Jeffrey Camporal v. Richard Ford ( 2003 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
On Briefs March 11, 2003
JEFFREY L. CAMPORA, ET AL. v. RICHARD DALE FORD
A Direct Appeal from the Circuit Court for Franklin County
No. 11,156-CV The Honorable Thomas W. Graham, Judge
No. M2002-01409-COA-R3-CV - Filed March 28, 2003
This case involves a dispute arising from a Promissory Note executed by and between the
Appellant/Maker and Appellee/Payee. Specifically, Appellant asserts that he signed the Note in a
representative capacity and, therefore, he is not personally liable on the Note. The Circuit Court of
Franklin County granted Appellee’s Motion for Summary Judgment, entering a Judgment against
Appellant for principal, interest, and costs. Appellant appeals from this Judgment. We affirm.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Affirmed
W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which DAVID R. FARMER ,
J. and HOLLY KIRBY LILLARD, J., joined.
Gregory M. O'Neal, Winchester, For Appellant, Richard Dale Ford
Gerald L. Ewell,Jr., Tullahoma, For Appellees, Jeffrey L. Campora and Coyle Clark
OPINION
Plaintiffs, Jeffrey L. Campora (“Mr. Campora,” or “Plaintiff”) and Coyle Clark, as Co-
Trustee of the Credit Shelter Trust under the will of Jerry Campora, deceased, sued defendant,
Richard Dale Ford (“Mr. Ford,” or “Defendant”), for the balance due on a non-negotiable promissory
note. In 1996, Mr. Ford was the President and Chief Operating Officer (“COO”) of Sircle Software,
L.L.C. (“Sircle”). Sircle was a Tennessee L.L.C. created for the purpose of developing and
marketing computer software for teachers. As part of his duties, Mr. Ford was charged with raising
investment capital for the operation of the company prior to a proposed stock offering at some point
in the future. To that end, Mr. Ford contacted Jeffrey Campora during the fall of 1996.1 Messrs.
Ford and Campora met on several occasions to exchange information about the proposed investment.
On November 27, 1996, the parties met at Regions Bank in Tullahoma, Tennessee and executed a
1
Me ssrs. Ford and Camp ora were acquaintanc es who had known ea ch other for over 40 yea rs.
Promissory Note (the “Note”). The Note was signed by Messrs. Ford and Campora and notarized.2
It reads as follows:
PROMISSORY NOTE
On ninety days after the date, for value received, I, Richard Dale
Ford, promise to pay to the Credit Shelter Trust under the Will of
Jerry Campora, 220 N. Jefferson Street, Winchester, TN 37398, the
sum of Fifty Thousand Dollars ($50,000.00), with interest thereon in
the amount of $5,000.00 for a total principle [sic] and interest
payment due and payable in the amount of $55,000.00.
If default is made in the payment of $55,000.00, of this single
principle [sic] and interest payment, then the whole sum shall become
immediately due and payable at the option of the payee, without
notice.
In the event of commencement of suit to enforce payment of this note,
I, Richard Dale Ford, agree to pay such additional sums including
attorney’s fees and Court costs as the Court may adjudge necessary
and reasonable.
I, Richard Dale Ford, chief operating officer of Sircle Software LLC,
convey to the Credit Shelter Trust under the Will of Jerry Campora,
an option to convert the principle [sic] of this promissory note, dated
27 November 1996, to 4% ownership interest in Sircle Software LLC.
This option may be exercised anytime during the ninety day period,
but is the option solely of Jeffrey L. Campora, Co-Trustee of the
Credit Shelter Trust, and does not include the interest due and payable
in conjunction with this promissory note. In any event the $5,000.00
in interest will be due and payable within (90) ninety days.
This note and subsequent option for conversion of principle [sic] shall
be governed by the laws of the State of Tennessee.
Agreed this 27 November 1996.
Richard Dale Ford /ss/ Jeffrey L. Campora /ss/
Richard Dale Ford Jeffrey L. Campora
President Co-Trustee
2
W e note that notarization of the instrument was no t necessary to secure its legal validity.
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Sircle Software 220 N. Jefferson Street
Winchester, TN 37398
Two days after the Note was executed, $50,000.00 was wired to Mr. Ford’s personal
account. On February 27, 1997, Mr. Ford made the $5,000.00 interest payment by personal
check. The principal of the Note was not called at that time and, pursuant to the option outlined
in Paragraph four of the Note, Mr. Campora elected to have the indebtedness converted to an
equity ownership in Sircle. Despite Mr. Campora’s attempt to exercise his option under the
Note, the principal was not converted into membership or equity interest in Sircle. Sircle was
eventually liquidated with no private stock offering ever being made. The Note was, thereby,
rendered worthless.3
On September 14, 1998, Plaintiff filed suit in the Circuit Court of Franklin County,
seeking judgment against Mr. Ford for breach of the Note. On December 12, 1998, Mr. Ford
filed an Answer to the Complaint.
Discovery was propounded to Mr. Ford and he did not timely respond. Plaintiff then filed
a Motion to Compel. An Agreed Order was entered on March 24, 1999, providing that Mr. Ford
answer by April 7, 1999. Mr. Ford failed to answer and a Motion for Sanctions was filed on
April 16, 1999. The interrogatories were answered on May 4, 1999.
Mr. Ford received notice for his deposition on January 20, 2000. Mr. Ford failed to
appear for his deposition and Plaintiff filed a Motion for Default Judgment on March 20, 2000.
On November 28, 2000, the trial court entered an Order Under Penalty of Default, requiring Mr.
Ford’s appearance at his deposition and awarding attorney’s fees to Plaintiff. Mr. Ford was
deposed on April 13, 2001.
Both parties filed Motions for Summary Judgment.4 The trial court heard the Motions on
February 26, 2002 and found that there was no genuine issue as to any material fact and that Mr.
Campora was entitled to judgment as a matter of law. Judgment was entered on May 13, 2002
against Mr. Ford for principal in the amount of $46,424.00, prejudgment interest in the amount
of $22,956.02, and attorney’s fees.
Mr. Ford appeals from this Judgment and raises two issues for our review as stated in his
brief:
3
Both Plaintiff and Defendant acknowledged that Plaintiff elected to convert the principal due on the No te to
an interest in Sircle, but Defendant did not provide the ownership interest and never recognized that Plaintiff had any
such ownership interest. There is no contention by Defendant that the attempt to exercise the option to convert the
principal of the Note to such an ownership interest affects his alleged personal liability on the Note.
4
Defendant filed his Mo tion for Summary Judgment, along with an Affidavit and M emorandum in support
thereo f, on O ctober 3, 2001 . Plaintiffs filed their Motion for Summary Jud gment, along with supporting documents, on
January 15, 2002.
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I. Whether the trial court committed error by finding the Defendant,
Richard Dale Ford, personally liable on the Note when he signed as
President?
II. If the court found the Note to be ambiguous, did it commit error
by not allowing extrinsic proof to prove the relationship between the
parties?
Resolution of the issues in this case are solely dependent on the construction of the
provisions of the Note signed by the parties hereto. The language used in a contract must be
taken and understood in its plain, ordinary, and popular sense. Bob Pearsall Motors, Inc. v.
Regal Chrysler-Plymouth, Inc., 521 S.W.2d 578 (Tenn.1975). In construing contracts, the
words expressing the parties’ intentions should be given the usual, natural, and ordinary
meaning. Ballard v. North American Life & Cas. Co., 667 S.W.2d 79 (Tenn. Ct. App.1983). If
the language of a written instrument is unambiguous, the Court must interpret it as written rather
than according to the unexpressed intention of one of the parties. Sutton v. First Nat. Bank of
Crossville, 620 S.W.2d 526 (Tenn. Ct. App.1981). A contract is not ambiguous merely because
the parties have different interpretations of the contract’s various provisions, Cookeville
Gynecology & Obstetrics, P.C. v. Southeastern Data Sys., Inc., 884 S.W.2d at 462 (citing
Oman Constr. Co. v. Tennessee Valley Auth., 486 F. Supp. 375, 382 (M.D.Tenn.1979)), nor can
this Court create an ambiguity where none exists in the contract. Cookeville P.C., 884 S.W.2d at
462 (citing Edwards v. Travelers Indem. Co., 300 S.W.2d 615, 617-18 (Tenn.1957)). Courts
cannot make contracts for parties but can only enforce the contract that the parties themselves
have made. McKee v. Continental Ins. Co., 234 S.W.2d 830 (Tenn. 1950). The interpretation
of a written contract is a matter of law and not of fact. See Rainey v. Stansell, 836 S.W.2d 117
(Tenn. Ct. App. 1992).
A motion for summary judgment should be granted when the movant demonstrates that
there are no genuine issues of material fact and that the moving party is entitled to a judgment as
a matter of law. Tenn. R. Civ.P. 56.04. The party moving for summary judgment bears the
burden of demonstrating that no genuine issue of material fact exists. See Bain v. Wells, 936
S.W.2d 618, 622 (Tenn. 1997). On a motion for summary judgment, the court must take the
strongest legitimate view of the evidence in favor of the nonmoving party, allow all reasonable
inferences in favor of that party, and discard all countervailing evidence. Summary judgment is a
preferred vehicle for disposing of purely legal issues. See Byrd v. Hall, 847 S.W.2d 208 (Tenn.
1993); Bellamy v. Federal Express Corp., 749 S.W.2d 31 (Tenn. 1988). Since the construction
of a written contract involves legal issues, construction of the contract is particularly suited to
disposition by summary judgment. Browder v. Logistics Management, Inc., 1996 LEXIS Tenn.
App. 227 (Tenn. Ct. App. 1996); see also Rainey, at 119. Since only questions of law are
involved here, there is no presumption of correctness regarding the trial court’s grant of summary
judgment. Bain at 622. Therefore, our review of the trial court’s grant of summary judgment is
de novo on the record before this Court. Warren v. Estate of Kirk, 954 S.W.2d 722, 723 (Tenn.
1997).
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We first address Appellant’s second issue. In this case, no documents were signed other
than the Note dated November 26, 1996 and no side agreements were made to alter the terms of
that Note. The Note is, therefore, the only evidence that exists concerning the agreement
between the parties. As to the issue of whether the trial court erred in not allowing extrinsic
evidence as to Mr. Ford’s personal liability on the Note, it is generally agreed that the
admissibility of parol evidence to prove the intent of the signatory hinges on whether the
instrument itself manifests some ambiguity. See United American Bank v. First Citizens Nat’l
Bank, 764 S.W.2d 555 (Tenn. Ct. App. 1988). In general terms, an ambiguity occurs where a
word or phrase is capable of more than one meaning when viewed in the context of the entire
agreement by an objective and reasonable person. See, e.g., Walk-in Medical Ctrs., Inc. v.
Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir. 1987). The Note at issue in this case contains
no ambiguities; rather, the Note, on its face, appears complete and there is nothing in the
document to indicate that Mr. Ford’s signature was made in a representative capacity. It is well
established that parol evidence cannot be used to contradict or alter the terms of a written
contract that is complete and unambiguous on its face. See, e.g., Jones v. Books, 696 S.W.2d 886
(Tenn.1985); Airline Constr., Inc. v. Barr, 807 S.W.2d 247, 259 (Tenn. Ct. App.1990). Since
the Note contains no ambiguity and since this Court is barred from creating an ambiguity where
one does not exist, Cookeville P.C., 884 S.W.2d at 462, this issue is without merit.
Turning to the Appellant’s first issue, we reiterate that there is no ambiguity in the Note.
Therefore, our determination of whether Mr. Ford is personally liable under the Note rests solely
in the plain language of the document. Notwithstanding the signature line, which, as noted
above, contains no indication that Mr. Ford is signing on behalf of Sircle, the language contained
in the body of the Note clearly obligates Mr. Ford personally. Paragraph one of the document
states that “I, Richard Dale Ford, promise to pay to the Credit Shelter Trust...the sum of Fifty
Thousand Dollars ($50,000.00)....” Likewise, in Paragraph three of the Note, Mr. Ford is made
personally liable by these words: “I, Richard Dale Ford, agree to pay such additional sums
including attorney’s fees and Court costs....” It is only in Paragraph 4 that Mr. Ford is referred to
as the COO of Sircle. However, this paragraph does not address the repayment obligations under
the Note; rather, Paragraph four concerns Mr. Ford’s authority as COO of Sircle to honor
Plaintiff’s option to convert the principal of the Note to a 4% ownership in the company. The
law concerning contract interpretation is well settled–absent ambiguity, plain language controls.
Considering the document in its entirety, we, as did the trial court, can reach but one conclusion
concerning this Note. Mr. Ford is personally liable for repayment of the principal, interest, and
attorney’s fees.
For the foregoing reasons, we affirm the order of the trial court granting summary
judgment to Plaintiff. Costs of this appeal are assessed to the Appellant, Richard Dale Ford, and
his surety.
__________________________________________
W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.
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