ÿWPCJ œ­þü8<öM”v^ª2,lC Bñ$ÛléyÄ[ ,T¾Wd% ù«2v’%9‘ FŽ‹=æ— ` èP¢h•´ûRø’h‚2Ò‘žßBuÕÕ™·GnõMµ«…>îÕkïÛIÿ&xÕ!£)“ІŠØîò•an»y  ¢°:L”Az¢8 þ$àíiðà7±ËòƒÉy˜JÀ5ÊDŒòøJ2gþË<ü³mVOœ(õÜ7Ñk(±ÆSÈãŽN‘éVSÓs†¹ÊŸ1:b›Éü.îÆk¦7®Š¡‘ò½ü 1h¿ÔðsÎ*ˆ)äÔ{Ãõß•jéÃÝb#šÓiR‡9åUå^1éKí?³K‹vƒ‹‚0‚ÏD­ÿ©,‘󗯋rëA}!Úqk~²†|ÁM65´lfš†-±ÞûÍ­í+LM]T3Â3€õ´ÈéûÓº]$¼ÒDPv±+©ÌÊuÞ—¸õ rÔC\n£ÂTºò±Ä‚¾ª=Eò?7kn_eÓB¹‹bÏÖ)XÿÃ4¦eÙ»äJÌž¹"&%øì§/Ð y:ΟA+Ür¢6NB/# ’UN %ë 0(ñw@4YmUN| 0lÊ 0D6z‡‚ ‡ U:‘‘‘‘‘‘‘‘‘‘‘‘‘‘‘‘‘ 0DËË B D3, AQ_Æ° 0Dv 0Dº D/þ B-˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLhÎ(ÈhH  Z 6Times New Roman RegularX($¡¡ 56E789U:D;<D=Ó€Gn~<$3|xG(ÈhH  Z ‹6Times New Roman Regular((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó }Ý ƒ üÝ$Ýà  àòòÚ  Ú1Ú  ÚóóÝ  Ýà ` àThe€text€of€the€Tennessee€Securities€Act,€found€in€ðð€48-2-121,€reads:Ð ° ÐÌÒ°ÒÒ°ÒÓ  Ó(a)€€It€is€unlawful€for€any€person,€in€connection€with€the€offer,€sale€or€purchase€of€anyÏsecurity€in€this€state,€directly€or€indirectly,€to:€Ì(1)€Employ€any€device,€scheme,€or€artifice€to€defraud;€Ì(2)€Make€any€untrue€statement€of€a€material€fact€or€omit€to€state€a€material€factÏnecessary€in€order€to€make€the€statements€made,€in€the€light€of€the€circumstancesÏunder€which€they€are€made,€not€misleading;€or€Ì(3)€Engage€in€any€act,€practice,€or€course€of€business€which€operates€or€wouldÏoperate€as€a€fraud€or€deceit€upon€any€person.€Ì(b)€€It€is€unlawful€for€any€person€who€receives€any€consideration€from€another€personÏprimarily€for€advising€the€other€person€as€to€the€value€of€securities€or€their€purchaseÏor€sale,€whether€through€the€issuance€of€analyses€or€reports€or€otherwise,€in€this€state,Ïto:€Ì(1)€Employ€any€device,€scheme,€or€artifice€to€defraud€the€other€person;€Ì(2)€Engage€in€any€act,€practice,€or€course€of€business€which€operates€or€wouldÏoperate€as€a€fraud€or€deceit€upon€the€other€person;€or€ÌÒ°­ÒÒ°ÒÒ°»ÒÒ°Ò(3)€Take€or€have€custody€of€any€securities€or€funds€of€any€client€except€as€theÏcommissioner€may€by€rule€permit€or€unless€the€person€is€licensed€as€a€broker-dealerÏunder€this€part.€Ì(c)€€It€is€unlawful€for€any€person€to€make€or€cause€to€be€made,€in€any€document€filedÏwith€the€commissioner€or€in€any€proceeding€under€this€part,€any€untrue€statement€ofÏa€material€fact€or€to€omit€to€state€a€material€fact€necessary€in€order€to€make€theÏstatements€made,€in€the€light€of€the€circumstances€under€which€they€are€made,€notÏmisleading.€ÌÓÉÓÌÒ°ÜÒÒ°üÒTenn.€Code€Ann.€ðð€48„2„121€(Supp.€1998).€ ÷Ý ƒ+¯"ÝÝ  ÝÔ€XxeXXXÔÔ€'qXXxeÔÓ  Óò òÔ Ad ÔFILEDÔ€XxeX'qÔÐ  ÐÌMay€19,€1999ÌÌCecil€Crowson,€Jr.ÌAppellate€Court€ClerkÔdAhÔó ó }Ý ƒ üÝ$Ýà  àòòÚ  Ú1Ú  ÚóóÝ  Ýà ` àThe€text€of€the€Tennessee€Securities€Act,€found€in€ðð€48-2-121,€reads:Ð ° ÐÌÒ°ÒÒ°ÒÓ  Ó(a)€€It€is€unlawful€for€any€person,€in€connection€with€the€offer,€sale€or€purchase€of€anyÏsecurity€in€this€state,€directly€or€indirectly,€to:€Ì(1)€Employ€any€device,€scheme,€or€artifice€to€defraud;€Ì(2)€Make€any€untrue€statement€of€a€material€fact€or€omit€to€state€a€material€factÏnecessary€in€order€to€make€the€statements€made,€in€the€light€of€the€circumstancesÏunder€which€they€are€made,€not€misleading;€or€Ì(3)€Engage€in€any€act,€practice,€or€course€of€business€which€operates€or€wouldÏoperate€as€a€fraud€or€deceit€upon€any€person.€Ì(b)€€It€is€unlawful€for€any€person€who€receives€any€consideration€from€another€personÏprimarily€for€advising€the€other€person€as€to€the€value€of€securities€or€their€purchaseÏor€sale,€whether€through€the€issuance€of€analyses€or€reports€or€otherwise,€in€this€state,Ïto:€Ì(1)€Employ€any€device,€scheme,€or€artifice€to€defraud€the€other€person;€Ì(2)€Engage€in€any€act,€practice,€or€course€of€business€which€operates€or€wouldÏoperate€as€a€fraud€or€deceit€upon€the€other€person;€or€ÌÒ°­ÒÒ°ÒÒ°»ÒÒ°Ò(3)€Take€or€have€custody€of€any€securities€or€funds€of€any€client€except€as€theÏcommissioner€may€by€rule€permit€or€unless€the€person€is€licensed€as€a€broker-dealerÏunder€this€part.€Ì(c)€€It€is€unlawful€for€any€person€to€make€or€cause€to€be€made,€in€any€document€filedÏwith€the€commissioner€or€in€any€proceeding€under€this€part,€any€untrue€statement€ofÏa€material€fact€or€to€omit€to€state€a€material€fact€necessary€in€order€to€make€theÏstatements€made,€in€the€light€of€the€circumstances€under€which€they€are€made,€notÏmisleading.€ÌÓÉÓÌÒ°ÜÒÒ°üÒTenn.€Code€Ann.€ðð€48„2„121€(Supp.€1998).€,c½¬AZ‹"Arial Regular(3¯$££Ý ƒ!ÝÝ  Ý d""""'ÿÿdxd*+ ,-Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó..'÷ÿ dxdüÿP PdÝ ƒ!ÝÝ  Ýñ=ñ›ñ=ñÑTR[  AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÑ7€,†XXdðdÈ7ÑñGññ=ñßr€) (<,(j 8` `€€@Eȱ` 8ttxP°ð  rßñ=ññGññGññGññGññ=ñ›ñ=ññGññGññGññGñ›ñGññGñ›ñGñà@} } ìàò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEˆÌñGñœßt€) (>.*jxÜ+` `€€@E¤Ë` 8ttxPÜ Ð + tß›ñGñà@jj%ìàAT€JACKSONˆÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð à ÐÌóóÌLEE€P.€FITE,€Individually€andà h àà À à)Ð ` ° ÐDerivatively€on€behalf€of€à  àà h àà À à)Ð P   ÐH€&€M€CONSTRUCTION€CO.,à h àà À à)Ð @  ÐINC.,€a€Tennessee€Corporation,à h àà À à)Ð 0 € Ðà  àà ` àà ¸ àà  àà h àà À à)Ìà  àó óPlaintiff/Appellant,à  àà h àà À àò ò)à  àó óMadison€Chancery€No.€52002€€Ð `  Ðœñ<ñ7ñ<ñ›à  àà ` àà ¸ àà  àà h àà À àò ò)Ð P  Ðv.à  àà ` àà ¸ àà  àà h àà À à)Ð ð@  Ðà  àà ` àà ¸ àà  àà h àà À à)à  àó óAppeal€No.€02A01„9710„CH„00266ò òÐ à0  ÐRICHARD€L.€FITE,€C.€DAVID€FITE,€€€à À à)Ð Ð  ÐLARRY€P.€BECKER,€H€&€M€à h àà À à)Ð À ÐCONSTRUCTION€CO.,€INC.,€a€à h àà À à)Ð ° ÐTennessee€Corporation€and€SHARES€à À à)Ð  ð ÐOF€STOCK€IN€H€&€M€à  àà h àà À à)Ð à ÐCONSTRUCTION€CO.,€INC.€OWNEDà À à)Ð €Ð ÐBY€LEE€P.€FITE,à ¸ àà  àà h àà À à)Ð pÀ Ðà  àó óDefendants/Appellees.à h àà À àò ò)Ð `° ÐÌÌó óÌÌà0  àà ° àà@zzì(#(#àAPPEAL€FROM€THE€CHANCERY€COURT€OF€MADISON€COUNTYˆÌà@)) ìàAT€JACKSON,€TENNESSEEˆÌÌÌà@  ìàTHE€HONORABLE€JOE€C.€MORRIS,€CHANCELLORˆÌÌÌòòÌÌFor€the€Plaintiff/Appellantóó:òòà  àà h àà À àFor€the€Defendants/Appelleesóó:Ð €%Ð # ÐÌMartin€H.€Aussenbergà  àà h àà À àLee€J.€Chase,€III€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð `'°"% ÐMemphis,€Tennessee€€€à  àà h àà À àMemphis,€Tennessee€€Ð P( #& Ѐ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌÌÌò òà  àà ` àà ¸ àà  àà h àà À àREVERSED€AND€REMANDEDó óÐ ,`'* ÐÌÌÌà  àà ` àà ¸ àà  àà h àà À àHOLLY€KIRBY€LILLARD,€J.ÌÌÌCONCUR:ÌÌÌW.€FRANK€CRAWFORD,€P.J.,€W.S.€€€€€€€€€€ÌÌÌDAVID€G.€HAYES,€J.Ð  @837 ÐØØÑ7€,†XXdðXXdð7ÑÑ  ÑÓÓÑ  Ñà@55'ìàò òOPINIONó óˆÐ ° Ðà  àThis€case€involves€allegations€of€breach€of€fiduciary€duty,€fraud€in€the€inducement€of€aÏcontract,€and€violation€of€the€Tennessee€Securities€Act.€€The€plaintiff€asserts€that€the€defendants,€hisÏtwo€brothers€who€are€majority€shareholders€in€the€family€corporation,€the€corporation,€as€an€alter€egoÏor€veil€of€the€majority€shareholders,€and€an€officer€and€director€of€the€corporation,€used€fraudulentÏexpense€and€contract„kickback€schemes€to€lower€the€book€value€of€the€corporationððs€stock€whenÏplaintiff€executed€an€option€to€sell€agreement.€€The€trial€court€granted€summary€judgment€to€theÏdefendants.€€We€reverse€and€remand.€Ìà  àH€&€M€Construction€Co.,€Inc.€(ð ðH€&€Mðð)€is€a€closely€held€corporation€which€was€ownedÏjointly€by€the€three€Fite€brothers.€€They€each€obtained€a€one„third€ownership€in€the€corporation€afterÏtheir€father€died€in€1983.€€Plaintiff,€Lee€P.€Fite€(ð ðLee€Fiteðð),€worked€for€H€&€M€from€1975€to€1978,€Ï1986€to€1991,€and€again€for€a€short€time€in€1995.€€C.€David€Fite€and€Richard€L.€Fite,€(ð ðthe€DefendantÏFite€Brothersðð),€have€worked€for€H€&€M€since€1970€and€1975,€respectively.€€C.€David€Fite€currentlyÏserves€as€the€Chairman€of€the€Board€of€H€&€M,€while€Richard€L.€Fite€currently€serves€as€the€ChiefÏExecutive€Officer€of€H€&€M.€€Larry€P.€Becker€(ð ðBeckerðð)€currently€serves€as€the€President€of€H€&ÏM€and€has€been€an€officer€and€director€of€H€&€M€at€all€times€pertinent€to€this€litigation.€€AlthoughÏhe€was€not€a€shareholder€in€1992€when€the€option€agreement€was€signed,€he€became€a€shareholderÏsometime€prior€to€the€filing€of€this€suit.€€The€record€is€unclear€as€to€Beckerððs€ownership€percentage.€Ï€€€€€€à  àIn€1991,€Lee€Fite€decided€to€pursue€a€law€degree.€€The€parties€negotiated€a€sale€of€Lee€FiteððsÐ p&À!$ Ðshares€of€H€&€M€to€allow€him€to€finance€his€education.€€The€record€contains€conflicting€accountsÏof€who€initiated€the€negotiations.€€Lee€Fite€hired€an€attorney,€Daniel€Hatzenbuehler,€in€connectionÏwith€the€negotiations.€€On€March€31,€1992,€Lee€Fite€signed€an€Option€Agreement€which€granted€HÏ&€M€a€fourteen€year€option€to€buy€out€his€ownership€interest€in€H€&€M.€€Pursuant€to€the€OptionÏAgreement,€Lee€Fite€resigned€as€a€corporate€director€and€officer€of€H€&€M€and€discontinued€hisÏemployment€with€the€corporation.€€The€book€value€used€in€the€Option€Agreement€was€$29,980.45Ïper€share.€€This€figure€was€determined€by€outside€certified€public€accountants€based€on€the€auditedÏfinancial€statements€of€H€&€M.€€The€Option€Agreement€provided€that€the€book€value€would€beÏincreased€by€nine€percent€per€year€for€each€calendar€year€after€the€agreement€was€executed.€€H€&€M€Ïpurchased€4.11€shares€from€Lee€Fite€in€1991€for€a€total€of€$113,156;€4.31€shares€in€1992€for€a€totalÏof€$129,215;€5.96€shares€in€1993€for€a€total€of€$194,794;€6.06€shares€in€1994€for€a€total€of€$215,855;Ð ;`6: Ðand€5.83€shares€in€1995€for€a€total€of€$226,538.€€H€&€M€advanced€$143,379€to€Lee€Fite€in€1996,Ïalthough€no€shares€were€redeemed€because€of€pending€litigation.€€Lee€Fite€also€received€$150,000Ïpursuant€to€a€confidentiality€agreement€signed€at€the€time€of€the€Option€ñ-ñœñ-ñAgreement.ñ-ñ›ñ-ñÌà  àIn€July€1995,€Lee€Fite€resumed€work€for€H€&€ñ-ñœñ-ñM.ñ-ñ›ñ-ñ€ñ-ñœñ-ñ€Atñ-ñ›ñ-ñ€that€time,€Lee€Fite€noticed€that€hisÏbrothers€were€living€an€extravagant€lifestyle,€allegedly€characterizing€the€funds€needed€to€supportÏthis€lifestyle€as€corporate€expenses.€€ñ-ñœñ-ñLeeñ-ñ›ñ-ñ€Fite€believed€that€the€inflated€corporate€expenses€and€largeÏcorporate€salaries€paid€to€the€Defendant€Fite€Brothers€ñ-ñœñ-ññ-ñœñ-ñhad€hadñ-ñ›ñ-ññ-ñ›ñ-ñ€the€effect€of€lowering€the€book€valueÏof€his€stock,€thereby€decreasing€the€value€of€Lee€Fiteððs€interest€in€H€&€M€at€the€time€of€the€sale.€ñ,ñœñ,ñÌ€€à  àOn€June€24,€1996,€Lee€Fite€filed€a€complaint€against€Richard€L.€Fite,€C.€David€Fite,€LarryÐ ° ÐP.€Becker,€H€&€M€Construction€Co.,€Inc.,€and€Shares€of€Stock€in€H€&€M€Construction€Co.,€Inc.ÏOwned€by€Lee€P.€Fite.€€The€defendants€will€collectively€be€referred€to€as€ð ðthe€Defendants.ððò ò€€ñ-ñœñ-ñó óTheñ-ñ›ñ-ñÐ pÀ Ðcomplaint€asserted€both€direct€and€derivative€causes€of€action€for€breach€of€fiduciary€duties,Ïfraudulent€inducement€to€contract,€and€violation€of€the€Tennessee€Securities€Act.ñ-ñœñ-ññ-ñ׃×ñ-ññ-ñ׃ ×ñ-ñÝ ƒ #ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×ñ-ñ›ñ-ñ€ò ò€ó óAll€of€Lee€FiteððsÐ 0€ Ðclaims€were€based€on€the€same€facts„„that€the€Defendants€used€various€schemes€to€reduce€the€netÏincome€of€the€corporation,€including€excessive€salaries€to€the€officers€and€directors,€the€use€ofÐ ð@ Ðcorporate€funds€to€pay€for€personal€items€or€services€that€benefit€the€officers€and€ñ-ñœñ-ñdirectors,ñ-ñ›ñ-ñ€andÏcontract€ð ðkickbacks,ðð€that€is,€corporate€payment€of€excessive€prices€for€goods€and€services€providedÏby€entities€controlled€by€the€corporationððs€officers€and€directors.€€Use€of€these€schemes€allegedlyÏfraudulently€lowered€the€book€value€of€the€stock€that€Lee€Fite€agreed€to€sell€in€the€OptionÏAgreement.€€The€mismanagement€of€corporate€funds€by€the€Defendants€violated€their€fiduciary€dutyÏto€H€&€M,€Lee€Fite€asserted,€because€it€reduced€H€&€Mððs€net€income€and€shrunk€its€retainedÏearnings.Ìà  àPrior€to€any€substantial€discovery,€the€Defendants€filed€a€motion€for€summary€judgment,€asÏwell€as€a€motion€to€stay€discovery€pending€resolution€of€the€motion€for€summary€judgment.€€In€theirÏmotion€for€summary€judgment,€the€Defendants€asserted€that€Lee€Fiteððs€claims€were€barred€by€theÏstatute€of€limitations,€laches,€and€unclean€hands.€€They€asserted€that€Lee€Fite€lacked€standing€toÏbring€a€derivative€claim€since€he€did€not€represent€any€other€shareholder.€€In€addition,€they€arguedÏthat€Lee€Fite€was€estopped€from€bringing€his€claims€because€he€affirmed€the€Option€Agreement€inÏa€prior€legal€proceeding€and€because€the€Option€Agreement€contained€a€release€of€all€claims€againstÏthem.€€Finally,€they€asserted€that€Lee€Fiteððs€failure€to€return€the€consideration€he€received€under€theÏOption€Agreement€barred€his€claims.€€In€support€of€their€motion€for€summary€judgment,€theÏDefendants€filed€a€memorandum€of€law,€the€closing€documents€signed€in€connection€with€the€saleÏof€stock,€including€the€Option€ñ-ñœñ-ñAgreement,ñ-ñ›ñ-ñ€mutual€ñ-ñœñ-ñrelease,€andñ-ñ›ñ-ñ€copies€of€checks€showing€ñ-ñœñ-ñmoniesñ-ñ›ñ-ñ€paidÏto€Lee€Fite€under€the€Option€Agreement,€Lee€Fiteððs€deposition€taken€during€his€1994€divorceÏproceedings€containing€statements€allegedly€ñ-ñœñ-ñwarranting€the€application€of€judicialñ-ñ›ñ-ñ€estoppel,€andÏaffidavits€by€C.€David€Fite,€Richard€L.€Fite,€and€Larry€P.€Becker€containing€the€circumstances€andÏspecifics€of€the€stock€sale.€€€The€Defendants€sought€a€stay€of€discovery€pending€resolution€of€theÏsummary€judgment€motion,€alleging€that€Lee€Fite€sought€ð ðirrelevant,€immaterial,€sensitive€andÏconfidential€ñ-ñœñ-ñinformationñ-ñ›ñ-ñ€which€has€no€bearing€upon€this€lawsuit€and€will€in€no€way€lead€to€theÏdiscovery€of€admissible€evidence.ðð€€In€addition,€they€argued€that€discovery€was€moot€because€LeeÏFiteððs€claims€were€barred€by€the€statute€of€limitations,€judicial€estoppel,€voluntary€release,€laches,Ïand€waiver.€€€€Ìà  àIn€response,€Lee€Fite€filed€a€memorandum€of€law€in€which€he€argued€that€summary€judgmentÏwas€inappropriate€because€he€had€not€been€afforded€an€adequate€opportunity€to€conduct€discoveryÐ 09€48 Ðand€because€the€case€involved€fraud€issues€that€could€not€be€resolved€by€summary€judgment.€€InÏaddition,€he€argued€that€the€determination€of€whether€his€claim€was€barred€by€the€statute€ofÏlimitations€could€not€be€made€on€a€motion€for€summary€judgment.€ñ-ñœñ-ñ€Leeñ-ñ›ñ-ñ€Fite€denied€release€or€waiverÏof€his€claims.€€In€support€of€his€response€to€the€summary€judgment€motion,€œñ3ñthe›€ñ3ñLee›€Fite€filed€his€ownÏaffidavit€describing€the€ñ-ñœñ-ñcircumstancesñ-ñ›ñ-ñ€surrounding€the€stock€sale€and€an€affidavit€by€his€ex„wife,ÏJanet€Denice€Jones€Fite,€stating€that€Lee€Fite€told€her€in€1992€that€he€believed€his€brothers€cheatedÏhim€in€the€stock€sale.€€Lee€Fite€argued€that€discovery€should€be€permitted€because€he€was€deprivedÏof€the€opportunity€to€adequately€respond€to€the€Defendantsðð€motion€for€summary€judgment.€€HeÏargued€that€discovery€is€a€condition€precedent€to€the€entry€of€summary€judgment,€and€therefore,Ïsummary€judgment€was€inappropriate.Ìà  àAfter€considering€the€partiesðð€pleadings€and€supporting€documents,€the€trial€judge€concludedÏthat€there€was€no€genuine€issue€as€to€any€material€fact,€and€that€the€Defendants€were€entitled€toÏjudgment€as€a€matter€of€law€on€all€legal€theories.€€No€discovery€was€permitted.€€Rule€11€sanctionsÏwere€denied.€€The€order€of€the€trial€judge€did€not€set€forth€ñ-ñœñ-ñhisñ-ñ›ñ-ñ€reasoning.€Ìà  àOn€appeal,€Lee€Fite€argues€that€the€trial€court€erred€in€dismissing€his€claims.€€Lee€FiteÏcontends€that€his€allegations€state€a€claim€for€ñ-ñœñ-ñrelief€andñ-ñ›ñ-ñ€raise€genuine€issues€of€material€ñ-ñœñ-ñfactñ-ñ›ñ-ñ€as€to€theÏDefendantsðð€breach€of€fiduciary€duties,€fraudulent€inducement€to€contract,€and€violation€of€theÏTennessee€Securities€Act.€€Lee€Fite€maintains€that€the€Defendants€failed€to€establish€any€affirmativeÏdefenses€to€his€allegations.€Ìà  àIn€support€of€his€direct€action€for€breach€of€fiduciary€duty,€Lee€Fite€argues€that€the€DefendantÏFite€Brothersò ò€ó órealized€disguised€dividends€not€shared€with€the€other€shareholders€by€having€entitiesÐ 0*€%( Ðcontrolled€by€the€Defendant€Fite€Brothers€and€ñ-ñœñ-ñBeckerñ-ñ›ñ-ñ€charge€H€&€M€inflated€prices.€€In€addition,Ïhe€argues€that€the€Defendant€Fite€Brothers,€as€majority€shareholders€and€officers€and€directors,ÏBecker,€as€an€officer€and€director,€and€H€&€M,€as€the€alter€ego€of€the€majority€shareholders,€avoidedÏpaying€dividends€to€him€as€the€minority€shareholder€by€keeping€H€&€Mððs€retained€earningsÏartificially€low.€€Ìà  àIn€support€of€his€derivative€action€for€breach€of€fiduciary€duty,€Lee€Fite€argues€that€theÏDefendant€Fite€Brothers,€as€majority€shareholders€and€officers€and€directors,€Becker,€as€an€officerÏand€director,€and€the€corporation€as€a€mere€veil€of€the€majority€shareholders,€harmed€the€corporationÐ 09€48 Ðby€diminishing€its€retained€earnings.€€He€contends€that€they€defrauded€the€corporation€by€havingÏentities€controlled€by€the€individual€Defendants€charge€H€&€M€inflated€prices.€€He€argues€that€theseÏactions€constitute€fraudulent€inducement€to€contract€and€a€violation€of€the€Tennessee€Securities€ActÏbecause€they€fraudulently€reduced€H€&€Mððs€net€income€and,€as€a€result,€lowered€the€book€value€ofÏthe€stock.€€As€to€all€of€the€legal€theories€advanced,€Lee€Fite€argues€that€the€trial€court€erred€inÏrefusing€to€permit€discovery€prior€to€deciding€the€motion€for€summary€judgment.Ì€€€à  àA€motion€for€summary€judgment€should€be€granted€when€the€movant€demonstrates€that€thereÐ ð@  Ðare€no€genuine€issues€of€material€fact€and€that€the€moving€party€is€entitled€to€a€judgment€as€a€matterÏof€law.€òò€ò òSeeóó€ó óTenn.€R.€Civ.€P.€56.03.€€The€party€moving€for€summary€judgment€bears€the€burden€ofÐ ° Ðdemonstrating€that€no€genuine€issue€of€material€fact€exists.€€ò òòòSee€Byrd€v.€Hallóóó ó,€847€S.W.2d€208,€211Ð à Ð(Tenn.€1993).€€On€a€motion€for€summary€judgment,€the€court€must€take€the€strongest€legitimate€viewÏof€the€evidence€in€favor€of€the€nonmoving€party,€allow€all€reasonable€inferences€in€favor€of€thatÏparty,€and€discard€all€countervailing€evidence.€€òòò òSee€id.ó óóó€at€210„11.€€Summary€judgment€is€onlyÐ 0€ Ðappropriate€when€the€facts€and€the€legal€conclusions€drawn€from€the€facts€reasonably€permit€onlyÏone€conclusion.€€ò òòòSee€Carvell€v.€Bottomsó óóó,€900€S.W.2d€23,€26€(Tenn.€1995).€€Since€only€questions€ofÐ ð@ Ðlaw€are€involved,€there€is€no€presumption€of€correctness€regarding€a€trial€court's€grant€of€summaryÏjudgment.€€ò òòòSee€id.ó óóó€€Therefore,€our€review€of€the€trial€courtððs€grant€of€summary€judgment€is€òòde€novoóóÐ °"  Ðon€the€record€before€this€Court.€€ò òòòSee€id.óóó ó€€€€€€€€€€€€€€€€€€€€€€€Ð $à" Ðà  à€à ` àLee€Fite€alleges€overall€that€the€trial€court€erred€in€not€permitting€him€to€conductÐ p&À!$ Ðdiscovery€prior€to€deciding€the€motion€for€summary€judgment.€€Indeed,€in€some€circumstances,€theÏparties€must€be€afforded€the€opportunity€to€conduct€discovery€prior€to€the€determination€of€aÏsummary€judgment€motion.€ñ-ñœñ-ñò òòò€See€Griffin€v.€Traughberóóó ó,€No.€01„A„01„9511„CH„00533,€1996€WLÐ ,`'* Ð355069,€at€*6€(Tenn.€App.€June€28,€1996).€€ð ðThis€proposition€is€especially€true€when€such€discoveryÏis€necessary€to€properly€oppose€the€motion.ðð€€òòò òId.óóó ó€(citing€numerous€œñ4ñFñ4ññ6ññ5ñFñ5ññ6ññ7ñfñ7ñederal›€and€Tennessee€cases).€€InÐ Ð/ +. Ðconnection€with€each€legal€theory€on€which€Lee€Fite€relies,€we€will€consider€his€argument€on€appealÏthat€he€should€have€been€permitted€to€conduct€discovery€prior€to€resolution€of€the€motion€forÏsummary€judgment.€€We€will€also€address€the€affirmative€defenses€asserted€by€the€Defendants,Ïâ âincluding€the€statute€of€limitations,€waiver,€judicial€estoppel€and€release.€Ð P7 26 Ðà  àLee€Fite€argues€that€the€trial€court€erred€in€dismissing€his€direct€action€for€breach€of€fiduciaryÏâ âduty.€€Lee€Fite€maintains€that€Defendant€Fite€Brothers,€as€majority€shareholders,€Becker,€as€anÏofficer€and€director,€and€H€&€M€as€the€alter€ego€of€the€majority€shareholders,€breached€theirÏfiduciary€duties€to€Lee€Fite€as€a€minority€shareholder.€€Lee€Fite€asserts€that€they€utilized€contract„¼kickback€schemes€in€which€entities€controlled€by€the€individual€Defendants€charged€the€corporationÏexcessive€prices.€€Lee€Fite€also€contended€that€the€Defendant€Fite€Brothers€kept€H€&€Mððs€earningsÏlow€by€paying€themselves€excessive€salaries€and€using€corporate€funds€to€pay€personal€expenses.€ÏThrough€these€schemes,€Lee€Fite€alleged,€the€Defendants€avoided€paying€dividends€to€Lee€Fite€asÏthe€minority€shareholder.Ìà  àIt€is€a€ð ðwell-settled€rule[]€of€corporate€law€.€.€.€that€officers€and€directors€of€the€corporationÏoccupy€a€fiduciary€relationship€to€their€shareholders,€as,€indeed,€do€majority€stockholders€towardÏminority€stockholders.ðð€€ò òòòNelms€v.€Weaveróóó ó,€681€S.W.2d€547,€549€(Tenn.€1984)€(citing€ò òòòJohns€v.Ð P  ÐCaldwellóóó ó,€601€S.W.2d€37€(Tenn.€App.€1980);òòò ò€Heylandt€Sales€Co.€v.€Welding€Gas€Prods.€Co.óóó ó,€180Ð 0€ ÐTenn.€437,€175€S.W.2d€557€(1943)).€€In€general,€majority€shareholders€may€recover€for€injuriesÏð ðcaused€by€the€wrongdoings€of€majority€stockholders.ðð€€òòò òNelson€v.€Martinóóó ó,€958€S.W.2d€643,€647„48Ð ð@ Ð(Tenn.€1997)€(quoting€ò òòòMcCampbell€v.€Fountain€Head€R.R€Co.óóó ó,€111€Tenn.€55,€77€S.W.€1070Ð Ð  Ð(1903)).€€The€facts€as€alleged€by€Lee€Fite€could€state€a€claim€for€breach€of€fiduciary€duty,€if€properlyÏsupported€by€evidence.€€Lee€Fite,€as€the€respondent€to€the€motion€had€the€burden€of€showingÏð ðspecific€facts,€not€legal€conclusions,€by€using€affidavits€or€the€discovery€materials€listed€in€RuleÏ56.03,€establishing€that€there€are€indeed€disputed,€material€facts€creating€a€genuine€issue.ðð€€òòò òByrd€v.Ð P( #& ÐHallóóó ó,€847€S.W.2d€208,€215€(Tenn.€1993).€€However,€the€motion€for€summary€judgment€was€decidedÐ 0*€%( Ðbefore€Lee€Fite€was€given€the€opportunity€to€conduct€discovery.€€Therefore,€unless€the€DefendantsÏare€entitled€to€summary€judgment€based€on€one€of€the€asserted€affirmative€defenses,€the€grant€ofÏsummary€judgment€was€premature€as€to€Lee€Fiteððs€direct€action€for€breach€of€fiduciary€duty.€€¼à  àLee€Fite€next€argues€that€the€trial€court€erred€in€dismissing€his€derivative€claim€for€breachÏof€fiduciary€duty.€€Rule€23€of€the€Tennessee€Rules€of€Civil€Procedure€requires€that€a€shareholder€whoÏbrings€a€derivative€action€must€ð ðfairly€and€adequately€represent€the€interests€of€the€shareholders€orÏmembers€similarly€situated€in€enforcing€the€right€of€the€corporation€or€association.ðð€€Tenn.€R.€Civ.ÏP.€23.06.€€The€Defendants€contend€that€the€trial€court€correctly€dismissed€Lee€Fiteððs€claim€becauseÐ 09€48 Ðhe€has€a€conflict€of€interest€as€a€matter€of€law€under€the€holding€of€òòò òWaterhouse€v.€CumberlandÐ ° ÐCounty€Bankóóó ó,€Nos.€03A01„9102„CH„00056,€03A01„9106„CH„00079,€1991€WL€199480€(Tenn.€App.Ð à ÐOct.€8,€1991).€€òòò òWaterhouseóóó ó€held€that€where€a€plaintiff€represents€other€similarly€situatedÐ pÀ Ðshareholders€in€a€derivative€suit€on€behalf€of€a€corporation,€and€at€the€same€time€asserts€his€ownÏinterests€in€a€direct€action€against€the€corporation,€there€is€a€conflict€of€interest€as€a€matter€of€law.€Ïòòò òId.€óóó óat€*2.€€òòò òHall€v.€Tennessee€Dressed€Beef€Co.óóó ó,€No.€01„A„01„9510„CH„00430,€1996€WL€355074,€Ð `  Ðat€*5€(Tenn.€App.€June€28,€1996),€expanded€on€òòò òWaterhouse€óóó óand€held€that€where€a€minorityÐ ð@  Ðshareholder€is€the€only€minority€shareholder,€and€thus€is€the€only€similarly€situatedò ò€ó óshareholder,€thereÐ Ð  Ðis€no€conflict€of€interest€when€that€shareholder€also€brings€a€direct€action€against€the€corporation.€ÏThe€òòò òHall€ó óóócourt€reasoned€that€if€a€single€minority€shareholder€were€not€allowed€to€bring€a€derivativeÐ à Ðsuit,€then€ð ðRule€23.06€would€deprive€the€shareholders€of€closely€held€corporations€of€their€abilityÏto€bring€derivative€actions.ðð€€òòò òId.€óóó ó€€Ð P  Ðà  àIn€this€case,€it€is€unclear€whether€Lee€Fite€is€the€sole€minority€shareholder€or€whether€thereÏare€other€similarly€situated€shareholders.€€In€their€briefs,€both€parties€maintain€that€the€three€FiteÏbrothers€owned€equal€one„third€shares€of€H€&€M.€€The€Option€Agreement,€however,€was€signed€byÏa€fourth€shareholder,€James€M.€Eidson,€Sr.€€If€Mr.€Eidson€is€still€a€shareholder€and€is€a€similarlyÏsituated€shareholder,€then€Lee€Fite€would€be€barred€from€his€derivative€suit€under€òòò òWaterhouseóóó ó.€€IfÐ °"  ÐLee€Fite€is€the€only€minority€shareholder,€and€thus€the€only€similarly€situated€shareholder,€then€underÏòòò òHall€óóó óthere€would€be€no€conflict€of€interest.€ò ò€ó óBecker,€an€alleged€co„conspirator,€must€be€consideredÐ p&À!$ Ðas€well.€€Since€the€record€in€this€case€is€unclear,€we€cannot€determine€whether€Lee€Fiteððs€derivativeÏclaim€was€properly€dismissed.€€Therefore,€we€remand€for€the€trial€court€to€determine€whether€LeeÏFite€was€the€only€œñ8ñsimilarly€situated€ñ8ñminority›€shareholder€and€whether€Lee€Fiteððs€derivative€actionÏcan€be€maintained.€€à ¸ àœñ9ñÐ ð-@), Ðà  àñ9ñLee›€Fite€asserts€that€the€trial€court€erred€in€granting€summary€judgment€on€his€claim€ofÏfraudulent€inducement€to€contract.€€As€discussed€above,€Lee€Fite€argues€that€the€Defendants€usedÏseveral€schemes€to€reduce€corporate€income€and€lower€the€book€value€of€€Lee€Fiteððs€stock.€€Lee€FiteÏargues€that,€by€failing€to€pay€him€dividends,€the€Defendants€encouraged€him€to€liquidate€hisÏâ âownership.€€In€his€affidavit€in€opposition€to€the€motion€for€summary€judgment,€Lee€Fite€alleged€thatÐ P7 26 Ðhis€brothers€told€him€that€ð ðthe€company€was€not€making€any€money,€and€that€there€were€no€profitsÏto€distribute€to€shareholders.ððÌâ âà  àThe€five€elements€of€an€action€for€fraudulent€inducement€to€contract€are:€€ð ð(1)€a€falseÏstatement€concerning€a€fact€material€to€the€transaction;€(2)€knowledge€of€the€statementððs€falsity€orÏutter€disregard€for€its€truth;€(3)€intent€to€induce€reliance€on€the€statement;€(4)€reliance€underÏcircumstances€manifesting€a€reasonable€right€to€rely€on€the€statement;€(5)€an€injury€resulting€fromÏthe€reliance.ðð€òòò ò€Lowe€v.€Gulf€Coast€Dev.,€Inc.óóó ó,€No.€01„A„01„9010„CH„00374,€1991€WL€220576,€atÐ ð@  Ð*7€(Tenn.€App.€Nov.€1,€1991).€€As€a€general€rule,€summary€judgment€is€not€appropriate€for€a€fraudÏclaim€because€a€trial€is€needed€to€develop€the€action€fully.€€òòò òSee€Fowler€v.€Happy€Goodman€Familyóóó ó,Ð ° Ð575€S.W.2d€496,€499€(Tenn.€1978);€òòò òLong€v.€State€Farm€Fire€&€Cas.€Co.óóó ó,€510€S.W.2d€517,€519Ð à Ð(Tenn.€App.€1974).€€The€facts€as€alleged€by€Lee€Fite€could€properly€state€a€claim€for€fraudulentÏinducement€to€contract.€€In€response€to€the€motion€for€summary€judgment,€Lee€Fite€needed€toÏdemonstrate€that€there€was€a€genuine€issue€of€material€fact.€€òòò òSee€Byrd€v.€Hallóóó ó,€847€S.W.2d€208,€211€Ð 0€ Ð(Tenn.€1993).€€As€with€Lee€Fiteððs€direct€action€for€breach€of€fiduciary€duty,€discussed€above,€€LeeÏFite€was€denied€the€opportunity€to€conduct€discovery.€€Therefore,€unless€the€Defendants€are€entitledÏto€summary€judgment€based€on€one€of€the€asserted€affirmative€defenses,€the€grant€of€summaryÏjudgment€was€premature€as€to€Lee€Fiteððs€claim€of€fraudulent€inducement€to€contract.€€Ì€à  àOn€appeal,€the€Defendants€assert€that€the€trial€court€properly€dismissed€Lee€Fiteððs€claimsÐ $à" Ðbecause€each€is€barred€by€the€applicable€statute€of€limitations.€€We€must€determine€whether€aÏgenuine€issue€of€material€fact€exists€as€to€this€affirmative€defense.€€Ìà  àThe€Defendants€assert€that€Lee€Fiteððs€claim€for€fraudulent€inducement€to€contract€is€barredÏby€the€three€year€statute€of€limitations€for€tortious€injury€to€property.€€òòò òSee€óóó óTenn.€Code€Ann.€ðð€28„3„Ð ,`'* Ð105.€€They€contend€that€Lee€Fiteððs€claims€for€breach€of€fiduciary€duty€are€barred€under€the€one„yearÏstatute€of€limitations€contained€in€Tennessee€Code€Annotated€ðð€48„18„601.€€They€argue€that€LeeÏFiteððs€claim€under€the€Tennessee€Securities€Act€is€barred€by€the€Actððs€two„year€statute€of€repose.€Ð °1-0 Ðòòò òSee€óóó óTenn.€Code€Ann.€ðð€48„2„122(h)€(Supp.€1998).Ð 3à.2 Ðà  àUnder€the€statutes€for€fraudulent€inducement€to€contract€and€breach€of€fiduciary€duty,€theÏperiod€of€limitations€accrues€at€the€time€the€plaintiff€knew€of€the€acts€from€which€the€cause€of€actionÏarose,€or€at€the€time€that€the€plaintiff€should€have€discovered€them€through€reasonable€diligence.€€òòò òSeeÐ 09€48 ÐVance€v.€Schulderóóó ó,€547€S.W.2d€927,€930€(Tenn.€1977);€Tenn.€Code€Ann.€ðð€48„18„601€(1995).€€TheÐ ° Ðstatute€of€repose€for€the€Tennessee€Securities€Act,€on€the€other€hand,€places€œañ:ñn›€absoluteñ:ñ›€two„year€cap€onÏactions€under€the€statute,€which€cannot€be€tolled€merely€by€the€plaintiffððs€failure€to€discover€hisÏcause€of€action.€€òòò òSee€Montcastle€v.€American€Health€Sys.óóó ó,€702€F.€Supp.€1369,€1374€(E.D.€Tenn.Ð P   Ðœ1988).›€€However,€fraudulent€concealment€of€the€cause€of€action€by€the€defendants€will€toll€theÏstatutes€of€limitations€until€the€plaintiff€discovers€the€fraud.€€òòò òSee€id.óóó ó€(discussing€fraudulentÐ `  Ðconcealment€in€regard€to€the€Tennessee€Securities€Actððs€two„year€statute€of€repose);òò€ò òVance€v.Ð ð@  ÐSchulderóóó ó,€547€S.W.2d€927,€930€(Tenn.€1977)€(discussing€fraudulent€concealment€in€regard€to€theÐ Ð  Ðthree€year€statute€of€limitations€for€tortious€injury€to€property);€Tenn.€Code€Ann.€ðð€48„18„601Ï(containing€provisions€on€fraudulent€concealment€in€regard€to€the€one„year€statute€of€limitations€forÏbreach€of€fiduciary€œduty).Ìñ1ñà  àñ1ñLee›€Fite€maintains€that€he€did€not€know€of€the€alleged€fraud€or€breaches€of€fiduciary€dutyÏuntil€July€of€1995€when€he€returned€to€work€for€H€&€M.€€Conversely,€the€Defendants€maintain€thatÏLee€Fite€had€full€knowledge€of€their€salaries,€management€policies,€and€other€complained€of€actsÏstarting€in€1983.€€In€òòò òSoldano€v.€Owens„Corning€Fiberglass€Corp.óóó ó,€696€S.W.2d€887,€889€(Tenn.Ð ð@ Ð1985),€the€court€discussed€the€obligation€to€do€a€reasonable€inquiry€to€attempt€to€discover€fraud:ÌÒ°ÒÒ°ÒÓÓMere€ignorance€and€failure€of€the€plaintiff€to€discover€the€existence€of€a€cause€ofÏaction€is€not€sufficient€to€toll€the€running€of€the€statute€of€limitations.€€There€is€anÏexception€to€this€rule.€€Fraudulent€concealment€of€the€cause€of€action€by€theÏdefendant€tolls€the€statute€of€limitations.€€It€begins€to€run€as€of€the€time€of€theÏdiscovery€of€the€fraud€by€the€plaintiff.€.€.€.€[W]here€a€fiduciary€relationship€exists€andÏthere€is€a€duty€to€speak,€mere€silence€may€constitute€a€fraudulent€concealment.ÌÌÒ°umÒÒ°gmÒÓƒmÓòòò òId.óó€€ó ó(quoting€Tennessee€Jurisprudence,€Vol.€18,€at€92).€€In€general,€the€inquiry€of€when€a€plaintiffÐ @)$' Ðknew€of€or€should€have€discovered€a€cause€of€action€is€a€question€of€fact€not€properly€decided€onÏsummary€judgment.€€òòò òSee€City€State€Bank€v.€Dean„Witter€Reynolds,€Inc.óóó ó,€948€S.W.2d€729,€735Ð -P(+ Ð(Tenn.€App.€1996).€€In€òòò òMike€v.€Po€Group,€Inc.óóó ó,€937€S.W.2d€790,€795€(Tenn.€1996),€a€suit€byÐ à.0*- Ðminority€shareholders€against€the€corporation€and€its€majority€shareholders€for€breach€of€fiduciaryÏduty,€the€trial€court€granted€summary€judgment€without€determining€when€the€statute€of€limitationsÏperiod€began.€€The€Tennessee€Supreme€Court€remanded€the€case€back€to€the€trial€court,€stating€thatÏthis€was€a€necessary€determination.€€òòò òSee€id.€Ð `6°15 Ðà  àóóó óIn€this€case,€the€Defendant€Fite€Brothers€as€majority€shareholders€and€officers€and€directorsÐ @837 Ðof€H€&€M,€and€Becker,€as€an€officer€and€director,€clearly€had€a€fiduciary€duty€to€Lee€Fite€as€aÐ  :p59 Ðminority€shareholder€as€well€as€a€duty€to€the€corporation.€€A€genuine€issue€of€material€fact€exists€asÏto€whether€they€fraudulently€concealed€their€actions€from€Lee€Fite.€€Therefore,€the€Defendants€areÏnot€entitled€to€summary€judgment€based€on€the€statute€of€œlimitationsñ;ñ€at€this€timeñ;ñ.›€€€Ìà  àThe€Defendants€also€raise€the€affirmative€defense€of€waiver,€claiming€that€Lee€Fite€acceptedÏthe€benefits€of€the€Option€Agreement€after€he€knew€of€the€alleged€wrongful€acts€of€the€Defendants.€Ïòòò òBrandon€v.€Wrightóóó ó,€838€S.W.2d€532,€534€(Tenn.€App.€1992),€stated,€ð ðIf,€after€discovery€of€the€fraud,Ð `  Ð[the€defrauded€party]€does€any€act€implying€acquiescence€therein,€or€remains€silent€underÏcircumstances€indicating€such€acquiescence,€this€will€amount€to€a€waiver€of€the€fraud€.€.€.ðð€€Such€actsÏdone€after€knowledge€of€the€fraud€are€deemed€to€be€a€voluntary€waiver€of€the€fraud.€€òòò òSee€id.óóó ó€€OnceÐ ° Ðagain,€Lee€Fite€asserts€that€he€did€not€know€of€any€of€the€fraudulent€acts€until€July€1995,€while€theÏDefendants€assert€his€knowledge€began€in€1983.€€As€with€the€statute€of€limitations€issue€discussedÏabove,€a€genuine€issue€of€material€fact€exists€as€to€when€Lee€Fite€knew€or€should€have€known€of€theÏalleged€wrongful€acts.€Therefore,€the€Defendants€are€not€at€this€time€entitled€to€summary€judgmentÏbased€on€the€affirmative€defense€of€waiver.Ìà  àThe€third€affirmative€defense€raised€by€the€Defendants€is€judicial€estoppel.€€Judicial€estoppelÏprohibits€a€party€from€contradicting€a€sworn€statement€given€in€a€prior€judicial€proceeding€with€aÏlater€statement.€€òòò òSee€In€re:€€Adoption€of€Johnson€v.€Johnsonóóó ó,€678€S.W.2d€65,€67€(Tenn.€App.Ð °"  Ð1984).€€The€doctrine€of€judicial€estoppel€was€developed€to€prevent€a€party€from€unfairly€gaining€anÏadvantage€through€the€use€of€inconsistent€positions€on€the€same€issue.€€òòò òSee€Shell€v.€Lawóóó ó,€935€S.W.2dÐ p&À!$ Ð402,€408€(Tenn.€App.€1996)€(citing€òòò òCarvell€v.€Bottomsóóó ó,€900€S.W.2d€23€(Tenn.€1995)).€€TheÐ P( #& ÐDefendants€argue€that€judicial€estoppel€applies€here€because,€in€1994,€at€Lee€Fiteððs€divorceÏproceeding,€Lee€Fiteððs€attorney€stated€that€the€Option€Agreement€was€valid:€ÌÒ°ÒÒ°ÒÓÓà ` àWith€regard€to€Exhibit€2€the€closing€documents€in€connection€with€theÏvarious€redemptions€and€options€of€Lee€P.€Fite€corporate€and€partnership€interestsÏinvolving€entities€of€H€&€M€Construction,€.€.€.€Mr.€Fite€is€not€contesting€the€validityÏof€this€document€or€the€amounts€that€he€received€under€this€document€or€theÏownership€interests€that€are€reflected€in€this€document.€€So€I€donððt€want€there€to€beÏany€concern€that€youððve€got€to€go€behind€this€document€in€terms€of€what€he€hasÏaccepted€or€has€agreed€to.Ìà ` àThe€specifics€youððve€asked€him€about€he€does€not€have€information€on,€butÏso€far€as€Exhibit€2,€it€speaks€for€itself.€€Itððs€a€part€of€the€record,€and€we€are€notÏsuggesting€that€it€is€not€a€valid€document€at€this€point.ÌÌÒ°Ù|ÒÒ°ç|ÒÓõ|ÓThe€Defendants€contend€that€this€statement€by€Lee€Fiteððs€attorney€now€prevents€him€€fromÏcontesting€the€validity€of€the€Option€Agreement€as€this€would€contradict€his€previous€statement.€€InÐ  :p59 Ðtheñ-ñ›ñ-ñ€above€ñ-ñœñ-ñpassage,ñ-ñ›ñ-ñ€however,€€Lee€Fiteððs€attorney€speaks€only€of€her€intent€to€accept€the€validity€ofÐ  :p59 Ðthe€agreement€for€the€purpose€of€the€divorce€proceedings;€there€is€no€factual€assertion€that€theÏagreement€is€valid.€€Therefore,€based€on€this€statement,€Lee€Fite€is€not€estopped€from€arguing€theÏñ-ñœñ-ñinvalidityñ-ñ›ñ-ñ€of€the€Option€Agreement€in€this€lawsuit.€€€€à p à€Ð pÀ Ðà  àFinally,€the€Defendants€argue€the€affirmative€defense€that€the€release€contained€in€the€OptionÏAgreement€relieves€them€of€liability.€€However,ÌÒ°ÒÒ°ÒÓÓ[A]€release,€the€execution€of€which€is€procured€by€false€and€fraudulentÏrepresentations€is€voidable€or€void,€and€may€be€set€aside€at€the€instance€of€the€partyÏdefrauded.€ñ-ñœñ-ñ€Thereñ-ñ›ñ-ñ€is€abundant€authority€to€support€the€rule€that€a€false€representationÏas€to€one€of€several€matters€which€is€material€and€which€enters€into€the€considerationÏin€procuring€a€settlement€is€sufficient€to€render€a€release€void.ÌÒ°ňÒÒ°ÓˆÒÌÓáˆÓòòò òEvans€v.€Tillett€Bros.€Const.€Co.ó óóó,€545€S.W.2d€ñ-ñœñ-ñ8,€11ñ-ñ›ñ-ñ€ñ-ñœñ-ñ(Tenn.€App.ñ-ñ›ñ-ñ€1976)€(citations€omitted).€€The€factsÐ ° Ðas€alleged€by€Lee€Fite€could€render€the€release€void,€if€properly€supported€by€evidence.€€The€trialÏcourt€granted€the€Defendantsðð€motion€for€summary€judgment€before€Lee€Fite€could€establish€specificÏfacts€through€affidavits€or€discovery€materials€negating€the€validity€of€the€release.€€Lee€Fite€isÏentitled€to€conduct€some€discovery€in€order€to€counter€the€Defendantsðð€claims€that€the€releaseÏabrogated€their€liability€from€Lee€Fiteððs€claims.€€The€Defendants€are€not€entitled€to€summaryÏjudgment€at€this€time€on€the€affirmative€defense€of€release.€€€ò òÐ ð@ Ðó óà  àIn€sum,€as€to€Lee€Fiteððs€claims€of€breach€of€fiduciary€duty€and€fraudulent€inducement€toÐ Ð  Ðcontract,€the€trial€court€erred€in€granting€summary€judgment€to€the€Defendants€without€affording€LeeÏFite€the€opportunity€to€conduct€discovery.€€As€to€Lee€Fiteððs€derivative€claim€for€breach€of€fiduciaryÏduty,€the€cause€is€remanded€for€the€trial€court€to€determine€whether€Lee€Fite€was€the€sole€similarlyÏsituated€shareholder.€€If€not,€Lee€Fiteððs€conflict€of€interest€bars€him€from€asserting€a€derivative€actionÏñ-ñœñ-ñin€addition€to€his€directñ-ñ›ñ-ñ€action€for€breach€of€fiduciary€duty.€€If€so,€then€entry€of€summary€judgmentÏfor€the€Defendants€on€this€claim€was€premature€and€Lee€Fite€should€be€afforded€the€opportunity€toÏconduct€discovery.€€Since€a€genuine€issue€of€material€fact€exists€as€to€when€Lee€Fite€knew€or€shouldÏhave€known€of€the€alleged€wrongful€acts€and€whether€the€Defendants€ñ-ñœñ-ñfraudulently€concealedñ-ñ›ñ-ñ€LeeÏFiteððs€cause€of€action,€the€Defendants€are€not€at€this€time€entitled€to€summary€judgment€based€onÏthe€statute€of€limitations€or€the€affirmative€defense€of€waiver.€€ñ-ñœñ-ñThis€issue€may€be€reviewed€again€byÏthe€trñ%ññ$ñal€coñ$ññ%ññ&ñial€court€after€discovery.€ñ&ññ'ñ€ñ'ñAsñ-ñ›ñ-ñ€to€the€Defendantsðð€affirmative€defense€of€release,€summaryÏjudgment€was€premature€in€that€Lee€Fite€was€not€afforded€the€opportunity€ñ-ñœñ-ñtoñ(ñ€conduct€discovery€toñ(ññ-ñ›ñ-ñÏestablish€genuine€issues€of€material€ñ-ñœñ-ñfactñ)ñsñ)ññ-ñ›ñ-ñ€regarding€false€representations€made€by€the€Defendants€inÐ 09€48 Ðthe€buy„out€€proceedings.€€The€doctrine€of€judicial€estoppel€ñ-ñœñ-ñis€not€applicable€to€barñ-ñ›ñ-ñ€Lee€Fite€fromÏcontesting€the€validity€of€the€Option€ñ-ñœñ-ññ*ñañ*ññ+ñAñ+ñgreement,ñ-ñ›ñ-ñ€based€on€the€statement€by€Lee€Fiteððs€attorney€inÏhis€divorce€proceeding.Ìà  àThe€decision€of€the€trial€court€is€reversed€and€remanded.€€The€cause€is€remanded€to€the€trialÏcourt€for€further€proceedings€consistent€with€this€Opinion.€€Costs€are€taxed€to€Appellee,€for€whichÏexecution€may€issue€if€necessary.€€€ÌÌÓÓÔ‡X?<XXXÔà  àà ` àà ¸ àà  àà h àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð Ð  Ðà  àà ` àà ¸ àà  àà h àò òóóHOLLY€KIRBY€LILLARD,€J.Ð ¼  Ðó óà  àò òÌCONCUR:ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð X¨ ÐóóW.€FRANK€CRAWFORD,€P.€J.,€W.S.Ð D” ÐÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÐ X ÐDAVID€G.€HAYES,€J.ó óÐ ôD ÐÔ#†X¬êXXX?