Nulife Ventures, LLC v. Avacen, Inc., F/K/A Avacen Medical, Inc. ( 2021 )

04/15/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
February 23, 2021 Session
NULIFE VENTURES, LLC. v. AVACEN, INC., F/K/A
AVACEN MEDICAL, INC.
Appeal from the Circuit Court for Hamilton County
No. 20C673 W. Jeffrey Hollingsworth, Judge
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No. E2020-01157-COA-R3-CV
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The trial court declined to grant injunctive relief to the plaintiff, NuLife Ventures, LLC
(“NuLife”), regarding its claims that the defendant, AVACEN, Inc., f/k/a AVACEN
Medical, Inc. (“AVACEN”), had been competing with NuLife and soliciting NuLife’s
affiliated sellers to do the same in violation of the parties’ written agreements. NuLife
has appealed. Determining that NuLife demonstrated sufficient evidence of a threat of
irreparable injury warranting injunctive relief, we reverse the trial court’s judgment and
remand this matter to the trial court for further proceedings.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Reversed; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and ANDY D. BENNETT, J., joined.
John P. Konvalinka and Cody M. Roebuck, Chattanooga, Tennessee, for the appellant,
NuLife Ventures, LLC.
Anthony A. Jackson, Chattanooga, Tennessee, for the appellee, AVACEN, Inc.
OPINION
I. Factual and Procedural Background
On June 22, 2020, NuLife filed a complaint in the Hamilton County Circuit Court
(“trial court”), seeking injunctive relief against AVACEN, a manufacturer of medical
devices designed to relieve joint and muscle pain (“medical devices”). NuLife is a direct
sales company that markets the medical devices, along with other products, through a
network of business owners known as Independent Brand Partners (“IBPs”). NuLife
asserted in its complaint that the parties had executed a contract providing that NuLife
was to be the exclusive global distributor and reseller of the medical devices (“Reseller
Agreement”). NuLife also averred that sale of the medical devices comprised
approximately ninety percent of its business.
In its complaint, NuLife explained that it had contracts with each IBP governing
each of their respective business relationships. These contracts prohibited the IBPs from,
inter alia, (1) soliciting or recruiting other IBPs to compete with NuLife or (2) selling
medical devices directly from their own websites. NuLife averred that AVACEN was an
IBP as well as a manufacturer. According to NuLife, in February 2020, AVACEN began
soliciting other IBPs to form a competing direct sales company in order to sell the
medical devices, thereby circumventing and entering into competition with NuLife.
NuLife claimed that AVACEN also began selling the medical devices directly from its
own website.
NuLife further alleged that in May 2020, AVACEN sent a letter to NuLife
purportedly terminating the Reseller Agreement upon claiming that NuLife had failed to
order the requisite number of medical devices within a certain timeframe pursuant to the
contract terms. NuLife stated in its complaint that in actuality, AVACEN had been
unable to manufacture a sufficient number of the medical devices to meet NuLife’s
demand.
NuLife asserted that the Reseller Agreement and the other contracts between the
parties were valid and enforceable. Moreover, NuLife asserted that although it had
consistently performed its duties pursuant to the applicable contracts, AVACEN had
breached the contracts by competing with NuLife in its sale of the medical devices.
NuLife claimed that it had been damaged and would be irreparably harmed unless
AVACEN was prohibited from continuing such conduct. NuLife sought a temporary
restraining order, a temporary injunction, and a permanent injunction “prohibiting
AVACEN from competing with NuLife as the exclusive global distributor/reseller” of the
medical devices. NuLife also sought an award of attorney’s fees and expenses. The trial
court issued a temporary restraining order against AVACEN on the same day the
complaint was filed and set the matter for hearing on July 2, 2020. The trial court
subsequently continued the hearing until July 10, 2020.
On July 7, 2020, AVACEN filed a response in opposition to the temporary
restraining order. In its response, AVACEN explained that NuLife was a multi-level
marketing company such that its IBPs were compensated pursuant to a structured
compensation plan that was based on each individual IBP’s sales volume as well as the
sales of other IBPs placed beneath it, also referred to as an IBP’s “downline.” AVACEN
averred that the Reseller Agreement required NuLife to purchase 1,500 products
cumulatively valued at $1.5 million in the first six months following execution of the
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agreement and 4,500 products cumulatively valued at $4.5 million in the following six
months, for a total of 6,000 products within the first year. According to AVACEN, it was
given an IBP designation by NuLife as part of its consideration for entering into the
Reseller Agreement but was not required to execute an IBP contract at that time.
AVACEN alleged that within the first year, it had built a successful downline and
was doing well as an IBP, earning the designation of “IBP Director.” However, on May
23, 2020, NuLife “unilaterally locked AVACEN out” and forced it to acquiesce in a new
IBP contract before AVACEN would be allowed to retrieve essential information
regarding its IBP downline and carry on its business. AVACEN alleged that it had no
choice but to accept the IBP contract at that time. According to AVACEN, it
subsequently provided notice to NuLife that NuLife had materially breached the Reseller
Agreement by only purchasing approximately 1,938 products within the first year of the
Reseller Agreement. Although AVACEN purportedly provided NuLife forty-five days to
cure its breach, NuLife failed to purchase any additional products.
AVACEN averred in its response that on June 15, 2020, AVACEN again
contacted NuLife, requesting that it purchase additional medical devices in order to meet
its obligations under the Reseller Agreement. AVACEN also informed NuLife that if the
medical devices were not purchased by NuLife, AVACEN would release them to other
sellers. Because NuLife allegedly failed to purchase further medical devices, AVACEN
considered the Reseller Agreement terminated and placed the medical devices for sale on
its own website in order to mitigate damages. In summary, AVACEN asserted that
NuLife’s claims of competition were unfounded and were advanced solely to prevent
AVACEN from terminating the Reseller Agreement. AVACEN thus sought dissolution
of the temporary restraining order.
Following the July 10, 2020 evidentiary hearing, the trial court entered an order on
July 17, 2020, dissolving the temporary restraining order and denying injunctive relief.
In pertinent part, the court stated that it had “determined that [NuLife] had not met its
burden of demonstrating irreparable injury warranting injunctive relief as required by
Tennessee Rule of Civil Procedure 65.04.” The trial court concluded that irreparable
injury had not been shown “[b]ecause monetary damages can be calculated in this.”
AVACEN filed an answer to NuLife’s complaint on July 22, 2020, denying that it
had breached the parties’ contracts and asserting various affirmative defenses. On July
29, 2020, NuLife filed a motion seeking to alter or amend the trial court’s order denying
injunctive relief. In the alternative, NuLife sought to file an interlocutory appeal.
AVACEN filed a response opposing both actions. On August 26, 2020, the trial court
entered an order denying NuLife’s motion and certifying its order as final pursuant to
Tennessee Rule of Civil Procedure 54. NuLife timely appealed.
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II. Issues Presented
NuLife presents the following issues for this Court’s review, which we have
restated slightly:
1. Whether the trial court erred by determining that NuLife had failed
to establish irreparable harm as required by Tennessee Rule of Civil
Procedure 65.04.
2. Whether the trial court erred by refusing to enforce the written
agreements between NuLife and AVACEN.
III. Standard of Review
Our review of the trial court’s judgment following a non-jury trial is de novo upon
the record with a presumption of correctness as to the trial court’s findings of fact unless
the preponderance of the evidence is otherwise. See Tenn. R. App. P. 13(d); Rogers v.
Louisville Land Co., 367 S.W.3d 196, 204 (Tenn. 2012). “In order for the evidence to
preponderate against the trial court’s findings of fact, the evidence must support another
finding of fact with greater convincing effect.” Wood v. Starko, 197 S.W.3d 255, 257
(Tenn. Ct. App. 2006) (citing Rawlings v. John Hancock Mut. Life Ins. Co., 78 S.W.3d
291, 296 (Tenn. Ct. App. 2001)). We review questions of law, including questions
involving contract interpretation, de novo with no presumption of correctness. See
Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000); Cummings Inc. v. Dorgan, 320
S.W.3d 316, 333 (Tenn. Ct. App. 2009). The trial court’s determinations regarding
witness credibility are entitled to great weight on appeal and shall not be disturbed absent
clear and convincing evidence to the contrary. See Morrison v. Allen, 338 S.W.3d 417,
426 (Tenn. 2011); Jones v. Garrett, 92 S.W.3d 835, 838 (Tenn. 2002).
This Court reviews a trial court’s decision to deny injunctive relief pursuant to an
abuse of discretion standard. See Gentry v. McCain, 329 S.W.3d 786, 793 (Tenn. Ct.
App. 2010). As our Supreme Court has elucidated concerning the abuse of discretion
standard of review:
The abuse of discretion standard of review envisions a less rigorous
review of the lower court’s decision and a decreased likelihood that the
decision will be reversed on appeal. Beard v. Bd. of Prof’l Responsibility,
288 S.W.3d 838, 860 (Tenn. 2009); State ex rel. Jones v. Looper, 86
S.W.3d 189, 193 (Tenn. Ct. App. 2000). It reflects an awareness that the
decision being reviewed involved a choice among several acceptable
alternatives. Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 708 (Tenn. Ct.
App. 1999). Thus, it does not permit reviewing courts to second-guess the
court below, White v. Vanderbilt Univ., 21 S.W.3d 215, 223 (Tenn. Ct.
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App. 1999), or to substitute their discretion for the lower court’s, Henry v.
Goins, 104 S.W.3d 475, 479 (Tenn. 2003); Myint v. Allstate Ins. Co., 970
S.W.2d 920, 927 (Tenn. 1998). The abuse of discretion standard of review
does not, however, immunize a lower court’s decision from any meaningful
appellate scrutiny. Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 211
(Tenn. Ct. App. 2002).
Discretionary decisions must take the applicable law and the relevant
facts into account. Konvalinka v. Chattanooga-Hamilton County Hosp.
Auth., 249 S.W.3d 346, 358 (Tenn. 2008); Ballard v. Herzke, 924 S.W.2d
652, 661 (Tenn. 1996). An abuse of discretion occurs when a court strays
beyond the applicable legal standards or when it fails to properly consider
the factors customarily used to guide the particular discretionary decision.
State v. Lewis, 235 S.W.3d 136, 141 (Tenn. 2007). A court abuses its
discretion when it causes an injustice to the party challenging the decision
by (1) applying an incorrect legal standard, (2) reaching an illogical or
unreasonable decision, or (3) basing its decision on a clearly erroneous
assessment of the evidence. State v. Ostein, 293 S.W.3d 519, 526 (Tenn.
2009); Konvalinka v. Chattanooga-Hamilton County Hosp. Auth., 249
S.W.3d at 358; Doe 1 ex rel. Doe 1 v. Roman Catholic Diocese of
Nashville, 154 S.W.3d [22,] 42 [(Tenn. 2005)].
To avoid result-oriented decisions or seemingly irreconcilable
precedents, reviewing courts should review a lower court’s discretionary
decision to determine (1) whether the factual basis for the decision is
properly supported by evidence in the record, (2) whether the lower court
properly identified and applied the most appropriate legal principles
applicable to the decision, and (3) whether the lower court’s decision was
within the range of acceptable alternative dispositions. Flautt & Mann v.
Council of Memphis, 285 S.W.3d 856, 872-73 (Tenn. Ct. App. 2008)
(quoting BIF, a Div. of Gen. Signal Controls, Inc. v. Service Constr. Co.,
No. 87-136-II, 1988 WL 72409, at *3 (Tenn. Ct. App. July 13, 1988) (No
Tenn. R. App. P. 11 application filed)). When called upon to review a
lower court’s discretionary decision, the reviewing court should review the
underlying factual findings using the preponderance of the evidence
standard contained in Tenn. R. App. P. 13(d) and should review the lower
court’s legal determinations de novo without any presumption of
correctness. Johnson v. Nissan N. Am., Inc., 146 S.W.3d 600, 604 (Tenn.
Ct. App. 2004); Boyd v. Comdata Network, Inc., 88 S.W.3d at 212.
Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524-25 (Tenn. 2010).
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IV. Evidence Concerning Irreparable Injury
NuLife asserts that it presented sufficient evidence that it would suffer an
immediate and irreparable injury if it were not granted injunctive relief. The trial court,
however, found that NuLife “had not met its burden of demonstrating irreparable injury
warranting injunctive relief as required by Tennessee Rule of Civil Procedure 65.04 and
that, therefore, the Temporary Restraining Order entered on June 22, 2020, shall be
dissolved and that [NuLife’s] request for injunctive relief shall be denied.” Following
our review of the evidence presented, we disagree with the trial court’s conclusion.
As this Court has previously explained concerning the burden of proof required for
a temporary injunction:
Under Tenn. R. Civ. P. 65.04(2), the following standards apply with respect
to temporary injunctions:
A temporary injunction may be granted during the pendency
of an action if it is clearly shown by verified complaint,
affidavit or other evidence that the movant’s rights are being
or will be violated by an adverse party and the movant will
suffer immediate and irreparable injury, loss or damage
pending a final judgment in the action, or that the acts or
omissions of the adverse party will tend to render such final
judgment ineffectual.
Pursuant to caselaw, there are four factors to be considered by a trial court
in deciding whether to issue a temporary injunction: the threat of
irreparable harm, the balance between the harm to be prevented and the
injury to be inflicted if the injunction issues, the probability that the
applicant will succeed on the merits, and the public interest. Moody v.
Hutchison, 247 S.W.3d 187, 199-200 (Tenn. Ct. App. 2007).
Curb Records, Inc. v. McGraw, No. M2011-02762-COA-R3-CV, 2012 WL 4377817, at
*3-4 (Tenn. Ct. App. Sept. 25, 2012).
NuLife presented testimony from several witnesses during trial. Christopher
Stubbs, NuLife’s Chief Operating Officer, testified that the Reseller Agreement provided
for NuLife to be the exclusive global distributor and reseller of the medical devices.
According to Mr. Stubbs, NuLife’s business depended upon maintaining such
exclusivity. As Mr. Stubbs explained, “in direct sales or peer-to-peer marketing,
reputation and exclusivity are everything. If you lose those two things, you don’t have a
business.”
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Mr. Stubbs further testified that as an IBP, AVACEN signed certain agreements
stating that it would not recruit NuLife’s customers or other IBPs for any other direct
sales or network marketing business that competed with NuLife. Mr. Stubbs described
this requirement as representing the idea that an IBP could not circumvent NuLife while
taking advantage of the network NuLife had built. As Mr. Stubbs explained, peer-to-peer
selling was based on trust, and the buyers had to trust the person or company that was
selling the products. Mr. Stubbs opined that if trust or credibility were destroyed, buyers
would stop purchasing the products from the person or company that had lost credibility.
Mr. Stubbs also articulated that although IBPs were allowed to have their own
websites as approved by NuLife, they could not directly sell NuLife’s products via their
own website, online auction site, or online marketplace. Mr. Stubbs stated that in May
2020, NuLife received information that AVACEN intended to circumvent NuLife and
begin selling the medical devices directly. As such, Mr. Stubbs began monitoring the
AVACEN website and witnessed the placement of a link or “buy button” on the website
allowing consumers to purchase the medical devices directly from AVACEN.
Mr. Stubbs explained that by selling the medical devices directly to consumers,
AVACEN tarnished NuLife’s reputation because NuLife had represented itself as the
exclusive seller of the medical devices. In Mr. Stubbs’s opinion, if AVACEN, as the
manufacturer of the medical devices, were allowed to begin selling the devices directly to
consumers, NuLife would have no purpose and its IBPs would lose faith in NuLife,
resulting in a loss of business for both NuLife and its IBPs. According to Mr. Stubbs,
AVACEN was offering the medical devices directly to consumers at the same price as
NuLife had been charging but with a longer warranty, financing options, and free
shipping, all of which would discourage consumers from buying the medical devices
from NuLife.
In addition to the “buy button” on AVACEN’s website, Mr. Stubbs testified that
AVACEN had placed a link for “IBP Support” on its website, which appeared to collect
the names and contact information for NuLife’s IBPs. Mr. Stubbs stated that NuLife did
not authorize this collection of data, which he believed was a violation of the parties’
contracts. Mr. Stubbs posited that the network of IBPs was built by NuLife and that if
the network were “taken” by another sales company, the harm would be irreparable. Mr.
Stubbs also opined that the damages for such action could not be quantified because of
the destruction that would be caused to NuLife’s business. Mr. Stubbs stated that
injunctive relief was necessary to prevent further damage from occurring. According to
Mr. Stubbs, NuLife had already suffered damage to its reputation because some of its
IBPs had become aware of AVACEN’s actions and had made inquiries to NuLife’s
representatives.
With regard to AVACEN’s claims that NuLife had breached the Reseller
Agreement by failing to purchase a sufficient number of the medical devices, Mr. Stubbs
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explained that from the beginning of their relationship, AVACEN had been unable to
produce as many medical devices as NuLife desired to order. Mr. Stubbs acknowledged
that part of the reason AVACEN had been unable to increase production was due to
issues stemming from the COVID-19 pandemic.
Mr. Stubbs testified that NuLife wished to continue selling the medical devices
and desired that AVACEN honor the parties’ agreements. He opined that by collecting
confidential IBP information, AVACEN would be able to continue NuLife’s business
model without NuLife, which in turn would destroy NuLife’s business and its credibility
with its IBPs. According to Mr. Stubbs, he had heard one of AVACEN’s owners,
Danielle Forsgren, solicit a NuLife IBP to sell medical devices in competition with
NuLife by partnering with a new company named AVACEN Medical. Mr. Stubbs also
related that he had been told by an AVACEN employee that AVACEN co-owners,
Thomas Muehlbauer and Ms. Forsgren, intended to circumvent NuLife and establish
AVACEN as a direct seller of the medical devices.
Denis St. Pierre, a NuLife IBP, testified that he had partnered with Bret Matheny
to sell NuLife products beginning in August 2019. Mr. St. Pierre related that he had been
involved in a recent conversation with Mr. Matheny and Ms. Forsgren wherein Ms.
Forsgren informed the IBP partners that AVACEN “wanted to take [its] baby back.”
According to Mr. St. Pierre, Ms. Forsgren began verbally denigrating NuLife and told the
IBP partners that there was “another deal” coming that would be cheaper. However, she
remained somewhat cryptic, stating that she could not yet provide details. Mr. St. Pierre
related that following that conversation, Mr. Matheny forwarded a text message from Ms.
Forsgren requesting that Mr. St. Pierre and Mr. Matheny refrain from telling anyone
about the conversation. Mr. St. Pierre and Mr. Matheny were then asked by Ms. Forsgren
to sign a non-disclosure agreement before they could receive details regarding the new
arrangement, which agreement provided that the parties were “exploring a mutual
business relationship.” According to Mr. St. Pierre, when Mr. Matheny and he were
considering purchasing a “founder’s position” in NuLife for $15,000, Ms. Forsgren told
them it would be the worst investment they ever made.
Suzanne Bird, who identified herself as NuLife’s bookkeeper, corroborated Mr.
Stubbs’s testimony concerning the “buy button” that had appeared on AVACEN’s
website. Ms. Bird also testified that she had calculated the number of medical devices
ordered by NuLife within the requisite time period and that NuLife had not breached its
obligations under the Reseller Agreement. Similarly, Sherri Adams, NuLife’s director of
compliance, testified that she had also viewed the “buy button” that had appeared on
AVACEN’s website. Ms. Adams further related that she had listened in on a telephone
conversation in March 2020 wherein Ms. Forsgren promoted purchasing the medical
devices outside of NuLife. She stated that during the phone call, Ms. Forsgren asked
AVACEN employee Stephanie Graham to speak and that Ms. Graham explained how to
become an “AVACEN broker” in order to increase one’s income and enjoy financial
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freedom. Ms. Adams also related that she had noticed certain medical devices offered for
sale on the eBay online auction platform and that the sellers were located in the San
Diego area, which was where AVACEN was headquartered.
Based on the proof presented, we conclude that NuLife clearly demonstrated that
its rights had been “violated by an adverse party and [NuLife] will suffer immediate and
irreparable injury, loss or damage pending a final judgment in the action, or that the acts
or omissions of the adverse party will tend to render such final judgment ineffectual.”
See Tenn. R. Civ. P. 65.04. In the Reseller Agreement, AVACEN granted to NuLife the
exclusive right to market and sell the medical devices globally with the specific
exceptions of China, Hong Kong, Macao, and Taiwan.1 AVACEN further agreed to
“refrain from selling [the medical devices] over the internet (on-line) or to any other
potential reseller that [AVACEN] has reason to believe intends to market and sell such
[medical devices] via Direct Selling or online marketing.”
NuLife presented proof that AVACEN was violating these contractual provisions
by marketing the medical devices directly to consumers via AVACEN’s own website
within the market that AVACEN had granted to NuLife as exclusive distributor. Mr.
Stubbs testified that by doing so, AVACEN would destroy NuLife’s business because (1)
consumers would be enticed to purchase directly from AVACEN in order to receive
longer warranties, financing options, and free shipping, which would decrease the ability
of NuLife and its IBPs to sell the medical devices, and (2) consumers and IBPs would
lose faith in NuLife because NuLife would be perceived as falsely advertising itself as
exclusive distributor of the medical devices, resulting in a diminishment of NuLife’s
seller reputation.
In addition, the Reseller Agreement provides:
The Parties acknowledge and agree that they each may come into contact
with confidential or proprietary information of the other Party, including
but not limited to, vendor or supplier information, terms and conditions of
supplier agreements, components or elements of the Services or
Documentation, business plans and information, Customer information or
data, sales and product plans and data, PII,[2] Usage Data, all information
1
AVACEN argues that the “terms of the Reseller Agreement are not in play” because the temporary
restraining order issued by the trial court did not specifically mention the Reseller Agreement. We note,
however, that the Reseller Agreement addresses the prohibition against direct and online sales by
AVACEN, conduct that was specifically enjoined in the temporary restraining order. We further note that
the Reseller Agreement was referenced and relied upon in NuLife’s complaint, was made an exhibit at
trial, and was the subject of a considerable amount of trial testimony. We therefore find AVACEN’s
contention in this regard to be unavailing.
2
“PII” is defined in the agreement as “Personally Identifiable Information, Customer Data, or Affiliate
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about NuLife Ventures’ network configuration, plant or any equipment
attached thereto; and all other information relating to the software,
operations, products or service offerings of NuLife Ventures which was
disclosed or provided to [AVACEN] or became known to [AVACEN]
through its relationship with NuLife Ventures or which a reasonable person
knows or should know is confidential (“Confidential Information”).
AVACEN expressly agreed to refrain from the “disclosure or unauthorized use” of such
information, including “use [of] any of the other Party’s Confidential Information for any
purpose other than in furtherance of this Agreement.” In addition, in NuLife’s policies
and procedures concerning its IBPs, an IBP is prohibited from “recruit[ing] any [NuLife]
Customers or IBPs for any other direct sales or network marketing business[.]”
Moreover, in each respective IBP application and agreement, each IBP agreed that it
would not “encourage, solicit, or otherwise attempt to recruit or persuade any other
Independent Brand Partner to compete with the business of NuLife Ventures.”
NuLife presented evidence that AVACEN had attempted to solicit IBP
information through its website and that AVACEN had been in contact with certain of
NuLife’s IBPs regarding a new business venture wherein the IBPs could become
“AVACEN brokers.” According to Mr. Stubbs, by collecting confidential IBP
information and soliciting the IBPs to sell for AVACEN, AVACEN would be able to
continue NuLife’s business model without NuLife, which would destroy NuLife’s
business and its credibility with its IBPs.
Considering the language in Tennessee Rule of Civil Procedure 65.04(2) along
with the factors listed in Curb Records, we determine that NuLife demonstrated sufficient
evidence of a threat of irreparable injury warranting injunctive relief. The potential harm
to NuLife that could be prevented by a grant of injunctive relief is greater than the
potential harm to AVACEN if the injunction issues, and as the trial court recognized,
NuLife would likely prevail on a breach of contract claim against AVACEN. See Curb
Records, 2012 WL 4377817, at *3-4. We further determine that the public interest will
be served by enforcing the parties’ contracts as written. See id.AVACEN asserts that the trial court was correct in determining that injunctive
relief was not warranted because monetary damages could be calculated and would be a
sufficient remedy for AVACEN’s breach of the parties’ agreements. However, as Mr.
Stubbs testified, the damage to NuLife’s credibility and reputation cannot be easily
quantified in terms of money. See, e.g., Reitz v. City of Mt. Juliet, No. M2016-02048-
COA-R3-CV, 2017 WL 3879201, at *3 (Tenn. Ct. App. Aug. 31, 2017) (explaining that
damages for loss of reputation are disfavored in breach of contract actions as
Data, other than the personal information that is deemed necessary for shipping and/or warranty related
purposes.”
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nonquantifiable and speculative). We conclude that monetary damages would be
insufficient in this matter and, therefore, that the trial court’s judgment denying injunctive
relief to NuLife should be reversed.
V. Enforcement of Contracts
NuLife asserts that the trial court erred by refusing to enforce the parties’ contracts
as written despite implicitly finding the contracts to be enforceable. Both the Reseller
Agreement and the IBP contracts specifically provide that certain actions by the parties
would constitute irreparable injury. For example, in the Reseller Agreement, the parties
agreed that “the disclosure or unauthorized use of Confidential Information may cause
irreparable injury and damages may not be readily ascertainable.” This agreement further
provides that the parties shall “be entitled to seek injunctive relief upon a disclosure or
improper use, or threatened disclosure or improper use, of any Confidential Information
in addition to such other remedies as may be available at law or in equity.”
Similarly, in NuLife’s policies and procedures concerning its IBPs, an IBP is
prohibited from “recruit[ing] any [NuLife] Customers or IBPs for any other direct sales
or network marketing business[.]” Such action is described as “constitut[ing]
unreasonable and unwarranted contractual interference between [the IBP] and [NuLife]
and would inflict irreparable harm on [NuLife].” NuLife asserts that inasmuch as it
proved that AVACEN had undertaken actions in violation of the above contract
provisions, irreparable injury was an indisputable conclusion. Having previously
determined that NuLife presented sufficient evidence of irreparable injury, however, we
determine this issue to be pretermitted as moot.
VI. Conclusion
For the foregoing reasons, we reverse the trial court’s judgment denying injunctive
relief to NuLife. We remand this matter to the trial court for further proceedings
consistent with this opinion. Costs on appeal are assessed to the appellee, AVACEN, Inc.
_________________________________
THOMAS R. FRIERSON, II, JUDGE
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