# FILED
July 10, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

## IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

MOORE CONSTRUCTION COMPANY, ) INC., and PAUL W. MOORE, ) ) Plaintiffs/Appell

ants, )

) Montgomery Circuit ) No. C9-31 VS. ) ) ) Appeal No. STORY ENGINEERING COMPANY, ) 01A01-9606-CV-00267 INC., and RODDY L. STORY, ) ) Defendants/Appel

lees. )

APPEAL FROM THE CIRCUI T COURT FOR MONTGOMERY COUNTY AT CLARKSVILLE, TENNESSEE THE HONORABLE JAMES E. WALTON, JUDGE

For Plaintiffs/A

ppellants : For Defendants/Appellees : Thomas N. Bateman John T. Horton RobertT. Bateman Brewer, Krause, Brooks & Mills Bateman, Batem

an & Darnell Nashville, Tennessee Clarksville, Tennessee



## AFFIRMED AND REMANDED

WILLIAM C. KOCH, JR., JUDGE-2- 

## O P I N I O N

This appeal stems from a construction contract to improve the natural gas transmission

system in the City of C

larksville. Afte

r the City awarde

d the contract,
an unsuccessful bidder sued the project engineer in the Circuit Courtfor Montgomery County, claiming interference with prospective economic advan tage, defamation, an d disparagement. The trial court granted the project en gineer’s motion for summary jud gment, a nd the unsuccessful bid der has appealed to t

his court. We have determined that the

summary judgment

was appropriate be

cause Tennessee d

oes not recognize the tort of interfe rence with

prospective economi

c advantage and becau se the project engineer’s statements concerning the unsuccessful bidder were true.

I.

In the early 1990's, t

he City of Clarksville hired Story Engineering Co., Inc. to performa feasibility study concerning the ca pacity o f its natural gas tr ansmission system. Roddy L. Story, t he principal of Story E

ngineering who was to perform the work, is a Vanderbilt-tr

ained e ngineer w ho had been employed by Nashville Gas Company for thirty-two years. Mr. Story had assisted with the design of Clarksville’s existing system i n the 1950's.

After Mr. Story reported tha

t Clarksville’s syst

em was no longer ade

quate to meet the expected deman

d in t he ca se of severe weather, the City retained him as pro jectengineer to design the improvements and to pr epare the plans a

n d specifications

and other con

tract documents for the project. The project Mr. Story designed called for the installation of 116,900 linear feet of 123⁄4-in ch O.D. coated steel natural gas pipe with fittings, 600 linear feet of 6 

### e -inch O.D. coated steelgas pipe, and various regulato r stations, bridge c

rossings, ti e-ins, and related appurtenances.

Because the quality of the wo

rkmanship on the proje ct w as extremely impo rtant, Mr. Story included in the specificatio

ns and contract docum

ents a requirement

that the successful bidder must have constructed a similar natural gas1 The Specifications and Contract Documents stated: The Owner will require as mini mum qual ification for Bidd er to have succe

ssfully completedwithin the last thirty- six mon ths the installation of a natural gas transmission pipeline and regu lator station syste

m similar in

size andcomplexity to this Project. Bidder must have previous experience in welding on high pressure gas lines, hydrostatic pressure testing, and filling of pipelines with high pressure natural gas. -3- transmission

pipeline project within three years preceding the date o f the Clarksville project. 1 Moore Construction C ompany, Inc. wa

s one of th e nine companies submitting bids on the project. Mr. Story requested Moore Construction C

ompany to provide additional inf

ormation because it

s original bid did not cont ain sufficient information

about its pri or j obs or the personnel w ho would perform the

work. Moore Construction Company’s supplemental information revea led that the

last gas pipeline it had constructed was in 1984 in Louisiana.

After evaluating the bids, Mr. Story informed the City tha t King Pipeline and Utility Company, Inc. ha d submitted the lowes

t bid of $3, 398,808 and

that it had recently completed four simi

lar projects. H

e also informed the

City th at Moore Construction Company had submitted the second l owest bid of $3,432,378 but that ithad not completed a s imilar proje ct within the past three years. Moore Construction

Company appeared a

t a meet ing of the Clarksville Utility Committee shortly after the bids we

re opened and reques

ted that it be awar

ded the contract in accordance with the City’s procurement rule that favors local contractors when there is less than a five percent difference betwee n their bid a nd the lowest bid. T

he committee declined to recomm end Moore Constructi

on Company because it

did not meet the specification’s qualifications fo r performi ng the work. When the matter
came before the Clarksville City Council, Mr. Story informed the council members that Mo ore Construction Company was “not qualified to construct the project and that the Cit y of

Clarksville, Te

nnessee, and its indi

vidual council membe

rs . . . would expose itself and themselves t o liabilit y should it award the contract to [Moore2 The City Council’s resolution awarding the contract to King Pipeline recited that There was extended discussion regarding the option of awar ding the contract

to Moore Construction Co., a local contractor and the second low bidder, under the 5% provision. Mr. Story stated that in accordance with the bid specif

ications, it was his opinion that Moore Construction Co. was not qualified bec ause this company had not completeda project of this magnitude within the past 36 months as specified in the bid documents.” -4- Construction

Company] . . . instead of following [his] re commendation . . ..” 2 Thereafter, the City Council awarded the contract to King Pipeline.

In November

1992, Moore Construction Company and its president filed suit against Mr. Story and Stor

y Engineering in

the Circuit Court f

or Montgomery County alleging that Mr. Story’s s tatements to

the City Council had defamed and disparaged them and had interfere

d with their prospec

tive economic advantage

. They requested $300,000 in a ctual and $600,000 in punitive d amages. Mr. St

ory later moved for summary judgment. The trial court granted the motion

and dismissed each of Moore Construction

Company’s claims on the ground that Mr. Stor y’s statements

to the City Council concerning

Mo ore Construction Com pany’s qualificatio

ns under the project’s specifications were true.

II. Summary judgments enjoy no presumption

of correctness on app eal. See City of Tullahoma v. Bedf

ord County , 938 S .W. 2d 408, 412 (Tenn. 19 97); McClung v. Delta Square Ltd. Partner ship , 937 S.W.2d 891, 894 (T enn. 1996). Acco

rdingly, reviewing

courts must make a f resh determina

tion co ncerning whether t he requirements

of Tenn. R. Civ. P. 56 have been s atisfied. See Hunter v. Brown , 955 S.W.2d 49, 50-51 (Tenn. 1 997); Mason v. Seaton , 942 S.W.2d 470, 472 (Tenn. 1997). Summary judgments are appro priate only when the

re are no genuine factual disputes withregard to the claim or defense em bodied in the motion and w hen the moving party is entitled to a

judgment as a matter o f law. See Tenn. R. Civ. P . 56.04; Bain
v. Wells , 936 S.W.2d 618, 622 (Tenn. 1997); Carvell v. Bottoms , 900 S.W.2d 23, 26 (Tenn. 1995).

Courts reviewing summar y judgments must view t

he evidence in the lig

ht most favorable to the nonmoving party

and must also draw a

ll reasonable infer

ences in the nonmoving party’s favor. See Robinson v. Omer , 952 S.W.2d 423, 426 (Tenn. 1997);-5-

Mike v. Po Group, Inc. , 937 S.W.2d 790, 792 (Tenn. 199 6). Thus, a summary judgment should be granted only when the undisputed facts reasonably support one conclusion

-- that the moving

party is entitled to a judg ment as a matter of law. See McCall v. Wilder , 913 S.W.2d 150, 15 3 (Tenn. 1995); Carvell v. Bottoms , 900 S.W.2d a t 26. A party may ob

tain a summary judgme

nt by demonstrating th

at th e nonmoving party will be

unable to prove an es sential element of it s case, see Byrd v. Hall , 847 S.W.2d 208, 212-13 (Tenn. 1993), because the inability to prove an essential element of a cl aim necessarily rend ers all other facts imma terial. See Alexander

v. Memphis Individual Practice Ass’n , 870 S.W.2d 278, 280 (Tenn. 1993); Strauss v. Wyatt, Tarrant

, Combs, Gilbert

& Milom , 911 S.W.2d 727, 729 (Tenn. Ct. App. 1995).

III.

Moore Construction Co mpany asse rts that Mr. Story was not entitled to a summary dismissal of his three claims because of material factual disputes that render
a summary judgment inappropriate. It claims thatthe record contains disputed facts regardingits ability to construc t the pipeline

according to the project specifications and the City Counci l’s po tential liability for awarding the contr

act to a contractor who did not meet the bid requirements. We have determine d that these issues,

to the extent that they are factual,

are not material to the disposition of this case and that Mr. Story is entitled to

a judgment dismissing

each of Moore Const

ruction’s claims as

a matter of law.

A.

The status of the tort of intentional interfe rence with prospec

tive economic advantage

was not settled when Moore Construction C ompany first filed i

ts complaint

against Mr. Story

. However, the T ennessee Supreme Court put this issue to rest in 1997 when it held that this cause of action would not be r ecog nized in Tennessee. See Nelson v. Mart in , 958 S.W.2d 643, 646 (Te nn. 19 97). The Court’s decision applies to cases pending at the time it was ha nded down, see Alexander v. Inman , 825 S.W.2d 102, 105 (Tenn. Ct. App . 1991) (applying re tr oactivel y the Tennessee Supreme Court’s abolition of the common-law tort of alienat ion o f-6-

affections). Thus, we affir m the trial court’s

dismissal of this cla

im because

it does not exist under Tenn essee law.

B.

Moore Construction Company ass erts that its defamation claim shou ld not have been summarily dismissed because the facts, taken in their most f

avorable light, demonstrate

that Mr. Story’s state ments were false or falsely implied the existence of other derogatory fa

cts. Based on the unc

ontroverted e

videnc e concerning Mr. Story’s statements to the City Council, we have det ermined that Mr. Story’s statements were true as a matter of law. Therefore, th e trial court corr

ectly summarily d ismissed this claim because Moore Construction Company failed to demonstrate that it would be able to pr

ove an essential ele

ment of its defama

tion claim at trial.

The basis of a defamation action, whether it be libel or slander , is that the defamatory statement has injure d a person’s charac

ter or reputatio

n. See Quality Auto Parts Co. v. Bluff Cit

y Buick Co. , 876 S.W.2d 818, 820 (Tenn. 1994). The Tennessee Supreme Court, adopting Res tatement (Second)

of Torts § 580B (1977), defined the tort as follows:

One who publishes a

falseand defamatory com munication concerning

a private person, or concer

ning a publicofficial or public figure in rel

ation to a purely p

r ivate matter not affecting his conduct, fitness

or role in his public c apacity, is subject to liability,

if, but only if, he (a) knows that the state

ment is false and tha

t it defames the other, (b) acts in reckle ss disregard of these matters, or (c) acts negligently in failing to ascert ain them. Press, Inc. v. Verran , 569 S.W.2d 435, 442 (T enn. 1978). Under this formula tion, statements that are factual ly true cannot

provide a basis for a

defamation

action. See Stones River Motors, In

c. v. Mid-South P

ublishing Co. , 651 S.W.2d 713, 719 ( Tenn. Ct. App. 1983).

Mr. Story’s statement

s that Moore Construction C ompany did not satisfy th e qualifications

for bidding on this proje ct were based on in

formation that M oore Construction

Company itself

provided. There is no dispute t hat Moore Constructi

on Company had not undertaken to bu ild a natural gas tra

nsmission pipeline duri

ng the thirty-six months prior to bidding on this project. Mr. Story’s appraisal of whether-7-

Moore Construction Company qualified as a bidder on this project

cast no reflection
on the company’s competence as a contractor, but rather reflectedthe undisputed fact that the company did not sati sfy the prior experi ence requirement

in the specificatio

ns for this project.

Moore Construction also asserts that Mr. Stor y’s warning a bout the City Council’s exposure to liability is false and

defamatory. Th

is statement, whi

ch is little
more than an expre ssion of legal opinion by a lay person, is also correct. Local governmental offic i als are not immune f rom suit for willfu

l or wanton acts or a

cts amount ing to gross negligen ce. See Tenn. Code Ann. § 29-20-201(b)(2) (Su pp . 1997). Because it was undisputed that Moore Construction C ompany did not

meet the qualifications to

bid, Mr. Story’s caut

ion about the

consequences of aw

arding a contractto construct a natural gas pipeline to a c ontractor who did not meet the qualifications to bid w

as neither inappropr

iate nor defamator

y.
C.

Moo re Construct ion Company’s final c laim is for dispara

gement. Even though Tennessee courts have not specifically rec

ognized this tort, it is among the classes of torts recognized in the Restat ement (Second) of Torts § 623(A) (1977) which provides: One who publishes a false statem ent harmful to the

interests of another is subject to liability for pecu

niary loss resulting to the other

if (a) he intends for publication of the statement to res u lt in harm to interests of the ot her having a

pecuniary value, or either recognizes or

should recognize that it is likely to do so, and (b) he knows that the

statement

is false or acts in re

ckless disregard of its tru th or falsity.
This case does not provid e an appropriate ve hicle for explicitl

y recognizing disparagement

as a separate tor

t because Moore Cons

truction Company has b een unable to demonstrate that it will be able to prove an essential i ngredient of the cau se of action.

Like a claim for defamation, a claim for disparagement must be based on a falsestatement. We have already determined that Mr. Story’s statements concer ning-8-

Moore Construction Company’s inability to qualify as a bidder under the project’s specifications

and his caution of the possible consequences of aw

arding the bid to a non-responsive

bidder were true and correct. Accordingly, these s ta tements, as a matter of law, cannot support a cause of action for dispar

agement.

IV.

We affirm the summa

ry j udgm ent and remand the c ase to the trial cour t for whatever further proceedi

ngs may be required.

We tax the

costs of this appeal, jointly and severally, to M oore Construction Com

pany and Paul W. Moore and their surety for which execu tion, if necessary, may issue.

______________________________ WILLIAM C. KOCH, JR., JUDGE

CONCUR:

__________________________________ HENRY F. TODD, PRESIDING JUDGE MIDDLE SECTION

__________________________________ SAMUEL L. LEWIS, JUDGE