Where a case was dismissed pursuant to the defendant’s Rule 12 motion, the trial court should not have held a subsequent hearing on and granted dismissal under the defendant’s separate TPPA petition. In Horst v. Gaar, No. W2023-00442-COA-R3-CV (Tenn. Ct. App. Dec. 4, 2024), the plaintiff was the former son-in-law of the defendant. Plaintiff ran an investment business, and while plaintiff and defendant’s daughter were divorcing, defendant allegedly made statements to one of plaintiff’s clients that caused the client to move his investments to a different firm. The complaint alleged that defendant told the client that plaintiff was leaving Memphis and moving to Las Vegas, and that such a move would “jeopardiz[e] the service and expertise that [client] was used to getting from [the business] locally.” Based on these statements, plaintiff filed this action for tortious interference with a business contract, intentional interference with a business relationship, and a violation of the TCPA.
Defendant filed a motion to dismiss under Tennessee Rule of Civil Procedure 12, asserting that plaintiff’s complaint failed to state a claim for relief. Defendant also filed a petition to dismiss under the Tennessee Public Protection Act (“TPPA”). The rule 12 motion was set for hearing, and the trial court granted dismissal. In the order granting dismissal, the trial court stated that “it would retain jurisdiction over the unheard TPPA petition to dismiss.” Some time later, the trial court held a hearing and granted the TPPA petition to dismiss. The trial court also awarded costs, attorney’s fees and expenses in the TPPA dismissal order. On appeal, dismissal pursuant to Rule 12 was affirmed, but the Court of Appeals vacated the decision to grant dismissal under the TPPA.
A Rule 12 motion to dismiss challenges the sufficiency of the complaint, and the Court of Appeals agreed that dismissal was appropriate here. Looking first to the interference with contract claim, the Court noted that a plaintiff asserting a common law or statutory claim for interference with contract must prove certain elements, including that a breach of contract occurred. The plaintiff’s contract with the client at issue permitted the client to move his money at any time for any or no reason. Because of this language, the Court agreed with the trial court that the client did not breach the contract. Without a breach of contract, plaintiff could not state a claim for tortious interference with contract and dismissal was appropriate.
Regarding the plaintiff’s claim for intentional interference with business relationships, the Court explained that Tennessee case law provides that “prospective contractual relations” can fall within the ambit of this tort. Existing or past contracts, however, are not protected by this tort. The Court wrote that “the tort of intentional interference with business relationships does not itself protect against interference with an existing or past contract.” Because the client had an existing contract with the plaintiff, the Court affirmed dismissal of this claim.
The Court of Appeals also affirmed dismissal of the TCPA claim, finding that the statement that the plaintiff relied on was a statement of opinion, not of fact, and thus did not support his claim.
After affirming Rule 12 dismissal, the Court of Appeals analyzed the trial court’s decision to hear and decide the TPPA petition to dismiss after its granting of the Rule 12 motion. The Court held that the “TPPA petition became a nonjusticiable, moot issue given the trial court’s dismissal of [the plaintiff’s] complaint for failure to state a claim and denial of a motion to alter or amend in relation to same.” The Court looked at the Tennessee Supreme Court’s reasoning in cases involving TPPA petitions and voluntary dismissals, noting that “[n]owhere does the text of the TPPA require that a petition, once filed, must be adjudicated under any and all circumstances.” (internal citation omitted). The Court found that “in a case such as the present one, an unheard TPPA petition is mooted if a defendant has already achieved a dismissal of a plaintiff’s action by way of a motion to dismiss for failure to state a claim.” Notably, the Court pointed out in a footnote that it was “not presented with a factual pattern where a Rule 12 dismissal motion and TPPA petition were prosecuted concurrently in an attempt to obtain dismissal.”
Because the TPPA petition should not have been heard, the award of fees under that petition was also vacated. The trial court had also awarded fees pursuant to the Rule 12 dismissal, which should not have been awarded until after the appeal. The Court, however, held that this error was harmless. Dismissal under Rule 12 was affirmed, and the TPPA ruling was vacated.
As we continue to see the TPPA take shape, this particular opinion illustrates the reasons a defendant may wish to pursue the TPPA petition at the same time as any other dismissal motion. Should a case be dismissed before a TPPA petition is heard, the TPPA petition will likely be considered moot, and a successful defendant may be entitled to fewer fees and costs.
This opinion was released 5.5 months after oral arguments.