ÿWPCõ /# ¢UN­ %û 0(b)w@14q…” 0Jœ 0Tæ 0^: 0h˜ 0r 0|r 0†î 0t 1u 0dyU>ÝB) AQD Æ• 0D[ 0@Ÿ 0Dß DC# D/f B• B² D3Ï AM U*O +y v~¤ vÓ"˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLhÎ(ÖÃ9 Z ‹6Times New Roman RegularX($¡¡- ù- ËÌEÍÎ[ÏÐÑÒÓÓ€Ýê‚_#x93|xá2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman% Line 7 d!"#$&Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý("ÿÿ$££Ò  ÒÒ  Ò($$””ò òÚ  Ú1Ú  Úó ó7Border 1dd(('÷ÿ dxd düÿP Pd'''''ÿÿdxd!#%Cþÿ << Gÿÿ< Œ 9p`(Arial !Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÝ  ÝÝ ƒ""ÝÝ  ÝÔ€+ÔÔ€+ÔÓ  Óò òÔ YYY ÔFILEDÔ€+XÔÌÌNovember€14,€1997ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó óPtPtHHÚ(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  ÝÒ  ÒÒ „ ÒÑ  ÑÑ\R AØ'\ÑÑ€ÑÑ7€Ö7XXdìdÈ7ÑÑ  ÑÑ  Ñò ò›Þ ÞÌAMERICAN€COLOR,€a€division€of€à à)ÌSULLIVAN€GRAPHICS,€INC.,à àà à)Ìà àà àà àà àà àà à)à àœRobertson›€ChanceryÌà àPlaintiff/Appellee,à àà àà à)à àNo.€€12258Ìà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àAppeal€No.ÌINNOVO,€INC.,à àà àà àà à)à à01A01„9703„CH„00120Ìà àà àà àà àà à€à à)à àÌà àDefendant/Appellant.à àà à)ÌÌÌà@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àMIDDLE€SECTION€AT€NASHVILLEÌÌà@ àAPPEAL€FROM€CHANCERY€COURT€OF€œROBERTSON›€COUNTYÌà@ àAT€SPRINGFIELD,€TENNESSEEÌÌà@ àHONORABLE€ALEX€W.€DARNELL,€JUDGEÌÙ€!Ùó óœßR€*,%A1-j|²ûd` ç `€€@ÿRß›ÌÌÌÌÌPatrick€JohnsonÌCavalier€Building,€Suite€508Ì95€White€Bridge€RoadÌNashville,€TN€37205ÌATTORNEY€FOR€PLAINTIFF/APPELLEEÌÌLisa€M.€SherrillÌ509€West€Court€SquareÌSpringfield,€TN€37172ÌATTORNEY€FOR€DEFENDANT/APPELLANTÌÌÌÓ  ÓÔ€¼Ôò òMODIFIED,€AFFIRMED€AND€REMANDED.ÌÌó óÔ€XÔÌÓ  ÓÌà àà àà àà àà àHENRY€F.€TODDÌà àà àà àà àà àPRESIDING€JUDGE,€MIDDLE€SECTIONÌÌÌÌÌœÌÌÌ›ÌÌCONCUR:ÌœBEN›€H.€CANTRELL,€JUDGEÌœÌCONCUR€IN€RESULTS:ÌWILLIAM›€C.€KOCH,€JR.,€JUDGEÌÌÌœÌò òAMERICAN›€COLOR,€a€division€of€à à)ÌSULLIVAN€GRAPHICS,€INC.,à àà à)Ìà àà àà àà àà àà à)à àœRobertson›€ChanceryÌà àPlaintiff/Appellee,à àà àà à)à àNo.€€12258Ìà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àAppeal€No.ÌINNOVO,€INC.,à àà àà àà à)à à01A01„9703„CH„00120Ìà àà àà àà àà à€à à)à àÌà àDefendant/Appellant.à àà à)ÌÌó óÌà@ àòòò òÔ€„ÔO€P€I€N€I€O€NÔ€XÔóóó óÌÓ  ÓÌÌÒ  ÒÒ 9 ÒÓÓà àThe€defendant,€Innovo,€Inc.,€has€appealed€from€a€non€jury€judgment,€in€the€amount€ofÏ$58,856.26,€in€favor€of€the€plaintiff,€American€Color,€a€division€of€Sullivan€Graphics,€Inc.,€forÏmerchandise€sold€and€services€rendered€to€the€defendant.ÌÒ  ÒÒ „ ÒÌà àThe€complaint€states€that€the€suit€is€brought€upon€a€sworn€account€as€authorized€byÏT.C.A.€ðð€24„5„107,€but€no€sworn€itemized€statement€of€account€is€exhibited€to€the€complaint.€ÏInstead,€the€complaint,€which€is€verified€by€the€oath€of€its€general€manager,€narrates€a€series€ofÏcharges€represented€by€invoices€attached€to€the€complaint€on€which€the€complaint€alleges€aÏbalance€of€$58,856.26€is€due.ÌÌà àIn€thirteen€numbered€paragraphs,€the€complaint€alleges€amounts€due€from€defendantÏupon€thirteen€invoices€which€are€exhibited€to€the€complaint.ÌÌà àThe€answer€of€defendant€which€is€verified€by€the€oath€of€its€president,€admits€that€itÏowes€some€of€the€invoices,€denies€knowledge€of€two€and,€as€to€the€remaining€invoices,€makesÏthe€following€defense:ÌÒ ¸ ÒÒ ` ÒÓÓà àThe€products€were€supplied€to€Nasco€Group,€Inc.,Ïthe€parent€of€Innova.€€Nasco€has€since€changed€its€name€toÏSpirco,€Inc.,€and€has€filed€for€protection€under€theÏbankruptcy€code.ÌÒ  ÒÒ „ ÒÓÓÌà àThis€Court€has€tabulated€the€assertions€of€the€complaint€and€answer€as€œfollows:Ì›Ìòòà à€€€Date€€€à àà à€€Amount€€à àà àDefendants€AnsweróóÌÓÓà à12/24/92à àà à$€€€€116.37à àà àAdmitÌà à12/29/92à àà à€€€1,339.05à àà àNasco€received€productÌà à01/22/93à àà à€15,678.93à àà àNasco€received€productÌà à01/22/93à àà à€€€€€€841.10à àà àAdmitÌà à01/29/93à àà à€€€1,603.18à àà àAdmitÌà à01/29/93à àà à€€€€€€624.60à àà àNasco€received€productÌà à01/29/93à àà à€13,013.82à àà àNasco€received€productÌà à01/29/93à àà à€€€€€€815.12à àà àNasco€received€productÌà à01/29/93à àà à€10,825.00à àà àNasco€received€productÌà à01/31/93à àà à€11,120.82à àà àNasco€received€productÌà à02/12/93à àà à€€€€€€950.44à àà àNasco€received€productÌà à02/15/93à àà àòò€€€1,190.75óóà àà àNasco€received€productÌÓÓà àà àà à€€€€€€€€€€$58,118.88Ìà àIt€appears€that€defendantððs€sworn€answer€admitted€owing€plaintiff€$2,560.65,€deniedÏknowledge€of€$11,640.12€and,€as€to€the€remainder€of€the€charges,€stated€that€the€product€wasÏsupplied€to€the€ð ðparentðð€of€defendant€which€is€in€bankruptcy.̛̜à àThe€Trial€Judge€filed€the€following€memorandum:ÌÒ ¸ ÒÒ ` ÒÓÓà àThis€is€an€action€on€an€account€that€is€severelyÏcontested€on€most€of€the€general€elements€for€which€a€debtÏmay€be€challenged.Ìà àÌà à(1)à àThere€is€a€challenge€to€the€amount€due€andÏwhether€the€pleadings€bar€the€Plaintiff€from€a€judgmentÏlarger€than€a€prayer€of€some€$46,000.00.ÌÌà à(2)à àThere€is€some€form€of€accord€and€satisfactionÏalleged.€€This€comes€about€when€the€defense€alleges€that€aÏpromissory€note€was€substituted€as€satisfaction€for€a€debtÏallegedly€made.€€The€substitution€being€a€future€guaranty€ofÏpayment.ÌÌà à(3)à àThe€Defendant€alleges€that€the€obligation,€ifÏany,€is€not€that€of€Innovo€but€of€a€subsidiary€of€Innovo,ÏNasco.ÌÌà àThe€Plaintiff€agrees€that€the€work€done€was€forÏNasco,€a€subsidiary€company€of€Innovo.€€The€PlaintiffÏdisagrees€as€to€who€is€the€obligor,€claiming€that€Innovo€wasÏthe€guarantor€of€the€debt€and€that€all€of€the€proceedings,Ïbillings,€charges€and€payments€were€made€in€light€of€thatÏtype€of€arrangement.€€The€Plaintiff€sought€an€amendment€toÏthe€prayer€for€damages€and€asked€that€the€amendment€beÏallowed€and€that€the€judgment€conform€to€the€proof€and€thereÏbe€no€limit€of€$46,000.00€by€virtue€of€the€prayer€in€theÏcomplaint.ÌÌà àAmerican€Color€prepared€the€advertising€agenda€andÏthe€products€for€the€defendant.€€Kathrine€Bahr,€who€was€theÏcredit€manager€of€the€Plaintiff€company,€testified€that€theÏcompany,€set€up€a€ledger€card€on€all€its€accounts€and€that€theÏone€ledger€card€maintained€for€the€charges€was€in€the€nameÏof€Innovo.€€This€œledger›€card€then€was€supplemented€by€theÏcharges€and€payments€on€the€account.€€Ms.€Bahr€said€thereÏwas€not€a€separate€account€for€Nasco€in€any€of€its€capacities,Ïwhether€Nasco€Sportswear€or€Nasco€Express.€€Ms.€BahrÏserves€as€the€credit€manager€of€the€Plaintiff€and€she€wasÏpersonally€responsible€for€and€oversaw€the€accounts€of€theÏcompany€and€specifically€the€one€involving€Innovo.ÌÌà àBefore€1992€the€bill€of€the€Plaintiff€actually€went€toÏZamora€and€Associates€and€they€would€then€pay€theÏcompany.€€Beginning€in€1992,€Innovo€decided€to€have€theÏœbillings›€made€direct€to€them€or€at€least€they€were€made€toÏthem€at€somebodyððs€request.€€Ms.€Bahr€admitted€that€she€Íhad€received€a€check€from€Nasco€but€she€claims€that€theÏpayment€was€made€subsequent€to€a€bill€made€to€Innovo.ÌÌà àMs.€Patricia€Anderson€Lasko,€the€CEO€and€PresidentÏof€Innovo€testified€with€respect€to€the€companyððs€attemptedÏfinancial€arrangements€with€the€Plaintiff€company.€€ThisÏwitness€testified€that€Innovo€was€œa€holding›€company€and€thatÏsome€of€the€subsidiaries€were€Innovo,€Inc.,€Nasco,€Inc.,Ïand€Nasco€Products.€€She€testified€that€each€one€of€theseÏcompanies€had€its€own€accounts€and€did€its€own€receipts€andÏdisbursements€and€handled€its€own€business€items.€€TheÏwitness€acknowledged€that€there€were€some€credit€problemsÏparticularly€in€1992€and€there€was€an€attempt€to€have€aÏfunding€of€the€debt€and€future€responsibilities€done€byÏpromissory€notes€which€would€cover€the€debts€andÏpurchases€of€the€three€subsidiary€companies€of€Innovo.ÌÌà àThe€substance€of€the€testimony€of€Ms.€Lasko€wasÏthat€Nasco€was€the€beneficiary€of€the€products€furnished€byÏthe€plaintiff€and€Innovo€did€not€have€an€obligation€to€pay€forÏNascoððs€purchases.€€She€insisted€that€each€company€wasÏindependent€in€its€own€operations€and€dealings€withÏAmerican€Color€and€Innovo€was€not€to€be€charged€with€theÏresponsibility€in€view€of€the€independence€of€Nasco.ÌÌà àAs€part€of€the€testimony€in€this€cause€there€wasÏfurnished€the€deposition€of€Ismael€Zamora.€€Mr.€Zamora€isÏengaged€as€a€graphic€designer€and€his€wife€is€a€salesÏrepresentative.€€They€began€doing€business€with€Innovo€inÏ1990.€€He€began€doing€work€for€Innovo€and€then€took€aÏfull„time€job€with€Innovo€and€did€work€with€œAmerican›€ColorÏfor€the€benefit€of€Innovo.€€Some€of€the€accounts€or€theÏbilling€by€American€Color€was€through€Mr.€Zamora€andÏsome€went€another€direction€but€he€did€participate€in€theÏpayments€to€American€Color.ÌÌà àWeighing€all€of€the€testimony€including€theÏaforementioned€highlights€shows€that€the€balance€falls€to€theÏPlaintiff.€€The€Plaintiff€has€shown€by€a€preponderance€of€theÏtestimony€that€the€Defendant€is€obligated€in€the€amount€ofÏ$58,856.25.ÌÌà à(1)à àThe€motion€to€amend€the€prayer€for€damagesÏto€conform€to€the€proof€is€allowed.ÌÌà à(2)à àThe€Court€finds€that€the€offer€of€theÏpromissory€note€as€satisfaction€to€debt€was€not€accepted€byÏthe€Plaintiff.ÌÌà à(3)à àThe€materials€were€furnished€to€theÏsubsidiary€Nasco;€but€Innovo,€by€all€the€proof,€is€the€entityÏto€be€charged€with€the€debt.ÌÌà àThis€Opinion€shall€be€filed€as€a€part€of€the€record€inÏthis€Cause,€but€is€not€to€be€copied€in€the€decree€herein.€ÌÒ  ÒÒ „ ÒÓÓÌà àœThe›€Trial€Judge€awarded€judgment€to€plaintiff€against€the€defendant€for€$58,828.26,Ïthe€amount€alleged€to€be€due€in€the€sworn€complaint.ÌÌà àà àOn€appeal,€defendant€presents€the€following€issues€for€review:ÌÒ ¸ ÒÒ ` ÒÓÓI.à àDid€the€trial€court€err€in€disregarding€the€corporateÏform€by€holding€the€defendant,€Innovo,€Inc.,€responsible€forÏthe€debts€incurred€by€its€sister€corporations?ÌÌà àA.à àCan€corporations€be€held€liable€for€the€debtsÏà àà àincurred€by€their€sister€corporations?ÌÌà àB.à àWhen€and€how€should€the€court€determineÏà àà àwhether€it€is€appropriate€to€disregard€theÏà àà àcorporate€form?ÌÌà àC.à àDid€the€evidence€presented€by€AmericanÏà àà àColor€justify€disregarding€the€corporateÏà àà àforms€of€the€subsidiary€corporations?ÌÌÒ  ÒÒ „ ÒÌà àPlaintiff€presents€its€issues€in€the€following€form:ÌÌÒ ¸ ÒÒ ` Ò1.à àThe€trial€court€was€correct€in€ruling€that€the€appellantÏis€liable€for€charges€to€an€open€account€made€by€itself€andÏsister€corporations€when:€(1)€The€ð ðcourse€of€dealingsððÏbetween€the€parties€indicated€that€the€appellee€looked€to€theÏappellant€for€payment€on€this€account€and€appellant€made€noÏobjections€thereto;€(2)€the€appellant,€as€agent€for€its€sisterÏcorporations,€is€liable€since€credit€was€extended€to€it€alone.ÌÌ2.à àThe€trial€court€abused€its€discretion€in€failing€toÏaward€prejudgment€interest.ÌÒ  ÒÒ „ ÒÓÓÌÌà àThe€defendantððs€only€defense€to€the€ð ðsworn€amountðð€(sworn€complaint€with€invoices),Ïwas€a€sworn€answer€that€ð ðthe€productðð€(the€subject€of€the€invoices),€was€delivered€to€aÏsubsidiary€of€the€same€corporation€of€which€defendant€was€also€a€subsidiary.€€Defendant€doesÏnot€explain€how€it,€a€subsidiary,€is€litigating€its€liability€while€its€parent€corporation€is€inÏbankruptcy.ÌÌà àDefendantððs€sworn€€answer€is€not€an€unequivocal€denial€as€contemplated€by€T.C.A.€ððÏ24„5„107,€but€an€effort€to€shift€the€liability€to€a€sister€corporation€when€there€is€evidence€thatÏthe€course€of€dealing€between€the€parties€was€that€the€goods€and€services€would€be€furnished€toÏthe€sister€corporation€ð ðat€the€request€of€defendant,ðð€that€defendant€would€pay€plaintiff€for€suchÏgoods€and€services€and€collect€from€the€sister€corporation.€€There€is€evidence€of€an€effort€toÏchange€the€course€of€dealing€to€direct€billing€and€to€collection€from€the€sister€corporation,€butÏthe€permanent€accomplishment€of€such€change€is€not€œshown.ÌÓ  Ó›ÌÓ  Óà àThe€evidence€does€not€preponderate€against€the€findings€of€the€Trial€Judge.€€However,Ïthis€Court€finds€that€part€of€the€debt€($3,298.03)€which€defendant€did€not€deny€in€its€swornÏanswer€should€bear€œpre„judgment€interest.›€€Upon€remand€the€amount€of€said€interest€will€beÏcomputed€and€the€judgment€of€the€Trial€Court€will€be€increased€in€this€amount.€€The€judgmentÏso€rendered€will€bear€statutory€interest€from€the€date€of€the€original€judgment€October€28,Ï1996,€until€paid.€€Costs€of€this€appeal€will€be€paid€by€defendant€and€its€surety.ÌÓ  ÓÓÓÌÓ  Óò òÔ€¼ÔMODIFIED,€AFFIRMED€AND€REMANDEDÔ€XÔ.ó óÌÓ  ÓÌÌÌà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌà àà àà àà àà àà àHENRY€F.€TODDÌà àà àà àà àà àà àPRESIDING€JUDGE,€MIDDLE€SECTIONÌÌœCONCUR:›ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌBEN€H.€CANTRELL,€JUDGEÌÌÌœCONCUR€IN€RESULTS›œ:›ÌWILLIAM€C.€KOCH,€JR.,€JUDGEÌÌà à