### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE Ja nuary 6, 200 4 S es sio n
KEVI N DEMERS, ET AL 

### . v. WAL TER W HI TTE NBURG, ET AL 

### .

Ap pe a l f ro m th e Cir c uit

Cou rt fo r R ob e rt so n Co un ty No. 9908 J ohn H. Gasa way , I I I , J udg e

No . M 20 03 -0 01 84 -C OA -R 3- CV - F iled May 27, 2004

This case involves two Rule 12.02(6) motions to dism iss converte d to m o t i ons for summary jud g me nt throu g h th e fi lin g of a dd iti on a l a ff

ida vit s w ith Plaint if

f’ s r e sp on se to the se mot ion s. Although the trial court dismi s s ed al l claims ag ainst Defe ndants for f ailure to state a

claim under Rule 12.02(6), we must review the evidence using a Rule 56 motion for summary judgme nt standard. Plaintiff alleg ed n u m er o u s b u s i n es s t o rt s , co n s p i ra cy , i n t en t i o n al i n fl i ct i o n o f e m o t i o n al d i s tre s s , and defa mation in th is action ag ainst Defe ndants. Howe ver, Plaintiff failed to provide any evidenc e fr om wh ic h a jury c ou ld r e turn a

ve rdict in f

a vo r o f P la int if

f o n a ny c ou nt a lle g e d. Th e tr ia l c ou rt a lso g rante d R u l e 1 1 s anctions against P laintiff. The judg ment of the trial c ourt is affirmed, but on
su mma ry jud g me nt g ro un ds

. Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Circ uit Court Affir m e d as M odi fie d

W I L L I AM B. C A IN , J ., delivere d the opinion of the court, in which P A T R IC IA J . C O T T RE LL , J ., joined. W I L L I AM C. K O CH , J R ., P.J ., M.S., filed a sepa rate concur

ring opinion.

Troy L . Br ooks, Mt. J uliet, Tennesse e, for the appe llants, Kevin Deme rs and De mers, Inc.

Robert J . Mendes, Na shville, Tenne ssee, for t he appellees, W alter Whittenburg , Randall Qualls, and Whit tenburg , I nc.
Mic ha e l E rn e st E va ns , N a sh vil le , T e nn e sse e , f or the app e lle e , K are n A nn e tte Wal la c e De me rs
.C o urt of A p p eal s R ul e 1 0 (b): 1
T h e C o u rt, w ith the c o n c u rr e n c e o f a ll ju d g e s p a rtic ip a ting in t h e c a se , m a y a ff irm , re v e rs e o r m o d ify t he act i o ns o f

t he t ri al co urt by m e m o ra nd um op i ni o n when a fo rma l op i ni o n wo ul d have no prec edent i al va l ue. W hen a c as e i s deci ded b y m em o randum opi ni on i t s hal l be des i gn at ed “M E M O R A N D U M O P IN IO N , ” shal l not b e p ub l i shed, and s hal l not b e ci t ed o r re lied on f o r any
re a so n in a su b se q u e n t un re la te d c a se
. -2-

M EM OR AN DU M OP IN ION 1

I

. F AC TU AL

HI STO RY

Th e fa c ts i n th is c a se ha il b a c k to the div or c e of Pla int if f, Ke vin De me rs , f

ro m D e fe nd a nt, Kar en Wallace Demer s, in May of 1998. At the time of the divorce , Plaintiff w as found to have an annual income of $250,000 from his business as a printing press broke r, in which business his wife participated. He was ordered to pay child support in the amount of $4,100 per month. I n Dec ember of 20 00 , Pl a int iff fi led a Pe tit ionto r e du c e his c hil d s up po rt a lle g ing a

su bs ta nti a l de c lin e in h is business due to “mar

ket circ u m s t an ces bey ond his control.” He alleg ed his loss of business to be due to the interne t obviating the ne ed for an American printing pre ss broker.

On Janu ary

23 , 2 00 1, Pla int if

f w a s sue d by Wes te rnPr int ing Compa ny , Inc . inSou th D ako ta reg arding the purc hase of a printing press by W estern Printing . Some time therea fter, Plaintiff de c ide d to liq uid a te his bu sin e ss a nd c e a se op e ratio n. He a dv e rt ise d e xten siv e ly fo r an auc tio n to be held on June 7, 2001 to acc omplish t his liquidation. Western Printing Company found out about the liq uid a t i o n a n d o b t a i n e d a R e s tr a i n i n g O r d e r

o n Ju n e 6 , 2 0 0 1 a tap p r o xi m a t e l y 4 : 0 0 p .m. requiring Plaintiff to deposit all funds from the proce eds of the auction with the Chance ry Court of Robertson County , Tenne ssee. The Restraining Orde r wa s serve d on Plain t i ff ap p ro x imately one ho ur prior to the sta rt of the auc tio n th e mornin g of June7. Ac c or din g to P la int if f, the a uc tio n d id not g o as we ll as expected, and he blamed service of the Restraining Orde r for the alleg ed failure of the auc tion.

On Fe bruary

20, 2002, Plaintiff f

iled an Amended Petition for reduc tion of his child support obligation where in he stated that his business had be en liquidated an d cea sed to exist . He f urther al l ege d t h ath e h ad h ad n o i n co m e s i n ce t h e l i q u i d at i o n s al e. On Fe b ru ar y 2 6 , 2 0 0 2 , t h e t ri al j u d ge he ardhis c hil d s up po rt

pe tit iona ndde te rm ine d th a t he wa s vo lun tari ly un de re mpl oy e d, re fu sin g to reduc e his child support. Plaintiff appea led that ruling , but the court of a ppeal s u p h el d the trial
c o u r t’ s d e termination. Se e De me rs v . D e me rs , No

. M 2 0 0 2 -0 1 9 70-COA-R3-CV, 2003 WL 22938951 (Tenn.Ct.App. De c. 10, 2003).

On June 5, 20 02 , Pla int if

f fi le d a Complaint

in f e de ra l c ou rt

a g a ins t D e fe nd a nts in this c a se an d o t h erD e f

e n d a n t s
. P l ai n t i ff

t h en d i s m i s s ed De fe n d an t s i n t h i s ca s e, W al t erW h i t t en b u rg, individually , Whit tenburg , I nc., Ka ren Wallac e De mers, individually , and J ames Randall Qualls and fi le d thi s a c tio n a g a ins t the se na me d De fe nd a nts in C ir c uit Cou rt fo r R ob e rt so n Co un ty

on Au g us t 7, 20 02 . T he Complaint a lle g e d s e ve n c a us e s o f actio n: (1) tort iou s in te rf e re nc e wi th b us ine ss re la tio ns , ( 2) tortio us int e rf e re nc e a nd ind uc e me nt t o b re a c h c on tr a c t, ( 3) c ivi l c on sp ir a c y , ( 4) un fair-3-

competition, (5) intentional infliction of emotional distress , (6) defamation, and (7) punitive da ma g e s. Th e se c aus e s o f a c tio n w e re ba se d o n a lle g a tio ns in the Complaint a s f oll ow s:
6. At all rele vant times here in, Defe ndan t W ALTER WHI TTENB URG has lived at 1900 Nicholas D rive, Spring field, Tenne ssee 37172. This Defendant is the former secr etary

of the Corporation and vice- president of Demer s, I nc., whe re he was e mpl oy e d f

or six y e ars a ndwa s p ri vy to confi dentia l in fo rm a tio n a ndc or po rate secr ets of De mers, In c. This Defe ndant as a vice- president a nd secr etary of the
c or po ratio n h a d c e rt a in f

idu c iary re sp on sib ili tie s.
7

. At a ll r e le v a n t t im e s h e r e in , D e f e n d a n t W H I T T E N B U RG , I N C. ’ s p r imary busin es s ad dress ha s been 208th Ave nue, Spring field, Tenne ssee 37172. Upon information and be lief the De fendant corporatio n i s believed to be a Te nnessee Corporation. This Tenne ssee c orporation is in dir ect competition w ith Demers, Inc. and De mers Parts.

8. At all rele vant times here in, Defe ndant KAREN WALLACE DEMERS is t he ex-wife of Plaintiff KEV IN DEMER S, who resides at 316 Clearview D rive, Springf ield, Tenne ssee 37172. This De fendant also had ac cess to conf idential information of Plaintiffs and wa s directly connec ted to Def endants WAL TER WHITT EN B UR G andRA ND AL L QU AL L S. D e fe nd a nt KAR ENWAL LAC E DEMERS ag ree d to a three y ea r non-compe te clause in the Marital Dissolution Ag ree ment, which wa s signe d May 27, 1998. This ag ree ment expired May 27, 2001, which wa s one we ek bef

ore the ex-parte injunction wa s signe d. (See attached MD A as Exhibi t #1 and at t ached Ex-Parte I njunction as Exhi bit #2) Her e rrone ous statement “K evin Deme rs has a way of closin g down businesses to avoid cr editors and law suits as he has done it bef ore” fuele d the ex-parte injunctive relief.

9. At all rele vant times, the Def endant RAND ALL

QUAL L S is t h e sales manag er f

or De fendant WHI TTENB URG, INC. The act s comm itted ag ainst the Plaintiffs by

the Def endant RAND ALL

QUAL L S were while he wa s employ ed by the Defen d a n t W H I T T E N B U RG , I N C. F o r me r ly , th is D e f e n d a n t w a s th e s a le s manag er of

Demer s, I nc. This Def

endant ha d acc ess to confide ntial information and Def endant a lso h ad intimate knowledg e of the business of Kevin De mers and Demer s, I nc. Defendant RANDALL QUAL L S has also been know n to have made lif e thr e a te nin g state me nts w hi ch we re re c or de d, a g a ins t K e vinDe me rs . T he se rec orded state ments contain and als o a c kn o w le d g ec o n f id e ntial information about the business affairs of the Plaintiffs. It also contained c onfidential information about ong oing litig ation of the Plaintiffs in Aber deen South Dakota (see attache d tapeT hi s ‘ t rans cri p t ’ co nsi st ed of an unsworn st at em ent of P l ai nt i f f ’ s gi rl f ri end regardi ng t hreat eni ng cal l s she 2 cl ai m s t o have recei ved f rom an uni d ent i f

i ed pe rs o n. -4- tr a n s c r i p tE x h i b i t# 3 )

. P r e v i o u s l y i n a s e p ar a t e i n c i d e n t , t h e D e f e n d a n t R A N D A LL 2 Q U A LLS c a l l e d t h e p o l i c e , a n d m a d e a f a l s e r e p o r t , a g a i n s tP l a i n t i f f K E V IN DEMERS, and as a r esult of the fa lse report, the Plaintiff was ar rested.

. . . . 13. Upon information and be lief, Defenda nt WAL TER WHI TTENB URG, Pr e sid e nt o f Wh itt e nb ur g , Inc ., app ro a c hed the De fe nd a nt KAR ENWAL LAC E DE ME RS, andhe a ndDe fe nd a nt KA REN WAL LAC E DE ME RS, de vis e d a sc he me to ma li c i o u s l y

a t t a c k a n d t o p u rp o s e l y

i n t e r f e r e , w i t h t h e e xi s t i n g b u s i ne ss relationships and future business re lationships of the Plaintiff KEVI N DEMERS and DEMERS, I NC. All Defe ndants named a bove participated in this scheme.

14

. Th e De fe nd a nts a ll a c te d inc on c e rt wi th a c omm on pu rp os e a ndsc he me to int e nti on a lly

da ma g e a ndde str oy

the e xistin g bu sin e ss rel a tio ns hip s, a ndto intentionally

interfe re w ith the future busine s s relationships , of Ke vin Demer s and Demer s, I nc. and D emer s Parts.

15. Def

endants W ALTER WHI TTENB URG, WHI TTENB URG INC., R AN DA LL

QU ALL S an d KA R E N W ALLAC E DE M E R S h ad i n t i m at e k n o wl ed ge of the Plaintiff’s business re latio n s h i p s and prospe ctive business re lationships be tw e e n D e me rs , Inc . a nd th eir e xistin g c lie nts . T ho se thr e e De fe nd a nts a c te d in
c on c e rt a ndint e nd e d to c aus e th e brea c h o r t e rm inatio n o f thee xistin g bu sin e ss relationships of Kevin Demer s and De mers, Inc.
16. All Def

endants acted im proper and had an (sic) improper moti ve and me ans to intentionall y i n t erf

ere with and destroy

the business relationships of P laintiff Kevin De mers and D emer s, I nc.
17. Specifica lly

the Def endants Walter Whittenburg and Kar en Wallace De mers al o n g with the other De fendants made fa lse ac cusations about the Plaintiff that
cause d an Ex-Parte I njunction to be issued ag ainst the Plaintiff of (sic) J une 6, 2001 at 4:20 p.m. (See attached E x -Parte Injunction as Ex hibit 2). Further, this injunction
was served improperly on the Plaintiff at a pproxi mately 10:15 a .m. on J une 7, 2001. The Plaintiff Ke vi n Demer s and others pe rsonally witnessed a pa

rked ve hicle later known to be the pr ocess se rver s waiting at appr ox imatel y 9 : 0 0 a. m
. outside of the premises of Demer s, I nc. located at 800 B ill J ones I ndustrial Drive, Spring field, Tenne ssee. The proce ss se rver s wer e parke d outside of the premises for appro xim a te ly

o n e h o u r a lo n g s id e th e r o a d , w a it in g u n ti l th e la s t m in u te , w h ic h resulted in the auction not sta rting on time. These actions resulted in a se vere d (sic)-5-

chilling e ffe ct of the a

bsolute auction. The two proce ss server s acte d outrag eous and with total d i s re gard to the Plaintiffs by waiving the exposed Ex -Parte Injunction inside and outside of the Plaintiff’s pla ce of bu s i ness, in view of hig hly banked confirme d bidders, whe re the P l aintiff’s a bsolute auction wa s being conducte d on J une 7, 2001. The P laintiff’s absolute auction had been wide ly advertised both in the Un it e d S t a t e s , C a n a d a a n d i n t e r n a t i o n a l l y
. T h e ab s o l u t e a u c t i o n w a s s c h e d u l e d to sta rt a t 11 :00 a .m. on June 7, 20 01 . ( Ple a se se e a tta c he d A dv e rt ise me nt a s E xhibi t #4 ). Th e pr oc e ss s e rv e rs pu rp os e ly a ndintent io nal lyde la y e d s e rv ing the Ex- Part e I nju nc tio n o n th e Pla int if fs. Th is w a s d on e to d e la y g ivi ng the Pla int if

fs a mpl e opportunity

to challeng e the va lidityof the Ex-Parte Injunction.

. . . . . . . The re sult of the civil conspirac y of the De fendant s an d t h e outrag eous conduct of

the proc ess serve s of the Ex-Parte I njunction, resulted in a sever e chilling of the auction. The chilling e ffe ct re sulted in a sever e pec uniary loss to the Pl aintiff.

. . . . Upon information and be lief the De fendants W AL TER WHI TTENB URG, KAREN WALLAC E DEMERS and J AMES RANDALL QUAL L S prior to the absolute auc tion sale, c ontacted othe r third parties to spy on the auc tion and dissemina te fa lse information about the Plaintiffs. The se ac tions were done afte r Gene ral Sessions J udg e Max Fag an o rd ere d the Def endants WAL TER WHITT EN B UR G andJAME S RA ND AL L QU AL L S to sta y a way fr om the abs olu te auc t i on. These same Def endants disseminated f

alse information to prospective buy ers to ca

use them not to participate in the Plaintiff’s absolute auc tion.

. . . . 20. There was a

valid b usiness relationship betwe en Plaintiff and a n exis ting six teen y ear

customer ba se of De mers, Inc. The Def end ants WAL TER WHITT EN B UR G, RA ND AL L QU AL L S a nd KA RENWAL

LAC E D EM ERS , a ll had intimate and e x pres s k n o wl edg e of the relationships t hat Kevin De mers and De me rs , Inc . h a d w ith the ir c lie nt ba se thr ou g ho ut the Un ite d St a te s, Ca na da a ndin Europe.

21

. Th e De fe nd a nts int e nti on a lly int e rf e re d o r sou g ht t o in te rf

e re wi th the se re la tio ns hips an d c aus e the br e a c h o r t e rm inatio n o f the e xistin g bu sin e ss re la tio ns hip s.

. . . .-6-

24

. Th e re wa s a

bin din g c on tr a c tua l r e la tio ns hip be tw e e n Pl ain ti ffs a ndthe ir exis ting c ustomer base . The De fendants cause d interfe renc e to the absolute auction being co n d ucted by

J oseph F in Auctioneer . The a bsolute auction could not be stopped bec ause the Plaintiff was under contac t to conduct an a

bsolute auction. The chilling e ffe ct could not be discove red by the Plaintiffs until t he auc tion had alre ady started.

2 5

. Def

endants WAL

TER WHI TTENB URG, RA N D AL L Q U AL L S a n d K AREN WAL LACE DEMERS have express intimate knowledg e of the se contractual relationships. T h e co n t rac tual relationships t hat exist ed, one of which wa s the contra ct to hire the auctioneer J oseph F in. Further, as stated i n the Facts section of this Com plaint, this absolute auction was wide ly advertise d t h ro u ghout the United States, Canada and the world.

26. Def

endants intentionally

interfe red or soug ht to interfe re and induce a brea ch of the c on tr a c tua l r e la tio ns hip s.

. . . . 29. The De fendants eac h had the intent and knowledge of ea ch other ’s intent and acte d in conce rt to stop the absolute auc tion of the Pl ai n t iffs and c aused the Pla int if fs ’ p e c un iary

los s.

. . . . 31. Def

endants ha ve eng ag ed in conduc t sufficient to establish tort l iabilityon the orie s o f i nte rf

e re nce w it h bu sin e ss r e la tio ns , in te rf e re nc e a ndind uc e me nt t o br e a c h Co ntr a c t.
32. Such acts we re c ommitt ed knowing ly , intentionally and in bad f

aith.

33. Such actions have deprive d the Plaintiffs of customers and/or ot her prospec tive customers thus causing pe cuniary damag es to Plaintiffs, e ntitli ng them to d a ma g e s.

. . . . 35. The e x treme and outrag eous conduc t of the De fendants W AL TER WHI TTENB URG, WHI TTENB URG, INC., R ANDAL L QUAL L S and KAREN WAL LACE DEMERS intentionallycause d the Plaintiff KEVIN DEMERS severe d (s ic ) e mot ion a l dis tr e ss. Th e re fo re e nti tli ng the Pla int if fs he re in n a me d to da ma g e s. (See attached A ffidavits of Ge org e S ch i ck, Ke vin Demer s, and Ne il Sut herla nd as Collective Exhi bit #6)-7- . . . . 3 7

. The D e f

e n d a n ts ma d e f

a ls e a n d d e f

a mato r y s ta te me n ts a g a in s t th e Pl a in tif f KEVIN DEMERS and t he P laintiff’s busi ness, which cause d a sig nificant pe cuniary loss to the Pl aintiffs. Thus entitling Plaintiffs to damag es. Many of these e rrone ous statements wer e contained in the Ex -Parte Injunction, which was sig ned on June 6, 2001 by a Circuit Court J udg e of Robertson County . (See A ttached E x hi bit #2) (Also see attache d Collective Ex hibit #6), (Also see attache d Affida v i t o f P l aint iff KEVIN DEMERS as Exhi bit #7) These a lleg ations were basele ss and fa lse.

. . . . 3 9

. T h e f

o r e g o i n g a c t s a n d o m i s s i o n s w e r e c o m m i t t e d k n o w i n g l y, i n t e n t i o n a l l y, fr aud ule ntl y , ma lic iou sly

a ndre c kle ssl y , th us e nti tli ng Pla int if f t o p un iti ve da ma g e s.
De fe nd a nts fi le d Rule 12 .0 2( 6) Mo tio ns to Dis mis s. I n re sp on se to the ir Mo tio ns to D ism iss , Pla int if f f ile d tw o a ff

ida vit s a lle g ing a dd iti on a l inf orma tio n. Pla int if

f’ s Af fi da vit fi le d inre sp on se to the Whit tenburg /Qualls Motion to Dis miss st ated:

4. Def

endants Whittenburg and Qua lls conspired with Def endant Ka ren Wal la c e De me rs to s te a l my c lie nts , dis se min a te fa lse inf orma tio n to my

su pp lie rs , a ndba sic a lly

to dri ve me ou t of

bu sin e ss. Th e y ha ve int e nti on a lly int e rf e re d w ith my fo rm e r and

e xistin g bu sin e ss re la tio ns hip s. Th e y ha ve c a us e d De me rs , I nc . to los e c on tr a c ts w ithe xistin g c us tom e rs a ndsu pp liers. Spec if ic a lly , a ft e r the abs olu te auction wa s held on J une 7, 2001, De fe n d an t Kare n Wallace De mers, Walter Whit tenburg , and James Ra ndall Qualls contac ted numerous exis ting customers of De me rs , Inc . T he y

dis se min a te d fa lse inf

orma tio n a

bo ut m y se lf

a ndmy c omp a ny to destroy these business rel at i o n s hips. Further , these De fendants contacte d many of my su pp lie rs a nd c us tom e rs a nddis se min ate d f a lse inf orma tio n a

bo ut m y se lf

a ndmy c omp a ny to t ry a nda lso de str oy the se bu sin e ss re la tio ns hip s. I re c e ive d many c a lls back f rom these e x isting customer s and my s u p p l i er s asking me why my ex-wife Ka re n De me rs wa s c on ta c tin g the m. Furthe r, the se thi rdpa rt ie s h a ve de sc ri be d to me the da ma g ing a ndne g a tiv e re mark s ma de by the De fe nd a nts

. 5. De fe nd a nt Wh itt e nb ur g on his la st da y of e mpl oyme nt w ith De me rs , I nc . s ta te d h e wo uld “ pu t me out of bu sin e ss, ” a nd he too k nume ro us c omp a ny fi le s, rolodexes, metal g aug es. Further, afte r leaving Demer s, I nc. he subse quently asked
e m p l o ye e s o f

D e m e r s , In c
. t o s t e a l p ar t s f o r h i m a n d W h i t t e n b u r g , In c
. J u s tr e c e n t l y, De fe nd a nt Wh itt e nb ur g dis se min ate d fal se inf orma tio n a

bo ut m y se lf

a ndmy company to Evert Jackson, Sr. of Fran k l i n Printing located in Z anesville, Ohio. De fe n d a n t W h i t t e n b u r g m a d e c e r t a i n s t a t e m e n t s ab o u t t w o e m p l o y e e s of my company . Def

endant Whittenburg said “one was a n alcoholic the sec ond employ ee, darn w ell doesn’ t gi v e a d amn about his work” . Further, he made a ccusations-8-

conce rning the sale of

a He idelberg Printing Press that w as s o l d by my self to Mr. J ackson twe lve y ear s ag o. These f alse stateme nts caused me to lose this sale of a He ide lbe rg Pr int ing Pr e ss t o Frank lin Pr int ing . I ha d to re fu ndthe d e po sit on thi s c on tr a c t. T his is j us t on e of the ma ny e xamp le s of De fe nd a nt Wh itt e nb ur g ’s ho sti le actions towar d my self and my company . This occur

red on or about S ep tember 3, 2002 in Springfie ld, Tennesse e.
6. De fe nd a nt Q ua lls c on tin ue s to c onst a ntl y dis se min a te fa lse information and da mag ing r emar ks about m y self and Demer s, I nc. This ac tivityhas been ong oing f

or the pa st two y ear s. Specifica lly , the Def endant Qua lls visi ts L arry ’s restaur ant locate d in Spring field, Tenne ssee. This is one place that he disseminates false inf ormation and da mag ing r emar ks about my self and my company
. I have be en told by more than one person that this has occ urre d.

7. Further, De fendant Qualls in the past has made li fe thre atening state me nts a g a ins t my se lf . T he se re c or de d s ta te me nts c on taine d a nda lso acknow l ed ged confide ntial information about my business aff

airs. The Def

endant Qualls also had spe cific know led g e and w as involved in participating with De fendant Whit tenburg and De fendant Demer s, in forwa rding the fa l s e information that was
us e d in the Ex- Part e Ma nd a tory Te mpo ra ry Re str a ini ng Or de r, iss ue d b y the Cir c uit Court of Robertson County . Further, Defendant Qua lls in a separate incident has called the police and made a false report ag ainst my self. As a result of the r eport, I
w a s arr e s t e d a n d j a i l e d w r o n g f u l l y.
Plaintiff’s Affida vit filed in response to De fendant Kare n Demer s’ Motion to Dismi ss provided:

2. The De fendant Ka re n Wallace De mers is my ex-wife. We wer e divorce d on May

27, 1998. The De fendant Kare n Wallace Dem ers ha s conspired with the other two de fendants to financially harm my self and my

company . Further, she has c onspired with th e o t her D efe ndants to phy sically harm me. O n May

22, 20 01 , th e De fe nd a nt K are n Wa lla c e De me rs made the fo llo wi ng state me nt “ Ke vin has a w ay of closing down businesses to a void la wsuits a nd cre ditors a s he has done it before ”. This statement was made at a settlement c onfer ence in the parties’ divorce
case . This statement was made l ess than two we eks bef ore my absolute auc tion. Th is s ta te me nt w a s a lso ma de in f ro nt o f t wo Rob e rt so n Co un ty At torney s a ndmy acc ountant Geor g e Schick.

3. Further, the D efe ndant Kar en Wallace Demer s contac ted J erry Spurlock, a loca l business man and aske d him to spyon my auction. The auction was conducte d on J une 7, 2001. On J une 6, 2001, the Defe ndant Kar en Wallace Demer s takes a n unexpected trip to Gatlinburg , Tenne ssee with our thre e minor child re n. This trip was not planned a nd don e at the very last minute. The Def

endant Ka

ren-9-

Wallace De mers wa s out of town on the day of t he auc tion, and continues to use that hu rrie d a ndun e xpe c te d trip t o G a tli nb ur g , T e nn e sse e a s h e r a lib i.

4. Th e De fe nd a nt Ka re n Wal la c e De me rs re turne d fr om the hu rrie d trip to Gatlinburg , Tenne ssee on June 8, 2001. This w as afte r the absolute auction was chi lle d a ndthe pr oc e e ds of my abs olu te auc tio n w e re loc ke d u p b y the Ex- Part e Ma nd a tory

Re str a ini ng Or de r that w a s is su e d b y the Rob e rt so n Co un ty

Cir c uit Cou rt

. (T h e E x -P ar t e M an d at o ryR es tra i n i n g O r d e r w as s i gn ed b y a C i rc u i tC o u rt J u d ge Michae l J ones at a

pproxi mately

4:20 p.m., J une 6, 2001.) I was not g iven any

notice of t h e E x- P ar t e M a n d a t o r y R e s tr a i n i n g O r d e r

u n t i l t h e m o r n i n g o f

m y ab s o lut e auction, June 7, 2001. The Ex -Parte Mandatory Restraining Orde r wa s not nece ssary be c aus e I ha d a lr e a dy

c omp lie d w ith the ins truc tio ns of the F e de ra l Co urt in Sou th Dakota.

5. Th e De fend ant Ka re n Wa lla c e De me rs c on sp ir e d w ith De fe nd a nts Walter Whit tenburg and Randa ll Qualls to close down and c hill myabsolute auc tion held on J une 7, 2001.

6. The De fendant Kare n Wallace De mers and D efe ndants Whit tenburg and Qua lls were be hind contacting and hiring the Attorney s in C l ar k s v i lle, Tenne ssee, to pre pare and draft and file the 56 (fifty six ) pag e Ex-Parte Mandatory Restraining Orde r ag ainst my company and my self. This E x -P ar t e Mandatory Restraining Orde r wa s serve d on me at my place o f business in Springf ield, Te nn e sse e onthe mornin g of June 7, 20 01 . T his wa s le ss tha n o ne ho ur be fo re my auction wa s to beg in. This Ex -Parte Ma ndatory Restraining Orde r ef

fec tively chilled my absolute auc tion that had been w idely advertised in the United States, Canada and abroa d. Be cause the manner in which the Ex-Par

te Mandatory

Restraining Orde r wa s serve d was both outrag eous and unnece ssary
. I had no time to reac t because it was
serve d less than one hour befor e my

auction wa s to beg in.

7. The sale of my

inventory

was sever ely

lessened by

the chilling e ffe ct of this Mandatory

Restraining Orde r. I

lost as a re sult of the Def endants’ a ctions
ap p r o x i m a t e l y $ 1 , 0 0 0 , 0 0 0

. 0 0 i n a s s e t s a n de q u i t y.
8. The De fendant Kar en W allace Demer s had ac cess to the c onfidential inf orma tio n a

bo ut m y se lf

a ndmy com pan y , w hic h w a s su pp lie d to the Cla rk sv ill e Attorne y s. Th is inf

orma tio n wa s fa lse ly dis se min a te d a ndapp e are d in the Af fi da vit of Stephen Pfeif

fer who i s the P resident of Western Printing Incorpor ated. Further, I would submit t hat Def endants ( s i c) Kare n Wallace De mers wa s one of the Def endants that c aused the Western Printi n g l aw s u i t to he filed ag ainst me in the United States District Court of South Dakota.-10- 9. The De fendant Kare n Wallace Dem er s has made threatening comments to me that she wa s g oing to “ ruin me, kill me, or have me killed.”

Def endant, Ka

ren D emer s, also filed a Motion for Rule 11 Sanc tions.

On Oc tob e r

1 0 , 2 0 0 2 , P l a i n t i f

f f i l e d a P r o p o s e d A m e n d e d C o m p l a i n t

. T h e M o t i o n s to Dismiss, Motion to Amend Plaintiffs’ Complaint, and Motion for Rule 11 Sanctions were hear d on October 11, 2002. At that time, the court ref used t o g rant P laintiffs’ Motion to Amend and g rante d De fe nd a nts ’ M oti on s to Di smi ss. Th e tr ia l c ou rt ’s Or de r p ro vid e s, in p e rt ine nt p art :
The Court has f

ully revie wed all of t he pleadings and the entire rec ord i n this matter, including the proposed a mended c omplaint submi tted by Plaintiffs on October 10, 2002. After fully considering all of these matters and the a rg ument of counse l, the Cou rt he re by or de rs a s f

oll ow s: 1. Ms. Demer s motion to dismiss this matter with pre judice is g rante d. I t is clear f

rom Plaintiffs’ orig inal complaint and the proposed a mended c omplaint that th e statut e of lim itatio ns in co nn e c tio n with a ny c la im all e g e d in c on ne c tio n w ith Ms. Demer s has expired. 2. The motion to dismi ss filed by the Whitte n b u r g D e f

e n d an ts is gr anted. Pla int if fs ’ o riginal c omp la int

a ndpr op os e d a me nd e d c omp la int do no t se t f

orth adequat e we l l-plead ( sic) fa cts to state any of the purported causes of a ction. The Court also finds that Plaintiffs’ orig inal complaint and propose d amende d complaint fail to state ca

uses of a ction for whic h relief may be g rante d for the r easons a sserted in the motions, briefs and ora l arg ument prese nted by Ms. Deme rs and the Whitte nb ur g De fe nd a nts

. 3. The Plaintiff’s motion to amend the c omplaint in thi s matt e r is de nied. The Court finds that Plaintiffs (sic) ha ve had a dequate time to attempt t o p l ea d a vali d caus e of

a c tio n a ndha ve faile d to do so in the pr op os e d a me nd e d c omp la int

. The Court further finds that it is clear from the volume of plea dings f iled by Plaintiffs that Plaint if

fs ha ve ha d a n a de qu a te op po rtun ity to se e k to ame nd the ir c omp la int

to plead va lid causes of

action. Any

further eff orts would be futile. 4. Ms. De me rs mot ion fo r sa nc tio ns a g a ins t Plaint if fs a ndthe ir

c ou ns e l, Mr. Troy L

. Br ooks, is g rante d. The Court finds t hat, althoug h rea sonable pa rties and counsel may

fre quently

be able to disag ree about t h e ap p l i cation of a statute of lim itatio ns to a

pa rt ic ula r c a se , th is i s n ot s uc h a

c a se
. Ac c or din g ly , Ms. De me rs is entitled to b e re imbursed for a ll attorney s’ fe es and othe r costs incurr ed af ter he r counsel a dvised Plaintiffs throug h their counse l that the statute of limitations prec luded any

action ag ainst her.

De fe nd a nt a

pp e a ls the se ru lin g s o f the tr ia l c ou rt

. I I

. DENIAL

OF L EAVE TO AMEND TH E COMPL AINT-11-

Although T ennesse e Rule of Civil Pro c e d u r e1 5 provides that lea ve to amend should be g iven fr e e ly wh e n ju sti c e so re qu ir e s, thi s matte r i s le ft to the so un d d isc re tio n o f the tr ial c ou rt a ndis revie wed unde r an a

buse of discretion standard. Me rri ma n v . S mi th , 599 S.W .2d 584 (Tenn.Ct.App. 1979).

Since a Te nn. R. Civ. P . rule 12.02(6) motion is not deemed t o b e a responsive pleading wi thi n the me a nin g of Te nn
. R. Civ

. P. ru le 15 , Ap pe lla nt sh ou ld ha ve be e n a llo we d to a me ndhis complaint, and the tria l court er red in de ny ing the Motion to Amend. Richmond Country Club v. CRC Equiti es, Inc

. , 832 S.W .2d 554 (Tenn.Ct.App. 1991).

Whil e futility

of a pr oposed ame ndment provides ample r eason to deny a motion to amend af t er a re s ponsive pleading has bee n filed, Me rri ma n v . S mi th , su pr a that rule do e s n ot a

pp ly to motions t o amen d fi l ed before a responsive ple ading is filed. We will therefor e conside r the
a me nd e d c omp la int

. Wit h reg ard to those c auses of action pled in the origina l Comp laint, the Amended Complaint adds no additional fa cts, but merely continues to state t h e s am e vag ue alleg ations and leg al
con c lu sions. The only

new a lleg ations made in the Ame nded Complaint are r eg arding activity which ha s o c c ur re d sinc e the fi lin g of the orig ina l Compl a int

. Mo st of the se ne w “f a c ts” re la te to b us ine ss torts a nd are a lle g e d to ha ve oc c ur re d a ft e r the tim e that Plaint if f p re vio us ly

te sti fi e d th a t hi s b us ine ss cea sed to exist

. Se e De me rs , 20 03 WL 22 93 89 51 , a t *1 -2

. Th e re ma ind e r of the ne w “ fa c ts” c on sis t of alleg ations of fa lse statements and thre ats mad e b y Defendants. B ut the alleg ations contain no specific fac ts as to where , when, or to whom these statements were ma de, or e ven what the Def endants we re suppose d to have sa id. This Com plaint still fails to plead va lid causes of action, and we ag ree with the trial court that the amendment is futile.

The a ssertions made by

Mr. Deme rs in his Compl aint of August 7, 2002 and in his Amende d Complaint of Oc tob e r 10 , 20 02 sta ndin s ha rp c on tr a st w ith his sw orn te sti mon y in h is d ivo rc e c a se as to the eve nts that were occur ring contem p o ra n eousl y

with the alleg ed tra nsg ressions of the defe ndants in this case
. As part of the Marital Dissolution Ag ree ment, which he e x ecute d in May of 1998, Mr. De mers ag ree d to pay Mrs. Dem ers 1.8 million dollars in settlement of all marital pr op e rt y in ter e sts . B e tw e e n M a y of 19 98 a ndthe F e br

ua ry 26 , 2 00 2 b e nc h tria l of

his pe tit ionto reduc e his child support, the eve nts relative to the a lleg ations of the ca se at ba r occ urre d:

On Fe bruary

26, 2002, a benc h trial was he ld on Father’ s petition. At the time of trial, Father wa s forty -three y ear s old. Fathe r testified on his own beha lf. Father said that, by

Dec ember

2000, Demer s I nc. was heavily in debt due to the loans h e t o o k o u ta g a i n s tth e c o m p a n y t o p a y M o t h e r

h e r $ 1

. 8 m i l l i o n s e t t l e m e n t

. In
a dd iti on , h e c la ime d th a t the a dv e nt of the int e rn e t ne g a tiv e ly

imp a c te d h is b us ine ss be c aus e pr os pe c tiv e c lie nts c ou ld f ind a va ila ble print ing e qu ipm e nt, pa rt ic ula rl y in othe r c o u n trie s , s imp ly b y u s in g a n in te r n e t s e ar c h , o b v iati n g th e n e e d f o r an Am e ri c a n p ri nti ng pr e ss b ro ke r s uc h a s D e mer s I nc . B e c a us e of the de c lin e in business a n d th e in te r e s t h e h a d to p a y o n th e lo a n , F a th e r “ w a s n o t ma k ing theFat her cl ai m ed t hat he s p ent ab o ut $3 3 , 0 0 0 i n pri nt i ng ad vert i seme n ts fo r t he auct i o n, and he pa i d t he 3

au cti o ne er $ 3 5 ,00 0 f

o r his effo rts

. -12- money ,” and he said that he “was actually paying more child support than [he] was paying [himself].” On top of this, in approximately J anuary 2001, Father wa s sued by Western Printing Company (“Western Printing”) in South Dakota.

Father testified that, in J une 2001, he he ld the auction to liquidate the company ’s assets, in or der to pay off the company ’s debts with the proc eeds. A bout an hour be fore the J une 2001 auction, Fathe r wa s serve d with an injunction from the Western Printing law suit, requiring him to pay all the proc eeds of

the auc tion into t he local chancery

court, to be held pending the outcome of the lawsuit. Father c laimed that he wa s prese nted wit h the injunction in the presenc e of some ve ry well-fina nced bid de rs , an d tha t this ha d a chi lli ng e ff e c t on the a uc tio n, c a us ing it to be s ig nif ic a ntl y less succe ssful than he ha d anticipated. Despite thi s, afte r t he auction, Fathe r wa s 3 able to fully

pay the debts of De mers Inc. After paying the se debts, F ather owned, fre e and cl ea r, the $600,000 manufa cturing fac ilityout of which De mers Inc. had d o n e b u s i n e s s
. A tt h e t i m e o f tr i a l , F a t h e r

w a s a c t i v e l y tr yi n g t o s e l l t h e f a c i l i t y.
Father testified that, since the June 2001 auction, he ha s not had any income. Father e x plained that af

ter the auction, he spent the g reat majority of his time dealing
w i t h t h e S o u t h D ak o t a W e s t e r n P r i n t i n g l a w s u i t , w h i c h w a s f i n a l l y r e s o l v e d in his favor in Febr uary 2002, just prior to the trial on his child supp o rt p et i t i o n. He claimed that his living e x penses, including attorney ’s fe es and child support, we re being paid by

the line of c redit ag ainst his house that he obtained f rom Reg ions Bank. I n addition, Fathe r said, he sold some assets to me et his financial oblig ations. Father sold his larg er B MW v eh i cle f or $35,000 and boug ht an older mode l for $12,500. He a lso so ld a

Re g a l bo a t f

or $1 6, 40 0. At

the tim e of tr ia l, F a the r ha d a F e rr ari wo rth $55,000 that he wa s attempting to sell, but he also owned a sailboat worth $90,000 that he wanted to ke ep. Father acknow ledg ed that he had other assets, including an antique printing press collection worth $50,000; a re tirement ac count worth $70,000; an investment ac count worth $28,000; a r ace car worth $6,000; an d $ 1 5 , 0 0 0 in a bank ac count in Eng land.

. . . . On c ross -ex amin a tio n, F a the r a c kn ow le dg e d th a t hi s si ste r, wh o li ve s in F lo r id a , b e g a n a b u s in e s s c a ll e d D e me r s Pa r ts , w h ic h w a s e n g a g e d in buy ing a nd selling printing pre ss parts. Demers Parts had ope rate d out of Father’s building since
early 2001, and paid no r ent to Father for the use of the space
. Father testified that his sis te r w a s n ot a c tua lly inv olv e d inthe op e ratio n o f D e me rs Parts, bu t th a t hi s br oth e r w a s q uit e inv olv e d inthe c omp a ny . Pr ior to h is w or

k w ith De me rs Part s, F a the r’ s b ro the r h a d n o e xpe ri e nc e in th e print ing pr e ss b us ine ss. F a the r a lsoA c tua lly, D e m e rs P a rts p a id F a the r o n ly $ 2 1 ,0 0 0 , an d stil l o w e d him a b o u t $ 1 0 ,0 0 0 a t t h e ti m e o f t ria l. 4

-13- acknow ledg ed that, at the June 2001 auction, he sold equipment with a stree t value of $150,000 t o Demer s Parts for $31,000. He a lso admitted that, a few months after 4 the auc tion, he sold a machine for $178,000, the pr ocee ds of which we nt into Demers Parts. Father a dmitted to helping De mers Parts sell m achine s and parts, but he denied ha ving be en paid a ny money by the company

for his ser vices. Father said that his brother lives with hi m , p ay i n g no rent. F ather also admitted that he sold a
c omp a ny va n be lon g ing to De me rs I nc . f or $8 ,5 00 a nd , u sin g that mo ne y , b ou g ht h is b ro t h era $ 1 0 , 0 0 0 M u s t an g. Fu rt h er , Fa th erad m i t t ed t o u s i n g t h e D em er s I n c. ch ar ge car d a n d c h e c k in g a c c o u n t f r e q u e n tl y f o r p e r s o n a l u s e , s u c h a s inp a y me n t f or football season ticke ts, travel ex p en s es, re staurant e x penses, g asoline, and othe r expenses. I n fac t, betwee n October 2000 and Mar ch 2001, F ather spent $33,126 of Demer s I nc. funds on tra vel and e ntertainment, including a t ri p t o I taly . Father insisted that all of the trips were business relate d.

De me rs v . D e me rs , No. M2002-01970-COA- R3-CV (Tenn.Ct.App. De c. 10, 2003).

At that same he aring of F ebrua ry 20, 2002, Mrs. Deme rs testified:

She said that Father ha d g reat potential to continue his business. She noted that she and F ather

had close d down the business for a period of time in 1994, but that, when the business resume d, it was strong er tha n befor e. She asserted that Father is a “ very brig ht individual” who “has the capa city to e arn income.” Mother also submitted the testimonyof De mers Inc. former e mploy ee, D ecke r Da vis (“Da vis”). Da vis stated that, in J anuary 2 0 01, Father “ said he ha d too many lawsuits, and his ex-wife wa s suing him for , I

g uess, for c hild support, and he wa s closing the business down.” Mo the r a rg ue d th a t F a the r c los e d D e me rs I nc . in or de r t o a vo id p a y ing c hil d s up po rt

. De me rs , No. M2002-01970-COA- R3-CV (Tenn.Ct.App. De c. 10, 2003). The finding s of fact of the t rial court in the De me rs v . D e me rs case wer e re ndere d Marc h 28, 20 02 a ndare de va statin g to M r. De me rs
.

-F a the r c los e d h is b us ine ss i n 200 1 be c a us e the bu sin e ss h a d to o mu c h d e bt; throug h the liquidatio n, Father pa id off the de bts and owned a $600,000
ma nu fa c turing bu ild ing c le ar o f d e bt.

- F a th e r c laim e d n o in c o me a f te r th e a u c ti o n in Ju n e 2 0 0 1 , y e t th e r e wa s no decline in his lifesty le.Fat her admi t t ed t o publ i s hi ng a “ goi ng out of bus i nes s ” a dver t i s ement i n Sept emb er 200 0, wh en i n fact 5
D em ers Inc. was not planni ng t o go o ut of b usi ness at t hat t i m e. A no t her adve rt i seme nt was purchased ca l l i ng t he b u sin e ss D e m e rs In te rn a tio n a l, w h e n tha t, in fa c t, w a s n o t t h e na m e o f t h e c o m p a n y. -14- -A f t e r Ju n e 2 0 0 1 , F a t h e r

p u r c h a s e d s e a s o n t i c k e t s t o t h e N a s h v i l l e K a t s, maintained his PSL s wi t h t h e Titans, and ha s enjoy ed trips abr oad, which w ere c ha rg e d th ro ug h h is b us ine ss a c c ou nt.

-F ath e r ’ s c laim

th a t h e h a d n o in c o me s in c e Ju n e 2 0 0 1 w a s n o t c redible, be c aus e he wa s no t e arn ing inc ome on his $6 00 ,0 00 bu ild ing

. De me rs P arts occupie d the building, but F ather collecte d no rent fr om his sis ter.

-De mers Parts wa s ess entially the same business F ather was in, y et neither Father’s sister nor

his brother ha d expertise in the business.

-F ather was at Demer s Parts on a daily basi s ; i t i s i ncre dulous that Fathe r would work ther e but re ceive no income for his pa rticipation in the business, rental or otherw ise.

-T h o u gh Fa t h eri s n o tco l l ege ed u ca t ed , h e h as ex p er t i s e, ex p erience, tra inin g, backg round, and a history of busi ness s ucce ss. Ba sed on his technica l backg round and his e x perie nce, as well as his entre prene urship, he has an ability which he is not
cu rr en t l y u t i l i z i n g.
-F a the r h a s d e lib e rate ly

c ho se n n ot t o p ur su e job s th a t ut ili ze h is a bil iti e s.
-F ather stated to Dec ker Davis, a former employ ee, that his de cision to go out of business was due , at least in part, to his child support obl igation.

-F a the r u se d f

a lse a dv e rt isi ng re g ard inghis bu sin e ss andfi c tit iou s b us ine ss names, whic h made his business re lationship with his sist er and brother e ven more su sp e c t. 5

-F a the r’ s b ro the r l ive s w ith him , y e t pay s n o r e nt.

-F a the r d e nie s a ny kn ow le dg e re g ard ing the c apit a lizatio n h is s ist e r p ut i nto her business, y et she’s c onducting business out of the same b u s i n ess which he op e rate s, a ndsh e is a

pp are ntl y no t in vo lve d inhe r b us ine ss o n a da ily ba sis

. -F ather trade d a business van to obtain a vehic le for his brothe r, and none of the pr oc e e ds we re us e d f

or c hil d s up po rt

.-15- -F a the r s old pa

rt s fr om his bu sin e ss to his s ist e r’ s n e w b us ine ss at a fa vo ra ble price and took a note f

or a portion of the purcha se price

. -F ather g ave a financi al statement to Reg ions Bank r eporting a 401(k) plan of $70,000 and showing a sala ry of $125,000, both of which he testified wer e not qu ite c or re c t.

-F ather used t he busi ness charg e ca rd for considera

ble per sonal expense on extravag ance s, including a trip to I taly

and a c ruise.

-F ather did not tell his acc ountant about the use of the business cha

rg e ca rd fo r p e rs on a l e xpe ns e s.
-F ather used the line of cr edit he obtained f rom Reg ions Bank to pay off share holder de bt to hims elf.

-F a the r e xhibi te d a

g e ne ra l la c k o f c a nd or

re g ard ing his bu sin e ss a ff a ir s.
De me rs , No. M2002-01970-COA- R3-CV (Dec . 10, 2003).

Con sp ic uo us ly

abs e nt fr om the te sti mon y of Mr . D e me rs in the c hil d s up po rt re du c tio n c a se are any of the a lleg ations contained in the Complaint or the Amended C omplaint in the case at ba r. L ikewise, c onspicuously

absent fr om the Complaint an d Amended Complaint at bar is any alleg ation of a ny fa c tua l di sc ov e ri e s b y

Mr . D e me rs be tw e e n h is F e br ua ry 20 , 2 00 2 te sti mon y

in the c hil d support case and his Aug ust 7, 2002 filing of the Complaint i n the ca se at ba r.
I I I

. DI SMI SSAL

OF PLAINTIFF ’S COMPL AINT AND AMENDED COMPL AINT

Th e orig ina l c omp la int , the a me nd e d c omp la int , a ndthe vo lum ino us do c ume nts fi le d w ith the amende d complaint are couche d in abstrac t ge nera lities, conclusory alleg ations, and ar e short on specific s. Whi le pleading s are liberally construed under the Tenne ssee Rules of Civil Procedure , the
ne e d f or so me de g re e of

c oh e re nc e ha s n ot b e e n to ta lly aba nd on e d. Ten n. R. Ci v. P. 8 .0 1 s til l require s that the fac ts upon which a c laim for re lief is founded must be st ated in the complaint. W & O Con str uc tio n Co . v. Cityof S mi thv ill e , 5 57 S.W. 2d92 0 ( Te nn . 1 97 7) . Si nc e Te nn . R. Civ . P. rule 8.01a nd Fe d. R. Civ. P . rule 8(a ) ar e couc hed in identical lang uag e we may look to feder al decisions in construing the Tenne ssee r ule. March v . Levine , 115 S.W .3d 892 (Tenn.Ct.App. 2003).

Even in the fa ce of

an F ed. R. Civ. P. rule 12(b)(6) motion not converted t o rule 56 status by extraneous documents, the c omplaint must meet at lea st mini mal standards of coher ence
. I n the pre cincts patrolled by Rule 12(b)(6) , the demands on the pleade r ar e min ima l. A s w e ha ve re c e ntl y state d, the c ou rt

mus t-16- acc ept the we ll-pleade d fac tual aver ments of the latest (se cond
a me nd e d) c omp la int

a s tr ue , a ndc on str

ue the se fa c ts in the lig ht m os t fl a tte ri ng to the [pla int if

f’ s] c a us e
. . . e xemp t[in g ], of c ou rs e , th os e “fa cts” whic h have sinc e bee n conclusively con t radic ted by [pl aintiff’s] conce ssions or othe rwise, a nd likewise esc hew[ing] any reliance on ba ld assertions, unsupportable c onclusions, and “opprobrious epithets.” Cho ng ris v . B oard

of A pp e als , 811 F.2d 36, 37 ( 1st Cir.), cert de nied , _

__ __ U. S. _____, 107 S.Ct . 3266, 97 L .Ed.2d 765 (1987) ( citations omitt ed). A Rule 12(b)(6) motion will be g rante d only if, when viewed in this manner , the pleading shows no set of facts which could entitle plaintiff to relief

. Conley v. Gibson , 355 U.S. 41, 45- 48 , 78 S.Ct

. 99 , 1 01 -0 3, 2 L .E d. 2d80 (1 95 7) . N e ve rthe le ss, min ima l r e qu ir e me nts are no t ta ntamou nt to no ne xiste nt re qu ir e me nts

. Th e thr e sh old ma y be low , b ut i t is
re a l–andit i s th e plaint if

f’ s b ur de n to take the ste p wh ic h bring s h is c a sesa fe ly int o the next phase of the litigation. The court need not c onjure up unpled a lleg ations or contri v e el aborately

arc ane sc ripts in order to ca rry the blushing bride throug h the po rt a l. I n th is c a s e , th e p lain ti f f p le a d e d n o f

a c ts a d e q u a te to e n ti tl e h im to offer evi d e n c e in s u p p o r t o f h is ( e n ti r e ly c o n c lu s o r y ) a s s e r ti o n s
. A n d w e n e e d neither reinve nt the wheel nor t arry long over his claims to the contrary . The district court has compe tently

described the shortcoming s of the sec ond amende d complaint and
n o t h i n g w o u l d b e g a i n e d b y ap p e l l a t e r e i t e r a t i o n o f t h e p i v o t a l p o i n t s
. A c c o r d i n g l y, the jud g me nt of dis mis sa l may be a ff ir me d f or su bs ta nti a lly

the re a so ns se t f

orth i n J udg e Z obel’s insig htful opinion, 678 F.Supp. 939.

. . . . Mo de rnno tio ns of

“ no tic e ple a din g ” no tw ithstand ing , a plaint if f, we thi nk , is
no ne the le ss r e qu ir e d to se t for th fac tua l a lle g a tio ns , e ith e r d ir e c t or inf e re nti a l,
re sp e c tin g e a c h mate ri a l e le me nt n e c e ssa ry to s us ta in r e c ov e r

y u n d e r s o m ea c ti o n able leg al theory . We ag ree with the Seventh Circuit th at if the fa cts narr ated by the plaintiff “do not at le ast outline or adumbrate” a viable cla im, his complaint cannot pass Rule 12(b)(6) muster. Sutliff , Inc. v . Donovan Companies , 727 F.2d 648, 654 (7th Cir. 1984). Se e als o D e wey v . U niv e rsi ty of N

e w H am ps hire , 69 4 F .2 d 1, 3 ( 1s t C i r. 1 9 82), cert. de nied , 4 6 1 U

. S. 9 4 4 , 1 0 3 S. Ct

. 2 1 2 1 , 7 7 L

. E d

. 2 d 1 3 0 1 ( 1 9 8 3); S lo tn ic k v
. Staviskey , 560 F.2d 31, 33 ( 1st Cir. 1977), cert. de nied , 434 U.S. 1077, 98 S.Ct . 1268, 55 L .Ed.2d 783 (1978). Appellant asks to be excused from even t his minimal burden bec ause of what he ch ara cterizes as “the underly ing policy considerations” of the Petroleum Marke ting Pra ctices A ct. Appellant’ s Brief at 21. But Goole y ’s view of these policy considerations i s l o psided; there a re two sides to the statutory story . Although w e ha ve lon g a c kn ow le dg e d th e ne e d to con st ru e the PMPA lib e ra lly to e ff e c tuate its ultimate obje ctive–the g ranting of some meaning ful measur e of pr otection to service-17-

station franc hisees–we have likew ise b o rn e i n mind that the statute “constituted a dim inu tio n o f p ri or ri g hts of fr a nc his or s and thu s shou ld not be e xten de d b e y on d [it s] lang uag e and pur

pose.” Desfosses v. W

allace Ene rgy, Inc

. , 836 F.2d 22, 26 (1st Cir. 1987) (c itation omit ted). He re, the alleg ation that Mobil’s offe r was other than bona fide wa s merely

a subjec tive char acte rization, devoid of a minimall y s u f f ic ie n t f a c tual predic ate. To pe rmit a plai ntiff, on such a skimpyfoundation, to drag a def endant past the plea ding thr eshold would be to i nvite litigation by hunch and to ope n g asoline fr anchisors–just bec ause the y are fra nchisors–to the most unrestra ined of fishing e x peditions. W e dec line to impose such an onerous burden. I n sum, Count I I of the sec ond am en d ed compl aint cannot withstand scr utiny beca use it contains ins uf fi c ie nt r ud ime nts of

a n a c tio na

ble c la im.

Go ole y v . M ob il O il Co rp ., 851 F.2d 513, 514- 15 (1st Cir. 1988).

I n a similar context, the court ana ly zed a complaint under the Sherman Antitrust Act whic h ha d b e e n c ou nte re d b y

a n F e d. R. C iv. P. r

ule 12 (b )( 6) mot ion . Sa id the c ou rt :
Th e iss ue turns a s mu c h o n a re c ur ri ng pr ob le m of

c ivi l pr oc e du re –w hat fo rc e is t o be a c c or de d c on c lus ory

te rm s in a

c omp laint

–a s it do e s o n a nti trus t a na ly sis

. Th e g ov e rn ing pr e c e pt, to b or ro w the dis tr ic t c ou rt ’s e xce lle nt s umm ary , is that while the plaintiff’ s “fa cts” must be ac cepte d as alleg ed, this does not automatically

extend to “[ b]ald assertions, subjective c h ar acte rizations and leg al conclusions,” 2 F .Supp.2d at 2 2 8 (c i ting c ases) ; further , as the district judg e said, “the f a c tu a l a ll e g a ti o n s mu s t b e s p e c if ic e n o u g h to ju s ti f

y ‘ d r a g [g in g ] a

d efe ndant past the plea ding thr eshold,’ ” id. at2 2 8 (q u o t i n g Gooley v . Mobil Oil Corp. , 8 51 F.2d 513, 514 ( 1st Cir. 1988)). Gooley’ s conce pt of “the ple ading threshold” i s cr itical. The c omplaint sh ou ld i nc lud e “ a

sh ort and plain state me nt” of the c la im s ho wi ng that th e ple a de r i s entitled to r elief, F ed. R. Civ. P. 8(a), so it need not include e videntiary detail. On the other ha nd, the price of entry , even to discove ry , is fo r t h e p l ai ntiff to alleg e a factualpredic ate c oncre te enoug h to warr ant furthe r proc eeding s, which may be costly and burde nsome. Conclusory alleg ations in a complaint, if they stand alone,
are a dang er sig n that the plaintiff is eng ag ed in a f ishing e x pedition.

DM Re se arc h v . Co lle ge of A me ric an Pa tho log ist s , 170 F.3d 53, 55 ( 1st Cir. 1999).

We f ir st m us t de te rm ine the pr op e r sta nd ard of re vie w f or the tr ia l c ou rt ’s de c isi on to d ism iss Plai n ti f f ’ s Co mp lain t. A lth o u g h D e f e n d a n ts o r ig in a ll y

f il e d a T e n n e s s e e Ru le o f

Ci v il Pr o c e dure 12.02(6) Moti o n t o Di smiss, P laintiff subsequently filed a Response which included a dditional aff idavits. Pl ai n ti f

f ’ s relianc e on these aff

idavits outside the pleading s converted the orig inal Motion to Dis mis s to a Mo tio n for Sum mary Judg me nt. F urthe r, e ve n thou g h the tr ia l cou rt c on sid e re d th is
ma tte r a Rul e 12 Mo tio n to Dism iss a nd ma de its de c isi on ba se d on th a t st a nd ard , o ur re vie w o f i ts decision will use th e s t an dard of revie w for a

Rule 56 Motion for Summary J udg ment. Such was-18-

this Court’s holding in a similar situation in the ca se of Pacific Eastern Corp. v

. Gulf Lif e Holding Co. , 902 S.W .2d 946 (Tenn.Ct.App. 1995).

I n the E a s t e r n P ac ifi c ca s e, plaintiff introduce d two aff idavits after

the filing of his initial complaint and spec ifically reque sted the court to consider one of t h es e affidavits in its opposi tion to a mot ionto d ism iss . Sa id the c ou rt :
L ater paper s filed in the trial co u rt indicate that the trial court did not exclude the
a ff ida vit fr om c on sid e ratio n, a nd in fa c t, the tr ia l c ou rt ’s fi na l or de r stat es t hat its decision to g rant the motion to dismiss was based on “the entire rec ord in this cause.”

. . . . . . . The moving party

g ener ally trig g ers the c onversion proc ess b y c h a lle ng ing the suffic ienc y

of the plea der’ s complaint with materials not included in the pleadings; howeve r, Tenn.R.Civ.P. 12.02 does not restrict the right to introduce extraneo u s m at eria ls to the moving party . The plea der may also bring about the
conver sion by submitt ing extraneous materia ls to oppose the motion to dis miss. 5A Charles A. Wrig ht & Arthur R. Mill er, Fe de ra l Prac tic e an d P ro c e du re § 1366, at 486-88 (2d e d. 1990) (“ Fe dera l Practice and Proce dure” ).

Trial courts have discr etion to ac ce p t or exclude matters be y ond the pleading s, Fe dera l Practice and Proce dure, su pr a , § 1366, at 491, and may preve nt a conve rsion from taking place by declining t o co n s i d er e x trane ous matters. 2A J ames W. Moore & J o D. L ucas, Moore’ s Federal Prac tice ¶ 12.09 [3] , at 12-107 (2d
e d. 19 94 ) ( “ Mo or e ’s Federal Pr a c tic e ” ). Th e y mus t, h ow e ve r, c on ve rt

a Te nn .R. Civ.P

. 12.02(6) motion to dismiss t o a motion for summary judgme nt if they

do not exclude the extraneous evide nce. Hixson v. Stick ley , 493 S.W

. 2 d 471, 473 (Tenn. 19 73 ); D

. T. M

c Ca ll & S o n s v
. S e a g r

aves , 7 9 6 S.W .2d 457, 459-60 (Te nn.Ct.App. 1990).

Pa c if

ic Ea ste rnma de a

ta c tic a l de c isi on to opp os e the mot ionto d ism iss wi th two aff idavits. The trial court did not exclude the af fidavits from conside ration and
acc ording ly

should ha ve converted the motion to dis miss to a moti on for summary judgme nt. Since the parties hav e n o t t aken issue on appea l with the trial court’s failure to c o n v e r t th e mo ti o n o r w ith it s c o n s id e r a ti o n o f th e a f f id a v it , th e y

h ave waive d th e ir

op po rtun ity

to t ake iss ue wi th the se pr oc e du ra l e rr or s.
No twit hs tan ding the tr ia l c ou rt ’s ov e rs ig ht, we wi ll r e vie w i ts d e c isi on to g rant the motion to dismis s using the sta ndard of revie w for T enn.R.Civ.P. 56 motions. See F

ord Motor Co. v. Summit Motor Prods., Inc. , 930 F.2d 277, 284 (3d Cir.), cert. de nied , 5 02 U. S. 9 39 , 1 12 S.Ct . 3 73 , 1 16 L .E d. 2d 32 4 ( 19 91 ); Y

oung v. Bi gg e rs , 938 F.2d 565, 568 ( 5th Cir. 1991); Moore’s F eder al Prac tice, su pr a , ¶-19-

1 2

. 0 9 [ 3 ]

. Ac co rd i n g l y , o u r t as k i s t o d et er m i n e w h et h erT en n
. R

. C i v
. P

. 5 6 's require ments have be en met. Cow de n v . S ovr an Ba nk /Ce ntr al S ou th , 816 S.W .2d 74 1, 74 4 ( Te nn . 1 99 1) ; Ma ns fie ld v . Co lon ial

Fre igh t Sy s. , 862 S.W .2d 527, 530 (Tenn.Ct.App. 1993). Pacific Eastern Corp. , 902 S.W .2d at 951-52.

Def endants pointed out numerous de ficienc ies in Plainti ff’ s pleading s in the ir Rule 12.02(6) motions. I n response , Plaintiff provided “e vidence ” in the form of two sworn af fi d av i t s to be consi d er ed by

the trial court. Once this additional evide nce outside of the initial pleading s was prese nted, the job of the tria l court, and our job, be came to ta ke the strong est leg itimate view of the evide nce in favor of

Plaintiff and determine if there is a dis pute as to any materia l fac t or doubt as to the conclusions to be dra wn from the f acts unde r Tenne ssee Rule of Civil Procedur e 56.

The trial c o u rt dismiss ed all alleg ations ag ainst Defe ndant Kar en De mers finding that the statute of limitations had expired on any claim ag ainst her. We ag ree with this determination. The
on ly sp e c if ic fa c t a lle g e d a g a ins t K are n D e me rs wa s a state me nt m a de on Ma y

22 , 2 00 1 that “ Ke vin has a way of closing down businesses to a void la w suits and cre ditors a s he has done it before .” The Complaint aga inst Ms. Demers wa s no t filed until Aug ust 7, 2002, over a y ear afte r the a lleg ed de fama tory

state me nt. Th e statut e of lim itatio ns “ fo r s la nd e ro us wo rd s sp ok e n” is si x months in Te nn e sse e . T e nn .Co de An n. § 2 8- 3- 10 3. An y la ws uit fo r da ma g e s c a us e d b y thi s st a te me nt i s c le arl y u n t i m e l y.
Th e re ma ind e r o f the “ fa c ts” a lle g e d by Pla int if f c on sis ts of le g a l c on c lus ion s w ith re g ardto Plaintiff’s action and of

unsubstantiated alleg ations of ac tions and conspirac ies comm i t t ed by Def endant Ka

ren D emer s, with no claim of how Plaintiff had pe rsonal knowledg e of these acts and conspirac ies. Plaintiff failed to prese nt one shred of evidence that any of the a ctions alleg ed to have been perf ormed by Ms. D emer s ever actua lly happene d. I n order to sur vive a motion for summary judgme nt, the evidenc e must be “suc h th at a re as o n ab le jury could re turn a ve rdict forthe nonmoving pa

rty , the same standa

rds used in eva luating a

motion for direc ted ver dict. . . . ‘There is no issue for tria l unle ss the re is suf ficient evidenc e favor

ing the non-moving party for a jury to return a ver d i ct fo r t h at party .’ ” By rd v . H all , 8 4 7 S

. W

. 2 d 2 0 8 , 2 1 2 (T en n
. 1 9 9 3 ) ( q u o t i n g Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 2 4 9 (1 9 8 6 ))

. I n that same c ase, the Tenne ssee Supre me Court also adopted the ruling in Ce lotex Cor p. v . Ca tre tt , 477 U.S. 317 (1986). “[A] complete fa ilure of proof c oncerning an essential ele ment of the non-moving party ’s ca se nec essarily rende rs all other fa ct s i m m aterial.” Id. at 2 1 3 (q u o t i n g Celotex , 4 7 7 U

. S. a t 3 2 1 )

. Wi thr e g ar d to a n y o ther alleg ations ag ainst Ms. Demers, no e vidence at all was pr esente d.

L ikewise, with re g ard to Walter Whittenburg , Whit tenburg , I nc., and J ames Qua lls, the trial court found that the Complaint failed to state a c laim for which r elief c ould be g rante d and dismissed
a ll c la ims a g a ins t th e se De fe nd a nts . We up ho ld the tr ia l c ou rt’s decis ionto d ism iss the c la ims ag ainst these De fendants, but do so on a summary judgme nt standard.-20-

As with Ms. Demer’ s Motion to Dis miss, P laintiff a t t ac h ed an affidavit in response to the Motion to Dism iss filed by rema ining De fendants, converting their Motion to Dismiss into a Motion fo r S u m mary

J udg ment. Once ag ain, Plaintiff made numer ous unsubstantiated ac cusations and alleg ations ag ainst Defe ndants, but fails to pr ovide any evidenc e of wrong doing by Def endants or state his first hand knowle dg e of the ir ac tions. There are numerous alleg ations of statements made by Def endants a nd alleg ations of contact that Def endants had with Plaintiff’s customers. However , Plaintiff fails to provide any evidenc e that these a ctions ever occur red e ither throug h a stateme nt of his first hand knowledge of t he actions or st atements of those who wer e a w itness or a pa rty to the alleg ed occur

renc es. “Rule 56.05 provides that the nonmoving pa rty ‘may not rest upon the mer e a lle g a tio ns or de nia ls of

his ple a din g , b ut h is r e sp on se , b y a ff ida vit s o r [o the rw ise ], mu st s e t f orth
s p ecif ic fa cts showing that there is a g enuine issue f or trial.’ ” By rd , 8 4 7 S. W. 2d at 210. “F urthermor e, the f

acts on which the nonm oving party relies must be admissi ble i n evidenc e. Price v. Be cke r , 8 1 2 S. W. 2 d 5 9 7 ( T e n n
. A p p
. 1 9 9 1).” Br aswe ll v . Ca ro the rs , 863 S.W .2d 722, 729 (Tenn.Ct.App. 1993).

Under a summary

judgme nt standard, we fail to find enoug h evidenc e to raise any g enuine i s s u e o f m at er i al fa c t wi t h re gar d t o al l ega t i o n s m ad e a gai n s tDe fe n d an t s W al t erW h i t t en b u rg, Whitte nb ur g , Inc ., a ndJame s Q ua lls . Pl a int if f f a ile d to pr e se nt any

e vid e nc e on wh ic h a

jury c ou ld
re turn a ve rd ic t f or Pla int if f o n a ny c aus e of a c tio n a lle g e d a g a ins t th e se De fe nd a nts

. I V. SANCTI ONS

Ms. Demer s also filed a Motion for Sanctions ag ainst Plainti ff, whic h was g rante d by the trial
court. T h e tria l c o u r t s tate d th a t th is w a s n o t a c a s e in w h ic h r e a s o n ab le p ar ti e s c o u ld disa g ree reg arding the application of the statute of limitatio n s
. Du e to t he obvious g roundless nature of Plaintiff’s suit ag ainst Ms. Demers, w e af firm the trial c ourt’s g rant of sanctions and attorney ’s fe es ag ainst Plainti ff.

Th e jud g me nt of the tr ia l cou rt is in all re sp e c ts aff ir me d a ndthe c a se re ma nd e d to the Cir c uit Court of Robertson County for suc h further

proce eding s as may b e n ec essary . Costs are asse ssed
a g a ins t A pp e lla nt.

___________________________________ WI LL I AM B. CAIN, J UDGE