Joan B. Hardcastle, et al., v. Frank Harris

This appeal concerns a pyramid sales scheme involving the sale of unregistered investment contracts. After discovering that their contracts were worthless, four purchasers filed separate actions against the person who sold them the contracts. These cases were consolidated for trial in the Chancery Court for Davidson County. Following a bench trial, the trial court determined that the seller had breached his personal guarantee contract with two of the buyers and had violated the Tennessee Securities Act of 1980 by selling unregistered investment contracts to all the purchasers. Accordingly, the court awarded the four purchasers judgments totaling $99,450.00, as well as $44,979.50 for attorney's fees and legal expenses. The seller asserts on this appeal that the Tennessee Securities Act claims were filed after the statute of limitations had expired and that the doctrines of waiver and estoppel prevent the purchasers from asserting these claims. In addition, he insists that the court erred by permitting the purchasers to amend their complaints one week before trial to add their Tennessee Securities Act claims. He also takes issue with the trial court's decision to award the purchasers their attorney's fees. We affirm the judgments.