Jerry Collins D/B/A Westside Equipment Company, Inc. v. Greene County Bank

I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON FILED November 1, 1995 J ERRY COLLI NS, d / b/ a W ESTSI DE ) C/ A NO. 03A01- 9507- CH- 0021 6 Cecil Crowson, Jr. EQUI PMENT COM PANY, I NC. , ) Appellate C ourt Clerk ) GREENE CHANCERY Pl a i nt i f f - Appe l l a nt , ) ) HON. DENNI S H. I NMAN, v. ) J UDGE ) GREENE COUNTY BANK, ) AFFI RMED I N PART, ) VACATED I N PART, De f e nda nt - Appe l l e e . ) AND REM ANDED

J . RONNI E GREER, Gr e e ne vi l l e , f or Pl a i nt i f f - Appe l l a nt .

KENNETH CLARK HOOD, ROGERS, LAUGHLI N, NUNNALLY, HOOD & CRUM, Gr e e ne vi l l e , f or De f e nda nt - Appe l l e e .

O P I N I O N

Fr a nks . J .

I n t hi s di s put e be t we e n pl a i nt i f f bor r owe r a nd d e f e n d a nt l e nde r , t he Tr i a l Cour t e nt e r e d s umma r y j udgme nt f o r t h e d e f e nda nt a nd pl a i nt i f f ha s a ppe a l e d.

Pl a i nt i f f Col l i ns be ga n ope r a t i ng W s t Si de Tr a c t or e

Co mp a n y, I nc . ( WST) f or i t s owne r , Ke nne t h M l one i n 1986. a

Pl a i n t i f f a nd M l one a gr e e d t ha t Pl a i nt i f f woul d be c ome t he a

o wn e r of W i n e xc ha nge f or pa yi ng t he c ompa ny' s de bt s . ST

Pl a i n t i f f s i mul t a ne ous l y owne d a nd r a n W s t Si de Equi pme nt e

Co mp a n y ( W , a us e d e q ui pme nt t r a di ng bus i ne s s . SE) The

b u s i n e s s a r r a nge me nt be t we e n Pl a i nt i f f a nd M l one c ont i nue d a

u n t i l 1992, whe n W be c a me de l i nque nt wi t h i t s de a l e r s a nd ST

s u p p l i e r s a nd c l os e d.

I n 1990, Pl a i nt i f f pl e dge d hi s home a nd f a r m a s

c o l l a t e r a l f or a $125, 000 l oa n f or W f r om de f e nda nt Gr e e ne ST

Co u n t y Ba nk. Ul t i ma t e l y , de f e nda nt f or e c l os e d on t he pr ope r t y a n d p l a i nt i f f ' s e f f or t s t o pr e ve nt t he f or e c l os ur e t hr ough l i t i g a t i on f a i l e d.

Pl a i nt i f f t he n f i l e d t hi s a c t i on a l l e gi ng t ha t i l l e g a l hol ds ha d be e n pl a c e d on hi s c he c ki ng a c c ount , t ha t o r a l r e pr e s e nt a t i ons r e ga r di ng t he c r os s - c ol l a t e r a l i z a t i on c l a u s e i n t he de e d of t r us t c ons t i t ut e d f r a udul e nt i nduc e me n t t o e n t e r a c ont r a c t , a nd t ha t s t a t e me nt s by ba nk of f i c i a l s c o n s t i t ut e d t or t i ous i nt e r f e r e nc e wi t h t he bus i ne s s

r e l a t i ons hi p be t we e n pl a i nt i f f a nd M l one . a

The Tr i a l Cour t gr a nt e d s umma r y j udgme nt on a l l i s s ue s . Af t e r gi vi ng Appe l l a nt a n a ddi t i ona l t wo we e ks t o f i l e n ot i c e s of hol ds t ha t ha d be e n pl a c e d on hi s a c c ount , t h e Co u r t f ound t ha t none of t he hol ds pr oduc e d we r e wi t hi n t he r e g u l a t i on' s one ye a r l i mi t a t i ons pe r i od. The Cour t a l s o c on c l u de d t ha t r e s j udi c a t a a nd c ol l a t e r a l e s t oppe l ba r r e d t h e c l a i m of f r a udul e nt i ndu c e me nt t o e nt e r a c ont r a c t . Fur t he r , t h e c o ur t de t e r mi ne d t ha t t he bus i ne s s r e l a t i ons hi p a l l e ge d l y i n t e r f e r e d wi t h wa s pr os pe c t i ve i n na t ur e a nd t hi s j u r i s d i c t i on doe s not r e c ogni z e a c a us e of a c t i on f or p r o s p e c t i ve i nt e r f e r e nc e .

Pl a i nt i f f c l a i ms t ha t Gr e e ne Count y Ba nk vi ol a t e d 1 2 *3 C. F. R. 2 29 1 e t . s e q. ( c o mmonl y known a s Re gul a t i on CC) by p l a c i n g i mpr ope r hol ds o n hi s c he c ki ng a c c ount s . The s t a t u t e o f l i mi t a t i ons f or Re gul a t i on CC pr ovi de s t ha t a c t i ons mus t b e b r o u g h t " wi t hi n one ye a r a f t e r t he da t e of t he oc c ur r e nc e of t h e v i ol a t i on i nvol ve d. " 12 C. F. R. 229. 21 ( 1992) . At t he h e a r i n g on t he mot i on f or s umma r y j udgme nt a nd a f t e r be i ng g i v e n a n a ddi t i ona l t wo we e ks , pl a i nt i f f c oul d not pr oduc e a n y h o l d not i c e s da t e d wi t hi n one ye a r of t he f i l i ng of t he s ui t .

Pl a i nt i f f a r gue s t ha t t he hol ds r e pr e s e nt e d a c o n t i n ui ng oc c ur r e nc e a nd t he s t a t ut e of l i mi t a t i ons be ga n t o r u n , f or a l l vi ol a t i ons , f r om t he da t e of t he l a s t hol d. Th i s a r g u me nt i s wi t hout me r i t . The l a s t hol d not i c e i s da t e d mo r e t h a n o ne ye a r f r om t he f i l i ng of t he s ui t a nd i s i t s e l f o u t s i de t he l i mi t a t i ons pe r i od, a nd whi l e a " c ont i nui ng v i o l a t i on" t he or y ha s be e n us e d t o pr e ve nt t he s t a t ut e of

l i mi t a t i ons f r om b a r r i ng e mpl oyme nt di s c r i m na t i on, s e e , e . g . , i

Ha v e n s Re al t y Cor p. v . Col e man, 455 U. S. 363, 71 L. Ed. 2d 21 4 , 1 0 2 S. Ct . 1114 ( 1982) , t he c a s e s c i t e d by pl a i nt i f f f a i l t o p r o v i de a ny r a t i ona l e f or a ppl i c a t i on of t he t he or y t o t he s e c i r c u ms t a nc e s . Pl a i nt i f f r e c e i ve d wr i t t e n not i c e s i nf or mi ng h i m o f e a c h a l l e ge d vi ol a t i on. The r e wa s no c onc e a l me nt of h i s r i ght s or l a c k of oppor t uni t y t o pur s ue t he s e c l a i ms a s s o o n a s t he y a r os e a nd we f i nd no r e a s on why t he s t a t ut e of l i mi t a t i ons s houl d n ot ba r t hi s c l a i m.

Pl a i nt i f f a s k e d t he Tr i a l Cour t t o a l t e r or a me nd t h e s u mma r y j udgme nt on t he ba s i s of hi s di s c ove r y of a not i c e

1 1 2 C. F . R. 2 2 9 . 2 1 i s e n t i t l e d " Av a i l a b i l i t y o f F u n d s a n d Co l l e c t i o n o f Ch e c k s " a n d g o v e r n s t h e p r o c e d u r e s wh i c h b a n k s mu s t f o l l o w i n ma k i n g d e p o s i t s a v a i l a b l e t o c u s t o me r s .

o f a hol d on hi s ba nk a c c ount t ha t ha d oc c ur r e d wi t hi n t he o n e y e a r s t a t ut e o f l i mi t a t i ons pe r i od, a nd a l l e ge d a l t e r a t i ons 2 o f a b a nk doc ume nt . The mot i on wa s de ni e d.

W t he r t o gr a nt a ne w t r i a l ba s e d on ne wl y he

d i s c o v e r e d e vi de nc e i s di s c r e t i ona r y wi t h t he t r i a l j udge .

S e a y v . Ci t y o f Knox v i l l e , 654 S. W 2d 397 ( Te nn. App. 1983) . .

Th e mo vi ng pa r t y mus t de mons t r a t e t ha t t he ne w e vi de nc e wa s n o t k nown pr i or t o or du r i ng t r i a l a nd t ha t i t c oul d not ha v e b e e n a s c e r t a i ne d b y t he e xe r c i s e of r e a s ona bl e di l i ge nc e . Al s o t o be c ons i de r e d by t he Tr i a l J udge i s whe t he r a ne w t r i a l ba s e d on s uc h e vi de nc e woul d c ha nge t he r e s ul t . Le e pe r

v . Co o k , 688 S. W 2d 94 ( Te nn. App. 1985) . .

Pl a i nt i f f f ou nd t he hol d s l i ps by s e a r c hi ng t hr ou g h h i s r e c or ds a nd t he ba nk doc ume nt , a l l e ge dl y a l t e r e d, wa s t u r n e d ove r t o pl a i nt i f f dur i ng di s c ove r y. Ac c or di ngl y, p l a i n t i f f wa s i n pos s e s s i on of t he r e c or ds a nd doc ume nt whi l e t he c a s e wa s b e i ng l i t i ga t e d. He wa s gi ve n a ddi t i ona l t i me a f t e r t he he a r i ng on t he s umma r y j udgme nt t o t i me l y pr oduc e

h o l d n ot i c e s . W a gr e e wi t h t he Tr i a l J udge t ha t pl a i nt i f f e

d i d n o t e xe r c i s e r e a s ona bl e di l i ge nc e i n pr e s e nt i ng t he s e c l a i ms a nd a f f i r m hi s d e ni a l of t he mot i on t o a l t e r or a me nd t h e j u dgme nt .

Ne xt , p l a i nt i f f i ns i s t s r e s j udi c at a a nd c ol l a t e r a l e s t o p p e l s houl d not ba r hi s a c t i on.

A de t e r mi na t i on of whe t he r a n a c t i on i s ba r r e d by r e s j u di c at a i s a n a ppr opr i a t e us e of s umma r y j udgme nt . By r d

2 Th e a l l e g e d a l t e r a t i o n s o f t h e b a n k d o c u me n t a r e e v i d e n c e d b y t h e d i f f e r e n t t y p e wr i t e r p r i n t u s e d f o r t h e l a s t s e n t e n c e . ( De p o s i t i o n o f Dr . Al f o n s o Lu c e r o , P h . D. ) .

v . Ha l l , 847 S. W 2d 208 ( Te nn. 1993) . .

Re s j udi c at a ba r s a s e c ond s ui t be t we e n t he s a me p a r t i e s o n t he s a me c a us e of a c t i on a s t o a l l i s s ue s whi c h we r e o r c oul d ha ve be e n l i t i ga t e d i n t he f or me r s ui t . Sc al e s

v . S c al e s , 564 S. W 2d 667 ( Te nn. App. 1977) . . The pa r t y

a s s e r t i ng t he de f e ns e mu s t de mons t r a t e : ( 1) t ha t t he u n d e r l yi ng j udgme nt wa s r e nde r e d by a c our t of c ompe t e nt j u r i s d i c t i on; ( 2) t ha t t he s a me pa r t i e s we r e i nvol ve d i n bo t h s u i t s , ( 3) t ha t t he s a me c a us e of a c t i on wa s i nvol ve d i n bot h s u i t s , a nd ( 4) t ha t t he unde r l yi ng j udgme nt wa s on t he me r i t s .

Le e v . Hal l , 790 S. W 2d 293, 294 ( Te nn. App. 1990) . .

Col l a t e r a l e s t oppe l , i n c ont r a s t , ba r s a s e c ond s u i t b e t we e n t he s a me pa r t i e s on a di f f e r e nt c a us e of a c t i on whe r e t he i s s ue s we r e a c t ua l l y l i t i ga t e d a nd de t e r mi ne d i n t he f or me r s ui t . Sc al e s . Pl a i nt i f f a r gue s t he j udge i nc or r e c t l y g r a n t e d s umma r y j udgme nt be c a us e t he t hi r d e l e me nt of r e s j u d i c a t a, i . e . , t he s a me c a us e of a c t i on, wa s not me t .

The pr i or l i t i ga t i on s ought t o e nj oi n t he f o r e c l os ur e on Appe l l a nt ' s f a r m a nd home . Thos e pr ope r t i e s h a d b e e n pl e dge d unde r a 1990 l oa n a gr e e me nt . A c r os s -c ol l a t e r a l i z a t i on c l a us e i n t ha t a gr e e me nt s t a t e d t ha t t he c ol l a t e r a l f r om t he l oa n wa s a l s o t o be us e d a s s e c ur i t y f o r

o t h e r l oa ns out s t a ndi ng t o W a nd W SE ST, a nd t he de e d of t r u s t

wa s n o t t o be r e l e a s e d u nt i l t he l oa ns out s t a ndi ng ha d be e n p a i d. Pl a i nt i f f c l a i ms t ha t he wa s not a wa r e of t hi s c r os s -c ol l a t e r a l i z a t i on c l a us e whe n he s i gne d t he doc ume nt .

Pl a i nt i f f a r gue s t he pr e vi ous l i t i ga t i on s ought t o p r e v e n t f or e c l os ur e on hi s f a r m be c a us e t he Ba nk ha d i mpa i r e d h i s a b i l i t y t o pa y t hr ough t he wr ongf ul r e pos s e s s i on of hi s *6 e q u i p me nt . He di s t i ngui s he s t he pr e vi ous c l a i ms f r om hi s p r e s e nt c l a i m, whi c h i s c ha r a c t e r i z e d a s f r a udul e nt i nduc e me nt t o e n t e r i nt o t he De e d of Tr us t c ont a i ni ng c r os s -c ol l a t e r a l i z a t i on l a ngua ge . He a r gue s t ha t t he or a l r e p r e s e nt a t i ons we r e ma de t o hi m i ndi c a t i ng t ha t hi s f a r m a n d h o me woul d be r e l e a s e d upon r e pa yme nt of t he l oa n.

The Tr i a l Cour t de a l i ng wi t h t he pr i or l i t i ga t i on a dd r e s s e d t he c r os s - c ol l a t e r a l i z a t i on c l a us e dur i ng t he p l a i n t i f f ' s e f f or t t o e nj oi n t he f or e c l os ur e :

Now t he f i r s t ma t t e r - t ha t i s , t h e of f e r t o di s c ha r ge t he not e di r e c t l y s e c ur e d by t he de e d o f t r us t - t ha t , o f c our s e , i s t he c r os s - c ol l a t e r a l i z a t i on c l a us e i s s ue . I ' ve de a l t wi t h i t . The Cour t of Appe a l s ha s de a l t wi t h i t . I ' m boun d by i t . Thos e c l a us e s a r e va l i d, a nd f a i l ur e t o r e a d t he l a ngua ge , a nd I ' m s ur e M . Col l i ns i s t e l l i ng r t he t r ut h. He di dn' t r e a d t he l a ngua ge . He di dn ' t r e a l i z e t he s i gni f i c a nc e of i t , but t he c a s e a r e l i t e r a l l y l e gi on i n t hi s s t a t e t ha t s a y t ha t f a i l ur e t o r e a d l a ngua ge t ha t i s t he r e t o r e a d i s not a de f e ns e t o e nf or c e me nt of t ha t l a ngua ge .

The Tr i a l Cou r t he l d t hi s c l a i m wa s ba r r e d unde r e i t h e r r e s j udi c a t a or c ol l a t e r a l e s t oppe l be c a us e t he pr i o r a c t i o n' s

s ol e pur pos e [ wa s ] t he e nj oi ni ng of t he f or e c l os u r e by t he ba nk on t he de e d of t r us t . At t ha t t i me , e ve r yt hi ng t h a t c oul d ha ve be e n known a bout t ha t s i t ua t i on wa s known. The r e we r e no be l a t e d r e ve l a t i ons of f a c t . The onl y t hi ng t ha t oc c ur r e d a f t e r t ha t s u i t wa s t he f or e c l os ur e a nd i t oc c ur r e d be c a us e t he Cour t r e f us e d t o e nj oi n i t . . . Col l i ns ' c l a i m t ha t t h e ba nk f r a udul e nt l y i nduc e d hi m t o e nt e r i nt o t ha t c r os s c ol l a t e r a l i z a t i on a gr e e me nt or mi s r e pr e s e nt e d f a c t s t o hi m s uc h t ha t he s i gne d i t wi t h a mi s a ppr e he ns i on of i t s e f f e c t . . . c oul d a nd s houl d ha ve b e e n r a i s e d a t t ha t t i me wi t hi n t he c onf i ne s of t ha t s ui t s i nc e i t di d ha ve a s i t s s ol e pur pos e . . . t h a t f or e c l os ur e s a l e . . . M . Col l i ns i s r ba r r e d b y c ol l a t e r a l e s t oppe l i n t ha t r e ga r d. . . . "

The s t a t ut e g ove r ni ng i nj unc t i ons of f or e c l os ur e s r e q u i r e s t ha t :

Cont e nt s of Appl i c a t i on f or I nj unc t i on. - - The pa r t y a ppl yi ng f or r e l i e f i n s uc h c a s e s ha l l di s t i nc t l y s t a t e how, whe n, a nd t o whom t he de bt or a ny pa r t o f de bt s e c ur e d a f or e s a i d ha s be e n pa i d, or a ny c i r c ums t a nc e s of f r a ud whi c h vi t i a t e t he c ont r a c t " .

T. C. A. 29- 23- 202 ( 1980) ( e mpha s i s a dde d) .

The e s t oppe l of a j udgme nt or de c r e e e xt e nds t o a l l ma t t e r s ma t e r i a l t o t he de c i s i on of t he c a s e whi c h t he pa r t i e s e x e r c i s i ng r e a s ona bl e di l i ge nc e mi ght ha ve br ought f or wa r d a t

t he t i me . M Ki nne y v . W dne r , 746 S. W 2d 699 ( Te nn. App. c i .

1987) . A pl a i nt i f f ma y not r e s e r ve a t he or y whi c h s uppor t s h i s a c t i on f or a s e c ond l a ws ui t . I d.

Pl a i nt i f f ' s c l a i m s e e ks r e l i e f on t he ba s i s of f r a u d u l e nt i nduc e me nt i n e nt e r i ng i nt o t he Tr us t De e d. By t h e t e r ms of t he s t a t ut e , t he i s s ue of f r a ud s houl d ha ve be e n l i t i g a t e d i n t he pr i or pr oc e e di ng. I n t he pr e vi ous p r o c e e di ng, t he i s s ue of t he c r os s - c ol l a t e r a l i z a t i on c l a us e wa s a c t ua l l y l i t i ga t e d a nd de t e r mi ne d. The r e a r e no ne w f a c t s wh i c h we r e not known or ne w i s s ue s whi c h c oul d not ha ve be e n p r e s e n t e d a t t ha t t i me . Ac c or di ngl y, t he Tr i a l J udge pr ope r l y g r a n t e d s umma r y j udgme nt on t hi s i s s ue .

Fi na l l y, p l a i nt i f f c ont e nds t he Tr i a l J udge wa s i n e r r o r i n gr a nt i ng s umma r y j udgme nt on t he i s s ue of t or t i ous i nt e r f e r e nc e wi t h p l a i nt i f f ' s bus i ne s s r e l a t i ons hi p. Pl a i n t i f f a l l e ge d t ha t t he ba nk, t hr ough i t s a ge nt s a nd e mp l o y e e s t or t i ous l y de s t r oye d " t he bus i ne s s r e l a t i ons hi p

b e t we e n J e r r y Col l i ns . . . a nd Ke nne t h M l one . . . " . a The

i n t e r f e r e nc e c ompl a i ne d of oc c ur r e d i n 1991 whe n a ba nk

o f f i c e r r e f us e d t o ma ke a l oa n t o W s t Si de Tr a c t or a nd e

a l l e g e dl y t ol d M l one t ha t pl a i nt i f f wa s s t e a l i ng hi m bl i nd a

a n d " c a r r yi ng [ hi m] o f f . " Pl a i nt i f f t e s t i f i e d t ha t a s a

r e s u l t M l one a nd h i s f a mi l y woul d not a s s i s t pl a i nt i f f i n a

t a k i n g out a l oa n, woul d not pl e dge a ddi t i ona l c ol l a t e r a l t o a l l o w hi m t o bor r ow mor e mone y, a nd e ve nt ua l l y e vi c t e d p l a i n t i f f ' s bus i ne s s f r om t he pr ope r t y. The bus i ne s s s u b s e q ue nt l y f ol de d.

The Tr i a l Cour t c onc l ude d t he di s i nt e gr a t i on of t h e b u s i n e s s r e l a t i ons hi p wa s pr os pe c t i ve a nd t he r e i s no c a us e o f a c t i o n i n Te nne s s e e f or t or t i ous i nt e r f e r e nc e wi t h a p r o s p e c t i ve bus i ne s s r e l a t i ons hi p.

The r e a r e di s put e d i s s ue s of ma t e r i a l f a c t a s t o wh e t h e r t he a l l e ge d i nt e r f e r e nc e wa s wi t h a n e xi s t i ng bus i n e s s r e l a t i ons hi p. Ac c or di n gl y, i t i s a ppr opr i a t e t o r e ma nd t hi s

c a s e f or a de t e r mi na t i o n of whe t he r t he e l e me nt s of t hi s t o r t 3 e xi s t .

Appe l l e e r e s p onds t ha t i n a ny e ve nt t he a c t i on i s b a r r e d by t he one ye a r s t a t ut e of l i mi t a t i ons §28- 3- 104 4 . Th e a p p l i c a bl e s t a t ut e o f l i mi t a t i ons i s de t e r mi ne d by t he a l l e ga t i ons o f t he c omp l a i nt . He r e t he da ma ge a l l e ge d i s t h e

l o s s o f M l one ' s bus i ne s s r e l a t i ons hi p a nd f i na nc i a l ba c ki n g , a

wh i c h l e d t o t he c l os e of t he bus i ne s s . Pl a i nt i f f ' s c l a i m

3 Th e e l e me n t s o f t h e t o r t o f i n t e r f e r e n c e wi t h b u s i n e s s r e l a t i o n s a r e : t he exi s t e nc e of a va l i d bus i ne s s r e l a t i on ( not nec e s s a r i l y evi de nc e d by a n enf or c e a bl e cont r a c t ) or expe c t a nc y; k n o wl e d g e o f t h e r e l a t i o n s h i p or e xpe c t a nc y on t he pa r t of t he i nt e r f e r e r ; a n i nt e nt i ona l i n t e r f e r e n c e i n d u c i n g o r c a u s i n g a b r e a c h o r t e r mi n a t i o n o f t h e r e l a t i ons hi p or expe c t a nc y; a n d r e s u l t a n t d a ma g e t o t h e p a r t y wh o s e r e l a t i ons hi p or expe c t a nc y had be e n di s r upt e d. Ka n Co n s t r u c t i o n a n d Cl e a n i n g Co r p . I n c . , v . T a t u m, 1 9 9 3 W 4 3 4 7 4 1 ( Te n n . Ap p . 1 9 9 3 ) , c i t i n g L 4 5 Am. J u r . 2 d I n t e r f e r e n c e 5 0 ( 1 9 6 9 ) .

4 T. C. A. 2 8 - 3 - 1 0 4 ( 1 9 8 0 ) r e a d s : " Pe r s o n a l t o r t a c t i o n s . - ( a ) Ac t i o n s f o r l i b e l , f o r i n j u r i e s t o t h e p e r s o n , f a l s e i mp r i s o n me n t , ma l i c i o u s p r o s e c u t i o n , c r i mi n a l c o n v e r s a t i o n , s e d u c t i o n , b r e a c h o f ma r r i a g e p r o mi s e , a c t i o n s a n d s u i t s a g a i n s t a t t o r n e y s f o r ma l p r a c t i c e wh e t h e r s u c h a c t i o n s a r e g r o u n d e d o r b a s e d i n c o n t r a c t o r t o r t , c i v i l a c t i o n s f o r c o mp e n s a t o r y o r p u n i t i v e d a ma g e s , o r b o t h , b r o u g h t u n d e r t h e f e de r a l c i vi l r i ght s s t a t ut e s , a nd a c t i ons f or s t a t ut or y pe na l t i e s s ha l l b e c o mme n c e d wi t h i n o n e ( 1 ) y e a r a f t e r c a u s e o f a c t i o n a c c r u e d . "

d e a l s wi t h bus i ne s s a nd pr ope r t y l os s e s whi c h a r e gove r ne d b y t h e t h r e e - ye a r l i mi t a t i on pe r i od of T. C. A. §28- 3- 105, a nd t h e l i mi t a t i ons pe r i od f or t he a na l ogous t or t of i nt e r f e r e nc e wi t h

a c on t r a c t ua l r e l a t i ons hi p i s t hr e e ye a r s . W c onc l ude t he e

t hr e e - ye a r s t a t ut e o f l i mi t a t i ons woul d a ppl y. Se e Car r ut h e r s

Re a d y - M x , I nc . v . Ce me nt M ons Loc al 520 , 779 F. 2d 320 ( 6 t h i as

Ci r . 1 985) ; Gi f f or d v . Ci t y of Gat l i nbur g, 900 S. W 2d 293 .

( Te n n . App. 1995) .

Fi na l l y, de f e nda nt a r gue s pl a i nt i f f ' s c l a i m woul d b e b a r r e d unde r t he doc t r i ne of j us t i f i c a t i on. I t a r gue s i t s a c t i o n s we r e pr i vi l e ge d a nd j us t i f i e d, a nd i n f a c t i t ha d s u c h d u t y unde r a ny of t he s e c i r c ums t a nc e s , i . e . , whe n a pe r s on s t a n d s i n a pos i t i on of r e s pons i bi l i t y t o a not he r , whe n t he i n t e r f e r e nc e i s t o pr ot e c t t he publ i c we l f a r e , a nd whe n one

h a s a dut y t o pr ot e c t t h e we l f a r e of a not he r . M f f or d v . Ci t y e

o f Du p ont oni a, 49 Te nn. App. 349, 354 S. W 2d 823 ( 1961) . .

Es s e nt i a l l y, De f e nd a nt a r gue s i t ha d t he r i ght t o t e l l

M l o n e of Col l i ns ' a a c t i v i t i e s be c a us e M l one wa s a c us t ome r a

a n d s t oc khol de r i n t he b a nk a nd wa s a gua r a nt or of W a nd W SE ST

not e s . De f e nda nt f ur t he r a r gue s s umma r y j udgme nt i s a pp r o p r i a t e on t hi s i s s u e be c a us e t he a l l e ge d s t a t e me nt s t h a t

Co l l i n s wa s s t e a l i ng M l one bl i nd a r e i na dmi s s i bl e he a r s a y a n d a

a r e n o t s ubj e c t t o c ons i de r a t i on on a mot i on f or s umma r y j u d g me nt , T. R. C. P. Rul e 56. 06 a nd t ha t t he r e ma i ni ng a d mi s s i bl e e vi de nc e wou l d be a r out t he e l e me nt s of j us t i f i c a t i on.

W c a nnot a gr e e . e Fi r s t , M f f or d t e a c he s t ha t e

j us t i f i c a t i on i s a ppr op r i a t e i f :

One who i s c h a r ge d wi t h r e s pons i bi l i t y f or t he

we l f a r e of a not he r i s pr i vi l e ge d pur pos e l y t o c a us e hi m not t o pe r f or m a c ont r a c t , or t o e nt e r i nt o o r c ont i nue a bus i ne s s r e l a t i on, wi t h a t hi r d pe r s on i f t he a c t or ( a ) doe s not e mpl oy i mpr ope r me a ns a nd ( b ) a c t s t o p r ot e c t t he we l f a r e of t he ot he r . "

I d. , c i t i ng Re s t a t e me nt of Tor t s , Vol . 4, Se c . 7 70.

Advi s i ng s ome one t ha t t he i r bus i ne s s a s s oc i a t e i s s t e a l i ng t he m bl i nd i s a que s t i ona bl e ma nne r of i nf or mi ng of

p r o b l e ms wi t h a l oa n. M e ove r , t he e vi de nc e t ha t ba nk or

o f f i c e r s s a i d Col l i ns wa s " s t e a l i ng [ hi m] bl i nd" i s not n e c e s s a r i l y i na dmi s s i bl e . Thos e s t a t e me nt s c oul d be n o n h e a r s a y ope r a t i ve f a c t s whi c h a r e a dmi s s i bl e . N. Cohe n, D. Pa i n e , S. She ppe a r d, Te nne s s e e Law of Ev i de nc e , Se c ond Ed i t i o n, 801. 5 ( 1990) . " Ve r ba l a c t s " ma y c a us e l e ga l c o n s e q ue nc e s whol l y a pa r t f r om t he t r ut h or f a l s i t y of t he wo r d s . An a na l ogy c a n be dr a wn t o a de f a ma t i on a c t i on, whe r e t h e p l a i nt i f f mus t pr ove t he de f e nda nt s poke or wr ot e t he d e f a ma t or y wor ds . The p l a i nt i f f ' s pur pos e i s t o e s t a bl i s h t ha t t he s t a t e me nt wa s ma de , n ot t o of f e r i t t o pr ove t he t r u t h of t he ma t t e r a s s e r t e d i n t he s t a t e me nt . Te nne s s e e La w o f Ev i de nc e , I d.

The r e c or d p r e s e nt s a n i s s ue of ma t e r i a l f a c t a s t o wh a t v e r s i on of e ve nt s oc c ur r e d. Summa r y j udgme nt on t he i s s u e of j us t i f i c a t i on i s not a ppr opr i a t e .

For t he f or e go i ng r e a s ons we a f f i r m t he Tr i a l Co u r t ' s j udgme nt i n pa r t a nd va c a t e i n pa r t a nd r e ma nd f or f u r t h e r pr oc e e di ngs i n a c c or da nc e wi t h t hi s opi ni on.

Cos t s o f a ppe a l a r e a s s e s s e d one - ha l f t o e a c h pa r t y .

________________________ He r s c he l P. Fr a nks , J .

CONCUR:

_ _ _ _ _ ______________________ Do n T. M M r a y, J . c ur

_ _ _ _ _ _ _____________________ Ch a r l e s D. Sus a no, J r . , J .