Boren v. Hill Boren, P.C., W2017-02383-COA-R3-CV

• Decision Date: 17 October 2018
• Docket Number: No. W2017-02383-COA-R3-CV,W2017-02383-COA-R3-CV
• Parties: RICKY L. BOREN, ET AL. v. HILL BOREN, P.C., ET AL.
• Court: Tennessee Court of Appeals

RICKY L. BOREN, ET AL. v. HILL BOREN, P.C., ET AL.

No. W2017-02383-COA-R3-CV

COURT OF APPEALS OF TENNESSEE AT JACKSON

June 20, 2018 Session

October 17, 2018

Appeal from the Chancery Court for Madison County

No. 75056

Robert E. Lee Davies, Senior Judge

T. Robert Hill ("Hill") and Hill Boren, P.C. (collectively "Defendants") appeal the November 6, 2017 order of the Chancery Court for Madison County ("the Trial Court") finding Defendants in civil contempt. Defendants raise multiple issues regarding whether Defendants received proper notice, whether damages may be awarded absent a finding of willful contempt, whether the Trial Court erred in awarding damages pursuant to Tenn. Code Ann. § 29-9-104, and whether the Trial Court erred in allowing Plaintiffs access to corporate documents. We find and hold that Defendants received sufficient notice, that damages may not be awarded absent a finding of willful contempt, that the Trial Court did not err in awarding damages pursuant to Tenn. Code Ann. § 29-9-104 for the willful failure to turn over a computer server, and that the Trial Court did not err in allowing access to corporate documents. We, therefore, vacate the awards of damages for failure to turn over the copy machine and failure to turn over the Copitraks. We affirm the Trial Court's holding Defendants in civil contempt with regard to the failure to turn over the server and awarding damages for this contempt. The remainder of the Trial Court's order is affirmed.

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

D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which ARNOLD B. GOLDIN and KENNY W. ARMSTRONG, JJ., joined.

T. Robert Hill, Jackson, Tennessee, for the appellant, Hill Boren, P.C.

Tamara Hill, Jackson, Tennessee, for the appellant, T. Robert Hill.

Lewis L. Cobb and Teresa A. Luna, Jackson, Tennessee, for the appellees, Ricky L. Boren on behalf of Hill Boren, P.C.; Ricky L. Boren; and Jeffrey P. Boyd.

OPINION

Background

Ricky L. Boren on behalf of Hill Boren, P.C.; Ricky L. Boren, individually; and Jeffrey P. Boyd (collectively "Plaintiffs") sued Defendants with regard to ownership of stock in Hill Boren, P.C., a law firm in Jackson, Tennessee. The Trial Court entered an order on January 9, 2017 ordering, inter alia:

3. The following actions shall be taken in furtherance of the maintaining of the status quo:

* * *

b. Computers, Software, and Computer Equipment: Defendants will allow Boren and Boyd to possess all of Hill Boren P.C.'s computers, computer software, and computer equipment necessary for Boren and Boyd to carry out their law practices. This would include all computers, computer software, and computer equipment used by the staff of Hill Boren, P.C. but not the computers from the offices of T. Robert Hill or Tamara Hill. Along with this possession, Boren and Boyd will assume any expenses, liability, leases and/or payments for these computers, computer software, and computer equipment.

In February of 2017, Plaintiffs filed a motion for contempt alleging, in pertinent part, that Defendants had failed to turn over possession of a copier, Copitraks software/hardware, corporate documents, and a computer server, among other things. The Trial Court held a hearing on the motion for contempt in September of 2017 and heard testimony with regard to the alleged contempt.

Jeffrey P. Boyd ("Boyd") testified at the hearing that he was present on December 30, 2016, which had been set as the moving day for Plaintiffs to move furniture and equipment from Hill Boren, P.C. to Plaintiffs' new office location. Boyd testified that a request was made for the computer server ("the Server"), but Hill refused to turn it over. Boyd stated:

[W]e appeared pursuant to the court order to retrieve furniture and office equipment and files. And as part of that, we were supposed to get the server.

Mr. Cobb asked about the server, and Mr. Hill flatly denied us the ability to get that and actually screamed bloody murder at David Riggs for even bringing it up about us getting the server.

Instead of being given the Server, Plaintiffs were given a smaller computer server. Boyd testified that this smaller server did not work well for Plaintiffs. Boyd testified:

Basically we had all the stuff on that - - on that temporary server, but because of the - - the size volume and the usage of it, literally I would be in the middle of a brief, and my computer would crash, and we would lose - - I would lose documents because the server wasn't capable, when everybody was on it doing various things, to handle the whole process efficiently.

Boyd testified that the lease on the Server was set to expire in July of 2017. Between January 1, 2017 and July of 2017, Plaintiffs paid $18,464.32 on the lease.¹ Plaintiffs obtained their own server in July of 2017. Boyd stated that Plaintiffs "would have re-upped with the same lease with the same equipment going forward," if they had received the Server. He explained: "That system was adequate for our needs and would still be adequate for our needs but for them not giving [the Server] up." Boyd testified that due to the inadequacy of the smaller server Plaintiffs terminated the old lease "based on the functionality of the system that we had." He stated that Plaintiffs were in a position where they had to take that action. Boyd testified that the smaller server gave "[s]ubstantially diminished" performance, and he estimated it cost Plaintiffs "25, 30 percent efficiency lost in the usage of the software and programs and the day to day."

Michele Eckhart ("Eckhart") testified that she previously worked for Hill Boren, P.C., and that she currently works for Boren & Boyd. Eckhart started as the receptionist at Hill Boren, P.C. and eventually moved up to the position of office manager. Eckhart was present on December 30th, the moving day, when the Server was discussed. She testified that Hill refused to allow Plaintiffs to take the Server. She stated: "prior to that day, [Hill] did say we could have the server. On that particular day, I remember there being a discussion about he was not going to let them move the server, but I don't remember the exact words. He just said he wasn't going to allow it." Eckhart's understanding was that Hill was going to speak to the vendor, and that Plaintiffs could have the server "within a couple of weeks." The Server, however, never was provided. Instead, Plaintiffs used an old, used server. Eckhart testified that after the moving day, Plaintiffs attempted to get the Server on several occasions, but never were allowed to take the Server.

Eckhart was asked how the old server worked for them, and she stated:

We would lose work that we were working on constantly. It would shut down. It would - - the new - - it just didn't have memory. You would save something in one file to find it in another. It was just a Band-Aid to get us by for the couple weeks that turned into nine months.

At the hearing on the motion for contempt, Hill's deposition testimony concerning the corporate records was introduced. Hill testified that the corporate records were "stored on a safe, on top of a safe, basically just lined up," and that when the suit was filed the records were put in a box. Hill testified that as far as he knew, the records still were sitting in a box on the floor. Hill further stated that one of the Hill Boren, P.C. employees had boxed up the records. Hill was not sure which employee did this, but he stated it was either the office manager or someone under her supervision.

After the hearing, the Trial Court entered its Order For Contempt on November 6, 2017 finding and holding, inter alia:

With regard to the failure to provide the corporate documents of Hill Boren PC, the Court cannot find that there was a willful disobedience by Mr. Hill regarding the withholding of corporate documents from Mr. Boren, one of the plaintiffs and a minority shareholder of HBPC. During the hearing, Defendants provided the corporate tax returns for HBPC. Within fourteen days from the entry of this Order, Plaintiffs and their counsel shall have the opportunity to inspect the remaining corporate documents which are located at the offices of Hill Boren, P.C. Counsel for Defendants shall also be present during this inspection.

With regard to the copiers that were leased from R.J. Young Company, there were four copiers which were to be transferred to Plaintiffs for which Plaintiffs were then responsible for the payment of all costs associated with the lease of said copiers. Only three copiers were provided to Plaintiffs, and Plaintiffs seek reimbursement for the fourth copier for which they paid the invoice for four months. However, the Court cannot find that Mr. Hill willfully violated this provision of the Order. Indeed, there appears to have been at least an attempt to give the copier to the Plaintiffs. Although there is no finding of willful contempt, Defendants failed to comply with said Order, and Plaintiffs incurred damages in theamount of $1,500 by paying the invoice on the fourth copier that Defendants kept in their possession. Accordingly, Plaintiffs are awarded a judgment against Defendants jointly and severely in the amount of $1,500 for which execution may issue.

With regard to the Copitraks system, the Order allowed Plaintiffs to take possession of the Copitraks equipment; however, Plaintiffs were not given the software for said equipment by Defendants which was necessary to operate the equipment. Pursuant to the Order, Plaintiffs assumed the financial responsibility for the payment of all expenses associated with the Copitraks system. The Court cannot find that there was willful disobedience on the part of Mr. Hill as there was a reasonable dispute as to all of the equipment that went with the Copitraks system. However, since the Plaintiffs paid for the entire Copitraks system which should have included the software, they are entitled

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