Dalton Diversified, Inc. appeals from the grant of a judgment notwithstanding the verdict and in the alternative the grant of a new trial on a breach of contract claim. Finding that one essential element in each of the claims for conversion, trespass, tortious interference with contractual relations, tortious interference with business relations, and breach of contract was not proven, the grant of JNOV as to such claims is affirmed. The issue of the alternative grant of a new trial on grounds of an excessive verdict is moot; furthermore, the verdict as to each theory of liability was excessive, because the appropriate legal measure of damages was not used and an unauthorized accounting method was used instead. On February 8, 1999, AmSouth the successor to Pioneer Bank entered into “The Business Manager Agreement with Businesses and Professionals” with Diversified, which provided that AmSouth could, at its “sole option and discretion,” purchase accounts receivable up to a $350,000 advance with any repurchase or other obligations owed by Diversified to AmSouth being secured by the receivables and other specified property. AmSouth could require, but was not required to allow, Diversified to repurchase all or any portion of the receivables, under certain conditions including age of 120 days uncollected. The Agreement vested “absolute right, title and ownership of the Receivables . . . in the Bank,” and Diversified had “no right to reacquire, redeem or otherwise obtain title to the Receivables or any proceeds thereof.” Further, Diversified granted to AmSouth a security interest in all Diversified’s present and future accounts, instruments, contract rights, chattel paper, documents and general intangibles and all proceeds, including the funds held in a so-called “Reserve Account.” As an essential term of the agreement, Diversified warranted to AmSouth that the Receivables were bona fide and existing obligations owed to Diversified free of any deduction, offsets, defense, counterclaim, or dispute. Upon the occurrence of a default, Diversified agreed that AmSouth had the right to immediately terminate the Agreement and to withhold any further payments to Diversified. In the Agreement, Diversified released AmSouth from any liability for indirect, special, or consequential damages such as loss of anticipated revenues, and damages were limited to “THE AMOUNT OF THE SERVICE CHARGE PAID BY THE BUSINESS TO THE BANK DURING THE PRECEDING TWELVE 12 MONTH PERIOD.” Section 11 of the Agreement acknowledged and agreed that the Agreement constituted the parties’ entire agreement and could not be modified or amended except in writing. Also, AmSouth had a UCC-filed security interest in Diversified’s accounts receivable. Upon the daily delivery of accounts receivable from Diversified, AmSouth approved the receivables and credited Diversified’s operating account 90 of the factored amount and 10 deposited to the reserve account, less fees. Diversified’s practice was to fax invoices to Chattanooga daily and later deliver the pink invoice copy to AmSouth.
By June of 1999, several dozen accounts receivable/invoices, totaling $165,081.25 for Shaw Industries had been credited to Diversified’s operating account by AmSouth but were questioned by Shaw and were uncollectible, because Shaw had no record of such sales and deliveries and disputed the invoices, refusing to pay the invoices. Merle T. Haymes, Jr., Diversified’s CPA, admitted upon cross-examination that there were problems with invoices to Shaw in March and April of 1999. Baker, the president of Diversified, admitted to AmSouth that one or more invoices may have been sent in by error after they had been paid. Amber Holland, Shaw’s employee, testified that Shaw and not AmSouth placed a hold on Diversified’s account, because there was a problem with Diversified’s invoices. AmSouth collected the account receivable from Diversified’s customers. Had there been no problem for AmSouth collecting the Shaw invoices, then the $165,081.25 would have been timely collected by AmSouth. On September 9,1999, the reserve account had only $5,534.56 in it. On September 29, 1999, AmSouth was owed $165,081.25 for uncollectible accounts receivable and charged off the balance of Diversified’s funds held of $15,905. When a debt was owed, AmSouth did not release its security interest until the debt was paid, which was normal banking practice.
