Summary Judgment Vacated Because Depositions Were Improperly Limited

In Evans v. Piedmont Natural Gas Co., Inc., No. M2014-01099-COA-R3-CV (Tenn. Ct. App. Aug. 18, 2015), plaintiff asserted claims for property damage caused when sewage flowed into his home in 2013 allegedly due to a damaged sewer line. The undisputed facts in this case established that a gas line was installed on the relevant property in 1984 by Nashville Gas, that said gas line had not been repaired or serviced since 1984, and that no other “dig permits” had been issued for the property between 1980 and the 2013 sewage flooding. Plaintiff’s theory was that the sewage line was damaged during the gas line installation and that the gas company covered up the damage. The company who did the work in 1984 was Nashville Gas, which later merged into Piedmont Natural Gas Company, the named defendant.

Plaintiff in this case obtained a judgment in general sessions court, but on appeal to circuit court summary judgment was granted to defendant. As grounds for summary judgment, the trial court found that there was no evidence that the gas company “damaged the sewer line in question, repaired the sewer line in question or intentionally concealed any damage or repair[,]” that there was no proof that the alleged damage occurred during the gas line installation in 1984, and that there was no proof that the gas company “was ever aware of any damage to the sewer line at any time before 2013[.]” Further, the trial court found that the claim was barred by the four year statute of repose found in Tenn. Code Ann. § 28-3-202, which applies to improvements to real property. Finally, the trial court overturned the award of punitive damages to plaintiff, stating there was “no factual or legal basis for punitive damages here.”

While the Court of Appeals affirmed the summary denial of punitive damages, it overturned summary judgment as to the property damages claim in light of the additional discovery that should have been allowed. In the circuit court, plaintiff had requested two depositions: one of a specific gas company employee and one of a gas company corporate representative. Defendant moved for a protective order to limit these depositions, which the trial court granted in part. The trial court allowed for the employee’s deposition, but ordered that “if it comes out that he knows nothing and that [the employee] cannot assist Plaintiff in any way, then Plaintiff shall pay all of the costs of the deposition , the witness’ costs and Defendant’s attorney fees.” Regarding the corporate representative, the court limited the scope of the deposition to “the two instances when the sewer or gas lines near the Plaintiff’s property were damaged,” and the court again ordered plaintiff to pay all costs if “nothing comes up in that representative’s deposition that can be used in the case.”

The Court of Appeals held that the trial court erred regarding these depositions in two ways. First, the trial court should not have “conditioned the requested depositions on their usefulness to [plaintiff],” ordering him to pay all costs and attorneys’ fees if nothing useful came out of the deposition. According to the Court, “[s]uch a condition placed a discouraging or deterring effect on discovery, which [is] inconsistent with the broad and liberal treatment given discovery rules.” Further, by conditioning the depositions only on their usefulness to plaintiff, the trial court “ignore[d] the fact that discovery sometimes relates to the claim or defense of the party defending the discovery.”

Second, the trial court improperly limited the scope of the corporate representative’s deposition. Part of plaintiff’s claim rested on his allegation that defendant was liable for the acts of Nashville Gas, its predecessor company, and defendant denied liability under that theory. The trial court, though, did not allow plaintiff to question a corporate representative about the merger of these two companies after defendant stated that it did not have the documents anymore and could not provide a representative to give “meaningful” testimony. The Court of Appeals rejected this discovery limitation, stating that defendant “cannot foreclose discovery on the merger documents by simply asserting a corporate representative cannot provide “meaningful” testimony about the documents. Ultimately, whether the [defendant] corporate representative’s testimony is meaningful is a matter to be explored through discovery.”

Defendant’s motion for summary judgment as to the property damages claim had been based on two grounds: 1) that Piedmont Gas was not liable for acts by Nashville Gas, and 2) that the statute of repose barred plaintiff’s claims.* The Court of Appeals rejected the first ground, stating that as the company surviving a merger Piedmont Gas would “stand in Nashville Gas’s stead and [be] subject to its liabilities.” As to the second ground, the Court found that without the relevant discovery, it could not determine whether the work in question would fall under the cited statute of repose or whether one of the exceptions to the statute of repose would apply. The Court cited Tennessee’s Supreme Court in noting that “a grant of summary judgment can be premature and necessitate a remand when the parties have not been permitted to conduct discovery.” Here, plaintiff timely objected to the discovery limitations. The Court of Appeals agreed that necessary discovery related to the statute of repose and the merger had not been allowed and accordingly vacated summary judgment as to the property damage claim.

Essentially, the Court of Appeals held that not enough discovery was allowed here to make this case ready for a summary disposition. The Court found that the trial court improperly limited discovery in this case, which was the correct holding in this matter. The alleged damage occurred many years ago, and plaintiff should have been allowed to conduct necessary discovery related to the facts surrounding both the gas line installation and the company merger. Plaintiff did not seek excessive discovery—he only asked to depose two people—and the limitations set on the depositions by the trial court were absurd. Requiring a plaintiff to pay for all costs, including opposing counsel’s attorney fees, if the deposition did not provide information to support his theory of the case would seriously undermine the purpose of the discovery process. This case is a good reminder that an insufficient discovery allowance or an improper limitation on discover can be ripe grounds for appealing a grant of summary judgment.


* The trial court granted summary judgment on these grounds, as well as an additional basis that there was no evidence that Nashville Gas damaged the sewer lines, a ground not raised by defendant in its motion. The Court of Appeals held that by granting summary judgment on a ground not raised by defendant, the trial court acted sua sponte, giving plaintiff no notice and no opportunity to respond.

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