                   IN THE COURT OF APPEALS OF TENNESSEE
                              AT KNOXVILLE
                             May 12, 2003 Session

 FRED D. SLAUGHTER, and wife, JUDY SLAUGHTER v. LAURA LEIGH
            SLAUGHTER and DANIEL BRUCE CROWE

              Direct Appeal from the Chancery Court for Washington County
                     No. 33925   Hon. G. Richard Johnson, Chancellor

                                     FILED SEPTEMBER 18, 2003

                                No. E2002-02477-COA-R3-CV



The Trial Court gave Judgments for plaintiffs against defendants and cross-defendant Slaughter was
given Judgments for compensatory and punitive damages against co-defendant Crowe and her deed
to Crowe was voided. On appeal, we affirm all Judgments except for the Judgment for punitive
damages which is remanded for trial on damages.


Tenn. R. App. P.3 Appeal as of Right; Judgment of the Chancery Court Affirmed in part,
vacated in part, and Remanded.


HERSCHEL PICKENS FRANKS , J. delivered the opinion of the court, in which CHARLES D. SUSANO,
JR., J., and D. MICHAEL SWINEY, J., joined.

Keith D. Stewart, Knoxville, Tennessee, for Appellant, Daniel Bruce Crowe.

Don Arnold, Johnson City, Tennessee, for Appellees, Fred Slaughter and wife, Judy Slaughter.

Todd Covert, Knoxville, Tennessee, for Appellee, Laura Leigh Slaughter.



                                           OPINION


               In this action plaintiffs were awarded judgments against defendant, Laura L.
Slaughter, and Laura L. Slaughter was awarded a judgment for compensatory damages against co-
defendant, Daniel Bruce Crowe, as well as punitive damages, and the Court voided a warranty deed
from Laura L. Slaughter to Daniel Bruce Crowe.
              Daniel Bruce Crowe has appealed and raised these issues:

              1.      Whether the Trial Court erred in its determination of the respective credibility
                      of the witnesses in awarding damages, as a result of such determination?

              2.      Whether the Trial Court erred in setting aside the conveyance between
                      defendant Crowe and defendant Slaughter?

              3.      Whether the Trial Court erred in awarding punitive damages against the
                      weight of the evidence?

               Since the credibility of witnesses is the determinative issue on appeal, we quote
extensively as pertinent from the Chancellor’s Memorandum Opinion and Final Order:

                      This painfully interesting and somewhat complex case results from a lengthy
              factual history involving indulgent parents, their spoiled and sick daughter and her
              bogus ex-boyfriend.

                       The Plaintiffs (the parents, Dr. And Mrs. Slaughter) sue their daughter,
              Defendant Slaughter, and her ex-boyfriend, Defendant Crowe, for a debt of
              $259,000.00, plus accrued interest since March 31, 1999. They also ask the Court
              to declare that the conveyance of realty from Slaughter to Crowe was a fraud and,
              therefore, should be declared void. In addition, they ask the Court to sell the realty
              to satisfy the debt. . . .

                      Slaughter and Crowe deny the substantive allegations of the complaint and
              assert various affirmative defenses.

                      Next, Slaughter cross-sues her Co-defendant for: fraud, fraud in the
              inducement, deceit, fraudulent and negligent misrepresentation, conversion, civil
              conspiracy, conspiracy to defraud, intentional infliction of emotional distress as a
              result of conduct characterized by outrageousness, recklessness, and maliciousness,
              she also sues Crowe for punitive damages, and for the title to the realty to be restored
              to her by Crowe.

                      Crowe denies the substantive allegations of the cross-complaint and asserts
              the Statute of Frauds, comparative fault, and various other defenses.

              ...

                      At the conclusion of the presentation of evidence, the Court granted the
              Plaintiffs’ motion, without objection, to conform the pleadings to the proof.



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Findings of Fact and Conclusions of Law

        Dr. And Mrs. Slaughter’s (hereinafter Plaintiffs) daughter, Laura Leigh
Slaughter (hereinafter Slaughter) is a troubled young lady. Although she is a
highschool graduate and, after several tries, a college graduate, she suffers multiple
medical maladies including depression and anxiety, which are believed to result from
a sexual assault she experienced when she was six to seven years old. She still
suffers from depression and anxiety and takes medication for these disorders. . . .

       While in college, in the mid-1990s, Slaughter met the Defendant, Daniel
Bruce Crowe (hereinafter Crowe). They dated for almost a year, during which time
Crowe became aware of Slaughter’s various medical conditions. Crowe’s knowledge
of Slaughter’s condition included driving her to her psychiatrist’s office for
appointments and, on one occasion, reporting to Mrs. Slaughter his fear that the
Defendant Slaughter might commit suicide. Slaughter and Crowe remained friends
and stayed in contact with one another from time to time after they stopped dating.

        In January of 1998, Slaughter became employed as a pharmaceutical
representative making $37,500.00 a year, plus bonus. In early 1999, Slaughter
became interested in buying a home in Johnson City. Slaughter enlisted the help of
her mother in getting her father to help her purchase the house. . . . Dr. Slaughter was
reluctant and wanted to think about it. Finally, Dr. Slaughter capitulated and agreed
to loan Slaughter $259,000.00 as a bridge loan until her mortgage loan application
was approved. As a result, Dr. Slaughter borrowed $259,000.00 at nine percent (9%)
per annum on his personal line of credit at his bank and instructed the bank to issue
Slaughter a check in that sum. Slaughter purchased the home on March 5, 1999. . .
Subsequently, because of disagreements with her father, Slaughter refused to sign a
promissory note for the loaned sum and refused to sign a deed of trust to the
Plaintiffs on the subject realty to secure payment of the loan. . . .

        In the meantime, Slaughter stole three (3) checks from her father’s office
account, wrote the checks to herself, and forged her father’s signature; one on
February 23, 1999 for the sum of $3,000.00, and two checks on April 1, 1999, one
for $8,000.00 and the other for $52,000.00. Dr. Slaughter was unaware fo the theft
at the time of the “bridge loan” to Slaughter. He became aware of the stolen and
forged checks at a later date when he had his account audited. Slaughter unlawfully
took $63,000.00 from her father and converted it to her use. Slaughter quit her job
as a pharmaceutical sales representative in July of 1999. . . .

       Although still maintaining her home in Johnson City, Slaughter went to work
for Crowe’s company, Skynet, in Knoxville sometime around the Spring of 2000.
Crowe’s Knoxville company sells security systems for residential and commercial
use. The work that Slaughter did for the company is disputed. Crowe visited


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Slaughter at her Johnson City home. Slaughter asked Crowe about repairs to her
house because Crowe had told Slaughter that he had a contractor’s license. . . .
Slaughter also knew that Crowe worked with his father buying/selling real estate and
renting houses in Knoxville and Kingston, Tennessee. Based on pretense, Crowe got
Slaughter’s deed to the house, . . . and had a deed drafted deeding Slaughter’s house
to himself. In spite of the affidavit of market value recited on the deed, reflecting the
house’s worth as $259,000.00, Crowe admits he paid Slaughter a $10,000.00 check
for the house. Slaughter insists the $10,000.00 check was for work at Skynet and
“moving expenses”, as Crowe convinced Slaughter to move from her house so he
could “refinish” the floors. Slaughter made inquiry to Crowe as the check reflected
in was for the “purchase of Berkshire”, the name of the street on which the house is
located. Crowe replied, “Yeah, like I could purchase your home for $10,000.00". If
the $10,000.00 was for purchase of the house, it was grossly inadequate consideration
for a house valued at $259,000.00. Crowe and his partner also convinced Slaughter
that placing Crowe’s name on the deed would make him a “mutual owner” and this
would protect Slaughter’s rights against her parents, as Crowe was fully aware that
Slaughter had never paid the loan to her parents for the purchase of the house.
Slaughter did not ask Crowe to purchase her home. Slaughter did not intent to deed
her interest in the home to Crowe. Slaughter believed Crowe. Crowe was very
convincing. Slaughter’s gullibility and business naivety were some of the tools that
Crowe and his partner used to get Slaughter to execute the document deeding
Slaughter’s $259,000.00 Johnson City home to Crowe. Crowe drafted the document
deeding Slaughter’s home to himself . . . The alleged agreement for Crowe to
purchase Slaughter’s $259,000.00 house is rescinded for lack of adequate
consideration; the agreement was induced by fraudulent and deceitful conduct on the
part of Crowe; and Crowe made material and intentional misrepresentations to
Slaughter which she relied on as inducement for Slaughter to sign the deed. . . .
Crowe’s title to Slaughter’s realty is the result of fraud, deceit, and material
intentional misrepresentations perpetrated by Crowe on Slaughter. Crowe got his
title to the realty from a young woman of marginal mental health, as Slaughter
suffered from significant emotional frailties that cause her commercial vulnerability.
Crowe was strongly superior mentally, emotionally, and business savvy-wise
compared to Slaughter, all of which Crowe took to his full and complete advantage.
...

        Crowe continued his nefarious conduct toward Slaughter.

        Crowe insisted that Slaughter immediately cash the $10,000.00 check that
Crowe says was for the purchase of the house and Slaughter says she earned as salary
and moving expenses from Johnson City to Knoxville. Crowe went with Slaughter
to a Johnson City bank to cash the check. Slaughter got $10,000.00 cash in a bank
envelope which she then placed in the glove box of her BMW vehicle. Crowe and
Slaughter returned to Slaughter’s home where they were joined by Crowe’s partner.


                                  -4-
The next morning, Slaughter found that someone had taken the $10,000.00 cash from
the locked glove box of her BMW while the vehicle was parked in her locked garage
at her home on Berkshire. Somehow, some way, someone had access to Slaughter’s
house and to her vehicle and knew that the $10,000.00 cash was in the glove box.
Nothing else was disturbed about her car. Everything else in the car was as it was left
by Slaughter, except the $10,000.00 cash in the envelope in the locked glove box in
the car, in the closed and locked garage. They keys to Slaughter’s vehicle had been
stolen about two (2) months prior to the theft. Crowe had previously obtained a key
to Slaughter’s home, ostensibly so he could perform the repairs and refinish the
floors in the home. Slaughter reported the theft to the police. Crowe, or Crowe’s
agent, stole the $10,000.00 cash from Slaughter’s vehicle and converted the same to
his/their use. Slaughter did not prove, to the satisfaction of the Court, that the
$10,000.00 was for her “salary” or an “advance” or for “moving expenses”.

        The next day, Slaughter loaded her BMW with her clothes, jewelry, and other
personalty, and drove to Knoxville to work for Crowe’s business while living in an
apartment over the business. The following day, Slaughter discovered her BMW was
missing. She reported the theft to the Knoxville police who advised Slaughter that
her vehicle was registered in the name of Crowe. Crowe insisted he paid Slaughter
$5,000.00 cash for the BMW, which Slaughter denies. Someone forged Slaughter’s
name to the title of her BMW. A couple of months later, Crowe sold the BMW to
his partner’s father for $12,000.00 on the date of this sale, the vehicle had a fair
market value of $25,000.00. Crowe forged Slaughter’s name to the title of her
vehicle. Crowe paid Slaughter nothing for Slaughter’s vehicle. Crowe obtained
Slaughter’s BMW by fraud, deceit, and conversion. Crowe owes Slaughter the fair
market value of her automobile, i.e., $25,000.00.

       Crowe continued to denude Slaughter’s estate.

        Slaughter’s accommodations at the upstairs “Skynet” apartment consisted of
her sleeping on the floor. What Slaughter lacked in accommodations, however, she
made up for by having one room full of “high dollar” clothes and jewelry which she
had transported from her Johnson City home. In order to have appropriate sleeping
accommodations, Slaughter moved in with a woman she met in a Knoxville grocery
stores. Slaughter “locked” her clothes and jewelry in a room at Skynet. When she
attempted to retrieve her clothes and jewelry, she found that Crowe’s partner had
changed the lock to the room where the clothes and jewelry were located. Slaughter
was told that her clothes had been placed in an alley behind Skynet. She found
several garbage bags of clothes, but the majority of her clothing and jewelry were
missing. An employee of Skynet, witness Vanover, saw Crowe and his mother one
morning at 4:00 A.M., in the alley behind Skynet, going through Slaughter’s
“garbage bag” belongings and taking what they wanted which not only included
“high-dollar” clothes and jewelry, but two mink coats (Slaughter’s grand-father was


                                  -5-
a furrier and had given the items to her), all of which Slaughter valued at $80,000.00.
This same employee, whom Slaughter had dated, also testified that Crowe and his
partner were crooks, whose business practices included implementing, teaching, and
practicing some of the finer points of forgery, cheating employees out of their justly
earned pay, intimidating employees (“We have a bullet for you.”), how to talk to the
police when they have you involved in an investigation, and how to act in court.
Amazingly, Crowe’s demeanor on the witness stand mirrored the way in which
Crowe and his partner had instructed witness Vanover to act while testifying in court.
Crowe and/or his agent(s) obtained Slaughter’s clothing and jewelry by conversion
and theft. . . .

         While Slaughter was living in Knoxville, Crowe stripped Slaughter’s home
of its fixtures, as well as its furnishings. Slaughter’s hot tub and lawn furniture were
located at Crowe’s house. Crowe sold a storage bin of Slaughter’s personalty to his
partner’s father for $3,800.00. The fair market value of the personalty and fixtures
that was owned by Slaughter and taken by Crowe without Slaughter’s consent was
$120,000.00. Crowe produced a document drafted by Crowe and signed by Slaughter
that transferred all of Slaughter’s personalty in the house to Crowe. Slaughter said
she signed the document because Crowe explained that her signature was required
in order for him to obtain insurance, since he was working on the house. Exhibit 14
is a sham and is void. Crowe never obtained lawful ownership of Slaughter’s
household goods, furnishings, and fixtures. Crowe gained control of Slaughter’s
household goods, furnishings, and fixtures by conversion, fraud, deceit, and
intentional misrepresentations.

         In the meantime, about June of 2002, one of Slaughter’s boyfriends (not
Crowe or Vanover) directed her to a finance company in Johnson City in order for
her to obtain funds to pay off her debts, including the money owed her father.
Slaughter says this boyfriend agreed to make the monthly payment on this debt for
“work she would do for him.” As a result, the finance company took a first deed of
trust from Slaughter on her Johnson City home, securing a $50,000.00 loan. After
Slaughter refused to sign a note and deed of trust to her father as security for the
$259,000.00 he loaned her for the purchase of the realty, Dr. Slaughter had a title
examination done on the realty. The title examination revealed the finance
company’s first lien deed of trust. Dr. Slaughter then purchased Slaughter’s note and
deed of trust from the finance company in November of 2000 for $55,451.09. At the
time of Dr. Slaughter’s purchase of the note and deed of trust, the finance company
was ready to initiate foreclosure, as Defendant Slaughter’s boyfriend was delinquent
in repaying the loan.

       The Court has carefully considered the various elements of credibility in
evaluating witnesses’ testimony. The motive, the interest, and other applicable
elements of evaluating the witnesses’ testimony, as well as the exhibits, have been


                                  -6-
               utilized, including the demeanor of the witnesses. The Court was taken aback when
               Crowe’s demeanor mimicked that which witness Vanover testified was the demeanor
               that Crowe and his partner had told him to utilize. Crowe’s credibility, in light of the
               record, is poor. All of the other witnesses had good credibility. Defendant
               Slaughter’s demeanor and her testimony demonstrated a wide range of emotions,
               from crying, giving rambling answers that did not always answer the question,
               inappropriately laughing, and giddy some of the time but, nevertheless, genuine. It
               was evident to the Court that Defendant Slaughter did not understand at the time, that
               Crowe was robbing her of her estate. This Court fails to understand her attraction to
               her tormentor. Her trust in Crowe was misplaced. Defendant’s Slaughter’s
               ignorance of the documents she was signing for Crowe was appalling but,
               nevertheless, she had a true lack of understanding of the documents.

               Defendant Crow argues that the Trial Court “erred in its determination of the
respective credibility of the witnesses.”

               As the Supreme Court has observed:

                       Unlike appellate courts, trial courts are able to observe witnesses as they
               testify and to assess their demeanor, which best situates trial judges to evaluate
               witness credibility. See State v. Pruett, 788 S.W.2d 559, 561 (Tenn. 1990); Bowman
               v. Bowman, 836 S.W.2d 563, 566 (Tenn. Ct. App. 1991). Thus, trial courts are in the
               most favorable position to resolve factual disputes hinging on credibility
               determinations. See Tenn-Tex Properties v. Bornell-Electro, Inc., 778 S.W.2d 423,
               425-26 (Tenn. 1980); Mitchell v. Archibald, 971 S.W.2d 25, 29 (Tenn. Ct. App.
               1998). Accordingly, appellate courts will not re-evaluate a trial judge’s assessment
               of witness credibility absent clear and convincing evidence to the contrary. See
               Humphrey v. David Witherspoon, Inc., 734 S.W.2d 315-16 (Tenn. 1987); Bingham
               v. Dyeersbury Fabrics Co., Inc., 567 S.W.2d 169, 170 (Tenn. 1978).

Wells v. Tennessee Bd. Of Regents, 9 S.W.3d 779 at 783 (Tenn. 1999).

                There is no basis to assail the Judge’s assessment of Crowe’s credibility. As to Laura
Slaughter, there are significant inconsistencies in her testimony, and defendant Crowe points to the
fact that she executed the documents, but her testimony is contrary to what the documents actually
state. In most of the cases in this area of the law dealing with voiding deeds, the deeds as to form
are valid. Clearly, the Trial Judge reconciled the inconsistencies in Laura Slaughter’s testimony on
his finding that she “suffers from depression and anxiety and takes medication for these disorders.”
Consistent with this condition, he noted her emotional outbursts on the witness stand were consistent
with her emotional state.

                The Trial Judge observed the witnesses and evaluated their testimony. We find no
basis to reverse his ruling on the respective credibility of the witnesses.


                                                 -7-
              Next, Crowe argues the Court erred in setting aside the deed between defendant
Crowe and defendant Slaughter. The time-honored rule in equity in cases to set aside fraudulent
conveyances states where fraud will be presumed:

                “Where the consideration is shockingly inadequate. Where the consideration paid,
               or promised, is so grossly inadequate as to shock the conscience, especially when
               accompanied by other inequitable circumstances, such as concealments,
               misrepresentations, undue advantage or oppression on the part of the person
               obtaining the benefit, or ignorance, weakness of mind, sickness, old age, incapacity
               or pecuniary necessity on the part of the other party, in such cases, fraud is presumed.

Gibsons Suits in Chancery, § 196, 6th Ed., p.192-3, Inman. Also see, § 448.

               This Court has stated the Rule that a deed executed at a time when the grantor is
mentally unbalanced, has no intelligent comprehension of the acts being performed, and is incapable
of transacting such business is void. Henson v. Robinson, 364 S.W.2d 9751 (Tenn. App. 1962).
Moreover, a party need not to have been declared mentally incompetent to render a deed voidable.
Mental debility not necessarily amounting to incompetency is a basis for cancellation of a deed.
Bedwell v. Bedwell, 774 S.W.2d 953 (Tenn. App. 1989). The evidence does not preponderate
against the Chancellor’s finding on this issue. Tenn. R. App. P. 13(d).

               Finally, defendant argues the Court erred in awarding punitive damages against the
weight of the evidence.

                The Chancellor’s finding of fact on this issue established a basis to award punitive
damages, and the evidence does not preponderate against this finding. Tenn. R. App. P. 23(d).
However, the Trial Court should have conducted an evidentiary hearing on the amount of punitive
damages, and we vacate his Judgment of punitive damages against defendant Crowe, and remand
for a new trial on punitive damages only. At that time the Court will follow the instructions in
Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992) and take into account the factors set forth
in McLaron v. McLaron, 2001 WL 91, 2707 (Tenn. Ct. App. August 13, 2001).

                 The award of compensatory damages on behalf of the plaintiffs and cross-plaintiff
are affirmed. The Judgment for punitive damages is vacated and the cause is remanded for a new
trial on the sole issue of the amount of punitive damages.

               The costs of the appeal are assessed to defendant Daniel Bruce Crowe.




                                                       _________________________
                                                       HERSCHEL PICKENS FRANKS , J.


                                                 -8-
