Western Section.
Plаintiff, New Life Corporation of America (New Life), appeals from the order of the trial court which granted summary judgment to defendant, Thomas Nelson, Inc. (Nelson).
New Life is a Tennessee not-for-profit corporation which was originally founded in 1979 as World Bible Society of America (World Bible). Norvell Olive, World Bible’s founder, developed a successful merchandising program for the sale of audio and video cassettes emphasizing religious themes. Apparently by 1986 or 1987, Olive was interested in selling the business, and in 1988, Nelson made an offer of $7,000,000.00 to purchase the business. This offer was rejected, and Olive arranged for the sale of the company to Jordan Industries for $7,850,000.00. However, the transaction for the sale was not completed. Subsequently, in 1991, Nelson again offered to purchase the business. The offer was accepted, and Nelson purchased all of the assets of World Bible for $6,150,000.00. The terms of the sale are embodied in аn “Asset Purchase Agreement” dated October 1, 1991. Following the sale of the assets, World Bible’s name was changed by charter amendment to New Life Corporation of America.
In June, 1993, New Life filed a complaint against Nelson seeking compensatory damages in the amount of $6,100,000.00 and punitive damages in the amount of $25,000,000.00. The complaint avers that World Bible, through a division known as Silver Bells, had developed its business of selling Christmas music cassette tapes to the extent thаt annual sales exceeded $8,000,000.00 by 1985. The complaint also avers that the success of the business was largely a result of plaintiffs development of “highly valuable research, development and marketing data and techniques, and other confidential business assets including without limitation, customer lists, supplier lists, business plans, marketing strategies, customer preference data, pricing data (both current and historical), product cost data, and profit and overhеad information.”
The complaint further avers that because of the wrongful activities of Nelson, World Bible’s business suffered during the period of July, 1989, through Septembеr, 1991, and that in October, 1991, World Bible agreed to sell its assets to Nelson at a greatly deflated price. The complaint avers that World Bible learned of Nelson’s activities in December, 1992, long after the sale of its assets to Nelson.
The complaint sets out six counts, but only Counts I, II, and V are involved in this appeal. In Count I, New Life alleges that Nelson’s inducement of Dickey to perform work for the benefit of Nelson while he was employed by World Bible constituted an inducement or procurement of the breach of Dickey’s contract of employment under the common law and also violated T.C.A. § 47-50-109 (1995). Count II alleges that Nelson’s actions constituted interference with existing business relations under the common law of Tennessee. Count V avers that plaintiff is a consumer, and that Nelson’s activities violated the Tennessee Consumer Protection Act, T.C.A. § 47-18-101, et seq. (1995).
Nelson’s answer denies the material allegations of the complaint аnd avers that plaintiff has no standing to bring this action because any claim or cause of action that plaintiff had was transferred and sold to Nelson by virtue of the asset purchase agreement.
The trial court granted Nelson summary judgment on Counts I, II, and V, but denied Nelson’s motion as to the remaining counts. After plaintiff’s application for interlocutory appeal was denied by this Court, plaintiff voluntarily dismissed the remaining counts of the complaint and appealed to this Court pursuant to Rule 3, T.RA.P. Plaintiff’s only issue for review is whether the trial court erred in granting summary judgment to defendant on Counts I, II, and V.
Nelson, in its brief, presents the issue of whether this Court has jurisdiction to hear the case because there was no final order entered in the trial court. Nelson filed a motion to dismiss the appeal on the same ground, and on August 7,1995, this Court, in denying the motion to dismiss, stated:
Thomas Nelson asserts that New Life cannot create a right to appeal an interloсutory order by voluntarily dismissing its remaining claims. This court disagrees. A party is entitled to an appeal as of right once the trial court has entered a final order that resolves all the claims between all the parties. Tenn.RApp.P. 3(a). The voluntary dismissal of a claim resolves that claim for the purposes of Tenn.R.App.P. 3. Consequently, the order dismissing New Life’s remaining claims resolved all the remaining issues between the parties andNew Life was entitled to an appeal as of right.
The order of this Court effectively disposes of appellee’s issue, and we will not consider it further.
A trial court should grant a motion for summary judgment only if the movant demonstrates that there are no genuine issues of material fact, and that the moving party is entitled to judgment as a matter of law. Tenn.R.Civ.P. 56.03.
Byrd v. Hall,
Once it is shown by the moving party that there is no genuine issue of material fact, the nonmoving party must then demonstrate, by affidavits or discovery materials, that there is a genuine, material fact dispute to warrant a trial [citations omitted]. In this regard, Rule 56.05 provides that the nonmoving party cannot simply rely upon his pleadings but must set forth specific facts showing that there is a genuine issue of material fact for trial.
Id. at 211. (Emphasis in original).
Nelson first asserts that plaintiff cannot maintain this action, because plaintiff sold all of its assets to Nelson, including the alleged causes of action involved in this case.
The Asset Purchase Agreement between the parties provides for the sale of:
[A]ll of Sellers’ assets, whеrever located (collectively, subject only to such specified exclusions, the “Assets”), including but not limited to the following: all of Sellers’ respective rights, properties, cash, assets, contracts and businesses of every kind, character and description, whether tangible or intangible, whether real, personal or mixed, whether accrued, contingent or otherwise, wherever located, including -without limitation, all cash, accounts receivable, inventories, fixed assets, machinery and equipment, furniture, furnishings and fixtures, prepaid expenses, deposits and deferred charges, contract rights, copyrights, master recordings, trademarks, service marks, trade names, and all claims and causes of actions brought (or subject to being brought) by either Seller relating to any of the foregoing, including claims and actions for past infringement.
New Life asserts that its claim against Nelson was unknown at the time the assets were sold, and that therе was no intent to include any such claim in the agreement. New Life further asserts that the plain language of the agreement does not include unknown claims, and that a separate provision of the .Asset Purchase Agreement, Paragraph 4.13, 1 which specifically requires disclosure of all claims and suits by or against plaintiff, does not encompass the claim involved in this case.
The agreement specifically transfers claims “brought or subject to being brought” which imрlicitly denotes the known existence of the claims. There is no provision to transfer unknown claims, and it is uncontroverted from the proof before the Court that plaintiff did not know of the claim at the time the Asset Purchase Agreement was signed. Moreover, Nelson specifically denies that it
We also note that the transfer of an obli-gee’s elaim(s) to an obligor is, in effect, a release by the obligee of its claims against the obligor. The transfer by the obligee of claims against the obligor vests in the obligor all of the obligee’s rights in these claims, thus totally eliminating the obligee’s ability to further pursue any action against the obligor. This is the same effect creаted by a release.
In
Richland Country Club v. CRC Equities, Inc.,
First, we note that a release is a contract and rules of construction applied to contracts are used in construing a release. Jackson v. Miller,776 S.W.2d 115 (Tenn.App.1989). The cardinal rule is to ascertain the intention of the parties. Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc.,521 S.W.2d 578 (Tenn. 1975). A general release covers all claims between the parties which are in existence and within' their contemplation. Cross v. Earls,517 S.W.2d 751 (Tenn.1974). In Jackson, the court adopted these additional propositions of law in seeking to discover the effect of a release:
In interpreting a release to determine whether a particular claim has been discharged, the primary rule of construction is that the intention of the parties shall govern, and this intention is to be determined with a consideration of what was within the contemplation of the parties when the release was executed, which in turn is to be resolved in the light of all of the surrounding facts and circumstances under which the рarties acted. (Citing 66 Am.Jur.2d Release § 30 (1973)).
Claims in tort which have not matured or were not known to the parties when they executed their release and which they did not intend to affect when the settlement was made are not discharged by a release. (Citing 66 Am.Jur.2d Release § 33 (1973)).
A release ordinarily covers all such matters as may fairly be said to have been within the contemplation of the parties when it was given ... consequently a demand of which a party was ignorant when the release was given is not as a rule ... embraced therein ... (Citing 76 C.J.S. Release § 52 (1952)).
Nelson asserts that Olive’s affidavit in which he states that the claim at issue was unknown and was not intended to be included in the agreement, violates the parole evidence rule and should not be considered. Nelson argues that the language of the agreement transfers all of the assets and all claims and causes of actions of any nature, and that the affidavit would have the effect of varying the terms of the agreement.
A contract must be construed with reference to the situation of the parties, the business to which the contract relates, and the subject matter as it appears from the words used.
Petty v. Sloan,
Olive’s affidavit clearly shows that the claim against Nelson was unknown, and in the absence of language in the agreement that includes unknown claims, Olive’s affidavit stating that the claim was not intended to be a part of the agreement does not have the effect of varying terms of the written agreement. Moreover, considering the situation of the parties, it is not the usual and customary practice in this type of arrangement for an obligee to assign to an obligor its claims against that obligor. Considering all of the factors, our interpretation of the agreement is that it does not include any claim or cause of action that plaintiff has against defendant.
Nelson next asserts that plaintiff must either disaffirm the Asset Purchase Agreement and tender the consideration therefor or abide by the agreement. Nelson argues that plaintiffs retention of the benefits of the contract has operated to affirm the agreement and waive the claims presented in the instant ease.
In the case at bar, Dickey’s deposition establishes that he was plaintiffs employee, that he was solicited by defendant’s representative to provide information concerning his employer’s business, that defendant’s representative indicated that he wanted to injure or damage plaintiffs business to the extent that it could be profitably purchased by defendant, and that pursuant to defendant’s solicitation, Dickey provided the information while he was in the employ of plaintiff. The deposition further indicates that Nelson’s representative actively sought Dickey’s services, and that Dickey was enticed by defendant to leave his employment with plaintiff. The record also indicates that plaintiff released its former employee, Harry Dickey, from any and all claims plaintiff may have against Dickey in connection with his activity on behalf of Nelson, and Nelson as--serts that this release operates as a release of these claims against Nelson. We disagree. This Court considered thе same argument in
TSC Industries, Inc. v. Tomlin,
Count I of plaintiffs complaint alleges a cause of action under both the common law and under T.C.A. § 47-50-109 (1995) for inducement to breach a contract. T.C A. § 47-50-109 provides:
47-50-109. Procurement of brеach of contracts unlawful — Damages.—It is unlawful for any person, by inducement, persuasion, misrepresentation, or other means, to induce or procure the breach or violation, refusal or failure to perform any lawful contract by any party thereto; and, in every case where a breach or violation of such contract is so procured, the person so procuring or inducing the same shall be hable in treble the amount of damagеs resulting from or incident to the breach of the contract. The party injured by such breach may bring suit for the breach and for such damages.
The statute is declaratory of the common law except as to the amount of damages that may be recovered against a wrongdoer.
Emmco Ins. Co. v. Beacon Mut. Indem. Co.,
The evidence in the record at this stage of the proceedings establishеs that a genuine issue of material fact exists as to whether the above elements are satisfied in this case. Dickey had a contract of employment with World Bible (New Life), and although the contract was terminable at will, an action can still be maintained for procure
In Count II, plaintiff alleges that defendant’s actions сonstituted an intentional interference with a business relationship. In
Kan Const. & Cleaning Corp. v. Tatum,
No. 01A01-9304-CV-00150,
The elements of the tort of interference with business relations are also set out in 45 Am.Jur.2d Interference 50 (1969).
The basic elements which establish a prima facie tortious interference with a business relationship are the existence of a valid business relation (not necessarily evidenced by an enforceable contract) or expectancy; knowledge of the relationship or expectancy on the part of the interferer; an intentional interference inducing or causing a breach or termination of the relationship or expectancy; and resultant damage to the party whose relationship or expectancy has been disrupted.
Id. at *4.
Olive’s affidavit and Dickey’s deposition establish the existence of a genuine issue of material fact as to whether Nelson’s contacts with plaintiffs employee (Dickey) constituted an interference with plaintiffs business relationship with Dickey. Therefore, summary judgment was not appropriate on Count II.
In Count V, plaintiff seeks recovery pursuant to the Tennessee Consumer Protection Act, T.C.A. § 47-18-101, et seq., (1995). Plaintiff asserts that it was injured by “unfair and deceptive practices” and therefore should be allowed recovery under the Act. Plaintiff primarily relies upon
Smith Corona Corp. v. Pelikan, Inc.,
47-18-102. Purposes. — The provisions of this part shall be liberally construed to promote the following policies:
(1) To simplify, clarify, and modernize state law governing the protection of the consuming public and to conform these laws with existing consumer protection policies;
(2) To protect consumers and legitimate business enterprises from those who engage in unfair or deceptive acts or practices in the conduct of any trade or commerce in part or wholly within this state;
(3) To encourage and promote the development of fair consumer practices;
(4) To declare and to provide for civil legal means for maintaining ethical standards of dealing between persons engaged in business and the consuming public to the end that good faith dealings between buyers and sellers at all levels of commerce be had in this state; and
(5) To promote statewide consumer education.
T.C.A. § 47-18-103 (1995) provides in pertinent part:
47-18-103. Definitions. — As used in this part, unless the context otherwise requires:
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(9) “Trade,” “commerce,” or “consumer transaction” means the advertising, offering for sale, lease or rental, or distribution of any goods, services, or property, tangible or intangible, real, personal, or mixed, and other articles, commodities, or things of value wherever situated.
In summary, the order of the trial court granting summary judgment as to Counts I and II of the complaint is reversed, and the order granting summary judgment as to Count V is affirmed. The case is remanded to the trial court for such further proceedings as may be necessary. Costs of the appeal are assessed against appellee.
Notes
. Paragraph 4.13 of the agreement provides:
4.13. Litigation. Except as set forth in Schedule 4.13, there are no claims, actions, suits, proceedings or investigations pending or threatened by or against, or otherwise affecting Seller at law or in equity or before or by any federal, state, municipal or other governmental department, commission, board, agency, instrumentality or authority. Seller does not know or have any reason to know of any such claim, action, suit, proceeding or investigation. No claim, action, suit, proceeding or investigation set forth in Schedule 4.13, could, if adversely decided, have a material adverse effect on the condition (financial or otherwise), assets, liabilities, earnings, prospects or business of Seller.