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Posted by: Tanja Trezise on Aug 1, 2013

Court: TN Court of Appeals

Attorneys 1:

Eugene N. Bulso, Jr. and Steven A. Nieters, Nashville, Tennessee, for the appellants, H. Preston Ingram and IS Investment, Inc.

Attorneys 2:

W. Scott Sims and Jason W. Callen, Nashville, Tennessee, for the appellees, Scott Sohr and SIS Development, LLC.

Judge(s): CLEMENT

This complex litigation arises out of a series of disputes between two former partners and members in more than twenty partnerships and limited liability companies that were in the business of real estate development. Following a tumultuous six year business relationship, in an attempt to extricate themselves from their business relationships, the parties executed a Membership Interest and Exchange Agreement, which distributed the entities so a portion were solely owned by one former partner/member and the others were solely owned by the other former partner/member. After closing on the Exchange Agreement, the plaintiff commenced this action against his former business partner alleging fraud, violation of the Tennessee Consumer Protection Act, breach of contract, breach of fiduciary duty, and fraudulent transfer of which most, but not all, of the claims arose from the Exchange Agreement. The complaint was later amended to add additional claims. The defendant filed a Counter-Claim alleging that the plaintiff was also in breach of the Exchange Agreement. The trial court dismissed several of the plaintiff’s claims on summary judgment. The remaining issues were tried. At the close of the plaintiff’s proof during the jury trial, the trial court granted a directed verdict in favor of the defendant on some, but not all, of the remaining claims. At the conclusion of the jury trial, the jury entered a verdict for the defendant on the remaining claims. Although the jury found the defendant in breach of three provisions of the Exchange Agreement and a partnership agreement of a jointly owned company, the jury awarded no damages based upon the plaintiff’s prior knowledge and acquiescence of the breaches. Thereafter, each party sought to recover their respective attorney’s fees pursuant to § 11(l) of the Exchange Agreement. The trial court held that defendant was the prevailing party; therefore, the trial court granted the defendant’s motion to recover his attorney’s fees pursuant to § 11(l) of the Exchange Agreement and awarded attorney’s fees and costs to the defendant. The trial court also awarded the defendant indemnity under the bylaws of one corporation and the partnership agreement of another. The trial court also assessed discretionary costs against the plaintiff. On appeal, the plaintiff raises numerous issues relating to the dismissal of his claims on summary judgment and directed verdict, the instructions given to the jury, the trial court’s ruling on a post-trial motion to amend the defendant’s answer, attorney’s fees and costs, and indemnity. We affirm the trial court’s rulings on summary judgment and directed verdict in all respects. We affirm the trial court’s ruling on attorney’s fees and costs under the Exchange Agreement, holding that as the trial court correctly determined the defendant was the prevailing party for those purposes. We also affirm the trial court’s determinations that the defendant was entitled to indemnification under the provisions of the Partnership Agreement and indemnification under the bylaws of IS Investment, Inc.