Hawkins v Hart

• Decision Date: 15 November 2001
• Docket Number: 00-02449
• Citation: 86 S.W.3d 522
• Court: Tennessee Court of Appeals
• Parties: DWAYNE HAWKINS, et al. v. PATRICK A. HART, et al

DWAYNE HAWKINS, et al. v PATRICK A. HART, et al.

No. M2000-02449-COA-R3-CV

January 29, 2001 Session

IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE

Filed November 15, 2001

Appeal from the Circuit Court for Davidson County, No. 96C-2528

Barbara N. Haynes, Judge

This matter began when Plaintiffs signed an agreement to purchase an automobile dealership from Defendant, Patrick Hart. Defendant Hart refused to honor this agreement and later agreed to sell the dealership to Defendant, Nelson Bowers. The current case flows from these breach of contract and inducement of breach of contract actions previously dismissed by the trial court and appealed to this Court. We are now asked to determine whether the trial court correctly applied the Court of Appeals decision in this matter. Plaintiffs appeal two orders issued by the trial court on remand: (1) an order dismissing claims for conversion and interference with business relations against the Bowers Defendants, reinstating the discretionary costs previously vacated by this Court in favor of the Bowers Defendants, and denying Plaintiffs' motion to amend to add additional claims and parties; and (2) a second order dismissing Plaintiffs' separate action against European Motors and Sonic Automotive, parties whom Plaintiffs had previously tried to join in the original action. We find that the trial court correctly interpreted and applied the Court of Appeals decision and affirm both orders in their entirety.

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 Patricia J. Cottrell, J., joined.

Steven A. Riley, Katharine R. Cloud, and Taylor A. Cates, Nashville, Tennessee, for the appellants, Dwayne Hawkins and Al Gossett.

John P. Branham and Kathryn Barnett, Nashville, Tennessee, for the appellees, Patrick A. Hart, Superior Motors, Inc., Nelson Bowers, II, and Bowers Transportation Group, LLC.

H. Wayne Grant and David M. Elliott, Chattanooga, Tennessee, for the appellees, Bownel EMN, LLC f/k/a European Motors of Nashville, LLC, Sonic Automotive, Inc., Sonic Automotive of Tennessee, Inc., and Sonic Automotive of Nashville, LLC.

OPINION

I. Case History

This is round two of an action originally brought by Plaintiffs/Appellants, Dwayne Hawkins and Al Gossett, against Defendants/Appellees, Patrick Hart and Superior Motors, Inc. The facts regarding that original action are well set out in the previous opinion of this Court. See Hawkins v. Hart, No. 01A01-9707-CV-00294, 1998 WL 272926 (Tenn. Ct. App. May 29, 1998). In summary, Plaintiffs signed an agreement with Defendant, Patrick Hart, owner of Superior Motors, Inc. to purchase Superior Motors in September of 1995 (hereinafter the "Agreement.") Shortly after signing the Agreement, Hart determined that the terms were not advantageous to him and informed Plaintiffs that he was unwilling to proceed with the sale as agreed. The parties subsequently began negotiating new terms. Plaintiffs sued Hart and Superior Motors for breach of contract on July 8, 1996.

Hart entered into an agreement on August 16, 1996 with Nelson Bowers and his company, Bowers Transportation Group (hereinafter "the Bowers Defendants"), to sell Superior Motors to Bowers. On September 19, 1996, the Bowers Defendants were added to the 1996 law suit when the trial court granted Plaintiffs' Motion to Amend and allowed their First Amended Complaint, which asserted that Bowers held the assets of Superior in constructive trust and were liable for inducing breach of the agreement.

Prior to the actual sale of Superior Motors, Bowers assigned the contract to European Motors, another entity owned by Bowers. European Motors then purchased the assets of Superior Motors. In December 1996, Plaintiffs attempted to amend their Complaint to add European Motors as a defendant, asserting the same claims against them as previously asserted against the Bowers Defendants. In April 1997, Plaintiffs again attempted to amend their Complaint to add a new cause of action, interference with prospective economic advantage.

In addition, two motions for summary judgment were filed by Defendants in this matter and heard along with Plaintiffs' Motions to Amend. Hart and Superior filed a motion for summary judgment, which was granted in an Order dated April 21, 1997. In this Order, the trial court found that the Agreement was too uncertain to be enforced; therefore, Hart and Superior were entitled to summary judgment. The second motion was filed by the Bowers Defendants. In their motion, the Bowers Defendants argued that they were entitled to judgment as a matter of law since the undisputed evidence showed that the Agreement between Plaintiffs and Defendants, Hart and Superior, was breached prior to Bowers having any knowledge of the Agreement. Further, for the purposes of their summary judgment motion, Bowers specifically assumed the enforceability of the Agreement. The trial court also granted this second summary judgment motion and denied Plaintiffs' Motions to Amend in an Order dated April 28, 1997. Herein the court stated:

1.As a matter of law, neither Bowers nor European can be liable for inducement of breach of contract under Tennessee Code Annotated § 47-50-109.

2.The tort of intentional interference with a prospective economic advantage is not a recognized cause of action in Tennessee.

3.The imposition of a constructive trust on the assets of European purchased by Bowers from Superior Motors, Inc. is not an appropriate equitable remedy given the absence of liability under T.C.A. § 47-50-109, the facts as presented to the Court, and the findings in the Order granting Defendants Superior Motors, Inc., and Patrick A. Hart's Motion for Summary Judgment.

WHEREFORE, it is hereby ORDERED that Bowers' Motion for Summary Judgment is granted, Plaintiffs' Motion to Amend is denied, and this case is dismissed in its entirety with the costs taxed against the plaintiffs.

Plaintiffs then appealed the trial court's Orders to this Court. The issues presented for appeal, which are relevant to the matter currently at bar, were framed by Plaintiffs as follows:

I. Whether a written purchase agreement for an automobile dealership is too uncertain to be enforced simply because it is conditioned upon the buyer's ability to obtain an acceptable lease or purchase of the premises and provides that the buyer will buy such of seller's used cars as seller and buyer may agree upon.

. . . .

III. Whether a constructive trust may be imposed on the assets of Superior Motors where the assets were conveyed to a third party with knowledge of Appellants' written agreement to purchase those assets.

IV. Whether Tennessee recognizes the tort of interference with prospective economic advantage.

In summary, this Court, in Hawkins v. Hart, 1998 WL 272926, made the following determinations from these presented issues:

1)Tennessee does not recognize the tort of interference with prospective economic advantage, thus the trial court properly refused to allow the April 1997 amendment attempting to add this cause of action.

2)The purchase of certain assets of the dealership may be enforceable, and a contract may be found to exist, thus summary judgment granted in favor of Hart and Superior was reversed.

3)"[I]t was not error for the Trial Court to refuse to impose a constructive trust on assets conveyed to a third party." Id. at *10. A constructive trust is available only when damages are unavailable, and in this case, Plaintiffs have a remedy of damages.

4)No reversible error was found with regard to the trial court's discretionary denial of Plaintiffs' leave to amend their First Amended Complaint.

5)Discretionary costs were vacated subject to reinstatement.

The case was subsequently remanded for further proceedings.¹

Further developments occurred in the case between the time the trial court dismissed the case and the Court of Appeals' decision. The assets Superior Motors, Inc. were again sold, this time by European Motors to Sonic Automotive, Inc.

On remand to the trial court, it became evident that the parties disagreed on what had actually been decided by the trial and appellate courts. Plaintiffs filed another Motion to Amend Complaint, ostensibly to conform with the Court of Appeals opinion, and attached their Third Amended Complaint. This Complaint continued to allege the inducement claim against the Bowers Defendants, continued to request a constructive trust, attempted to add European and Sonic Automotive as additional defendants, and alleged four new causes of action against all Defendants: (1) conspiracy to breach a contract, (2) interference with contractual relations, (3) intentional interference with a business relationship, and (4) conversion. The Bowers Defendants filed a Motion to Dismiss and for Reinstatement of Award of Discretionary Costs stating that no causes of actions still remained against them. In its December 2, 1999 Order, the court, again, refused to allow amendment to the Complaint, dismissed the Bowers Defendants from the case and reinstated the award of discretionary costs. This appeal ensued.

Plaintiffs then proceeded to file a separate action against Sonic Automotive² and European Motors in chancery court. This 2000 Complaint re-alleged the four causes of action previously asserted against Sonic and European in Plaintiff's Third Amended Complaint but not allowed by the circuit court. Upon motion of Defendants, the case was transferred to the circuit court division that originally heard the matter. Defendants then filed a Motion to Dismiss, and the trial court dismissed the Complaint in its entirety by order dated September 26, 2000. Plaintiffs then also appealed the trial court's actions in dismissing this 2000 Complaint against the additional Defendants. The appeal from the 2000 action was consolidated with the appeal already filed...