                                                                                          01/30/2019
                   IN THE COURT OF APPEALS OF TENNESSEE
                              AT KNOXVILLE
                                     December 6, 2018 Session

     STEVEN L. MCCULLOUGH v. DAN RAWLS D/B/A CLEVELAND
                   PERFORMANCE CENTER

                      Appeal from the Circuit Court for Bradley County
                       No. V-14-198       Jerri S. Bryant, Chancellor1

                             ___________________________________

                                 No. E2018-00016-COA-R3-CV
                             ___________________________________



In this breach of contract action, the trial court entered a judgment against the individual
defendant for the plaintiff’s damages and attorney’s fees. The defendant subsequently
filed a motion to alter or amend the judgment, asserting that he could not be held
personally liable for damages because the work he had performed for the plaintiff was
conducted through his business, which was a limited liability company. The trial court
denied the motion to alter or amend, determining that there were no facts presented at
trial to support the defendant’s contention that he was operating his business as a limited
liability company. The defendant timely appealed. Discerning no reversible error, we
affirm.

           Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                                Affirmed; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which CHARLES D.
SUSANO, JR., and JOHN W. MCCLARTY, JJ., joined.

Wencke West, Cleveland, Tennessee, for the appellant, Dan Rawls d/b/a Cleveland
Performance Center.

Ginger Wilson Buchanan, Cleveland, Tennessee, for the appellee, Steven L. McCullough.




       1
           Sitting by interchange.
                                      OPINION

                         I. Factual and Procedural Background

      On September 12, 2013, Steven L. McCullough filed an action in the Bradley
County General Sessions Court (“sessions court”) against Dan Rawls d/b/a Cleveland
Performance Center (“CPC”), alleging that Mr. McCullough’s vehicle had been damaged
when Mr. Rawls made faulty and unapproved repairs to it. Judge Daniel Swafford
recused himself from the matter, and Judge Lila Statom was designated to hear the case.
Judge Statom conducted a trial on January 24, 2014, and entered a judgment in favor of
Mr. McCullough in the amount of $3,250.00 plus interest.

       On February 3, 2014, Mr. Rawls filed a motion with the sessions court, seeking to
have the judgment against him set aside because, according to Mr. Rawls, CPC was a
limited liability company (“LLC”), of which he was merely a member. Mr. Rawls thus
asserted that he could not be held personally liable for any claims against CPC. Mr.
McCullough filed a response on March 10, 2014, stating that Mr. Rawls had failed to
previously raise the issue that CPC was an LLC. Mr. McCullough also asserted that
CPC’s LLC had been administratively dissolved on August 9, 2011, and had only
recently been reinstated on February 12, 2014, after the judgment at issue was entered.
Additionally, Mr. McCullough attached his invoices from CPC, purportedly to
demonstrate that Mr. Rawls did not represent to the public that CPC was an LLC.

       Mr. McCullough appealed the judgment of the sessions court to the Bradley
County Circuit Court (“trial court”) on March 17, 2014. Although an order concerning
the disposition of Mr. Rawls’s motion to set aside the judgment does not appear in the
record, Mr. McCullough’s notice of appeal states that the motion was disposed of on
March 12, 2014.

       On June 3, 2014, Mr. McCullough filed a motion in the trial court, seeking to
amend his complaint. Mr. McCullough’s proposed amended complaint added an
allegation that Mr. Rawls had breached a contract with Mr. McCullough by overcharging
Mr. McCullough for work performed on his vehicle and by failing to perform the work
properly. Mr. McCullough further alleged that Mr. Rawls was negligent because he
caused damage to the body and paint of Mr. McCullough’s car. Additionally, Mr.
McCullough stated claims pursuant to the Tennessee Consumer Protection Act (“TCPA”)
and for breach of the implied warranty of fitness for a particular purpose. Mr.
McCullough sought compensatory damages in the amount of $25,000.00 plus treble
damages and attorney’s fees pursuant to the TCPA.

      On July 1, 2014, Judge Michael Sharp recused himself from the matter, and
Chancellor Jerri S. Bryant was designated to hear the case by interchange on July 3,

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2014. The trial court subsequently granted Mr. McCullough leave to file his amended
complaint.

       On November 4, 2014, Mr. Rawls filed an “Answer and Counter Petition,”
wherein he denied the allegations of negligence and breach of contract. Mr. Rawls
further denied the claims pursuant to the TCPA and for breach of implied warranty. As
an affirmative defense, Mr. Rawls asserted, inter alia, that Mr. McCullough had failed to
join an indispensable party, namely the LLC. In his counter-complaint, Mr. Rawls
claimed that Mr. McCullough was liable for extortion. Mr. McCullough subsequently
filed an answer wherein he denied this claim.

        On November 30, 2015, Mr. Rawls filed a motion seeking dismissal of the
complaint against him and CPC. Mr. Rawls asserted that CPC was an LLC, of which he
was merely a member. Mr. Rawls claimed that all work was performed by and through
the LLC and that he informed Judge Statom of this fact during the January 24, 2014 trial
in sessions court. Although he acknowledged that the LLC had been administratively
dissolved on August 9, 2011, Mr. Rawls asserted that the LLC had been reinstated as of
February 12, 2014, and that such reinstatement related back to the date of the
administrative dissolution pursuant to Tennessee Code Annotated § 48-245-303(c). Mr.
Rawls further claimed that he had notified Mr. McCullough of CPC’s LLC status prior to
the filing of the appeal but that Mr. McCullough had failed to sue or serve the LLC as a
party. Mr. Rawls therefore asserted that the claims against him and CPC should be
dismissed. Mr. Rawls attached to his motion a copy of CPC’s filing information from the
Secretary of State, demonstrating the LLC’s current status as “active.”

       On February 11, 2016, Mr. McCullough filed a response to the motion to dismiss,
again asserting that Mr. Rawls had never held CPC out as an LLC. Mr. McCullough
further stated that he had requested the production of documents related to the LLC but
that Mr. Rawls had objected to such requests on the basis that the LLC was not a party to
the action. Mr. McCullough attached invoices from CPC, which do not explicitly denote
that CPC is an LLC. Mr. McCullough additionally attached copies of his request for
production of documents and Mr. Rawls’s response.

        The trial court conducted a hearing concerning the motion to dismiss on April 27,
2016. On May 11, 2016, the trial court entered a written order, wherein the court found
that “there were no facts before the Court supporting [that] the Defendant was operating
the business under Cleveland Performance, LLC at the time in question.” The court
further found that “if the Defendant is asserting that the wrong party was sued the
Plaintiff is entitled to have the information requested through the Interrogatories and
Request for Production of Documents to determine if the wrong party has been sued . . .
.” The court thus denied the motion to dismiss and ordered Mr. Rawls to respond to the
discovery previously propounded upon him within thirty days.

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        On December 21, 2016, Mr. Rawls nonsuited his counter-complaint. Thereafter,
on May 8 and 22, 2017, the trial court conducted a bench trial. By order entered August
8, 2017, the trial court ultimately determined that Mr. Rawls was liable to Mr.
McCullough for breach of contract and violation of the TCPA. Mr. Rawls was ordered to
pay Mr. McCullough $9,761.35 in damages plus attorney’s fees. In a subsequent order,
the trial court directed Mr. Rawls to pay attorney’s fees to Mr. McCullough in the amount
of $4,997.50, as well as discretionary costs in the amount of $989.25.

        On September 5, 2017, Mr. Rawls filed a motion to alter or amend, asserting that
the trial court erred by, inter alia, failing to find that CPC was an LLC, such that Mr.
Rawls would be shielded from individual liability. The trial court conducted a hearing on
the motion on October 19, 2017, entering a written order on December 6, 2017. In its
order, the court explained that it had previously found in its May 11, 2016 order that
“there were no facts before the Court to support Defendant’s contention that he was
operating his business under Cleveland Performance LLC.” The court additionally noted
that there were “no exhibits entered at trial and no proof was presented at trial that
Defendant was operating as an LLC.” The court therefore denied Mr. Rawls’s motion to
alter or amend. Mr. Rawls timely appealed. Mr. Rawls subsequently provided notice
that no transcript or statement of the evidence would be filed.

                                    II. Issue Presented

        Mr. Rawls presents the following issue for our review, which we have restated
slightly:

       Whether the trial court erred by determining that Cleveland Performance
       Center was not a valid limited liability company.

                                 III. Standard of Review

       We review a non-jury case de novo upon the record with a presumption of
correctness as to the findings of fact unless the preponderance of the evidence is
otherwise. See Tenn. R. App. P. 13(d); Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn.
2000). “In order for the evidence to preponderate against the trial court’s findings of fact,
the evidence must support another finding of fact with greater convincing effect.” Wood
v. Starko, 197 S.W.3d 255, 257 (Tenn. Ct. App. 2006). We review questions of law,
including those of statutory construction, de novo with no presumption of correctness.
See Bowden, 27 S.W.3d at 916 (citing Myint v. Allstate Ins. Co., 970 S.W.2d 920, 924
(Tenn. 1998)); see also In re Estate of Haskins, 224 S.W.3d 675, 678 (Tenn. Ct. App.
2006).



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                           IV. Proof Concerning Status of CPC

       On appeal, Mr. Rawls argues that pursuant to Tennessee Code Annotated § 48-
245-303(c) (2012), when an LLC is administratively dissolved and subsequently
reinstated by the secretary of state, such reinstatement “relates back to and takes effect as
of the effective date of the administrative dissolution and the LLC resumes carrying on its
business as if the administrative dissolution had never occurred.” Mr. Rawls thus argues
that Cleveland Performance Center, LLC, although administratively dissolved at the time
of the transaction herein, was reinstated on February 12, 2014, and that such
reinstatement related back to the time of the dissolution.

      Mr. McCullough asserts, however, that the trial court was presented with no
evidence regarding CPC’s LLC status at trial. In its May 11, 2016 order concerning the
motion to dismiss filed by Mr. Rawls and the motion to compel discovery filed by Mr.
McCullough, the trial court found:

       [T]here were no facts before the Court supporting [that] the Defendant was
       operating the business under Cleveland Performance, LLC at the time in
       question. Upon arguments on the Motion to Compel Discovery previously
       propounded to the Defendant, the Court found that if the Defendant is
       asserting that the wrong party was sued the Plaintiff is entitled to have the
       information requested through the Interrogatories and Request for
       Production of Documents to determine if the wrong party has been sued
       and if Defendant seeks to prove the LLC was operating the business, the
       discovery must be provided to the Plaintiff.

       Following trial, the trial court entered an order explaining its factual findings
concerning the transaction in question and awarding a judgment to Mr. McCullough. The
appellate record contains no transcript of the trial or statement of the evidence. Mr.
Rawls’s written closing argument submitted prior to entry of the trial court’s judgment
does not mention CPC’s LLC status. Likewise, the trial court’s August 8, 2017 order
entered following the trial does not mention any claim of an LLC.

        On September 5, 2017, Mr. Rawls filed a motion to alter or amend, alleging that
the trial court erred by failing to hold that CPC was an LLC and that Mr. Rawls thereby
had no personal liability. The trial court entered a subsequent order on December 6,
2017, wherein the court explained:

              It is the Defendant’s position that Cleveland Performance Center
       was an LLC and not a sole proprietorship. The Court conducted a hearing
       on April 27, 2016 and entered an order May 11, 2016 finding there were no
       facts before the Court to support Defendant’s contention that he was
       operating his business under Cleveland Performance LLC. The Court has
                                          -5-
       no exhibits entered at trial and no proof was presented at trial that
       Defendant was operating as an LLC. This ground on the motion to alter or
       amend is hereby overruled.

       Tennessee Rule of Appellate Procedure 24(b) provides that it is the appellant’s
duty to prepare “a transcript of such part of the evidence or proceedings as is necessary to
convey a fair, accurate and complete account of what transpired with respect to those
issues that are the bases of appeal.” Tennessee Rule of Appellate Procedure 24(c) states
that where a transcript is not available or affordable, “the appellant shall prepare a
statement of the evidence” which “should convey a fair, accurate and complete account
of what transpired with respect to those issues that are the bases of appeal.” In this
matter, we have been provided neither a transcript of the hearing nor a statement of the
evidence pursuant to Tennessee Rule of Appellate Procedure 24. Although we have been
provided with the trial exhibits, none of those exhibits support Mr. Rawls’s contention
that he was operating CPC as an LLC.

        It is well settled that in cases where no transcript or statement of the evidence is
filed, the appellate court is required to presume that the record, had it been properly
preserved, would have supported the action of the trial court. See Fayne v. Vincent, 301
S.W.3d 162, 169-70 (Tenn. 2009) (“[W]hen an issue of sufficiency of the evidence is
raised on appeal, we must presume, in the absence of a record of the proceedings, that the
transcript or statement of the evidence, had it been included in the record, would have
contained sufficient evidence to support the trial court’s factual conclusions.”); Reinhardt
v. Neal, 241 S.W.3d 472, 477 (Tenn. Ct. App. 2007) (explaining that in the absence of a
transcript or statement of the evidence, the appellate court had to presume that the
evidence supported the trial court’s findings and ultimate conclusion that there was a
failure of proof); Sherrod v. Wix, 849 S.W.2d 780, 783 (Tenn. Ct. App. 1992) (“This
court cannot review the facts de novo without an appellate record containing the facts,
and therefore, we must assume that the record, had it been preserved, would have
contained sufficient evidence to support the trial court’s factual findings.”). Because we
have not been provided with a transcript or statement of the evidence in the case at bar,
we accordingly must presume that the trial court’s finding is correct that there was
insufficient evidence presented at trial concerning CPC’s status as an LLC.

       The trial court indicated in its May 11, 2016 pre-trial order that it had no facts to
support Mr. Rawls’s claim that he was operating CPC as an LLC. The court instructed
Mr. Rawls to provide discovery to Mr. McCullough in order to prove that “the wrong
party was sued.” Mr. McCullough never amended his complaint to add the LLC as a
party, and Mr. Rawls never filed any motion seeking to join the LLC as a party
defendant. The trial court’s December 6, 2017 order reflects a failure of proof
concerning CPC’s status as an LLC, and without a transcript or statement of the evidence,
this Court must presume that the proof (or lack thereof) supported this finding. See

                                           -6-
Fayne, 301 S.W.3d at 169-70. As such, we must affirm the trial court’s denial of Mr.
Rawls’s motion to alter or amend the judgment based on CPC’s alleged LLC status.

                                    V. Conclusion

      For the foregoing reasons, we affirm the trial court’s judgment in all respects.
Costs on appeal are taxed to the appellant, Dan Rawls d/b/a Cleveland Performance
Center. This matter is remanded to the trial court for enforcement of the trial court’s
judgment and collection of costs assessed below.



                                               _________________________________
                                               THOMAS R. FRIERSON, II, JUDGE




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