(a)

Attorney's Note

Under the Tennessee Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
class E felony1 to 6 yearsup to $3,000
For details, see Tenn. Code § 40-35-111
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Terms Used In Tennessee Code 66-11-138

  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Prime contractor: means a person, including a land surveyor as defined in §. See Tennessee Code 66-11-101
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • Real property: includes real estate, lands, tenements and hereditaments, corporeal and incorporeal, and fixtures and improvements thereon. See Tennessee Code 66-11-101
  • Remote contractor: means a person, including a land surveyor as defined in §. See Tennessee Code 66-11-101
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Any prime contractor or remote contractor who, with intent to defraud, uses the proceeds of any payment made to that contractor on account of improving certain real property for any purpose other than to pay for labor performed on, or materials, services, equipment, or machinery furnished by that contractor’s order for the real property, and overhead and profit related thereto, while any amount for the labor, materials, services, equipment, machinery, overhead, or profit remains unpaid shall be liable to an injured party for any damages and actual expenses incurred, including attorneys’ fees, if the damages and expenses incurred are the result of the misapplication of the payment.
(2) A violation of subdivision (a)(1) is a Class E felony.
(b) Notwithstanding subsection (a), there is no violation of this section when:

(1) Funds are disbursed pursuant to written agreement; or
(2) The use of funds received and deposited in a business account for use on multiple construction projects is based on the allocation of costs and profits in accordance with generally accepted accounting principles for construction projects.
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