ÿWPCØ …# VUNa %¯ 0ûµw@° 4ð   0J 0Te 0^¹ 0h 0r 0|ñ 0†m 0ó 1uƒ 0døU>\U*šB)ÄDCí AM0U*}«§ BRv~ovÓí D3À 0@ó AO3Æ‚ 0DH D/Œ B»˜HP LaserJet 4HPPCL5MS,ü,,,,,ü0nLhÒ(ÈhH  Z 6Times New Roman RegularX(Ó3c$¡¡Ñ7€|ìXXdðXXdð7ÑÑ  ÑÒ°ÒÒH°ÒÔ€¼Tþ¼XXÔÑTR[¤ AØ'ÿ Legal[¤ AØ'ÿ Legal AØ'ÿ Legal AØ'ÿ LegalTÑ ½D¾¿ÀDÁÂDÃÄDÅÆÓ€f|œ$3|xÑ2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman< Œ 9p`(Times% Line 7 d 7Border 1dd€-!Cþÿ << Gÿÿ< Œ 9p`(Arial ¡Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÑ  ÑÒ  ÒÒ H ÒÔ€¼ÔÑ\R AØ'\ÑÝ  ÝÔ€#ÔÔ€#ÔÓ  ÓÔ YYY ÔFILEDÔ€#XÔÌÌò òJuneÏ25,Ï1998ÌÌCecilÏCrowson,ÏJr.ÌÔ€#ôÔAppellateÏCourtÏClerkó ó dPtPtHHØ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ellan Geneva ÒÒ  ellan Geneva Ò%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÑ#€Xd#ÑÑ  ÑÒ  ÒÒ H ÒÔ€¼ÔÑ\R AØ'\ÑÝ  ÝÑ  ÑÑ7€ž»XdðXXdð7Ñò òÓ  ÓÙ€€ÙßR€"$!A1-j|` à. `€€@ÿRß›Þ ÞÌIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌAT€KNOXVILLEÌÓ  ÓÌÌÌÌÌó óCANONIE€ENERGY,€INC.€andà à)ÌWGI,€INC.,à àà àà àà àà à)à àANDERSON€CHANCERYÌà àà àà àà àà àà à)Ìà àPlaintiffs/Appelleesà àà à)à àNO.€€03A01„9710„CH„00481Ìà àà àà àà àà àà à)Ìv.à àà àà àà àà àà à)à àHON.€€WILLIAM€E.€œLANTRIP›Ìà àà àà àà àà àà à)à àCHANCELLORÌTENNESSEE€ENERGY€PIPELINEà à)ÌAND€STORAGE€COMPANY,à àà à)Ìà àà àà àà àà àà à)Ìà àDefendant/Appellantà àà à)à àREVERSEDÌÌÌÌLewis€S.€Howard,€Jr.,€Knoxville,€for€Appellant.ÌÌH.€Bruce€œGuyton›,€Knoxville,€for€Appellee.ÌÌÌò òòòà@ àÔ€ ÔO€P€I€N€I€O€NÔ€¼ÔÌÌó óóóà àà àà àà àà àà àà àINMAN,€Senior€JudgeÌÌà àThis€is€an€action€for€a€declaratory€judgment.Ìà àÌÓÓà àIn€1992€an€option€was€œexecuted›€by€four€(4)€corporations€engaged€in€gasÏand€oil€exploration€and€development:€œCanonie›€Energy,€Inc.€œ[CEI];›€WGI,€Inc.;ÏCoal€Creek€Mining€and€Manufacturing€Co.€[CC];€and€Tennessee€EnergyÏTransport,€Inc.€[TET].€€These€corporations€created€TEPSCO,€anotherÏcorporation,€in€1992,€but€CEI€and€WGI€chose€not€to€become€shareholders€atÍthe€time€TEPSCO€was€chartered,€choosing€instead€to€have€the€right€to€acquire,Ïby€option,€25€percent€of€the€shares€of€TEPSCO€within€three€years.€Ìà àTo€the€extent€pertinent,€the€Option€provides:ÌÓÓà8 àà àð ðWHEREAS,€the€parties€agree,€in€accordance€with€theÏprocedures€and€limitations€set€forth€herein,€to€permit€CEI/WGI€toÏacquire€a€25%€stock€ownership€in€TEPSCO.ÌÌà8 àà àNOW€THEREFORE,€in€consideration€of€the€mutualÏagreements€and€undertakings€of€the€parties€hereto,€it€is€agreed€asÏfollows:ÌÌà8 àà à1.à àDuring€a€three€(3)€year€period€from€the€date€hereof,Ïon€written€notice€of€TEPSCO€to€CEI/WGI€or€CEI/WGI€toÏTEPSCO€œ(i)›€at€such€time€as€TEPSCO€requires€additional€workingÏcapital,€or€(ii)€at€the€option€of€CEI/WGI,€CEI/WGI€may€acquire€aÏ25%€stock€ownership€in€TEPSCO€by€timely€making€the€cashÏpayment€for€such€25%€stock€ownership€as€hereinafter€determinedÏby€the€appraisal€method.ÌÌÓ  Óà8 àà àœàH@¸ ¸ ¸ ààH@ìì¸ à€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ò ò.›€€€.€€€.€€€.€€€.€€€.€€€.€€€ÌÓ  ÓÌó óà8 àà à6.à àThis€right€to€acquire€a€25%€stock€interest€in€TEPSCOÏmay€be€invoked€and€exercised€only€once€and€only€as€to€theÏœentirety›€of€such€25%€interest,€is€non„assignable€and€non„transferable€by€CEI/WGI€and€shall€terminate€on€the€òòearlieróó€of:€(a)Ïthree€years€from€this€date,€(b)€the€default€by€CEI/WGI€in€theÏinvestment€schedule€or€other€requirements€under€the€œEx›€and€œDev›ÏAgreement,€(c)€the€notice€to€CEI/WGI€under€Paragraph€1€and€theÏdeclination€of€CEI/WGI€to€purchase€stock,€or€(d)€the€failure€ofÏCEI/WGI€to€timely€close€on€the€acquisition€of€stock€hereunder€andÏpay€the€consideration€therefore.ððÌÌÓÓà àOn€January€6,€1993,€CEI€notified€TEPSCO€that€it€elected€to€exercise€theÏoption€to€the€exclusion€of€WGI€and€would€acquire€the€25%€stock€interest€inÏTEPSCO€for€$500,000.00.€€Fifteen€days€later,€Jerry€Canonie€and€DonÍœHelmboldt›,€officers€of€CEI,€attended€a€board€meeting€of€TEPSCO€andÏreported€that€WGI€was€not€participating€in€the€transaction€and€would€execute€aÏwaiver€of€its€right€to€do€so.€œ€TEPSCO›€acknowledged€the€exercise€of€theÏOption.Ìà àOn€March€1,€1993,€the€scheduled€closing€date€for€purchase€of€theÏTEPSCO€stock€by€CEI,€its€representatives€attended€the€offices€of€TEPSCO,€butÏfailed€to€tender€the€purchase€price€and€could€not€close€the€transaction.Ìà àTwo€years€later,€on€May€3,€1995,€CEI/WGI€sent€a€letter€to€TEPSCOÏattempting€a€second€time€to€exercise€the€right€to€acquire€25%€interest€inÏTEPSCO€under€the€Option.€€By€letter€dated€May€8,€1995,€TEPSCO€advisedÏCEI/WGI€that€such€rights€had€terminated€pursuant€to€paragraph€six€(6)€of€theÏOption.Ìà àThis€action€for€a€declaratory€judgment€was€filed€by€CEI/WGI.€€TheÏComplaint€does€not€allege€separate€or€severable€rights€as€to€the€Option.€ÏInterestingly,€the€Complaint€alleges€CEI/WGI€ð ð€.€.€.€have€properly€and€timelyÏexercised€their€stock€acquisition€rights€under€The€Option€Agreement,ðð€and€thatÏTEPSCO€refused€to€perform€its€obligations.Ìà àTEPSCO€defended€the€action€œupon€›the€premise€that€CEI€and€WGIÏexercised€the€Option€for€the€agreed€purchase€price€of€$500,000.00,€with€theÏtransaction€to€be€closed€on€or€before€March€1,1993.€€The€defendant€allegedÏthat€the€plaintiffs€reneged€and€failed€to€pay€the€consideration,€resulting€in€aÍdefault€of€closure,€thereby€activating€section€6(d)€of€the€œcontract›€whichÏprovides€that€the€Option€may€be€exercised€only€one€time.Ìà àThe€Chancellor€agreed€and€dismissed€the€action,€but€thereafterÏreconsidered€and€granted€the€plaintiffs€specific€performance.€€Because€we€findÏthe€Chancellor€was€correct€the€first€time,€the€judgment€is€reversed€and€the€caseÏis€dismissed.Ì€à àOur€review€of€the€findings€of€fact€made€by€the€trial€Court€is€òòde€novoóóÏupon€the€record€of€the€trial€Court,€accompanied€by€a€presumption€of€theÏcorrectness€of€the€finding,€unless€the€preponderance€of€the€evidence€isÏotherwise.òò€Tenn.€R.€App.€P.,€Rule€13óó(d).òò.€R.€App.€P.,€Rule€13óó(d);€òòCampbellÏv.€Florida€Steel€Corp.,€óó919€S.W.2d€26€(Tenn.€1996).€Where€there€is€noÏconflict€in€the€evidence€as€to€any€material€fact,€the€question€on€appeal€is€one€ofÏlaw,€and€the€scope€of€review€is€òòde€novoóó€with€no€presumption€of€correctnessÏaccompanying€a€chancellor's€conclusions€of€law.€òòUnion€Carbide€Corp.€v.ÏœHuddleston›,óó€854€S.W.2d€87€(Tenn.€1993).€€Ìà àThe€appellant€correctly€argues€that€a€resolution€of€this€case€involvesÏinterpretation€of€the€Option,€which€is€a€matter€of€law€and€not€one€of€fact.€ÏòòPetty€v.€Sloane,óó€277€S.W.2d€355€(Tenn.€1955).€€It€is€elementary€that€contractsÏmust€be€enforced€according€to€their€terms.€€€òòœPearsall›€Motors€v.€RegalÏChrysler„Plymouth,€Inc.,€óó521€S.W.2d€578€(Tenn.€1975);€òòœMalone›€&€Hyde€FoodÏService€v.€Parson,€óó642€S.W.2d€157€(Tenn.€App.€1982).€€Ìà àWe€agree€with€the€appellant€that€the€œOption,›€by€its€clear€andÏunambiguous€terms,€granted€a€single,€œunseverable›€right€to€acquire€a€25%€stockÏownership€in€TEPSCO€to€CEI/WGI€and€limited€these€optionees€to€a€singleÏexercise.€€The€Chancellor€determined,€upon€reconsideration,€that€his€findingÏthat€the€Option€terminated€when€the€transaction€failed€to€close€was€applicableÏto€CEI€only,€and€not€to€WGI.€€This€conclusion€manifestly€requires€theÏpresumption€that€òòeitheróó€of€these€entities€had€exercisable€rights.€€We€are€unableÏto€agree,€because€there€is€no€language€in€the€Option€to€this€effect,€eitherÏdirectly€or€œinferably›.€€Moreover,€the€evidence€clearly€revealed€that€the€OptionÏwas€held€jointly€by€CEI€and€WGI,€and€that€the€representatives€of€theseÏoptionees,€at€the€January€21,€1993€board€meeting,€advised€TEPSCO€that€WGIÏacquiesced€in€its€exclusion.€€The€corporate€minutes€reflect€and€affirm€this€fact.€ÏSignificantly,€none€of€the€correspondence€or€documents€generated€after€theÏJanuary€board€meeting€contains€any€reference€to€the€involvement€of€WGI;€noÏwitness€testified€that€WGI€was€improperly€excluded,€and€it€was€stipulated€thatÏthe€œCharter›€of€WGI€had€been€revoked,€with€its€business€winding€up.€€AgainÏsignificantly,€WGI€did€not€allege€that€it€held€a€separate€or€severable€right,€andÏthis€issue€was€not€raised€at€trial.Ìà àWe€agree€with€the€appellant€that€the€only€right€created€by€the€OptionÏwas€the€ð ðnon„assignable€and€non„transferableðð€right€of€CEI/WGI€jointly€toÍacquire€a€single,€25%€stock€interest€in€TEPSCO,€which€right€terminated€whenÏthe€transaction€failed€to€close€upon€default€of€payment€of€the€purchase€price.Ìà àThe€judgment€is€reversed€and€the€case€is€dismissed€at€the€costs€of€theÏappellees.Ìà àà àà àà àà àà àÌÓÓà àà àà àà àà àà à_______________________________Ìà àà àà àà àà àà àWilliam€H.€Inman,€Senior€JudgeÌÌCONCUR:ÌÌÌÌ_______________________________ÌHouston€M.€Goddard,€Presiding€JudgeÌÌÌÌ_______________________________ÌHerschel€P.€Franks,€Judge