Court Opinion

ID: 4121177
Source: CourtListenerOpinion
Date Created: 2017-01-31 15:11:23.695274+00
Date Added: 2024-06-11T14:32:52.594241
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                            AT JACKSON
                               October 25, 2016 Session

 BATTERY ALLIANCE, INC. ET AL. v. ALLEGIANT POWER, LLC ET AL.

                 Appeal from the Chancery Court for Shelby County
                    No. CH-14-1532-2     Jim Kyle, Chancellor

              No. W2015-02389-COA-R3-CV – Filed January 30, 2017

In this dispute among competing battery distribution companies, the plaintiff companies
appeal the trial court‟s grant of summary judgment in favor of the defendant company
and its employees. The plaintiffs also appeal the trial court‟s denial of their motion to
dismiss the defendant company‟s counterclaim on jurisdictional grounds. Having
determined that the trial court granted summary judgment without stating the legal basis
for its decision prior to instructing the defendants‟ counsel to prepare a template for the
court‟s order, we conclude that the trial court failed to fully comply with the procedural
requirements of Tennessee Rule of Civil Procedure 56.04. We therefore vacate the trial
court‟s order granting summary judgment in favor of the defendants and denying the
plaintiffs‟ motion to compel discovery. We affirm the trial court‟s denial of the
plaintiffs‟ motion to dismiss the defendant company‟s counterclaim. We remand to the
trial court for further proceedings consistent with this opinion, including a determination
of the defendants‟ motion for summary judgment in compliance with Rule 56.04 and of
the plaintiffs‟ motion to compel discovery.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                Affirmed in Part, Vacated in Part; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J., joined.

Bruce S. Kramer, Amy E. Strickland, and Martha C. Burgett, Memphis, Tennessee, for
the appellants, Battery Alliance, Inc., and Allegiant Power, LLC, a Tennessee Limited
Liability Company.

Richard D. Underwood and Henry B. Talbot, Memphis, Tennessee, for the appellees,
Allegiant Power, LLC, a Florida Limited Liability Company; Tom Wilson; Sam Fox;
Tim Weyandt; Noel Sutton; Carleen Dinwiddie; Brandy Davis; and Eric Burrus.
                                       OPINION

                         I. Factual and Procedural Background

       Prior to May 2014, the individual defendants, Tom Wilson, Sam Fox, Tim
Weyandt, Noel Sutton, Carleen Dinwiddie, Brandy Davis, and Eric Burrus (collectively,
“the Individual Defendants”), were employed by Battery Alliance, Inc. (“Battery
Alliance”). The record reflects that no employment contract and no covenant not to
compete existed between the Individual Defendants and Battery Alliance. Battery
Alliance is a Tennessee corporation in the business of providing batteries and battery-
related products to its “customer-members” throughout the United States.

       Mr. Wilson began working for Battery Alliance in 2000 and became President of
the corporation in 2012 after the death of his father, who had been President. Mr.
Wilson‟s mother, Diane Wilson, became majority shareholder following her husband‟s
death. Mr. Wilson served as President of the corporation from 2012 until April 2014.
Based on the parties‟ pleadings, there appears to be a dispute as to whether Mr. Wilson‟s
removal from his position as President of the company in April 2014 was voluntary or
involuntary. Nonetheless, Mr. Wilson maintained employment with Battery Alliance
until June 16, 2014, when he voluntarily resigned from the company. On May 7, 2014,
Mr. Fox resigned from his position as Vice President of Sales and from his employment
with Battery Alliance.

       Mr. Wilson and Mr. Fox founded Allegiant Power, LLC, a Florida limited liability
company (“Florida Allegiant Power”). The record reflects a dispute regarding the exact
date on which Florida Allegiant Power was established. Similar to Battery Alliance,
Florida Allegiant Power acts as a “middlem[a]n” between its vendors and member-
customers to provide batteries and battery-related products throughout the United States.
By June 23, 2014, the remaining Individual Defendants had resigned from Battery
Alliance. They subsequently joined Mr. Wilson and Mr. Fox at Florida Allegiant Power.
In August 2014, with knowledge of the existence of Florida Allegiant Power, Diane
Wilson founded Allegiant Power, LLC, a Tennessee limited liability company
(“Tennessee Allegiant Power”). Ms. Wilson acknowledged during her deposition
testimony that Tennessee Allegiant Power had never conducted business under its filed
name and that Ms. Wilson remained its sole “employee.”

      Battery Alliance and Tennessee Allegiant Power (collectively, “Plaintiffs”) filed a
complaint on October 17, 2014, against Florida Allegiant Power and the Individual
Defendants (collectively, “Defendants”), alleging (1) infringement for use of the name
“Allegiant Power” in the state of Tennessee; (2) breach of fiduciary duty of loyalty; (3)
                                           2
intentional interference with business relationships; (4) civil conspiracy; (5) violation of
the Tennessee Consumer Protection Act, codified at Tennessee Code Annotated §§ 47-
18-101 to -131 (2013 and Supp. 2016); (6) use and disclosure of trade secrets and
confidential proprietary information; (7) conversion; (8) violation of the Computer Fraud
and Abuse Act, codified at 18 U.S.C.A. § 1030 (2000 and Supp. 2010); and (9) “unfair
competition/trade dress infringement in violation of the Lanham Act,” codified at 15
U.S.C.A. § 1051 et seq. (2009). Plaintiffs sought damages and injunctive relief to
prohibit Defendants from (1) conducting business under the name “Allegiant Power”; (2)
contacting any customer or vendor with whom they had contact while they were still
employed by Battery Alliance; (3) contacting any employee of Battery Alliance for the
purpose of soliciting or recruiting such employee “to work with or for Defendants in any
capacity”; (4) using any property of Battery Alliance; and (5) disseminating, disclosing,
or using information they learned while employed with Battery Alliance.

        On December 8, 2014, Defendants filed an answer to the complaint, denying all
substantive allegations and asserting multiple defenses. Acting separately, Florida
Allegiant Power concomitantly filed a counterclaim, alleging that Plaintiffs, with
knowledge that Florida Allegiant Power was doing business as “Allegiant Power, LLC,”
acted with “malice and malicious intent” by filing organizational papers in the State of
Tennessee that prevented Florida Allegiant Power from “enrolling to do business in the
State of Tennessee.” In its counterclaim, Florida Allegiant Power also requested
damages and “an order that [Tennessee] Allegiant Power‟s State of Tennessee filings be
deemed invalid or remain valid and belong to [Florida] Allegiant Power, LLC.” Four of
the Individual Defendants–Tom Wilson, Sam Fox, Eric Burrus, and Tim Weyandt–also
filed a counterclaim, alleging that Battery Alliance “wrongfully refused to pay certain
individual defendants salaries/wages earned prior to their resignation from [Battery
Alliance].” These Defendants requested damages in favor of the individuals not paid, plus
treble damages, attorney‟s fees, and costs.

       Discovery commenced on November 18, 2014, when Plaintiffs propounded
interrogatories, a request for production of documents, and requests for admission to
Defendants. Defendants responded to several discovery requests on December 8, 2014;
December 9, 2014; and December 19, 2014.

       On January 8, 2015, Plaintiffs filed a motion to dismiss Florida Allegiant Power‟s
counterclaim against them, alleging that Florida Allegiant Power was not authorized to
do business in Tennessee and was thereby precluded from maintaining a lawsuit in
Tennessee pursuant to Tennessee Code Annotated § 48-246-601(a). Plaintiffs also filed
an answer in response to Defendants‟ respective counterclaims against them, denying all
substantive allegations.

                                             3
       On April 29, 2015, Defendants responded to additional discovery requests, which
they later supplemented on May 29, 2015. Defendants filed a motion for summary
judgment on May 26, 2015, asserting that “there is no issue of material fact and that
Defendants are entitled to judgment as a matter of law” and that “Plaintiffs‟ evidence is
insufficient to establish and Plaintiffs cannot prove the required elements of their claims.”
Defendants contemporaneously filed a memorandum of law and statement of undisputed
material facts in support of their motion for summary judgment. On June 19, 2015,
Plaintiffs filed a motion for an extension of time to respond to Defendants‟ motion for
summary judgment. The trial court granted the extension on July 8, 2015, while also
granting Plaintiffs leave to take depositions.

        Plaintiffs filed a motion to compel discovery on June 19, 2015, requesting, inter
alia, that the trial court order Defendants to produce communications between
Defendants and Plaintiffs‟ competitors, vendors, and customer-members taking place
from January 1, 2014, through July 30, 2014. In response to the motion to compel
discovery, Defendants stated that they had answered the relevant portion of the respective
interrogatory request and that the remaining request was (1) seeking irrelevant
information, (2) unlikely to lead to the discovery of admissible evidence, (3) overly
broad, or (4) pursuing information already in the possession or control of Plaintiffs. The
trial court heard the Plaintiffs‟ motion to compel on June 26, 2015, and entered an order
denying Plaintiffs‟ request on July 1, 2015. On August 13, 2015, Plaintiffs filed both a
“Memorandum in Response to Defendants‟ Motion for Summary Judgment” and a
“Plaintiffs‟ Statement of Additional Facts.” Defendants subsequently filed a reply in
support of their motion for summary judgment. Plaintiffs then filed a supplemental
response and a second supplemental response to Defendants‟ statement of undisputed
facts.

      Meanwhile, on July 17, 2015, Plaintiffs sent “Notices of Deposition Duces
Tecum” to all individual defendants, requesting that they appear for depositions and
produce all communications between Defendants and Plaintiffs‟ competitors, vendors,
and customer/members taking place from June 1, 2014, through June 30, 2014.
According to Plaintiffs, the individual defendants participated in depositions but did not
produce the requested documents. Plaintiffs filed their second motion to compel on
August 19, 2015, the day prior to the hearing on the motion for summary judgment and
motion to dismiss.

      On August 20, 2015, the trial court heard arguments regarding the motion to
dismiss filed by Plaintiffs and the motion for summary judgment filed by Defendants.1
1
  As explained, the motion to compel was filed the day before the scheduled hearing regarding the
Defendants‟ motion for summary judgment and Plaintiffs‟ motion to dismiss. The trial court did not hear
arguments regarding the motion to compel on August 20, 2015, but scheduled the hearing on Plaintiffs‟
                                                4
The court denied Plaintiffs‟ motion to dismiss and took the motion for summary
judgment under advisement. On August 21, 2015, the judicial law clerk for the court, at
the behest of the chancellor, informed the parties‟ counsel via electronic mail that the
court had made its decision and intended to grant Defendants‟ motion for summary
judgment “based on the briefs and the argument.” In that communication, the attorneys
for Defendants were instructed to “draw up the order.”

        Upon subsequently appearing before the trial court for hearing on the motion to
compel, counsel for Plaintiffs requested that the court provide its legal reasoning
supporting the decision to grant Defendants‟ motion for summary judgment prior to entry
of the judgment. The transcript reflects that the court did not provide specific reasons but
informed counsel that the legal reasoning would be provided in the court‟s order. The
trial judge informed the parties that counsel for Defendants was preparing only a
“template” for the court‟s order and that the actual court order entered would be the
court‟s “work.” The trial court denied the Plaintiffs‟ second motion to compel,
determining that additional discovery was not necessary because the court had already
announced its intention to grant Defendants‟ motion for summary judgment. An order
memorializing the trial court‟s dismissal of Plaintiffs‟ second motion to compel was
entered thereafter.

       On September 17, 2015, at the request of the trial court, counsel for Defendants
emailed to the court and Plaintiffs‟ counsel the template prepared for the court‟s order
granting the summary judgment motion. Plaintiffs did not prepare a template for the
court but instead filed an objection to the template prepared by Defendants‟ counsel. On
September 23, 2015, the trial court entered its “Opinion and Order Granting Defendants‟
Motion for Summary Judgment.” The court entered a judgment certified as final
pursuant to Tennessee Rule of Civil Procedure 54.02 on October 29, 2015. Plaintiffs
timely appealed.

                                       II. Issues Presented

       1.      Whether the trial court erred by denying Plaintiffs‟ motion to
               dismiss the counterclaim filed by Florida Allegiant Power.

       2.      Whether the trial court erred by failing to comply with the
               procedures regarding summary judgment set forth in Tennessee Rule
               of Civil Procedure 56.04.

second motion to compel discovery for August 28, 2015.
                                                  5
      3.     Whether the trial court erred by denying Plaintiffs‟ second motion to
             compel discovery after the court had announced its decision to grant
             the motion for summary judgment in favor of Defendants.

                                III. Standard of Review

        The grant or denial of a motion for summary judgment is a matter of law;
therefore, our standard of review is de novo with no presumption of correctness. See Rye
v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick
Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013)
(citing Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court
must “make a fresh determination of whether the requirements of Rule 56 of the
Tennessee Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250. As
our Supreme Court has explained concerning the requirements for a movant to prevail on
a motion for summary judgment pursuant to Tennessee Rule of Civil Procedure 56:

      [W]hen the moving party does not bear the burden of proof at trial, the
      moving party may satisfy its burden of production either (1) by
      affirmatively negating an essential element of the nonmoving party‟s claim
      or (2) by demonstrating that the nonmoving party‟s evidence at the
      summary judgment stage is insufficient to establish the nonmoving party‟s
      claim or defense. We reiterate that a moving party seeking summary
      judgment by attacking the nonmoving party‟s evidence must do more than
      make a conclusory assertion that summary judgment is appropriate on this
      basis. Rather, Tennessee Rule 56.03 requires the moving party to support
      its motion with “a separate concise statement of material facts as to which
      the moving party contends there is no genuine issue for trial.” Tenn. R.
      Civ. P. 56.03. “Each fact is to be set forth in a separate, numbered
      paragraph and supported by a specific citation to the record.” Id. When
      such a motion is made, any party opposing summary judgment must file a
      response to each fact set forth by the movant in the manner provided in
      Tennessee Rule 56.03. “[W]hen a motion for summary judgment is made
      [and] . . . supported as provided in [Tennessee Rule 56],” to survive
      summary judgment, the nonmoving party “may not rest upon the mere
      allegations or denials of [its] pleading,” but must respond, and by affidavits
      or one of the other means provided in Tennessee Rule 56, “set forth specific
      facts” at the summary judgment stage “showing that there is a genuine issue
      for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party “must do more
      than simply show that there is some metaphysical doubt as to the material
      facts.” Matsushita Elec. Indus. Co., 475 U.S. [574,] 586, 106 S. Ct. 1348
      [1986]. The nonmoving party must demonstrate the existence of specific
                                            6
       facts in the record which could lead a rational trier of fact to find in favor of
       the nonmoving party. If a summary judgment motion is filed before
       adequate time for discovery has been provided, the nonmoving party may
       seek a continuance to engage in additional discovery as provided in
       Tennessee Rule 56.07. However, after adequate time for discovery has
       been provided, summary judgment should be granted if the nonmoving
       party‟s evidence at the summary judgment stage is insufficient to establish
       the existence of a genuine issue of material fact for trial. Tenn. R. Civ. P.
       56.04, 56.06. The focus is on the evidence the nonmoving party comes
       forward with at the summary judgment stage, not on hypothetical evidence
       that theoretically could be adduced, despite the passage of discovery
       deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65 (emphasis in original). Pursuant to Tennessee Rule of Civil
Procedure 56.04, the trial court must “state the legal grounds upon which the court denies
or grants the motion” for summary judgment, and our Supreme Court has instructed that
the trial court must state these grounds “before it invites or requests the prevailing party
to draft a proposed order.” See Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316
(Tenn. 2014).

      A trial court‟s determinations regarding pre-trial discovery, including motions to
compel, are reviewed under an abuse of discretion standard. See West v. Schofield, 460
S.W.3d 113, 120 (Tenn. 2015). As our Supreme Court has explained:

              An abuse of discretion occurs when a court strays beyond the
       framework of the applicable legal standards or when it fails to properly
       consider the factors customarily used to guide that discretionary decision.
       State v. Lewis, 235 S.W.3d 136, 141 (Tenn. 2007). Discretionary decisions
       must take the applicable law and relevant facts into account. Ballard v.
       Herzke, 924 S.W.2d 652, 661 (Tenn. 1996). Thus, reviewing courts will set
       aside a discretionary decision only when the court that made the decision
       applied incorrect legal standards, reached an illogical conclusion, based its
       decision on a clearly erroneous assessment of the evidence, or employs
       reasoning that causes an injustice to the complaining party. Mercer v.
       Vanderbilt Univ., 134 S.W.3d 121, 131 (Tenn. 2004); Perry v. Perry, 114
S.W.3d 465, 467 (Tenn. 2003).

Konvalinka v. Chattanooga-Hamilton Cnty. Hosp. Auth., 249 S.W.3d 346, 358 (Tenn.
2008). A trial court‟s discretionary decision will be upheld on appeal unless the trial
court failed to apply the correct legal standard or the decision is clearly unreasonable.
Bogan v. Bogan, 60 S.W.3d 721, 733 (Tenn. 2001).
                                              7
      As our Supreme Court has elucidated with regard to motions seeking dismissal of
a complaint pursuant to Tennessee Rule of Civil Procedure 12.02(6):

              A Rule 12.02(6) motion to dismiss only seeks to determine whether
      the pleadings state a claim upon which relief can be granted. Such a
      motion challenges the legal sufficiency of the complaint, not the strength of
      the plaintiff‟s proof, and, therefore, matters outside the pleadings should
      not be considered in deciding whether to grant the motion. In reviewing a
      motion to dismiss, the appellate court must construe the complaint liberally,
      presuming all factual allegations to be true and giving the plaintiff the
      benefit of all reasonable inferences. It is well-settled that a complaint
      should not be dismissed for failure to state a claim unless it appears that the
      plaintiff can prove no set of facts in support of his or her claim that would
      warrant relief. Great specificity in the pleadings is ordinarily not required
      to survive a motion to dismiss; it is enough that the complaint set forth “a
      short and plain statement of the claim showing that the pleader is entitled to
      relief.”

Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn. 2002) (quoting
White v. Revco Dist. Drug Ctrs., Inc., 33 S.W.3d 713,718 (Tenn. 2000)) (other internal
citations omitted).

                     IV. Denial of Motion to Dismiss Counterclaim

        Plaintiffs contend that the trial court erred by denying their motion to dismiss
Florida Allegiant Power‟s counterclaim pursuant to Tennessee Rule of Civil Procedure
12.02(6). Plaintiffs specifically argue that Florida Allegiant Power lacks standing to
pursue a counterclaim against Plaintiffs because Florida Allegiant Power is conducting
business within Tennessee without a certificate of authority pursuant to Tennessee Code
Annotated § 48-246-601(a). Florida Allegiant Power, however, asserts that its lack of a
certificate of authority does not preclude the defending of the action filed against it.
Upon careful review, we determine that the trial court did not err in denying Plaintiffs‟
motion to dismiss Florida Allegiant Power‟s counterclaim.

      Plaintiffs filed their motion to dismiss pursuant to Tennessee Rule of Civil
Procedure 12.02(6), which provides:

      Every defense, in law or fact, to a claim for relief in any pleading, whether
      a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in

                                            8
       the responsive pleading thereto if one is required, except that the following
       defenses may at the option of the pleader be made by motion in writing:
       ***
              (6) failure to state a claim upon which relief can be granted[.]

A Tennessee Rule of Civil Procedure 12.02(6) motion to dismiss “challenges the legal
sufficiency of the complaint, not the strength of the plaintiff‟s proof.” See Trau-Med, 71
S.W.3d at 696. We stress again that in reviewing the grant or denial of a Tennessee Rule
of Civil Procedure 12.02(6) motion to dismiss, we must construe the complaint liberally,
presuming all factual allegations to be true and giving the plaintiff the benefit of all
reasonable inferences. Id.

       Regarding limited liability companies, Tennessee Code Annotated § 48-246-
601(a) (2012) provides in pertinent part:

       (a)    A foreign LLC transacting business in this state without a certificate
              of authority may not maintain a proceeding in any court in this state
              until it obtains a certificate of authority.

       ***

       (f)    Notwithstanding subsections (a) and (b), the failure of a foreign LLC
              to obtain a certificate of authority does not impair:

       ***

              (3)    The foreign LLC from defending any action, suit, or
                     proceeding in any court of the state of Tennessee.

Tennessee Code Annotated § 48-246-102 (2012) further provides in relevant part:

       (a)    The following activities of a foreign LLC, among others, do not
              constitute transacting business within the meaning of this chapter or
              § 48-247-110:

              (1)    Maintaining, defending, or settling any proceeding, claim, or
                     dispute[.]

      Upon consideration of Plaintiffs‟ motion to dismiss Florida Allegiant Power‟s
counterclaim, the trial court denied the motion. Because Florida Allegiant Power was
merely asserting its counterclaim as a defense to the action filed against it by Plaintiffs,
we discern no error in the trial court‟s denial of Plaintiffs‟ motion to dismiss.
                                             9
        This Court addressed a similar issue with regard to foreign corporations in the case
of Arcata Graphics Co. v. Heidelberg Harris, Inc., 874 S.W.2d 15, 22 (Tenn. Ct. App.
1993), wherein the defendant was a foreign corporation that had been sued in a
Tennessee court. The foreign corporation did not possess a certificate of authority
allowing it to conduct business in the State of Tennessee pursuant to Tennessee Code
Annotated § 48-25-101.2 Arcata Graphics at 22. In response to the action filed against it
in Tennessee, the foreign corporation filed a counterclaim against the plaintiff. Id. The
Arcata Graphics plaintiff argued that the counterclaim against it should be dismissed
because the foreign corporation was prohibited from maintaining suit in Tennessee
pursuant to Tennessee Code Annotated § 48-25-102(a).3 Id. This Court determined the
plaintiff‟s argument to be without merit because the defendant “ha[d] been sued in
Tennessee courts and was merely asserting as a defense a counterclaim, which arose out
of the same transaction.” Id.

      Likewise, in the case at bar, we determine that Florida Allegiant Power was
merely asserting the counterclaim as a defense to the action filed against it in the
Tennessee court. See id. Therefore, the trial court did not err in denying Plaintiffs‟
motion to dismiss Defendants‟ counterclaim pursuant to Tennessee Code Annotated §§
48-246-102 and -601(a).

2
  Tennessee Code Annotated § 48-25-101, which pertains to foreign corporations, is substantially similar
to Tennessee Code Annotated § 48-246-102, which governs foreign limited liability companies.
Tennessee Code Annotated § 48-25-101 provides in pertinent part:

       (a)     A foreign corporation, except a foreign insurance corporation subject to title 56,
               may not transact business in this state until it obtains a certificate of authority
               from the secretary of state.

       (b)     The following activities, among others, do not constitute transacting business
               within the meaning of subsection (a):

               (1)     Maintaining, defending, or settling any proceeding, claim, or dispute[.]
3
  Tennessee Code Annotated § 48-25-102(a), which pertains to foreign corporations, is substantially
similar to Tennessee Code Annotated § 48-246-106(a), which governs foreign limited liability companies.
Tennessee Code Annotated § 48-25-102(a) provides in pertinent part:

       (a)     A foreign corporation transacting business in this state without a certificate of
               authority may not maintain a proceeding in any court in this state until it obtains
               a certificate of authority.

                                                   10
                                  V. Summary Judgment

        Plaintiffs contend that the trial court erred by failing to comply with the procedure
set forth in Tennessee Rule of Civil Procedure 56.04 when granting summary judgment
in favor of Defendants. Specifically, Plaintiffs argue that the trial court did not announce
its legal basis and reasoning supporting the grant of Defendants‟ motion for summary
judgment prior to directing Defendants‟ counsel to draft the proposed order or template
for the court‟s order. Defendants assert that “it is against the interests of judicial
economy to remand this case just so that the trial court may enter another order that will
likely substantially reflect the order on appeal now.” They posit that the template
prepared by counsel “promoted the expeditious disposition of a case that had proceeded
long enough . . . .” Having carefully reviewed the record, we agree with Plaintiffs that
the trial court failed to adhere to Tennessee Rule of Civil Procedure 56.04.

       Tennessee Rule of Civil Procedure 56.04 provides in pertinent part: “The trial
court shall state the legal grounds upon which the court denies or grants the motion,
which shall be included in the order reflecting the court‟s ruling.” In addressing similar
circumstances concerning a grant of summary judgment, our Supreme Court explained
the importance of providing legal reasoning for a court‟s decision:

               The essential purposes of courts and judges are to afford litigants a
       public forum to air their disputes, and to adjudicate and resolve the disputes
       between the contending parties. To carry out these purposes, judges must
       arrive at their decisions by applying the relevant law to the facts of the case.
       Because making these decisions is a “high judicial function,” a court‟s
       decisions must be, and must appear to be, the result of the exercise of the
       trial court‟s own judgment.

               The manner in which judges arrive at their decisions “gives formal
       and institutional expression to the influence of reasoned argument in human
       affairs.” In addition to expecting judges to be “fair, impartial, and
       engaged,” the litigants, the bench and bar, and the public expect them to
       explain why a particular result is correct based on the applicable legal
       principles.

              Providing reasons for a decision reinforces the legitimacy of the
       legal process which, in turn, promotes respect for the judicial system. As
       Judge Richard Nygaard has noted with regard to judicial opinions:

              Judicial opinions are the core work-product of judges. They
              are much more than findings of fact and conclusions of law;
                                             11
              they constitute the logical and analytical explanations of why
              a judge arrived at a specific decision. They are tangible proof
              to the litigants that the judge actively wrestled with their
              claims and arguments and made a scholarly decision based on
              his or her own reason and logic.

       Bright v. Westmoreland Cnty., 380 F.3d 729, 732 (3d Cir. 2004).

Smith, 439 S.W.3d at 312-13 (other internal citations omitted).

        As in the instant action, the trial court in Smith ruled on the parties‟ summary
judgment motions without providing the legal reasoning behind the trial court‟s decision.
See id. at 312. The trial court in Smith then requested that the parties‟ respective counsel
draft proposed orders addressing the issues for which each prevailed regarding the
summary judgment motions, specifically directing the attorneys to “prepare the order and
the rationale for the [trial court‟s] ruling.” Id. at 309. Later, the Smith defendant filed a
renewed motion for summary judgment, which was granted. Id. at 310. In its ruling
from the bench, the Smith trial court stated in relevant part: “I‟m directing the
[defendant] to prepare the order and to establish the rationale for the [c]ourt‟s ruling in
quite specific detail, and let this go forward as quickly as possible to the [a]ppellate
[c]ourt.” Id. at 311.

       In Smith, our Supreme Court held:

       Tenn. R. Civ. P. 56.04 requires the trial court, upon granting or denying a
       motion for summary judgment, to state the grounds for its decision before it
       invites or requests the prevailing party to draft a proposed order. Not only
       will this requirement assure that the decision is the trial court‟s, it will also
       (1) assure the parties that the trial court independently considered their
       arguments, (2) enable the reviewing courts to ascertain the basis for the trial
       court‟s decision, and (3) promote independent, logical decision-making.

Id. at 316-17 (emphasis added) (citations omitted).

       The Supreme Court also provided guidance to trial courts to assist in compliance
with the requirement set forth in Smith:

       A trial court may comply with this requirement in a number of ways. First,
       the trial court may state the grounds for its decision at the same time it
       announces its decision on the record. Second, the trial court may announce
       its decision and inform counsel that it will provide the grounds in a
                                              12
       subsequently filed memorandum or memorandum opinion. Third, after
       announcing its decision, the trial court may notify the parties of the grounds
       for its decision by letter, as long as the letter has been provided to all parties
       and has been made part of the record.

Id. at 317 n.28. Ultimately, the Supreme Court in Smith vacated the trial court‟s
judgment and remanded the matter to the trial court for further proceedings after
determining that “the trial court failed to perform the „high judicial function‟ required by
Tenn. R. Civ. P. 56.04” and that the record failed to demonstrate that the grounds
provided in the court‟s orders “were the product of the trial court‟s own independent
judgment.” Id. at 312, 318.

        In the present case, Defendants cite to the case of Huggins v. McKee, 500 S.W.3d
360 (Tenn. Ct. App. 2016) perm. app. denied (Tenn. Sept. 22, 2016), in their responsive
brief as “a factually analogous scenario.” In Huggins, the trial court failed to provide the
legal reasoning behind its decision to grant summary judgment. Huggins, 500 S.W.3d at
366. However, we determine Huggins to be highly distinguishable from the present case.
In Huggins, the case had been awaiting a disposition for nearly a decade. Id. The
Huggins Court recognized that the trial court‟s practice was “not fully compliant with the
letter and spirit of Smith,” but exercised its discretion to proceed with the merits of the
appeal “[i]n the interest of providing the parties to this case a final resolution of the
issues.” Id. The Huggins Court also cautioned litigants and trial courts that the Court
may choose not to exercise this discretion in future cases. Id. at 366-67.

       We determine the case at bar to be more closely aligned with this Court‟s decision
in McEarl v. City of Brownsville, No. W2015-00077-COA-R3-CV, 2015 WL 6773544, at
*3 (Tenn. Ct. App. Nov. 6, 2015), wherein this Court declined to exercise its discretion to
address the merits of the appeal and vacated the trial court‟s grant of summary judgment.
In McEarl, the trial court ruled at the close of a hearing that it was granting the
defendant‟s motion for summary judgment without providing any factual findings or
legal grounds for its decision. McEarl, 2015 WL 6773544, at *3. Subsequently, the trial
court directed the parties to prepare competing proposed orders before ultimately
adopting the proposed order prepared by the defendant. Id. Relying on Smith, this Court
in McEarl determined that the trial court had not complied with Tennessee Rule of Civil
Procedure 56.04 and ultimately vacated the trial court‟s judgment. Id.

        In the case at bar, the trial court considered legal arguments by counsel regarding
Defendants‟ motion for summary judgment during a hearing on August 20, 2015. The
trial court then took the matter under advisement. On August 21, 2015, the trial court
caused an electronic mail message to be sent to the parties‟ respective attorneys,

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announcing the court‟s intention to grant summary judgment in favor of Defendants. The
communication provided in pertinent part:

      The Chancellor advised me to get in touch with you to say that he has
      decided to grant Defendants‟ Motion for Summary Judgment based on the
      briefs and the argument. He has also advised [Defendants‟ counsel] and his
      co-counsel to draw up the order.

       The trial court did not provide or state the legal grounds upon which its decision
was based prior to directing counsel to prepare the order. During a subsequent hearing on
August 28, 2015, Plaintiffs‟ counsel requested that the trial court provide the legal
reasoning supporting the decision to grant summary judgment in favor of Defendants.
The trial court did not explain the legal reasoning underpinning its decision prior to
entering its judgment. On August 28, 2015, the trial court informed the parties that
counsel for Defendants was preparing only a template for the court‟s order and that the
court order entered would be the work product of the court. As reflected by the following
discussion between Plaintiffs‟ counsel and the trial court, counsel for Defendants did not
know the legal reasoning for the grant of summary judgment when submitting the
template:

      Counsel for Plaintiffs:     My point is that although opposing counsel can
                                  draft an order, he does not know your legal
                                  grounds for the grant of summary judgment.

      Trial Court:                He absolutely doesn‟t. And I will put that part
                                  in the order. He is drawing a template for me
                                  just like you can if you wish.

                                  All I did was, like we‟re doing on every other
                                  motion this morning and how we‟ve done for
                                  the last year, prevailing side helps the Court
                                  draft the order. I mean, he‟s going to draw . . .
                                  what he thinks a template, and we‟re going to
                                  adjust it. It will be my work. Good day.

      The record contains the template prepared and submitted by Defendants‟ counsel.
Although there are slight differences, the template prepared by Defendants‟ counsel
appears very similar to the Opinion and Order Granting Defendants‟ Motion for
Summary Judgment entered by the court on September 25, 2015. During the August 28,
2015 hearing, the trial court acknowledged that although Defendants‟ counsel did not
have knowledge of the legal grounds upon which the trial court was basing its decision,
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the court would adjust the “template” so as to supply the basis for the summary judgment
ruling. The template prepared by Defendants‟ counsel contained specific legal reasoning
supporting the trial court‟s decision to grant summary judgment in favor of Defendants,
which reasoning the trial court substantially adopted in its opinion and order. We also
emphasize that although the judgment entered by the trial court includes language that the
order represented an “independent analysis of the Court,” which we respect and accept as
true, the legal reasoning adopted through the court‟s independent analysis was not
communicated to counsel before the prevailing party was requested to draft the prepared
order.

       Upon our thorough review of the record, we determine that the trial court did not
provide the legal reasoning supporting its decision to grant Defendants‟ motion for
summary judgment prior to requesting counsel to draft and submit a proposed order or
template for the order. See Smith, 439 S.W.3d at 316-17. Because the trial court failed to
fully comply with Tennessee Rule of Civil Procedure 56.04, we vacate the trial court‟s
order granting summary judgment. See id. at 312-18.

                            VI. Motion to Compel Discovery

       Plaintiffs argue that the trial court erred in denying their second motion to compel
discovery. In its order denying Plaintiffs‟ motion to compel, the trial court found in
pertinent part:

              The Court stated at the hearing on August 28, 2015 that the Court, as
      the Parties had previously been informed on August 21, 2015, intended to
      grant the Motion for Summary Judgment; however, the Court had yet to file
      its order. Since the Court intended to grant summary judgment, the Court
      felt that additional discovery was not warranted on the matter.

Thus, the trial court relied on the grant of summary judgment when denying Plaintiffs‟
motion to compel, declining to allow further discovery because the court had previously
announced its intention to grant summary judgment in favor of Defendant. Inasmuch as
we have determined that the trial court‟s judgment granting summary judgment in favor
of Defendants must be vacated, we also vacate the trial court‟s denial of Plaintiffs‟
motion to compel and remand for consideration on the merits. See, e.g., Billingsley v.
Waggener, No. M2001-01015-COA-R3-CV, 2002 WL 12990, at *5 (Tenn. Ct. App. Jan.
4, 2002) (“Because we vacate the grant of summary judgment to Defendant, Plaintiff‟s
motion in limine is no longer moot. We decline to decide this issue on appeal without the
benefit of a ruling by the Trial Court on the merits of this motion.”).

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                                     VII. Conclusion

       For the reasons stated above, we vacate the trial court‟s grant of summary
judgment in favor of Defendants and its denial of the motion to compel discovery. We
remand this matter to the trial court for further proceedings consistent with this opinion,
including a determination of Defendants‟ motion for summary judgment in compliance
with Rule 56.04 and Plaintiffs‟ motion to compel. We affirm the trial court‟s denial of
Plaintiffs‟ motion to dismiss Florida Allegiant Power‟s counterclaim. Costs on appeal
are taxed one-half to the appellants, Battery Alliance and Tennessee Allegiant Power, and
one-half to the appellees, Florida Allegiant Power, Tom Wilson, Sam Fox, Tim Weyandt,
Noel Sutton, Carleen Dinwiddie, Brandy Davis, and Eric Burrus.

                                                 _________________________________
                                                 THOMAS R. FRIERSON, II, JUDGE

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