Amelia Swafford v. Bobby M. Johnson ( 2004 )


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  •                  IN THE COURT OF APPEALS OF TENNESSEE
                                 AT NASHVILLE
                                        April 13, 2004 Session
    
                 AMELIA SWAFFORD v. BOBBY M. JOHNSON, ET AL.
    
                         Appeal from the Chancery Court for Sumner County
                             No. 95C-264    Tom E. Gray, Chancellor
    
    
    
                         No. M1999-00463-COA-R3-CV - Filed July 22, 2004
    
    
    The instant appeal was stayed in 1999 by this Court’s order upon suggestion of bankruptcy. The stay
    has been lifted, and the case proceeds on Amelia Swafford’s appeal from the trial court’s order in
    favor of the defendants Bobby and Betty Johnson and Old Hickory Engineering & Machine Co., Inc.
    (“OHEMCO”). We reverse the trial court.
    
              Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                                    Reversed and Remanded
    
    WILLIAM B. CAIN , J., delivered the opinion of the court, in which WILLIAM C. KOCH , JR., P.J., M.S.,
    and PATRICIA J. COTTRELL, J., joined.
    
    Christopher R. Fox, Jason S. Mangrum, Lebanon, Tennessee, for the appellant, Amelia E. Swafford.
    
    Bobby M. Johnson, Betty A. Johnson and Old Hickory Engineering & Machine Co., Inc., Pro Se
    Appellees
    
                                                OPINION
    
            In 1993, Bobby and Betty Johnson sought to sell a machine shop business which made and
    repaired compressor parts. As a result of the inquiries made on behalf of one Ray Farmer and the
    appellant Amelia E. Swafford, the business, Old Hickory Engineering & Machine Co., Inc.
    (OHEMCO) was not sold. Instead the parties entered into business together. Mrs. Swafford was
    hired by OHEMCO as a “full-charge” bookkeeper. At the same time she entered into a stock
    purchase agreement with Betty and Bobby Johnson whereby she attempted to obtain 15% of the
    corporate stock for the sum of $50,000. From her date of hire in January of 1994 until the last day
    she worked with OHEMCO in May of 1995, relations between Mrs. Swafford and the Johnsons were
    difficult. Mrs. Swafford was terminated and subsequently filed the complaint in this action.
    I.     Procedural History
    
           A.      Pleading and Pre-Trial
    
             On September 19, 1995, Mrs. Swafford filed her complaint alleging fraud in the inducement
    against Bobby and Betty Johnson and OHEMCO in connection with the stock purchase agreement.
    The Johnsons and OHEMCO answered, denying the allegations in the complaint and alleging lack
    of consideration for the stock purchase agreement. The parties participated in a trial management
    conference which resulted in the first of several orders regarding discovery and trial. This scheduling
    order, entered May 21, 1996, set the case for a jury trial on December 20, 1996; required disclosure
    of experts and T.R.C.P. Rule 26 statements by July 1, 1996; and required all expert discovery
    depositions be completed by September 1, 1996. The scheduling order was subsequently amended
    by agreement on September 6, 1996, allowing discovery to be completed by November 1, 1996. The
    record reveals that even after this agreement the plaintiff Swafford did not disclose her expert by the
    November 5, 1996 deadline. Upon motion of the defendants and agreement of plaintiff’s counsel
    the trial was continued from its December 20, 1996 trial date. Defendant was required to file its
    Rule 26 expert statement by November 15, 1996, with the plaintiff to follow suit on December 15,
    1996. The deadline for deposition of experts was extended to March 15, 1997. Pursuant to this
    order the defendants filed their Rule 26 statement on November 13, 1996 and amended their
    previously filed answer adding a counter complaint for negligence based, inter alia, on the Plaintiff’s
    alleged failure to correctly draft and mail a rent payment, which failure led to the bringing of an
    eviction suit against OHEMCO. In pertinent part, that counter complaint made the following
    allegations:
    
                  7.       Said intentional and/or negligent failure to perform consists of but is
           not limited to the following matters:
    
                            A.     Swafford did not pay the corporation rent thereby
                   precipitating a lawsuit by the landlord against the corporation. This
                   lawsuit required Mr. Johnson to concentrate on resolving the problem
                   and finding a new premises for the company. As a result, he was
                   unable to make his sales and the corporate business suffered. This
                   was clearly the duty of Swafford and she deliberately failed to pay the
                   rent.
                            B.     Swafford failed to properly use corporate titles for her
                   job position, leading to confusion with lenders and others.
                            C.     Swafford failed to prepare proper financial statements,
                   again, damaging the company’s standing with various financial
                   institutions.
                            D.     Swafford failed to properly manage cash flow, thereby
                   leading to financial difficulties for the company.
                            F.     Swafford ineptly prepared the Form 1120 for the fiscal
                   year 1993.
    
    
                                                     -2-
                           G.      Swafford improperly booked account transactions.
                           H.      Swafford intentionally misrepresented her personal
                   transactions with the company.
                           I.      Other acts which appear to be both intentional and
                   negligent as a full charge bookkeeper.
    
          On January 21, 1997, Mrs. Swafford filed her answer denying the allegations in the counter
    complaint and raising the following affirmative defenses:
    
                   1.     Swafford was prevented from assuming bookkeeping duties by the
           actions of the Johnsons. Moreover, Swafford was actually hindered and denied
           essential information both before and after investment in Johnsons’ business, and
           was continuously shut out of all operations, including bookkeeping, by the Johnsons.
                   2.     The Johnsons are guilty of such unclean hands against Swafford so as
           to warrant denial of any relief sought against her.
                   3.     The countercomplaint is barred by the applicable statute of limitations.
                   4.     The countercomplaint fails to state a claim upon which relief may be
           granted.
    
            According to the technical record, this cause then languished for over a year until, on March
    5, 1998, the parties agreed to set the cause for a four-day jury trial to begin on August 24, 1998. On
    July 28, 1998, the plaintiff filed her motion for a continuance alleging that her expert witness was
    not allowed to review the records of the defendants. The record reveals that although plaintiff had
    retained one Chuck Tomlin, CPA, as an expert witness, that witness was later replaced by a Sean
    Roach with the same accounting firm. Plaintiff argued that this later witness was denied access to
    the company records. The defendants responded arguing that all records had been disclosed. The
    trial court denied the motion on August 10, 1998. After unsuccessfully moving to amend the order
    denying its motion and attempting to amend the previously mentioned scheduling order, the plaintiff
    voluntarily dismissed her claim pursuant to Tennessee Rules of Civil Procedure 41.01.
    
           B.      Trial and Order
    
            The cause came on for trial on the defendants’ counter claim August 24-26 before Chancellor
    Gray in Sumner County. After that hearing the trial court made specific findings of fact concerning
    the allegations of negligence, finding in pertinent part that Mrs. Swafford negligently caused the
    bringing of an eviction law suit against her employer OHEMCO and Bobby and Betty Johnson. The
    findings from the bench were transcribed and included in the final order by reference. The following
    language is of particular note:
    
                   From the standpoint of the eviction lawsuit and the time spent there, the Court
           finds that he has in fact proven some damages. And based on Mr. Mensel’s
           testimony the Court finds that he suffered - - that the company OHEMCO suffered
           $33,000 in damages. On a comparative fault basis, and this is based on Mr.
    
    
                                                     -3-
           Johnson’s testimony that - - it’s based on his negligence and his wife’s intentional not
           turning over to the full charge bookkeeper all the duties and responsibly she should
           have had. But Mr. Johnson testified that Mrs. Swafford told us we didn’t have the
           money to pay the rent and I told her to go ahead and send it out. And the evidence
           is clear it wasn’t sent out in time to be in Florida by the 10th day of October, the date
           that the rent was due.
                    If the Court hasn’t said it, the Court did find that Mrs. Swafford had access
           to the information on the lease and that the check was incorrectly made out. It was
           not made out for the right amount of money.
                    But weighing all of the various factors, the Court finds that Mrs. Swafford
           was 55 percent at fault and the Johnsons 45 percent at fault, and the costs in this
           matter are assessed to Mrs. Swafford.
                    Mr. Cannon, you can prepare the order making final disposition in this case.
    
           C.      Appeal
    
            On December 21, 1998, the court denied Mrs. Swafford’s motion for a new trial. Her notice
    of appeal was filed on January 13, 1999 with the trial court. Upon the filing of a Chapter 11
    bankruptcy petition by OHEMCO, this Court stayed all proceedings on appeal by order entered
    October 15, 1999. By subsequent order of this Court the stay was lifted, and on June 25, 2003, this
    Court granted Appellee’s counsel’s motion to withdraw. Appellant appeared at oral argument and,
    represented by counsel, urged reversal of the trial court’s order raising the following issues on
    appeal:
    
           I.      Whether Elizabeth Swafford is entitled to an Order reversing the trial court’s
                   decision or ordering a new trial, where the trial court failed to require
                   OHEMCO to perform prior discovery orders, failed to allow Swafford
                   reasonable discovery, and failed to grant a continuance to allow Swafford to
                   obtain necessary discovery.
    
           II.     Whether Elizabeth Swafford is entitled to an Order reversing the trial court’s
                   decision awarding OHEMCO judgment based upon negligent performance
                   of employment as a bookkeeper, where the statute of limitations barred
                   OHEMCO from asserting all of its claims.
    
           III.    Whether Elizabeth Swafford is entitled to an Order reversing the trial court’s
                   decision awarding OHEMCO judgment based upon negligent performance
                   of employment where the evidence clearly demonstrates that Swafford
                   performed within the standard of care for a bookkeeper.
    
           IV.     Whether Elizabeth Swafford is entitled to an ORDER reversing the trial
                   court’s decision awarding OHEMCO judgment based upon negligent
    
    
    
                                                     -4-
                   performance of employment where the evidence clearly demonstrates that the
                   negligence of OHEMCO was substantially greater than that of Swafford.
    
           V.      Whether Elizabeth Swafford is entitled to an ORDER reversing the trial
                   court’s decision awarding OHEMCO judgment based upon negligent
                   performance of employment where such a cause of action is not supported by
                   modern case law, does not fulfill the common and ordinary understanding of
                   duties and responsibility for the common law, and is contrary and abhorrent
                   to public policy.
    
           VI.     Whether Swafford is entitled to an order reversing the decision of the
                   Chancery Court based upon the failure of Johnson to plead or prove damages.
    
           VII.    The weight of the evidence presented necessitated a finding contrary to the
                   Chancery Court’s finding regarding the damages and level of fault
                   attributable to the parties.
    
            Inasmuch as this Court finds Appellant’s negligence and comparative fault argument
    dispositive, we address these issues first.
    
    III    Employee Negligence and Breach of Fiduciary Duty
    
            The Johnsons and OHEMCO assert negligence on the part of employee Swafford. As
    authority for the claim, Appellees cite the reported case of Standard Oil Co. of Louisiana v. Entriken
    4 Tenn.App. 57 (1926). That opinion involved a set-off claim raised by an employer against the
    back wages sought by a former employee. As grounds for the set-off, the employer, Standard Oil,
    urged that Entriken, a senior clerk for one of Standard Oil Company’s Memphis service stations, was
    responsible for gasoline shortages at that station. The employee argued that he received no special
    instructions concerning the chargeable nature of the shortages alleged. In determining the issue in
    Standard Oil’s favor, the court, Senter, J. writing for the majority, held:
    
           [W]e think the record clearly shows that defendant in error knew and understood the
           custom of charging and holding responsible senior clerks for any shortage that would
           result from his conduct of the business. If, as contended by defendant in error, he
           was not so informed of this system and rule of the company at the time he was
           promoted to this position of senior clerk in August, 1925, it is clear from the record
           that after he became a senior clerk and while he was so employed from August, 1925,
           until December 15, 1925, he knew of the custom and rule that senior clerks would
           be held to account for any shortage resulting during the time they were on duty. He
           continued in the employment with full knowledge of this rule and requirement. If he
           did not so understand his obligation in that regard at the time he accepted the
           promotion in August, 1925, we think it clear from all the facts and circumstances as
           disclosed by the record, that he certainly acquired this knowledge and full
    
    
                                                     -5-
           understanding during the time he was so employed, and if he was not willing to be
           bound by any such rule or custom of the company he would have so notified the
           company or resigned his position. While there is no direct evidence in the record that
           his attention had been personally called to the fact these shortages had accrued to his
           account, it does appear that there was posted a bulletin or list of all shortages of the
           respective senior clerks for the information of senior clerks, and that they had full
           access to these posted bulletins daily. There were about seventy-five of these senior
           clerks in the employ of plaintiff in error at its various filling stations in Memphis, and
           this rule and custom and requirement was enforced as to all of them alike. Under the
           system employed by defendant in error the senior clerk responsible for the shortage,
           if any, could be easily and definitely determined.
    
            ....
    
           If the senior clerk exercises reasonable and proper diligence in invoicing the
           commodities on hand, and in determining that he does not [receipt] for a larger
           quantity than is delivered to him, and is careful and cautious in collecting for the cash
           sales and in charging any credit sales, there should be no material discrepancies. We
           think the duty of the senior clerk under the conditions of employment would be to
           exercise reasonable care and diligence in the conduct of the business with which he
           is charged, and even if there was no contractual arrangements by which the senior
           clerk would be held responsible for shortage, he would certainly owe to the employer
           the duty of reasonable care and diligence. We are also of the opinion that the system
           employed by plaintiff in error, and the rule of the company requiring employees to
           account for all gasoline, etc., entrusted to them, and making them liable for any
           shortage that may result, is a reasonable rule and condition of employment.
           However, the liability of said senior clerk would not be absolute and unconditional.
           If, for instance, it appeared that the apparent shortage was the result of theft by a third
           party and for which the senior clerk was not in fault; or it appeared that the measuring
           machinery or apparatus by which the gasoline, etc., is sold to customers were
           inaccurate, or perhaps for the other reasons that could be suggested, the shortage is
           accounted for in a way that would not make the senior clerk liable for the shortage.
    
    Standard Oil, 4 Tenn.App. 57, 60-61 (1926).
    
            Appellant makes much of the age of our rule and the dearth of case-law substantiating the
    proposition that an employee may be liable to her employer for negligent acts committed in the scope
    and course of the employment. Appellant argues that the age of this Court’s decision in Entriken
    warrants its disregard in the face of current public policy and the danger of employers interposing
    a defense of negligence to a claim for unpaid wages. To the contrary, stare decisis, the foundational
    principle of common law precedent, necessarily implies that age alone will not militate against the
    application of a well settled rule of law. Indeed other jurisdictions have recognized the well settled
    nature of the liability of an employee to his principal:
    
    
                                                      -6-
                    The defendant contends that, under the facts set out in the declaration, he
           should be held liable only when acting wantonly or outside the scope of his
           employment.
                    He does not seriously question the existence of the recognized rule, that an
           agent or an employee is liable to his principal or to this employer for acts of
           negligence causing damage to such principal or employer, whether such damage be
           direct or brought about by compensation the latter has been obliged to make to some
           third person for injuries sustained by him arising from such negligent acts. Page v.
           Wells, 
    37 Mich. 415
    ; 18 R.C.L. 502; 1 Am. & Eng. Encyc. of Law (2d Ed.) 1063; 2
           Shearman & Redfield on Negligence (6th Ed.) § 242.
                    The defendant, however, urges that the above principle should not be held to
           apply to domestic servants or employees, that they should constitute an exception to
           the general rule and that he, as the plaintiff’s chauffeur, falls within this category. In
           support of this contention, the defendant points out the close relationship which often
           exists between an employer and his domestic servants, more so than between the
           employer and other types of agents or employees, and also the complete oversight
           and control usually exercised by the employer under such circumstances.
                    In our judgment, the defendant’s claim in this connection is not sound. While
           it is possibly the fact, as he states, that there is a lack of reported cases of this kind,
           brought by an employer against his domestic servant, this situation may well be due
           to practical considerations, or circumstances of a like nature. In our opinion the right
           of action exists. No authorities have been brought to our attention which support the
           proposition that, in an action of this type, a domestic servant is not liable to his
           employer for ordinary negligence, and we find no holding that an employer assumes
           the risk of such negligence. The nature of the relationship alone between an
           employer and a domestic servant does not warrant the creation of such an exception
           to the general rule.
    
    Darman v. Zilch, 
    186 A. 21
    , 
    110 A.L.R. 826
    , 828 (R.I. 1936).
    
            As late as 1984 a federal appeals court has recognized coexistence of the employer’s right
    of action for negligence with the employee’s right of action under the Federal Employers’ Liability
    Act (FELA), 45 U.S.C. §§ 51, et seq. In Cavanaugh v. Western Maryland Ry. Co., the court of
    appeals for the Fourth Circuit recited this very rule:
    
           In determining whether the railroads have a right of action which they can assert as
           a counterclaim in an FELA action begun by a railroad employee, we begin by
           recognizing that there is a well accepted common law principle that a master or
           employer has right of action against his employee for property damages suffered by
           him “arising out of ordinary acts of negligence committed within the scope of [his]
           employment” by the offending employee. This was stated as the standard rule by the
           Court in Stack v. Chicago, M., St. P. & P.R. Co., 94 Wash.2d 155, 
    615 P.2d 457
    , 459
           (1980), which is the primary authority on which the plaintiff relies. It is also the law
    
    
                                                      -7-
           as declared generally in the Annotation in 
    110 A.L.R. 831
    , and is recognized and
           applied in National Grange M.I. Co. v. Wyoming Cty. Ins. Ag., Inc., 156 W.Va. 521,
           
    195 S.E.2d 151
     (1973), as the law of West Virginia, where the accident occurred.
           Moreover, this right of action in favor of the employer or master may be asserted
           either in an independent action by the employer against the offending employee or
           by a counterclaim filed by the employer in the employee’s action to recover for
    
    
    
           injuries sustained by him in the same occurrence. 3
                   3
                      Of course, in either event, the action may be defeated if the master or employer has
           contributed to his damages by his own negligence. Kentucky & Indiana Terminal Railroad Company
           v. Martin, 
    437 S.W.2d 944
     (Ky. 1969).
    
    Cavanaugh v. Western Maryland Ry. Co., 
    729 F.2d 289
    , 290-91 (4th Cir. 1984).
    
          Later the New Jersey Superior Court discussed a division of authority with regard to
    employee liability for negligence.
    
                     In 1961, the New Jersey Supreme Court suggested that such a rule was
           “anachronistic” insofar as it permitted an employer, liable to a third party for the
           negligence of an employee under the doctrine of respondent superior, to recoup the
           loss from the negligent employee. Eule v. Eule Motor Sales, 
    34 N.J. 537
    , 540, 
    170 A.2d 241
     (1961). The Eule Court, quite clearly, if not explicitly, rejected the general
           rule, at least in the context of liability incurred as the result of negligence in operating
           a motor vehicle. It opined that the liability of the employer to third parties is derived
           from the doctrine of respondent superior which in turn “rests on a public policy that
           the employer bear the burden as an expense of the operation he expends through the
           employment of others.” The employee should not, therefor, be required to bear that
           cost by way of indemnification to the employer.
    
                                                         ...
    
                   Such a rule is consistent with the approach that New Jersey has taken in
           requiring a business entity to assume the costs attendant on the conduct of that
           business. It is analogous to our rule prohibiting an employer from seeking
           indemnification from a co-employee who negligently injures an employee to whom
           the employer is liable under our workers’ compensation laws. N.J.S.A. 34; 15-8. Cf.
           Landrigan v. Celotex Corp., 
    127 N.J. 404
    , 
    65 A.2d 1079
     (1992) (imposing, as a cost
           of business, products liability responsibility on a manufacturer who produced
           products which were considered safe at the time but thereafter determined to be
           unsafe).
    
    
    
                                                        -8-
    Brown v. United Cerebral Palsy/Atlantic & Cape May, Inc., 
    278 N.J. Super. 208
    , 211-12, 
    650 A.2d 848
    , 850 (1994) (footnotes omitted).
    
           These authorities place in stark contrast the rights of employees to compensation for their
    services and the ability of any employer to scorch the very earth from which the employee may reap
    his bounty. Nonetheless we find that the circumstances of the instant controversy protect our
    decision and the rule in Entrekin from extension to an unjust and absurd end. The action will lie,
    provided under our comparable fault rules any fault of the employer is outweighed by that of the
    employee. See McIntyre v. Balentine, 
    833 S.W.2d 52
    , 57 (Tenn. 1992).
    
    IV.    The Day to Day Operations of OHEMCO and the Ambiguous Nature of Swafford’s Position
    
            The record reveals that, although Mrs. Swafford was hired as a “full-charge bookkeeper,” she
    had no signatory authority on the corporate accounts and did not hold herself out as an accountant
    certified and licensed by the state and held to the higher standard of care applicable to those
    professionals. In fact the record also reveals that the absence of signatory authority, if not plenary
    authority, over accounting procedures was a source of friction between Swafford and the Johnsons.
    Bobby Johnson testified that he delegated the accounting authority to Mrs. Swafford. Nonetheless,
    upon cross examination Mr. Johnson painted a more consultative picture:
    
                   Q.      Who would make the decision to pay the rent instead of paying the
           vendors?
                   A.      Again, that was an accounting thing.
                   Q.      So your testimony is that Mrs. Swafford made the decision of whether
           or not the rent would get paid or the - -
                   A.      No, the final decision was not hers - -
                   Q.      Whose was it?
                   A.      - - always.
                   Q.      Whose was it?
                   A.      We could decide to pay the rent instead of a vendor just in a
           discussion.
                   Q.      Who are you including in “we” because you’d - -
                   A.      Myself and her.
                   Q.      Okay.
                   A.      Myself and Amelia Swafford.
                   Q.      What about your wife? Would she also decide that the rent was to be
           paid ahead of vendors?
                   A.      That’s my decision.
                   Q.      It was your decision. Would she ever engage Mrs. Swafford in
           discussions with respect to whether or not to pay the rent instead of paying other
           vendors?
                   A.      I don’t know.
                   Q.      You didn’t witness any?
    
    
                                                     -9-
                   A.      I don’t remember it.
    
        Likewise Mrs. Swafford gave the following confusing account of her day to day duties for
    OHEMCO:
    
                    Q.     Can you please tell us what your duties were as a bookkeeper at
           OHEMCO specifically?
                    A.     I did the daily transactions. There was supposed to be a financial
           statement produced each month for NationsBank in accordance with their agreement
           for a hundred and twenty thousand dollar note. I found it virtually impossible to do
           my job. Work in process wasn’t in - - I don’t know how to describe it. You couldn’t
           get information from the work in process. Betty Johnson just did that out of her head
           in order to produce statements. Cash on delivery was very, very common. It used
           to go in the back of the shop. I didn’t have information to enter this stuff. I never
           received the first expense check from Mr. Johnson. Let me think. Betty Johnson had
           stacks and stacks and stacks of work on her desk going back six months, eight
           months, I’m not real sure, maybe longer that was sales. I didn’t know what they
           were.
                           As regards paying bills, can I explain that?
                    Q.     Sure.
                    A.     I took a current accounts payable, I copied it from the purchase journal
           where we entered these payables. I copied a current one each month. I copied a
           current accounts receivable from the sales journal each month. I presented it to Betty
           Johnson. She was familiar with checks being held. I wasn’t. She was familiar with
           sales; I wasn’t. She knew the money situation. She told me what to pay.
                    Q.     Did you sign the checks, Ms. Swafford?
                    A.     No, I did not. I had no authority.
                    Q      Who could sign checks?
                    A.     Bobby Johnson and Betty Johnson.
                    Q.     Who was the one in your experience at OHEMCO that signed the
           checks most often?
                    A.     Betty Johnson.
                    Q.     Did you report directly to her in your activities?
                    A.     Yes.
    
             Thus the parties operated, albeit disfunctionally, until October of 1994. The picture painted
    by the testimony of Swafford and Johnson is one of miscommunication. Mrs. Swafford at the
    direction of Mr. Johnson drafted a check for $2,400 for a rental payment, which pursuant to the terms
    of OHEMCO’s lease with Marlene Gaskins was to be $2,520. According to the record before us,
    OHEMCO had been behind on its rental payments off and on prior to October 1994. The trial court
    specifically found that Mrs. Swafford was aware of the terms of the rental agreement and of the fact
    that the landlord would be requiring strict compliance with the lease including the increased payment
    of $2,520 due on the 10th of October. The check was not drawn until the 8th of October on a
    
    
                                                    -10-
    Saturday. It was presented to Betty Johnson some time after that date but prior to October 12, 1994
    which is the date of the postmark on the envelope in which the rental check was mailed. It is this
    alleged failure on the part of Mrs. Swafford to timely and accurately pay OHEMCO’s landlord
    pursuant to its lease that constitutes OHEMCO and Johnsons’ claim for negligence. Nonetheless
    Mrs. Swafford acted under the direction of the Johnsons, who had equal if not superior knowledge
    of the lease terms. The record shows that the landlord returned the tendered rent payment and filed
    suit for possession of OHEMCO’s leased premises on October 31, 1994.
    
            The appellees asserted at trial that this failure violated the duty of reasonable care owed by
    a full-charge bookkeeper to her employer, which violation proximately caused Mr. Johnson’s
    inability to obtain sales during the period when he was attempting to resolve the resulting lease
    dispute. Mr. Johnson gave the following testimony concerning the damages sought:
    
                   Q.       Now, I had mentioned in my opening statement that we were seeking
           the sum of $157,000. Where does that come from? How did you arrive at that as a
           damage figure?
                   A.       That figure only is the addition of the loss plus the next year’s retained
           earnings.
                   Q.       Up until October 31st of 1994 when the lawsuit hit, had Old Hickory
           Engineering - - OHEMCO - - been increasing its sales in profitability?
                   A.       Yes. Again, at record levels.
                   Q.       To what do you attribute the sudden and rapid decline in sales and
           profitability after October 31st of 1994?
                   A.       My inattention to sales.
                   Q.       Why were you inattentive to sales?
                   A.       I was looking for a place to go with respect to the lease eviction
           lawsuit.
                   Q.       Why was the lease eviction lawsuit ever filed?
                   A.       Because we didn’t send $2,520 to Marlene Gaskins and place it in her
           hands before the 10th of October 1994.
                   Q.       Whose job was it to have done that?
                   A.       Amelia E. Swafford’s.
    
           Mr. Mensel, the appellant’s expert at trial, testified to the drop in sales resulting from the
    lawsuit occasioned by the inadequate payment:
    
                          BY MR. CANNON:
                   Q.     Now, while we’re at it, for the sake of the record, Mr. Mensel, let’s
           do give the exact numbers. We want to be precise on this one.
                   A.     Going back, starting - - I’ve got it back to the first quarter of 1991.
                   Q.     Let’s concentrate, really, on the end of 1993.
                   A.     Okay. The third quarter of ‘93 sales were 32,700. I’ll round this off
           to near hundreds, or I can give it to you in dollars.
    
    
                                                      -11-
                   Q.      Round it off nearest is fine.
                   A.      Fourth quarter, 36,200; first quarter of ‘94, [fifty]-nine thousand five;
           second quarter, a hundred and eighty-five thousand six; third quarter, two hundred
           and fifteen thousand nine; fourth quarter a hundred and twenty-one thousand four;
           first quarter of ‘95, eighty-six thousand seven; second quarter, a hundred and one
           thousand seven; third quarter a hundred and fifty-five thousand eight; fourth quarter,
           a hundred and fifty-one thousand two.
                   Q.      Those were the numbers that you used in calculating the graph which
           we have submitted as Exhibit Number 20; correct?
                   A.      Yes, sir.
                   Q.      Were you able to form an opinion, sir, regarding the cause of the sales
           drop following the filing of the landlord lawsuit in the last quarter - - or excuse me,
           the third quarter of 1994?
                   A.      I have a professional opinion.
                   Q.      What is that opinion, sir?
                   A.      That Mr. Johnson’s energies were so diverted by the lawsuit with Ms.
           Gaskins that he was unable to concentrate on the day-to-day running of OHEMCO.
                   Q.      Now, as far as the payment of the rent, had you made a determination
           based on the books and record of the company as to whose job it was to pay the rent?
                   A.      The bookkeeper’s.
                   Q.      That would be Ms. Swafford?
                   A.      Yes, sir.
                   Q.      Is that part of her - - excuse me. Let me rephrase that. As a full-
                           charge bookkeeper, would the payment of rent be part of her
                           reasonable and ordinary care toward the company?
                   A.      It would.
                   Q.      Something that a bookkeeper’s supposed to do?
                   A.      Yes, sir.
    
            The trial court took this testimony into account when assigning fault to the appellants
    Johnson and OHEMCO in the amount of 45%. This finding of fact comes with a presumption of
    correctness pursuant to Tennessee Rules of Appellate Procedure 13(d). However, we find that the
    evidence preponderates against that finding and in favor of an equal apportionment to the counter-
    plaintiffs and to the defendant. The record shows that all parties shared equally in the failure to
    forward timely and correct payment. Mrs. Swafford’s apparent unwillingness to be supervised, and
    the defendants’ unwillingness to share information contributed in equal measure to place the leased
    property at risk. The accounting policies in place at OHEMCO and devised at the Johnsons’ instance
    placed their responsibility of signing the checks on their shoulders. The testimony of the expert
    Mensel notwithstanding all parties bore the responsibility for the rental payment.
    
           The lease payment had two deficiencies. First, it was late. This was the fault of Mrs.
    Swafford. Secondly, it was in an insufficient amount. Betty Johnson had to know this as only Betty
    or Bobby Johnson had authority to sign checks. Betty Johnson signed the rent check.
    
    
                                                     -12-
             When the evidence so preponderates against the finding of the chancellor it is our duty to
    enter such decree as the law and evidence warrant. See Thornburg v. Chase, 
    606 S.W.2d 672
    (Tenn.Ct.App. 1980). Consistent with this duty we find that the comparative fault of the counter-
    plaintiffs bar recovery. The trial court is reversed and judgment is entered in favor of Amelia
    Swafford. Costs are assessed against Bobby and Betty Johnson.
    
    
    
                                                          ___________________________________
                                                          WILLIAM B. CAIN, JUDGE
    
    
    
    
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