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IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON
September 24, 2004 Session AMANDA CONSTRUCTION, INC. v. CHARLES L. WHITE, ET AL.
Direct Appeal from the Chancery Court for Shelby County No. 110107-1 Walter L. Evans, Chancellor

No. W2004-00521-COA-R3-CV - Filed December 1, 2004

This appeal involves a homeowner's attempt to pierce the corporate veil to reach the shareholders of a construction company. During the course of the litigation, the construction company was administratively dissolved, and the homeowner filed a motion to join as defendants the shareholders, officers, and directors. The trial court granted judgment in favor of the homeowner against the construction company for breach of contract, but denied the homeowner's motion to join the shareholders, officers, and directors. We affirm. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed; and Remanded DAVID R. FARMER , J., delivered the opinion of the court, in which ALAN E. HIGHERS, J. and HOLLY M. KIRBY , J., joined. Felix H. Bean, III, Memphis, Tennessee, for the appellants, Charles L. White and Claudette E. White. Randall N. Songstad, Memphis, Tennessee, for the appellee, Amanda Construction, Inc. OPINION Facts and Procedural History In 1996, Amanda Construction, Inc. ("Amanda") and Charles and Claudette White (collectively "the Whites") entered into a contract for the construction of a one-room addition to the Whites' home. Amanda was a closely held corporation in the business of remodeling and renovating residential homes. Amanda's sole shareholders were Sam and Cheryl Grisham. During the construction process, the Whites became dissatisfied with Amanda's work, alleging a number of construction defects, and decided to withhold further payment. Soon thereafter, Amanda filed a complaint against the Whites for breach of contract, seeking money damages and enforcement of its mechanic's and materialmen's lien. Shortly thereafter, the Whites filed a complaint for removal of

Amanda's lien and for damages resulting from the faulty construction. The trial court entered an agreed order consolidating the cases, treating the Whites' complaint as an answer and counter-claim. The parties agreed to the appointment of a special master to conduct an investigation and prepare a report regarding the allegedly defective construction. The case was tried before the special master who, after visually inspecting the premises and hearing the evidence, filed his report finding numerous defects in the construction of the addition to the Whites' home. Through responses to interrogatories, the Whites discovered that, during the course of litigation, Amanda was administratively dissolved for failure to file an annual report. In addition, the Whites discovered that Amanda had not maintained a bond, as required for a licensed home improvement contractor under section 62-37-108 of the Tennessee Code.1 Subsequently, the Whites twice filed motions to substitute the shareholders and officers of Amanda as proper party defendants. On January 30, 2004, the trial court entered an order (1) dismissing Amanda's complaint against the Whites; (2) removing the lien in favor of Amanda against the Whites' property; (3) awarding the Whites a judgment in the amount of $137,844.60; and (4) overruling the Whites' second motion to add the officers, shareholders, and directors of Amanda. The Whites appealed from the trial court's order and have presented the following issue for our review: whether the trial court erred in failing to permit the Whites to join the officers and directors of Amanda, when Amanda dissolved during the course of litigation without notice to the Whites. Law and Analysis As a preliminary matter, the Whites argue that Amanda has sought to avoid its liability in this case by dissolving the corporation during the course of litigation. Section 48-24-105 of the Tennessee Code, however, clearly provides that the dissolution of a corporation does not abate or suspend a proceeding against the corporation. Tenn. Code Ann.

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