Tennison Brothers, Inc. v. William H. Thomas, Jr.
556 S.W.3d 697
| Tenn. Ct. App. | 2017Background
- Tennison Brothers leased prime interstate-adjacent property to Clear Channel (20‑year lease beginning Sept. 1, 2004) for a billboard; Southern Millwork leased adjacent property to William H. Thomas, Jr., who likewise sought a billboard permit.
- TDOT spacing rules meant only one billboard could be permitted at the two proximate sites; Thomas’s first TDOT application was returned for a notarization defect, Clear Channel’s was approved, and administrative proceedings later voided Clear Channel’s permit pending review.
- Relying on an initial administrative order (later reversed), Thomas built a billboard in Nov. 2005 without a TDOT permit, obtained a local Shelby County permit, and later sold the structure and lease to CBS Outdoor; TDOT ultimately found Thomas’s billboard illegal and ordered its removal.
- Tennison Brothers and Clear Channel sued Thomas (and others) for intentional interference with business relations and inducement/procurement of breach of contract; Thomas repeatedly failed to comply with discovery, and the trial court struck his answers and entered default judgment against him (liability established; damages to be determined later).
- On appeal (Tennison I) this Court held the complaints sufficiently pleaded the torts and remanded solely for a damages determination; on remand a special master computed lost rent (Tennison) and lost profits (Clear Channel), both trebled under Tenn. Code Ann. §47‑50‑109; the trial court adopted the master’s report and awarded Tennison ~$1.095M and Clear Channel $3.906M.
- Thomas appealed, challenging discovery sanctions, the scope of the remand (causation/liability), the special master process, certainty/mitigation of damages, treble damages, and whether the Billboard Act’s later federal unconstitutionality ruling affects his liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Discovery sanctions / exclusion of evidence | Tennison & Clear Channel: sanctions were justified by Thomas’s discovery abuses and refusal to attend deposition; exclusion limited relitigation but left damages hearing intact | Thomas: sanctions (striking answers, precluding evidence on damages) were unconscionable and denied his right to present a defense | Court: sanctions were within discretion given long‑standing contumacious conduct; no due‑process violation; exclusion appropriate under Tenn. R. Civ. P. 37 |
| Validity of claims after default judgment | Plaintiffs: default established liability for intentional interference and inducement to breach; only damages remained for proof | Thomas: complaints fail to state claims; he may contest legal sufficiency, causation, and even the Act’s applicability | Court: because of default and Rule 13(f), Thomas cannot raise failure‑to‑state on appeal; Tennison I already held pleadings sufficient and liability was fixed by default |
| Scope of remand / causation proof on damages | Plaintiffs: remand limited to quantifying damages caused by Thomas’s interference; plaintiffs need only prove damages amount (and elected treble) | Thomas: he may relitigate causation/legal issues (e.g., sale to CBS, local permit issues, purported legality of his sign) to eliminate or reduce damages | Court: remand was properly limited to damages; default admitted defendant’s liability (first causal nexus), so Thomas cannot relitigate liability; plaintiffs must only prove damages causally connected to the event |
| Damages calculation, certainty, treble & mitigation | Plaintiffs: damages (lost rent for Tennison; lost net profits for Clear Channel) were proved with reasonable certainty; both elected statutorily mandated treble damages; mitigation not required for statutory claim | Thomas: awards speculative, plaintiffs failed to mitigate, Clear Channel not entitled to treble, and possible double recovery | Court: special master’s factual calculations are supported by material evidence and properly adopted; reasonable‑certainty standard satisfied; treble allowed under §47‑50‑109; no double recovery or mitigation offset shown |
Key Cases Cited
- Dorsett Carpet Mills, Inc. v. Whitt Tile & Marble Distrib. Co., 734 S.W.2d 322 (Tenn. 1987) (measure of damages for interference with contract is pecuniary loss of benefits)
- Trau‑Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691 (Tenn. 2002) (recognition of tort of intentional interference with business relationships)
- Hannan v. Alltel Publ’g Co., 270 S.W.3d 1 (Tenn. 2008) (existence of damages must be proven with reasonable certainty; amount may be estimated)
- Adkisson v. Huffman, 469 S.W.2d 368 (Tenn. 1971) (effect of default judgment—liability admitted; damages inquiry limited to amount and proof must conform to pleadings)
- Nickas v. Capadalis, 954 S.W.2d 735 (Tenn. Ct. App. 1997) (pre‑Rule authority permitting appellate review of complaint sufficiency after default)
- Qualls v. Qualls, 589 S.W.2d 906 (Tenn. 1979) (default judgment cannot grant relief different in kind from that pleaded)
- Waggoner Motors, Inc. v. Waverly Church of Christ, 159 S.W.3d 42 (Tenn. Ct. App. 2004) (lost profits recoverable when nature and occurrence established with reasonable certainty)