991€and€running€throughÏJuly€1994.€€The€original€monthly€rent€was€$1,005.00€but€was€periodically€adjusted,€pursuant€toÏthe€Agreement.€€By€the€end€of€the€rental€period€in€1994,€the€monthly€rent€had€increased€toÏ$1,048.00.€€The€Agreement€provided€further€that€TQM€was€liable€for€late€charges€of€10%€onÏdelinquent€rental€payments€owed€to€Nonconnah.€€It€€also€included€a€provision€for€the€payment€ofÏNonconnahððs€costs€of€collection€and€attorneyððs€fees€if€Nonconnah€was€required€to€employ€anÏattorney€to€enforce€TQMððs€obligations€under€the€Agreement.€€At€the€time€the€parties€entered€into€theÏAgreement,€TQM€was€licensed€as€an€Arkansas€corporation.€ò òÌà àó óSoon€after€TQM€entered€into€the€Agreement,€it€began€experiencing€financial€difficulties.€ÏThompson€notified€Nonconnah€that€TQM€would€be€unable€to€continue€occupying€such€a€largeÏspace.€Evidence€from€the€record€indicates€that€TQM€vacated€the€premises€in€June€1992,€and€beganÏdefaulting€on€its€monthly€lease€payments€beginning€in€August€1992.€Ìà àThe€Agreement€included€a€provision€preventing€TQM€from€assigning€the€lease€or€sub„leasing€the€premises€without€Nonconnahððs€prior€written€consent.€€The€Agreement€also€providedÏthat€any€modifications€or€amendments€to€the€Agreement€must€be€ð ðreduced€to€writing€and€signed€byÏ[both€parties]ðð.Ìà àAfter€TQM€notified€Nonconnah€that€it€would€be€unable€to€continue€occupying€its€space,ÍNonconnahððs€leasing€agent,€Stephen€Sorrell,€facilitated€TQMððs€introduction€to€Mr.€LeonardÏAlexander,€a€potential€sub„tenant€for€TQMððs€space.€€Subsequently,€Alexander€sent€a€letter€toÏSorrell€informing€Nonconnah€that€he€was€negotiating€with€TQM€to€sub„lease€its€space,€andÏrequesting€Nonconnahððs€assistance.€€Pursuant€to€Alexanderððs€request,€Sorrell€conferred€withÏAlexander.€€Alexander€later€entered€into€a€lease€agreement€with€Nonconnah€for€space€other€thanÏTQMððs€space.€€à àMeanwhile,€Nonconnah€showed€TQMððs€space€to€other€potential€sub„tenants,€and€maintained€newspaper,€radio€and€television€advertisements€for€the€entire€office€park.€ÏNo€sub„tenant€for€TQMððs€space€was€located.€€It€is€undisputed€that€TQM€never€obtained€a€sub„leasing€agreement,€a€written€amendment€to€the€Agreement,€or€any€other€document€that€wouldÏrelieve€TQM€from€its€obligations€under€the€Agreement.Ìà àIn€February€1993,€Nonconnah€filed€suit€against€TQM€in€the€General€Sessions€Court€€ofÏShelby€County€for€TQMððs€breach€of€the€Agreement.€€After€a€bench€trial,€the€General€SessionsÏCourt€entered€judgment€for€Nonconnah€for€the€maximum€statutory€limit€of€$14,999.00,€as€well€asÏcourt€costs.€€à àTQM€appealed€the€General€Sessions€Court€judgment€to€the€Shelby€County€CircuitÏCourt,€where€it€was€entitled€to€a€ò òòòde€novoó óóó€proceeding.€€Nonconnah€then€discovered€that€TQM€was€Ïincorporated€in€Arkansas,€not€Tennessee,€and€that€TQM€had€never€been€authorized€to€do€businessÏin€Tennessee.€€Nonconnah€determined€further€that€TQMððs€corporate€charter€was€revoked€in€ÏArkansas€in€January€1993.€€Nonconnah€thereafter€filed€an€amended€complaint€in€Shelby€CountyÏCircuit€Court€naming€Fred€Thompson,€individually,€d/b/a€Thompson€Quality€Management,€Inc.,Ïas€an€additional€defendant.€Ìà àAt€the€bench€trial€in€this€cause,€TQM€argued€that€the€Agreement€was€unconscionableÏbecause€it€did€not€relieve€TQM€of€its€obligation€to€pay€the€monthly€lease€payments€despite€TQMððsÏundisputed€financial€straits,€maintaining€that€this€constituted€lack€of€ð ðmutuality€of€obligation.ðð€ÏTQM€contended€further€that€it€had€an€agreement€with€Mr.€Alexander€to€sub„lease€TQMððs€space,Ïand€that€Nonconnah€had€interfered€with€the€sublease€agreement€with€Mr.€Alexander€and€inducedÏhim€to€lease€space€other€than€TQMððs€space.€€Finally,€TQM€argued€that€Nonconnah€failed€to€makeÍsufficient€efforts€to€mitigate€its€damages.Ìà àRegarding€Nonconnahððs€alleged€interference€with€Mr.€Alexanderððs€sublease€of€TQMððsÏspace,€Thompson€testified€at€the€trial€that€he€believed€that€he€had€reached€an€agreement€with€Mr.ÏAlexander€to€sublease€his€space.€€He€testified€that€Alexander€then€met€with€Sorrell,€NonconnahððsÏleasing€agent.€€Thompson€alleged€that€Sorrel€interfered€with€his€negotiations€with€Alexander€byÏleasing€Alexander€space€with€Nonconnah€other€than€TQMððs€space.ò òÌœó óÌ›à àFurther€proof€at€trial€indicated€that€Alexander€sent€a€letter€to€Sorrell€dated€June€8,€1992.€ÏThe€letter€requested€Nonconnahððs€assistance€in€sub„leasing€Alexanderððs€current€office€spaceÏbecause€Alexander€was€ð ðcurrently€pursuing€arrangements€to€sub„lease€the€offices€of€[TQM]ðð.ÏAlexanderððs€letter€does€not€indicate€that€an€agreement€with€TQM€had€been€finalized,€but€only€thatÏthe€parties€were€ð ðpursuing€arrangements.ðð€€At€trial,€counsel€for€Nonconnah€read€into€the€recordÏAlexanderððs€deposition€testimony€regarding€the€status€of€his€alleged€agreement€with€TQM€to€sub„lease€TQMððs€vacant€office:ÌÓÓà8 àQ:à8 à...[D]id€you€subsequently€make€a€decision€about€whether€or€not€toÏsublease€that€space?Ìà8 àA:à8 à(by€Alexander)€Yes,€we€did.Ìà8 àQ:à8 àWhat€was€that€decision?Ìà8 àA:à8 àNot€to€lease€it.Ìà8 àQ:à8 àDid€you€and€Mr.€Thompson€ever€œreach›€a€verbal€agreement€that€youÏwould€sublease€the€space?Ìà8 àA:à8 àNo,€we€didnððt.ÌÌÓÓAlexander€stated€that€ð ðWe€were€only€talking€about€it€[the€possibility€of€subleasing]€and€negotiatingÏit.€€We€hadnððt€reached€any€settlement€in€it€or€final€arrangements€on€it.ðð€€Alexander€testified€thatÏseveral€factors€caused€him€to€decide€not€to€sublease€TQMððs€space€„€the€two€years€remaining€onÏTQMððs€lease,€the€increase€in€rent€that€Alexander€would€incur,€and€the€fact€that€TQM€wouldÏcontinue€to€maintain€a€small€office€on€the€premises.€€Alexander€testified€that€his€decision€not€toÏsublease€from€TQM€was€not€due€to€any€action€taken€by€Nonconnah€or€any€Nonconnah€agent:ÌÓÓà8 àQ:à8 àDid€Steven€Sorrel€or€anyone€at€Nonconnah€Corporate€Center€doÏanything€to€attempt€to€dissuade€you€from€subleasing€that€space€fromÍMr.€Thompson?Ìà8 àA:à8 àNo.Ìà8 àQ:à8 àWas€the€decision€not€to€sublease€strictly€your€own€based€on€theÏconcerns€you€just€testified€to?Ìà8 àA:à8 àYes,€it€was€based€on€my€own€concerns.ÌÌÓÓIt€was€undisputed€that€no€written€subleasing€agreement€was€signed.€€ò òÌó óà àRegarding€Nonconnahððs€efforts€to€mitigate€its€damages,€a€commercial€leasing€agent€forÏNonconnah€testified€at€trial,€describing€their€efforts€to€sublease€TQMððs€space:ÌÓÓà8 àQ:à8 àDid€you€show€the€space€that€Mr.€Thompson€had€vacated€to€otherÏpeople€who€might€be€potential€lessees?Ìà8 àA:à8 àI€did,€and€I€have€up€until€recently.Ìà8 àQ:à8 àHave€you€continually€tried€to€release€it€since€the€time€that€Mr.ÏœThompson›€gave€you€permission€to€do€so?ÌœÇÌÌ›à8 àA:à8 àAt€every€œopportunity.Ì›à8 àQ:à8 àDo€you€know€how€many€times€you€have€shown€that€property€or€canÏyou€tell€œus?Ì›à8 àA:à8 àI€personally€have€probably,€going€on€recall,€shown€it€to€six€or€eightÏdifferent€operations,€some€of€which€I€can€name.Ìà@ à******Ìà8 àQ:à8 àHow€did€you€try€to€market€this€space€other€than€to€people€that€youÏhave€named€and€people€that€would€come€in€who€might€be€potentialÏlessees?Ìà8 àA:à8 àWe€maintain€three€days€a€week€in€the€Commercial€Appeal€ads€thatÏwill€give€a€range€of€space€that€will€cover€most€anything€that€isÏavailable€in€the€park....There€are€display€ads€periodically€in€theÏnewspaper.€We€also€run€TV€and€radio€ads€which€generate€someÏtraffic,€but€basically€are€image€building€and€an€educationalÏprocess....Ìà8 àQ:à8 àWhat€about€signs,€do€you€have€signs€up€showing€spaces?Ìà8 àA:à8 àThere€are€signs€scattered€around€the€[office]€park.ÌÌÓÓTQM€offered€no€proof€as€to€measures€Nonconnah€failed€to€take€in€order€to€mitigate€its€damages.€€Ìà àIn€addition,€Nonconnah€asserted€that€Thompson€should€be€held€individually€liable€forÏTQMððs€indebtedness.€€Nonconnah€argued€that€the€trial€court€should€permit€Nonconnah€to€ð ðpierceððÏTQMððs€ð ðcorporate€veilðð€to€permit€Thompsonððs€individual€liability.€€On€this€issue,€ThompsonÏadmitted€on€cross„examination€that,€of€10,000€shares€of€stock,€only€1,000€had€been€issued.€ÏThompson€indicated€that€he€was€the€only€shareholder,€the€only€officer€and€the€only€director.€€HeÏstated€that€tax€records€were€kept,€but€that€there€were€no€corporate€minutes€or€annual€reports.€ÏThompson€testified€that,€at€the€time€of€his€testimony,€TQM€was€not€capitalized€and€there€was€noÏpaid„in€capital.€€After€leaving€Nonconnah,€Thompson€worked€out€of€his€home.Ìà àNonconnah€also€argued€that€Thompson€should€be€held€liable€for€TQMððs€debts€becauseÏTQMððs€corporate€charter€had€been€revoked€and€TQM€failed€to€obtain€a€certificate€of€authority€to€doÏbusiness€in€Tennessee.€€Nonconnah€presented€undisputed€evidence€that€TQM€was€not€incorporatedÏin€Tennessee€and€had€no€certificate€of€authority€to€do€business€in€Tennessee.€TQM€wasÏincorporated€in€Arkansas,€but€the€State€of€Arkansas€revoked€TQMððs€corporate€charter€in€January,Ï1993,€nearly€six€months€after€TQM€vacated€its€Nonconnah€office€space.€€Based€on€the€revocationÏof€TQMððs€corporate€charter,€as€well€as€the€piercing€of€TQMððs€corporate€veil,€NonconnahÍmaintained€that€Thompson€should€be€held€individually€liable€for€TQMððs€indebtedness.Ìà àAt€the€conclusion€of€the€bench€trial,€the€trial€court€entered€judgment€in€favor€of€Nonconnah€œÇfor›€$3,015.00€in€damages€and€$1,000.00€in€attorneyððs€fees.€€The€trial€courtððs€findings€of€fact€andÏconclusions€of€law€included€the€following:ÌÌà@ àòòFINDINGS€OF€FACTóóÌÓÓà8 à3.à8 àMr.€Thompson€paid€rent€for€one€(1)€year.Ìà8 à4.à8 àMr.€Thompson€lost€one€of€his€large€accounts€which€caused€himÏgreat€hardship€in€fulfilling€all€obligations€of€the€Lease.Ìà8 à5.à8 àMr.€Thompson€began€negotiating€to€get€out€of€the€remaining€two€œ(2)›Ïyear€obligation€of€the€Lease.Ìà8 à6.à8 àMr.€Thompson€negotiated€with€several€people,€one€of€whom€was€aÏpresent€tenant€of€Nonconnah,€Mr.€Leonard€Alexander€(ð ðMr.ÏAlexanderðð).Ìà8 à7.à8 àMr.€Thompson€thought€he€had€entered€into€an€agreement€with€Mr.ÏAlexander€to€sublease€the€space.Ìà8 à8.à8 àMr.€Thompson€gave€notice€to€Nonconnah€that€he€would€be€movingÏout€in€late€June,€1992.Ìà8 à9.à8 àThere€was€some€kind€of€agreement€between€Mr.€Thompson€and€Mr.ÏAlexander.Ìà8 à10.à8 àMr.€Sorrell,€agent€for€Nonconnah,€offered€Mr.€Alexander€aÏsweetheart€deal€which€frustrated€the€agreement€that€Mr.€ThompsonÏand€Mr.€Alexander€had€negotiated.Ìà8 à11.à8 àNonconnah€attempted€to€rent€everything€but€the€space€leased€toÏTQM,€by€and€through€Fred€Thompson€as€President,€becauseÏNonconnah€knew€rent€was€accruing€on€that€space€and€not€on€otherÏvacant€space.Ìà8 à12.à8 àMr.€Thompson€gave€proper€notice€and€moved€out€timely.Ìà8 à13.à8 àThe€corporation€(TQM)€was€viable€at€the€time€that€the€indebtednessÏaccrued.Ìòòà@ àÌà@ àCONCLUSIONS€OF€LAWóóÌ€Ìà8 à2.à8 àNonconnah€did€not€prove€that€it€mitigated€damages€and€did€notÏprove€that€it€offered€the€property€at€a€reduced€rate,€or€for€one„third,Ïor€for€whatever€it€had€to€in€order€to€relieve€Mr.€Thompson.Ìà8 à3.à8 àThe€lease€is€unconscionable€because€there€is€no€mutuality€ofÏobligation.Ìà8 à4.à8 àMr.€Thompson€could€not€terminate€the€lease€despite€hardship.Ìà8 à5.à8 àNonconnah€is€entitled€to€a€reasonable€amount€of€the€LeaseÏobligation.Ìà8 à6.à8 àA€reasonable€amount€of€the€Lease€obligation€would€be€for€ninetyÏ(90)€days€(three€(3)€monthððs€rent)€after€June€1€at€($1,005.00)€perÏmonth€for€a€total€of€€($3015.00).Ìà8 à8.à8 àDefendants€are€not€obligated€to€pay€the€amounts€due€pursuant€to€theÏterms€and€conditions€of€the€Lease€Agreement€including€but€notÏlimited€to€the€increased€rent,€operating€expenses,€real€estate€taxes,Ïrent€adjustments,€late€charges,€attorneyððs€fees,€collection€costs,€orÏother€obligations€contained€in€the€Lease€Agreement.Ìà8 à9.à8 àThe€corporation€(TQM)€was€viable€at€the€time€the€indebtednessÏaccrued;€therefore,€the€corporation€is€obligated€and€not€the€defendantÏpersonally.€ÌÌÓÓÌFrom€this€decision,€Nonconnah€now€appeals.€€Ìà àOn€appeal,€Nonconnah€argues€that€the€trial€court€erred€in€holding€that€the€lease€agreementÏwas€unconscionable€because€there€was€no€ð ðmutuality€of€obligation.ðð€€Nonconnah€also€contendsÏthat€the€trial€court€erred€in€finding€that€there€was€an€agreement€between€TQM€and€Alexander€toÏsublease€œÌTQMððs›€space,€and€that€Nonconnah€interfered€with€this€agreement.€€In€addition,€Nonconnah€assertsÏthat€the€trial€court€erred€in€holding€that€Nonconnah€had€the€burden€of€proving€reasonable€efforts€toÏmitigate€its€damages,€and€in€finding€a€failure€to€mitigate€damages.€€Nonconnah€also€argues€thatÏThompson€should€be€held€individually€liable€for€sums€due€from€TQM.€€Nonconnah€asks€this€CourtÏto€hold€TQM,€and€Thompson,€liable€for€all€past€due€rent,€contractual€obligations€and€attorneyððsÏfees.Ìà àOur€review€in€this€case€is€ò òòòde€novoó óóó€on€the€record€of€the€trial€court,€with€a€presumption€ofÏthe€correctness€of€its€factual€findings,€unless€the€evidence€preponderates€against€those€findings.€ÏRule€13(d),€Tenn.€R.€App.€Proc.€€No€presumption€of€correctness€attaches€to€the€trial€courtððsÏconclusions€of€law.€€ò òòòSee€Carvell€v.€Bottomsó óóó,€900€S.W.2d€23,€26€(Tenn.€1995).Ìà@ àò òI.€UNCONSCIONABILITYó óÌà àNonconnah€argues€that€the€trial€court€erred€in€finding€that€the€Agreement€wasÏunconscionable€because€there€was€no€mutuality€of€obligation.€In€òòò òDobbs€v.€Guentheró óóó,€846ÏS.W.2d€270€(Tenn.App.1992)€this€Court€discussed€mutuality€of€obligation:ÌÓÓà0 àà àà8 àConsideration€is€a€necessary€ingredient€for€every€contract,€but€mutuality€of€obligation€is€notÏunless€lack€of€mutuality€will€leave€one€party€without€consideration€for€his€or€her€promise.€ÏThat€portions€of€a€contract€may€apply€to€one€party€but€not€to€others€has€no€bearing€on€theÏmutuality€of€partiesðð€obligations€as€long€as€consideration€exists€and€all€parties€are€bound€toÏhonor€the€contract.ÌÌÓÓòòò òId.ó óóó€at€276€[citations€omitted].€€Inòòò ò€Dark€Tobacco€Growers€Co„Op€Assoc.€v.€Masonó óóó,€150ÍTenn.€228,€263€S.W.€60€(Tenn.€Dec.€Term€1923),€the€Tennessee€Supreme€Court€held:ÌÓÓà8 àGenerally,€there€is€mutuality€of€obligation€where€both€parties€undertake€to€doÏsomething.€€A€contract€does€not€lack€mutuality€merely€because€every€obligation€ofÏthe€one€party€is€not€met€by€an€equivalent€counter€obligation€of€the€other.€€MutualityÏof€contract€means€that€an€obligation€rests€upon€each€party€to€do€or€permit€to€be€doneÏsomething€in€consideration€of€the€act€or€promise€of€the€other.Ìà@ à***Ìà8 àIt€is€invariably€held€that€the€promise€of€one€party€is€a€valid€consideration€for€theÏpromise€of€the€other€party.ÌÌòòò òId.,€ó óóó150€œTenn.€at›€250„51,€263€S.W.€òò€óóat€67.€(quoting€in€part€from€òòò òTexas€Seed€&€Floral€Co.Ïv.€œChicagoÌÌSet›€&€Seed€Co.ó óóó,€187€S.W.€747€(Tex.Civ.App.€1916)).Ìà8 àÌÓÓœòòò òÇ›à àó óóóThis€Court€has€stated€that€a€contract€may€be€deemed€unconscionable€when:ÌÓÓà8 à[T]he€inequality€of€the€bargain€is€so€manifest€as€to€shock€the€judgment€of€a€personÏof€common€sense,€and€where€the€terms€are€so€oppressive€that€no€reasonable€personÏœwould›€make€them€on€the€one€hand,€and€no€honest€and€fair€person€would€acceptÏthem€on€the€other.€ÌÌòòò òÓÓHaun€v.€Kingó óóó,€690€S.W.2d€869,€872€(œTenn.€›App.1984)€(quoting€ò òòòBrenner€v.€Little€RedÏSchoolhouseó óóó,€302€N.C.€207,€274€N.E.2d€206,€210€(N.C.€1981)).Ìà àIn€signing€the€Agreement€in€this€case,€both€parties€surrendered€rights€they€previously€held.€ÏNonconnah€was€contractually€obligated€to€provide€TQM€with€office€space€at€a€preordained€priceÏirrespective€of€future€market€conditions;€TQM€was€obligated€to€pay€Nonconnah€a€set€rate€ofÏmonthly€rent€for€the€next€three€years.€The€trial€court€appeared€to€conclude€that€the€Agreement€wasÏunconscionable€because€it€did€not€contain€an€ð ðescape€clauseðð€for€TQM€in€the€event€of€financialÏdifficulties:€€ÌÓÓà8 àThe€only€thing€that€the€tenant€or€the€lessee€is€to€do€is€pay.€€There€is€no€way€that€heÏcan€terminate€[the€Agreement]€even€when€he€is€confronted€with€this€type€ofÏhardship€[losing€an€account].ÌÌÓÓThere€is€no€proof€in€the€record€indicating€that€the€rental€rate€paid€by€TQM€was€unjust€or€evenÏunfavorable.€€Indeed,€the€record€indicates€that€the€Agreement€was€a€standard€commercial€leaseÏagreement€entered€into€between€two€experienced,€commercial€enterprises.€€Both€parties€knowinglyÏundertook€quantifiable€risks.€€We€find€that€the€trial€court€erred€in€holding€that€the€Agreement€lackedÏmutuality€of€obligation€and€in€concluding€that€the€lack€of€an€escape€clause€for€TQM€in€the€event€ofÏfinancial€difficulty€rendered€the€Agreement€unconscionable.€€The€trial€court€is€reversed€on€thisÏissue.€€à@ àò òII.€INTERFERENCE€WITH€SUBLEASEó óÌà àNonconnah€next€alleges€that€the€trial€court€erred€in€determining€that€Sorrell,€NonconnahððsÏcommercial€leasing€agent,€interfered€with€an€agreement€between€TQM€and€Alexander€to€subleaseÏTQMððs€vacated€premises.€€The€trial€court€determined€that€Sorrell€conferred€with€Alexander,€whoÏthen€revoked€an€alleged€agreement€he€had€made€with€Thompson€in€favor€of€a€better€offer€to€rentÏother€office€space€with€Nonconnah.Ìà àIt€is€undisputed€that€there€was€no€written€sublease€agreement€between€Alexander€and€TQM,Ïas€was€required€under€the€Agreement€between€Nonconnah€and€TQM.€€Thompson€alleges€that€heÏbelieved€that€he€had€a€verbal€agreement€with€Alexander€to€sublease€TQMððs€space,€while€AlexanderÏtestified€that€he€had€no€such€agreement€with€Thompson.€€However,€Alexanderððs€unrefutedÏtestimony€was€that€no€one€associated€with€Nonconnah€dissuaded€him€from€subleasing€TQMððsÏspace,€and€that€his€decision€was€based€on€his€own€concerns€about€factors€such€as€the€length€of€theÏlease€and€the€increase€in€rent.€€Under€these€circumstances,€even€if€there€were€a€subleasingÏagreement€between€Alexander€and€TQM,€the€evidence€preponderates€against€the€trial€courtððsÏfinding€that€Nonconnah€interfered€with€the€alleged€agreement.€€Consequently,€the€trial€court€isÏreversed€on€this€issue.€Ìà@ àò òIII.€MITIGATION€OF€DAMAGES€ó óÌà àNonconnah€next€contends€that€the€trial€court€erred€in€concluding€that€Nonconnah€failed€toÏð ðprove€that€it€mitigated€damages.ðð€€Nonconnah€asserts€that€the€trial€court€applied€an€improperÏstandard€regarding€the€burden€of€proof,€€by€requiring€Nonconnah€to€prove€that€it€mitigated€itsÏdamages.Ìà àIn€òòò òHailey€v.€Cunninghamó óóó,€654€S.W.2d€392€(Tenn.1983),€the€Tennessee€SupremeÏCourt€addressed€the€issue€of€mitigating€damages€in€re„leasing€€commercial€premises.€€The€òòò òHaileyó óóóÏcourt€held€that,€in€actions€between€lessors€and€lessees,€the€lessee€ð ðhad€the€burden€of€proof€toÏestablish€failure€of€the€lessors€to€mitigate€their€damages.ðð€€òòò òId.ó óóó€at€396.€In€ò òòòHaileyóóó ó€the€lessorÏtestified€that€a€realtor€ð ðplaced€a€rental€sign€on€the€premises€and€advertised€it€on€several€occasions€inÏa€local€newspaperðð€in€order€to€re„lease€the€premises.€òòò òId.ó ó€óóat€395.€The€ò òòòHaileyóóó ó€court€further€notedÏthat€the€lessees€had€failed€to€meet€their€burden€and€observed€that€the€lessors€had:ÌÓÓà8 à[E]ngage[d]€two€different€commercial€real€estate€firms€to€attempt€to€re„rent€theÏproperty,€had€it€advertised€in€newspapers€on€several€occasions,€and€had€a€rentalÏsign€placed€thereon.€€There€is€no€suggestion€of€anything€else€that€the€lessors€couldÏreasonably€have€ben€expected€to€do.€ÌòòÌÓÓò òId.ó óóó€at€396.€€Therefore,€the€burden€of€proof€was€on€TQM€to€establish€that€Nonconnah€failed€toÍmitigate€its€damages.€€Ìà àNonconnah€also€maintains€that€the€trial€court€applied€an€unreasonably€high€standard€toÏNonconnah€regarding€its€efforts€to€mitigate€its€damages.€€The€trial€court€concluded€that€NonconnahÏfailed€to€do€ð ðwhatever€it€had€to€in€order€to€relieve€Mr.€Thompson.ðð€€In€òòò òNashland€Associates€v.ÏShumateó óóó,€730€S.W.2d€332€(Tenn.App.1987),€this€Court€stated€that€a€landlord€ð ðmust€do€what€isÏfair€and€reasonable€to€reduce€his€damages.ðð€€òòò òIdó óóó.€at€333.€€Therefore,€the€trial€courtððs€findingÏoverstates€Nonconnahððs€duty€to€mitigate€and€exceeds€the€ð ðfair€and€reasonableðð€standard€establishedÏin€òòò òNashlandó óóó.ÌœÇÌ›à àIn€this€case,€unrefuted€testimony€from€Nonconnahððs€leasing€agents€established€that€TQMððsÏspace€was€shown€to€at€least€six€potential€tenants,€and€that€advertisements€for€the€office€park€as€aÏwhole€regularly€appeared€in€television,€newspaper€and€radio.€€TQM€offers€no€proof€of€additionalÏmeasures€Nonconnah€could€have€taken€to€sublease€TQMððs€space.€€Based€upon€the€evidence€in€theÏrecord,€it€is€clear€that€the€defendants€failed€to€carry€their€burden€of€proof€and€that€the€trial€courtÏerred€in€finding€that€Nonconnah€did€not€mitigate€its€damages.Ìà@ àò òIV.€DAMAGE€AWARD€AGAINST€TQM€ó óÌà àNonconnah€next€alleges€that€the€trial€court€erred€in€failing€to€award€Nonconnah€the€fullÏmeasure€of€damages€it€incurred.€€The€trial€court€awarded€Nonconnah€damages€of€$3,015,Ïattorneyððs€fees€of€$1,000€and€discretionary€costs€of€$672.96,€based€on€its€conclusions€that€theÏAgreement€was€unconscionable,€that€Nonconnah€interfered€with€a€sublease€to€Alexander,€and€thatÏNonconnah€failed€to€mitigate€its€damages.Ìà àIt€is€well„settled€in€Tennessee€that€a€ð ðcourt€is€not€at€liberty€to€make€a€new€contract€forÏparties€who€have€spoken€for€themselves.ðð€òòò òSmithart€v.€John€Hancock€Mut.€Life€Ins.€Co.ó óóó,Ï167€Tenn.€513,€525,€71€S.W.2d€1059,€1063€(Tenn.1934).€€òòSee€alsoò ò€Stone€v.€Martinó óóó,€185ÏTenn.€369,€374,€206€S.W.2d€388,€390€(Tenn.1947).€ð ðParties€to€a€contract€are€free€to€allocate€risksÏand€burdens€between€themselves€as€they€see€fit.ðð€€€òòò òBrown€Bros.,€Inc.€v.€Metro.€Govt.€ofÏNashville€and€Davidson€Countyó óóó,€877€S.W.2d€745,€749€(Tenn.App.1993).€€Inò òòò€Dobbs€v.ÏGuentheróóó ó,€846€S.W.2d€270,€276€(Tenn.App.1992)€this€Court€stated€that€ð ðcourts€will€not€createÏor€rewrite€a€contract€simply€because€its€terms€are€harsh€or€because€one€of€the€parties€was€unwise€inÏagreeing€to€them.ðð€€Ìà àIn€this€case,€the€trial€court€selected€a€three„month€period€in€which€to€assess€damages€againstÏNonconnah,€rather€than€the€full€two„year€period€remaining€under€the€terms€of€the€partiesððÏagreement.€The€three„month€period€mirrored€the€trial€courtððs€finding€that€Nonconnah€failed€toÏmitigate€its€damages.€However,€because€we€have€reversed€the€trial€courtððs€findings€ofÍunconscionability,€interference€with€a€sublease€to€Alexander€and€failure€to€mitigate€damages,€weÏmust€consider€evidence€from€the€record€regarding€the€damages€incurred€by€Nonconnah.€ÏNonconnah€submitted€the€œÇfollowing›€figures€at€trial€demonstrating€the€damages€resulting€from€TQMððs€breach€of€the€leaseÏagreement:ÌÓÓà8 àPast€Due€Rent,€Operating€Costs€and€Real€Estate€Taxes:à à$25,279.37Ìà8 àContractual€Obligation€for€Delinquency:€(at€10%)à àà à$€€2,527.94Ìà àAttorneyððs€Fees:à àà àà àà àà àà à$€10,629.69Ìà8 àExpenses:à àà àà àà àà àà àà à$€€€€€€809.74Ìà8 àAnticipated€Collection€Efforts:à àà àà àà àòò$€€€€€€775.00óóÌà àà àà àà àà àà àà àò òTotal:ó óà àà àò ò$40,021.74ó óÌÌÓÓœUnder›€the€Agreement,€Nonconnah€is€entitled€to€the€past€due€rent,€including€rent€adjustments,€asÏwell€as€the€operating€costs€and€the€real€estate€taxes.€€In€addition,€paragraph€6€of€the€AgreementÏstates€that€Nonconnah€may€collect€a€ten€percent€late€charge€for€delinquent€rental€payments.€€œÌ›à àThe€Agreement€provides€further€that€TQM€must€pay€ð ð.€.€.all€costs€of€collection€and€allÏreasonable€attorneyððs€fees.€.€.€.ðð€€From€the€record,€it€is€unclear€whether€the€item€of€claimedÏdamages€deemed€ð ðexpensesðð€are€costs€of€collection,€since€Nonconnah€also€seeks€damages€forÏð ðanticipated€collection€efforts.ðð€€The€Agreement€provides€only€for€payments€of€costs€of€collectionÏactually€incurred,€not€ð ðanticipatedðð€costs.€€Consequently,€on€remand,€the€trial€court€must€determineÏthe€costs€of€collection€actually€incurred€by€Nonconnah,€as€well€as€a€ð ðreasonableðð€amount€ofÏattorneyððs€fees,€in€light€of€our€decision€on€the€issues€raised€by€Nonconnah€on€appeal.Ìà àAccordingly,€we€reverse€the€trial€courtððs€award€of€damages€and€remand€for€a€determinationÏof€the€costs€of€collection€actually€incurred,€and€a€reasonable€attorneyððs€fee.€€Ìà@ àò òV.€INDIVIDUAL€LIABILITY€OF€THOMPSON€ó óÌà àFinally,€Nonconnah€contends€that€the€trial€court€erred€in€holding€that€Fred€Thompson€wasÏnot€individually€liable€for€the€debts€incurred€by€TQM.€Nonconnah€asserts€two€alternative€theoriesÏunder€which€Thompson€should€be€deemed€individually€liable€for€TQMððs€debts:€1)€ThompsonÏfailed€to€follow€the€required€corporate€formalities,€thus€€the€trial€court€should€ð ðpierce€the€corporateÏveilðð€of€TQM;€and€2)€the€state€of€Arkansas€had€revoked€TQMððs€corporate€charter€at€the€time€thatÏTQM€incurred€its€liability€to€Nonconnah,€and€alternatively,€that€TQM€violated€Tennessee€law€byÏfailing€to€obtain€a€certificate€of€authority€to€transact€business€in€Tennessee€as€a€foreign€corporation.€ÍBecause€TQM€was€an€Arkansas€corporation,€before€we€consider€the€question€of€ThompsonððsÏindividual€liability,€we€must€determine€whether€the€law€of€Arkansas€or€Tennessee€is€applicable.€€€ÌœÇ›à@ àò òA.€Conflict€of€Laws€ó óÌà àNeither€party€disputes€the€fact€that€Tennesseee€law€applies€to€the€determination€of€TQMððsÏliability€under€the€Agreement.€€However,€as€recently€stated€in€òòò òBayberry€Associates€v.€Jonesó óóó,Ï1988€WL€137181€(Tenn.App.1988),€ò òòòvacated€on€other€groundsóóó ó,€783€S.W.2d€553Ï(Tenn.1990),€an€unreported€decision€from€this€Court,€an€issue€concerning€the€individual€liability€ofÏa€shareholder€or€officer€for€the€corporationððs€debts€is€considered€an€issue€regarding€the€ð ðinternalÏaffairsðð€of€a€corporation€that€may€be€governed€by€the€law€of€the€state€of€incorporation:ÌÓÓà8 àClaims€involving€the€ð ðinternal€affairsðð€of€a€corporation€should€be€resolved€inÏaccordance€with€the€law€of€the€state€of€incorporation.€€Internal€corporate€affairsÏinvolve€matters€peculiar€to€corporations€such€as€the€relationships€among€theÏcorporation€and€its€officers,€directors€and€stockholders.€ÌÌò òòòId.ó óóó€at€*4€(citations€œomitted).€€òòò ò›ÓÓBayberryó óóó€involved€a€similar€conflict€of€laws€question€regarding€theÏcorporate€ð ðinternal€affairsðð€doctrine€and€the€appropriate€state€law€to€apply.€€The€ò òòòBayberryó óóó€courtÏcited€the€Restatement€(Second)€of€Conflict€of€Laws,€ðð€309€(1969),€which€states:ÌÓÓà8 àà8 àThe€local€law€of€the€state€of€incorporation€will€be€applied€toÏdetermine€the€existence€and€extent€of€a€directorððs€or€officerððs€liabilityÏto€the€corporation,€its€creditors€and€stockholders,€except€where,Ïwith€respect€to€the€particular€issue,€some€other€state€has€a€moreÏsignificant€relationship€under€the€principles€stated€in€ðð€6€to€theÏparties€and€the€transaction,€in€which€event€the€local€law€of€the€otherÏstate€will€be€applied.€Ìà8 àÌò òòòÓÓId.ó óóó€€Section€6,€cited€in€Section€309€above,€lists€the€following€as€ð ðfactors€relevant€to€the€choice€ofÏthe€applicable€rule€of€law,ðð€to€be€considered€in€the€absence€of€a€statutory€directive€to€the€contrary:ÌÓÓà8 à€à8 à(a)€the€needs€of€the€interstate€and€international€systems,€(b)€theÏrelevant€policies€of€the€forum,€(c)€the€relevant€policies€of€theÏinterested€states€and€the€relative€interests€of€those€states€in€theÏdetermination€of€the€particular€issue,€(d)€the€protection€of€justifiedÏexpectations,€(e)€the€basic€policies€underlying€the€particular€field€ofÏlaw,€(f)€certainty,€predictability€and€uniformity€of€result,€and€(g)Ïease€in€the€determination€and€application€of€the€law€to€be€applied.Ìòòò òÌÓÓó óóóRestatements€(Second)€of€Conflict€of€Law€ðð€6€(1969).€€òòò òBayberryó óóó€adopted€the€ð ðinternal€affairsððÏdoctrine,€as€set€forth€in€the€Restatement,€which€applies€a€balancing€test€between€these€factors€andÏthe€predisposition€toward€applying€the€law€of€the€state€of€incorporation€in€matters€involving€theÍinternal€affairs€of€the€corporation.€€ò òòòBayberryó óóó,€1988€WL€137181€at€*4„5.Ìà àIn€the€case€at€bar,€the€lease€agreement€involved€TQMððs€corporate€office€in€Tennessee.ÏHowever,€Thompson€testified€that€the€majority€of€his€business€at€the€time€he€entered€into€theÏAgreement€occurred€in€Arkansas.€€€The€proof€in€the€record€discusses€TQMððs€contacts€withÏTennessee€at€the€time€of€trial,€May,€1995,€but€does€not€indicate€in€any€detail€TQMððs€contacts€withÏTennessee€prior€to€that€time.€€Considering€the€factors€listed€in€Section€6€of€the€Restatement,€setÏforth€above,€€balanced€against€the€internal€affairs€doctrine,€which€favors€the€application€ofÏArkansas€law,€we€œfind€that›€the€proof€is€insufficient€to€demonstrate€that€Tennessee€law€should€beÏapplied.€€Accordingly,€we€€find€that€Arkansas€law€governs€the€issue€of€Thompsonððs€individualÏliability€for€TQMððs€debts.€Ìà àWe€will€consider€separately€the€two€theories€under€which€Nonconnah€asserts€ThompsonððsÏindividual€liability.€Nonconnah€has€asserted€that€TQMððs€ð ðcorporate€veilðð€should€be€ð ðpiercedðð€dueÏto€Thompsonððs€failure€to€follow€certain€corporate€formalities€which€are€concomitant€with€theÏseparate€existence€and€limited€liability€afforded€a€corporation€under€the€laws€of€Arkansas.€€Ìà@ àò òB.€Piercing€the€Corporate€Veil€ó óÌà àIt€is€well€settled€in€Arkansas€that€a€corporation€and€its€stockholders€are€separate€and€distinctÏentities,€even€though€the€stockholder€may€be€the€owner€of€a€majority€of€the€stock€in€a€corporation,€Ïand€that€the€doctrine€of€piercing€the€corporate€veil€should€be€applied€with€great€caution.€Ïòòò òHumphries€v.€Brayó óóó,€271€Ark.€962,€966„67,€611€S.W.2d€791,€793€(Ark.App.1981);€ò òòòBanksÏv.€Jonesóóó ó,€239€Ark.€396,€399,€390€S.W.2d€108,€100€(Ark.1965).€€It€is€only€when€the€privilege€ofÏtransacting€business€in€a€corporate€form€has€been€illegally€abused€to€the€injury€of€a€third€personÏthat€the€corporate€entity€should€be€disregarded.€òòò òFausett€Co.€v.€Randó óóó,€2€Ark.€App.€216,€221,Ï619€S.W.2d€683,€686€(Ark.App.1981).€€The€issue€of€whether€the€corporate€entity€has€beenÏfraudulently€abused€is€a€question€for€the€trier€of€fact,€and€this€finding€will€not€be€disturbed€onÏappeal€unless€it€is€clearly€erroneous.€€The€one€seeking€to€pierce€the€corporate€veil€and€disregard€theÏcorporate€entity€has€the€burden€of€proving€that€the€corporate€form€was€abused€to€his€injury.€òòSeeÍò òNational€Bank€of€Commerce€v.€HCA€Health€Servs.€of€Midwest,€Inc.ó óóó,€œ304€Ark.€55,Ï59,€800›€S.W.2d€694,€697€(Ark.1990).€Ìà àConditions€under€which€the€corporate€entity€may€be€disregarded€or€looked€upon€as€the€alterÏego€of€the€principal€stockholder€€vary€according€to€the€circumstances€of€each€case€and€are€factÏspecific.€òòò òWinchel€v.€œCraigó óóó,€55€Ark.€App.€373,€380„81,›€934€S.W.2d€946,€950Ï(Ark.App.1996).€€Factors€to€consider€include:ÌÓÓà8 à[I]nadequate€capitalization€or€the€failure€to€issue€stock....€€Another€fact€emphasizedÏin€the€application€of€the€doctrine€is€the€failure€to€observe€corporate€formalities,€atÏleast€as€to€corporations€that€are€not€closely€held.€€Failure€to€observe€corporateÏformalities€includes€such€activities€as€commencement€of€business€without€theÏissuance€of€shares,€lack€of€shareholdersðð€or€directorsðð€meetings,€lack€of€signing€ofÏconsents,€and€the€making€of€decisions€by€shareholders€as€if€they€were€partners.€ÏOther€facts€emphasized€include€nonpayment€of€dividends,€the€insolvency€of€theÏdebtor€corporation€at€the€time€[the€liability€was€incurred],€siphoning€of€funds€of€theÏcorporation€by€the€dominant€shareholder,€commingling€of€corporate€and€personalÏassets,€nonfunctioning€of€other€officers€and€directors,€absence€of€corporate€records,€œÌÌÌà8 à.›€.€.€.€[T]he€most€common€significant€factors€justifying€disregarding€a€corporateÏentity€have€been€undercapitalization,€failure€to€observe€formalities,€nonpayment€ofÏdividends,€siphoning€of€corporate€funds€by€dominant€stockholders,€non„functioning€of€other€officers€and€directors,€absence€of€corporate€records...and€useÏof€the€corporate€entity€in€promoting€injustice€or€fraud.€.€.€€The€failure€to€distinguishÏbetween€corporate€and€personal€property,€the€use€of€corporate€funds€to€payÏpersonal€expenses€without€proper€accounting,€and€the€failure€to€maintain€completeÏcorporate€and€financial€records€are€looked€upon€with€extreme€disfavor.€ÏConsequently,€undercapitalization,€disregard€of€corporate€formalities€and€the€likeÏcoupled€with€an€element€of€injustice,€fraud€or€fundamental€unfairness€have€beenÏregarded€fairly€uniformly€to€constitute€a€basis€for€an€imposition€of€individualÏliability€under€the€doctrine.ÌÌFletcher,€òòò òCyclopedia€of€the€Law€of€Private€Corporationsó óóó,€ðð41.30€(1990).Ìà8 àÌÓÓà àIn€the€case€at€bar,€Thompson€testified€that€TQM€had€10,000€shares€of€stock,€but€onlyÏ1,000€had€been€issued.€€He€acknowledged€that€he€was€the€only€shareholder,€officer€or€director.€ÏWhen€asked€if€TQM€maintained€corporate€records,€he€responded,€ð ðTo€some€degree,€more€or€lessÏtax€records.ðð€€He€admitted€that€TQM€kept€no€corporate€minutes,€and€that€TQM€had€no€capital€orÏpaid„in€capital.€€Since€leaving€Nonconnah,€TQM€was€operated€out€of€Thompsonððs€home.€€Ìà àHowever,€Thompson€also€testified€that€he€hired€both€an€attorney€and€a€CPA€to€establish€theÍcorporation€and€perform€the€necessary€documentation.€€While€records€of€€corporate€meetings€wereÏnot€kept,€TQM€established€a€corporate€bank€account,€maintained€accounting€records,€at€one€timeÏowned€office€furniture,€a€copy€machine,€and€a€computer,€and€had€previously€maintained€itsÏheadquarters€at€Nonconnah€Center.€€Thompson€also€testified€that€TQMððs€assets€had€been€depletedÏsince€its€incorporation€in€1990.€€There€was€no€evidence€that€Thompson€siphoned€corporate€fundsÏor€commingled€TQMððs€assets€and€his€personal€assets.€€€€Ìà àThe€record€does€not€reflect€that€Thompson€utilized€the€corporate€form€to€perpetrate€a€fraudÏon€Nonconnah.€€Thompson€testified€that€he€first€learned€of€the€revocation€of€TQMððs€charter€at€theÏtime€that€the€amended€complaint€was€filed€in€1994.€€He€€testified€that€he€attempted€to€correct€theÏcause€of€the€revocation,€the€late€payment€of€franchise€taxes,€although€at€the€time€of€trial€in€May,Ï1995€Arkansas€had€not€reinstituted€TQMððs€corporate€charter.€The€record€does€not€indicate€whether€ÏTQM€was€undercapitalized€at€the€time€it€entered€into€the€Agreement€with€Nonconnah.€€ThompsonððsÏtestimony€concerns€TQMððs€financial€health€at€the€time€of€the€trial,€rather€than€at€the€time€that€itÏentered€into€the€œAgreement.Ì›à àœConsidered›€in€its€entirety,€€the€evidence€does€not€preponderate€against€the€trial€courtððsÏdecision€that€Nonconnah€should€not€be€permitted€to€pierce€TQMððs€corporate€veil.€€The€trial€court€isÏaffirmed€on€this€issue.œ× ƒ# ××  כ̜ò òà@ àC.›€Revocation€of€the€Corporate€Charteró óÌà àIn€the€alternative,€Nonconnah€argues€that€Thompson€should€be€held€personally€liable€forÏdebts€that€TQM€incurred€subsequent€to€revocation€of€its€corporate€charter.€Ìà àThe€issue€of€liability€of€an€individual€shareholder€for€corporate€debts€incurred€afterÍrevocation€was€considered€in€òòò òMullenax€v.€Edwards€Sheet€Metal€Works,€œInc.ó óóó,€279€Ark.Ï247,›€650€S.W.2d€582€(Ark.1983).€€òòò òMullenaxó óóó€involved€a€corporation,€Mid€America€Video,Ïwhose€charter€was€revoked€for€failing€to€pay€franchise€taxes.€€During€the€six€month€period€inÏwhich€the€corporate€charter€was€revoked,€Mid€America€received€an€invoice€from€one€of€itsÏsuppliers€for€certain€components€manufactured€for€Mid€America.€€œò òòòId.€ó óóó279€Ark.€at€248,€650ÏS.W.2d›€at€583.€€The€supplier€later€sued€Mid€America€for€nonpayment€for€these€parts.€€TheÏArkansas€Supreme€Court€affirmed€the€trial€courtððs€determination€that€Mid€Americaððs€incorporatorsÏwere€personally€liable€for€the€corporate€debts€incurred€during€the€time€in€which€the€charter€wasÏrevoked.€€œò òòòId.ó óóó279€Ark.€at€249,€650€S.W.2d€at€583„84.›€€Since€the€invoices€had€been€presented€toÏMid€America€during€the€six€month€ð ðwindowðð€during€which€its€charter€had€been€revoked,€theÏincorporators€were€held€personally€liable€for€the€value€of€the€components.€€ò òòòId.óóó óÌà àIn€the€case€at€bar,€Nonconnah€presented€unrefuted€evidence€that€TQMððs€corporate€charterÏwas€revoked€on€January€7,€1993€and€had€not€been€reinstated€as€of€May€2,€1995.€€TQM€initiallyÏbreached€the€Agreement€in€August€1992€by€failing€to€pay€its€rent.€€Thompson€became€personallyÏliable€on€any€debts€incurred€by€TQM€while€its€charter€was€revoked.€€Thus,€Thompson€would€beÏheld€personally€liable€for€the€amount€due€from€TQM€under€the€agreement€from€January€7,€1993Ïthrough€the€termination€of€the€lease€in€July€1994.€€The€decision€of€the€trial€court€is€reversed€as€toÏthis€time€œperiod,›€and€the€cause€is€remanded€for€a€determination€of€the€amounts€for€whichÏThompson€is€individually€liable.Ìà@ àò òVI.€CONCLUSIONó óÌà àIn€sum,€we€find€that€the€Agreement€did€not€lack€mutuality€of€obligation€and€was€notÏunconscionable.€€Because€Nonconnahððs€actions€did€not€cause€Alexander€to€renege€on€any€allegedÏagreement€to€sublease€TQMððs€space,€Nonconnah€cannot€be€deemed€to€have€ð ðinterferedðð€with€anyÏsuch€agreement.€€The€burden€of€proving€Nonconnahððs€failure€to€mitigate€damages€was€on€TQM,Ïand€TQM€failed€to€carry€its€burden€on€this€issue.€€TQM€is€liable€for€damages€for€amounts€unpaidÏunder€the€Agreement€for€the€entire€term,€from€the€date€of€breach€through€termination€of€theÍAgreement.€€The€question€of€the€amount€of€Nonconnahððs€damages€must€be€remanded€to€the€trialÏcourt€for€a€determination€of€the€costs€of€collection€and€for€assessment€of€€reasonable€attorneyððsÏfees,€pursuant€to€the€Agreement.€€Nonconnah€will€not€be€permitted€to€pierce€TQMððs€corporate€veil.€ÏHowever,€because€TQMððs€charter€was€revoked,€under€Arkansas€law,€Thompson€will€be€heldÏpersonally€liable€for€amounts€due€under€the€Agreement€from€the€date€of€revocation€through€theÏtermination€of€the€Agreement.€€The€determination€of€this€amount€is€remanded€to€the€trial€court.Ìà àThe€decision€of€the€trial€court€is€affirmed€in€part€and€reversed€in€part,€as€set€forth€above.€ÏCosts€are€taxed€to€Appellees,€for€which€execution€may€issue€if€necessary.ÌÌÓÓœà à›à àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ìà àœà à›à àà àà àà àò òóóHOLLY€KIRBY€LILLARD,€J.ÌÌÌCONCUR:ÌÌòòÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌóóALAN€E.€HIGHERS,€J.ÌÌÌòòÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌDAVID€R.€FARMER,€J.ó óÌÌÌÌ