Shirley Collins v. John D. Carter

04/09/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs November 1, 2019
SHIRLEY COLLINS ET AL. v. JOHN D. CARTER ET AL.
Appeal from the Circuit Court for Greene County
No. CC-16-CV-310 Alex E. Pearson, Judge
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No. E2018-01365-COA-R3-CV
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Four family members sued their former employer and eight individual defendants after
their employment was terminated amid allegations of malfeasance. The complaint
alleged nine causes of action. The court dismissed the plaintiffs’ claims against the
former employer and six of the eight individual defendants on summary judgment. The
plaintiffs and the remaining two defendants then became embroiled in an extended
discovery battle. The battle ended with the trial court dismissing the remaining claims
with prejudice based on the plaintiffs’ failure to cooperate in discovery. We conclude
that the trial court erred in granting summary judgment on the contract claims because the
contract at issue was not ultra vires. Because we reverse that portion of the trial court’s
decision, we also reverse the award of attorney’s fees under Tennessee Code Annotated
§ 29-20-113(a). We affirm the trial court in all other respects.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in
Part, Reversed in Part, and Case Remanded
W. NEAL MCBRAYER, J., delivered the opinion of the court, in which CHARLES D.
SUSANO, JR., J., and J. STEVEN STAFFORD, P.J., W.S., joined.
Jeffrey A. Greene, Franklin, Tennessee, for the appellants, Shirley Collins, Willie
Collins, Bill Jennings, and Kandie Jennings.
Thomas L. Kilday and Thomas J. Garland, Jr., Greeneville, Tennessee, for the appellees,
John D. Carter, Beth Ann Fletcher, Robert Tyson Lamb, Stephanie Faye Wallin, Vera
Miranda Cox, and Chuckey Utility District.
S. Douglas Drinnon, Dandridge, Tennessee, and T. Wood Smith, Greeneville, Tennessee,
for the appellee, David M. Ellis.
R. Wayne Culbertson, Kingsport, Tennessee, for the appellee, Jamie Lamb.
Edward L. Kershaw, Greeneville, Tennessee, pro se appellee.
OPINION
I.
A.
Shirley Collins served as general manager for Chuckey Utility District and Cross
Anchor Utility District from 1986 until her retirement in 2012. The utility districts
provided water services to customers in Greene and Washington Counties under a joint
operating agreement. Other members of Ms. Collins’s immediate family were also
employed by the districts. When Ms. Collins retired, her daughter, Kandie Jennings,
became the new general manager.
Ms. Collins and Chuckey Utility District executed a consulting contract to begin
upon her retirement. The contract obligated Ms. Collins to provide assistance to the
District, as needed, for two years. In exchange, the District agreed to pay her a fixed
amount of monthly compensation, beginning in April 2013.
On October 2, 2013, John Carter, president of the Board of Commissioners of
Chuckey Utility District, informed Ms. Jennings that a recent audit had uncovered
possible malfeasance involving Ms. Jennings, her husband, and her parents. The
governing boards of both districts had voted to summarily suspend the four family
members with pay while the allegations were investigated. The family was asked to
leave the premises immediately. And the audit findings were reported to the State
Comptroller’s Office.
The family adamantly maintained their innocence during the ensuing
investigation. But in November, the two boards voted to change their employment status
to leave without pay. And at some point, Shirley Collins’s consulting contract and the at-
will employment of the other three family members were terminated.
The Greene County Grand Jury also indicted Ms. Collins and Ms. Jennings on
multiple felony counts. Before trial, the District Attorney General agreed to dismiss the
majority of the criminal charges against both women in exchange for a best interest guilty
plea by Ms. Collins. All criminal charges against Ms. Jennings were dismissed.
Ms. Collins pled guilty to soliciting unlawful compensation and received judicial
diversion. All other criminal charges against Ms. Collins were dismissed.
2
B.
In July 2016, Shirley Collins, Willie Collins, Kandie Jennings, and Bill Jennings
sued. They named as defendants Chuckey Utility District; John Carter; David M. Ellis,
auditor for the utility districts; Edward Kershaw, attorney for the districts; four
employees of Chuckey Utility District; and one employee’s wife. The complaint sought
compensatory and punitive damages arising from nine causes of action, including civil
conspiracy, malicious prosecution, defamation, false light invasion of privacy, negligent
and intentional infliction of emotional distress, breach of contract, interference with
contract, and interference with at-will employment.
We focus on four of the nine claims: malicious prosecution, breach of contract,
interference with contract, and civil conspiracy. Ms. Collins and Ms. Jennings asserted
malicious prosecution claims against the eight individual defendants. According to the
complaint, the individual defendants provided false information that led the District
Attorney General to file unwarranted criminal charges against the two women.
Ms. Collins also asserted a breach of contract claim against Chuckey Utility District and
a corresponding interference with contract claim against all the individual defendants
based on the termination of her consulting contract. Finally, all four plaintiffs claimed
the individual defendants engaged in a civil conspiracy to destroy the plaintiffs’
reputations, terminate their employment and Ms. Collins’s consulting agreement, and
instigate an unwarranted criminal prosecution.
In their answers, the defendants denied liability and raised a number of affirmative
defenses and counterclaims.1 And they began to chip away at the multiple claims
through a series of summary judgment motions. The trial court eventually granted
summary judgment on the malicious prosecution claim. The court ruled that the criminal
prosecution had not terminated in the plaintiffs’ favor because the charges were
dismissed as part of a joint settlement. The dismissal of the malicious prosecution claims
applied to all individual defendants except Mr. Carter, who had not joined in the motion
for summary judgment.
The District moved for summary judgment on the breach of contract claim,
arguing that the consulting contract was ultra vires and unenforceable. While Mr. Carter
may have signed the contract on behalf of the District, his signature had not been
witnessed by another board officer, as required by the board’s bylaws. The individual
defendants, other than Mr. Carter, moved for summary judgment on the interference
claim on this same basis. The trial court ruled that the missing attestation rendered the
contract ultra vires and granted summary judgment on both claims.
1
All counterclaims were later dismissed.
3
The court also dismissed the civil conspiracy claim against six individual
defendants. The court ruled that the plaintiffs could not assert a claim for civil
conspiracy in the absence of an underlying actionable tort and all other claims against the
six defendants had been dismissed.
When the dust settled, two defendants remained—Mr. Carter and Mr. Ellis.
Despite the grants of summary judgment, both men still faced multiple claims.
C.
The focus of the litigation then shifted to discovery. Mr. Carter and Mr. Ellis
served each plaintiff with a set of interrogatories and requests for production of
documents in the spring of 2017. When the plaintiffs did not respond within the
timeframe established by our rules of civil procedure, the defendants unilaterally offered
to extend the deadline to late May. But the extended deadline came and went without
any discovery responses from the plaintiffs.
The defendants cancelled the upcoming party depositions and filed separate
motions to compel and for sanctions. The plaintiffs provided discovery responses on
June 2, the day Mr. Ellis filed his motion to compel. But the defendants found the
responses inadequate. Not only did the interrogatory responses consist mostly of “canned
answers” but in response to the requests for production, the plaintiffs “dumped” a
mountain of documents and other materials on the defendants, many of which appeared
unresponsive to the requests.
The defendants promptly filed new motions to compel. At the hearing on this
second set of motions, the parties were able to resolve some of their issues by agreement.
But resolution over the “canned answers” and the “document dump” eluded them. After
reviewing the discovery responses, the court agreed with the defendants and ordered the
plaintiffs to supplement multiple interrogatory responses and to “specifically identify
which documents or other items [we]re produced in response to which interrogatory or
request for production” by August 4.
The defendants agreed to extend the court-ordered deadline to August 7. And the
plaintiffs provided supplemental responses by the extended deadline. But the defendants
were unimpressed with the plaintiffs’ efforts. In his second motion for sanctions,
Mr. Ellis complained that the supplemental responses contained the same “canned”
responses as before. And while the plaintiffs “may have reduced the total undefined
universe of documents described in Plaintiffs’ original responses, this reduction remains
akin to a galaxy of documents, . . . mostly . . . unrelated to the request[s].” Mr. Carter
expressed his frustration that the plaintiffs had not fully answered his interrogatories.
The plaintiffs maintained that Mr. Carter should be held liable for the tortious acts of co-
conspirators not named as defendants. But they failed to identify these co-conspirators or
4
to provide any specific information about the co-conspirators’ conduct. The party
depositions, which had been rescheduled for August, were again postponed. And Mr.
Carter and Mr. Ellis asked the court to dismiss the claims against them as a sanction for
the plaintiffs’ continuing failure to cooperate in discovery.
The court agreed that the supplemental responses fell short. In a September 13,
2017 order, the court directed the plaintiffs to provide either clear answers or specific
objections to the interrogatories. With regard to the “document dump,” the court directed
counsel to meet and “confer in good faith” to resolve the dispute. And if the plaintiffs
continued to provide nonresponsive documents, the court indicated it would consider
monetary sanctions. But because the court did not view the plaintiffs’ conduct thus far as
willful disobedience, the court declined to grant the requested sanction of dismissal.
At the court-ordered meeting, the plaintiffs’ counsel resisted all defense entreaties
that he identify specific pages within the produced documents that were responsive to the
discovery requests. Rather, he continued to insist that, as currently worded, the requests
only obligated him to broadly identify the responsive documents. Given the apparent
impasse, Mr. Ellis drafted a second set of document requests, asking the plaintiffs to
identify specific pages. Mr. Carter also sent the plaintiffs a second set of re-worded
interrogatories in an effort to resolve the dispute over the meaning of the first set.
The court’s September order did not set a deadline for the plaintiffs to supplement
their responses. In mid-October, having received no supplemental responses, the
defendants renewed their requests for sanctions for discovery abuse. The motions were
set for a hearing on November 14.
The plaintiffs served the defendants with supplemental responses to Mr. Carter’s
discovery on November 1. And on November 14, the plaintiffs’ counsel filed a
declaration in which he represented to the court that he could “commit . . . to having the
responses [to Mr. Ellis’s discovery] completed by Monday November 20, and likely by
Friday November 17.” His excuse for his tardiness was “the scheduling of [a] long-
planned two-week vacation coupled with extraordinary and unforeseeable problems [at
work] that required intense and immediate attention.” But he assured the court that “the
delays associated with completing the discovery should not affect the [April] trial date.”
At the November 14 hearing, the plaintiffs’ counsel explained that his
supplemental responses to Mr. Ellis’s first discovery requests were almost finished. And
he stood by his representation to the court that the responses would be completed by
November 20. He also apologized for overlooking Mr. Ellis’s second set of requests. He
anticipated that he could provide those responses fairly quickly. The court accepted
counsel’s representations that complete discovery responses were forthcoming and took
the request for sanctions under advisement.
5
On November 29, Mr. Carter and Mr. Ellis notified the court that no additional
discovery responses had been received. On December 3, Mr. Ellis received Ms. Collins’s
supplemental responses to his first set of discovery. And the plaintiffs’ counsel notified
the court by letter that he expected to complete the supplemental responses of the
remaining plaintiffs by the end of the week. By December 15, the defendants had not
received the promised responses. So they apprised the court of the latest missed deadline.
In an order dated January 12, 2018, the court found that the plaintiffs had failed to
fully comply with its previous discovery orders. The court also found that the plaintiffs
were given ample time to respond to the requests and had “engaged in unacceptable
discovery practices that have impacted the speedy progress of this lawsuit.” The
discovery delays “have impacted the defendants’ ability to prepare for the upcoming
trial.” But the court declined to dismiss the action based on the plaintiffs’ counsel’s
representations on November 14 that his other commitments “will no longer serve as an
impediment to the progress of this case.” Instead, the court awarded monetary sanctions.
Dissatisfied, the defendants asked the court to reconsider. They pointed out that
the plaintiffs had still not answered Mr. Ellis’s second set of discovery requests, which
had been outstanding since September.
On March 2, the defendants’ motion to reconsider came on for hearing. After
considering the argument from counsel and the record as a whole, the court dismissed
with prejudice all remaining claims against Mr. Carter and Mr. Ellis based on the
plaintiffs’ repeated discovery abuses. The court noted that the plaintiffs missed multiple
discovery deadlines forcing the defendants to file repeated motions. The court found that
this dispute was more than a misunderstanding regarding the scope of discovery. The
plaintiffs had repeatedly failed to comply with the rules of civil procedure and the court’s
orders. As of March 2, the plaintiffs had made no effort to answer discovery that had
been outstanding since September. The plaintiffs had never asked the court for additional
time to respond or for a protective order. The court found “no justification for this many
issues over discovery.” While the court had tried to accommodate the plaintiffs’
counsel’s busy schedule, “these discovery abuses have continued far too long.”
II.
The plaintiffs seek review of various rulings of the trial court. Ms. Jennings
appeals the dismissal of her claims against the individual defendants for malicious
prosecution and civil conspiracy. Ms. Collins appeals the dismissal of her claim against
the District for breach of contract and her claims against the individual defendants for
interference with contract and civil conspiracy. And all the plaintiffs appeal the dismissal
of their claims against Mr. Carter and Mr. Ellis as a discovery sanction.
6
A.
Summary judgment may be granted only “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Tenn. R. Civ. P. 56.04. The party moving for summary
judgment has “the burden of persuading the court that no genuine and material factual
issues exist and that it is, therefore, entitled to judgment as a matter of law.” Byrd v.
Hall, 847 S.W.2d 208, 211 (Tenn. 1993). If the moving party satisfies its burden, “the
nonmoving party must then demonstrate, by affidavits or discovery materials, that there is
a genuine, material fact dispute to warrant a trial.” Id.
Here, the parties moving for summary judgment do not bear the burden of proof at
trial. Thus, the burden of production on summary judgment could be satisfied “either (1)
by affirmatively negating an essential element of the nonmoving party’s claim or (2) by
demonstrating that the nonmoving party’s evidence at the summary judgment stage is
insufficient to establish the nonmoving party’s claim or defense.” Rye v. Women’s Care
Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 264 (Tenn. 2015). Satisfying this burden
requires more than a “conclusory assertion that summary judgment is appropriate,” rather
the movant must set forth specific material facts as to which the movant contends there is
no dispute. Id.
If a motion for summary judgment is properly supported, the nonmoving party
must then come forward with something more than the allegations or denials of its
pleadings. Id. at 265. The nonmoving party must “by affidavits or one of the other
means provided in Tennessee Rule 56, ‘set forth specific facts’ at the summary judgment
stage ‘showing that there is a genuine issue for trial.’” Id. (quoting Tenn. R. Civ. P.
56.06).
A trial court’s decision on a motion for summary judgment enjoys no presumption
of correctness on appeal. Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008);
Blair v. W. Town Mall, 130 S.W.3d 761, 763 (Tenn. 2004). We review the summary
judgment decision as a question of law. Martin, 271 S.W.3d at 84; Blair, 130 S.W.3d at
763. So we must review the record de novo and make a fresh determination of whether
the requirements of Rule 56 of the Tennessee Rules of Civil Procedure have been met.
Eadie v. Complete Co., 142 S.W.3d 288, 291 (Tenn. 2004); Blair, 130 S.W.3d at 763.
1. Malicious Prosecution
Ms. Jennings appeals the court’s dismissal of her malicious prosecution claim. A
plaintiff asserting malicious prosecution must prove: “(1) a prior suit or judicial
7
proceeding was brought against [her] without probable cause, (2) defendant brought such
prior action with malice, and (3) the prior action was finally terminated in favor of
plaintiff.” Christian v. Lapidus, 833 S.W.2d 71, 73 (Tenn. 1992). The defendants
contend that Ms. Jennings cannot establish the third element: favorable termination of the
prior action.
The favorable termination element presents a mixed question of law and fact.
Sewell v. Par Cable, Inc., No. 87-266-II, 1988 WL 112915, at *2 (Tenn. Ct. App. Oct.
26, 1988) (citing RESTATEMENT (SECOND) OF TORTS § 673(1)(b), (2)(c) (AM. LAW INST.
1977)). Whether the prior action was terminated favorably to the plaintiff is a question of
law for the court to decide. Id. But the circumstances under which the prior action
terminated remains a question of fact. Id.
While an acquittal is clearly a favorable outcome, something less will support a
malicious prosecution action. Meeks v. Gasaway, No. M2012-02083-COA-R3-CV, 2013
WL 6908942, at *4 (Tenn. Ct. App. Dec. 30, 2013). Our courts have accepted a
prosecutor’s entry of a nolle prosequi and a grand jury’s refusal to indict as favorable
terminations. See Scheibler v. Steinburg, 167 S.W. 866, 866-67 (Tenn. 1914); Perry v.
Sharber, 803 S.W.2d 223, 225 (Tenn. Ct. App. 1990). A favorable termination should
allow an inference that the accused was innocent of wrongdoing. See Christian, 833
S.W.2d at 74 (“The ‘favorable’ component is required because a judgment in favor of the
original plaintiff is conclusive of probable cause, unless procured by fraud.”); Parrish v.
Marquis, 172 S.W.3d 526, 530 (Tenn. 2005), overruled on other grounds by Himmelfarb
v. Allain, 380 S.W.3d 35 (Tenn. 2012) (noting a favorable termination “tends to indicate
the innocence of the accused, and coupled with the other elements of lack of probable
cause and malice, establishes the tort”); see also RESTATEMENT (SECOND) OF TORTS
§ 660 cmt. a (AM. LAW INST. 1977) (noting that a criminal action is only terminated in
favor of the accused when the “final disposition is such as to indicate the innocence of the
accused”).
But dismissal of criminal charges as part of a settlement agreement is not a
favorable termination for purposes of a malicious prosecution action. Christian, 833
S.W.2d at 74; Landers v. Kroger Co., 539 S.W.2d 130, 133 (Tenn. Ct. App. 1976).
“[T]he fact of compromise indicates that the question of . . . guilt or innocence is left
open.” RESTATEMENT (SECOND) OF TORTS § 660 cmt. c.
Ms. Jennings argues that the trial court erred in granting summary judgment on her
malicious prosecution claim because the charges against her were abandoned by the
prosecutor, not dismissed as part of a settlement agreement. We disagree. The
defendants submitted proof, through the declaration of District Attorney General Dan
Armstrong, that the charges against Ms. Jennings were dismissed as part of a joint
settlement agreement. The fact that Ms. Jennings did not sign the plea agreement is not
dispositive. The written plea agreement between Ms. Collins and the State included as a
8
condition of settlement the dismissal of all charges against Ms. Jennings. And we
conclude that her criminal defense attorney’s declaration fails to create a genuine fact
dispute as to the circumstances under which the charges were dismissed. Ms. Jennings’s
attorney participated in settlement negotiations on her behalf. His subjective belief that
Ms. Jennings would have prevailed in the criminal proceedings and his insistence during
settlement negotiations that all charges against his client be dismissed are immaterial to
the issue on summary judgment.
Ms. Jennings failed to create a genuine issue of material fact as to the
circumstances under which the criminal prosecution against her terminated. The charges
were dismissed as part of a joint settlement agreement. No inference can be made that
Ms. Jennings was innocent of wrongdoing. The trial court did not err in ruling that
dismissal under these circumstances was not a favorable termination.
2. Contract Claims
Ms. Collins appeals the dismissal of her claims based on the termination of her
consulting contract. An enforceable contract is an essential element of both a cause of
action for breach of contract and for tortious interference with contract. See ARC
LifeMed, Inc. v. AMC-Tenn., Inc., 183 S.W.3d 1, 26 (Tenn. Ct. App. 2005); Oak Ridge
Precision Indus., Inc. v. First Tenn. Bank Nat’l Ass’n, 835 S.W.2d 25, 29 (Tenn. Ct. App.
1992). Ms. Collins contends that the trial court erred in ruling that her consulting
contract with the District was ultra vires and thus, unenforceable.
Chuckey Utility District is a municipal corporation. See Tenn. Code Ann. § 7-82-
301(a)(1)(A) (Supp. 2019); United Cities Gas Co. v. Wigington, 815 S.W.2d 506, 509
(Tenn. 1991).
Under Tennessee law, a municipal action may be declared ultra vires for
either of two reasons: (1) because the action was wholly outside the scope
of the city’s authority under its charter or a statute, or (2) because the action
was not undertaken consistent with the mandatory provisions of its charter
or a statute.
City of Lebanon v. Baird, 756 S.W.2d 236, 241 (Tenn. 1988). Undisputedly, the District
had the power to enter into the consulting contract. See Tenn. Code Ann. § 7-82-
304(a)(4) (Supp. 2019). So our focus is on the second prong or how the District
exercised its power to contract. See City of Lebanon, 756 S.W.2d at 241 (noting that “the
law recognizes a difference between the existence of a municipal power and the manner
or mode of exercising municipal power legitimately”).
The Utility District Law of 1937 governs the formation and operation of public
utility districts. See Tenn. Code Ann. § 7-82-201 (2015); Am. Heritage Apartments, Inc.
9
v. Hamilton Cty. Water & Wastewater Treatment Auth., 494 S.W.3d 31, 41 (Tenn. 2016).
All public utility districts have the power to “[m]ake and enter into contracts.” Tenn.
Code Ann. § 7-82-304(a)(4). How is that power to be exercised? A public utility district
acts through its board of commissioners. See id. § 7-82-301(a)(1)(A) (providing that
district powers are “vested in and exercised by a majority of the members of the board of
commissioners”). The board of commissioners may exercise the general and specific
powers of a public utility district “by vote, ordinance or resolution.” Id. § 7-82-309(a)(1)
(Supp. 2019). The board may also delegate any of its powers to “one (1) or more of its
members.” Id. § 7-82-308(b) (Supp. 2019).
Here, Mr. Carter, President of Chuckey Utility District’s Board, executed the
consulting contract. The District does not argue that Mr. Carter lacked authority to
execute the contract on its behalf. Rather, it contends that Mr. Carter’s signature was not
attested to by the Board Secretary, as required by the Board’s bylaws. See id. § 7-82-
309(a)(2) (authorizing the board to make bylaws). The Board’s bylaws required all
contracts to “be signed by the President or the Secretary of the Board and attested by the
Secretary if signed by the President and attested by the Treasurer if signed by the
Secretary.” The contract here lacked the required attestation.
But Ms. Collins counters that the Board’s permissive authority to enact bylaws did
not limit the manner in which the District could legitimately exercise its power to
contract. Bylaws may be waived. 8 William Meade Fletcher et al., Fletcher Cyclopedia
of the Law of Corps. § 4200, Westlaw (database updated Sept. 2019). According to Ms.
Collins, during her extensive tenure with the District, the Board routinely waived the
attestation requirement. In her experience, attestation was only necessary for real estate
and banking transactions.
Citing another provision of the Utility District Law, the District maintains that the
District’s power to contract is limited by a “‘mandatory provision’ of a statute that
requires a contract to be executed in the manner directed by the board, which in this case
is set forth in the CUD’s Bylaws.” See Tenn. Code Ann. § 7-82-309(a)(4). But the
District’s reliance on this statutory provision is misplaced. The Utility District Law gives
the board of commissioners of a public utility district the power and authority to: “[l]ease,
purchase, sell, convey and mortgage the property of the district and to execute all
instruments, contracts, mortgages, deeds or bonds on behalf of the district in such manner
as the board shall direct.” Id. This provision does not restrict the manner in which the
District can exercise its power to contract. It merely authorizes the Board to execute
whatever documents are necessary to carry out its decision to “lease, purchase, sell,
convey, [or] mortgage” district property. And even if we were to accept the District’s
argument, this section does not restrict the Board’s ability to waive its own bylaws.
We conclude that Ms. Collins has the better part of this argument. Mr. Carter had
the authority to execute the consulting contract. The attestation requirement was not
10
mandated by statute. And whether the attestation requirement was waived here is
disputed. The missing attestation does not make the contract ultra vires. The trial court
erred in granting summary judgment to the defendants on this basis.
Our conclusion on the enforceability of the contract means that a predicate tort,
namely tortious interference with contract, remains pending. See Watson’s Carpet &
Floor Coverings, Inc. v. McCormick, 247 S.W.3d 169, 180 (Tenn. Ct. App. 2007)
(holding that a civil conspiracy claim cannot stand in the absence of an underlying
predicate tort). So the trial court erred in dismissing Ms. Collins’s civil conspiracy claim
on that basis.
B.
We next consider the plaintiffs’ argument that the trial court erred in dismissing
with prejudice their claims against Mr. Carter and Mr. Ellis as a discovery sanction. Trial
courts have broad inherent authority to control proceedings in their courts. Hodges v.
Attorney Gen., 43 S.W.3d 918, 921 (Tenn. Ct. App. 2000). When warranted, a trial court
may dismiss an action for failure to comply with procedural rules or the orders of the
court. Tenn. R. Civ. P. 37.02(C), 41.02(1). Dismissal is a harsh yet necessary sanction in
appropriate circumstances. Holt v. Webster, 638 S.W.2d 391, 394 (Tenn. Ct. App. 1982).
But the power to dismiss must be exercised with restraint because “[t]he interests of
justice are best served when lawsuits are resolved on their merits.” Langlois v. Energy
Automation Sys., Inc., 332 S.W.3d 353, 357 (Tenn. Ct. App. 2009) (quoting Orten v.
Orten, 185 S.W.3d 825, 836 (Tenn. Ct. App. 2005) (Lee, J., dissenting)).
We review a trial court’s decision to impose discovery sanctions for an abuse of
discretion. Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 133 (Tenn. 2004). Our
review of discretionary decisions is limited. Beard v. Bd. of Prof’l Responsibility, 288
S.W.3d 838, 860 (Tenn. 2009). We do not “second-guess the court below” or “substitute
[our] discretion for the lower court’s.” Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524
(Tenn. 2010). In reviewing discretionary decisions, we consider “(1) whether the factual
basis for the decision is properly supported by evidence in the record, (2) whether the
lower court properly identified and applied the most appropriate legal principles
applicable to the decision, and (3) whether the lower court’s decision was within the
range of acceptable alternative dispositions.” Id. We “review the underlying factual
findings using the preponderance of the evidence standard contained in Tenn. R. App. P.
13(d) and . . . the lower court’s legal determinations de novo without any presumption of
correctness.” Id. at 525.
The trial court dismissed the plaintiffs’ case based on their repeated failure to
comply with discovery deadlines and the court’s discovery orders. On appeal, the
plaintiffs challenge the court’s finding that they failed to comply with its discovery
orders. This record simply does not support their argument. We recognize that they
11
made some attempt to comply with the court’s orders, but they never fully and
completely answered the discovery requests, as ordered by the court. See Tenn. R. Civ.
P. 37.01(3) (providing that evasive or incomplete answers may be treated as a failure to
answer).
The plaintiffs also contend that dismissal was too harsh a sanction when the failure
to comply with discovery was due to plaintiffs’ counsel, not the parties themselves. See
Mills v. Bank of Roane Cty., No. 176, 1991 WL 126553, at *2 (Tenn. Ct. App. July 15,
1991). But we have affirmed dismissals when the misconduct was attributable to
counsel. See, e.g., Gordon v. Wilson, No. 02A01-9611-CV-00282, 1998 WL 315940, at
*6 (Tenn. Ct. App. June 17, 1998); Nokes v. Hooper, No. 89-00-II, 1989 WL 115186, at
*4 (Tenn. Ct. App. Oct. 4 1989); Ratliff Dev. Corp. v. Brooks, No. C.A. 144, 1988 WL
116455, at *4 (Tenn. Ct. App. Nov. 2, 1988); Holt, 638 S.W.2d at 394.
Whether dismissal was an appropriate sanction under the circumstances is
determined on a case by case basis. Murray v. Christian Methodist Episcopal Church,
153 S.W.3d 371, 378 (Tenn. Ct. App. 2004). And we will affirm the trial court’s
decision to dismiss a case when there is a “clear record of delay or contumacious
conduct.” Shahrdar v. Glob. Hous., Inc., 983 S.W.2d 230, 236 (Tenn. Ct. App. 1998)
(quoting In re Beckman, 78 B.R. 516, 518 (M.D. Tenn. 1987)). Here, the parties have
been embroiled in discovery disputes for nine months. Forward progress in this case has
been stalled since March 2017. The plaintiffs’ inadequate responses have forced the
party depositions to be cancelled twice and hampered the defendants’ ability to prepare
for the upcoming trial. Even so, the trial court initially refrained from dismissing this
case, choosing instead to accept the representations of the plaintiffs’ counsel that his
other commitments would no longer impede the progress of the litigation. Despite this
reprieve, there was no attempt to answer the outstanding discovery. And no excuses were
offered. Cf. Howard v. Am. Indus. Servs., Inc., No. M2001-02711-COA-R3-CV, 2002
WL 31769115, at *4 (Tenn. Ct. App. Dec. 11, 2002) (affirming dismissal after plaintiffs
failed to properly respond to contention interrogatories or identify the specific documents
that supported their claims “after almost a year and repeated orders to comply”).
We conclude that the trial court’s dismissal of the plaintiffs’ action was not an
abuse of discretion.2 The court identified and applied the correct law. The evidence in
the record supports the factual basis for its decision. The plaintiffs’ failure to properly
respond to discovery requests unduly prolonged discovery and halted forward progress in
the litigation. Clearly, sanctions were appropriate here. And the court’s choice of
dismissal as the appropriate sanction was within the range of acceptable dispositions.
2
We are not persuaded by the argument of the other defendants that the trial court’s dismissal of
the plaintiffs’ claims against Mr. Carter and Mr. Ellis should also apply to them. The other defendants
did not propound any discovery requests and were unaffected by the plaintiffs’ conduct.
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C.
Finally, the plaintiffs ask this court to reverse the trial court’s award of attorney’s
fees to some of the defendants. After the trial court had dismissed the claims against
Mr. Carter and Mr. Ellis, the District, Mr. Carter, and four other defendants employed by
the District requested an award of reasonable attorney’s fees and costs as prevailing
parties under Tennessee Code Annotated § 29-20-113(a) (Supp. 2019).3 The court found
that the five employee-defendants were sued in their individual capacities for actions
taken in their official capacities on behalf of the District. And they were prevailing
parties, within the meaning of the statute, because they successfully defended the claims
against them.
Because we reversed the trial court’s grant of summary judgment on the claims for
tortious interference with contract and civil conspiracy, the employee-defendants other
than Mr. Carter are no longer prevailing parties. So we reverse the award of attorney’s
fees and remand to the trial court for determination of the amount of attorney’s fees
attributable to Mr. Carter’s defense.
III.
The trial court properly granted summary judgment on the malicious prosecution
claim. The plaintiffs could not establish a favorable termination of the criminal
prosecution. But the trial court erred in granting summary judgment on the claims of
Ms. Collins for breach of contract and tortious interference with contract. The consulting
contract between Ms. Collins and Chuckey Utility District was not ultra vires. Because
the underlying tort of tortious interference with contract remains pending, we reverse the
dismissal of Ms. Collins’s civil conspiracy claim against the individual defendants other
than Mr. Carter and Mr. Ellis. The trial court did not abuse its discretion in dismissing all
claims against Mr. Carter and Mr. Ellis based on the plaintiffs’ repeated failure to
cooperate in discovery. Finally, we reverse the trial court’s award of attorney’s fees
3
The statute provides:
Notwithstanding § 20-12-119(c)(5)(A), if a claim is filed with a Tennessee . . . court . . .
against an employee of the state or of a governmental entity of the state in the person’s
individual capacity, and the claim arises from actions or omissions of the employee
acting in an official capacity or under color of law, and that employee prevails in the
proceeding as provided in this section, then the court or other judicial body on motion
shall award reasonable attorneys’ fees and costs incurred by the employee in defending
the claim filed against the employee.
Tenn. Code Ann. § 29-20-113(a).
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under Tennessee Code Annotated § 29-20-113(a). We remand the case for such further
proceedings as may be necessary in light of this opinion.
_________________________________
W. NEAL MCBRAYER, JUDGE
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