# FILED

March 10, 2000 Cecil Crowson, Jr. Appellate Cou rt Clerk IN THE COURT OF AP PEALS OF TENNESSEE, AT JACKSON

____________________________________________________________ ) MANUFACTURER

S ) Shelby County Circuit Court CONSOLIDATION SERVICE, INC. , ) No. 89341-2 T.D. ) Plaintiff/Appella

nt, ) ) C.A. No. W1998-00889 -COA-R3-CV And ) W1998-00882-COA- R9-CV ) C. O. TURNER, III, ) ) Intervening

Plaintiff/Appella

nt, )

) VS. ) ) RICK RODELL, CORNE RSTONE ) SYSTEMS, INC., TIM CLAY, PAT ) NIEMAN, JERRY RIC E, BRUCE ) HALLMANN, JACK BI LLINGSLEY , ) JIM CHALTAS, GREG G MITCHELL , ) and ANGIE TAYLOR, ) ) Defendants/App

ellees, ) ) And ) ) RICARDO FERNANDEZ, GUY ) WALLACE and LARRY P RITCHETT , )

) Defendants/App

ellants. )

______________________________________________________________________________ From the Circuit Co

urt of Shelby

County at Memp

his. Honorable James F. Russell, Judge

Bruce S. Kramer , Jeffrey C. Smith , BOROD & KRAMER, P.C., Memphis, Tennessee Attorneys for Plaintiff/Appellant Manufacturers Consolidation Service, I nc., and Intervening Plai ntiff/Appe llant C. O. T urner , III. J. Alan Hanover , James R. Newsom

, III , HANOVER, WALSH, JALENAK & BLAI R, PLLC, Memphis, Tennessee Attorneys for Defendants/Appellants Ricardo Fernandez, Guy Wallace and Larry Pritchett and for Defendants/Appellees Rick Rodell, Cornerstone Systems, Inc., Tim Clay , Pat Nieman, Jerry Rice, Bruce Hallmann, Jack Billingsley, Jim Chaltas, Gregg Mitchell and Ang ie Taylor.

OPINION FIL

ED: AFFIRMED IN P

ART, REVERSED IN PA RT AND REMANDED FARMER, J. HIGHERS, J. : (Concurs) LILLARD, J. : (Concurs)1 As hereinafter explained, we will accept as true the complaint’s allegations unless they

were specifica

lly refuted

by the affi

davits submitted in su

pport of the individ

ual Defendants’ motions to dismiss for lack of personal jurisdiction.

In this consolid

ated appeal, the

parties ask this co

urt to review thre

e separate orders of the trial court. Plaintiff Manufacturers Consolidation Service, Inc. (MCS), appeals the trial court’s order dismissing its claims against Rick Rodell, Cornerstone Systems, Inc., a nd other named Defendants who are former employees of MCS. In the same order, the trial court dismissed the claims of Intervening Plaintiff C.O. Turner, II I, against Defendant Rick Rodell, and Turner has appealed this order, as well as a later order of the trial court which g ranted Rodell’s motion for summary judgment on a counterclaim against Turner. F inally, three of the individual Defendants, Ricardo Fernandez, Guy Wallace, and L arry Pritchett, appeal the trial court’s order denying their motions to dismiss for lack of personal jurisdiction. We reverse the trial court’s order of dismissal to the extent that it dismissed MCS’s claims against the Defendants, and we reverse the trial court’s order granting Rodell’s motion for summary judgment against Turner; however, we af

firm the trial cou

rt’s orders in all

other respects.

The present proceedings began in August 1997 when MCS filed a multi-count complaint against the Defendants alleging various business torts. Inasmuch a s the trial court ultimately di

smissed MCS’s compla

int without address

ing its merits, for

purposes of this ap

peal, we will accept a

s true most of the co

mplaint’s allega

tions. 1

In its complaint, MCS described itself as “an intermodal marketing company which arranges intermodal transportation services for shippers of full trailerloads of car go from point of origin to point of delivery.” MCS contracts with railroads to haul the cargo over long distances, and it contracts with over-the-road and local trucking companies to deliver carg o to, and pick up cargo from, rail ramps. MCS is a Tennessee corporation, and its principal place of business is in Memphis.

Prior to the dispute that precipitated this litigation, Defendant Rick Rodell was the president and fif

ty percent (50%) sharehold

er of MCS. As the re

sult of a previous l

awsuit brought by Intervening Plaintiff C.O. Turne r, III, to enforc

e a contract for the sale of stock, Rodell sold his 50% interest in MCS to Turner in April 1997. In connection with the sale,Turner, on beha lf of MCS, and Rodell e

xecuted a manag

ement contract p

ursuant to which Rod

ell agreed to perform management consulting services for MCS for an e ight-year term. MCS agreed to pay R odell a tota l of $2 mill ion un der th e cont ract a t the r ate of$250, 000 pe r year. In addition, Turner signed a promissory note in his individual capacity promising to pay Rodell the sum of $1 million over

a five-ye ar period. The pr

omissory note

specified that the

first installment of $100,000 would be due on April 14, 1998, the one-year anniversary of the stock sale. After the s

ale, Turner bec

ame the presiden

t and sole shareho

lder of MCS.

Approximately one week after the sale was consummated, Rodell incorporated a new company, Cornerstone Systems, I nc., and he became its president. Like MCS, Cornerstone is an intermodal marketing company based in Memphis, Tennessee.

MCS’s complaint asserted causes of action against the Defendants for misappropriation of trade secrets and unfair trade practices (count I ), procurement of breach of contract (count

II), inte ntional interfer

ence with business relationship (co unt III ), civil conspiracy (count IV), and bre ach of fiduciary duty (c

ount V). In addition, the complaint asserted claims for defamation (count VI) against some of the De fendants and a claim for breach of management contract (count VII ) against Rodell.

In support of these claims, the complaint alleged that, both prior and subsequent to the closing of t

he sale of Rodell’ s MCS stock to Turner , Rodell and the othe

r Defendants solicited MCS employ

ees to leave MCS an

d to work with Rodell a

nd Cornerstone. A

ccording to the complaint, the

Defendants deli

berately s et out to recruit ma

ny of MCS’s ke

y operation

s, sales, and administrative personnel. To substantiate these allegations, the complaint asserted that on June 16, 1997, Larry Pritchett, Ricardo Fernandez, and all of the e mployees in MCS’s Chicago, Illinois, office resigned en masse . The complaint further asserted that on June 17 and 18, 1997, Guy Wallace and all of the employee s in MCS’s Portsmouth, Virginia, office resigned

en masse . The resigning employees sent similar letters of resig nation to MCS’s corporate office in Memphis. At the time the complaint was filed, all of Cornerstone’s employees were former MCS employees.The complaint further alleged that the Defendants, using their knowledge of

MCS’s contracts an

d business relatio

nships, solicited MCS’ s customers to term inate their contracts and bu

siness relationshi

ps with MCS and to ente

r into contractua

l and business relationships with Cornerstone. According to the complaint, the Defendants created confusion as to the source of se

rvices provided b

y both MCS and Co

rnerstone, at time

s representing

that MCS was changing its name to Cornerstone. The complaint additionally asserted se veral defamation claims, including one alleging that Defendant Ricardo Fernandez stated to Mountain I ntermodal that “MCS was going under” and that Fernandez was going with a new c ompany. The complaint alleged that all of the Defendants engaged in a civil conspiracy to misappropriate MCS’s confidential and/or proprietary information, to engage in unfair trade practices, and to destroy MCS’s business by inducing the breach of existing contracts and business relationships between MCS and its key

employees,

customers, carr

iers, and vendor

s. The complaint cl

aimed that these and other actions by the Defendants constituted breaches of their duties of loy alty to MCS.

Three of the Def

endants, Ricardo

Fernandez, Guy

Wallace, and L

arry Pritc hett,
respo nded t o MCS ’s com plain t by fil ing mo tion s to di smis s for l ack ofperso nal ju risdi ction . In support of their respective motions to dismiss, the three Defendants submitted virtually identical affidavits that contained the following statements: that, prior to June 1997, the Defendants were employed by MCS on an at-will basis; that they never executed any sort of noncompetition or confidentiality

agreements; th

at they car

ried out all of thei

r responsibilities

for MCS in their respective home

states; that they

were not requir

ed to visit the state

of Tennessee or

to work in Tennessee as pa

rt of their respon

sibilities for MCS; tha

t they, in fa

ct, did not visit or wo

rk in Tennessee as part of their responsibilities for MCS; that they terminated their respective relationships with MCS in June 1997 of their own free wills; that they were not induced to leave MCS by Rodell or

Cornerstone; and

that, to the contra

ry, they initiated contact

with Rodell regarding possible employment opportunities. The Defendants’ a ffidavits concluded by denying that they were disloyal to MCS and, in Fernande z’s case, by further denying that he had defamed MCS.

The tri al c our t de nie d th e th ree D efen dan ts’ mot ion s to dis mis s. S ubs equ ent ly, the trial court and this court granted the Defendants’ application for permission to pursue aninterlocutory appeal before this court. See Tenn. R. App. P. 9. In its order granting permission

to appeal, the tri

al court explained

why it denie

d the Defendants ’ motions to dismiss:

[MCS] urges the Court to find that the jury could find that Movants, togethe

r with the other de

fendants herein

, participated in a civil conspiracy to do harm to [MCS], a Tennessee corporation, each Movant having acted in his own state of residence to do so. Part of Movants’ alleged activity had to do with leaving employment with one Tennessee corporation and taking employment with another Tennessee corporation in direct competition and in an effort to pirate the business of [MCS]. The Court agrees th

at these facts a

re sufficient to s

upport [MCS’s] contention that minimum contacts with the forum state do exist, as is constitutionally required. . . .

. . . . . . . Among those a

cts, [MCS] claims that Mo vants impermissibly solicited then current employees of [MCS] who worked in the same

offices as they

did to terminate the

ir employment with [MCS] to work for Defendant Cornerstone, resulting in the en masse resignations of the entire Chicago, Illinois and Portsmouth, Virginia office[s] of [MCS] and the transmission, via f

acsimile, to [MCS’s] co

rporate office

in Tennessee of not

ices of resigna

tion by employ

ees from said offices. . . . . . . The Complaint does not allege that any of the complained of acts generally attributed to all defendants occ urred in the State of Tennessee insofar as the Movants are concerned, but the Court believes that such general allegations are sufficient among other fa

ctors . . . to establ

ish the “minimum cont

acts” necessary to provide this Court with jurisdiction over Movants.

In April 1998,

C.O. Turner, I

II, file d a motion for perm

ission to intervene

in this lawsuit. In his proposed complaint, which named only Rick Rodell as a defendant, Turne r sought a declaratory judgment that the $1 million promissory note signed by him in connection with his purchase of Rodell’s interest in MCS was unenforceable because of a lack of consideration. Specifically, Turner contended that the promissory note lacked consideration because Turner did not receive a personal benefit in exchange for his execution of the promissory note. In his proposed complaint, Turner also asked the trial court to enjoin Rodell “from commencing or prosecuting any other action re garding the payment of the Promissory Note.” When he filed the motion to intervene, Turner deposited the sum of $100,000 with the court clerk, the amount of the first installment due under the promissory note. The trial court entered an order directing the court clerk to invest the funds in a bank account “at the highest pre vailinginterest rate available for the benefit of Intervenor pending this litigation and further Order of the Court.”

Rodell objected to Turner’s motion to intervene on the ground, inter alia , that “[t]he issue raised by the intervenor regarding the note [was] strictly between the intervenor and Rodell and [had] no pla

ce in this litigatio

n involving many

defendants unco

nnected with this transaction.” Rodell also argued that Turner’s deposit of the first installment with the court clerk did not constitute payment as required under the note, and Rodell stated his intention to declare the note in default and to accelerate payment due of the e ntire note.

Despite these objections, the trial court entered an order granting Turner’s motion to intervene on June 8, 1998. In its order, the trial court indicated that it would grant Turner’s request for preliminary injunctive relief upon his posting a bond in an amount required by the court. To this end, the order enjoined Rodell from “commencing or prosecuting any other action regarding the payment of the Promissory Note dated April 14, 1997, which is the subject of the intervening complaint, pending resolution of the declaratory judg ment complaint, upon the plaintiff posting a corporate bond in the amount of $ 1,600,000.00 .”

Turner subsequently filed his complaint for declaratory and injunctive relief against Rodell; however, Turner did not post the $1.6 million bond referenced in the trial court’s June 8 order allowing intervention.

Rodell filed an answer to Turner’s complaint and a counterclaim in which he contended that Turner had defaulted on the note. Rodell later filed a motion for summary judgment as to Turner’s intervening complaint in which he argued, on various grounds, that the complaint should be dismissed on the merits.

On September 3, 1998, the trial court entered a supplemental order again granting Turner’s motion to intervene. In its supplemental order, however, the trial court explained that the $1.6 million bond r

eferenced in th

e court’s June 1998

order was a cond

ition precedent t

o allowing Turner

to intervene in this

action. Accordi

ngly, the tr

ial court ordere

d Turner to post2 Section 29-9-103 c ontains the followi

ng provisions: (a) The punishment for contempt may be by fine or by imprisonment, or both. (b) Where not otherwis e specially

provided, the cir

cuit, chancery , and appellate c

ourts are limited to

a fine of fifty dollars ($50.00),

and imprisonment no

t exceeding ten ( 10) days, and, except as provided in § 29-9-108, all other courts are limited to a fine of ten dollars ($10.00). Tenn. Code Ann. § 29-9-103 (Supp. 1997).

3 Section 29-9-104 c

ontains the followi

ng provisions: (a) If the contempt consists in an omission to perform an act which it is yet in the power of the person to perform, he may be imprisoned until h

e performs it. (b) The person or if s ame be a corpor

ation, then the sai

d person or corporation can be separately fined, a s authorized by law, for each day it is in contempt until it performs the act ordered by the court. Tenn. Code Ann. § 29-9-104 (1980).

4 As pertinent, rule 41.02 provides that

(1) For failure of t

he plaintiff to pro

secute or to compl

y with these rules or any order of court, a defendant may move for dismissal of an act

ion or of any

claim against the

defendant.

. . . . (3) Unless the court in its order for dismi

ssal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this Rule 41, other than a dismissal for lack of jurisdiction or for

improper venue o

r for lack of an i

ndispensable party, ope rates as an adjud

ication upon the me

rits. Tenn. R. Civ. P. 41.02. the required bond within ten days of entry of the supplemental order.

On September 15, 1998, when Turner still had not posted the $1.6 million bond,
Rodell filed a Petition for Scire Facias and Citation for Con tempt against Tur

ner based upon his failure to post the bond. As a remedy for Turner’s alleg ed contempt, Rodell asked the trial court to impose one of the punishments set forth in Tennessee Code Annotated sections 29-9-103 2and 29-9-104 3 and/or to dismiss Turner’s intervening complaint under the authority of Tennessee Rule of Civil Procedure 41.02. 4 Rodell also suggested that the trial court “dismiss the entire case,” including

MCS’s complaint ag

ainst the various D

efendants, “[s]inc

e Turner is the sol

estockholder of MCS.”

On October 9, 1998, the trial court entered an order finding both of the Plaintiffs to be in contempt of court and, as sanctions, dismissing both Turner’s intervening complaint and MCS’s original complaint. Specifically, the trial court found

that the Plaintiffs are in contempt of this Court for the failure of the plaintiff-interv

enor, C.O. Turne

r III , who is also the sole stockholder of the plaintiff, [MCS], to make a bond in the proper form and manner i

n the amount of $1,6

00,000 as ordere

d by this Court by the orders entered June 8, 1998, and September 3, 1998, which bond was expressly ordered by the Court a s a condition precedent for the intervention of [Turner], pursuant to Rules 24 and 65 of Tennessee Rules of Civil Procedure.”

Citing rule 41.02 and the court’s inherent authority to punish for contempt, the trial court dismissed MCS’s compl

aint and Turner’ s intervening co mplaint “with preju

dice on the merits” due to Turner’s “

willful contempt” a

nd “failure to co

mply with the [c

ourt’s] orders.”

Upon its express determination that there was “no just reason for delay,” the trial court dire cted the entry of a final judgment as to MCS’s and Turner’s respective claims. See Tenn. R. Civ. P. 54.02. Both MCS and Turner timely appealed the trial court’s order of dismissal.

After the trial court entered its order of dismissal, Rodell amended the motion for summary judgment in which he previously had a sked the trial court to dismiss Turner’s intervening complaint on the merits. In his amended motion, Rodell asked the trial court to grant the additional re

lief of entering

summary judg

ment in his favor on

his counterclaim a

gainst
Turner.

In December 1998, the trial court finally disposed of all the claims in this action when it entered summary judgment in favor of Rodell on his counterclaim on the note. The trial court awarded Rodell the principal amount of $1 million, plus interest and attorney’s fees. Turner again f

iled a notice of a

ppeal, this time re

ferencing the

summary judg

ment entered in favor of Rodell. F

or purposes of he

aring, this cour

t consolidated the

parties’ appea

ls.I. Order Denying Three Defendants’ Motions to Dismiss for Lack of Personal Jurisdiction

On appeal, Defendants Fernandez, Wallace, and Pritchett contend that the trial court erred in denying their motions to dismiss because they lack sufficient contacts with the
state of Ten nesse e to su pport the tr ial co urt’s exerc ise of perso nal ju risdi ction over t hem. In support of this cont

ention, the Defe

ndants cite the unr

efuted assertio

ns contained in the

ir affidavits, specifically, that they had a t-will relationships with MCS, that they performed all of their work for MCS in their respective states of residence, that they perf ormed no work in the state of Tennessee, and that they had not visited the state of Tennessee. The Defendants further contend that the trial court erred in finding jurisdiction based upon the conspiracy the ory of jurisdiction beca

use this doctrine h

as not been, and sh

ould not be, embra

ced by the c

ourts of this
state.

The plaintiff in an action bears the burden of establishing a prima faciecase that exercising personal jurisdiction over the defendant is proper. Davis Kidd Booksellers, Inc. v. Day-Impex, Ltd. , 832 S.W.2d 572, 577 (T enn. Ct. App. 1992) ; accord CompuServe, Inc. v.
Patterson , 89 F.3d 1257, 1261 -62 (6th Cir. 1996) ; Market/Media Research, Inc. v. UnionTribune Publ’g Co. , 951 F.2d 102, 104 (6th Cir. 1991), cert. denied , 506 U.S. 824 (1992); Theunissen v. Matthews , 935 F.2d 1454, 145 8 (6th Cir. 1991); Serras v. First Tennes see Bank Nat’l Ass’n , 875 F.2d 1212, 1214 (6th Cir. 1989). If the defendant challenges the trial court’s personal jurisdiction over him by filing a properly supported motion to dismiss, “the plaintiff may not stand

on his pleadings b

ut must, by af

fidavit or otherw

ise, set forth spe

cific facts showing that the court has jurisdiction.” Theunissen , 935 F.2d at 1458; accord Serras , 875 F.2d at 1214.

In ruling on the defendant’s motion to dismiss for lack of personal jurisdiction, however, the tri

al court is requir

ed to construe the

pleadings and a

ffidavits in the lig

ht most favorable to the plaintiff. Chase Cavett Servs., Inc. v. Brandon Apparel Group, Inc. , No. 02A01-9803-CH-00055, 1998 WL 846708, at *1 (Tenn. Ct. App. Dec. 7, 1998) ( no perm. app. filed); accord CompuServe , 89 F.3d at 1262; Market/Media Research , 951 F.2d at 104; Theunissen , 935 F.2d at 1459; Serras , 875 F.2d at 1214. U nder this standar

d, dismissal is5 When a motion to dismiss for lack of pers

onal jurisdiction is

decided upon the p

arties’ pleadings and a

ffidavits, as opposed to an evidentia ry hearing

, the procedure

in many resp

ects is similar to a summary judgment procedure. See Byrd v. Hall, 847 S.W.2d 208, 214-15 (Tenn. 1993) (holding that nonmoving party faced with properly supported motion for summary judgment may not rely upon alleg ations of his pleadings and, further, that trial judge ruling on motion for summary

judgment must view

evidence in fav

or of nonmoving pa

rty); see also Radaszewski v. Telecom Corp. , 981 F.2d 305, 310 (8th Cir. 1992) (noting similarities between analytical processes applied to motions to dismiss for lack of personal jurisdiction and motions for summary judgment), cert. denied , 508 U.S. 908 (1993). Our supreme court has stressed, however, that the

two procedures s

hould not be confus

ed because, whe

reas a motion to dism

iss for lack of jurisd

iction is a motion in a

batement, a motion

for summary

judgment is a motion

in bar that goes to the merits of the action. Nicholstone Book Binde ry, Inc. v. Chelsea

House Publishers , 621 S.W.2d 560, 561 n.1 (Tenn. 1981), cert. denied , 455 U.S. 994 (1982) ; see also Goff v. Hackett Stone Co. , No. 98-7137, 1999 WL 397409, at *2 (10th Cir. 1999) (indicating that, whereas dismissal for lack of personal jurisdiction should be without prejudice, dismissal by summary judgment is with prejudice and may pr eclude subsequent action in another forum). proper only if all of the specific facts alleged by the plaintiff collectively fail to state a prima faciecase for jurisdiction. CompuServe , 89 F.3d at 1262; Market/Media Research , 951 F.2d at 105; Theunissen , 935 F.2d at 1459. 5

Tennessee’s lon

g-arm statute p

ermits the courts o

f this state to exerc

ise jurisdiction upon, inter alia , “[a]ny basis not inconsistent with the constitution of this state or of the United States.” Tenn. Code Ann. §§ 20-2-214(a)(6), 20-2-225(2) (1994 & Supp. 1997). When a state’s long-arm statute authorizes the assertion of personal jurisdiction to the limits of federal due process, as does Tennessee’s long-arm statute, the issue becomes simply whether the trial court’s exercise of personal jurisdiction over the defendant meets due process requirements. Coblentz GMC/Freightliner, Inc. v. General Motors Corp. , 724 F. Supp. 1364, 1368 (M.D. Ala. 1989), aff’d , 932 F.2d 977 (11th Cir. 1991).

Following the United States Supreme Court’s lead, the Tennessee Supreme Court has adopted the “minimum contacts” test for determining when the courts of this state may exercise personal jurisdiction over a nonresident defendant. Davis Kidd Booksellers, Inc. v. Day-Impex, Ltd. , 832 S.W. 2d 572, 574 -75 (Tenn. C t. App. 199 2) (citing Masada Inv. Corp. v. Allen , 697 S.W.2d 332, 334 (Tenn. 1985)). In adopting this test, our supreme court explained that

due process requires that a non-resident defendant be subject to a

judgment in personam only if he has minimum contacts with the forum such that “the maintenance of the suit does not offend6 See, e.g. , United Phosphorus, Ltd. v. Angus Chem. Co. , 43 F. Supp. 2d 904, 912-16

(N.D. Ill. 199

9); General Motors Corp. v. Lopez , 948 F. Supp. 656, 664-66 (E.D. Mich. 1996); Perry v. Kempton , 864 F. Supp. 37, 39 ( S.D. Ohio 1994); Thompson Trading Ltd. v. Allied Lyons PLC , 124 F.R.D. 534, 535-37 (D.R.I. 1 989); see also Hercules Inc. v. Le u Trust & Banking Ltd. , 611 A.2d 476, 481-84 (Del. 1992), cert. dismissed , 507 U.S. 1025 (1993); ExecuTech Bus. Sys., Inc. v. New Oji Paper Co. , ___ So. 2d ___, 2000 WL 44051, at *2-*3 (Fla.

‘traditional notions of fair play and substantial justice.;’” International Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945). However, the absence of physical co

ntacts will not def

eat in personam jurisdiction where a commercial actor purposefully directs his activities toward citizens of the forum State and litigation results from injuries arising out of or relating to those activities. Burger King Corp. v. Rudzewicz , [471 U.S. 462, 472], 105 S. Ct. 2174, 2182, 85 L. Ed. 2d 528 (1985). In such a case, “the defendant’s conduct and conne ction with the forum State

are such that he s

hould reasonably

anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297, 100 S. Ct. 559, 567, 62 L. Ed. 2d 490 (1980).

Masada Inv. Corp. v. Allen , 697 S.W.2d 332, 334 (Tenn. 1985).

At the time Fernandez, Wallace, and Pritchett sought permission to appeal the trial court’s order denying their motions to dismiss, the appellate courts of this state had not specifically

adopted the consp

iracy theo ry of jurisd

iction. Although p

rior opinions of bot

h this court and our supreme court had hinted at the viability of such a theory , the courts apparently had not been required to directly address the issue. See, e.g. , Budget Rent-A-Car of Knoxville, Inc. v. Car Servs., Inc. , 469 S.W.2d 360, 361 (Tenn. 1971) (concluding that defendants were not subject to Tennessee court’s per sonal jurisdiction b

ecause recor

d contained nothin

g to establish
any prese nce or activity

in Tennessee by

defendants or by

anyone re

presenting them

incidental to alleged conspi

racy on whi

ch suit was groun

ded); Putnam v. Putnam , No. 02A01-9511-CH-00250, 1996 WL 740807, at *3 (Tenn. Ct. App. Dec. 30, 1996) ( no perm. app. filed) (concluding that defendant was not subject to Tennessee court’s personal jurisdiction because alleged conspiracy occur red in Alabama).

After oral arguments were heard in this case, this court issued an opinion in which it specifically adopted the conspiracy theory of jurisdiction. In Chenault v. Walker , No. 02A01-9812-CV-00340, slip op. at 14-15 (Tenn. Ct. App. Feb. 9, 2000), we concluded, as had courts in other jur

isdictions, 6 that the exercise of personal jurisdiction pursuant to this theory2000); Rudo v. Stubbs , 472 S.E.2d 515, 516- 18 (Ga. Ct. App. 1996); Cameron v. OwensCorning Fiberglas Corp. , 695 N.E.2d 572, 577-79 (Ill. App. Ct.), appeal denied , 705 N.E.2d 434 (Ill. 1998), cert. denied , 119 S. Ct. 872 (1999). comported with constitutional due process requirements. In articulating the conspiracy theory of jurisdiction, we qu

oted extensively

from the decision

of a Maryla

nd federal distr

ict court:

[The conspiracy

theory of ju

risdiction] is based

on two principles:(1) that the acts of one co-conspirator are attributable to all coconspirators, McLaughlin v. Copeland , 435 F. Supp. 513, 530 (D. Md. 1977) (“McLaughlin”); and (2) that the constitutional requirement of mi

nimum contacts betw

een non-reside

nt defendants and the forum can be met if there is a substantial connection between the forum and a conspiracy entered into by such defendants. Vermont Castings, Inc. v. Evans Products Co. , 510 F. Supp. 940, 944 (D. Vt. 1981). The conspiracy theory of jurisdiction as developed in the cases, holds that when several individuals (1) co

nspire to do somethi

ng (2) that they

could reasonably

expect to have con

sequences in a pa

rticular forum, i

f one co-conspirator (3) who is subject to personal jurisdiction in the for um ( 4) co mmi ts o vert act s in fur the ranc e of t he co nsp ira cy, those acts are attributable to the other co-conspirators, who thus become subject to personal jurisdiction even if they have no other contacts with the forum. . . .

. . . . However, in several cases in which the conspirator who committed the overt acts was a resident of the forum, courts have required only that “substantial acts” in furtherance of the conspiracy

be committed in the f

orum. . . . While these

courts did not address the point explicitly, the only reasonable interpretation of this standard is that the acts committed in furtherance of the conspiracy must be of a type that, if c ommitted by the non-resident co-conspirators themselves, . . . would have provided a basis for subjecting the non-residents to personal jurisdiction under the forum’s long-a

rm statute. If

the overt acts do n

ot meet this standard, it would

be patently

unfair to subject

those non-reside

nts to personal jurisdiction via the conspiracy theory, unde r which the non-residents’ c

ontacts with the fo

rum are less dire

ct. All this suggests a need for a simplified articulation of the conspiracy theory of jurisdiction. Under that doctrine, when (1) two or more individuals conspire to do something (2) that they could reasonably expect to lead to conse quences in a particular f

orum, if (3) one co-conspirator commits overt acts in furtherance of the conspiracy, and (4) those acts are of a type which, if committed bya nonresident, would subject the non-resident to personal jurisdiction under the long-arm statute of the forum state, then those overt a

cts are attributa

ble to the other co

-conspirators,who thus become sub ject to personal ju

risdiction in the fo

rum, even if they

have no direct c

ontacts with the fo

rum.

Cawley v. Bloch , 544 F. Supp. 133, 134-35 (D. Md. 1982) (citations and footnotes omitted), quoted in Chenault v. Walker , No. 02A01-9812-CV-00340, slip op. at 14-15 (Tenn. Ct. App. Feb. 9, 2000).

Viewing the asse rtions contained i

n the pleadings a

nd affidavits in the

light most favorable to MCS, w

e hold that these a

ssertions are suf

ficient to support t

he trial court’s e

xercise of jurisdiction ove

r these Defenda

nts pursuant to the c

onspiracy t

heory of jur

isdiction. In it

s complaint, MCS alleg

ed that the Defe

ndants, including

Fernandez, Walla

ce, and Pritchett

, conspired to induc

e MCS’s employ

ees and customer

s to breach their

existing contrac

ts with MCS and to form new contracts with Cornerstone. In doing so, the Defendants allege dly misled customers by

representing t

hat MCS and Corners

tone were the sa

me entity, a

nd they alle

gedly misappropriated MCS’s confidential and/or proprietary information. If these allegations are true, the Defendants reasonably could expect their actions to lead to consequence s in the state of Tennessee, inasmuch as both MCS and Cornerstone are Tennessee corporations having principal places of business in Memphis.

Moreover, Defendant Rick Rodell allegedly directed a nd performed his part of the conspiracy

from his home state

of Tennessee. I

n furtherance o

f the conspiracy

, Rodell incorporated Cornerstone Systems, Inc., in Tennessee , and, on behalf of his new corporation, he recruited many of MCS’s key employ ees, some of whom worked in MCS’s Memphis office. According to the complaint’s allegations, Rodell and the other Defendants also induced all of MCS’s employe

es in both the Portsmo

uth, Virginia, of

fice and the Chic

ago, Illinoi

s, office to resign en masse and to transmit thei r letters of resi

gnation to MCS’s co

rporate office

in Memphis. In our view, the overt acts allegedly committed by Rodell in furtherance of the conspiracy would be sufficient to subject a nonresident to personal jurisdiction under this state’s long-arm statute. Accordingly, these acts may be attributed to the Defendants for purposes of exercising pers

onal jurisdiction ov

er them.7 In attempting to formulate a workable standard of the conspiracy theory of jurisdiction, the Delaware court held that

a conspirator who is absent from the forum state is subject to the jurisdiction of the

court, assuming h

e is properly

served under sta

te law, if the plaintif

f can make a fac

tual showing that: (1) a conspiracy to [commit a tort] existed; (2) the defe nda nt w as a m emb er of tha t co nsp ira cy; (3) a substantial act or substantial effect in furtherance of the conspiracy occurred in the forum state; (4) the defendant knew or had reason to know of the act in the forum state or that acts outside the forum state would have an effect in the forum state; and (5) the act in, or effect on, the forum state was a direct and for esee abl e res ult of t he co ndu ct i n fu rth eran ce of the con spi racy. Istituto Bancario Italian o , 449 A.2d at 225. On appeal, the Defendants suggest that this court’s adoption of the conspiracy theory of jurisdi ction rep resents a departur e from tra ditional m

inimum con

tacts ana lysis. We disagree. As explained by the Supreme Court of Delaware whe n it adopted the conspiracy theory of jurisdiction,

a defendant who has so voluntarily participated in a conspiracy with knowledge of its acts in or effects in the forum state can be said to have purposefully availed himself of the privilege of conducting activities in the forum state, thereby fairly invoking the benefits and burdens of its laws. . . . It can further be said that such participation is a substantial contact with the jurisdiction of a nature and quality that it is reasonable and fair to require the defendant to come

and defend an ac

tion there. Additio

nal contacts would of course make even more equitable the [exercise of] jurisdiction.

Istituto Bancario Italiano SpA v. Hunter Eng’g Co. , 449 A.2d 210, 225 (Del. 1982) (citation omitted). 7 The Court of Appeals of Georgia provided a similar rationale when it adopted the conspiracy theory of jurisdiction, explaining that

[w]hen the purpose of a conspiracy is to commit an intentional tort against a Geor

gian, all of the c

oconspirators ar

e purposefully directing their

activities toward

Georgia and sh

ould reasonably anticipate being haled into court here. . . . In this case, . . . the alleged conspi

racy targ eted a Georgia

resident specif

ically. Thus, the nonresident conspirators purposefully directed their activities8 The law is well-settled that a trial court may not exercise personal jurisdiction over a

nonresident defendant merely because the defe ndant is employed by a company domiciled in the forum state. Century Wrecker Corp. v. Hutchings , 1990 WL 131423, at *2 (Tenn. Ct. App. Sept. 14, 1990) (no perm. app. filed) (citing Burger King Corp. v. Rudzewicz , 471 U.S. 462 (1985)). Nevertheless, courts have recognized that such employ ment creates a significant contact which, when added to other contacts with the forum state, may support the exercise of per sonal jurisdiction over the nonresident defendant. See Equifax Servs., Inc. v. Hitz , 905 F.2d 1355,

toward Georgia, and could reasonably expect to be hale d into court here. Accordingly, the imputation to them of the instate acts of their coconspirator to satisfy the requirements of the Georgia Long Arm Statute is not pr

ecluded by

due process conc

erns.

Rudo v. Stubbs , 472 S.E.2d 515, 517 (Ga. Ct. App. 1996) (citation and footnote omitted).

We conclude that the same rationale applies in the present case. If the alleg ations of MCS’s complaint a

re true, the Def

endants have con

spired with a Tenn

essee resident t

o commit one or more intentional torts against a Tennessee corporation. One of the alleged conspirators, Rick Rodell, was a Tennessee resident and the president of a Tennessee corporation, Cornerstone Systems, Inc. The alleg ed conspiracy specifically targeted another Tennessee corp

oration, MCS. Under

these circumstan

ces, the nonresid

ent conspirators, including Fernandez, Wallace, and Pritchett, have purposefully direc ted their activities toward Tennessee and should reasonably anticipate being hale d into court here. Accordingly, due
process concer

ns do not preclude

the trial court fr

om exercising per

sonal jurisdiction o

ver these Defendants.

We further note that, although they seek to minimize such contacts, the Defendants themselves have contacts with the state of Tennessee. The Defendants were employed by MCS, a Tennessee corpor ation. Although the events surrounding their resignations from MCS were disputed, the parties did not dispute that the Defendants resigned from MCS and immediately

began working

for another Ten

nessee corpora

tion, Cornerstone. The Defendant s acknowledged contacting Rodell, a Tennessee resident, about employ ment opportunities, and they sent co

pies of their resi

gnation letters

to MCS’s corporate

office in Memphis.

Even if these contacts are insufficient, by themselves, to subject the Defendants to the trial court’s jurisdiction, we conclude that

these additional c

ontacts weigh in

favor of the tria

l court’s decision

to exercise jurisdiction over t

hem. 81358-59 (10th Cir. 1 990); Shipley Co. v. Clark, 728 F. Supp. 818, 82 2-23 (D. Mass. 199

0); see also ALTA Analytics, Inc. v . Muuss , 75 F. Supp. 2d 773, 779 (S.D. Ohio 1999). Citing Weller v. Cromwell Oil Co. , 504 F.2d 927 (6th C ir. 1974), the Def

endants insist that they

were entitled to d

ismissal of the act

ion against them b

ased upon MCS’s fai

lure to respond to the affidavits that the Defendants filed in support of their motions to dismiss for lack of personal jurisdiction. In Weller , the court held that, where a motion to dismiss for lack of personal jurisdiction is filed and is supported by affidavits, the plaintiff may not re st upon the allegations of his complaint. Instead, the plaintiff must respond, by aff idavit or otherwise, and “must set forth specific facts showing that the court has jurisdiction.” Weller , 504 F.2d at 929- 30. As pointed out by

the Defendants,

when presented w

ith their motions to dis

miss, MCS did not respond, by

affidavit or othe

rwise, but instead

chose to rely

upon the allega

tions contained in its complaint.

Despite MCS’s failu re to respond, we

hold that Fernan

dez, Wallace, and P

ritchett were not entitled

to dismissal of the a

ction against the

m. We agree with

the statement that

, “in the face of a p roperly suppor ted motio n for dismi ssal, the p laintiff m ay not stand on his pleadi ngs but must, by affidavit or otherwise, set forth specific facts showing that the court ha s jurisdiction.” Theunissen v. Matthews , 935 F.2d 1 454, 1458 ( 6th Cir. 1 991) (citi ng Weller , 504 F.2d at 930). The

key to this sta

tement of proced

ural law, howeve

r, is that the motion t

o dismiss must be “properly supported.” Id . In ruling on a motion to dismiss for lack of personal jurisdiction, the trial court must presume that the complaint’s allegations are true to the extent they are not contradicted by the parties’ affidavits. American Land Program, Inc. v.
Bonave ntura Uitgev ers Maa tschappij, N. V. , 710 F.2d 1449, 1454 (10th Cir. 1983). In our view, therefore, a defendant’s motion to dismiss is not “properly supported” by his affidavit unless the affidavit effe

ctively neg

ates the jurisdict

ional allegatio

ns of the plaintiff

’s complaint.

As we previously discussed, the Defendants’ motions to dismiss in this case were supported by affidavits which asserted merely that the Defendants were employed by MCS on an at-will basis, that

they never

executed any

sort of noncompeti

tion or confidenti

ality agr eements, that they carried out all of their responsibilities for MCS in their respective home states, that they were not requir

ed to visit the state

of Tennessee or

to work in Tennesse

e as part of theirresponsibilities f or MCS, that they

terminated their

respective rel

ationships with MCS of

their own free wills, that they were not induced to leave MCS by Rick Rodell or Cornerstone, that they initiated contact with Rodell regarding possible employment opportunities, and, finally , that they had not been disloyal to MCS. Although the Defendants’ affidavits emphasized their lack of physical contacts with the state of Tennessee, they did little to rebut many of the jurisdictional allegations of MCS’s complaint. For example, the affidavits did not contradict the complaint’s assertions that the

Defendants cons

pired with Rodell to i

nduce customers a

nd other employ

ees to terminate their relationships with MCS, nor did they deny that the en masse resignations of MCS’s employees in Chicago and Portsmouth resulted from a common scheme.

Moreover, although the affidavits asserted that Rodell did not induce the Defendants to te

rminate their emp

loyment with M

CS and that they

, in fact, initiate

d contact with Rodell, such assertions are not necessarily inconsistent with the complaint’s allegations that Rodell and the Def

endants entered

into a conspiracy

to interfere with

MCS’s contracts an

d to misappropriate MC

S’s confidential a

nd/or proprietar

y informatio

n. Although the De

fendants claimed to have initiated contact with Rodell, for instance, they could later have enter ed into a conspiracy with Rodell based upon the conversations that occurred during their initial contacts. And, although their affidavits generally denied that the De fendants were disloyal to MCS, the affidavits did not address the complaint’s allegations that the Defendants misappropriated MCS’s confidential and

/or proprietary

information. I

nasmuch as the De

fendants’ affi

davits failed to effectively negate the jurisdictional allega tions of MCS’s complaint, MCS’s decision to rest upon the allegations of its complaint was not fatal to its action against Fernandez, Wallace, and Pritchett.

We also reject the Defendants’ ar

gument that MCS’s c

omplaint failed to e

stablish

a prima faciecase that jurisdiction existed because the complaint contained only generalized allegations of a

conspiracy

without including

any specif

ic factual alleg

ations that these Defendants eng

aged in miscondu

ct. We agree wi

th the observation

of one federal c

ourt when it stated that “a plaintiff should not be permitted to hale a defendant into court based only on a bald-faced, conclusory assertion of conspiracy with no supporting factual allegations.” Thompson Trading Ltd. v. Allied Lyons PLC , 124 F.R.D. 534, 537 (D.R.I. 1989 ). The samecourt also noted, however, that

conspiracy is an activity which by its very nature is not done in the open for all to see. Since defendants are likely in control of any relevant eviden

ce, it would be man

ifestly unfa

ir to force plaint

iff to plead specific f

acts proving pa

rticular conspir

atorial acts prio

r to givi ng pl ain tif f th e op por tun ity t o co ndu ct d isc ove ry.

Id .; accord General Motors Corp. v. Lopez , 948 F. Supp. 656, 664 (E.D. Mich. 1996) (indicating that “[t]otally unsupported conspiracy allegations do not support jurisdiction” but that, “[a]t the same time, it is not fair to require a plaintiff to plead specific facts proving conspiracy before discovery”), quoted in Chenault v. Walker , No. 02A01-9812-CV-00340, slip op. at 13 (Tenn. Ct. App. Feb. 9, 2000).

At this stage in the proceedings, a plaintiff need only plead suff icient factual allegations from which the existence of a conspiracy may be inferred. Thompson Trading , 124 F.R.D. at 536. After carefully reviewing the c omplaint in this case, we hold that MCS has pled sufficiently specific factual allegations to withstand the Defenda nts’ motions to dismiss. See id. at 536-37.

II. Order Dismissing MCS’ s and Turner’s Complaints Du e to Turner’s Failure t

o Post Bond

We likewise affir

m the dismissal of Tur

ner’s interveni

ng complaint ag

ainst Rodell. On appeal

, Turner attack

s the order of dism

issal on several g

rounds. Turner f

irst contends that the t

rial court imprope

rly requir ed him to post a $1.6 mi

llion bond as a cond

ition to intervening in th

is action. Turner

points out that the tr

ial court’s orig

inal order allowi

ng him to intervene, dated June 8, 1998, required him to post the bond only as a condition to obtaining injunctive relief, not as a condition to intervening in the action. The trial court did not specify that the bond was a condition to intervening in the action until September 3, 1998, when the court entered its supplemental order. Turner contends that he effectively abandoned his claim for injunctive relief when he did not post the $1.6 million bond and that the trial court should not have continued to impose this requirement.

We conclude that these arguments are without merit. The trial court grantedTurner’s motion to intervene pursuant to rule 24.02 of the Tennessee Rules of Civil Procedure,

governing pe

rmissive interven

tion, which provide

s that,

[u]pon timely ap

plication any

one may be p

ermitted to intervene in an action: (1) when a statute confers a conditional right to intervene; or (2) when an applicant’s claim or defense and the ma in act ion ha ve a qu estio n of la w or fa ct in c ommo n. In exercising discretion the court shall consider whether or not the intervention will unduly delay or prejudice the adjudica tion of the rights of the ori

ginal parties.

Tenn. R. Civ. P. 24.02.

Under rule 24.02, the trial court may permit an applicant to intervene if the cour t determines that the applicant’s claims and the underlying action have a common question of law or fact. Ballard v. Herzke , 924 S.W.2d 652, 658 (Tenn. 1996); Tenn. R. Civ. P. 24.02. A question of law is “[a]n issue which involves the application or interpretation of a law.” Black’s Law Dictionary

1122 (5th ed. 1979). A question of fact is “[a]n issue involving the resolution of a factual dispute.” Id . As indicated by the language of rule 24.02, the dec ision to allow a permissive intervention is a matter entrusted to the trial court’s discretion. Ballard, 924 S.W.2d at 658. Absent a showing that the trial court abused its discretion, this court will not reverse the trial court’s decision. Id .; accord Shelby County Deputy S heriff’s Ass’n v. G

illess , 972 S.W.2d 683, 685 (Tenn. Ct. App. 1997).

As an initial matter, we are not convinced that Turner’s motion to intervene even met the requirements for a permissive intervention because the motion failed to establish the existence of any questions of law or fact common to both Turner’s claims and the underly ing action. As we previously indicated, Turner’s claims for declara tory and injunctive relief were premised on his ar

gument that the $1million promissory note signed by

him in connection w

ith his purchase of Rodell’s interest in MCS lacked consideration because Turner did not receive any personal benefit in exchange for executing the note. Thus, Turner’s claims presented the narr ow question of whether the promissory note was unenforceable due to a la ck of consideration. On the other hand, MCS’s claims against the Defendants in the underlying ac tion were premised on MCS’s assertions tha

t, both prior and subsequent to Rodell’s sale of his intere

st in MCS to9 The pertinent provisions of federal rule 24(b) are virtually identical to those of T ennessee rule 24.02. Rule 24(b) provides that

[u]pon timely ap

plication any

one may be p

ermitted to intervene in an action: (1) when a statute of the United States confers a conditional right to intervene; or (2) when an applicant’s Turner, Rodell and the other Defendants conspired to misappropriate MCS’s confidential and/or proprietary information, to engage in unfair tra de practices, and to destroy MCS’s business by inducing the breach of existing contracts and business relationships between MCS and its key employees, customers, carriers, and vendors. A review of the complaints’ allegations, therefore, fails to confirm that the intervening claims and the underlying action share any common questions of law or

fact.

In support of his motion to intervene, Turner asserted that he executed the promissory n

ote in connection w

ith the transactio

n whereby R

odell sold his intere

st in MCS to
Turner a nd that this transac

tion also w

as “the g enesis of the prese nt litiga tion.” We r

ecognize that the same transaction forms part of the factual background for both Turner’s claims and the underlying action. If Rodell had not sold his interest in MCS to Turner, Rodell likely would not have established a new corporation that directly competed with MCS for its employ ees and customers. Nevertheless, the common fact of this transaction does not support intervention. For purposes of MCS’s a

ction against the

Defendants, the

transaction whe

reby Rodell

sold his interest in MCS to Turner is not in dispute. What is in dispute is the conduct of Rodell and the other Defendants just prior and subsequent to the transaction. The transaction itself does not present any legal or factual question that needs to be re solved in the underlying action. In light of the tenuous relationship between Turner’s claims and the underlying a ction, therefore, the trial court would have been justified in denying Turner’s motion to intervene.

Inasmuch as the trial court had the discretion to deny Tur ner’s motion to intervene altogether, we

conclude that the

trial court did not a

buse its discretion

in permitting Tur

ner to intervene but, at

the same time, impos

ing a condition on

Turner’s interv

ention. Although t

his issue apparently

has not been addr

essed by the

appellate court

s of this state, our c

onclusion is supported by authorities interpreting the comparable federa l rule on permissive intervention. See Fed. R. Civ. P. 24(b). 9 In Beauregard, Inc. v. Sword Services LLC , 107 F.3d 351 (5th Cir.claim or defense and the main action have a question of law or fact in common. . . . In exercising its discretion the court shall consider whether the intervention will unduly delay or pre judice the adjudication of th

e rights of the or

iginal parties. Fed. R. Civ. P. 24(b). 1997), for example

, the court noted th

at

[i]t is undisputed that virtually any condition may be attache d to a grant of permissive intervention. See, e.g. , United Nuclear Corp. v. Cranford Ins. Co. , 905 F.2d 1424 (10th Cir. 1990)[, cert. denied , 498 U.S. 1073 (1991 )]; Fox v. Glickman Corp. , 355 F.2d 161, 164 (2d Cir. 1965)[, cert. denied , 384 U.S. 960 (1966)]; Wright, Miller & Kane, Federal Practice & Procedure: Civil 2d , § 1913, § 1922 (1986)

(“Since the cour

t has discretion to r

efuse intervention altogether, it also may specify the conditions on which it will allow the applicant to become a party.”).

Beauregard

, 107 F.3d at 352 n.2.

Similarly, in Stringfellow v. Concerned Neighbors in Action , 480 U.S. 370 (1987), Justice Brennan, in a concurring opinion, noted that

[e]ven highly restrictive conditions may be appropria tely placed on a permissive intervenor, because such a party has by definition neither a statutory right to intervene nor any interest at stake that the other parties will not adequately protect or that it could not adequately pro tect in ano ther proceed ing.

Stringfellow , 480 U.S. at 382 n.1 ( Brennan, J., conc

urring) (citing

Fed. R. Civ. P. 24(b)

); accord Columbus-America Discovery Group v. Atlantic Mut. Ins. Co. , 974 F.2d 450, 469 (4th Cir. 1992) (“When gr

anting an applic

ation for permissi

ve intervention, a

federal distric

t court is able to impose almost any condition.”), cert. denied , 507 U.S. 1000 (1993); In re Discovery Zo ne Sec. Litig. , 181 F.R.D. 582, 601 (N.D. Ill. 1998) (“It is axiomatic that courts may put limitations on a party’ s ability to int

ervene permissi

vely under

Rule 24(b)(2).”

); Lelsz v. Kavanagh , 783 F. Supp. 286, 292 (N.D. Tex. 1991) (“[A]n application for permissive intervention, unlike int erve nti on a s ofrigh t, i s ad dres sed to t he d isc ret ion of t he co urt , an d th e cou rt, acco rdi ngly, may impose various conditions or restrictions on the scope of intervention.”), aff’d , 983 F.2d 1061 (5th Cir.), cert. denied , 510 U.S. 906 (1993) ; see also Meyer v. Meyer , 842 S.W.2d 184,188 (Mo. Ct. App. 1992) (“A court may impose conditions on its grant of permissive

intervention.”).

In the present action, the trial court entered orders permitting Turner to intervene, but the court conditioned Turner’s intervention upon his posting a $1.6 million bond. Inasmuch as Turner failed to meet the condition for his intervention, we hold that the trial court did not abuse its discretion in dismissing his complaint against Rodell. In reaching this conclusion, we stress that, although the trial court conditioned Turner’s intervention on posting the $1.6 million bond, the court’s

action did not prev

ent Turner from p

ursuing his claim

s on the promissory

note against Rodell. Turner could have filed a separate lawsuit challenging the e nforceability of the promissory n

ote. The trial cou

rt’s ruling mere

ly limited Tur

ner’s right to pu

rsue such claims in the present action.

Turner also contends that the trial court erred in dismissing his intervening complaint based up

on the court’s fin

ding that Turner

was in contempt of c

ourt for failing

to comply with th

e court’s order

s allowing interv

ention. Describin

g the trial cour

t’s dismissal of his complaint as a “punitive and unconditional” sanction, Turner first characterizes the proceeding which led to the dismissal of his intervening complaint as a criminal contempt action. Based upon this characterization, Turner then contends that the trial court’s order of dismissal should be reversed beca

use the trial cour

t denied Turner th

e constitutional an

d procedural pr

otections to which he was entitled in a criminal contempt action. Specifically, Turner contends that he wa s not given notice that he was being charged with criminal contempt as required by Tennessee Rule of Criminal Procedure 42(b). Turner further contends that the trial court erred in finding him in contempt because he attempted in good faith to comply with the order to post the bond and, thus, his failure to comply with the order was not willful.

We believe that these arguments improperly character ize the proceeding that led to the dismissal of Turner’s intervening complaint as a criminal contempt action. The trial court dismissed Turner’s complaint pursuant to rule 41.02 of the Tennessee Rules of Civil Procedure, which authorizes th

e court to dismiss a p

laintiff’s claim i

f he fails to prose

cute the claim, to comply with the Rules of Civil Procedure, or to comply with any order of the court.10 Although the language of rule 41.02 does not explicitly require that the plaintiff’ s failure

to comply be willful, we note that appellate courts interpreting the comparable federal rule have held that a dismissa

l under rule 41(b)

for failure to co

mply with a co

urt order is appr

opriate only when there is a c

lear record of

delay or co

ntumacious conduc

t by the plain

tiff or when less drastic sanctions have proven ineffective. Guyer v. Beard , 907 F.2d 1424, 1429 (3d Cir. 1990); Roland v. Salem Contract Carriers, Inc. , 811 F.2d 1175, 117 7 (7th Cir. 1987); Judkins v. Beech Aircraft Corp. , 723 F.2d 818, 819- 20 (11th Cir. 1984); Carter v. City of Me mphis , 636 F.2d 159, 161 (6th C

ir. 1980); Wrenn v. American Cast Iron Pipe Co. , 575 F.2d 544, 546 ( 5th Cir. 1978). Lik

e Tennessee rul

e 41.02, federa

l rule 41(b) autho

rizes the court to di

smiss a claim “[f]or failure of the plaintiff to prosecute or to comply with these rules or any order of court.” Fed. R. Civ. P. 41(b). Thompson v. Dickerson , No. 02A01-9702-CV-00034, 1997 WL 437228, at *2 (Tenn. Ct. App. Aug. 1, 1997) (no perm. app. filed); Kotil v. Hydra-Sports, Inc. , No. 01A01-9305-CV-00200, 1994 WL 535542, at *3 (Tenn. Ct. App. Oct. 5, 1994) ( no perm. app. filed); Mills v. Bank of Roane County , 1991 WL 126553, at *2 (Tenn. Ct. App. July 15, 1991) ( no perm. app. filed); Tenn. R. Civ. P. 41.02( 1). Dismissal is a ha rsh sanction that g

enerally i s not favored in circumstances w

here lesser san

ctions are avail

able, and this cou

rt does not treat d

ecisions to dismiss cases pursuant to rule 41.02 lightly. Kotil , 1994 WL 535542, at *3. In reviewing such decisions, however, we recognize “that trial judges must be able to control their dockets and that to do so, th

ey must have ava ilable the most sever

e spectru m of sanct

ions not me

rely to penalize those whos e conduct wa rrants sanc tions but also to det er others wh o might be t empted to e ngage in similar conduct if the sanction did not exist.” Id . Accordingly , our review of su

ch decisions is governed by an abuse of discretion standard. Id ., at *4.

Although we recognize that the sanction of dismissal is “harsh,” we have found no authority for the proposition that a dismissal proceeding under rule 41.02 constitutes a criminal contempt proceeding or, for that matter, that the sanction of dismissal constitutes a criminal contempt penalty

. In light of T

urner’s failure

to direct us to any

such authority

, we reject his attempt to characterize the dismissal proceeding as a criminal contempt proceeding. Moreover , we note that Rodell’s Petition for Scire Facias and Citation for Contempt specifically informed Turner that Rodell was seeking sanctions based upon Turner’s failure to post the bond and that one of the sanctions sought was dismissal pursuant to rule 41.02.

As for Turner’s argument that his failure to comply with the trial court’s orde r was not willful, 10our review of this issue is hampered because the record on appeal does not11 The affidavit wa s signed by

an account execu

tive employe

d by Fidelity

and Deposit Company of Maryland, who stated that the company had been unable to write a bond as required by the court’s orders because the company’s underwriters could not determine the scope of the bond. contain a complete transcript of the evidence presented at the hearing on Rodell’s motion. The record contains a partial transcript of the October 2, 1998, hearing, but the transcript is marked “Excerpt only,” and it appears to contain only the r uling announced by the trial court at the hearing’s con

clusion. The only

evidence cited b

y Turner in

support of this issue

is an affidavit that was fi led several days after the he aring. 11

The appellant bears the burden of showing that the evidence presented below preponderates against the trial court’s judgment. Coakley v. Daniels , 840 S.W.2d 367, 370 (Tenn. Ct. App. 1992). To this end, the Tennessee Rules of Appellate Procedure require the appellant to prep

are “a transcr

ipt of such part of

the evidence or

proceedings a

s is necessary

to convey a fair, accurate and complete a ccount of what transpired with respect to those issues that are the bases of

appeal.” Tenn.

R. App. P. 24(b); see also Johnson v. Hardin , 926 S.W.2d 236, 239 (Tenn. 1996); Nickas v. Capadalis , 954 S.W.2d 735, 742 (Tenn. Ct. App. 1997). In the absence of a transcript or statement of the evidence, a presumption arises that the parties presented sufficient evidence to support the trial court’s judgment, and this court will affirm the judgment. Coakley , 840 S.W.2d at 370; Irvin v. City of Clark sville , 767 S.W.2d 649, 653 (Tenn. Ct. App. 1988).

Inasmuch as the record in this case fails to include a complete transcript of the hearing on Rodell’s motion, we are unable to determine whether, based upon the evidence befor e it, the trial court

erred in finding

that Turner was i

n “willful contemp

t” due to his “failu

re to comply with th

e [court’s] orders .” Under these c ircumstances, Tu

rner has failed

to meet his burden of showing

that the evidence

preponderates

against the tria

l court’s judgme

nt, and this issue does not prov

ide a basis for this

court to reverse

the judgment on a

ppeal.

In any event, we conclude that the tria l court was authorized to dismiss Turner’s intervening complaint regardless of whether the evidence supported a dismissal under rule 41.02. As we previously held, the trial court acted within its discretion when it conditioned Turner’sright to interve ne in this action upo

n his posting a bond

. When Turner fai

led to meet this condition, the tria

l court properly

denied Turner’ s request to interv ene by dismissing his complaint.

We conclude, on the other hand, that th

e trial court’s di

smissal of MCS’s clai

ms in the underlying action must be reversed. Although rule 41.02 expressly authorizes a trial court to dismiss a party’s claim if the party asserting the claim fails to comply with an order of the court, we have found no support within the language of rule 41.02 for dismissing one party’s claim based upon a

different party

’s violation of a c

ourt order. Tenn. R. Civ. P. 41.02(1). In this case, MCS did not violate the court’s orders allowing intervention because the orders did not require MCS to per

form any spe

cific act or, co

nversely, t

o refrain from p

erforming any

act. As a condition of allowi

ng Turner to inte

rvene in the unde

rlying ac tion, the orders r

equired only Turner, and not MCS, to post a $1.6 million bond. By failing to post the required bond, Turner risked, and ultimately suffered, the dismissal of his intervening complaint. The record conta ins no support, howeve

r, for imposing th

is sanction agai

nst MCS.

In urging this court to affirm the trial court’s order of dismissal aga inst MCS, the Defendants cite Quality First Staffing Services v. Chase-Cavett Services, Inc. , No. 02A01-9807-CH-00205, 1999 WL 281312 (Tenn. Ct. App. May 7, 1999) ( no perm. app. filed). In that case

, the trial court r

uled that the appe

llants, both of whom w

ere officers o

f a corporate defendant, were in contempt of court for failing to deposit money into the cour t registry as directed by previous court orders. Quality First, 1999 WL 281312, at *2. Although the corporate officers were not parties to the action, we affirmed the trial court’s judg ment of contempt against them, reasoning that “a corporation can comply with such an order only by acting through its agents.” Id ., at *4.

We conclude that the Quality First decis ion i s inap posit e to th e pres ent ca se. In Quality First, we upheld the tri al court’s judgm

ent of contempt ag

ainst the corpora

te officers, in part, because w

e reasoned that t

he only way

the corporate de

fendant could ha

ve complied with the court’s previous orders was through its agents, the corporate officers. We also obser ved that at least one of the

orders specific

ally direc ted the two corpor

ate officers to d

eposit the funds int

o12 Traditionally, courts have used this theory to impose liability against a controlling shareholder who has used the corporate entity to avoid his legal oblig ations. Clark v. United Techs. Automotive, Inc. , 594 N.W.2d 447, 449 n.3 (Mich. 1999). In recent years, howe ver, a “reverse pier

cing” theory

has gained rec

ognition whereb

y courts may

impose liability

against a corporation for the debts of its controlling shareholder. See, e.g. , In re Blatstein , 192 F.3d 88, 100 (3d Cir. 1999); Scholes v. Lehmann , 56 F.3d 750, 758 (7th Cir.), cert. denied , 516 U.S. 1028 (1995); Century Hotels v. United States , 952 F.2d 107, 110 n.6 (5th Cir. 1992); Zahra Spiritual Trust v. United States , 910 F.2d 240, 243- 44 (5th Cir. 1990); Thomsen Family Trust, 1990 v. Peterson Family Enters., Inc. , 989 S.W.2d 934, 937 (A rk. Ct. App. 1999); State v. Easton , 647 N.Y.S.2d 904, 908-09 (N.Y. Sup. Ct. 1995). See generally Gregory S. Crespi, The Reverse Pierce Doctrine: Applying Appropriate Standards , 16 J. Corp. L. 33, 55-69 (1990). As one court explained, whereas piercing analysis ty pically “is used to hold individuals liable for the actions of a corp

oration they

control,” rever

se piercing “se

eks to hold a corpo

ration accounta

ble for actions of its shareholders.” American Fuel Corp. v. Utah Energy Dev. Co. , 122 F.3d 130, 134 (2d Cir. 1997).

Despite this distinc

tion, both theories

rely on the p

remise that one e

ntity is the alter ego of the other. Scholes , 56 F.3d at 758; Century Hotels , 952 F.2d at 110 n.6 ; Zahra Spiritual Trust, 910 F.2d at 243-44. Although some courts apparently have embrac ed the “rev ers e pi erci ng” d oct rin e, o the rs h ave e xpr ess ed co ncer ns a bou t ad opt ing t his the ory, describing it as “potentially problematic” or “controversial.” Floyd v. IRS , 151 F.3d 1295, 1300 (10th Cir. 1998); Nursing Home Consultants, Inc. v. Quantum Health Servs., Inc. , 926 F. Supp. 835, 840 n.12 (E.D. Ark. 1996), aff’d , 112 F.3d 513 (8th C ir. 1997); Estate of Dailey v. Title Guar. Escrow Serv., Inc. , 178 B.R. 837, 844 (D. Haw. 1995), aff’d , 81 F.3d 167 (9th Cir. 1996). the court registry on behalf of the corporation. Quality First, 1999 WL 281312, at *2, *4. This reasoning do es not appl y in the present case. Unlik e a corporati on, which ca n act only thro ugh its officers and agents, Turner is an individual who may act on his own behalf without the assistance of an agent. Moreover, unlike the orders at issue in Quality First, the orders in this case directed only Turner, and not the corporation, to post the $1.6 million bond.

We similarly r

eject the Defen

dants’ sugges

tion that the order

of dismissal aga

inst MCS can be upheld by disregarding the corporation’s sepa rate identity, a theory also known as “piercing the corporate veil.” This theory permits a c ourt to disregard a corporate entity in order to impose liability against a related entity, such as a parent corporation or a controlling shareholder, where the two entities are in fact identical or indistinguishable and where nece ssary to accomplish justice. Stigall v. Wickes Mac h. , 801 S.W.2d 507, 510-11 (Tenn. 1990); Scandlyn v. McDill Columbus Corp. , 895 S.W.2d 342, 346-47 (Tenn. Ct. App. 1994). If the court imposes liability against the related entity under this theory, the evidence must show that one entity is the alter ego of the other. Contine ntal Ban kers Li fe Ins. Co. v. B

ank of Alamo , 578 S.W.2d 625, 632 n.1 (Tenn. 1979). 12

We conclude that the application of this theory should not have led to thedismissal of MCS’s cla ims. In so holding

, we express no opini

on on whether a tr

ial court, pursuant to rule 41.02, could dismiss both a corporation’s claims and the claims of its controlling shareholder based upon the theory of piercing the c orporate veil. In the present case, however, the trial court had before it both the corporation, MCS, and its controlling shareholder, Turner. Unlike the court’s orders in Quality First, the orders at issue in this case did not require both the corporation and

its officer to per

form a specific a

ct. In short, th

e record conta

ins nothing to suggest, prior

to entry of t

he trial court’s o

rder of dismissal,

that the court expe

cted MCS to perform the req

uired act of posti

ng the bond if Tur

ner failed to do so. Under these circumstances,

we hold that the tri

al court abused it

s discretion when

it dismissed MCS’s cla

ims bas ed u pon thi s th eory.

III. Order Entering Summary Judgment in Favor of Rodell on Counterclaim Against Turner

We also hold that the

summary judg

ment entered in f

avor of Rodell on hi

s counterclaim against Turner must be reversed. Ordinarily , the dismissal of an original complaint or an intervening complaint under rule 41.02 does not affect a defendant’s right to be he ard on any properly asserted c

ounterclaims. Quelette v. Whittemore, 627 S.W.2d 681, 682 (T enn. Ct. App. 1981); Brewer

v. Will iams , 80 S.E.2d 190, 194 (Ga. 1954). In such a case, the parties remain before the court, and the defendant may ele ct to proceed on his counterclaims against the plaintiff. Quelette , 627 S.W.2d at 682; American Actuaries, Inc. v. Mid America Diversified Servs., Inc. , 1988 WL 31964, at *2-*3 (Tenn. Ct. App. Apr. 7, 1988) ( no perm. app. filed).

The dismissal of an intervening complaint, however, differs procedurally from the denial of a motion to

file an interven

ing complaint. I

n the latter case

, the movant’s req

uest to participate in the litigation is denied, and the movant never becomes a party to the or iginal action. See Graham v. City of Anchorage , 364 P.2d 57, 59 (Ala ska 1961); McGough v.
Insuran ce Co. o f N. Am. , 691 P.2d 738, 742 (A riz. Ct. App. 1984); Wyatt v. R.D. Werner Co. , 524 N.W.2d 579, 580 (

N.D. 1994); see also Ray v. Trapp , 609 S.W.2d 508, 510 (Tenn. 1980); Greer v. American Sec. Ins. Co. , 445 S.W.2d 904, 905 (T enn. 1969); Goodman v. State , 351 S.W.2d 399, 401 (Tenn. Ct. App. 1960).Despite the trial court’s citation of rule 41.02, we believe that the court’s

dismissal of Turner’s intervening complaint, in actuality, constituted a denial of Turner’s motion to intervene. As w

e previously

indicated, when t

he trial court g

ranted Turner’ s motion to intervene, the court did so only upon the condition that Turner post a $1.6 million bond. The effect of this ruling was that, if Turner failed to post the required bond, Turner would not be permitted to intervene in this action. Ultimately, Turner failed to post the bond, and the trial court dismissed his intervening complaint. Given the procedural history of this litigation, we conclude that this

dismissal effect

ively denie

d Turner’s motion t

o intervene and p

revented him from ever becom

ing a party

to this action. I

nasmuch as Turne

r never became

a party, he

could not assert his claims for declaratory and injunctive relief ag ainst Rodell in this action, and, correlatively, Rodell could not assert a counterclaim in this action against someone who wa s not a party relative to claims that were not at issue. Under these circumstanc es, the trial court erred in granting Rodell’s motion for summary judgment on his counterclaim aga inst Turner.

For the foregoing reasons, we reverse the trial court’s or der of dismissal to the extent that it dismissed MCS’s claims against the Defendants, and we reverse the trial court’s order granting Rodell’s motion for summary judgment ag ainst Turner. In all other respects, the trial court’s orders are affirmed, and this cause is remanded for further proc eedings consistent with this opinion. Costs of this appeal are taxed one-half to Intervening Plaintiff C.O. Turner, III, and one-ha

lf to Defendants Rick Rodell, Cornerstone Systems, Inc., Tim Clay , Pat Nieman,
Jer ry Ri ce, R ica rdo Fern and ez, Guy W all ace, Bruc e Hal lma nn, Larr y Pri tch ett , Ja ck Bi lli ngsl ey, Jim Cha lta s, G regg Mit chel l, a nd A ngie Tayl or, for whi ch ex ecut ion may i ssu e ifnece ssa ry.

__________________________________ FARMER

, J.

______________________________ HIGH ERS, J.

______________________________ LIL LARD, J.