Stone v. Faulkner, Mackie & Cochran ( 2001 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
September 7, 2000 Session
TERRY W. STONE v. FAULKNER, MACKIE & COCHRAN, ET AL.
Appeal from the Circuit Court for Davidson County
No. 99C 2154 Hamilton V. Gayden, Jr., Judge
No. M2000-00125-COA-R3-CV - Filed January 22, 2001
Plaintiff, Terry Stone d/b/a Medical Claims and Collections Specialist, sued Defendants, David
Cochran, and Faulkner, Mackie & Cochran, for interference with contractual and business
relationships between Plaintiff and Plaintiff’s third-party client, Levine & Sharp Associates. The
trial court granted Defendants’ motion for summary judgment in this matter finding no genuine issue
of material fact and dismissed Plaintiff’s claims. The question presented to the Court is whether or
not there are genuine issues of material fact such that the trial court erred in granting Defendants’
Motion for Summary Judgment on the claim for interference with a business relationship. We affirm
the trial court’s dismissal of this claim.
Tenn. R. App. P. 3 Appeal as of Right ; Judgment of the Circuit Court Affirmed
WILLIAM B. CAIN , J., delivered the opinion of the court, in which BEN H. CANTRELL, P.J., M.S. and
WILLIAM C. KOCH, JR., J., joined.
James L. Harris, Nashville, Tennessee, for the appellant, Terry Stone.
H. Rowan Leathers, III, Nashville, Tennessee, for the appellees, Faulker, Mackie & Cochran, P.C.,
and David Cochran, individually.
OPINION
FACTUAL HISTORY
Plaintiff, Terry Stone d/b/a Medical Claims and Collections Specialist, signed a service
agreement (the ‘Agreement’) for Plaintiff to provide computerized claims, billing, and collection
services to Levine & Sharp Associates (‘L & S’), a medical partnership. This agreement contained
a provision whereby either party could terminate the Agreement for any reason by providing thirty
days written notice to the other party. A little over a year and a half after signing the Agreement, L
& S utilized the termination clause and provided Plaintiff with notice that the Agreement would be
terminated in thirty days. Following this termination, Plaintiff filed suit against the accounting firm
of Faulkner, Mackie & Cochran and Mr. David Cochran.
It is Plaintiff’s allegation that Faulkner, Mackie & Cochran, and in particular Mr. David
Cochran, intentionally interfered with the business relationship between L & S and Plaintiff. Mr.
Cochran allegedly made statements to L & S asserting that the reports provided by Plaintiff were not
correct; that Plaintiff and Defendant could not communicate, and that L & S should replace Plaintiff
with someone more knowledgeable. It was also alleged that Mr. Cochran suggested several friends
who did the same type of work as Plaintiff with whom he would have a better working relationship.
Just before termination of the contract, Mr. Cochran further expressed to L & S that he did not want
to continue working with Plaintiff and did not have confidence in Plaintiff’s reports or abilities.
Defendants filed a Motion for Summary Judgment, and in support of this motion, the
affidavit of Stephan C. Sharp, one of the doctors of Levine & Sharp, was provided. Dr. Sharp stated
in his affidavit that the decision to terminate the service agreement was based upon dissatisfaction
with the services provided by Plaintiff, not a result of advice provided by David Cochran or his CPA
firm. Plaintiff’s response to Defendants’ Motion for Summary Judgment provided only the affidavit
of Terry Stone, Plaintiff in this case, and the affidavit of his wife, Lori Stone, who works with him
in his business. These affidavits merely contained allegations of the statements made by Mr.
Cochran.
ISSUES PRESENTED FOR APPEAL
The sole issue presented for review is whether the trial court properly granted summary
judgment to Defendants with regard to Plaintiff’s cause of action against Defendants for tortiuous
interference with a business relationship.
The standards governing an appellate court’s review of a trial court’s action on a
motion for summary judgment are well settled. Since our inquiry involves purely a
question of law, no presumption of correctness attaches to the trial court’s judgment,
and our task is confined to reviewing the record to determine whether the
requirements of Tenn. R. of Civ. P. 56 have been met.
Carvell v. Bottoms, 900 S.W.2d 23 (Tenn. 1995). Thus, we review this matter de novo with no
presumption of correctness. See Owens v. Truckstops of Am., 915 S.W.2d 420, 424 (Tenn. 1996);
Tenn. R. App. P. 13(d).
The Tennessee Supreme Court in Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993), sets out an
exhaustive discussion of Tennessee’s summary judgment standard.
Rule 56 comes into play only when there is no genuine issue as to any material fact
and the moving party is entitled to a judgment as a matter of law. Thus, the issues
that lie at the heart of evaluating a summary judgment motion are: (1) whether a
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factual dispute exists; (2) whether the disputed fact is material to the outcome of the
case; and (3) whether the disputed fact creates a genuine issue for trial.
Byrd, 847 S.W.2d at 214 (emphasis in original). In addition, “complete failure of proof concerning
an essential element of the moving party’s case necessarily renders all other facts immaterial.” Id.
at 213.
Plaintiff’s sole argument on appeal was that the facts set forth in Plaintiff’s complaint and
amended complaint stated a cognizable cause of action for the tort of interference with a business
relationship. The elements of this tort can be found in New Life Corp. of Am. v. Thomas Nelson,
Inc., 932 S.W.2d 921 (Tenn. Ct. App. 1996). In order to create a prima facie case of tortiuous
interference with a business relationship, Plaintiff must show: (1) the existence of a valid business
relationship, not necessarily evidenced by an enforceable contract; (2) knowledge of the relationship
or expectancy on the part of the interferer; (3) an intentional interference inducing or causing a
breach or termination of the relationship or expectancy;1 and (4) resulting damages to the party
whose relationship or expectancy has been disrupted. New Life Corp., 932 S.W.2d at 927. In
addition, Plaintiff must also show malice or ill will to recover for tortiuous interference with a
business relationship. Teserman v. Tragesser, 789 S.W.2d 553, 556 (Tenn. Ct. App. 1998). The
facts of this case do not demonstrate the necessary elements for a prima facie case of tortiuous
interference with a business relationship.
First, no malice on the part of Defendant was ever shown. Plaintiff presented testimony in
the form of an affidavit which stated, in essence, that Defendant and Plaintiff had difficulty working
together. Plaintiff alleged that Defendant made statements to the effect that the parties “do not speak
the same language” and that Defendant felt that Plaintiff did not possess the requisite knowledge
necessary to perform the job. Defendants, as accountants for L & S, also offered to suggest other
companies or individuals which might replace Plaintiff should L & S so choose that action.
However, even assuming these allegations are true, none of these statements rise to the level of
actual malice necessary for the tort of intentional interference with a business relationship.
Second, Steven C. Sharp, one of the partners of L & S, testified through affidavit that
termination of Plaintiff was solely due to L & S’s dissatisfaction with the services provided by
Plaintiff. Dr. Sharp went on to say, “the service agreement was not terminated as a result of advice
provided by either David Cochran, CPA, or any other representative of Faulkner, Mackie &
Cochran, P.C.” Dr. Sharp’s affidavit is undisputed, as no evidence was presented to controvert the
reason given by Dr. Sharp for terminating Plaintiff’s services. There was no proof presented that
any interference by Defendant in the relationship between Plaintiff and L & S caused the termination
of the relationship.
1
It should be noted that the law in Tennessee is well settled that there can be no ac tion for inte rference with
a prospec tive busine ss relationsh ip. See Nelso n v. Ma rtin, 958 S.W.2d 643, 645 (Tenn. 1997); Polk & Sullivan, Inc.
v. United Cities Gas Co., 783 S.W.2d 538, 54 3 (Tenn. 1989); Shahrdar v. Global Housing, Inc., 983 S.W.2d 230, 238
(Tenn. Ct. App. 1998).
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This matter is simply a situation where Plaintiff and a third party, L & S, entered into a
contract which could be terminated for any reason and at any time by providing thirty days written
notice. L & S utilized its termination clause and terminated the contract according to its terms. As
there was no evidence presented of actual malice on the part of Defendant, nor was any evidence
presented to refute Dr. Sharp’s testimony that Defendants’ actions did not cause Plaintiff’s
termination, the trial court was correct to grant summary judgment to Defendant and dismiss
Plaintiff’s complaint.
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WILLIAM B. CAIN, JUDGE
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