FILED

May 29, 1998

Cecil W. Crowson

Appellate Court Clerk

DWAYNE HAWKINS and AL )

GOSSETT, ) Davidson Circuit

) No. 96C-2528

Plaintiffs/Appellants, )

)

VS. )

)

PATRICK A. HART, SUPERIOR )

MOTORS, INC., NELSON BOWERS, II, )

and BOWERS TRANSPORTATION )

GROUP, LLC, ) Appeal No.

) 01A01-9707-CV-00294

Defendants/Appellees. )

IN THE COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEAL FROM THE CIRCUIT COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

HONORABLE BARBARA N. HAYNES, JUDGE

Steven A. Riley, #6258

BOWEN, RILEY, WARNOCK & JACOBSON, PLC

1906 West End Avenue

Nashville, TN 37203

ATTORNEY FOR PLAINTIFFS/APPELLANTS

John P. Branham, #2552

Kathryn Barnett, #15361

BRANHAM & DAY, P.C.

150 Fourth Avenue North

First Union Tower, Suite 1910

Nashville, TN 37219

ATTORNEY FOR DEFENDANTS/APPELLEES,

PATRICK A. HART and SUPERIOR MOTORS, INC. 

H. Wayne Grant, #1573

David M. Elliott, #17966

GRANT, KONOALINKA & HARRISON, P.C.

Suite 900 Republic Centre

633 Chestnut Street

Chattanooga, TN 37450

ATTORNEYS FOR APPELLEES, NELSON E. BOWERS, II 

and BOWERS TRANSPORTATION GROUP, LLC

MODIFIED AND REMANDED.

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

BEN H. CANTRELL, JUDGE

WILLIAM C. KOCH, JR., JUDGE
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DWAYNE HAWKINS and AL GOSSETT,)

 ) 

Plaintiffs/Appellants, )

 )

VS. ) Davidson Circuit

 ) No. 96C-2528

PATRICK A. HART, SUPERIOR )

MOTORS, INC., NELSON BOWERS, II, )

and BOWERS TRANSPORTATION )

GROUP, LLC, ) Appeal No.

 ) 01A01-9707-CV-00294

Defendants/Appellees. )

O P I N I O N

This appeal represents a consolidation of two appeals in the same case by order of this

Court entered on October 22, 1997, since which time the captioned number has appeared on all

proceedings. These consolidated appeals are from rulings of the Trial Court in a single case

involving the efforts of plaintiffs to purchase an automobile dealership. The issues are best

understood from a detailed narration of the facts and subsequent proceedings.

Patrick Hart is a wealthy Seattle businessman. In February 1993 he struck up a

conversation with Mark Chmelar at a yacht show in Miami. Mr. Chmelar owned automobile

dealerships in Nashville and Tallahassee. Mr. Chmelar suggested that Mr. Hart acquire an

interest in the Nashville dealership, and Mr. Hart eventually agreed even though he had no prior

experience in the automobile business. Accordingly, in November 1993, Mr. Hart acquired a

50% interest in Superior Motors, Inc. Mr. Hart agreed that Mr. Chmelar would continue to

manage the day-to-day operations of the dealership. At the outset, the arrangement proved

satisfactory enough that Mr. Hart agreed in mid-1995 to purchase an interest in another

automobile dealership owned by Mr. Chmelar in Tallahassee, Florida.

First Tennessee Bank informed Mr. Hart in March 1995, that the Superior Motors

dealership in Nashville was $1,000,000 out of trust on its floor plan loan. Even though Mr.

Chmelar assured Mr. Hart that there were no problems with the dealership, Mr. Hart received

another call from the bank in June 1995 stating that the dealership was now $1,600,000 out of
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 trust. During the next two months, Mr. Hart discovered that Mr. Chmelar had purchased an

airplane using Superior Motors credit, that the dealership’s tax returns reported that the

dealership had sustained a $714,000 operating loss, and that Mr. Chmelar had been paying

himself an annual salary of $351,357 rather than the $144,000 agreed upon. Finally, in August

1995, First Tennessee Bank informed Mr. Hart that it intended to call his letter of credit and

require him to honor his personal guarantee unless the dealership’s financial problems were

quickly rectified.

Mr. Hart realized that he was in a precarious situation because the Nashville dealership

was $3,500,000 in debt. He decided to get out of the automobile business as quickly as he could

and retained James Cameron, a lawyer in Nashville, to assist him in resolving the problem with

the Nashville dealership. On September 5, 1995, Mr. Hart faxed Mr. Chmelar a letter stating that

he had discovered the financial irregularities at the dealership and that intended to remove Mr.

Chmelar as president of the corporation.

In the meantime, Mr. Chmelar had entered into discussions about the sale of the

Tallahassee dealership with Dwayne Hawkins, a Florida businessman engaged in the automobile

business, and his partner, Al Gossett who lived in Memphis . Mr. Gossett and Mr. Hawkins were

interested in purchasing not only the Tallahassee dealership but also the Nashville dealership.

On September 7, 1997, Mr. Gossett telephoned Mr. Hart in Seattle to inform him that he and Mr.

Hawkins were interested in acquiring both dealerships. Seeing this as an opportunity to get out

of the automobile business quickly, Mr. Hart agreed to meet in Memphis on September 10, 1995

to discuss the sale of the dealerships. Mr. Gossett and Mr. Hawkins agreed to make an offer for

both dealerships, and during the evening of September 10, 1995, Mr. Gossett telephone Mr. Hart

in Nashville to inform him that he would present an offer to purchase the two dealerships the

next day. 
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On the morning of September 11, 1995, Mr. Hart and Mr. Gossett met over breakfast in

Mr. Hart’s hotel room, and Mr. Gossett presented Mr. Hart with proposed contracts to acquire

both the Tallahassee and the Nashville dealerships. After negotiating several of the terms and

interlineating several changes in the documents, both Mr. Hart and Mr. Gossett signed two sets

of contract documents -one set pertaining to the Tallahassee dealership and the other set

pertaining to the Nashville dealership. Each set of documents consisted to an “Agreement for the

Purchase and Sale of Assets” and an “Agreement for Interim Management Agreement” [sic].

After Mr. Hart executed the agreements, Mr. Gossett obtained Mr. Chmelar’s signature on both

sets of agreements.

Mr. Hart and Mr. Gossett met later in the day with Mr. Hart’s lawyer, Mr. Cameron. Mr.

Hart informed Mr. Cameron “I got this thing solved. Here are two agreements. They’re all

signed, put to bed, and I can go home.” After Mr. Gossett left to go to the Nashville dealership,

Mr. Cameron informed Mr. Hart that the contracts were not financially advantageous to him and

that he could get a higher price for the dealerships. Later, Mr. Cameron informed Mr. Hart that

there was not enough money for Hart in the deal and that “the agreements would not work.” 

On September 12, 1995, Mr. Cameron sought Mr. Gossett’s assistance in convincing Mr.

Chmelar to relinquish his stock in the Nashville dealership. Mr. Gossett was willing to help

because he maintained a cordial relationship with Mr. Chmelar and because he understood that

his contract to purchase the Nashville dealership would be worthless if the bank foreclosed. Mr.

Gossett convinced Mr. Chmelar to relinquish his stock for $1,000 and Mr. Hart’s agreement to

pay their joint obligation to the bank. Mr. Chmelar conveyed his shares to Mr. Hart on

September 12, 1995, and on September 13, 1995, Mr. Gossett terminated Mr. Chmelar as

president of both dealerships with Mr. Hart’s blessing.

On September 14, 1995, Mr. Cameron demanded that Mr. Gossett release the agreements

to sell both the Tallahassee and the Nashville dealership. He stated that Mr. Hart would not
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consider performing or even amending the agreements unless Mr. Gossett agreed to release the

agreements executed on September 11, 1995. Mr. Gossett declined to sign a release.

Mr. Hart eventually sold the Tallahassee dealership to Mr. Gossett and Mr. Hawkins in

February 1996 based on an amended version of the agreement signed on September 11, 1995.

They never finalized the agreement concerning the Nashville dealership because Mr. Hart had

entered into negotiations with Nelson Bowers, II, an automobile dealer from Chattanooga, to sell

the dealership for a price higher than the price agreed to in the September 11, 1995 agreement

with Mr. Gossett. When Mr. Gossett learned of these negotiations, he informed Mr. Bowers in

a June 25, 1996 letter that he was seeking to close his September 11, 1995 contract with Mr.

Hart.

On July 8, 1996, Mr. Gossett and Mr. Hawkins filed suit against Mr. Hart and Superior

Motors, Inc. in the Chancery Court for Davidson County seeking to enforce the September 11,

1996 contract. They sent a copy of their complaint to Mr. Bowers several weeks later. Despite

the notice of the contractual dispute, Mr. Bowers signed a contract on August 16, 1996, to

purchase the Nashville dealership. Mr. Bowers later assigned his interest in this contract to

European Motors, Inc., a company in which he owns a 50% interest. On September 19, 1996,

Mr. Gossett and Mr. Hawkins filed an amended complaint adding Mr. Bowers and Bowers

Transportation Group as defendants. On October 17, 1996, Mr. Hart and Superior Motors, Inc.

conveyed the assets of the dealership to European Motors, but Mr. Bowers also required Mr. Hart

to agree to indemnify him and European Motors against any claims by Mr. Gossett and Mr.

Hawkins.

Following substantial discovery, Mr. Hart and Superior Motors, Inc. moved for summary

judgment on the ground that the September 11, 1995 Agreement for the Purchase and Sale of

Assets was too uncertain and indefinite to be enforced. Specifically, they based their defense on

two provisions of the contract -one that left the negotiation of the lease of the premises open for
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future negotiation and another providing that the parties would later agree upon a price for the

Nashville dealership’s inventory of new vehicles. Mr. Hart also asserted that he could not be

held personally liable on the contract even though he had signed it as guarantor. Mr. Bowers and

his corporations also moved for summary judgment on the constructive trust claim. The trial

court granted both motions in orders entered on April 21 and 28, 1997. The trial court reasoned

that the September 11, 1995 agreement was too indefinite to be enforceable under Florida law

and that impressing a constructive trust on the assets of Superior Motors was not an appropriate

equitable remedy. The trial court did not specifically address the issue of Mr. Hart’s liability as

guarantor of the September 11, 1995 contract.

Summary judgment is not a substitute for the trial of disputed factual issues. Taylor v.

Nashville Banner Publishing Co., Tenn. App. 1978, 573 S.W.2d 476; Cert. Den. 441, U.S. 923,

99 S.Ct. 2032, 60 L.Ed.2d 396; Gonzales v. Allman Constr. Co., Tenn. App. 1993, 857 S.W.2d

42.

A summary judgment is to be rendered only when it is shown that there is no genuine

issue as to a material fact and that the moving party is entitled to a judgment as a matter of law.

Daniels v. White Consolidated Industries, Inc., Tenn. App. 1985, 692 S.W.2d 422; Blazer Fin.

Svcs., Inc., v. Diddle, Tenn. App. 1983, 648 S.W.2d 257.

On appeal, no presumption of correctness attaches to decisions granting summary

judgment, because they involve only questions of law. Hembree v. State, Tenn. 1996, 925

S.W.2d 513.

 

The imposition of sanctions or discretionary costs is subject to the discretion of the trial

court, but is also subject to review on appeal, and a reversal is justified where the result is clearly

erroneous. Baker v. Nationwide Mutual Fin. Ins. Co., Tenn. App. 1982, 646 S.W.2d 440.
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In the order of their priority, the principal issues presented to this Court appear to be as

follows:

1. Does the September 11, 1995 agreement for the purchase and sale of the assets

of the Nashville dealership evidence an enforceable contract?

(This agreement was executed in Tennessee, its subject matter was Tennessee

property and it was to be performed in Tennessee. Nevertheless, paragraph 22 of the

agreement provides:

22 Governing Law: the laws of the State of Florida shall

govern all questions concerningthe construction, validity, and

interpretation of this agreement.)

In Truly Nolen Inc. v. Atlas Moving & Storage Warehouse, Inc., Fla. App.3d,1961,

125 So.2d 903, a contract requiring plaintiff to pay the cost of “an appropriate advertising

sign” was held unenforceable for vagueness as to size or specifications of the sign.

Plaintiff cites Blackhawk Heating. & Plumbing, Inc., v. Data Lease Fin. Corp., Fla.,

1974, 302 S.W.2d 404, wherein plaintiff brought a suit for specific performance of an option

to purchase bank stock. The Trial Court denied specific performance. The intermediate

court affirmed. The Supreme Court reversed and said: 

Data Lease relies upon Truly Nolen, Inc. v. Atlas

Moving and Storage Warehouse, Inc., 125 So.2d 903

(Fla.App.3d, 1961), writ discharged 137 So.2d 568

(Fla.1962), which holds that if an agreement is so vague and

uncertain in the specifications of the subject matter that the

Court cannot identify that subject matter or determine its

quality, quantity or price, it will be unenforceable. This case

involved “a latent ambiguity in the meaning of an essential

word,” which was not reconciled by construction of the

parties. 

- - - -

“[T]he fact that an executed written contract contains

within itself difficulties of construction about which the

parties disagree does not enable the parties to contend that the

minds of the parties never met, since by signing the writing

the parties bind themselves to such interpretation as

the court may place upon the words and symbols employed

by them.” 17 Am.Jur.2d, Contracts, § 22, at 359.
-8-

[5] Even though all the details are not definitely

fixed, an agreement may be binding if the parties agree on

the essential terms and seriously understand and intend the

agreement to be binding on them. A subsequent difference

as to the construction of the contract does not affect the

validity of the contract or indicate the minds of the parties

did not meet with respect thereto. 17 C.J.S. Contracts § 31.

The aforementioned rule of law has been codified

with respect to sales, with the adoption in Florida of the

Uniform Commercial Code. Fla.Stat. § 672.2-204, F.S.A.

However, the statute relates to a contract for the sale of

goods.

 “(1) a contract for sale of goods may be

made in any manner sufficient to show

agreement, including conduct by both parties

which recognizes the existence of such a

contract.

 “(2) An agreement sufficient to constitute

a contract for sale may be found even though

the moment of its making is undermined.

“(3) Even though one or more terms are left

open a contract for sale does not fail for

indefiniteness if the parties have intended to

make a contract and there is a reasonably

certain basis for giving an appropriate

remedy.” (Emphasis supplied.)

- - - -

[7] As Professor Corbin stated in his treatise, Corbin

on Contracts, Vol. I (1963), § 97, at 424:

 “If the parties provide a practicable,

objective method for determining this price or

compensation, not leaving it to the future will

of the parties themselves, there is no such

indefiniteness or uncertainty as will prevent

the agreement from being an enforceable

contract.”

The contract should not be held void for uncertainty

unless there is no other way out. As was stated by Justice

Cardozo in Heyman Cohen & Sons, Inc. v. M. Lurie Woolen

Co., Inc., 232 N.Y. 112, 133 N.E. 370, 371, “Indefiniteness

must reach the point where construction becomes futile.”

Again turning to Professor Corbin, he states at § 95,

page 400:

 “If parties have concluded a transaction in

which it appears they intend to make a

contract, the court should not frustrate their

intention if it is possible to reach a fair and
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just result, even though this requires a choice

among conflicting meanings and the filling of

some gaps that the parties have left.”

Williston on Contracts, (3rd Edition, 1968), Vol. 11,

§ 1424, page 813, states:

“The law does not favor, but leans against the

destruction of contracts because of

uncertainty; and it will, if feasible, so

construe agreements as to carry into effect

the reasonable intentions of the parties if that

can be ascertained.”

Processor Corbin again states at § 95, page 396:

 “In considering expressions of agreement,

the court must not hold the parties to some

impossible, or ideal, or unusual standard. It

must take language as it is and people as they

are. All agreements have some degree of

indefiniteness and some degree of

uncertainty.”

Professor Williston states at page 819:

 “It seems probable that the difficulty

regarding uncertaint y has been

overemphasized; certainly, it should not be

allowed to hamper or restrict equitable relief

further than necessity requires.” (Emphasis

supplied.)

In Stone v. Barnes-Jackson Co., Inc., 129 Fla. 816,

176 So. 767 (1937), this Court held that specific

performance could be granted on an oral contract to execute

a lease “in the usual form customarily used in Miami.”

The option agreement in the case sub judice was not

so uncertain in its terms as to require dismissal of the

specific performance suit. 

(Blackhawk Heating and Plumbing Co., Inc. v. Data Lease

Financial Corp., 302 So.2d at 408-09.)

In Jacksonville Port Authority v. Johnson, Fla.App. 1993, 624 So.2d 313, a

contractor sued the authority upon a work order to repair a crane. The order was later

awarded to another contractor. A jury found for the plaintiff. The appellate court reversed

and said:

1,2 [w]hile it is not necessary that all details of an

agreement be fixed in order to have a binding agreement
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between parties, if there has been no agreement as to

essential terms, an enforceable contract does not exist.

Williams v. Ingram, 605 So.2d 890, 893 (Fla. 1st DCA1992);

Blackhawk Heating and Plumbing Co., Inc. v. Data Lease

Financial Corp., 302 So.2d 404 (Fla. 1974).

So long as any essential matters remain open

for further consideration, there is no

completed contract. In order to create a

contract it is essential that there be reciprocal

assent to a certain and definite proposition.

Mann v. Thompson, 100 So.2d 634, 637 (Fla. 1st DCA1958).

Failure to sufficiently determine quality, quantity, or price

may preclude the finding of an enforceable agreement. See

Blackhawk Heating and Plumbing Co., Inc. at 408, citing

Truly Nolen, Inc. v. Atlas Moving and Storage Warehouse,

Inc., 125 So.2d 903 (Fla. 3d DCA1961), cert. discharged,

137 So.2d 568 (Fla.1962).

 [3] Where the parties are continuing to negotiate as to

these essential terms, there can be no meeting of the minds.

Central Properties, Inc. v. William H. Robbinson, 450 So.2d

277, 280 (Fla. 1st DCA 1984), modified, 468 So.2d 986

(Fla.1985).

 [4] In the instant case, while a general understanding may

have existed in April of 1989, concerning appellees’

continued participation as to phase III of the project, clearly

no enforceable contract existed. The scope of the work 

contemplated in phase III was not presented until late July of

1989. Additions continued to be made after that time. There

was never an agreed-upon price between the parties.

Correspondence between the parties indicated that

negotiations between the parties as to these essential terms

were continuing as late as January 1990. Letters and

correspondence from appellee confirm that it still felt that it

had not been awarded these projects, but was still seeking

acceptance of its proposals. Under these circumstances, no

binding agreement existed between the parties. 

(Jacksonville Port Authority v. Johnson, 624 So.2nd at 315.)

It appears from the foregoing that the statutory and case law of Florida requires that

the present controversy be resolved in the light of the intent of the parties as expressed in

their written instrument, but the severability of the various undertakings must be decided in

the light of the circumstances under which the instrument was signed.
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Appellees insist that the document was hurriedly prepared and signed as an

“agreement to agree.” Whatever the brief time frame of discussion before signing, it is

uncontroverted that there was time to have legal counsel prepare a 10-page document which

was signed by the parties after numerous initialed interlineations.

For the purpose of summary judgment, it cannot be found conclusively from the

present record that no part of the buy-sell agreement contains a binding contract. Paragraph

21 of Exhibit A reads as follows:

21. Severability: Whenever possible, each

provision of this Agreement shall be interpreted in such

manner as to be effective and valid under applicable law, and

if any provisions of this Agreement are determined to be

unenforceable or illegal, such provisions shall be deemed

severed from the other provisions which shall remain valid

and enforceable.

According to this provision, a part of the agreement may be enforceable even though

other parts may not be enforceable.

By paragraphs 1.1, 1.2, 5.1 and 5.2, the parties unequivocally agreed to the sale and

purchase of specified vehicles at specified prices.

Unless the parties subsequently agreed upon prices of used cars, it does not appear

that a binding agreement exists as to used cars.

Unless the parties subsequently agreed upon a person to inventory the parts and

accessories, it does not appear that there is a binding agreement in regard to this asset.

It appears that the parties agreed upon the prices of items mentioned in paragraphs

1.5, 1.6, 5.5 and 5.6.
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A problem exists as to the claim against Nelson Bowers, II and Bowers

Transportation Group, LLC. Before these defendants can be held liable, it must appear that

plaintiffs had an enforceable right to acquire an asset which was acquired by these

defendants.

A further problem exists regarding the right of plaintiffs to discover certain

documents in the possession of counsel for defendant, Hart, in spite of the asserted attorneyclient privilege and other documents in the possession of the banks of Hart and Superior

Motors. On April 21, 1997, the Trial Court entered the following order:

The matter came before the Court upon the motion of

Defendants Superior Motors, Inc. and Patrick A. Hart for

summary judgment. Based upon the arguments of counsel,

the memorandum of law and supporting documents, the

Court hereby grants the Defendants’ Motion for Summary

Judgment and dismisses this case based upon the following

findings:

1. The parties entered into a contract on

September 11, 1995 entitled “Asset Purchase Agreement”

that called for the application of Florida law to all questions

concerning the construction, validity, and interpretation of

the agreement.

2. Under Florida law, the provisions of the

agreement for the purchase of the assets were too uncertain

and indefinite to be enforced. The plaintiffs, therefore, are

not entitled to enforce the purchase of the assets under the

provisions of the September 11, 1995 agreement.

WHEREFORE, it is hereby ORDERED that the

Defendants’ Motion for Summary Judgment is granted and

this case is dismissed in its entirety with the costs taxed

against the plaintiffs and their surety for which execution

may issue, if necessary.

On April 28, 1997, the Trial Court entered the following order:

ORDER

The following motions were heard by this Court on

December 6, 1996:

1) Plaintiffs’ Motion to Compel;
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2) Defendants Superior Motors, Inc.’s 

(“Superior Motors”) and Patrick A. Hart’s

(“Hart”) Motion for a protective Order and to

Quash the Subpoena of first Tennessee Bank

National Association (“First Tennessee”);

3) Motion of Harwell Howard Hyne Gabbert &

Manner, P.C. (“Harwell Howard”) to Modify

Plaintiffs’ Subpoena Duces Tecum;

4) Motion of Harwell Howard for a Protective

Order.

After consideration ofthe motions, responses, replies

and arguments by counsel, this Court ORDERS:

Plaintiffs’ Motion to Compel

With respect to Interrogatory #2 requesting a

description of withheld documents, Plaintiff’s motion to

compel is DENIED at this time. After the deposition of

James Cameron, plaintiffs may for good cause re-petition

this Court to review in camera the withheld documents

and/or to require that defendants provide the Court with a

general description of the withheld documents and/or to

grant any other further relief.

With respect to Document Production Request #5

requesting personal financial statements, Defendant Hart

shall produce his most current financial statement as of

September 11, 1995 (including all attachments thereto) that

was provided to First Tennessee.

With respect to Document Production Request #22,

Defendant Hart shall produce transcripts of all depositions in

which he was deposed in any lawsuit that arises from his

ownership interest in Superior Motors that are in his

possession or in the possession of his past or present

attorneys.

Superior Motors’ and Hart’s Motion for a Protective

Order and to Quash the Subpoena 

of First Tennessee

With respect to Superior Motors’ and Hart’s motion

to quash and motion for a protective order, the subpoena and

notice of deposition of First Tennessee is modified to limit

its scope as follows:

1) to include only documents dated, signed,

received, sent out, or created during the

period from April 1, 1993 to September 15,

1995;
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2) to exclude all personal financial documents of

Hart except the most current personal

financial statement of Hart as of September

11, 1995.

Motion of Harwell Howard to Modify Plaintiffs’

Subpoena Duces Tecum

Harwell Howard’s motion to modify plaintiffs’

subpoena is GRANTED. The subpoena is modified to limit

the scope of the subpoena to exclude billing statements sent

to Superior Motors and Hart. After the deposition of James

Cameron, plaintiffs may for good cause re-petition this Court

to review in camera the withheld documents and/or to

require that defendants provide the Court with a general

description of the withheld documents and/or to grant any

other further relief.

Motion of Harwell Howard for a Protective Order

Harwell Howard’s motion for a protective order is

GRANTED. Plaintiffs’ counsel shall not ask any questions

at the deposition of Harwell Howard’s custodian of records

that are designed to elicit information regarding documents

that were withheld on the basis of attorney-client privilege or

work product doctrine. After the deposition of James

Cameron, plaintiff’s may for good cause re-petition this

Court to review in camera the withheld documents and/or to

require that defendants provide the Court with a general

description of the withheld documents and/or to grant any

other further relief.

During discovery, Messrs. Gossett and Hawkins submitted interrogatories and a

request for production of documents requesting both Mr. Hart and his lawyer to produce

documents and other materials that were discoverable under Tenn. R. Civ. P. 26. Mr. Hart

responded with a blanket refusal to provide the information on the ground that it was “not

required by the Tennessee Rules of Civil Procedure.” Even though the defendants indicated

that they were withholding two file boxes containing approximately two thousand pages of

documents based on their claim of privilege, the trial court declined to order the defendants

to identify the documents they were withholding.

The Tennessee Rules of Civil Procedure embody a broad policy favoring the

discovery of relevant, nonprivileged information. See Pettus v. Hurst , 882 S.W.2d 783, 786

(Tenn. Ct. App. 1993). Since claims of privilege are contrary to the general rule favoring
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discovery, see Jaffee v. Redmond, 518 U.S. 1, ___, 116 S. Ct. 1923, 1928 (1996), they

should be construed narrowly, and the burden of establishing the existence of the privilege

is on the party asserting it. See 4 James W. Moore, et. al., Moore’s Federal Practice ¶

26.11[1] (2d ed. 1996) (“Moore’s Federal Practice”). Accordingly, the courts should not

permit parties to use a bald assertion of privilege as grounds for a wholesale refusal to

participate in discovery. Instead, they should require parties asserting a privilege to provide

them with a log or index of the materials being held under a claim of privilege in order to

enable them to rule on the privilege claim. See 8 Charles A. Wright, et. al., Federal

Practice and Procedure § 2016.1, at 230-235 (2d ed. 1994); Moore’s Federal Practice ¶

26.11[1].

The purpose of the attorney-client privilege invoked by Mr. Hart is to shelter his

communications with his lawyer. See Smith County Educ. Ass’n v. Anderson, 676 S.W.2d

328, 333 (Tenn. 1984); Hazard v. Hazard, 833 S.W.2d 911, 914 (Tenn. Ct. App. 1991);

Tenn. Code Ann. § 23-3-105 (1994). Mr. Cameron has become a pivotal fact witness in this

case because of his investigation of Mr. Chmelar’s activities and his negotiations with

Messrs. Gossett and Hawkins and others concerning the various contracts to sell the

Nashville dealership. Based on the facts before us, many of his communications do not

appear to be privileged. Accordingly, on remand, the trial court should require Mr. Hart to

provide an index containing a description of the materials being withheld in order to enable

the court to determine whether the claim of privilege is being properly asserted.

The trial court also limited Messrs. Gossett’s and Hawkins’s discovery of Mr. Hart’s

and the dealership’s records at First Tennessee Bank to the period of April 1, 1993 to

September 15, 1995. Tenn. R. Civ. P. 26.02(1) permits the discovery of information that

“appears reasonably calculated to lead to the discovery of admissible evidence.” The

evidence indicates that Mr. Hart and the Nashville dealership continued its relationship with

First Tennessee Bank until October 1996. Accordingly, we do not perceive a basis for the
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trial court’s decision to limit this discovery request. On remand, the trial court should

modify its order to permit additional discovery of the First Tennessee Bank records, subject

of course to Mr. Hart’s right to seek a protective order with regard to specific documents

for good cause shown.

Meanwhile, the judgment for discretionary costs is vacated, subject to reinstatement,

if justified.

Plaintiffs’ fourth issue raises the question of the tort of interference with economic

advantage. That question is not controlled by Florida law, but lex fori, Tennessee law. In

Nelson v. Martin, Tenn. 1997, 958 S.W.2d 643, the Supreme Court refused to recognize the

tort of interference with prospective economic advantage.

Based upon the present record, the foregoing disposes of the issues presented by the

parties as follows:

The purchase of certain assets of the dealership is enforceable despite failure to agree

upon the price of other assets.

The agreement imposes individual liability upon Hart as guarantor to the extent of

the liability of Superior Motors, Inc.

Under the circumstances of the present case, it was not error for the Trial Court to

refuse to impose a constructive trust on assets conveyed to a third party. The equitable

remedy of constructive trust is appropriate only when the remedy of damages is unavailable.

Browder v. Hite, Tenn. App. 1980, 602 S.W.2d 489, and authorities cited therein. Plaintiffs

have the remedy of recovery of damages.
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Tennessee does not recognize the tort of prospective economic advantages. The Trial

Court correctly dismissed the counterclaims of Messrs. Gossage and Hart for interference

with prospective economic advantage.

Plaintiffs have a limited right of discovery to be fixed by the Trial Court after further

pleading and hearing. As above indicated, the Trial Court in effect reserved judgment upon

the claim of confidential privilege awaiting the tender or general description of material

claimed to be privileged. 

No reversible error is found in the discretionary denial of leave to amend the

complaint.

The award of discretionary costs is vacated.

The dismissal of the counterclaim should await further hearings by the Trial Court.

As a result of all the foregoing, the judgment of the Trial Court is modified to

conform to the holdings herein, and the cause is remanded to the Trial Court for further 

procedure in conformity with this opinion. Costs are assessed against the appellees.

MODIFIED AND REMANDED.

__________________________________

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

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BEN H. CANTRELL, JUDGE

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WILLIAM C. KOCH, JR., JUDGE