               IN THE COURT OF APPEALS OF TENNESSEE
                            AT JACKSON
                               January 20, 2016 Session

           SECURAMERICA BUSINESS CREDIT v. SOUTHLAND
                 TRANSPORTATION CO., LLC., ET AL.

               Direct Appeal from the Circuit Court for Shelby County
                    No. CT-001803-07     Donna M. Fields, Judge


                 No. W2015-00391-COA-R3-CV – Filed April 1, 2016


This is the third appeal involving liability on personal guaranties securing the debt of a
transportation company. On remand after our second opinion, the trial court found that
the transportation company and the lender, through the actions of its president, entered
into a conspiracy to violate the Tennessee Consumer Protection Act (“TCPA”) and
violated the duty of good faith and fair dealing, thereby relieving the guarantors of their
liability under the continuing guaranties. Specifically, the trial court found that the
guarantors were “consumers” under the TCPA, that the guarantors suffered an
ascertainable loss due to the transportation company‟s deceptive acts, and that a violation
of the TCPA can be a predicate tort for a civil conspiracy claim. Now, we reverse the
trial court‟s finding that the transportation company‟s acts affected trade or commerce
within the meaning of the TCPA. Accordingly, we also reverse the trial court‟s
determination that the guarantors should be released from their guaranties.

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

BRANDON O. GIBSON, J., delivered the opinion of the court, in which KENNY
ARMSTRONG, J., and JOHN EVERETT WILLIAMS, SP. J., joined.

William O. Luckett, Jr., Clarksdale, Mississippi, and Lorrie K. Ridder, Indianapolis,
Indiana, for the appellant, SecurAmerica Business Credit.

David Jarvis Cocke, Memphis, Tennessee, for the appellees, Karl Schledwitz and Terry
Lynch.
                                        OPINION

                          I. Background & Procedural History

       This is the third appeal in this case. In our previous opinion in this case, the facts
and procedural history were discussed at length. For a full history, see SecurAmerica
Business Credit v. Schledwitz, No. W2012-02605-COA-R3-CV, 2014 WL 1266121
(Tenn. Ct. App. Mar. 28, 2014) (hereinafter “SecurAmerica II”).

        Briefly, Appellant SecurAmerica Business Credit (“Appellant” or
“SecurAmerica”) brought this action against Southland Transportation Co., LLC
(“Southland Transportation”), Southland Capital Co. (“Southland Capital”), and
Appellees Karl Schledwitz and Terry Lynch. SecurAmerica II, 2014 WL 1266121 at *1.
SecurAmerica‟s claims arise from an alleged default on a September 16, 1999 Secured
Revolving Credit Agreement (“Credit Agreement” or “SRCA”) between SecurAmerica
and Southland Transportation, a trucking company. Id. The Credit Agreement was
personally guaranteed by Appellees, who co-owned Southland Transportation at the time.
Id. The Credit Agreement was a revolving line of credit and was intended to provide
working capital for the trucking company based on the value of certain assets, primarily
the company‟s accounts receivable. Id. at *2. Therefore, in order to receive funds from
the revolving line of credit, Southland Transportation submitted daily “borrowing base
certificates” to SecurAmerica that identified the amount of eligible accounts receivable
maintained on its books. Id. at *2, (quoting SecurAmerica Business Credit v. Schledwitz,
No. W2009-2571-COA-R3-CV, 2011 WL 3808232, at *1-2 (Tenn. Ct. App. Aug. 26,
2011)(hereinafter “SecurAmerica I”)). “Based upon the amount listed on the borrowing
base certificates, SecurAmerica would advance monies to Southland Transportation to
fund its daily operations. To pay down the loan balance, Southland Transportation
maintained a bank account called a „blocked account,‟ into which it directed its customers
to send their invoice payments. As these payments accrued in the blocked account,
monies would be wired directly to SecurAmerica to be applied to the balance of the line
of credit.” SecurAmerica I, 2014 WL 3808232 at *2. In addition to the Credit
Agreement, Mr. Schledwitz and Mr. Lynch both signed individual Guaranties securing
the loan.

       In August 2000, Appellees sold Southland Transportation to two of its employees
– Michael Harrell and Michael Lucchesi. SecurAmerica II, 2014 WL 1266121 at *4.
While the change in ownership constituted an event of default under the Credit
Agreement, SecurAmerica did not accelerate the loan, nor did it release Appellees from
their personal guaranties. Id. Instead, SecurAmerica continued to lend money to
Southland Transportation pursuant to the Credit Agreement, and Appellees continued as
guarantors. Id.
                                             2
       It was at this point that the facts began to develop in such a way to give rise to the
dispute presently before us.

       Sometime between August 2000 and February 2001, Southland
       Transportation began falsifying the borrowing base certificates that it
       submitted on a daily basis in order to acquire additional funds from
       SecurAmerica. These borrowing base certificates were falsely inflated to
       make it appear that Southland Transportation had a higher eligible accounts
       receivable balance than it actually did, which consequently allowed it to
       obtain advances from SecurAmerica in excess of that provided by the
       Credit Agreement. Essentially, this created an out of balance debt-to-
       collateral ratio because monies were advanced on the basis of accounts
       receivable that did not exist. For example, in August 2000, $815,000 was
       collected from accounts receivable and put in the blocked account to pay
       down the loan. That amount fell to $604,000 in September; $414,000 in
       October; $187,000 in November; and $24,000 in December. Thus,
       Southland Transportation‟s actual accounts receivable balance was
       dropping precipitously; however, all the while, the line of credit remained
       at its maximum balance of approximately $1.5 million.
       ....
       [F]or some period of time, both Mr. Harrell and Mr. Reagan were aware
       that the borrowing base certificates had been falsified; nevertheless,
       SecurAmerica continued to make advances. In addition to the falsified
       borrowing base certificates, Mr. Harrell, with the knowledge and
       complicity of Mr. Reagan, began diverting accounts receivable remittances
       around the blocked account. Now, instead of being used to pay down the
       line of credit, as required by the terms of the Credit Agreement, this money
       was diverted to fund the day-to-day operations of Southland Transportation.

Id. at *4.

       In SecurAmerica II, we remanded this case to the trial court with a roadmap
consisting of five issues for the trial court to address to properly support its ruling
regarding a Tennessee Consumer Protection Act (Tenn. Code Ann. §§ 47-18-101 et. seq.)
(“TCPA”) violation. We stated that the trial court must: (a) determine whether a
violation of the TCPA can serve as an underlying tort for a civil conspiracy claim; (b)
determine whether “the sophisticated commercial guarantors” here are properly
considered “consumers” under the TCPA; (c) make specific findings as to whether the
Guarantors suffered an “ascertainable loss of money or property” as a result of the
alleged TCPA violation; (d) make a determination as to whether SecurAmerica‟s conduct
was either “unfair” or “deceptive” and (e) make a finding as to whether the allegedly
                                             3
unfair or deceptive acts “affect trade or commerce.” Id. at *24.

        On remand, the trial court found that the Guarantors are properly considered
“consumers” under the TCPA and that the Guarantors suffered an ascertainable loss as a
result of SecurAmerica‟s actions. Additionally, the trial court found that SecurAmerica‟s
actions affected trade or commerce and were “intentionally deceptive.” Finally, the trial
court found that a violation of the TCPA can serve as an underlying tort for a civil
conspiracy claim. Based on those findings, the trial court released the Guarantors from
their guaranties. SecurAmerica now appeals.

                                         II. Issues

      Plaintiff/Appellant presents the following issues for review:

      1.     Whether the “credit terms” exemption found in Tenn. Code Ann. §
             47-118-111(a)(3) precludes a TCPA claim when guarantors of a
             credit agreement base their TCPA violation on a lender and
             borrower‟s modification of the terms of their credit agreement?

      2.     When parties to an existing loan no longer require accurate
             borrowing base certificates and bypass a blocked account, are such
             acts outside the TCPA‟s definition of trade or commerce which
             requires the acts at issue to affect advertising, offering for sale, lease,
             rental or distribution, goods, services or property?

      3.     May speculative testimony and unspecific proof on damages support
             a finding of ascertainable loss under the TCPA?

      4.     Should a claim under the deception prong of the TCPA be dismissed
             when there is no testimony that the claimant believed what was false
             or was misled as to a matter of fact?

      5.     Does the TCPA apply to highly sophisticated parties who enter into
             a specialized business transaction not offered generally to the
             consuming public?

      6.     Does a conspiracy claim relying on a TCPA violation fail when the
             violation is based on conduct that is not independently tortious?

      7.     Should TCPA and conspiracy claims survive when a court awards
             no damages because the proof is speculative and not specific?
                                              4
      8.     Is it a breach of a loan agreement when the parties to the loan
             modify the agreement to no longer require accurate borrowing base
             certificates and bypass a blocked account? And does a guarantor
             have standing to make a breach claim on that basis?

      9.     May a court nullify valid and express waivers contained in a
             guaranty agreement if it finds breach of the underlying loan
             agreement as to the very matters waived in guaranty?

      10.    Is it a breach of the duty of good faith and fair dealing to enforce
             valid and express waivers contained in a guaranty?

      11.    Should prejudgment interest be awarded in a guaranty case?

In addition, Defendant/Appellee presents the following issues:

      12.    Can a violation of the TCPA serve as an underlying tort for a civil
             conspiracy claim?

      13.    Are sophisticated commercial guarantors “consumers” protected
             under the TCPA?

      14.    Did Appellees suffer an ascertainable loss of money or property as a
             result of the alleged TCPA violation?

      15.    Was the conduct of Southland and SecurAmerica deceptive or
             unfair?

      16.    Did the allegedly unfair or deceptive conduct “affect trade or
             commerce?”

      17.    What terms of either the Secured Revolving Credit Agreement or the
             guarantees were breached?

      18.    How do the continuing nature of the guarantees, or the express
             waivers contained therein affect the obligations of the parties in this
             case?

      19.    Did the trial court consider this Court‟s holding in Transouth
             Mortgage Corp. v. Keith, 1985 WL 4677 (Tenn. Ct. App. 1985)
                                            5
             when ruling that the Appellees be released from their obligations
             under their respective guarantees?

                                III. Standard of Review

       In nonjury cases, this Court‟s review is de novo upon the record of the proceedings
in the trial court, with a presumption of correctness as to the trial court‟s factual
determinations, unless the evidence preponderates against those findings. Tenn. R. App.
P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). The trial
court‟s conclusions of law, however, are afforded no such presumption. Campbell v.
Florida Steel, 919 S.W.2d 26, 35 (Tenn. 1996).

                                      IV. Analysis

      The trial court‟s decisions in this case rest first on its finding that SecurAmerica,
through the actions of its president, violated the Tennessee Consumer Protection Act.
Accordingly, we begin with the issues concerning the TCPA. As we stated in
SecurAmerica II:

      The TCPA was enacted to provide statutory remedies beyond common-law
      fraud actions for consumers and legitimate business enterprises victimized
      by unfair or deceptive business acts or practices that were committed in
      Tennessee in whole or in part. See Tenn. Code Ann. § 47-18-102; Tucker v.
      Sierra Builders, 180 S.W.3d 109, 115 (Tenn. Ct. App. 2005). The TCPA
      applies to any “act or practice which is unfair or deceptive to the consumer
      or to any other person.” Tenn. Code Ann. § 47-18-104(b)(27). The
      TCPA‟s provisions, however, are limited to those actions “affecting the
      conduct of any trade or commerce.” Tenn. Code Ann. § 47–18–104(a),
      (b); see also Pursell v. First American Nat. Bank, 937 S.W.2d 838, (Tenn.
      1996) (limiting violations of the TCPA to conduct affecting trade or
      commerce). A “deceptive” act or practice is “one that causes or tends to
      cause a consumer to believe what is false or that misleads or tends to
      mislead a consumer as a matter of fact.” Tucker, 180 S.W.3d at 116
      (citations omitted). An act or practice may be deemed unfair if it “causes or
      is likely to cause substantial injury to consumers which is not reasonably
      avoidable by consumers themselves and not outweighed by countervailing
      benefits to consumers or to competition.” Id. at 116-17 (citing 15 U.S.C. §
      45(n)). Because the TCPA is remedial, courts have determined that it
      should be construed liberally in order to protect the consumer. Tucker, 180
      S.W.3d at 115. In order to recover under the TCPA, a plaintiff must prove:
      (1) that the defendant engaged in an unfair or deceptive act; and (2) that the
                                            6
       defendant's conduct caused an “ascertainable loss of money or property....”
       Tucker, 180 S.W.3d at 116 (quoting Tenn. Code Ann. § 47–18–109(a)(1));
       see also Cloud Nine, L.L.C. v. Whaley, 650 F.Supp.2d 789, 798 (E.D. Tenn.
       2009) (“plaintiffs asserting claims under the [TCPA] are required to show
       that the defendant's wrongful conduct proximately caused their injury”).

SecurAmerica II, 2014 WL 1266121, at *23 (internal footnotes omitted).

       With respect to the Tennessee Consumer Protection Act, the role of this Court in
construing statutes is to ascertain and give effect to legislative intent. Wilson v. Johnson
County, 879 S.W.2d 807, 809 (Tenn. 1994). “Legislative intent is to be ascertained
whenever possible from the natural and ordinary meaning of the language used, without
forced or subtle construction that would limit or extend the meaning of the language.”
Pursell v. First Am. Nat. Bank, 937 S.W.2d 838, 840 (Tenn. 1996) (citing Carson Creek
Vacation Resorts, Inc. v. Dep’t of Revenue, 865 S.W.2d 1, 2 (Tenn. 1993)). As the
supreme court noted in Pursell, “the Legislature has directed that the provisions of the
Consumer Protection Act be liberally construed to protect consumers and legitimate
business enterprises from those who engage in „unfair or deceptive acts or practices in the
conduct of any trade or commerce.‟” Pursell, 937 S.W.2d at 841 (citing Tenn. Code
Ann. § 47-18-102(2); Morris v. Mack’s Used Cars, 824 S.W.2d 538 (Tenn. 1992)).

                                 A. Trade or Commerce

        This appeal involves the interpretation of the Tennessee Consumer Protection Act,
Tennessee Code Annotated § 47-18-102, et seq. Our primary objective when construing
a statute is to effectuate the purpose of the legislature. Lipscomb v. Doe, 32 S.W.3d 840,
844 (Tenn. 2000). In construing legislative enactments, we presume that every word in
the statute has meaning and purpose and should be given full effect if the obvious
intention of the legislature is not violated by doing so. In re C.K.G., 173 S.W.3d 714,
722 (Tenn. 2005). When a statute is clear, we should apply the plain meaning without
complicating the task. Eastman Chem. Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn.
2004). In performing our statutory analysis, we observe that the legislature has directed
that the provisions of the Consumer Protection Act be liberally construed to protect
consumers and legitimate business enterprises from those who engage in “unfair or
deceptive acts or practices in the conduct of any trade or commerce.” Tenn. Code Ann. §
47-18-102(2); see also Morris v. Mack’s Used Cars, 824 S.W.2d 538 (Tenn. 1992).

      SecurAmerica argues that its acts did not affect trade or commerce within the
meaning of the TCPA. According to SecurAmerica:

       The trial court based its erroneous finding that SecurAmerica violated the
                                             7
        TCPA on two acts: allowing [Southland] Transportation to bypass the
        blocked account and receive funds on inaccurate borrowing base
        certificates. These acts, however, did not affect the advertising, offering for
        sale, lease, rental or distribution of any goods, services or property . . . . The
        behavior of which the Guarantors complain does not fall within the TCPA‟s
        definition of trade or commerce.

Tennessee Code Annotated section 47-18-103(19) defines “trade or commerce” as “the
advertising, offering for sale, lease or rental, or distribution of any goods, services, or
property, tangible or intangible, real, personal, or mixed, and other articles, commodities,
or things of value wherever situated.”

        In analyzing the language of the TCPA, the Tennessee Supreme Court, in Pursell
v. First American National Bank, 937 S.W.2d 838 (Tenn. 1996), determined that “[t]he
parameters of the Act . . . do not extend to every action of every business in the State.
The terms „trade or commerce‟ are specifically defined to limit the Act‟s application.”
Id. at 841. In Pursell, the plaintiff brought suit against First American National Bank
alleging several causes of action, including a claim under the TCPA. The court
determined that the alleged acts in the plaintiff‟s suit, which arose from a dispute over the
plaintiff‟s re-possessed truck, did not affect trade or commerce within the meaning of the
TCPA. Id. at 842 (“Though the definitions of „trade or commerce‟ contained within the
[TCPA] are broad, they do not extend to this dispute, which arose over repossession of
the collateral securing the loan.”).

        On remand, the trial court acknowledged the definition of “trade or commerce” as
set forth in Tennessee Code Annotated section 47-18-103(19). However, the trial court
did not apply that definition to the facts of this case. Instead, the court looked to
Tennessee Code Annotated section 47-18-111 to determine whether any of the express
exemptions applied. Before analyzing exemptions, however, a determination of whether
the complained-of activities fit within the definition of “trade or commerce” was
necessary.1

      While we recognize that the Pursell court confined its holding to the facts and
circumstances of that case and did not generally exempt banking activities from the

1
 The trial court relied on Beard v. Worldwide Mortgage Corp., 354 F.Supp.2d 789, 815 (W.D. Tenn.
2005) and Terry v. Community Bank of Northern Virginia., 255 F.Supp.2d 817, 823-24 (W.D. Tenn.
2003) to hold that “[t]he TCPA has been applied to cases involving credit transactions where there are
misrepresentations by defendants in the process of establishing or executing such a transaction.”
However, Beard and Terry were federal district court decisions on motions to dismiss, and the federal
district courts did not analyze whether the complained-of actions fell within the definition of “trade or
commerce.”
                                                   8
TCPA,2 we conclude that the court‟s reasoning in Pursell is applicable here. The actions
of SecurAmerica upon which Appellees base their TCPA claims, even if considered to be
unfair or deceptive, did not affect the “advertising, offering for sale, lease or rental, or
distribution of any goods, services, or property, tangible or intangible, real, personal, or
mixed, and other articles, commodities, or things of value wherever situated.” 3 Our
supreme court has

        stated many times that the most basic rule of statutory construction is to
        ascertain and give effect to the intention and purpose of the Legislature.
        Where . . . the language contained within the four corners of a statute is
        plain, clear, and unambiguous, there is no room for interpretation or
        construction, and we must apply the words of the statute.

Pursell, 937 S.W.2d at 842. According to the “Second Amended Answer, Counterclaim,
Third-party Claim and Cross Claim of Defendants, Karl Schledwitz and Terry Lynch,”
the alleged TCPA violation in this case arises from SecurAmerica‟s “direct and
purposeful acts and … practices that substantially eroded and impaired the value of the
security and collateral for a loan,” “instruct[ing] … Southland … to make false and
misleading, or deceptive statements and representations about the „eligible accounts‟
upon which advances could be made,” and “chang[ing] the course of conduct and terms
of the Guaranty Agreement after the sale of Southland…” Clearly, none of these alleged
activities are the “advertising” or “offering for sale, lease or rental” of “any goods,
services, or property, tangible or intangible, real personal, or mixed, and other articles,
commodities, or things of value wherever situated.” Tenn. Code Ann. § 47-18-103(19).
None of these alleged activities could be considered “distribution” of property, nor could
they be “distribution” of “goods” or “services” as those terms are defined in Tennessee
Code Annotated section 47-18-103 (7) or (18), respectively. Thus, the alleged acts would
only be covered by the Consumer Protection Act if they are the “distribution” of “other
articles, commodities, or things of value wherever situated.” We fail to see how
SecurAmerica‟s actions fit within this portion of the TCPA‟s definition of “trade or
commerce” without substantially expanding the statute‟s intended meaning or
application. See Perrin v. Gaylord Entm’t Co., 120 S.W.3d 823, 826 (2003). We cannot
force a construction of the statute that limits or extends its application. See Eastman
Chem. Co., 151 S.W.3d at 507. As did the court in Pursell, we acknowledge that
“[t]hough the definitions of „trade or commerce‟ contained within the [TCPA] are broad,

2
  Rather, the court approvingly cited to a law journal article demonstrating that courts in many states have
interpreted consumer protection statutes to include numerous banking activities, including the extension
of credit. Pursell, 937 S.W.2d at 842 (citing [James R. Cox,] State Consumer Protection or Deceptive
Trade Practices Statutes: Their Application to Extensions of Credit and Other Banking Activities, 105
Banking L.J 214 (1988)).
3
  Tenn. Code Ann. § 47-18-103(19).
                                                      9
they do not extend to this dispute . . . .” Pursell, 937 S.W.2d at 842.

        Additionally, we note that while Tennessee Code Annotated section 47-18-
104(b)‟s list of unfair or deceptive acts that constitute violations of the statute is “non-
exhaustive,” see Sowards v. Grange Mutual Casualty Co., No. 3:07-cv-0354, 2008 WL
3164523, at *12 (M.D. Tenn. Aug. 4, 2008), it provides some direction as to the types of
acts contemplated by the legislature. The alleged acts in this case look nothing like the
specific list of fifty unfair or deceptive acts affecting trade or commerce contained within
Tennessee Code Annotated section 47-18-104(b). Tenn. Code Ann. § 47-18-104(b).
While that alone is not determinative, taken together with the aforementioned discussion
of “trade or commerce,” we conclude that the alleged acts do not fall within the TCPA‟s
definition of “trade or commerce.”

       Because we have determined that SecurAmerica‟s acts did not affect trade or
commerce within the meaning of the TCPA, the Guarantors‟ TCPA claim necessarily
fails. We noted in SecurAmerica II that “[w]ithout a finding of a violation of the TCPA,
there can be no conspiracy.” SecurAmerica II, 2014 WL 1266121 at *39 (citing Foster
Business Park v. Winfree, No. M2006-02340-COA-R3-CV, 2009 WL 113242 (Tenn. Ct.
App. Jan. 15, 2009)). Further, “without a finding of conspiracy, under the holding in
Transouth, it appears there can be no avoidance of the obligations of the Guaranties.” Id.
at *39 (citing Transouth Mortg. Co. v. Keith, 1985 WL 4677 (Tenn. Ct. App. Dec. 24,
1985)). Therefore, we must reverse the trial court‟s determination that the Guarantors
should be released from their guaranties. All other issues with respect to the Guarantors‟
TCPA claim are pretermitted.

           B. Prejudgment Interest and Guaranty of Validity of Collateral

       Having determined that the trial court erred in releasing the Guarantors from their
individual guaranties, we next consider SecurAmerica‟s contention that prejudgment
interest should be awarded. In the first judgment, the trial court concluded that the
Guarantors should be held to their personal guaranties but declined to award prejudgment
interest in this case “because of the fraud on the part of Randall Reagan and
SecurAmerica.” In SecurAmerica I, we remanded the case to the trial court, in part,
because the trial court provided contradictory findings regarding fraud. SecurAmerica
I, 2011 WL 3808232 at *12. On remand, the trial court found that the Guarantors had
failed to prove fraud because they could not show reliance on the alleged
misrepresentations made by SecurAmerica. We affirmed the trial court‟s finding of no
reliance in SecurAmerica II and stated that “[w]ithout justifiable reliance, there can be no
fraud.” SecurAmerica II, 2014 WL 1266121, at *23. SecurAmerica now argues that
because there was no fraud, it is entitled to prejudgment interest.

                                             10
       “An award of prejudgment interest is within the sound discretion of the trial court
and the decision will not be disturbed by an appellate court unless the record reveals a
manifest and palpable abuse of discretion.” Myint v. Allstate Ins. Co., 970 S.W.2d 920,
927 (Tenn. 1998) (citing Spencer v. A-1 Crane Serv., Inc., 880 S.W.2d 938, 944 (Tenn.
1994); Otis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 446 (Tenn. 1992)). The
purpose of prejudgment interest “is to fully compensate a plaintiff for the loss of the use
of funds to which he or she was legally entitled, not to penalize a defendant for
wrongdoing.” Myint, 970 S.W.2d at 927. In Tennessee, several principles guide trial
courts in exercising their discretion to award prejudgment interest. “Foremost are the
principles of equity.” Id.; Tenn. Code Ann. § 47-14-123. The trial court must decide
whether the award of prejudgment interest is fair, given the particular circumstances of
the case. Myint, 970 S.W.2d at 927. Additionally, “[t]he certainty of the plaintiff‟s claim
is but one of many nondispositive facts to consider when deciding whether prejudgment
interest, is, as a matter of law, equitable under the circumstances.” Id. at 928.

        An award of prejudgment interest is within the purview of the trial court. Spencer,
880 S.W.2d at 944. While it would typically be appropriate for this Court to review the
trial court‟s determination with respect to an award of prejudgment interest, here, the trial
court must first revisit its ruling. This is now the third appeal in this case, and neither this
Court nor the trial court has addressed the issue of prejudgment interest since the trial
court‟s original judgment. While the trial court‟s reasoning with respect to its initial
decision to decline an award of prejudgment interest is no longer valid, the trial court
must still address the issue under “the principles of equity.” Myint, 970 S.W.2d at 927;
Tenn. Code Ann. § 47-14-123.

        In addition to the individual guaranties, SecurAmerica requests that this Court
enter judgment against Mr. Schledwitz on the Guaranty of Validity of Collateral
(“GVC”) in the full amount of the loan with interest at the time of trial, for
$3,083,063.83. In its original judgment, the trial court held the Guarantors to their
individual guaranties but released Mr. Schledwitz from the GVC based on its premise
that “a Guarantor cannot foresee an amendment to a loan obligation based upon
fraudulent books.” SecurAmerica appealed the trial court‟s ruling on the GVC; however,
the issue was pretermitted in SecurAmerica I, No. W2009-02571-COA-R3-CV, 2011 WL
3808232, at *13 (Tenn. Ct. App. Aug. 26, 2011). The trial court‟s subsequent judgments
and this Court‟s decision in SecurAmerica II did not address the GVC. Whether Mr.
Schledwitz is obligated to pay on the GVC is a question of fact for the trial court that we
cannot appropriately address. While we determined in SecurAmerica II that Appellees
failed to prove fraud, we cannot supplant the trial court‟s fact finding duty with respect to
Mr. Schledwitz‟s obligation under the GVC. Accordingly, with respect to the issues of
prejudgment interest the GVC, we must remand to the trial court to make factual findings
and conclusions of law consistent with this opinion.
                                              11
                                     C. Attorney’s Fees

      Finally, although not raised as an issue on appeal, SecurAmerica requests that this
Court reinstate the trial court‟s original attorneys‟ fee award of $125,000 against each
Guarantor and that it also be awarded its attorneys‟ fees for all three appeals and
expenses since the time of the first award in an amount to be submitted to the trial court
upon affidavit.

       Tennessee adheres to the “American rule” for award of attorney fees. John Kohl
& Co. v. Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn. 1998); Pullman Standard, Inc.
v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985). Under the American rule, a party in a
civil action may recover attorney fees only if: (1) a contractual or statutory provision
creates a right to recover attorney fees; or (2) some other recognized exception to the
American rule applies, allowing for recovery of such fees in a particular case. Cracker
Barrell Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009).

        In its original judgment, the trial court determined that SecurAmerica was entitled
to its attorneys‟ fees due to the Guarantors‟ contractual obligation to pay “any and all
costs and expenses (including attorney‟s fees and related expenses) incurred by
[SecurAmerica] in enforcing any rights under [the Guaranties].” After we vacated the
trial court‟s original judgment in the first appeal in this case, the trial court ruled in favor
of the Guarantors on remand. The issue of SecurAmerica‟s attorneys‟ fees has not been
addressed since the trial court‟s original judgment. However, because the issue of
attorneys‟ fees was not raised on appeal, this is an issue more properly addressed in the
trial court on remand. Therefore, we remand this case to the trial court to determine the
appropriateness of and the proper amount, if any, of attorneys‟ fees on appeal. See Davis
v. Davis, No. E2007-01251-COA-R3-CV, 2008 WL 2219277, at *6 (Tenn. Ct. App. May
29, 2008).

                                       V. Conclusion

       For the foregoing reasons, the judgment of the trial court is reversed and remanded
for such further proceedings as may be necessary and are consistent with this opinion.
Costs of the appeal are taxed to the Appellees, Karl Schledwitz and Terry Lynch, for
which execution may issue if necessary.



                                                   _________________________________
                                                   BRANDON O. GIBSON, JUDGE
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