ÿWPC" …# VUNa %¯ 0 cµU < w@T 4” ¨ 0§· 0J^ 0T¨ 0^ü 0hZ  0rÊ 0|< 0†¸ 0> 1uÎ 0dCU>§B)å 0DDCR AM•U*â? ÞK B) D3FLy.Å 0@ón39¡U6Úv~vÓŽ AOa Æ° 0Dv! D/º! Bé!˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÈÚØÚÚØÈÚ0nLHÎ(ÈhH  Z 6Times New Roman RegularX(;cW$¡¡Ò°ÒÒ„°ÒÔ€XaBXXXÔ-šBu Z‹$Arrus BT Roman KDLDMNHOUPîQÓ€RSÓ€]DÒ x3|x](W(3Ð>$¤¤Ý ƒcW!ÝÒ°ÒÒ„°ÒÔ€X4fXXXÔÝ  Ýà ` àòòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman% Line 7 d(#Ã$òòÚ  Ú0Ú  Úóó""""7Border 1dd€-$Cþÿ << Gÿÿ< Œ 9p`(Arial 5Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÔ€&ÔÔ€&ÔÓ  Óò òÔ YYY ÔFILEDÔ€&XÔÌÌSeptemberÏ24,Ï1997ÌÌCecilÏW.ÏCrowsonÌAppellateÏCourtÏClerkÔ  Ôó ó ÔÝ ƒ!ÝÑ#€d#ÑÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€Naomi€and€Wynonna€Judd€performed€as€a€duo€and€will€be€referred€to€asÏThe€Judds.€€They€operated€as€a€partnership,€which€will€be€referred€to€as€theÏPartnership.€€When€it€is€necessary€to€consider€the€Judds€and€the€PartnershipÏtogether,€they€will€be€referred€to€as€the€plaintiffs.Ì d))))'ÿÿdxd BÝ ƒ!ÝÑ#€d#ÑÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€In€the€early€1990s,€Wynonna€Judd€embarked€on€a€solo€career.€€ProÏTours€and€Pritchard€worked€for€Wynonna€Judd€on€these€tours€also.Ì $Ý ƒ!ÝÑ#€d#ÑÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€The€complaint€also€requested€an€attachment€of€certain€deposits€toÏpreserve€and€protect€those€funds.Ì("ÿÿ$££Ò  ÒÒ  Ò dÝ ƒ!ÝÑ#€d#ÑÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€Although€Pro€Tours€has€been€dissolved€and€is€essentially€a€ð ðshellÏcorporation,ðð€the€plaintiffsðð€claims€against€Pro€Tours€remain€active€in€the€trialÏcourt.Ì /Ý ƒ!ÝÑ#€d#ÑÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€€The€plaintiffs€have€not€appealed€the€trial€courtððs€judgment€dismissingÏtheir€shareholder€derivative€claims.Ì< Œ 9p`(Courier NewPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€!ÔÒ  ÒÒ „ ÒÔ€ÔÝ  ÝÑ\R AØ'\ÑÑ\R AØ'\ÑÑ7€ãðXXdêdÈ7ÑÑ  ÑÓ  ÓÞ ÞÌà@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€NASHVILLEÌà àà à€€€€______________________________________________ÌÙ€€ÙßR€%'$A1-j|-Ñ` à. `€€@ÿRßÌò òTHE€JUDDS,€a€Tennessee€partnership,ÌNAOMI€JUDD,€both€individually€andÌon€behalf€of€PRO€TOURS,€INC.,€a€ÌTennessee€corporation,€and€WYNONNAÌJUDD,€both€individually€and€on€behalfÌof€PRO€TOURS,€INC,€a€TennesseeÌcorporation,€ó óÌÌà àPlaintiffs„Appellants,€Ìà àà àà àà àà àà àà àDavidson€Circuit€No.€94C„2578ÌVs.à àà àà àà àà àà àà àCA.€No.€01A01„9701„CV„00030ÌÌò òSTEVEN€D.€PRITCHARD,€an€individualÌand€PRO€TOURS,€INC.,€a€TennesseeÌcorporation,€ó óÌÌà àDefendants„Appellees.Ì____________________________________________________________________________ÌÌà@ àFROM€THE€SECOND€CIRCUIT€COURT€FOR€DAVIDSON€COUNTYÌà@ àTHE€HONORABLE€MARIETTA€M.€SHIPLEY,€JUDGEÌÌÌà@ àJay€S.€Bowen,€John€R.€Jacobson,€and€Gregory€S.€ReynoldsÌà@ àBowen,€Riley,€Warnock€&€Jacobson,€PLC€of€NashvilleÌà@ àFor€AppellantsÌÌà@ àSamuel€D.€Lipshie€and€Scott€K.€HaynesÌà@ àBoult,€cumming,€Conners€&€Berry,€PLC€of€NashvilleÌà@ àFor€Appellee,€PritchardÌÌÌÌà@ àò òòòREVERSED€AND€REMANDEDÌÌà@ àó óóóOpinion€filed:ÌÌÌÌÌÌÌà àà àà àà àà àà àà àà àò òW.€FRANK€CRAWFORD,€Ìà àà àà àà àà àà àà àà àPRESIDING€JUDGE,€W.S.ÌÌÌÌCONCUR:ÌÌDAVID€R.€FARMER,€JUDGEÌÌSAM€L.€LEWIS,€JUDGEó óÌÓÓ›à àThis€appeal€involves€the€personal€liability€of€a€corporate€officer.€ÏPlaintiffs,€the€Judds,€a€Tennessee€partnership;€Naomi€Judd,€individually€and€onÏbehalf€of€Pro€Tours,€Inc.;€and€Wynonna€Judd,€individually€and€on€behalf€of€ProÏTours,€Inc.,× ƒ( ××  ×€appeal€from€the€judgment€of€the€trial€court€granting€summaryÏjudgment€to€defendant,€Steven€D.€Pritchard.€€Ìà àThe€Judds€performed€together€as€a€country€music€duo.€€From€1987€toÏ1994,€Pro€Tours€served€as€their€exclusive€booking€agent€and€principal€promoterÍof€their€concerts.× ƒ+ ××  ×€€Pritchard,€Kenneth€Stilts,€and€the€Partnership€each€ownedÏone„third€of€the€stock€of€Pro€Tours.€€Pritchard€was€the€president€of€Pro€Tours,Ïand€Pritchard€and€Stilts€made€up€the€board€of€directors.€€Stilts€also€served€asÏpersonal€manager€for€Naomi€and€Wynonna€Judd.Ìà àPro€Tours€arranged€concerts€for€the€Judds€and€negotiated€theirÏcompensation.€€€Generally,€the€Judds€were€compensated€for€performancesÏpromoted€by€Pro€Tours€solely€on€the€basis€of€a€percentage€of€gross€receipts,€lessÏcertain€approved€expenses,€with€no€guaranteed€payment.€€Pro€Tours€receivedÏfees€and€merchandising€revenue€for€the€Judds.€€Pro€Tours€also€receivedÏcorporate€sponsorship€fees€for€some€of€the€Juddsðð€concert€appearances.€€Ìà àOn€August€9,€1994,€the€plaintiffs€filed€a€complaint€against€Pritchard€andÏPro€Tours€alleging€fraud,€breach€of€fiduciary€duty,€breach€of€contract,€unjustÏenrichment,€and€conversion,€both€against€Pritchard€individually€and€as€aÏshareholder€derivative€suit€on€behalf€of€Pro€Tours.× ƒ, ××  ×€€The€complaint€alleges€thatÏthe€plaintiffs€were€advised€that€Pro€Tours€was€formed€to€maximize€their€profitsÏfrom€their€concerts€and€that,€instead,€Pro€Tours€was€intentionally€managed€andÍoperated€to€maximize€its€own€profits€at€the€direct€expense€and€detriment€ofÏthe€plaintiffs.€€The€complaint€alleges€that€Pritchard€and€Pro€Tours€owed€theÏplaintiffs€fiduciary€duties,€including€a€duty€of€loyalty€and€a€duty€to€act€solely€inÏthe€plaintiffsðð€best€interest.€€The€plaintiffs€allege€that€Pritchard€and€Pro€ToursÏmisrepresented€the€amount€of€income€and€expenses€from€the€Juddsðð€concertÏperformances.€€The€complaint€also€alleges€that€Pritchard€and€Pro€ToursÏaffirmatively€concealed€certain€income€from€the€plaintiffs,€that€PritchardÏmisused€his€position€with€Pro€Tours€to€gain€unfair€personal€benefits,€and€thatÏPritchard€wasted€corporate€assets.€€€€€€€Ìà àOn€November€15,€1994,€both€Pro€Tours€and€Pritchard€filed€answersÏdenying€the€material€allegations€of€the€complaint.€€Pro€Tours€and€PritchardÏadmit€that€the€plaintiffs€are€entitled€to€certain€deposits,€but€assert€that€some€ofÏthe€amounts€due€to€the€plaintiffs€are€subject€to€valid€set„offs.€€Both€answersÏraise€other€defenses€to€the€complaint.€€In€its€answer,€Pro€Tours€asserts€aÏcounter„claim€against€the€plaintiffs€alleging€breach€of€contract,€unjustÏenrichment,€procurement€of€breach€of€contract,€inducement€of€breach€ofÏcontract,€and€breach€of€certain€fiduciary€obligations.€€Pritchard€also€filed€aÏcounter„claim€alleging€that€the€plaintiffs€defamed€him€by€publishing€the€untrueÏallegations€in€their€complaint.€€On€January€9,€1995,€the€plaintiffs€filed€an€answerÍto€Pritchardððs€counter„claim€that€denies€his€material€allegations.€€On€January€17,Ï1995,€the€plaintiffs€filed€an€answer€to€Pro€Tourððs€counter„claim€that€also€deniesÏthose€material€allegations.Ìà àOn€October€26,€1995,€Pritchard€filed€a€motion€for€summary€judgment.€ÏIn€his€motion,€Pritchard€asserts€that€Stilts,€the€Juddsðð€personal€manager,€wasÏacting€as€the€plaintiffsðð€agent€with€regard€to€all€transactions€involving€Pro€Tours,Ïthat€his€knowledge€should€be€imputed€to€the€plaintiffs,€and€that€the€plaintiffsÏshould€be€estopped€from€asserting€any€claims€related€to€the€acts€that€StiltsÏratified.€€Pritchard€further€asserts€that€the€breach€of€fiduciary€duty€claim€isÏbarred€by€the€applicable€statute€of€limitations.€€Pritchard€also€asserts€that€he€isÏnot€personally€liable€for€any€claims€that€the€plaintiffs€may€have€as€a€result€of€ProÏTours€accepting€corporate€sponsorship€fees€for€the€Juddsðð€concert€appearances.€€€Ìà àAt€the€January€5,€1996€hearing€on€the€motion€for€summary€judgment,€theÏplaintiffs€raised€three€issues:€€1)€excessive€bonuses€paid€to€Pritchard€by€ProÏTours;€2)€excessive€compensation€paid€to€Pritchard€by€Pro€Tours;€and€3)Ïretention€of€corporate€sponsorship€fees€by€Pro€Tours€or€Pritchard€individually.€ÏOn€January€29,€1996,€the€trial€court€granted€partial€summary€judgment€in€favorÏof€Pritchard€on€the€first€two€issues,€both€of€which€concerned€the€plaintiffsððÏclaims€in€their€capacities€as€shareholders€of€Pro€Tours.€€The€trial€court€foundÍthat€Stilts€was€the€Juddsðð€agent,€that€his€knowledge€was€imputed€to€them,€andÏthat€the€plaintiffsðð€claims€as€shareholders€were€therefore€time„barred€by€theÏstatute€of€limitation€contained€in€T.C.A.€ðð€48„18„601€(1995).€€The€trial€courtÏtook€under€advisement€Pritchardððs€personal€liability€on€the€third€issue.à àOnÏMay€21,€1996,€the€trial€court€granted€summary€judgment€in€favor€of€PritchardÏon€the€third€issue,€holding€that€Pritchard€could€not€be€held€individually€liableÏfor€acts€committed€as€president€of€Pro€Tours.€€The€trial€court€found€thatÏPritchard€did€not€act€outside€the€scope€of€his€duties€and€did€not€personallyÏconvert€the€plaintiffsðð€property.€€On€October€23,€1996,€the€trial€court€enteredÏan€order€pursuant€to€Tenn.€R.€Civ.€P.€54.02€that€made€the€summary€judgment€aÏfinal€judgment.× ƒ. ××  ×€Ìà àThe€plaintiffs€appeal€the€judgment€of€the€trial€court€and€present€one€issueÏfor€review:€€whether€the€trial€court€erred€in€holding€that€Pritchard€could€not€beÏheld€personally€liable€for€fraud,€conversion,€or€breach€of€fiduciary€duty€simplyÏbecause€he€was€acting€as€an€officer€of€a€corporation€when€he€committed€theÍwrongful€acts.× ƒ/ ××  ×Ìà àA€trial€court€should€grant€a€motion€for€summary€judgment€only€if€theÏmovant€demonstrates€that€there€are€no€genuine€issues€of€material€fact€and€thatÏthe€moving€party€is€entitled€to€judgment€as€a€matter€of€law.€€Tenn.€R.€Civ.€P.Ï56.03;€€ò òòòByrd€v.€Hallóóó ó,€847€S.W.2d€208,€210€(Tenn.€1993);€òòò òDunn€v.€Hackettó óóó,€833ÏS.W.2d€78,€80€(Tenn.€App.€1992).€€The€party€moving€for€summary€judgmentÏbears€the€burden€of€demonstrating€that€no€genuine€issue€of€material€fact€exists.€òòò òÏByrdó óóó,€847€S.W.2d€at€210.€€On€a€motion€for€summary€judgment,€the€court€mustÏconsider€the€motion€in€the€same€manner€as€a€motion€for€directed€verdict€madeÏat€the€close€of€the€plaintiffððs€proof;€that€is,€ð ðthe€court€must€take€the€strongestÏlegitimate€view€of€the€evidence€in€favor€of€the€nonmoving€party,€allow€allÏreasonable€inferences€in€favor€of€that€party,€and€discard€all€countervailingÏevidence.ðð€òòò ò€Idó óóó.€at€210„11.€€In€òòò òByrdó óóó,€the€Tennessee€Supreme€Court€stated:ÌÓÓà8 àà8 àOnce€it€is€shown€by€the€moving€party€that€there€is€noÏgenuine€issue€of€material€fact,€the€nonmoving€partyÏmust€then€demonstrate,€by€affidavits€or€discoveryÏmaterials,€that€there€is€a€genuine,€material€factÏdispute€to€warrant€a€trial.€€In€this€regard,€Rule€56.05Ïprovides€that€the€nonmoving€party€cannot€simply€relyÏupon€his€pleadings€but€must€set€forth€òòspecific€factsóóÏshowing€that€there€is€a€genuine€issue€of€material€factÏfor€trial.Ì€à@ àÌòòò òÓÓIdó óóó.€at€211€(emphasis€in€original)€(citations€omitted).€€Where€a€genuine€disputeÏexists€as€to€any€material€fact€or€as€to€the€conclusions€to€be€drawn€from€thoseÏfacts,€a€court€must€deny€a€motion€for€summary€judgment.€òòò ò€Id.€óóó ó(citing€òòò òDunnó óóó,Ï833€S.W.2d€at€80).Ìà àThe€plaintiffs€present€four€claims€against€Pritchard€in€his€individualÏcapacity:€€fraud,€conversion,€inducing€breach€of€Pro€œToursððs›€fiduciary€œduty,›€andÏbreach€of€his€œown€fiduciary›€duty.€€The€plaintiffs€pursued€these€claims€as€€partiesÏto€a€contract€with€the€corporation,€not€as€shareholders.€€The€plaintiffs€argueÏthat€a€corporate€officer€who€commits€or€participates€in€tortious€conduct€isÏpersonally€liable€for€the€consequences€of€that€conduct,€regardless€of€the€liabilityÏof€the€corporation.Ìà àWe€agree€that€this€is€the€law€in€Tennessee.€€It€is€settled€law€that€an€agentÏcannot€escape€liability€for€tortious€acts,€including€fraud€or€misrepresentation,Ïagainst€third€persons€simply€because€the€agent€was€acting€within€the€scope€ofÏthe€agency€or€at€the€direction€of€the€employer.€€òòò òBrungard€v.€Caprice€Records,ÏInc.óóó ó,€608€S.W.2d€585,€590€(Tenn.€App.€1980).€€An€officer€of€director€of€aÏcorporation€who€commits€or€participates€in€the€commission€of€a€tort€isÏlikewise€liable€to€third€parties€regardless€of€the€liability€of€a€corporation.€€òòò òIdóóó ó.€atÏ590„91.Ìà àOrdinarily€a€director€of€a€corporation€is€an€agent€of€the€corporation€andÏis€liable€only€to€the€corporation.€€òòò òSchlater€v.€Haynieóóó ó,€833€S.W.2d€919,€924Ï(Tenn.€App.€1991).€€For€a€director€to€become€directly€liable€to€a€creditor,€thereÏmust€be€some€violation€of€a€statutory€duty,€some€other€conduct€that€establishesÏa€privity€of€contract,€or€a€tortious€injury€to€the€creditor€for€which€an€action€òòexÏdelictoóó€will€lie.€€òòò òId.óóó ó€€(citing€òòò òMerriman€v.€Smithóóó ó,€599€S.W.2d€548€(Tenn.€App.Ï1978)).Ìà àIt€is€legally€possible€for€Pritchard€to€be€personally€liable,€but€there€mustÏbe€òòspecific€factsóó€showing€that€there€is€a€genuine€issue€of€material€fact€for€trialÏconcerning€Pritchardððs€fraudulent€actions.€€The€plaintiffs€argue€that€Pritchard€isÏpersonally€liable€for€defrauding€them€and€converting€their€property€because€heÏdirected€and€participated€in€a€fraudulent€scheme€to€cheat€them€out€of€a€portionÏof€their€income.€€The€plaintiffs€assert€that€Pritchard€intentionally€caused€ProÏTours€to€convert€and€conceal€income€received€from€corporate€sponsorship€fees,Ïsales€of€concert€tickets€and€merchandise,€and€rebates€of€expenses€from€them.€ÏThe€plaintiffs€also€argue€that€Pritchard€paid€himself€enormous€bonuses€andÏarranged€other€personal€benefits.€€On€the€other€hand,€Pritchard€argues€that€heÏnever€received€any€of€the€corporate€sponsorship€fees€individually€and€that€theÏfees€were€always€deposited€into€a€Pro€Tours€account€or€used€to€pay€expenses€ofÍthe€particular€concert.Ìà àThe€trial€court€first€examined€the€plaintiffsðð€claim€of€conversion€andÏfound€that€ð ðno€genuine€issue€of€material€fact€exists€from€the€evidence€that€theÏPlaintiffs€have€produced€that€indicates€Mr.€Pritchard€is€liable€to€the€JuddsÏindividually€for€conversion.ðð€€Before€making€this€finding,€the€trial€court€grantedÏthe€plaintiffs€more€time€ð ðto€supplement€the€record€in€this€action€with€anyÏproof€that€defendant€Pritchard€himself€received€money€that€should€have€beenÏpaid€to€plaintiffs.ðð€€Ìà àIn€his€deposition,€Pritchard€admitted€that€the€plaintiffs€did€not€share€inÏsome€of€the€corporate€sponsorship€fees.€€He€stated€that€the€fees€were€eitherÏdeposited€into€a€Pro€Tours€bank€account€or€were€used€to€pay€the€expenses€for€aÏparticular€concert.€€Pritchard€testified€that€he€generally€told€representatives€ofÏthe€plaintiffs€when€a€particular€concert€had€a€corporate€sponsor,€but€did€notÏalways€inform€the€plaintiffs€when€corporate€sponsorship€fees€had€been€paid.€ÏPritchard€also€did€not€disclose€to€the€plaintiffs€that€Pro€Tours€was€sharing€inÏparking€revenue€and€food€and€soda€revenue.€€After€the€plaintiffs€fired€Pro€Tours,ÏPritchard€did€not€tell€them€about€the€receipt€of€additional€corporateÏsponsorship€fees.€€€€€Ìà àThe€plaintiffs€argue€that€the€trial€judge€mistakenly€concluded€thatÍPritchard€could€not€be€personally€liable€for€conversion€unless€he€personallyÏbenefitted€from€the€wrongful€acts.€€ð ðA€conversion,€in€the€sense€of€the€law€ofÏtrover,€is€the€appropriation€of€the€thing€to€the€partyððs€own€use€and€benefit,€byÏthe€exercise€of€dominion€over€it,€in€defiance€of€plaintiffððs€right.ðð€€ò òòòMammothÏCave€Production€Credit€Assððn€v.€Oldhamóóó ó,€569€S.W.2d€833,€836€(Tenn.€App.Ï1977)€(quoting€ò òòòBarger€v.€Webbóóó ó,€216€Tenn.€275,€391€S.W.2d€664,€665€(1965)).€ÏTo€be€liable€for€conversion,€the€defendant€need€only€have€an€intent€to€exerciseÏdominion€and€control€over€the€property€that€is€in€fact€inconsistent€with€theÏplaintiffððs€rights,€and€to€do€so;€good€faith€is€generally€immaterial.€€òòò òMammothÏCaveóóó ó,€569€S.W.2d€at€836.Ìà àThe€trial€court€found€that€the€plaintiffs€did€not€show€a€genuine€issue€ofÏmaterial€fact€indicating€that€Pritchard€converted€their€income€to€his€own€use.€ÏThe€trial€court€stated,€ð ð[T]here€is€no€showing€that€Mr.€Pritchard€exercisedÏððdominion€and€control,ðð€that€he€diverted€funds€for€his€own€use€and€enjoyment€asÏpresident€of€Pro€Tours.ðð€€Ìà àWe€must€respectfully€disagree.€€Pritchard€admits€that€funds€due€theÏplaintiffs€were€diverted€to€Pro€Tours€at€his€direction.€€The€proof€establishedÏthat€Pritchard€was€paid€what€could€be€termed€excessive€bonuses€and€otherÏfringe€benefits€by€Pro€Tours.€€Pritchard€was€president€of€the€corporation,€andÍthe€record€indicates€that€for€all€practical€purposes€he€controlled€the€company.€ÏUnder€the€circumstances,€there€could€be€an€inference€that€the€funds€wouldÏultimately€inure€to€his€benefit.€€It€is€conceivable€that€under€these€facts,€the€factÏfinder€could€determine€that€there€was€a€conversion€by€Pritchard€of€theÏplaintiffsðð€property.Ìà àThe€plaintiffs€also€alleged€a€claim€of€fraud€against€Pritchard.€€In€its€order,Ïthe€trial€court€did€not€specifically€address€fraud.€€However,€the€trial€court€didÏstate,€ð ðThere€is€no€showing€that€Mr.€Pritchard€negligently€or€fraudulentlyÏmisrepresented€the€accounts€to€the€Plaintiffs.ððÌà àIn€order€to€sustain€a€cause€of€action€for€fraudulent€misrepresentation,€theÏplaintiff€must€show€that:€€1)€the€defendant€made€a€representation€of€an€existingÏor€past€fact;€€2)€the€representation€was€false€when€made;€€3)€the€representationÏwas€in€regard€to€a€material€fact;€€4)€the€false€representation€was€made€eitherÏknowingly€or€without€belief€in€its€truth€or€recklessly;€€5)€plaintiff€reasonablyÏrelied€on€the€misrepresented€material€fact;€€and€6)€plaintiff€suffered€damage€as€aÏresult€of€the€misrepresentation.€€òòò òMetropolitan€Govððt€of€Nashville€and€DavidsonÏCounty€v.€McKinneyó óóó,€852€S.W.2d€233,€237€(Tenn.€App.€1992).Ìà àThe€plaintiffs€argue€that€Pritchard€intentionally€supplied€them€withÏfraudulent€accountings€on€which€they€relied.€€They€assert€that€this€is€part€of€theÍfraudulent€scheme€to€conceal€and€convert€their€income.€€The€plaintiffs€argueÏthat€they€have€adduced€substantial€evidence€to€support€their€fraud€claim.€€TheyÏrely€upon€Pritchardððs€deposition€in€which€he€admits€that€all€income€was€notÏdisclosed€to€the€plaintiffs€although€they€were€led€to€believe€that€the€variousÏaccountings€presented€to€them€were€complete€and€correct.€Ìà àConcealment€or€nondisclosure€will€give€rise€to€a€claim€for€fraud€when€theÏdefendant€has€a€duty€to€disclose€and€when€the€matters€not€disclosed€areÏmaterial.€€ò òòòDobbs€v.€Guenther,€ó óóó846€S.W.2d€270,€274€(Tenn.€App.€1992).€€ThereÏare€genuine€issues€of€material€fact€as€to€whether€there€was€a€negligent€orÏfraudulent€misrepresentation.Ìà àThe€plaintiffs€next€assert€that€Pritchard€should€be€held€personally€liableÏbecause€he€caused€Pro€Tours€to€breach€its€fiduciary€duties€while€Pro€Tours€wasÏacting€as€an€agent€for€the€Judds.€€Agency€rests€upon€contract€between€theÏprincipal€and€the€agent.€€ò òòòCline€v.€Plylyóóó ó,€3€Tenn.€App.€292,€301€(1926).€€An€agentÏis€simply€ð ð[o]ne€who€undertakes€to€transact€some€business,€or€to€manage€someÏaffair,€for€another,€by€the€authority€and€on€account€for€the€latter,€and€to€renderÏan€account€of€it.ðð€€òòò òSecurity€Federal€Sav.€&€Loan€Assððn€of€Nashville€v.€Riviera,ÏLtd.óóó ó,€856€S.W.2d€709,€715€(Tenn.€App.€1992)€(quoting€ò òòòMiller€v.€Insurance€Co.Ïof€North€Americaóóó ó,€211€Tenn.€620,€625,€366€S.W.2d€909,€911€(1963)).€€ð ðAgencyÍin€its€broadest€sense€includes€every€relation€in€which€one€person€acts€for€orÏrepresents€another.ðð€€òòò òKerney€v.€Aetna€Cas.€&€Surety€Co.óóó ó,€648€S.W.2d€247,€252Ï(Tenn.€App.€1982)€(quoting€ò òòòHoward€v.€Havenóóó ó,€198€Tenn.€572,€583,€281€S.W.2dÏ480,€485€(1955)).€€ð ðWhether€an€agency€has€been€created€is€to€be€determined€byÏthe€relations€of€the€parties€as€they€in€fact€exist€under€their€agreements€or€acts.€ÏIf€relations€exist€which€will€constitute€agency,€it€will€be€an€agency,€whether€theÏparties€understood€it€to€be€or€not.ðð€€òòò òIdóóó ó.€at€252„53€(quoting€ò òòòSmith€v.€TennesseeÏCoach€Co.óóó ó,€183€Tenn.€676,€680„81,€194€S.W.2d€867,€869€(1946)).€€The€relationÏof€principal€and€agent€is€a€trust€relation.€€ò òòòMcNeill€v.€œDobson„Bainbridge›€RealtyÏCo.,ó óóó€184€Tenn.€99,€œ106,€195›€S.W.2d€œ626,€629›€(1946).Ìœ›à àIn€essence,€œthe€plaintiffs›€are€asserting€that€Pritchard€interfered€with€theÏcontractual€relationship€between€Pro€Tours€and€œthe€plaintiffs›€by€causing€aÏbreach€of€fiduciary€duty€œowed€by€Pro€Tours€to€the€plaintiffs€as›€œtheir€agent›œ.€€In›Ïò òòòForrester€v.€Stockstilló óóó,€869€S.W.2d€328€(Tenn.€1994),€our€Supreme€Court,€inÏconsidering€an€issue€concerning€intentional€interference€with€corporateÏemployment,€quoted€with€approval€from€Thomas€G.€Fischer,€Annotation,ò òòòÏó óLiability€of€Corporate€Director,€Officer,€or€Employee€for€Tortious€Interference€withÏCorporationððs€Contract€with€Anotheróó,€72€A.L.R.4th€492€(1989)€as€follows:ÌÓÓà8 àà8 àSome€courts€have€recognized€that€generally€aÏcorporate€director,€officer,€or€employee€is€not€liableÍfor€tortiously€interfering€with€a€corporate€contract,Ïbecause€he€is€considered€a€party€to€the€contract,€asÏlong€as€he€is€acting€to€serve€the€corporate€interests,€orÏunless€his€activity€involves€individual€separate€tortiousÏacts.€€Courts€have€also€recognized,€however,€that€aÏcorporate€director,€officer,€or€employee€may€be€liableÏfor€tortiously€interfering€with€a€corporate€contract€ifÏhe€is€acting€outside€the€scope€of€his€authority,€actingÏwith€malice,€or€acting€to€serve€his€own€interests.ÌÌÓÓ869€S.W.2d€at€œ333€(quoting€72€A.L.R.4th€at€501).›€€œAlthough›€ò òòòForresteró óóó€dealtÏwith€a€breach€of€an€employment€€contract,€the€authority€cited€by€the€SupremeÏCourt€makes€no€distinction€in€the€type€of€contract,€nor€do€we€find€any.€€TheÏsubstance€of€the€issue€is€breach€of€a€duty€and€not€the€nature€of€the€duty€itself.Ìà àAs€we€have€heretofore€noted,€there€is€a€genuine€issue€as€to€material€factÏconcerning€Pritchardððs€actions€and€whether€he€was€acting€to€serve€his€ownÏinterest€by€being€instrumental€in€the€diversion€of€funds€to€Pro€œToursððs€accounts.›€ÏAccordingly,€summary€judgment€should€not€have€been€granted€on€œthe€plaintiffsðð›Ïaction€based€upon€Pritchardððs€inducing€the€breach€of€Pro€œToursððs›€fiduciary€duty.Ìà àThe€plaintiffs€also€allege€that€Pritchard€personally€owed€them€a€fiduciaryÏduty€because€he€was€acting€as€their€subagent€and€undertook€to€perform€ProÏToursððs€obligations€to€them.€€The€plaintiffs€cite€ò òòòThe€Prudential€Botts€&€Assocs.Ïv.€Guptonóóó ó,€No.€03A01„9403„CH„00087,€1994€WL€398826€(Tenn.€App.€Aug.€1,Ï1994),€for€the€proposition€that€Tennessee€recognizes€the€concept€of€subagency.€ÍIn€ò òòòPrudential€Bottsóóó ó,€this€Court€found€that€the€subagentððs€actions€bound€theÏagent€and,€therefore,€held€against€the€agent.€€ò òòòPrudential€Bottsóóó ó,€1994€WLÏ398826,€at€*6.€€In€this€case,€we€believe€that€Pritchardððs€actions€as€a€subagentÏbind€Pro€Tours€and€that€Pro€Tours€is€responsible€for€his€actions.€€PritchardððsÏactions€as€a€subagent€are€still€on€behalf€of€and€through€Pro€Tours,€and€hisÏactions€within€the€apparent€scope€of€his€authority€are€those€of€the€corporation.€Ïò òòòBateyóóó ó,€446€S.W.2d€at€694.€€€€Ìà àNeedless€to€say,€this€case€presents€a€complicated€mass€of€factualÏallegations€dealing€with€a€somewhat€unique€business.€€The€facts€introduced€atÏthis€stage€of€the€proceedings€present€a€close€question€concerning€genuine€issuesÏof€material€facts.€€Justice€Harbison,€speaking€for€our€Supreme€Court€in€ò òòòEvcoÏCorporation€v.€Rossó óóó,€528€S.W.2d€20€(Tenn.€1975),€said:ÌÓÓà8 àà8 àThe€summary€judgment€procedure€was€designed€toÏprovide€a€quick,€inexpensive€means€of€concludingÏcases,€in€whole€or€in€part,€upon€issues€as€to€whichÏthere€is€no€dispute€regarding€the€material€facts.€ÏWhere€there€does€exist€a€dispute€as€to€facts€which€areÏdeemed€material€by€the€trial€court,€however,€or€whereÏthere€is€uncertainty€as€to€whether€there€may€be€such€aÏdispute,€the€duty€of€the€trial€court€is€clear.€€He€is€toÏoverrule€any€motion€for€summary€judgment€in€suchÏcases,€because€summary€judgment€proceedings€are€notÏin€any€sense€to€be€viewed€as€a€substitute€for€a€trial€ofÏdisputed€factual€issues.ÌÌò òòòId.ó óóó€at€24,€25.Ìò òÌÓÓó óà àThe€order€of€the€trial€court€granting€summary€judgment€is€reversed.€€TheÏcase€is€remanded€for€such€further€proceedings€as€are€necessary.€€Costs€of€theÏappeal€are€assessed€against€appellee.ÌÓÓà àà àà àà àà àà àà à_________________________________Ìà àà àà àà àà àà àà àò òW.€FRANK€CRAWFORD,€Ìà àà àà àà àà àà àà àPRESIDING€JUDGE,€W.S.ó óÌÌ____________________________________Ìò òDAVID€R.€FARMER,€JUDGEó óÌÌ____________________________________Ìò òSAM€L.€LEWIS,€JUDGEó óœÔ€0ÔÔ€0Ô